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Investment securities

3 Months Ended

Mar. 31, 2022

Investment securities

Investment securities

4. Investment securities:

The amortized cost and fair value of investment securities aggregated by investment category at March 31, 2022 and December 31, 2021 are summarized as follows:


					Gross			Gross
		Amortized			Unrealized			Unrealized			Fair
March 31, 2022		Cost			Gains			Losses			Value
Available-for-sale:
U.S. Treasury securities		$	250,268		$	28		$	12,624		$	237,672
U.S. government-sponsored enterprises			28,174			31			184			28,021
State and municipals:
Taxable			69,027			106			6,021			63,112
Tax-exempt			99,805			505			6,843			93,467
Residential mortgage-backed securities:
U.S. government agencies			1,563			9			1			1,571
U.S. government-sponsored enterprises			105,652			50			9,168			96,534
Commercial mortgage-backed securities:
U.S. government-sponsored enterprises			12,396			14			129			12,281
Corporate debt securities			3,000						176			2,824
Total		$	569,885		$	743		$	35,146		$	535,482
Held-to-maturity:
Tax-exempt state and municipals		$	11,266		$	30		$	653		$	10,643
Residential mortgage-backed securities:
U.S. government agencies			18,511						1,315			17,196
U.S. government-sponsored enterprises			66,052			1			4,612			61,441
Total		$	95,829		$	31		$	6,580		$	89,280


					Gross			Gross
		Amortized			Unrealized			Unrealized			Fair
December 31, 2021		Cost			Gains			Losses			Value
Available-for-sale:
U.S. Treasury securities		$	193,849		$	107		$	2,382		$	191,574
U.S. government-sponsored enterprises			33,435			343						33,778
State and municipals:
Taxable			69,066			994			1,082			68,978
Tax-exempt			96,412			2,452			614			98,250
Residential mortgage-backed securities:
U.S. government agencies			1,790			53						1,843
U.S. government-sponsored enterprises			109,018			939			2,925			107,032
Commercial mortgage-backed securities:
U.S. government-sponsored enterprises			12,542			406						12,948
Corporate debt securities			3,000						82			2,918
Total		$	519,112		$	5,294		$	7,085		$	517,321
Held-to-maturity:
Tax-exempt state and municipals		$	11,476		$	126		$	56		$	11,546
Residential mortgage-backed securities:
U.S. government agencies			18,802						392			18,410
U.S. government-sponsored enterprises			40,935			3			448			40,490
Total		$	71,213		$	129		$	896		$	70,446

Restricted Investment In Stock

Restricted investment in stock includes Federal Home Loan Bank (“FHLB”) stock with a carrying cost of $3,413 and $4,003 at March 31, 2022 and December 31, 2021, respectively, and Atlantic Community Bankers Bank (“ACBB”) stock with a carrying cost of $42 at March 31, 2022 and December 31, 2021, respectively, which are included in other assets in the consolidated balance sheets. FHLB and ACBB stock was issued as a requirement to facilitate participation in borrowing and other banking services. The investment in FHLB stock may fluctuate, as it is based on the member bank’s use of FHLB’s services.

These restricted investments are carried at cost and evaluated for other-than-temporary impairment (“OTTI”) quarterly. As of March 31, 2022, there was no OTTI associated with these investments.

The maturity distribution of the fair value, which is the net carrying amount, of the debt securities classified as available-for-sale at March 31, 2022, is summarized as follows:


		Fair
March 31, 2022		Value
Within one year		$	19,709
After one but within five years			205,581
After five but within ten years			95,545
After ten years			101,618
			422,453
Mortgage-backed and other amortizing securities			113,029
Total		$	535,482

The maturity distribution of the amortized cost and fair value, of debt securities classified as held-to-maturity at March 31, 2022, is summarized as follows:


		Amortized			Fair
March 31, 2022		Cost			Value
After five but within ten years		$	8,098		$	7,657
After ten years			3,168			2,986
			11,266			10,643
Mortgage-backed securities			84,563			78,637
Total		$	95,829		$	89,280

Securities with a carrying value of $186,388 and $203,580 at March 31, 2022 and December 31, 2021, respectively, were pledged to secure public deposits and certain other deposits as required or permitted by law.

Securities and short-term investment activities are conducted with a diverse group of government entities, corporations and state and local municipalities. The counterparty’s creditworthiness and type of collateral is evaluated on a case-by-case basis. At March 31, 2022 and December 31, 2021, there were no significant concentrations of credit risk from any one issuer, with the exception of U.S. government agencies and sponsored enterprises, that exceeded 10.0 percent of stockholders’ equity.

The fair value and gross unrealized losses of investment securities with unrealized losses for which an OTTI has not been recognized at March 31, 2022 and December 31, 2021, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, are summarized as follows:


		Less Than 12 Months						12 Months or More						Total
		Fair			Unrealized			Fair			Unrealized			Fair			Unrealized
March 31, 2022		Value			Losses			Value			Losses			Value			Losses
U.S. Treasury securities		$	230,144		$	12,624								$	230,144		$	12,624
U.S. government-sponsored enterprises			13,918			184									13,918			184
State and municipals:
Taxable			47,356			4,074		$	11,711		$	1,947			59,067			6,021
Tax-exempt			59,847			5,420			13,125			2,076			72,972			7,496
Residential mortgage-backed securities:
U.S. government agencies			17,193			1,316									17,193			1,316
U.S. government-sponsored enterprises			91,894			6,551			58,780			7,229			150,674			13,780
Commercial mortgage-backed securities:
U.S. government-sponsored enterprises			10,042			129									10,042			129
Corporate debt securities			2,356			144			468			32			2,824			176
Total		$	472,750		$	30,442		$	84,084		$	11,284		$	556,834		$	41,726


		Less Than 12 Months						12 Months or More						Total
		Fair			Unrealized			Fair			Unrealized			Fair			Unrealized
December 31, 2021		Value			Losses			Value			Losses			Value			Losses
U.S. Treasury securities		$	179,974		$	2,382								$	179,974		$	2,382
State and municipals:
Taxable			26,827			718		$	8,008		$	364			34,835			1,082
Tax-exempt			38,693			357			10,319			313			49,012			670
Residential mortgage-backed securities:
U.S. government agencies			18,398			392									18,398			392
U.S. government-sponsored enterprises			77,875			1,454			48,276			1,919			126,151			3,373
Corporate debt securities			2,449			51			470			31			2,919			82
Total		$	344,216		$	5,354		$	67,073		$	2,627		$	411,289		$	7,981

The Company had 50 U.S. Treasury securities, 3 U.S. government-sponsored enterprises securities, 45 mortgage-backed securities, 97 tax-exempt municipals, 62 taxable municipals and 5 corporate bonds that were in unrealized loss positions at March 31, 2022. Of these securities, one corporate bond, 23 tax-exempt municipals, 10 mortgage-backed securities and 14 taxable municipals were in a continuous unrealized loss position for twelve months or more. Management does not consider the unrealized losses on the debt securities, as a result of significantly higher market interest rates, to be OTTI based on historical evidence that indicates the cost of these securities is recoverable within a reasonable period of time in relation to normal cyclical changes in the market rates of interest. Moreover, because there has been no known material change in the credit quality of the issuers or other events or circumstances that may cause a significant adverse impact on the fair value of these securities, and management does not intend to sell these securities and it is unlikely that the Company will be required to sell these securities before recovery of their amortized cost basis, which may be maturity, the Company does not consider the unrealized losses to be OTTI at March 31, 2022. There was no OTTI recognized for the three months ended March 31, 2022 and 2021.