XML 25 R9.htm IDEA: XBRL DOCUMENT
v3.20.4

2. Investment Securities | 12 Months Ended
--- | ---
Dec. 31, 2020
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | Investment securities available for sale at December 31, 2020 and 2019 are as follows: (Dollars in thousands)
|  | December 31, 2020 |
|  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Estimated Fair Value |
Mortgage-backed securities |  | $ | 143,095 |  |  |  | 2,812 |  |  |  | 593 |  |  |  | 145,314 |
U.S. Government |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
sponsored enterprises |  |  | 7,384 |  |  |  | 331 |  |  |  | 208 |  |  |  | 7,507 |
State and political subdivisions |  |  | 87,757 |  |  |  | 4,758 |  |  |  | 87 |  |  |  | 92,428 |
Total |  | $ | 238,236 |  |  |  | 7,901 |  |  |  | 888 |  |  |  | 245,249 |
(Dollars in thousands)
|  | December 31, 2019 |
|  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Estimated Fair Value |
Mortgage-backed securities |  | $ | 77,812 |  |  |  | 1,371 |  |  |  | 227 |  |  |  | 78,956 |
U.S. Government |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
sponsored enterprises |  |  | 28,265 |  |  |  | 443 |  |  |  | 311 |  |  |  | 28,397 |
State and political subdivisions |  |  | 84,686 |  |  |  | 3,657 |  |  |  | 200 |  |  |  | 88,143 |
Trust preferred securities |  |  | 250 |  |  |  | - |  |  |  | - |  |  |  | 250 |
Total |  | $ | 191,013 |  |  |  | 5,471 |  |  |  | 738 |  |  |  | 195,746 |
The current fair value and associated unrealized losses on investments in debt securities with unrealized losses at December 31, 2020 and 2019 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, 2020 |
|  | Less than 12 Months |  |  | 12 Months or More |  |  | Total |
|  | Fair Value |  |  | Unrealized Losses |  |  | Fair Value |  |  | Unrealized Losses |  |  | Fair Value |  |  | Unrealized Losses |
Mortgage-backed securities |  | $ | 80,827 |  |  |  | 565 |  |  |  | 4,762 |  |  |  | 28 |  |  |  | 85,589 |  |  |  | 593 |
U.S. Government |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
sponsored enterprises |  |  | - |  |  |  | - |  |  |  | 4,193 |  |  |  | 208 |  |  |  | 4,193 |  |  |  | 208 |
State and political subdivisions |  |  | 7,126 |  |  |  | 87 |  |  |  | - |  |  |  | - |  |  |  | 7,126 |  |  |  | 87 |
Total |  | $ | 87,953 |  |  |  | 652 |  |  |  | 8,955 |  |  |  | 236 |  |  |  | 96,908 |  |  |  | 888 |
(Dollars in thousands)
|  | December 31, 2019 |
|  | Less than 12 Months |  |  | 12 Months or More |  |  | Total |
|  | Fair Value |  |  | Unrealized Losses |  |  | Fair Value |  |  | Unrealized Losses |  |  | Fair Value |  |  | Unrealized Losses |
Mortgage-backed securities |  | $ | 28,395 |  |  |  | 177 |  |  |  | 6,351 |  |  |  | 50 |  |  |  | 34,746 |  |  |  | 227 |
U.S. Government |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
sponsored enterprises |  |  | 2,899 |  |  |  | 10 |  |  |  | 6,151 |  |  |  | 301 |  |  |  | 9,050 |  |  |  | 311 |
State and political subdivisions |  |  | 7,367 |  |  |  | 200 |  |  |  | - |  |  |  | - |  |  |  | 7,367 |  |  |  | 200 |
Total |  | $ | 38,661 |  |  |  | 387 |  |  |  | 12,502 |  |  |  | 351 |  |  |  | 51,163 |  |  |  | 738 |
At December 31, 2020, unrealized losses in the investment securities portfolio relating to debt securities totaled $888,000. The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary. From the December 31, 2020 tables above, six out of 86 securities issued by state and political subdivisions contained unrealized losses and 29 out of 68 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 2020, 2019 or 2018. The amortized cost and estimated fair value of investment securities available for sale at December 31, 2020, 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, 2020 |  |  |  |  |  |
(Dollars in thousands) |  |  |  |  |  |
|  | Amortized Cost |  |  | Estimated Fair Value |
Due within one year |  | $ | 10,576 |  |  |  | 10,705 |
Due from one to five years |  |  | 15,236 |  |  |  | 15,997 |
Due from five to ten years |  |  | 62,014 |  |  |  | 65,826 |
Due after ten years |  |  | 7,315 |  |  |  | 7,407 |
Mortgage-backed securities |  |  | 143,095 |  |  |  | 145,314 |
Total |  | $ | 238,236 |  |  |  | 245,249 |
During 2020, proceeds from sales of securities available for sale were $56.3 million and resulted in net gains of $2.6 million. During 2019, proceeds from sales of securities available for sale were $20.7 million and resulted in net gains of $226,000. During 2018, proceeds from sales of securities available for sale were $36.0 million and resulted in gross gains of $15,000. Securities with a fair value of approximately $77.3 million and $66.0 million at December 31, 2020 and 2019, respectively, were pledged to secure public deposits, 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, 2020 and 2019. (Dollars in thousands)
|  | December 31, 2020 |
|  | Fair Value Measurements |  |  | Level 1 Valuation |  |  | Level 2 Valuation |  |  | Level 3 Valuation |
Mortgage-backed securities |  | $ | 145,314 |  |  |  | - |  |  |  | 145,314 |  |  |  | - |
U.S. Government |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
sponsored enterprises |  | $ | 7,507 |  |  |  | - |  |  |  | 7,507 |  |  |  | - |
State and political subdivisions |  | $ | 92,428 |  |  |  | - |  |  |  | 92,428 |  |  |  | - |
(Dollars in thousands)
|  | December 31, 2019 |
|  | Fair Value Measurements |  |  | Level 1 Valuation |  |  | Level 2 Valuation |  |  | Level 3 Valuation |
Mortgage-backed securities |  | $ | 78,956 |  |  |  | - |  |  |  | 78,956 |  |  |  | - |
U.S. Government |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
sponsored enterprises |  | $ | 28,397 |  |  |  | - |  |  |  | 28,397 |  |  |  | - |
State and political subdivisions |  | $ | 88,143 |  |  |  | - |  |  |  | 88,143 |  |  |  | - |
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, 2020. (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) |  |  | (250 | )
Transfers in and/or (out) of Level 3 |  |  | - |
Balance, end of period |  | $ | - |
Change in unrealized gain/(loss) for assets still held in Level 3 |  | $ | - |

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsDebtAndEquitySecuritiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of marketable securities. This may consist of investments in certain debt and equity securities, short-term investments and other assets. + References No definition available. + Details
Name: | us-gaap_MarketableSecuritiesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration