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INVESTMENT SECURITIES
 12 Months Ended
Dec. 31, 2018
Investments [Abstract]  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]
6.  INVESTMENT SECURITIES
The cost basis and fair values of investment securities are summarized as follows:
Investment securities available for sale:
 
 
AT DECEMBER 31, 2018
 
  
 
COST 
BASIS
 
 
GROSS

UNREALIZED

GAINS
 
 
GROSS

UNREALIZED

LOSSES
 
 
FAIR

VALUE
 
  
 
(IN THOUSANDS)
 
U.S. Agency
 
$
7,685
 
 
$
4
 
 
$
(160
)
 
$
7,529
 
Municipal
 
 
13,301
 
 
 
114
 
 
 
(234
)
 
 
13,181
 
Corporate bonds
 
 
37,359
 
 
 
131
 
 
 
(996
)
 
 
36,494
 
U.S. Agency mortgage-backed securities
 
 
90,169
 
 
 
516
 
 
 
(1,158
)
 
 
89,527
 
Total
 
$
148,514
 
 
$
765
 
 
$
(2,548
)
 
$
146,731
 
Investment securities held to maturity:
 
 
AT DECEMBER 31, 2018
 
  
 
COST

BASIS
 
 
GROSS

UNREALIZED

GAINS
 
 
GROSS

UNREALIZED

LOSSES
 
 
FAIR

VALUE
 
  
 
(IN THOUSANDS)
 
U.S. Agency mortgage-backed securities
 
$
9,983
 
 
$
78
 
 
$
(132
)
 
$
9,929
 
Municipal
 
 
24,740
 
 
 
131
 
 
 
(404
)
 
 
24,467
 
Corporate bonds and other securities
 
 
6,037
 
 
 
13
 
 
 
(122
)
 
 
5,928
 
Total
 
$
40,760
 
 
$
222
 
 
$
(658
)
 
$
40,324
 
Investment securities available for sale:
 
 
AT DECEMBER 31, 2017
 
  
 
COST

BASIS
 
 
GROSS

UNREALIZED

GAINS
 
 
GROSS

UNREALIZED

LOSSES
 
 
FAIR

VALUE
 
  
 
(IN THOUSANDS)
 
U.S. Agency
 
$
6,612
 
 
$
—
 
 
$
(40
)
 
$
6,572
 
Municipal
 
 
7,198
 
 
 
27
 
 
 
(189
)
 
 
7,036
 
Corporate bonds
 
 
35,886
 
 
 
322
 
 
 
(424
)
 
 
35,784
 
U.S. Agency mortgage-backed securities
 
 
79,854
 
 
 
611
 
 
 
(719
)
 
 
79,746
 
Total
 
$
129,550
 
 
$
960
 
 
$
(1,372
)
 
$
129,138
 
Investment securities held to maturity:
 
 
AT DECEMBER 31, 2017
 
  
 
COST

BASIS
 
 
GROSS

UNREALIZED

GAINS
 
 
GROSS

UNREALIZED

LOSSES
 
 
FAIR

VALUE
 
  
 
(IN THOUSANDS)
 
U.S. Agency mortgage-backed securities
 
$
9,740
 
 
$
149
 
 
$
(45
)
 
$
9,844
 
Municipal
 
 
22,970
 
 
 
203
 
 
 
(238
)
 
 
22,935
 
Corporate bonds and other securities
 
 
6,042
 
 
 
38
 
 
 
(48
)
 
 
6,032
 
Total
 
$
38,752
 
 
$
390
 
 
$
(331
)
 
$
38,811
 
 
Maintaining investment quality is a primary objective of the Company’s investment policy which, subject to certain limited exceptions, prohibits the purchase of any investment security below a Moody’s Investors Service or Standard & Poor’s rating of A. At December 31, 2018, 57.5% of the portfolio was rated AAA as compared to 57.8% at December 31, 2017. Approximately 10.0% and 9.7% of the portfolio was rated below A or unrated on December 31, 2018 and 2017, respectively. The Company and its subsidiaries, collectively, did not hold securities of any single issuer, excluding U.S. Treasury and U.S. Agencies, that exceeded 10% of shareholders’ equity at December 31, 2018.
 
The book value of securities, both available for sale and held to maturity, pledged to secure public and trust deposits was $115,536,000 at December 31, 2018 and $117,181,000 at December 31, 2017.
The Company realized $15,000 of gross investment security gains and $454,000 of gross investment security losses in 2018, $115,000 of gross investment security gains in 2017, and $183,000 of gross investment gains and $6,000 of gross investment security losses in 2016. On a net basis, the realized loss for 2018 was $347,000 after factoring in a tax benefit of $92,000, the realized gain for 2017 was $76,000 after factoring in tax expense of $39,000, and the realized gain for 2016 was $117,000 after factoring in tax expense of $60,000. Proceeds from sales of investment securities available for sale were $9.5 million for 2018, $8.1 million for 2017, and $9.0 million during 2016.
The following table sets forth the contractual maturity distribution of the investment securities, cost basis and fair market values, and the weighted average yield for each type and range of maturity as of December 31, 2018. Yields are not presented on a tax-equivalent basis, but are based upon the cost basis and are weighted for the scheduled maturity. The Company’s consolidated investment securities portfolio had an effective duration of approximately 3.67 years. The weighted average expected maturity for available for sale securities at December 31, 2018 for U.S. Agency, U.S. Agency Mortgage-Backed, Corporate Bond, and Municipal securities was 8.91, 5.65, 
4.30
, and 5.73 years, respectively. The weighted average expected maturity for held to maturity securities at December 31, 2018 for U.S. Agency Mortgage-Backed, Corporate Bond/other securities, and Municipal securities 6.09, 3.73, and 6.65 years, respectively.
Investment securities available for sale:
AT DECEMBER 31, 2018
 
