Securities

9 Months Ended

Sep. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Securities

Note 4. Securities

The amortized cost, gross unrealized gains and losses and fair value of securities available-for-sale are summarized as follows (in thousands):

	September 30, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
U.S. Treasury	$	93,910	$	176	$	(61)	$	94,025
U.S. Government-sponsored enterprises (GSEs)		54,175		201		(913)		53,463
Municipal securities		93,422		2,179		(31)		95,570
Other debt securities		25,996		367		(72)		26,291
Mortgage-backed securities (GSEs)		68,837		1,339		(182)		69,994
Total	$	336,340	$	4,262	$	(1,259)	$	339,343

	December 31, 2020
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
U.S. Government-sponsored enterprises (GSEs)	$	30,526	$	10	$	(6)	$	30,530
Municipal securities		89,644		2,345		—		91,989
Other debt securities		25,019		112		(13)		25,118
Mortgage-backed securities (GSEs)		66,425		1,754		(182)		67,997
Total	$	211,614	$	4,221	$	(201)	$	215,634

At September 30, 2021 and December 31, 2020, securities with a carrying value totaling approximately $161.4 million and $80.2 million, respectively, were pledged to secure public funds and securities sold under agreements to repurchase.

The Company has entered-into-various fair value hedging transactions to mitigate the impact of changing interest rates on the fair values of available for sale securities. See Note 11 – Derivatives Financial Instruments for disclosure of the gains and losses recognized on derivative instruments and the cumulative fair value hedging adjustments to the carrying amount of the hedged securities.

Proceeds from sale of securities available-for-sale, gross gains and gross losses on sales and redemptions for the three and nine months ended September 30, 2021, and 2020 were as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Proceeds from sales	$	16,771	$	4,884	$	16,771	$	11,759
Gross gains	$	64	$	17	$	64	$	43
Gross losses	$	(19)	$	(26)	$	(19)	$	(37)
Proceeds from maturities and calls	$	32,275	$	30,350	$	43,551	$	45,800

The amortized cost and estimated fair value of securities at September 30, 2021, by contractual maturity for non-mortgage backed securities are shown below (in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	September 30, 2021
	Amortized		Fair
	Cost		Value
Due in one year or less	$	61,259	$	61,267
Due from one year to five years		3,817		3,843
Due from five years to ten years		90,688		91,409
Due after ten years		111,739		112,830
		267,503		269,349
Mortgage-backed securities		68,837		69,994
Total	$	336,340	$	339,343

The following tables present the gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities available-for-sale have been in a continuous unrealized loss position (in thousands):

	September 30, 2021
	Less than 12 Months					12 Months or Greater					Total
			Gross		Number			Gross		Number			Gross		Number
	Fair		Unrealized		of	Fair		Unrealized		of	Fair		Unrealized		of
	Value		Losses		Securities	Value		Losses		Securities	Value		Losses		Securities
U.S. Treasury	$	76,626	$	(61)	4	$	—	$	—	—	$	76,626	$	(61)	4
U.S. Government-sponsored enterprises (GSEs)		37,469		(910)	10		841		(3)	3		38,310		(913)	13
Municipal securities		3,929		(31)	3		—		—	—		3,929		(31)	3
Other debt securities		5,982		(72)	6		—		—	—		5,982		(72)	6
Mortgage-backed securities (GSEs)		8,891		(59)	8		8,780		(123)	6		17,671		(182)	14
Total	$	132,897	$	(1,133)	31	$	9,621	$	(126)	9	$	142,518	$	(1,259)	40

	December 31, 2020
	Less than 12 Months					12 Months or Greater					Total
			Gross		Number			Gross		Number			Gross		Number
	Fair		Unrealized		of	Fair		Unrealized		of	Fair		Unrealized		of
	Value		Losses		Securities	Value		Losses		Securities	Value		Losses		Securities
U.S. Government-sponsored enterprises (GSEs)	$	15,510	$	(5)	3	$	132	$	(1)	1	$	15,642	$	(6)	4
Other debt securities		1,495		(5)	1		977		(8)	1		2,472		(13)	2
Mortgage-backed securities (GSEs)		9,790		(87)	6		6,083		(95)	3		15,873		(182)	9
Total	$	26,795	$	(97)	10	$	7,192	$	(104)	5	$	33,987	$	(201)	15

The Company reviews the securities portfolio on a quarterly basis to monitor its exposure to other-than-temporary impairment. A determination as to whether a security’s decline in fair value is other-than-temporary takes into consideration numerous factors and the relative significance of any single factor can vary by security. Some factors the Company may consider in the other-than-temporary impairment analysis include the length of time and extent to which the security has been in an unrealized loss position, changes in security ratings, financial condition and near-term prospects of the issuer, as well as security and industry specific economic conditions.

Based on this evaluation, the Company concluded that any unrealized losses at September 30, 2021, represented a temporary impairment, as these unrealized losses are primarily attributable to changes in interest rates and current market conditions, and not credit deterioration of the issuers. As of September 30, 2021, the Company does not intend, or be required, to sell any of the securities, and expects to recover the entire amortized cost of all of the securities.

The following is the amortized cost and carrying value of other investments (in thousands):

	September 30,		December 31,
	2021		2020
Federal Reserve Bank stock	$	8,171	$	8,606
Federal Home Loan Bank stock		6,451		5,838
First National Bankers Bank stock		350		350
Total	$	14,972	$	14,794

Our restricted investments consist of non-marketable equity securities that have no readily determinable market value. Accordingly, when evaluating these securities for impairment, management considers the ultimate recoverability of the par value rather than recognizing temporary declines in value. As of September 30, 2021, the Company determined that there was no impairment on its other investments.