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2. Investment Securities | 12 Months Ended
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Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | Investment securities available for sale at December 31, 2018 and 2017 are as follows: (Dollars in thousands)
|  | December 31, 2018
|  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value
Mortgage-backed securities |  | $ | 52,145 |  |  |  | 516 |  |  |  | 558 |  |  |  | 52,103 |
U.S. Government |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
sponsored enterprises |  |  | 35,356 |  |  |  | 71 |  |  |  | 793 |  |  |  | 34,634 |
State and political subdivisions |  |  | 105,545 |  |  |  | 2,089 |  |  |  | 43 |  |  |  | 107,591 |
Trust preferred securities |  |  | 250 |  |  |  | — |  |  |  | — |  |  |  | 250 |
Total |  | $ | 193,296 |  |  |  | 2,676 |  |  |  | 1,394 |  |  |  | 194,578 |
(Dollars in thousands)
|  | December 31, 2017
|  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value
Mortgage-backed securities |  | $ | 53,124 |  |  |  | 814 |  |  |  | 329 |  |  |  | 53,609 |
U.S. Government |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
sponsored enterprises |  |  | 40,504 |  |  |  | 140 |  |  |  | 264 |  |  |  | 40,380 |
State and political subdivisions |  |  | 129,276 |  |  |  | 4,310 |  |  |  | 16 |  |  |  | 133,570 |
Corporate bonds |  |  | 1,500 |  |  |  | 12 |  |  |  | — |  |  |  | 1,512 |
Trust preferred securities |  |  | 250 |  |  |  | — |  |  |  | — |  |  |  | 250 |
Total |  | $ | 224,654 |  |  |  | 5,276 |  |  |  | 609 |  |  |  | 229,321 |
The current fair value and associated unrealized losses on investments in debt securities with unrealized losses at December 31, 2018 and 2017 are summarized in the tables below, with the length of time the individual securities have been in a continuous loss position. (Dollars in thousands)
|  | December 31, 2018
|  | Less than 12 Months |  | 12 Months or More |  | Total
|  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Mortgage-backed securities |  | $ | 6,932 |  |  |  | 56 |  |  |  | 17,670 |  |  |  | 502 |  |  |  | 24,602 |  |  |  | 558 |
U.S. Government |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
sponsored enterprises |  |  | 1,784 |  |  |  | 69 |  |  |  | 25,172 |  |  |  | 724 |  |  |  | 26,956 |  |  |  | 793 |
State and political subdivisions |  |  | 4,815 |  |  |  | 26 |  |  |  | 1,578 |  |  |  | 17 |  |  |  | 6,393 |  |  |  | 43 |
Total |  | $ | 13,531 |  |  |  | 151 |  |  |  | 44,420 |  |  |  | 1,243 |  |  |  | 57,951 |  |  |  | 1,394 |
(Dollars in thousands)
|  | December 31, 2017
|  | Less than 12 Months |  | 12 Months or More |  | Total
|  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Mortgage-backed securities |  | $ | 8,701 |  |  |  | 75 |  |  |  | 11,259 |  |  |  | 254 |  |  |  | 19,960 |  |  |  | 329 |
U.S. Government |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
sponsored enterprises |  |  | 12,661 |  |  |  | 98 |  |  |  | 10,067 |  |  |  | 166 |  |  |  | 22,728 |  |  |  | 264 |
State and political subdivisions |  |  | 798 |  |  |  | 2 |  |  |  | 1,501 |  |  |  | 14 |  |  |  | 2,299 |  |  |  | 16 |
Total |  | $ | 22,160 |  |  |  | 175 |  |  |  | 22,827 |  |  |  | 434 |  |  |  | 44,987 |  |  |  | 609 |
At December 31, 2018, unrealized losses in the investment securities portfolio relating to debt securities totaled $1.4 million. The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary. From the December 31, 2018 tables above, 11 out of 130 securities issued by state and political subdivisions contained unrealized losses and 31 out of 46 securities issued by U.S. Government sponsored enterprises, including mortgage-backed securities, contained unrealized losses. These unrealized losses are considered temporary because of acceptable financial condition and results of operations on each security and the repayment sources of principal and interest on U.S. Government sponsored enterprises, including mortgage-backed securities, are government backed. The Company periodically evaluates its investments for any impairment which would be deemed other-than-temporary. No investment impairments were deemed other-than-temporary in 2018, 2017 or 2016. The amortized cost and estimated fair value of investment securities available for sale at December 31, 2018, by contractual maturity, are shown below. Expected maturities of mortgage-backed securities will differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
