Securities

This table provides the major components of debt securities available for sale ("AFS") and held to maturity ("HTM") at amortized cost and estimated fair value at March 31, 2019 and December 31, 2018:



	March 31, 2019									December 31, 2018
(In thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value		Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
Available for sale:
U.S. Government sponsored entities	$	5,756	$	—	$	(78	)	$	5,678	$	5,758	$	—	$	(116	)	$	5,642
State and political subdivisions	4,547		20		(65		)	4,502		4,614		4		(120		)	4,498
Residential mortgage-backed securities	26,237		81		(467		)	25,851		27,159		74		(620		)	26,613
Corporate and other securities	10,230		30		(357		)	9,903		10,231		123		(394		)	9,960
Total debt securities available for sale	$	46,770	$	131	$	(967	)	$	45,934	$	47,762	$	201	$	(1,250	)	$	46,713
Held to maturity:
U.S. Government sponsored entities	$	2,527	$	—	$	(82	)	$	2,445	$	2,527	$	—	$	(94	)	$	2,433
State and political subdivisions	951		115		—			1,066		951		110		—			1,061
Residential mortgage-backed securities	3,249		21		(34		)	3,236		3,312		17		(52		)	3,277
Commercial mortgage-backed securities	3,540		—		(107		)	3,433		3,570		—		(138		)	3,432
Corporate and other securities	4,513		75		(1		)	4,587		4,515		84		—			4,599
Total securities held to maturity	$	14,780	$	211	$	(224	)	$	14,767	$	14,875	$	211	$	(284	)	$	14,802
Equity securities:
Total equity securities	$	2,398	$	35	$	(185	)	$	2,248	$	2,394	$	—	$	(250	)	$	2,144

This table provides the remaining contractual maturities and yields of securities within the investment portfolios. The carrying value of securities at March 31, 2019 is distributed by contractual maturity. Mortgage-backed securities and other securities, which may have principal prepayment provisions, are distributed based on contractual maturity. Expected maturities will differ materially from contractual maturities as a result of early prepayments and calls.



	Within one year				After one through five years				After five through ten years				After ten years				Total carrying value
(In thousands, except percentages)	Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield
Available for sale at fair value:
U.S. Government sponsored entities	$	—	—	%	$	3,693	1.61	%	$	1,985	2.17	%	$	—	—	%	$	5,678	1.81	%
State and political subdivisions	2,340		2.91		—		—		874		2.50		1,288		2.74		4,502		2.78
Residential mortgage-backed securities	68		2.94		8,750		2.69		14,851		2.95		2,182		2.79		25,851		2.85
Corporate and other securities	—		—		6,234		4.34		3,669		4.00		—		—		9,903		4.21
Total debt securities available for sale	$	2,408	2.91	%	$	18,677	3.03	%	$	21,379	3.04	%	$	3,470	2.77	%	$	45,934	3.01	%
Held to maturity at cost:
U.S. Government sponsored entities	$	—	—	%	$	1,002	2.03	%	$	1,525	1.94	%	$	—	—	%	$	2,527	1.98	%
State and political subdivisions	—		—		494		5.06		—		—		457		5.84		951		5.43
Residential mortgage-backed securities	—		—		460		3.32		924		3.15		1,865		3.82		3,249		3.56
Commercial mortgage-backed securities	—		—		—		—		3,540		2.76		—		—		3,540		2.76
Corporate and other securities	—		—		4,513		5.73		—		—		—		—		4,513		5.73
Total securities held to maturity	$	—	—	%	$	6,469	4.93	%	$	5,989	2.61	%	$	2,322	4.22	%	$	14,780	3.88	%
Equity Securities at fair value:
Total equity securities	$	—	—	%	$	—	—	%	$	—	—	%	$	2,248	2.17	%	$	2,248	2.17	%

The fair value of securities with unrealized losses by length of time that the individual securities have been in a continuous unrealized loss position at March 31, 2019 and December 31, 2018 are as follows:



	March 31, 2019
		Less than 12 months					12 months and greater					Total
(In thousands, except number in a loss position)	Total number in a loss position	Estimated fair value		Unrealized loss			Estimated fair value		Unrealized loss			Estimated fair value		Unrealized loss
Available for sale:
U.S. Government sponsored entities	5	$	—	$	—		$	5,678	$	(78	)	$	5,678	$	(78	)
State and political subdivisions	2	—		—			1,765		(65		)	1,765		(65		)
Residential mortgage-backed securities	28	1,691		(2		)	22,241		(465		)	23,932		(467		)
Corporate and other securities	5	—		—			6,792		(357		)	6,792		(357		)
Total temporarily impaired securities	40	$	1,691	$	(2	)	$	36,476	$	(965	)	$	38,167	$	(967	)
Held to maturity:
U.S. Government sponsored entities	2	$	—	$	—		$	2,445	$	(82	)	$	2,445	$	(82	)
Residential mortgage-backed securities	5	—		—			2,070		(34		)	2,070		(34		)
Commercial mortgage-backed securities	2	—		—			3,433		(107		)	3,433		(107		)
Corporate and other securities	1	1,512		(1		)	—		—			1,512		(1		)
Total temporarily impaired securities	10	$	1,512	$	(1	)	$	7,948	$	(223	)	$	9,460	$	(224	)



