Investment Securities

12 Months Ended

Dec. 31, 2020

Investments, Debt and Equity Securities [Abstract]

The following table shows the amortized cost, the estimated fair value and the allowance for credit losses of the held-to-maturity securities and available-for-sale securities at December 31, 2020 and the amortized cost and the estimated fair value of the held-to-maturity securities and available-for-sale securities at December 31, 2019, by contractual maturity within each type:


	At December 31, 2020										At December 31, 2019
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities Held-to-Maturity
U.S. government corporations and agencies:

After 1 year to 5 years	$	6,998	$	171	$	—	—		$	7,169	$	6,997	$	66	$	—	$	7,063

	6,998		171		—		—		7,169		6,997		66		—		7,063
Residential mortgage-backed securities:
After 5 years to 10 years	6,325		253		—		—		6,578		9,083		129		—		9,212
Over 10 years	137,934		4,644		—		—		142,578		175,972		2,749		(110)		178,611
	144,259		4,897		—		—		149,156		185,055		2,878		(110)		187,823




Total	$	151,257	$	5,068	$	—	$	—	$	156,325	$	192,052	$	2,944	$	(110)	$	194,886
Securities Available-for-Sale




U.S. government corporations and agencies:
Within 1 year	$	—	$	—	$	—	$	—	$	—	$	301	$	—	$	(1)	$	300


	—		—		—		—		—		301		—		(1)		300
State and political subdivisions:

After 1 year to 5 years	3,560		33		—		—		3,593		4,717		23		—		4,740
After 5 years to 10 years	9,881		63		—		—		9,944		29,563		292		—		29,855

	13,441		96		—		—		13,537		34,280		315		—		34,595
Residential mortgage-backed securities:
Within 1 year	—		—		—		—		—		304		9		—		313
After 1 year to 5 years	323		10		—		—		333		611		3		(1)		613
After 5 years to 10 years	1,664		58		—		—		1,722		36,893		107		(21)		36,979
Over 10 years	110,018		2,153		(63)		—		112,108		80,630		378		(453)		80,555
	112,005		2,221		(63)		—		114,163		118,438		497		(475)		118,460
Collateralized mortgage obligations:

After 5 years to 10 years	754		21		—		—		775		2,377		6		(22)		2,361
Over 10 years	4,561		—		(15)		—		4,546		—		—		—		—
	5,315		21		(15)		—		5,321		2,377		6		(22)		2,361
Corporate bonds:
Within 1 year	499		2		—		—		501		6,012		1		(4)		6,009
After 1 year to 5 years	29,498		1,440		—		(16)		30,922		29,606		596		(61)		30,141
After 5 years to 10 years	60,496		3		(5,450)		(853)		54,196		—		—		—		—
Over 10 years	—		—		—		—		—		60,000		—		(4,942)		55,058
	90,493		1,445		(5,450)		(869)		85,619		95,618		597		(5,007)		91,208
Total	$	221,254	$	3,783	$	(5,528)	$	(869)	$	218,640	$	251,014	$	1,415	$	(5,505)	$	246,924

Gross unrealized gains and losses on available-for-sale securities are recognized in accumulated other comprehensive income (loss) and changes in the allowance for credit loss are recorded in provision for credit loss expense. Expected maturities may differ from contractual maturities because debt issuers may have the right to call or prepay obligations without call or prepayment penalties and mortgage-backed securities typically prepay at a rate faster than contractually due.

Securities with a carrying value of $249.6 million and $340.8 million at December 31, 2020 and 2019, respectively, were pledged to secure public funds deposits and other contractual obligations. In addition, securities of $32.6 million and $12.5 million were pledged to secure credit derivatives and interest rate swaps at December 31, 2020 and 2019, respectively. See Note 17, "Derivative Instruments and Hedging Activities" for additional information.

The following table presents information related to sales of securities available-for-sale during the years ended December 31, 2020, 2019 and 2018:


	For the Years Ended December 31,
(Dollars in thousands)	2020		2019		2018
Securities available-for-sale:
Proceeds from sales	$	66,421	$	26,494	$	1,010
Gross realized gains on sales	885		78		10
Gross realized losses on sales	14		24		—
Tax expense related to net realized gains on sales	183		11		2

At December 31, 2020 and 2019, there were no reportable investments in any single issuer representing more than 10% of shareholders' equity.

