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Securities
 12 Months Ended
Dec. 31, 2014
Securities [Abstract]  
Securities

2.SECURITIES

 

The amortized cost of securities and their approximate fair value at December 31 were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

Amortized

 

Unrealized

 

Fair

 

 

Cost

 

Gains

 

Losses

 

Value

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agencies

 

$
26,687 

 

$
305 

 

$
(275)

 

$
26,717 

States and political subdivisions

 

 
30,182 

 

 
927 

 

 
(49)

 

 
31,060 

Total debt securities

 

$
56,869 

 

$
1,232 

 

$
(324)

 

$
57,777 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

FNMA

 

$
14,653 

 

$
516 

 

$
(15)

 

$
15,154 

FHLMC

 

 
5,901 

 

 
121 

 

 
(64)

 

 
5,958 

GNMA

 

 
6,014 

 

 
143 

 

 
(27)

 

 
6,130 

CMO

 

 
10,611 

 

 
42 

 

 
(139)

 

 
10,514 

Total mortgage-backed securities

 

$
37,179 

 

$
822 

 

$
(245)

 

$
37,756 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total securities designated as available for sale

 

$
94,048 

 

$
2,054 

 

$
(569)

 

$
95,533 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

 

 

 

 

 

 

 

 

 

 

 

States and political subdivisions

 

$
1,599 

 

$
7 

 

$
(32)

 

$
1,574 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total securities designated as held to maturity

 

$
1,599 

 

$
7 

 

$
(32)

 

$
1,574 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2013

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized

 

Unrealized

 

Fair

 

 

Cost

 

Gains

 

Losses

 

Value

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agencies

 

$
32,176 

 

$
439 

 

$
(623)

 

$
31,992 

States and political subdivisions

 

 
31,266 

 

 
802 

 

 
(188)

 

 
31,880 

Total debt securities

 

$
63,442 

 

$
1,241 

 

$
(811)

 

$
63,872 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

FNMA

 

$
13,204 

 

$
354 

 

$
(57)

 

$
13,501 

FHLMC

 

 
7,156 

 

 
109 

 

 
(147)

 

 
7,118 

GNMA

 

 
7,570 

 

 
99 

 

 
(96)

 

 
7,573 

CMO

 

 
7,981 

 

 
9 

 

 
(389)

 

 
7,601 

Total mortgage-backed securities

 

$
35,911 

 

$
571 

 

$
(689)

 

$
35,793 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total securities designated as available for sale

 

$
99,353 

 

$
1,812 

 

$
(1,500)

 

$
99,665 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

 

 

 

 

 

 

 

 

 

 

 

States and political subdivisions

 

$
2,384 

 

$
6 

 

$
(71)

 

$
2,319 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total securities designated as held to maturity

 

$
2,384 

 

$
6 

 

$
(71)

 

$
2,319 

 

 

Available for sale securities with a total fair value of $68.8 million and $71.1 million were pledged as collateral to secure public deposits and for other purposes required or permitted by law at December 31, 2014 and 2013, respectively.

 

The scheduled maturity of debt and mortgage-backed securities at December 31st of the respective years is summarized below.  All maturity amounts are contractual maturities.  Actual maturities may differ from contractual maturities because certain issuers have the right to call or prepay obligations with or without call premiums.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

2013

 

 

Amortized

 

Estimated

 

Amortized

 

Estimated

 

 

cost

 

fair value

 

cost

 

fair value

 

 

 

(in thousands)

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Due in one year or less

 

$
8,172 

 

$
8,256 

 

$
447 

 

$
454 

Due after one year through five years

 

 
22,118 

 

 
22,597 

 

 
23,732 

 

 
24,419 

Due after five years through ten years

 

 
20,517 

 

 
20,589 

 

 
31,450 

 

 
30,946 

Due after ten years

 

 
6,062 

 

 
6,335 

 

 
7,813 

 

 
8,053 

 

 

 
56,869 

 

 
57,777 

 

 
63,442 

 

 
63,872 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

available for sale

 

 
37,179 

 

 
37,756 

 

 
35,911 

 

 
35,793 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total available for sale securities

 

$
94,048 

 

$
95,533 

 

$
99,353 

 

$
99,665 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Due in one year or less

 

$
478 

 

$
477 

 

$
1,023 

 

$
1,020 

Due after one year through five years

 

 
77 

 

 
78 

 

 
178 

 

 
179 

Due after five years through ten years

 

 
932 

 

 
914 

 

 
1,064 

 

 
1,015 

Due after ten years

 

 
112 

 

 
105 

 

 
119 

 

 
105 

 

 

 
1,599 

 

 
1,574 

 

 
2,384 

 

 
2,319 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total held to maturity securities

 

$
1,599 

 

$
1,574 

 

$
2,384 

 

$
2,319 

 

Contractual maturities of the Company’s mortgage-backed securities generally exceed ten years, however, the effective lives may be significantly shorter due to prepayments of the underlying loans and due to the nature of these securities.   

 

There were no realized gains and losses from gross sales of securities in 2014, 2013 or 2012. 