  
 
U. S. AGENCY
 
 
U.S. AGENCY

MORTGAGE-BACKED

SECURITIES
 
 
CORPORATE

BONDS
 
 
MUNICIPAL
 
TOTAL INVESTMENT

SECURITIES

AVAILABLE

FOR SALE
 
(IN THOUSANDS, EXCEPT YIELDS)
 
COST BASIS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Within 1 year
 
$
—
 
 
 
—
%
 
$
26
 
 
 
3.29
%
 
$
1,000
 
 
 
2.69
%
 
$
—
 
 
 
—
%
 
$
1,026
 
 
 
2.71
%
After 1 year but within 5 years
 
 
2,400
 
 
 
2.91
 
 
 
1,334
 
 
 
1.86
 
 
 
15,656
 
 
 
3.80
 
 
 
1,987
 
 
 
2.86
 
 
 
21,377
 
 
 
3.49
 
After 5 years but within 10 years
 
 
2,443
 
 
 
2.94
 
 
 
10,977
 
 
 
3.00
 
 
 
20,703
 
 
 
4.22
 
 
 
11,314
 
 
 
3.27
 
 
 
45,437
 
 
 
3.61
 
After 10 years but within 15 years
 
 
—
 
 
 
—
 
 
 
27,295
 
 
 
2.82
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
27,295
 
 
 
2.82
 
Over 15 years
 
 
2,842
 
 
 
2.69
 
 
 
50,537
 
 
 
2.97
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
53,379
 
 
 
2.96
 
Total
 
$
7,685
 
 
 
2.84
 
 
$
90,169
 
 
 
2.91
 
 
$
37,359
 
 
 
4.00
 
 
$
13,301
 
 
 
3.21
 
 
$
148,514
 
 
 
3.21
 
FAIR VALUE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Within 1 year
 
$
—
 
 
 
 
 
 
$
26
 
 
 
 
 
 
$
995
 
 
 
 
 
 
$
—
 
 
 
 
 
 
$
1,021
 
 
 
 
 
After 1 year but within 5 years
 
 
2,386
 
 
 
 
 
 
 
1,320
 
 
 
 
 
 
 
15,380
 
 
 
 
 
 
 
1,981
 
 
 
 
 
 
 
21,067
 
 
 
 
 
After 5 years but within 10 years
 
 
2,401
 
 
 
 
 
 
 
10,986
 
 
 
 
 
 
 
20,119
 
 
 
 
 
 
 
11,200
 
 
 
 
 
 
 
44,706
 
 
 
 
 
After 10 years but within 15 years
 
 
—
 
 
 
 
 
 
 
27,012
 
 
 
 
 
 
 
—
 
 
 
 
 
 
 
—
 
 
 
 
 
 
 
27,012
 
 
 
 
 
Over 15 years
 
 
2,742
 
 
 
 
 
 
 
50,183
 
 
 
 
 
 
 
—
 
 
 
 
 
 
 
—
 
 
 
 
 
 
 
52,925
 
 
 
 
 
Total
 
$
7,529
 
 
 
 
 
 
$
89,527
 
 
 
 
 
 
$
36,494
 
 
 
 
 
 
$
13,181
 
 
 
 
 
 
$
146,731
 
 
 
 
 
 
   Investment securities held to maturity:
 
 
 
AT DECEMBER 31, 2018
 
  
 
U.S. AGENCY

MORTGAGE-BACKED

SECURITIES
 
 
CORPORATE

BONDS AND OTHER
 
 
MUNICIPAL
 
TOTAL INVESTMENT

SECURITIES HELD TO

MATURITY
 
  
 
(IN THOUSANDS, EXCEPT YIELDS)
 
COST BASIS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Within 1 year
 
$
—
 
 
 
—
%
 
$
1,000
 
 
 
1.65
%
 
$
—
 
 
 
—
% 
 
$
1,000
 
 
 
1.65
%
After 1 year but within 5 years
 
 
902
 
 
 
2.09
 
 
 
2,000
 
 
 
3.40
 
 
 
1,176
 
 
 
2.96
 
 
 
4,078
 
 
 
2.98
 
After 5 years but within 10 years
 
 
1,127
 
 
 
2.82
 
 
 
3,037
 
 
 
4.40
 
 
 
15,477
 
 
 
3.38
 
 
 
