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Securities

9 Months Ended

Sep. 30, 2021

(3) Securities

The amortized cost and fair value of securities as of September 30, 2021 and December 31, 2020 are as follows:


		September 30, 2021
					Gross		Gross				# of Securities
		Amortized			unrealized		unrealized		Fair		in unrealized
(dollars in thousands)		cost			gains		losses		value		loss position
Securities available-for-sale:
U.S. asset backed securities		$	21,120		199		(26)		21,293		4
U.S. government agency mortgage-backed securities			5,351		137		(29)		5,459		1
U.S. government agency collateralized mortgage obligations			23,712		483		(142)		24,053		7
State and municipal securities			72,415		874		(461)		72,828		23
U.S. Treasuries			15,082		6		(78)		15,010		11
Non-U.S. government agency collateralized mortgage obligations			999		—		—		999		1
Corporate bonds			6,450		73		(16)		6,507		4
Total securities available-for-sale		$	145,129		1,772		(752)		146,149		51
Securities held-to-maturity:
State and municipal securities			6,406		254		─		6,660		—
Total securities held-to-maturity		$	6,406		254		—		6,660		—


		December 31, 2020
					Gross		Gross				# of Securities
		Amortized			unrealized		unrealized		Fair		in unrealized
(dollars in thousands)		cost			gains		losses		value		loss position
Securities available-for-sale:
U.S. asset backed securities		$	25,303		364		(75)		25,592		8
U.S. government agency mortgage-backed securities			3,854		192		—		4,046		—
U.S. government agency collateralized mortgage obligations			23,010		916		(17)		23,909		1
State and municipal securities			63,848		2,025		(63)		65,810		3
Corporate bonds			4,200		7		(2)		4,205		2
Total securities available-for-sale		$	120,215		3,504		(157)		123,562		14
Securities held-to-maturity:
State and municipal securities			6,510		347		—		6,857		—
Total securities held-to-maturity		$	6,510		347		—		6,857		—

Although the Corporation’s investment portfolio overall is in a net unrealized gain position at September 30, 2021, the temporary impairment in the above noted securities is primarily the result of changes in market interest rates subsequent to purchase and the Corporation does not intend to sell these securities prior to recovery and it is more likely than not that the Corporation will not be required to sell these securities prior to recovery to satisfy liquidity needs, and therefore, no securities are deemed to be other-than-temporarily impaired.

As of September 30, 2021 and December 31, 2020, securities having a fair value of $63.6 million and $55.9 million, respectively, were specifically pledged as collateral for public funds, the FRB discount window program, FHLB borrowings and other purposes. The FHLB has a blanket lien on non-pledged, mortgage-related loans and securities as part of the Corporation’s borrowing agreement with the FHLB.

The following table shows the Corporation’s investment gross unrealized losses and fair value aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position at September 30, 2021 and December 31, 2020:


		September 30, 2021
		Less than 12 Months					12 Months or more				Total
		Fair			Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)		value			losses		value		losses		value		losses
Securities available-for-sale:
U.S. asset backed securities		$	4,158		(26)		—		—		4,158		(26)
U.S. government agency mortgage-backed securities			1,614		(29)		—		—		1,614		(29)
U.S. government agency collateralized mortgage obligations			7,315		(142)		—		—		7,315		(142)
State and municipal securities			34,808		(451)		568		(10)		35,376		(461)
U.S. Treasuries			12,049		(78)		—		—		12,049		(78)
Corporate bonds			2,244		(6)		439		(10)		2,683		(16)
Total securities available-for-sale		$	62,188		(732)		1,007		(20)		63,195		(752)


		December 31, 2020
		Less than 12 Months					12 Months or more				Total
		Fair			Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)		value			losses		value		losses		value		losses
Securities available-for-sale:
U.S. asset backed securities		$	2,884		(4)		7,443		(71)		10,327		(75)
U.S. government agency collateralized mortgage obligations			2,284		(17)		—		—		2,284		(17)
State and municipal securities			4,163		(63)		—		—		4,163		(63)
Corporate bonds			1,198		(2)		—		—		1,198		(2)
Total securities available-for-sale		$	10,529		(86)		7,443		(71)		17,972		(157)

The amortized cost and carrying value of securities at September 30, 2021 and December 31, 2020 are shown below by contractual maturities. Actual maturities may differ from contractual maturities as issuers may have the right to call or repay obligations with or without call or prepayment penalties.


		September 30, 2021									December 31, 2020
		Available-for-sale					Held-to-maturity				Available-for-sale					Held-to-maturity
		Amortized			Fair		Amortized		Fair		Amortized			Fair		Amortized		Fair
(dollars in thousands)		cost			value		cost		value		cost			value		cost		value
Investment securities:
Due in one year or less		$	—		—		—		—		$	—		—		—		—
Due after one year through five years			—		—		3,133		3,197			—		—		3,181		3,288
Due after five years through ten years			28,999		29,010		3,273		3,463			12,035		12,095		3,329		3,569
Due after ten years			86,068		86,628		—		—			81,316		83,512		—		—
Subtotal			115,067		115,638		6,406		6,660			93,351		95,607		6,510		6,857
Mortgage-related securities			30,062		30,511		—		—			26,864		27,955		—		—
Total		$	145,129		146,149		6,406		6,660		$	120,215		123,562		6,510		6,857

Proceeds from the sale of available for sale investment securities totaled $7.3 million for the three months ended September 30, 2021 and $20.9 million for the nine months ended September 30, 2021, resulting in a gross gain on sale of $314 thousand and no gross loss on sale for the three months ended September 30, 2021, and a gross gain on sale of $562 thousand and a gross loss on sale of $200 thousand for the nine months ended September 30, 2021. Proceeds from the sale of available for sale investment securities totaled $26.4 million and $44.6 million for the three and nine months ended September 30, 2020, respectively, resulting in a gross gain on sale of $1.3 million and no gross loss on sale for the three months ended September 30, 2020, and a gross gain on sale of $1.5 million and a gross loss on sale of $202 thousand for the nine months ended September 30, 2020.