XML 28 R12.htm IDEA: XBRL DOCUMENT

Investment Securities

12 Months Ended

Dec. 31, 2020

Investment Securities

Investment Securities

(4) Investment Securities

The amortized cost, gross unrealized gains and losses, and fair value of debt securities classified as available-for-sale at December 31, 2020 and 2019 were as follows:


		Total
		Amortized			Gross Unrealized						Fair
(in thousands)		Cost			Gains			Losses			Value
December 31, 2020
U.S. Treasury		$	2,772		$	26		$	—		$	2,798
U.S. government and federal agency obligations			11,732			197			—			11,929
U.S. government-sponsored enterprises			22,495			379			—			22,874
Obligations of states and political subdivisions			56,943			1,801			—			58,744
Mortgage-backed securities			88,357			1,809			(54)			90,112
Other debt securities (a)			10,000			358			(14)			10,344
Bank issued trust preferred securities (a)			1,486			—			(257)			1,229
Total available-for-sale securities		$	193,785		$	4,570		$	(325)		$	198,030

December 31, 2019
U.S. Treasury		$	987		$	8		$	—		$	995
U.S. government and federal agency obligations			8,124			—			(77)			8,047
U.S. government-sponsored enterprises			22,300			41			(58)			22,283
Obligations of states and political subdivisions			33,704			144			(59)			33,789
Mortgage-backed securities			105,522			522			(428)			105,616
Other debt securities (a)			3,000			53			—			3,053
Bank issued trust preferred securities (a)			1,486			—			(176)			1,310
Total available-for-sale securities		$	175,123		$	768		$	(798)		$	175,093

(a) Certain hybrid instruments possessing characteristics typically associated with debt obligations.

The Company's investment securities are classified as available for sale. Agency bonds and notes, Small Business Administration guaranteed loan certificates (SBA), residential and commercial agency mortgage-backed securities, and agency collateralized mortgage obligations (CMO) include securities issued by the Government National Mortgage Association (GNMA), a U.S. government agency, the Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Corporation (FHLMC) and the Federal Home Loan Bank (FHLB), which are U.S. government-sponsored enterprises.

Debt securities with carrying values aggregating approximately $153.9 million and $139.8 million at December 31, 2020 and December 31, 2019, respectively, were pledged to secure public funds, securities sold under agreements to repurchase, and for other purposes as required or permitted by law.

The amortized cost and fair value of debt securities classified as available-for-sale at December 31, 2020, by contractual maturity are shown below. Expected maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without prepayment penalties.


		Amortized			Fair
(in thousands)		Cost			Value
Due in one year or less		$	3,323		$	3,340
Due after one year through five years			21,829			22,071
Due after five years through ten years			38,404			39,570
Due after ten years			41,872			42,937
Total			105,428			107,918
Mortgage-backed securities			88,357			90,112
Total available-for-sale securities		$	193,785		$	198,030

Other investment securities

Other investment securities include equity securities with readily determinable fair values and other investment securities that do not have readily determinable fair values. Investments in Federal Home Loan Bank (FHLB) stock, and Midwest Independent Bank (MIB) bankers bank stock, that do not have readily determinable fair values, are required for membership in those organizations.


(in thousands)		2020			2019
Other securities:
FHLB stock		$	6,170		$	5,644
MIB stock			151			151
Equity securities with readily determinable fair values			32			13
Total other investment securities		$	6,353		$	5,808

Gross unrealized losses on debt securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2020 and December 31, 2019 were as follows:


		Less than 12 months						12 months or more						Total			Total
		Fair			Unrealized			Fair			Unrealized			Fair			Unrealized
(in thousands)		Value			Losses			Value			Losses			Value			Losses
At December 31, 2020
U.S. Treasury		$	1,015		$	—		$	—		$	—		$	1,015		$	—
Mortgage-backed securities			7,494			(54)			—			—			7,494			(54)
Other debt securities			2,987			(14)			—			—			2,987			(14)
Bank issued trust preferred securities			—			—			1,229			(257)			1,229			(257)
Total		$	11,496		$	(68)		$	1,229		$	(257)		$	12,725		$	(325)

(in thousands)
At December 31, 2019
U.S. government and federal agency obligations		$	6,238		$	(69)		$	1,809		$	(8)		$	8,047		$	(77)
U.S. government-sponsored enterprises			5,949			(47)			7,488			(11)			13,437			(58)
Obligations of states and political subdivisions			10,729			(53)			1,931			(6)			12,660			(59)
Mortgage-backed securities			5,444			(37)			40,120			(391)			45,564			(428)
Bank issued trust preferred securities			—			—			1,310			(176)			1,310			(176)
Total		$	28,360		$	(206)		$	52,658		$	(592)		$	81,018		$	(798)

The total available for sale portfolio consisted of approximately 308 securities at December 31, 2020. The portfolio included 10 securities having an aggregate fair value of $12.7 million that were in a loss position at December 31, 2020. Securities identified as temporarily

impaired which had been in a loss position for 12 months or longer totaled $1.2 million at fair value at December 31, 2020. The $325,000 aggregate unrealized loss included in accumulated other comprehensive loss at December 31, 2020 was caused by interest rate fluctuations.

The total available for sale portfolio consisted of approximately 322 securities at December 31, 2019. The portfolio included 128 securities having an aggregate fair value of $81.0 million that were in a loss position at December 31, 2019. Securities identified as temporarily impaired which had been in a loss position for 12 months or longer had a fair value of $52.7 million at December 31, 2019. The $798,000 aggregate unrealized loss included in accumulated other comprehensive loss at December 31, 2019 was caused by interest rate fluctuations.

Because the decline in fair value is attributable to changes in interest rates and not credit quality, these investments were not considered other-than-temporarily impaired at December 31, 2020 and 2019, respectively. In the absence of changes in credit quality of these investments, the fair value is expected to recover on all debt securities as they approach their maturity date, or re-pricing date or if market yields for such investments decline. In addition, the Company does not have the intent to sell these investments over the period of recovery, and it is not more likely than not that the Company will be required to sell such investment securities.

The table presents the components of investment securities gains and losses, which have been recognized in earnings:


(in thousands)		2020			2019			2018
Investment securities gains (losses), net
Available for sale securities:
Gains realized on sales		$	49		$	6		$	253
Losses realized on sales			(8)			(46)			—
Other-than-temporary impairment recognized			—			—			—
Other investment securities:
Fair value adjustments, net			20			—			2
Investment securities gains (losses), net		$	61		$	(40)		$	255

During the year ended December 31, 2020, the Company received $5.8 million proceeds from the sale of available for sale debt securities and recognized net securities gains, which include the unrealized net gains related to equity securities, of $61,000. This is compared to $21.5 million and $77.2 million proceeds from the sale of available debt securities and recognized net gains (losses) of $(40,000) and $255,000 for the years ended December 31, 2019 and 2018, respectively.