INVESTMENT SECURITIES AVAILABLE FOR SALE

12 Months Ended

Dec. 31, 2017

INVESTMENT SECURITIES AVAILABLE FOR SALE [Abstract]

INVESTMENT SECURITIES AVAILABLE FOR SALE

2. INVESTMENT SECURITIES AVAILABLE FOR SALE

A summary of amortized cost and approximate fair value of investment securities available for sale included in the consolidated statements of condition as of December 31, 2017 and 2016 follows:

	2017
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
(In thousands)	Cost		Gains		Losses			Value
U.S. government-sponsored agencies	$	44,476	$	—	$	(775	)	$	43,701
Mortgage-backed securities-residential		244,913		583		(2,380	)		243,116
SBA pool securities		5,262		—		(57	)		5,205
State and political subdivisions		24,910		87		(129	)		24,868
Corporate bond		3,000		82		—			3,082
Single-issuer trust preferred security		2,999		—		(162	)		2,837
CRA investment fund		5,000		—		(176	)		4,824
Total	$	330,560	$	752	$	(3,679	)	$	327,633

	2016
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
(In thousands)	Cost		Gains		Losses			Value
U.S. government-sponsored agencies	$	21,991	$	—	$	(474	)	$	21,517
Mortgage-backed securities-residential		238,271		860		(1,514	)		237,617
SBA pool securities		6,778		—		(65	)		6,713
State and political subdivisions		29,107		160		(274	)		28,993
Corporate bond		3,000		113		—			3,113
Single-issuer trust preferred security		2,999		—		(389	)		2,610
CRA investment fund		5,000		—		(175	)		4,825
Total	$	307,146	$	1,133	$	(2,891	)	$	305,388

The amortized cost and fair value of investment securities available for sale as of December 31, 2017, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or repay obligations with or without call or prepayment penalties. Securities not due at a single maturity, such as mortgage-backed securities, marketable equity securities and the CRA Investment Fund, are shown separately.

Maturing in:
(In thousands)	Amortized Cost		Fair Value
One year or less	$	18,057	$	17,999
After one year through five years		15,990		15,714
After five years through ten years		37,972		37,394
After ten years		3,366		3,381
		75,385		74,488
Mortgage-backed securities-residential		244,913		243,116
SBA pool securities		5,262		5,205
CRA investment fund		5,000		4,824
Total	$	330,560	$	327,633

Securities available for sale with a fair value of $209.0 million and $154.7 million as of December 31, 2017 and December 31, 2016, respectively, were pledged to secure public funds and for other purposes required or permitted by law.

The following is a summary of the gross gains, gross losses and net tax expense related to proceeds on sales of securities available for sale for the years ended December 31,

(In thousands)	2017		2016			2015
Proceeds on sales	$	—	$	5,499		$	46,254
Gross gains		—		133			536
Gross losses		—		(14	)		(9	)
Net tax expense		—		44			216

The following table presents the Company’s available for sale securities with continuous unrealized losses and the approximate fair value of these investments as of December 31, 2017 and 2016.

	2017
	Duration of Unrecognized Loss
	Less Than 12 Months					12 Months or Longer					Total
	Approximate					Approximate					Approximate
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(In thousands)	Value		Losses			Value		Losses			Value		Losses
U.S. government-
sponsored agencies	$	32,166	$	(317	)	$	11,535	$	(458	)	$	43,701	$	(775	)
Mortgage-backed
securities-residential		116,774		(1,000	)		71,646		(1,380	)		188,420		(2,380	)
SBA pool securities		—		—			5,205		(57	)		5,205		(57	)
State and political
subdivisions		5,628		(97	)		3,760		(32	)		9,388		(129	)
Single-issuer trust
preferred security		—		—			2,837		(162	)		2,837		(162	)
CRA investment fund		—		—			4,824		(176	)		4,824		(176	)
Total	$	154,568	$	(1,414	)	$	99,807	$	(2,265	)	$	254,375	$	(3,679	)

	2016
	Duration of Unrecognized Loss
	Less Than 12 Months					12 Months or Longer					Total
	Approximate					Approximate					Approximate
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(In thousands)	Value		Losses			Value		Losses			Value		Losses
U.S. government-
sponsored agencies	$	21,517	$	(474	)	$	—	$	—		$	21,517	$	(474	)
Mortgage-backed
securities-residential		151,114		(1,472	)		5,147		(42	)		156,261		(1,514	)
SBA pool securities		—		—			6,713		(65	)		6,713		(65	)
State and political
subdivisions		9,412		(274	)		—		—			9,412		(274	)
Single-issuer trust
preferred security		—		—			2,610		(389	)		2,610		(389	)
CRA investment fund		1,930		(70	)		2,894		(105	)		4,824		(175	)
Total	$	183,973	$	(2,290	)	$	17,364	$	(601	)	$	201,337	$	(2,891	)

Management believes that the unrealized losses on investment securities available for sale are temporary and due to interest rate fluctuations and/or volatile market conditions rather than the credit worthiness of the issuers. The Company does not intend to sell these securities nor is it likely that it will be required to sell the securities before their anticipated recovery.

At December 31, 2017, the unrealized loss of $162 thousand is related to a single-issuer trust preferred security issued by a large bank holding company that has experienced declines in fair value on all its securities due to the turmoil in the financial markets and a merger. The investment continues to be rated below investment grade by at least two recognized rating agencies. Management monitors the performance of the issuer on a quarterly basis to determine if there are any credit events that could result in deferral or default of the security. The fair value of this security at December 31, 2017 is higher than the fair value at December 31, 2016. Management believes the depressed valuation is a result of the nature of the bond, a trust preferred security, and the bond’s very low yield and not due to credit. At December 31, 2017, Management does not intend to sell the security nor is it likely that it will be required to sell the security before its anticipated recovery.

No other-than-temporary impairment charges were recognized in 2017, 2016 or 2015.