INVESTMENT SECURITIES

12 Months Ended

Dec. 31, 2017

NOTE 2 — INVESTMENT SECURITIES

The following table summarizes the amortized cost and fair value of securities available-for-sale and securities held-to-maturity at December 31, 2017 and 2016 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses (dollars in thousands):

At December 31, 2017	Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
Available-for-sale
Residential mortgage-backed securities		$	24,856		$	70		$	(242)		$	24,684
Residential collateralized mortgage obligations			2,809			—			(103)			2,706
Commercial collateralized mortgage obligations			1,581			—			(31)			1,550
Municipal bond			1,098			11			—			1,109
CRA mutual fund			2,160			—			(52)			2,108
Total securities available-for-sale		$	32,504		$	81		$	(428)		$	32,157
Held-to-maturity
Residential mortgage-backed securities		$	5,403		$	—		$	(98)		$	5,305
Foreign government securities			25			—			—			25
Total securities held-to-maturity		$	5,428		$	—		$	(98)		$	5,330

At December 31, 2016	Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
Available-for-sale
Residential mortgage-backed securities		$	29,152		$	165		$	(290)		$	29,027
Residential collateralized mortgage obligations			5,233			—			(130)			5,103
Municipal bond			1,122			14			—			1,136
CRA mutual fund			2,115			—			(52)			2,063
Total securities available-for-sale		$	37,622		$	179		$	(472)		$	37,329
Held-to-maturity
Residential mortgage-backed securities		$	6,475		$	—		$	(81)		$	6,394
Foreign government securities			25			—			—			25
Total securities held-to-maturity		$	6,500		$	—		$	(81)		$	6,419

The proceeds from sales and calls of securities and the associated gains and losses are listed below (dollars in thousands):

	Year Ended December 31,
	2017			2016			2015
Proceeds		$	—		$	2,771		$	—
Gross gains		$	—		$	40		$	—
Gross losses		$	—		$	—		$	—

There were no sales or calls of securities in the year ended December 31, 2017. The tax provision related to the net realized gain was $17,000 in 2016.

The amortized cost and fair value of debt securities at year-end December 31, 2017 and 2016 are shown by contractual maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date, primarily mutual funds and mortgage-backed securities are shown separately (dollars in thousands):

	Held to Maturity						Available for Sale
At December 31, 2017	Amortized Cost			Fair Value			Amortized Cost			Fair Value
Within one year		$	—		$	—		$	—		$	—
One to five years			25			25			—			—
Five to ten years			—			—			—			—
Beyond ten years			—			—			1,098			1,109
Total			25			25			1,098			1,109
Residential mortgage-backed securities		$	5,403		$	5,305		$	24,856		$	24,684
Residential collateralized mortgage obligations			—			—			2,809			2,706
Commercial collateralized mortgage obligations									1,581			1,550
CRA mutual fund			—			—			2,160			2,108
Total Securities		$	5,428		$	5,330		$	32,504		$	32,157

	Held to Maturity						Available for Sale
At December 31, 2016	Amortized Cost			Fair Value			Amortized Cost			Fair Value
Within one year		$	—		$	—		$	—		$	—
One to five years			25			25			—			—
Five to ten years			—			—			—			—
Beyond ten years			—			—			1,122			1,136
Total			25			25			1,122			1,136
Residential mortgage-backed securities		$	6,475		$	6,394		$	29,152		$	29,027
Residential collateralized mortgage obligations			—			—			5,233			5,103
CRA mutual fund			—			—			2,115			2,063
Total Securities		$	6,500		$	6,419		$	37,622		$	37,329

There were no securities pledged at December 31, 2017 and 2016 to secure borrowings.

At December 31, 2017 and 2016, all of the mortgage-backed securities and collateralized mortgage obligations held by the Bank were issued by U.S. government-sponsored entities and agencies, primarily Fannie Mae and Freddie Mac, institutions, which the government has affirmed its commitment to support.

Securities with unrealized losses for the years ended December 31, 2017 and 2016, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, and are as follows (dollars in thousands):

	Less than 12 Months						12 months or more						Total
At December 31, 2017	Estimated Fair Value			Unrealized Losses			Estimated Fair Value			Unrealized Losses			Estimated Fair Value			Unrealized Losses
Residential mortgage-backed securities		$	9,194		$	(85)		$	7,738		$	(157)		$	16,932		$	(242)
Residential collateralized mortgage obligations			—			—			2,706			(103)			2,706			(103)
Commercial collateralized mortgage obligations									1,550			(31)			1,550			(31)
CRA mutual fund			—			—			2,108			(52)			2,108			(52)
Total securities available-for-sale		$	9,194		$	(85)		$	14,102		$	(343)		$	23,296		$	(428)
Residential mortgage-backed securities		$	3,260		$	(33)		$	2,045		$	(65)		$	5,305		$	(98)
Total held-to-maturity		$	3,260		$	(33)		$	2,045		$	(65)		$	5,305		$	(98)

	Less than 12 Months						12 months or more						Total
At December 31, 2016	Estimated Fair Value			Unrealized Losses			Estimated Fair Value			Unrealized Losses			Estimated Fair Value			Unrealized Losses
Residential mortgage-backed securities		$	16,733		$	(290)		$	—		$	—		$	16,733		$	(290)
Residential collateralized mortgage obligations			2,887			(60)			2,216			(70)			5,103			(130)
CRA mutual fund			—			—			2,063			(52)			2,063			(52)
Total securities available-for-sale		$	19,620		$	(350)		$	4,279		$	(122)		$	23,899		$	(472)
Residential mortgage-backed securities		$	6,394		$	(81)		$	—		$	—		$	6,394		$	(81)
Total held-to-maturity		$	6,394		$	(81)		$	—		$	—		$	6,394		$	(81)

Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at December 31, 2017 and 2016.

At year-end 2017 and 2016, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.