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Investment Securities
 12 Months Ended
Dec. 31, 2020
Schedule of Investments [Abstract]  
Investment Securities

(3) Investment Securities

 

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

 

(Dollars in thousands)  As of December 31, 2020 
       Gross   Gross     
   Amortized   unrealized   unrealized   Estimated 
   cost   gains   losses   fair value 
                 
U. S. treasury securities  $2,000   $37   $-   $2,037 
U. S. federal agency obligations   18,804    138    (18)   18,924 
Municipal obligations, tax exempt   136,321    6,367    (12)   142,676 
Municipal obligations, taxable   46,643    2,892    -    49,535 
Agency mortgage-backed securities   75,530    3,108    -    78,638 
Certificates of deposit   5,460    -    -    5,460 
Total  $284,758   $12,542   $(30)  $297,270 

 

   As of December 31, 2019 
       Gross   Gross     
   Amortized   unrealized   unrealized   Estimated 
   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  $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 December 31, 2020 and 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.

 

(Dollars in thousands)   As of December 31, 2020 
       Less than 12 months   12 months or longer   Total 
   No. of   Fair   Unrealized   Fair   Unrealized   Fair   Unrealized 
   securities   value   losses   value   losses   value   losses 
U.S. federal agency obligations   4   $11,772   $(18)  $-   $-   $11,772   $(18)
Municipal obligations, tax exempt   12    4,191    (12)   -    -    4,191    (12)
Total   16   $15,963   $(30)  $-   $-   $15,963   $(30)

 

       As of December 31, 2019 
       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 U.S. federal agency portfolio consists of securities issued by the government-sponsored agencies of Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“FNMA”) and the FHLB. The receipt of principal and interest on U.S. federal agency obligations is guaranteed by the respective government-sponsored agency guarantor, such that the Company believes that its U.S. federal agency obligations do not expose the Company to credit-related losses. Based on these factors, along with the Company’s intent to not sell the securities and its 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 U.S. federal agency obligations identified in the tables above were temporarily impaired.

 

The Company’s portfolio of municipal obligations consists of both tax-exempt and taxable general obligations securities issued by various municipalities. As of December 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.

 

The table below 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. The amortized cost and fair value of investment securities at December 31, 2020 are as follows:

 

(Dollars in thousands)  Amortized   Estimated 
   cost   fair value 
Due in less than one year  $12,481   $12,558 
Due after one year but within five years   148,182    153,152 
Due after five years but within ten years   61,972    65,783 
Due after ten years   62,123    65,777 
Total  $284,758   $297,270 

 

Sales proceeds and gross realized gains and losses on sales of available-for-sale securities are as follows:

 

   2020   2019   2018 
(Dollars in thousands)  Years ended December 31, 
   2020   2019   2018 
Sales proceeds  $61,163   $15,318   $21,126 
                
Realized gains  $2,449   $2   $84 
Realized losses   (1)   (179)   (64)
Net realized gains  $2,448   $(177)  $20 

 

Securities with carrying values of $282.2 million and $240.0 million were pledged to secure public funds on deposit, repurchase agreements and as collateral for borrowings at December 31, 2020 and 2019, respectively. Except for U.S. federal agency obligations, no investment in a single issuer exceeded 10% of consolidated stockholders’ equity.