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Securities

3 Months Ended

Mar. 31, 2021

Note 2.Securities

Amortized cost and fair values of securities held-to-maturity and securities available-for-sale as of March 31, 2021 and December 31, 2020, are as follows:


		March 31, 2021
					Gross			Gross
		Amortized			Unrealized			Unrealized			Fair
(In thousands)		Cost			Gains			(Losses)			Value
Held-to-maturity
Securities of state and local municipalities tax exempt		$	264		$	8		$	—		$	272
Total Held-to-maturity Securities		$	264		$	8		$	—		$	272
Available-for-sale
Securities of state and local municipalities tax exempt		$	2,396		$	70		$	—		$	2,466
Securities of state and local municipalities taxable			747			7			—			754
Corporate bonds			13,972			155			(65)			14,062
SBA pass-through securities			121			1			—			122
Mortgage-backed securities			95,325			2,065			(1,136)			96,254
Collateralized mortgage obligations			21,055			467			(76)			21,446
Total Available-for-sale Securities		$	133,616		$	2,765		$	(1,277)		$	135,104


		December 31, 2020
					Gross			Gross
		Amortized			Unrealized			Unrealized			Fair
(In thousands)		Cost			Gains			(Losses)			Value
Held-to-maturity
Securities of state and local municipalities tax exempt		$	264		$	10		$	—		$	274
Total Held-to-maturity Securities		$	264		$	—		$	—		$	274
Available-for-sale
Securities of state and local municipalities tax exempt		$	3,398		$	95		$	—		$	3,493
Securities of state and local municipalities taxable			804			14			—			818
Corporate bonds			12,974			80			(237)			12,817
SBA pass-through securities			138			3			—			141
Mortgage-backed securities			81,296			2,479			(61)			83,714
Collateralized mortgage obligations			24,476			718			(26)			25,168
Total Available-for-sale Securities		$	123,086		$	3,389		$	(324)		$	126,151

The Company had $8.2 million and $9.2 million in securities pledged with the Federal Reserve Bank of Richmond (FRB) to collateralize certain municipal deposits at March 31, 2021 and December 31, 2020, respectively.

The following table shows fair value and gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at March 31, 2021 and December 31, 2020, respectively. The reference point for determining when securities are in an unrealized loss position is month-end. Therefore, it is possible that a security’s market value exceeded its amortized cost on other days during the past twelve-month period. Available-for-sale and held-to-maturity securities that have been in a continuous unrealized loss position are as follows:


		Less Than 12 Months						12 Months or Longer						Total
(In thousands)		Fair			Unrealized			Fair			Unrealized			Fair			Unrealized
At March 31, 2021		Value			Losses			Value			Losses			Value			Losses
Corporate bonds		$	1,976		$	(24)		$	2,184		$	(41)		$	4,160		$	(65)
Mortgage-backed securities			43,337			(1,136)			—			—			43,337			(1,136)
Collateralized mortgage obligations			3,930			(76)			—			—			3,930			(76)
Total		$	49,243		$	(1,236)		$	2,184		$	(41)		$	51,427		$	(1,277)


		Less Than 12 Months						12 Months or Longer						Total
		Fair			Unrealized			Fair			Unrealized			Fair			Unrealized
At December 31, 2020		Value			Losses			Value			Losses			Value			Losses
Corporate bonds		$	4,240		$	(10)		$	2,000		$	(227)		$	6,240		$	(237)
Mortgage-backed securities			17,504			(61)			—			—			17,504			(61)
Collateralized mortgage obligations			2,098			(26)			—			—			2,098			(26)
Total		$	23,842		$	(97)		$	2,000		$	(227)		$	25,842		$	(324)

Corporate bonds: The unrealized losses on the investments in corporate bonds were caused by interest rate increases. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. One of these investments carries an S&P investment grade rating of BBB+, while one has a rating of BB. The remaining nine investments do not carry a rating.

Mortgage-backed securities: The unrealized losses on the Company’s investment in eleven mortgage-backed securities were caused by interest rate increases. The contractual cash flows of those investments are guaranteed by an agency of the U.S. Government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost basis of the Company’s investments. Because the decline in market value is attributable to changes in interest rates and not credit quality, the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2021.

Collateralized mortgage obligations (CMOs): The unrealized loss associated with three CMOs was caused by interest rate increases. The contractual cash flows of these investments are guaranteed by an agency of the U.S. Government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost basis of the Company’s investments. Because the decline in market value is attributable to changes in interest rates and not credit quality, the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2021.

The amortized cost and fair value of securities as of March 31, 2021, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without penalties.


		March 31, 2021
		Held-to-maturity						Available-for-sale
		Amortized			Fair			Amortized			Fair
(In thousands)		Cost			Value			Cost			Value
After 1 year through 5 years		$	—		$	—		$	4,020		$	4,044
After 5 years through 10 years			264			272			26,993			27,761
After 10 years			—			—			102,603			103,299
Total		$	264		$	272		$	133,616		$	135,104

For the three months ended March 31, 2021 and 2020, proceeds from principal repayments of securities were $9.5 million and $6.2 million, respectively. During the three months ended March 31, 2021, proceeds from calls and maturities of securities were $ 1.0 million. There were no gross realized gains or losses during the three months ended March 31, 2021. During the three months ended March 31, 2020, proceeds from calls and maturities of securities were $1.0 million and gross realized gains were approximately $97,000. There were no realized losses on the sale of securities for the three months ended March 31, 2020.