Debt and Equity Securities

The amortized cost of securities available-for-sale and their approximate fair values as of

March 31, 2020

and

December 31, 2019

are summarized below:

(in thousands)

2020:			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value

U.S. government treasuries	$	9,393	$	378	$	-		$	9,771
U.S. government agencies		109,659		3,886		(62	)		113,483
U.S. government mortgage-backed securities		82,826		3,165		(6	)		85,985
State and political subdivisions		207,276		788		(2,306	)		205,758
Corporate bonds		74,179		1,075		(947	)		74,307
	$	483,333	$	9,292	$	(3,321	)	$	489,304

2019:			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value

U.S. government treasuries	$	9,392	$	64	$	(4	)	$	9,452
U.S. government agencies		124,913		1,609		(89	)		126,433
U.S. government mortgage-backed securities		80,295		867		(34	)		81,128
State and political subdivisions		193,745		1,852		(295	)		195,302
Corporate bonds		66,012		1,542		(26	)		67,528
	$	474,357	$	5,934	$	(448	)	$	479,843

The amortized cost and fair value of debt securities available-for-sale as of

March 31, 2020,

are shown below by expected maturity. Expected maturity will differ from contractual maturities because issuers

may

have the right to call or prepay obligations with or without call or prepayment penalties. (

in thousands

)

	Amortized		Estimated
	Cost		Fair Value

Due in one year or less	$	64,579	$	64,569
Due after one year through five years		243,384		248,125
Due after five years through ten years		138,192		140,093
Due after ten years		37,178		36,517
Total	$	483,333	$	489,304

Securities with a carrying value of

$207.1

million and

$180.0

million at

March 31, 2020

and

December 31, 2019,

respectively, were pledged on public deposits, securities sold under agreements to repurchase and for other purposes as required or permitted by law.

The proceeds, gains and losses for securities available-for-sale for the

three

months ended

March 31, 2020

and

2019

are summarized below (

in thousands

	Three Months Ended
	March 31,
	2020		2019
Proceeds from sales of securities available-for-sale	$	3,385	$	-
Gross realized gains on securities available-for-sale		386		-
Gross realized losses on securities available-for-sale		-		-
Tax provision applicable to net realized gains on securities available-for-sale		97		-

Gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are summarized as of

March 31, 2020

and

December 31, 2019

are as follows:

(in thousands)

	Less than 12 Months					12 Months or More					Total
2020:	Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses

Securities available-for-sale:
U.S. government treasuries	$	-	$	-		$	-	$	-		$	-	$	-
U.S. government agencies		3,921		(62	)		-		-			3,921		(62	)
U.S. government mortgage-backed securities		-		-			1,734		(6	)		1,734		(6	)
State and political subdivisions		106,027		(2,298	)		176		(8	)		106,203		(2,306	)
Corporate bonds		37,547		(947	)		-		-			37,547		(947	)
	$	147,495	$	(3,307	)	$	1,910	$	(14	)	$	149,405	$	(3,321	)

	Less than 12 Months					12 Months or More					Total
2019:	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses

Securities available-for-sale:
U.S. government treasuries	$	3,023	$	(4	)	$	-	$	-		$	3,023	$	(4	)
U.S. government agencies		23,827		(85	)		2,520		(4	)		26,347		(89	)
U.S. government mortgage-backed securities		14,885		(28	)		1,934		(6	)		16,819		(34	)
State and political subdivisions		17,512		(125	)		5,954		(170	)		23,466		(295	)
Corporate bonds		4,129		(26	)		-		-			4,129		(26	)
	$	63,376	$	(268	)	$	10,408	$	(180	)	$	73,784	$	(448	)

Gross unrealized losses on debt securities totaled

$3,321,000

as of

March 31, 2020.

These unrealized losses are generally due to changes in interest rates or general market conditions. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, state or political subdivision, or corporations. Management then determines whether downgrades by bond rating agencies have occurred, and reviews industry analysts’ reports. The Company’s procedures for evaluating investments in states, municipalities and political subdivisions include but are

not

limited to reviewing the offering statement and the most current available financial information, comparing yields to yields of bonds of similar credit quality, confirming capacity to repay, assessing operating and financial performance, evaluating the stability of tax revenues, considering debt profiles and local demographics, and for revenue bonds, assessing the source and strength of revenue structures for municipal authorities. These procedures, as applicable, are utilized for all municipal purchases and are utilized in whole or in part for monitoring the portfolio of municipal holdings. The Company does

not

utilize

third

party credit rating agencies as a primary component of determining if the municipal issuer has an adequate capacity to meet the financial commitments under the security for the projected life of the investment, and, therefore, does

not

compare internal assessments to those of the credit rating agencies. Credit rating downgrades are utilized as an additional indicator of credit weakness and as a reference point for historical default rates. Management concluded that the gross unrealized losses on debt securities were temporary. Due to potential changes in conditions, it is at least reasonably possible that changes in fair values and management’s assessments will occur in the near term and that such changes could materially affect the amounts reported in the Company’s financial statements.