	December 31, 2018
		Less than 12 months					12 months and greater					Total
(In thousands, except number in a loss position)	Total number in a loss position	Estimated fair value		Unrealized loss			Estimated fair value		Unrealized loss			Estimated fair value		Unrealized loss
Available for sale:
U.S. Government sponsored entities	5	$	—	$	—		$	5,642	$	(116	)	$	5,642	$	(116	)
State and political subdivisions	4	—		—			3,129		(120		)	3,129		(120		)
Residential mortgage-backed securities	31	4,445		(23		)	20,480		(597		)	24,925		(620		)
Corporate and other securities	5	971		(30		)	5,787		(364		)	6,758		(394		)
Total temporarily impaired securities	45	$	5,416	$	(53	)	$	35,038	$	(1,197	)	$	40,454	$	(1,250	)
Held to maturity:
U.S. Government sponsored entities	2	$	—	$	—		$	2,434	$	(94	)	$	2,434	$	(94	)
Residential mortgage-backed securities	5	1,277		(15		)	821		(37		)	2,098		(52		)
Commercial mortgage-backed securities	2	—		—			3,432		(138		)	3,432		(138		)
Total temporarily impaired securities	9	$	1,277	$	(15	)	$	6,687	$	(269	)	$	7,964	$	(284	)

Unrealized Losses

The unrealized losses in each of the categories presented in the tables above are discussed in the paragraphs that follow:

U.S. government sponsored entities and state and political subdivision securities: The unrealized losses on investments in these types of securities were caused by the increase in interest rate spreads or the increase in interest rates at the long end of the Treasury curve. The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the par value of the investments. Because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be at maturity, the Company did not consider these investments to be other-than temporarily impaired as of March 31, 2019 or December 31, 2018.

Residential and commercial mortgage-backed securities: The unrealized losses on investments in mortgage-backed securities were caused by increases in interest rate spreads or the increase in interest rates at the long end of the Treasury curve. The majority of contractual cash flows of these securities are guaranteed by the Federal National Mortgage Association (FNMA), the Government National Mortgage Association (GNMA) or the Federal Home Loan Mortgage Corporation (FHLMC). It is expected that the securities would not be settled at a price significantly less than the par value of the investment. Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be at maturity, the Company did not consider these investments to be other-than-temporarily impaired as of March 31, 2019 or December 31, 2018.

Corporate and other securities: Included in this category are corporate debt securities and trust preferred securities. The unrealized losses on corporate debt securities were due to widening credit spreads or the increase in interest rates at the long end of the Treasury curve. The Company evaluated the prospects of the issuers and forecasted a recovery period; and as a result determined it did not consider these investments to be other-than-temporarily impaired as of March 31, 2019 or December 31, 2018. The unrealized loss on the trust preferred security was caused by an inactive trading market and changes in market credit spreads. The contractual terms do not allow the security to be settled at a price less than the par value. Because the Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, which may be at maturity, the Company did not consider this security to be other-than-temporarily impaired as of March 31, 2019 or December 31, 2018.

Realized Gains and Losses

There were no gross realized gains or losses for the three months ended March 31, 2019, or 2018.

Equity Securities

Included in this category are Community Reinvestment Act ("CRA") investments and the Company's current other equity holdings. Equity securities are defined to include (a) preferred, common and other ownership interests in entities including partnerships, joint ventures and limited liability companies and (b) rights to acquire or dispose of ownership interest in entities at fixed or determinable prices.

The Company follows ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities," which aims to simplify accounting for financial instruments and to converge the guidance between U.S. GAAP and IFRS. ASU 2016-01 also includes guidance on how entities account for equity investments, present and disclose financial instruments, and measure the valuation allowance on deferred tax assets related to available-for-sale debt securities. The guidance in ASU 2016-01 requires an entity to disaggregate the net gains and losses on the equity investments recognized in the income statement during a reporting period into realized and unrealized gains and losses. As a result, equity securities are no longer carried at fair value through other comprehensive income (OCI) or by applying the cost method to those equity securities that do not have readily determinable values. Equity securities are generally required to be measured at fair value with market value adjustments being reflected in net income. The Company adopted this standard as of January 1, 2018.

The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during the three months ended March 31, 2019 and 2018:



	For the three months ended March 31,
(In thousands)	2019		2018
Net gains (losses) recognized during the period on equity securities	$	100	$	(15	)
Less: Net gains (losses) recognized during the period on equity securities sold during the period	—		—
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date	$	100	$	(15	)

Pledged Securities

Securities with a carrying value of $5.8 million and $4.3 million for March 31, 2019 and December 31, 2018, respectively, were pledged to secure Government deposits, secure other borrowings and for other purposes required or permitted by law.