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Investments

3 Months Ended

Mar. 31, 2020

Investments, Debt and Equity Securities [Abstract]

2.	Investments

A summary of investment securities available-for-sale is as follows:

		As of March 31, 2020
						Gross				Gross
		Amortized				unrealized				unrealized				Estimated
(Dollars in thousands)		cost				gains				losses				fair value

U. S. treasury securities		$	2,000			$	57			$	-			$	2,057
U. S. federal agency obligations			2,015				148				-				2,163
Municipal obligations, tax exempt			138,118				3,626				(61	)			141,683
Municipal obligations, taxable			48,307				1,822				(72	)			50,057
Agency mortgage-backed securities			112,570				4,054				-				116,624
Certificates of deposit			1,905				-				-				1,905
Total available-for-sale		$	304,915			$	9,707			$	(133	)		$	314,489

		As of December 31, 2019
						Gross				Gross
		Amortized				unrealized				unrealized				Estimated
(Dollars in thousands)		cost				gains				losses				fair value

U. S. treasury securities		$	2,300			$	16			$	-			$	2,316
U. S. federal agency obligations			4,015				91				-				4,106
Municipal obligations, tax exempt			142,391				3,513				(42	)			145,862
Municipal obligations, taxable			45,541				1,293				(55	)			46,779
Agency mortgage-backed securities			159,908				2,353				(230	)			162,031
Certificates of deposit			1,904				-				-				1,904
Total available-for-sale		$	356,059			$	7,266			$	(327	)		$	362,998

The tables above show that some of the securities in the available-for-sale investment portfolio had unrealized losses, or were temporarily impaired, as of March 31, 2020 and December 31, 2019. This temporary impairment represents the estimated amount of loss that would be realized if the securities were sold on the valuation date. Securities which were temporarily impaired are shown below, along with the length of time in a continuous unrealized loss position.

						As of March 31, 2020
(Dollars in thousands)						Less than 12 months								12 months or longer								Total
		No. of				Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
		securities				value				losses				value				losses				value				losses
Municipal obligations, tax exempt			19				5,220				(60	)			436				(1	)			5,656				(61	)
Municipal obligations, taxable			6				3,307				(72	)			-				-				3,307				(72	)
Total			25			$	8,527			$	(132	)		$	436			$	(1	)		$	8,963			$	(133	)

						As of December 31, 2019
(Dollars in thousands)						Less than 12 months								12 months or longer								Total
		No. of				Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
		securities				value				losses				value				losses				value				losses
Municipal obligations, tax exempt			23				5,676				(16	)			3,473				(26	)			9,149				(42	)
Municipal obligations, taxable			4				2,563				(55	)			-				-				2,563				(55	)
Agency mortgage-backed securities			21				15,735				(43	)			17,137				(187	)			32,872				(230	)
Total			48			$	23,974			$	(114	)		$	20,610			$	(213	)		$	44,584			$	(327	)

The Company’s portfolio of municipal obligations consists of both tax-exempt and taxable general obligations securities issued by various municipalities. As of March 31, 2020, the Company did not intend to sell and it is more likely than not that the Company will not be required to sell its municipal obligations in an unrealized loss position until the recovery of its cost. Due to the issuers’ continued satisfaction of the securities’ obligations in accordance with their contractual terms and the expectation that they will continue to do so, the evaluation of the fundamentals of the issuers’ financial condition and other objective evidence, the Company believed that the municipal obligations identified in the tables above were temporarily impaired as of March 31, 2020 and December 31, 2019.

The Company’s agency mortgage-backed securities portfolio consists of securities underwritten to the standards of and guaranteed by the government-sponsored agencies of FHLMC, FNMA and the Government National Mortgage Association. The receipt of principal, at par, and interest on agency mortgage-backed securities is guaranteed by the respective government-sponsored agency guarantor, such that the Company believed that its agency mortgage-backed securities did not expose the Company to credit-related losses. Based on these factors, along with the Company’s intent to not sell the securities and the Company’s belief that it was more likely than not that the Company will not be required to sell the securities before recovery of their cost basis, the Company believed that the agency mortgage-backed securities identified in the tables above were temporarily impaired as of December 31, 2019.

The table below sets forth amortized cost and fair value of investment securities at March 31, 2020. The table includes scheduled principal payments and estimated prepayments, based on observable market inputs, for agency mortgage-backed securities. Actual maturities will differ from contractual maturities because borrowers have the right to prepay obligations with or without prepayment penalties.

(Dollars in thousands)		Amortized				Estimated
		cost				fair value
Due in less than one year		$	8,256			$	8,286
Due after one year but within five years			139,382				143,620
Due after five years but within ten years			81,323				84,067
Due after ten years			75,954				78,516
Total		$	304,915			$	314,489

Sales proceeds and gross realized gains and losses on sales of available-for-sale securities were as follows for the periods indicated:

(Dollars in thousands)		Three months ended March 31,
		2020				2019

Sales proceeds		$	44,508			$	-

Realized gains		$	1,772			$	-
Realized losses			(2	)			-
Net realized gains		$	1,770			$	-

Securities with carrying values of $204.2 million and $240.0 million were pledged to secure public funds on deposit, repurchase agreements and as collateral for borrowings at March 31, 2020 and December 31, 2019, respectively. Except for U.S. federal agency obligations, no investment in a single issuer exceeded 10% of consolidated stockholders’ equity.