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INVESTMENT SECURITIES

6 Months Ended

Jun. 30, 2021

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE 3 INVESTMENT SECURITIES

Investment securities have been classified according to management’s intent. The amortized cost of securities and their approximate fair values are as follows:


		June 30, 2021
					Gross			Gross
		Amortized			Unrealized			Unrealized			Fair
(Dollars in thousands)		Cost			Gains			Losses			Value
Securities Held-to-Maturity
U.S. Government and agency obligations		$	15,027		$	64		$	(262)		$	14,829
Municipal obligations			484			7			—			491
		$	15,511		$	71		$	(262)		$	15,320
Securities Available-for-Sale
Mortgage-backed securities		$	37,381		$	148		$	(185)		$	37,344
U.S. Government and agency obligations			2,000			—			(71)			1,929
Municipal obligations			2,609			—			(26)			2,583
		$	41,990		$	148		$	(282)		$	41,856


		December 31, 2020
					Gross			Gross
		Amortized			Unrealized			Unrealized			Fair
(Dollars in thousands)		Cost			Gains			Losses			Value
Securities Held-to-Maturity
U.S. Government and agency obligations		$	17,034		$	93		$	(121)		$	17,006
Municipal obligations			489			10			—			499
		$	17,523		$	103		$	(121)		$	17,505
Securities Available-for-Sale
Mortgage-backed securities		$	15,968		$	179		$	(7)		$	16,140
U.S. Government and agency obligations			2,000			—			(39)			1,961
Municipal obligations			2,628			12			(11)			2,629
		$	20,596		$	191		$	(57)		$	20,730

Investment securities with a carrying amount of approximately $7.9 million and $6.9 million, respectively were pledged to secure deposits as required or permitted by law at June 30, 2021 and December 31, 2020.

Securities are classified according to their contractual maturities without consideration of principal amortization, potential prepayments, or call options. The expected maturities may differ from its contractual maturities because of the exercise of call options and potential paydowns. Accordingly, actual maturities may differ from contractual maturities.

NOTE 3 INVESTMENT SECURITIES (Continued)

The following is a summary of maturities of securities held-to-maturity and available-for-sale at June 30, 2021 and December 31, 2020:


		June 30, 2021
		Held-to-Maturity						Available-for-Sale
		Amortized			Fair			Amortized			Fair
(Dollars in thousands)		Cost			Value			Cost			Value
Amounts maturing in:
One year or less		$	—		$	—		$	—		$	—
After one through five years			—			—			—			—
After five through ten years			11,483			11,261			3,445			3,418
After ten years			4,028			4,059			38,545			38,438
		$	15,511		$	15,320		$	41,990		$	41,856


		December 31, 2020
		Held-to-Maturity						Available-for-Sale
		Amortized			Fair			Amortized			Fair
(Dollars in thousands)		Cost			Value			Cost			Value
Amounts maturing in:
One year or less		$	—		$	—		$	—		$	—
After one through five years			—			—			1			1
After five through ten years			11,490			11,452			3,361			3,355
After ten years			6,033			6,053			17,234			17,374
		$	17,523		$	17,505		$	20,596		$	20,730

There were no securities transferred between classifications during the first six months of 2021 or in 2020.

NOTE 3 INVESTMENT SECURITIES (Continued)

Information pertaining to securities with gross unrealized losses at June 30, 2021 and December 31, 2020 aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows:


		June 30, 2021
		Less than 12 Months						12 Months or Greater						Total
		Fair			Gross Unrealized			Fair			Gross Unrealized			Fair			Gross Unrealized
(Dollars in thousands)		Value			Losses			Value			Losses			Value			Losses
Securities Held-to-Maturity
U.S. Government and agency obligations		$	11,738		$	(262)		$	—		$	—		$	11,738		$	(262)
Municipal obligations			—			—			—			—			—			—
		$	11,738		$	(262)		$	—		$	—		$	11,738		$	(262)
Securities Available-for-Sale
Mortgage-backed securities		$	22,640		$	(185)		$	—		$	—		$	22,640		$	(185)
U.S. Government and agency obligations			1,929			(71)			—			—			1,929			(71)
Municipal obligations			2,583			(26)			—			—			2,583			(26)
		$	27,152		$	(282)		$	—		$	—		$	27,152		$	(282)
Total		$	38,890		$	(544)		$	—		$	—		$	38,890		$	(544)


		December 31, 2020
		Less than 12 Months						12 Months or Greater						Total
		Fair			Gross Unrealized			Fair			Gross Unrealized			Fair			Gross Unrealized
(Dollars in thousands)		Value			Losses			Value			Losses			Value			Losses
Securities Held-to-Maturity
U.S. Government and agency obligations		$	7,879		$	(121)		$	—		$	—		$	7,879		$	(121)
		$	7,879		$	(121)		$	—		$	—		$	7,879		$	(121)
Securities Available-for-Sale
Mortgage-backed securities		$	4,010		$	(7)		$	—		$	—		$	4,010		$	(7)
U.S. Government and agency obligations			1,961			(39)			—			—			1,961			(39)
Municipal obligations			1,751			(11)			—			—			1,751			(11)
		$	7,722		$	(57)		$	—		$	—		$	7,722		$	(57)
Total		$	15,601		$	(178)		$	—		$	—		$	15,601		$	(178)

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to the length of time and the extent to which that fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Bank to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

At June 30, 2021, there were 26 securities with an unrealized loss, compared to 8 securities with an unrealized loss at December 31, 2020. All of those securities are either guaranteed by federal, state and local governments or secured by mortgage loans. These unrealized losses relate principally to current interest rates for similar types of securities. In analyzing an issuer's financial condition, management considers whether the securities are issued by the federal government, its agencies, or other governments, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer's financial condition. As management has the ability to hold securities until maturity, or for the foreseeable future if classified as available-for-sale, no declines are deemed to be other-than-temporary.