December 31, 2018 |  |  |  |
(Dollars in thousands) |  |  |  |
|  | Amortized Cost |  | Estimated Fair Value
Due within one year |  | $ | 21,379 |  |  |  | 21,426 |
Due from one to five years |  |  | 80,932 |  |  |  | 82,325 |
Due from five to ten years |  |  | 32,271 |  |  |  | 32,174 |
Due after ten years |  |  | 6,569 |  |  |  | 6,550 |
Mortgage-backed securities |  |  | 52,145 |  |  |  | 52,103 |
Total |  | $ | 193,296 |  |  |  | 194,578 |
During 2018, proceeds from sales of securities available for sale were $36.0 million and resulted in gross gains of $15,000. No securities available for sale were sold during the year ended December 31, 2017. During 2016, proceeds from sales of securities available for sale were $1.5 million and resulted in gross gains of $729,000. Securities with a fair value of approximately $93.0 million and $105.6 million at December 31, 2018 and 2017, respectively, were pledged to secure public deposits, Federal Home Loan Bank of Atlanta (“FHLB”) borrowings and for other purposes as required by law. GAAP establishes a framework for measuring fair value and expands disclosures about fair value measurements. There is a three-level fair value hierarchy for fair value measurements. Level 1 inputs are quoted prices in active markets for identical assets or liabilities that a company has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The table below presents the balance of securities available for sale, which are measured at fair value on a recurring basis by level within the fair value hierarchy as of December 31, 2018 and 2017.
(Dollars in thousands) |  |  |  |  |  |  |  |
|  | December 31, 2018
|  | Fair Value Measurements |  | Level 1 Valuation |  | Level 2 Valuation |  | Level 3 Valuation
Mortgage-backed securities |  | $ | 52,103 |  |  |  | — |  |  |  | 52,103 |  |  |  | — |
U.S. Government |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
sponsored enterprises |  | $ | 34,634 |  |  |  | — |  |  |  | 34,634 |  |  |  | — |
State and political subdivisions |  | $ | 107,591 |  |  |  | — |  |  |  | 107,591 |  |  |  | — |
Trust preferred securities |  | $ | 250 |  |  |  | — |  |  |  | — |  |  |  | 250 |
(Dollars in thousands) |  |  |  |  |  |  |  |
|  | December 31, 2017
|  | Fair Value Measurements |  | Level 1 Valuation |  | Level 2 Valuation |  | Level 3 Valuation
Mortgage-backed securities |  | $ | 53,609 |  |  |  | — |  |  |  | 53,609 |  |  |  | — |
U.S. Government |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
sponsored enterprises |  | $ | 40,380 |  |  |  | — |  |  |  | 40,380 |  |  |  | — |
State and political subdivisions |  | $ | 133,570 |  |  |  | — |  |  |  | 133,570 |  |  |  | — |
Corporate bonds |  | $ | 1,512 |  |  |  | — |  |  |  | 1,512 |  |  |  | — |
Trust preferred securities |  | $ | 250 |  |  |  | — |  |  |  | — |  |  |  | 250 |
Fair values of investment securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges when available. If quoted prices are not available, fair value is determined using matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities. The following is an analysis of fair value measurements of investment securities available for sale using Level 3, significant unobservable inputs, for the year ended December 31, 2018.
(Dollars in thousands) |  |
|  | Investment Securities Available for Sale
|  | Level 3 Valuation
Balance, beginning of period |  | $ | 250 |
Change in book value |  |  | — |
Change in gain/(loss) realized and unrealized |  |  | — |
Purchases/(sales and calls) |  |  | — |
Transfers in and/or (out) of Level 3 |  |  | — |
Balance, end of period |  | $ | 250 |
Change in unrealized gain/(loss) for assets still held in Level 3 |  | $ | — |

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