The following table shows the fair value of securities that were in an unrealized loss position for which an allowance for credit losses has not been recorded at December 31, 2020 and 2019, by the length of time those securities were in a continuous loss position.


	Less than Twelve Months				Twelve Months or Longer				Total
(Dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
At December 31, 2020
Securities Held-to-Maturity



Total	$	—	$	—	$	—	$	—	$	—	$	—
Securities Available-for-Sale



Residential mortgage-backed securities	$	13,677	$	(62)	$	31	$	(1)	$	13,708	$	(63)
Collateralized mortgage obligations	4,545		(15)		—		—		4,545		(15)

Total	$	18,222	$	(77)	$	31	$	(1)	$	18,253	$	(78)

At December 31, 2019
Securities Held-to-Maturity

Residential mortgage-backed securities	$	26,767	$	(110)	$	—	$	—	$	26,767	$	(110)

Total	$	26,767	$	(110)	$	—	$	—	$	26,767	$	(110)
Securities Available-for-Sale

U.S. government corporations and agencies	$	—	$	—	$	300	$	(1)	$	300	$	(1)

Residential mortgage-backed securities	21,827		(62)		48,672		(413)		70,499		(475)
Collateralized mortgage obligations	—		—		1,295		(22)		1,295		(22)
Corporate bonds	998		—		65,506		(5,007)		66,504		(5,007)
Total	$	22,825	$	(62)	$	115,773	$	(5,443)	$	138,598	$	(5,505)

At December 31, 2020, the fair value of available-for-sale securities in an unrealized loss position for which an allowance for credit losses has not been recorded was $18.3 million, including unrealized losses of $78 thousand. These holdings were comprised of four federal agency mortgage-backed securities, which are U.S. government entities and agencies and are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. The Corporation does not intend to sell the securities in an unrealized loss position and is unlikely to be required to sell these securities before a recovery of fair value, which may be maturity. The Corporation concluded that the decline in fair value of these securities was not indicative of a credit loss. The Corporation did not recognize any other-than-temporary impairment charges on these securities for the year ended December 31, 2019.

At December 31, 2020, no held-to-maturity securities held by the Corporation were in an unrealized loss position. The Corporation did not recognize any credit losses on held-to-maturity debt securities for the year ended December 31, 2020 or other-than-temporary impairment charges for the year ended December 31, 2019.

The table below presents a rollforward by major security type for the year ended December 31, 2020 of the allowance for credit losses on securities available-for-sale.


(Dollars in thousands)	Corporate Bonds
For the Year Ended December 31, 2020
Securities Available-for-Sale
Beginning balance	$	—
Adjustment to initially apply ASU No. 2016-13 for CECL	(300)

Change in securities for which a previous expected credit loss was recognized	(569)
Ending balance	$	(869)

At December 31, 2020, the fair value of available-for-sale securities in an unrealized loss position for which an allowance for credit losses has been recorded was $58.7 million, including unrealized losses of $5.5 million, and allowance for credit losses of $869 thousand. These holdings were in an unrealized loss position for a period of greater than twelve months and were comprised of seven investment grade corporate bonds which fluctuate in value based on changes in market conditions. For these underlying securities, fluctuations were primarily due to changes in the interest rate environment. The Corporation does not have the intent to sell these securities and it is not likely that it will be required to sell the securities before their anticipated recovery. The underlying issuers continue to make timely principal and interest payments on the securities. The Corporation concluded that a portion of decline in the value of these securities was indicative of a credit loss. The Corporation recorded a provision for credit losses of $569 thousand on these available-for-sale debt securities for the year ended December 31, 2020. The Corporation did not record any other-than-temporary impairment charges on these securities for the years ended December 31, 2019 and 2018.

The Corporation recognized a $186 thousand net loss and a $80 thousand net gain on equity securities during the years ended December 31, 2020 and 2019, respectively, in other noninterest income. There were no sales of equity securities during the years ended December 31, 2020 or 2019.