 

 

Information regarding unrealized losses within the Company’s available for sale securities at December 31st of the respective years is summarized below.  The securities are primarily U.S. government-guaranteed agency securities or municipal securities.  All unrealized losses are considered temporary and related to market interest rate fluctuations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less than 12 months

 

 

12 months or longer

 

 

Total

 

 

 

Fair

 

 

Unrealized

 

 

Fair

 

 

Unrealized

 

 

Fair

 

 

Unrealized

 

 

 

Value

 

 

Losses

 

 

Value

 

 

Losses

 

 

Value

 

 

Losses

 

 

 

(in thousands)

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agencies

 

$
3,906 

 

$
(26)

 

$
7,751 

 

$
(249)

 

$
11,657 

 

$
(275)

States and political subdivisions

 

 
4,752 

 

 
(9)

 

 
1,902 

 

 
(40)

 

 
6,654 

 

 
(49)

Total debt securities

 

$
8,658 

 

$
(35)

 

$
9,653 

 

$
(289)

 

$
18,311 

 

$
(324)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FNMA

 

$
1,498 

 

$
(10)

 

$
1,731 

 

$
(5)

 

$
3,229 

 

$
(15)

FHLMC

 

 

-    

 

 

-    

 

 
1,482 

 

 
(64)

 

 
1,482 

 

 
(64)

GNMA

 

 

-    

 

 

-    

 

 
2,079 

 

 
(27)

 

 
2,079 

 

 
(27)

CMO'S

 

 
1,722 

 

 
(11)

 

 
4,290 

 

 
(128)

 

 
6,012 

 

 
(139)

Total mortgage-backed securities

 

$
3,220 

 

$
(21)

 

$
9,582 

 

$
(224)

 

$
12,802 

 

$
(245)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held To Maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

States and political subdivisions

 

$
371 

 

$
(1)

 

$
556 

 

$
(31)

 

$
927 

 

$
(32)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total temporarily impaired

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

securities

 

$
12,249 

 

$
(57)

 

$
19,791 

 

$
(544)

 

$
32,040 

 

$
(601)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less than 12 months

 

 

12 months or longer

 

 

Total

 

 

 

Fair

 

 

Unrealized

 

 

Fair

 

 

Unrealized

 

 

Fair

 

 

Unrealized

 

 

 

Value

 

 

Losses

 

 

Value

 

 

Losses

 

 

Value

 

 

Losses

 

 

 

(in thousands)

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agencies

 

$
10,553 

 

$
(486)

 

$
1,863 

 

$
(137)

 

$
12,416 

 

$
(623)

States and political subdivisions

 

 
7,953 

 

 
(150)

 

 
590 

 

 
(38)

 

 
8,543 

 

 
(188)

Total debt securities

 

$
18,506 

 

$
(636)

 

$
2,453 

 

$
(175)

 

$
20,959 

 

$
(811)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FNMA

 

$
4,819 

 

$
(57)

 

$
21 

 

$

-    

 

$
4,840 

 

$
(57)

FHLMC

 

 
2,677 

 

 
(46)

 

 
1,700 

 

 
(101)

 

 
4,377 

 

 
(147)

GNMA

 

 
2,751 

 

 
(96)

 

 

-    

 

 

-    

 

 
2,751 

 

 
(96)

CMO'S

 

 
6,466 

 

 
(389)

 

 

-    

 

 

-    

 

 
6,466 

 

 
(389)

Total mortgage-backed securities

 

$
16,713 

 

$
(588)

 

$
1,721 

 

$
(101)

 

$
18,434 

 

$
(689)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held To Maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

States and political subdivisions

 

$
1,210 

 

$
(24)

 

$
504 

 

$
(47)

 

$
1,714 

 

$
(71)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total temporarily impaired

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

securities

 

$
36,429 

 

$
(1,248)

 

$
4,678 

 

$
(323)

 

$
41,107 

 

$
(1,571)

 

Management has assessed the securities available for sale in an unrealized loss position at December 31, 2014 and 2013 and determined the decline in fair value below amortized cost to be temporary.  In making this determination, management considered the period of time the securities were in a loss position, the percentage decline in comparison to the securities’ amortized cost, and the financial condition of the issuer (primarily government or government-sponsored enterprises).  In addition, management does not intend to sell these securities and it is not more likely than not that we will be required to sell these securities before recovery of their amortized cost.  Management believes the decline in fair value is primarily related to market interest rate fluctuations and not to the credit deterioration of the individual issuers.  The Company holds no securities backed by sub-prime or Alt-A residential mortgages or commercial mortgages and also does not hold any trust-preferred securities.

 

The Company did not record any other-than-temporary impairment charges in 2014 or 2013,  and gross unrealized losses amounted to only $0.6 million at December 31, 2014.  The credit worthiness of the Company’s portfolio is largely reliant on the ability of U.S. government agencies such as the Federal Home Loan Bank (“FHLB”), Federal National Mortgage Association (“FNMA”), and the Federal Home Loan Mortgage Corporation (“FHLMC”), and municipalities throughout New York State to meet their obligations.  In addition, dysfunctional markets could materially alter the liquidity, interest rate, and pricing risk of the portfolio.  The stable past performance is not a guarantee for similar performance going forward.

 

The Company uses the Federal Home Loan Bank of New York (“FHLBNY”) as its primary source of overnight funds and also has several long-term advances with FHLBNY.  At December 31, 2014, the Company had a total of $13.7 million in borrowed funds with FHLBNY.  The Company has sufficient collateral in the form of residential real estate loans at FHLBNY.  As a member of the Federal Home Loan Bank System, the Bank is required to hold stock in FHLBNY.  The Bank held FHLBNY stock with a carrying value of $1.4 million as of December 31, 2014 and December 31, 2013, respectively.