19,641
 
 
 
3.51
 
After 10 years but within 15 years
 
 
2,662
 
 
 
3.68
 
 
 
—
 
 
 
—
 
 
 
7,772
 
 
 
3.90
 
 
 
10,434
 
 
 
3.84
 
Over 15 years
 
 
5,292
 
 
 
3.17
 
 
 
—
 
 
 
—
 
 
 
315
 
 
 
3.50
 
 
 
5,607
 
 
 
3.19
 
Total
 
$
9,983
 
 
 
3.17
 
 
$
6,037
 
 
 
3.61
 
 
$
24,740
 
 
 
3.52
 
 
$
40,760
 
 
 
3.45
 
FAIR VALUE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Within 1 year
 
$
—
 
 
 
 
 
 
$
944
 
 
 
 
 
 
$
—
 
 
 
 
 
 
$
944
 
 
 
 
 
After 1 year but within 5 years
 
 
882
 
 
 
 
 
 
 
1,982
 
 
 
 
 
 
 
1,171
 
 
 
 
 
 
 
4,035
 
 
 
 
 
After 5 years but within 10 years
 
 
1,123
 
 
 
 
 
 
 
3,002
 
 
 
 
 
 
 
15,296
 
 
 
 
 
 
 
19,421
 
 
 
 
 
After 10 years but within 15 years
 
 
2,702
 
 
 
 
 
 
 
—
 
 
 
 
 
 
 
7,706
 
 
 
 
 
 
 
10,408
 
 
 
 
 
Over 15 years
 
 
5,222
 
 
 
 
 
 
 
—
 
 
 
 
 
 
 
294
 
 
 
 
 
 
 
5,516
 
 
 
 
 
Total
 
$
9,929
 
 
 
 
 
 
$
5,928
 
 
 
 
 
 
$
24,467
 
 
 
 
 
 
$
40,324
 
 
 
 
 
 
The following table presents information concerning investments with unrealized losses as of December 31, 2018 (in thousands):
 
Total investment securities:
 
LESS THAN 12 MONTHS
 
 
12 MONTHS OR LONGER
 
 
TOTAL
 
 
FAIR

VALUE
 
 
UNREALIZED

LOSSES
 
 
FAIR

VALUE
 
 
UNREALIZED

LOSSES
 
 
FAIR

VALUE
 
 
UNREALIZED

LOSSES
 
U.S. Agency
 
$
244
 
 
$
(6
)
 
$
5,631
 
 
$
(154
)
 
$
5,875
 
 
$
(160
)
U.S. Agency mortgage-backed securities
 
 
17,718
 
 
 
(177
)
 
 
39,983
 
 
 
(1,113
)
 
 
57,701
 
 
 
(1,290
)
Municipal
 
 
6,601
 
 
 
(71
)
 
 
15,880
 
 
 
(567
)
 
 
22,481
 
 
 
(638
)
Corporate bonds and other securities
 
 
15,221
 
 
 
(440
)
 
 
17,038
 
 
 
(678
)
 
 
32,259
 
 
 
(1,118
)
Total
 
$
39,784
 
 
$
(694
)
 
$
78,532
 
 
$
(2,512
)
 
$
118,316
 
 
$
(3,206
)
 
The following table presents information concerning investments with unrealized losses as of December 31, 2017 (in thousands):
 
Total investment securities:
 
LESS THAN 12 MONTHS
 
 
12 MONTHS OR LONGER
 
 
TOTAL
 
 
FAIR

VALUE
 
 
UNREALIZED

LOSSES
 
 
FAIR

VALUE
 
 
UNREALIZED

LOSSES
 
 
FAIR

VALUE
 
 
UNREALIZED

LOSSES
 
U.S. Agency
 
$
5,923
 
 
$
(39
)
 
$
399
 
 
$
(1
)
 
$
6,322
 
 
$
(40
)
U.S. Agency mortgage-backed securities
 
 
36,783
 
 
 
(253
)
 
 
22,625
 
 
 
(511
)
 
 
59,408
 
 
 
(764
)
Municipal
 
 
8,657
 
 
 
(109
)
 
 
7,727
 
 
 
(318
)
 
 
16,384
 
 
 
(427
)
Corporate bonds and other securities
 
 
7,123
 
 
 
(71
)
 
 
13,655
 
 
 
(401
)
 
 
20,778
 
 
 
(472
)
Total
 
$
58,486
 
 
$
(472
)
 
$
44,406
 
 
$
(1,231
)
 
$
102,892
 
 
$
(1,703
)
The unrealized losses are primarily a result of increases in market yields from the time of purchase. In general, as market yields rise, the value of securities will decrease; as market yields fall, the fair value of securities will increase. There are 176 positions that are considered temporarily impaired at December 31, 2018. Management generally views changes in fair value caused by changes in interest rates as temporary; therefore, these securities have not been classified as other-than-temporarily impaired. Management has also concluded that based on current information we expect to continue to receive scheduled interest payments as well as the entire principal balance. Furthermore, management does not intend to sell these securities and does not believe it will be required to sell these securities before they recover in value or mature.