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Note 4 - Securities Available for Sale
 12 Months Ended
Dec. 31, 2019
Notes to Financial Statements  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]
NOTE
4
Securities Available for Sale
A summary of securities available for sale at
December 31, 2019
and
2018
is as follows:
 
 
(Dollars in thousands)
  
Amortized
Cost
    
Gross
Unrealized
Gains
    
Gross
Unrealized
Losses
    
Fair Value
  
December 31, 2019
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Mortgage-backed securities:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Federal National Mortgage Association (FNMA)
  
$
46,604
    
 
47
    
 
(65
)
  
 
46,586
  
Federal Home Loan Mortgage Corporation (FHLMC)
  
 
8,004
    
 
88
    
 
0
    
 
8,092
  
Collateralized mortgage obligations:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
FNMA
  
 
169
    
 
4
    
 
0
    
 
173
  
   
 
54,777
    
 
139
    
 
(65
)
  
 
54,851
  
Other marketable securities:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
U.S. Government agency obligations
  
 
49,974
    
 
39
    
 
(21
)
  
 
49,992
  
Municipal obligations
  
 
1,969
    
 
7
    
 
0
    
 
1,976
  
Corporate obligations
  
 
108
    
 
0
    
 
0
    
 
108
  
Corporate preferred stock
  
 
700
    
 
0
    
 
(35
)
  
 
665
  
   
 
52,751
    
 
46
    
 
(56
)
  
 
52,741
  
   
$
107,528
    
 
185
    
 
(121
)
  
 
107,592
  
                                 
December 31, 2018
                                
Mortgage-backed securities:
                                
FNMA
   $
3,886
      
0
      
(117
 )    
3,769
  
FHLMC
    
4,074
      
0
      
(10
 )    
4,064
  
Collateralized mortgage obligations:
                                
FNMA
    
199
      
0
      
(9
 )    
190
  
     
8,159
      
0
      
(136
 )    
8,023
  
Other marketable securities:
                                
U.S. Government agency obligations
    
69,971
      
0
      
(1,236
 )    
68,735
  
Municipal obligations
    
2,378
      
1
      
(10
 )    
2,369
  
Corporate obligations
    
173
      
0
      
(1
 )    
172
  
Corporate preferred stock
    
700
      
0
      
(140
 )    
560
  
     
73,222
      
1
      
(1,387
 )    
71,836
  
    $
81,381
      
1
      
(1,523
 )    
79,859
  
 
 
The Company did
not
sell any available for sale securities and did
not
recognize any gains or losses on securities available for sale in
2019,
2018
or
2017.
 
The following table presents the amortized cost and estimated fair value of securities available for sale at
December 31, 2019,
based upon contractual maturity adjusted for scheduled repayments of principal and projected prepayments of principal based upon current economic conditions and interest rates. Actual maturities
may
differ from the maturities in the following table because obligors
may
have the right to call or prepay obligations with or without call or prepayment penalties:
 
(Dollars in thousands)
  
Amortized
Cost
    
Fair
Value
  
Due one year or less
   $
46,931
      
46,962
  
Due after one year through five years
    
44,262
      
44,308
  
Due after five years through ten years
    
14,991
      
15,011
  
Due after ten years
    
1,344
      
1,311
  
Total
   $
107,528
      
107,592
  
 
 
The allocation of mortgage-backed securities in the table above is based upon the anticipated future cash flow of the securities using estimated mortgage prepayment speeds. 
 
The following table shows the gross unrealized losses and fair values for the securities available for sale portfolio aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at
December 31, 2019
and
2018:
 
   
Less Than Twelve Months
    
Twelve Months or More
    
Total
  
(Dollars in thousands)
  
# of
Investments
    
Fair
Value
    
Unrealized
Losses
    
# of
Investments
    
Fair
Value
    
Unrealized
Losses
    
Fair
Value
    
Unrealized
Losses
  
December 31, 2019
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Mortgage backed securities:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
FNMA
  
 
4
    
$
12,143
    
 
(65
)
  
 
0
    
$
0
    
 
0
    
$
12,143
    
 
(65
)
Other marketable securities:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
U.S. Government agency obligations
  
 
0
    
 
0
    
 
0
    
 
4
    
 
19,972
    
 
(21
)
  
 
19,972
    
 
(21
)
Corporate preferred stock
  
 
0
    
 
0
    
 
0
    
 
1
    
 
665
    
 
(35
)
  
 
665
    
 
(35
)
Total temporarily impaired securities
  
 
4
    
$
12,143
    
 
(65
)
  
 
5
    
$
20,637
    
 
(56
)
  
$
32,780
    
 
(121
)
                                                                 
December 31, 201
8
                                                                
Mortgage backed securities:
                                                                
FNMA
    
0
     $
0
      
0
      
2
     $
3,769
      
(117
 )   $
3,769
      
(117
 )
FHLMC
    
1
      
4,060
      
(10
 )    
0
      
0
      
0
      
4,060
      
(10
 )
Collateralized mortgage obligations:
                                                                
FNMA
    
0
      
0
      
0
      
1
      
190
      
(9
 )    
190
      
(9
 )
Other marketable securities:
                                                                
U.S. Government agency obligations
    
0
      
0
      
0
      
14
      
68,735
      
(1,236
 )    
68,735
      
(1,236
 )
Municipal obligations
    
3
      
498
      
(2
 )    
8
      
1,467
      
(8
 )    
1,965
      
(10
 )
Corporate obligations
    
0
      
0
      
0
      
1
      
172
      
(1
 )    
172
      
(1
 )
Corporate preferred stock
    
0
      
0
      
0
      
1
      
560
      
(140
 )    
560
      
(140
 )
Total temporarily impaired securities
    
4
     $
4,558
      
(12
 )    
27
     $
74,893
      
(1,511
 )   $
79,451
      
(1,523
 )
 
 
We review our investment portfolio on a quarterly basis for indications of impairment. This review includes analyzing the length of time and the extent to which the fair value has been lower than the cost, the market liquidity for the investment, the financial condition and near-term prospects of the issuer, including any specific events which
may
influence the operations of the issuer, and our intent and ability to hold the investment for a period of time sufficient to recover the temporary loss. The unrealized losses on impaired securities other than the corporate preferred stock are the result of changes in interest rates. The unrealized losses reported for the corporate preferred stock at
December 31, 2019
relates to a single trust preferred security that was issued by the holding company of a small community bank. As of
December 31, 2019
all payments were current on the trust preferred security and the issuer’s subsidiary bank was considered to be “well capitalized” based on its most recent regulatory filing. Based on a review of the issuer, it was determined that the trust preferred security was
not
other-than-temporarily impaired at
December 31, 2019.
The Company does
not
intend to sell the preferred stock and has the intent and ability to hold it for a period of time sufficient to recover the temporary loss. Management believes that the Company will receive all principal and interest payments contractually due on the security and that the decrease in the market value is primarily due to a lack of liquidity in the market for trust preferred securities. Management will continue to monitor the credit risk of the issuer and
may
be required to recognize other-than-temporary impairment charges on this security in future periods.