SECURITIES

9 Months Ended

Sep. 30, 2018

NOTE 9 - SECURITIES

The following disclosure of the estimated fair value of financial instruments is made in accordance with authoritative guidance. The estimated fair value amounts have been determined using available market information and valuation methodologies that management believes are appropriate. However, considerable judgment is necessarily required to interpret market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

A summary of the amortized cost and estimated fair value of available-for-sale securities and held-to-maturity securities at September 30, 2018 and December 31, 2017, follows:

($ In Thousands)

	September 30, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale securities:
Obligations of U.S. Government agencies	$	25,115		-	$	582	$	24,533
Tax-exempt and taxable obligations of states and municipal subdivisions		154,364		804		2,237		152,931
Mortgage-backed securities		244,177		138		5,832		238,483
Corporate obligations		9,701		2		710		8,993
	$	433,357	$	944	$	9,361	$	424,940

	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Estimated Fair Value
Held-to-maturity securities:
Taxable obligations of states and municipal subdivisions	$	6,000	$	1,105	$	-	$	7,105

	December 31, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale securities:
Obligations of U.S. Government agencies	$	4,996	$	-	$	4	$	4,992
Tax-exempt and taxable obligations of states and municipal subdivisions		137,281		2,028		725		138,584
Mortgage-backed securities		197,346		785		1,554		196,578
Corporate obligations		16,599		21		801		15,819
Other		1,256		-		335		920
	$	357,478	$	2,834	$	3,419	$	356,893

	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Estimated Fair Value
Held-to-maturity securities:
Taxable obligations of states and municipal subdivisions	$	6,000	$	1,398	$	-	$	7,398

The scheduled maturities of securities at September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018
	Available-for-Sale				Held-to-Maturity
($ In Thousands)	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value

Due less than one year	$	18,895	$	18,838	$	-	$	-
Due after one year through five years		56,059		55,756		-		-
Due after five years through ten years		72,255		71,617		6,000		7,105
Due greater than ten years		41,971		40,246		-		-
Mortgage-backed securities		244,177		238,483		-		-
Total	$	433,357	$	424,940	$	6,000	$	7,105

	December 31, 2017
	Available-for-Sale				Held-to-Maturity
($ In Thousands)	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value

Due less than one year	$	14,048	$	14,062	$	-	$	-
Due after one year through five years		49,519		49,776		-		-
Due after five years through ten years		57,713		58,589		6,000		7,398
Due greater than ten years		38,852		37,889		-		-
Mortgage-backed securities		197,346		196,577		-		-
Total	$	357,478	$	356,893	$	6,000	$	7,398

Actual maturities can differ from contractual maturities because the obligations may be called or prepaid with or without penalties.

The details concerning securities classified as available-for-sale with unrealized losses as of September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018
	Losses < 12 Months				Losses 12 Months or >				Total
($ In Thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Obligations of U.S. government agencies	$	20,244	$	390	$	3,797	$	192	$	24,041	$	582
Tax-exempt and taxable obligations of state and municipal subdivisions		92,865		1,533		18,175		704		111,040		2,237
Mortgage-backed securities		180,848		3,940		47,988		1,892		228,836		5,832
Corporate obligations		4,542		38		3,035		672		7,577		710
	$	298,499	$	5,901	$	72,995	$	3,460	$	371,494	$	9,361

	December 31, 2017
	Losses < 12 Months				Losses 12 Months or >				Total
($ In Thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Obligations of U.S. government agencies	$	4,992	$	4	$	-	$	-	$	4,992	$	4
Tax-exempt and taxable obligations of state and municipal subdivisions		40,559		501		8,723		224		49,282		725
Mortgage-backed securities		89,313		807		33,287		747		122,600		1,554
Corporate obligations		5,666		9		3,156		792		8,822		801
Other		-		-		920		335		920		335
	$	140,530	$	1,321	$	46,086	$	2,098	$	186,616	$	3,419

At September 30, 2018 and December 31, 2017, the Company security portfolio consisted of 515 and 235 securities, respectively, that were in an unrealized loss position. The Company reviews its investment portfolio quarterly for indications of other-than-temporary impairment (“OTTI”), with attention given to securities in a continuous loss position of at least ten percent for over twelve months. Management believes that none of the losses on available-for-sale securities noted above constitute an OTTI. The noted losses are considered temporary due to market fluctuations in available interest rates. Management considers the issuers of the securities to be financially sound, the corporate bonds are investment grade, and the collectability of all contractual principal and interest payments is reasonably expected. No OTTI losses were recognized during the nine months ended September 30, 2018 or the year ended December 31, 2017.