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Securities

9 Months Ended

Sep. 30, 2022

NOTE 2: Securities

The Corporation’s debt securities, all of which are classified as available for sale, are summarized as follows:

September 30, 2022

Gross

Gross

Amortized

Unrealized

Unrealized

(Dollars in thousands)

Cost

Gains

Losses

Fair Value

U.S. Treasury securities

$

60,727

$

—

$

(2,137)

$

58,590

U.S. government agencies and corporations

143,095

—

(12,885)

130,210

Mortgage-backed securities

205,077

—

(23,852)

181,225

Obligations of states and political subdivisions

115,689

16

(8,938)

106,767

Corporate and other debt securities

25,325

—

(2,553)

22,772

$

549,913

$

16

$

(50,365)

$

499,564


		December 31, 2021
					Gross			Gross
		Amortized			Unrealized			Unrealized
(Dollars in thousands)		Cost			Gains			Losses			Fair Value
U.S. government agencies and corporations		$	69,583		$	41		$	(1,339)		$	68,285
Mortgage-backed securities			189,985			1,565			(1,201)			190,349
Obligations of states and political subdivisions			91,304			1,642			(280)			92,666
Corporate and other debt securities			21,648			246			(121)			21,773
		$	372,520		$	3,494		$	(2,941)		$	373,073

The amortized cost and estimated fair value of securities at September 30, 2022, by the earlier of contractual maturity or expected maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without call or prepayment penalties.


		September 30, 2022
		Amortized
(Dollars in thousands)		Cost			Fair Value
Due in one year or less		$	102,015		$	95,529
Due after one year through five years			318,655			293,057
Due after five years through ten years			123,430			105,859
Due after ten years			5,813			5,119
		$	549,913		$	499,564

The following table presents the gross realized gains and losses on and the proceeds from the sales, maturities and calls of securities. During the three and nine months ended September 30, 2022 and during the three months ended September 30, 2021 there were no sales of securities. During the nine months ended September 30, 2021, $2.30 million of proceeds were related to sales of securities.


		Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in thousands)		2022			2021			2022			2021
Realized gains from sales, maturities and calls of securities:
Gross realized gains		$	—		$	3		$	—		$	41
Gross realized losses			—			—			—			—
Net realized gains		$	—		$	3		$	—		$	41
Proceeds from sales, maturities, calls and paydowns of securities		$	12,700		$	29,798		$	43,681		$	85,293

The Corporation pledges securities primarily to secure public deposits and repurchase agreements. Securities with an aggregate amortized cost of $238.62 million and an aggregate fair value of $212.03 million were pledged at September 30, 2022. Securities with an aggregate amortized cost of $185.25 million and an aggregate fair value of $186.22 million were pledged at December 31, 2021.

Securities in an unrealized loss position at September 30, 2022, by duration of the period of the unrealized loss, are shown below.

Less Than 12 Months

12 Months or More

Total

Fair

Unrealized

Fair

Unrealized

Fair

Unrealized

(Dollars in thousands)

Value

Loss

Value

Loss

Value

Loss

U.S. Treasury securities

$

58,590

$

2,137

$

—

$

—

$

58,590

$

2,137

U.S. government agencies and corporations

85,022

3,345

45,188

9,540

130,210

12,885

Mortgage-backed securities

91,082

9,283

90,052

14,569

181,134

23,852

Obligations of states and political subdivisions

79,337

6,456

14,189

2,482

93,526

8,938

Corporate and other debt securities

16,789

1,979

4,967

574

21,756

2,553

Total temporarily impaired securities

$

330,820

$

23,200

$

154,396

$

27,165

$

485,216

$

50,365

There were 567 debt securities totaling $485.22 million of aggregate fair value considered temporarily impaired at September 30, 2022. The primary cause of the temporary impairments in the Corporation’s investments in debt securities was increases in market interest rates. The Corporation concluded that no other-than-temporary impairment existed in its securities portfolio at September 30, 2022, and no other-than-temporary impairment loss has been recognized in net income, based primarily on the fact that changes in fair value were caused primarily by fluctuations in interest rates, securities with unrealized losses had generally high credit quality, the Corporation intends to hold these investments in debt securities to maturity and it is more-likely-than-not that the Corporation will not be required to sell these investments before a recovery of its investment, and issuers have continued to make timely payments of principal and interest. Additionally, the Corporation’s mortgage-backed securities are entirely issued by either U.S. government agencies or U.S. government-sponsored enterprises. Collectively, these entities provide a guarantee, which is either explicitly or implicitly supported by the full faith and credit of the U.S. government, that investors in such mortgage-backed securities will receive timely principal and interest payments.

Securities in an unrealized loss position at December 31, 2021, by duration of the period of the unrealized loss, are shown below.


		Less Than 12 Months						12 Months or More						Total
		Fair			Unrealized			Fair			Unrealized			Fair			Unrealized
(Dollars in thousands)		Value			Loss			Value			Loss			Value			Loss
U.S. government agencies and corporations		$	46,561		$	945		$	10,604		$	394		$	57,165		$	1,339
Mortgage-backed securities			126,873			1,127			5,178			74			132,051			1,201
Obligations of states and political subdivisions			16,578			224			2,703			56			19,281			280
Corporate and other debt securities			8,925			121			—			—			8,925			121
Total temporarily impaired securities		$	198,937		$	2,417		$	18,485		$	524		$	217,422		$	2,941

The Corporation’s investment in restricted stock totaled $1.12 million at September 30, 2022 and $1.03 million at December 31, 2021 and consisted of Federal Home Loan Bank of Atlanta (FHLB) stock. Restricted stock is generally viewed as a long-term investment, which is carried at cost because there is no market for the stock other than the FHLBs. Therefore, when evaluating restricted stock for impairment, its value is based on the ultimate recoverability of the par value rather than by recognizing any temporary decline in value. The Corporation did not consider its investment in restricted stock to be other-than-temporarily impaired at September 30, 2022 and no impairment has been recognized.