Securities

12 Months Ended

Dec. 31, 2021

Securities [Abstract]

Securities

Note 4. Securities

The amortized cost and fair value of securities available-for-sale and securities held-to-maturity at December 31, 2021 and 2020 are summarized as follow (in thousands):

	December 31, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
Available-for-sale:	Cost		Gains		Losses		Value
U.S. Treasury	$	138,212	$	64	$	(518)	$	137,758
U.S. Government-sponsored enterprises (GSEs)		21,898		76		(173)		21,801
Municipal securities		67,310		512		(2)		67,820
Other debt securities		26,989		313		(82)		27,220
Mortgage-backed securities (GSEs)		228,011		971		(1,128)		227,854
Total	$	482,420	$	1,936	$	(1,903)	$	482,453

	December 31, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
Held-to-maturity:	Cost		Gains		Losses		Value
U.S. Government-sponsored enterprises (GSEs)	$	31,023	$	20	$	(87)	$	30,956
Municipal securities		45,946		63		(19)		45,990
Total	$	76,969	$	83	$	(106)	$	76,946

	December 31, 2020
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
Available-for-sale:	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 December 31, 2021 and 2020, securities with a carrying value totaling approximately $201.2 million and $80.2 million, respectively, were pledged to secure public funds and securities sold under agreements to repurchase.

During the fourth quarter of 2021, the Company transferred $74.6 million of available-for-sale debt securities to the held-to-maturity category, reflecting the Company’s intent to hold those securities to maturity. Transfers of investment securities into the held-to-maturity category from the available-for-sale category are made at fair value at the date of transfer. The related $905 thousand of unrealized holding gain that was included in the transfer is retained in accumulated other comprehensive income and in the carrying value of the held-to-maturity securities. This amount will be amortized

as an adjustment to interest income over the remaining life of the securities. This will offset the impact of amortization of the net premium created in the transfer. There were no gains or losses recognized as a result of this transfer.

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 18 - Derivatives 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.

The amortized cost and estimated market value of securities by contractual maturity, are shown below (in thousands). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	December 31, 2021
	Amortized		Fair
Available-for-sale:	Cost		Value
Due in one year or less	$	907	$	911
Due from one year to five years		66,807		66,584
Due from five years to ten years		131,800		131,926
Due after ten years		54,895		55,178
		254,409		254,599
Mortgage-backed securities		228,011		227,854
Total	$	482,420	$	482,453
Held-to-maturity:
Due in one year or less	$	—	$	—
Due from one year to five years		—		—
Due from five years to ten years		4,061		4,051
Due after ten years		72,908		72,895
		76,969		76,946
Mortgage-backed securities		—		—
Total	$	76,969	$	76,946

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 and securities held-to-maturity have been in a continuous unrealized loss position, as of December 31, 2021 and 2020 (in thousands):

	December 31, 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
Available-for-sale:	Value		Losses		Securities	Value		Losses		Securities	Value		Losses		Securities
U.S. Treasury	$	99,959	$	(518)	11	$	—	$	—	—	$	99,959	$	(518)	11
U.S. Government-sponsored enterprises (GSEs)		14,156		(168)	2		579		(5)	2		14,735		(173)	4
Municipal securities		2,519		(2)	1		—		—	—		2,519		(2)	1
Other debt securities		5,983		(82)	6		—		—	—		5,983		(82)	6
Mortgage-backed securities (GSEs)		159,725		(1,002)	31		8,233		(126)	6		167,958		(1,128)	37
Total	$	282,342	$	(1,772)	51	$	8,812	$	(131)	8	$	291,154	$	(1,903)	59

	December 31, 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
Held-to-maturity:	Value		Losses		Securities	Value		Losses		Securities	Value		Losses		Securities
U.S. Government-sponsored enterprises (GSEs)	$	21,901	$	(87)	8	$	—	$	—	—	$	21,901	$	(87)	8
Municipal securities		4,173		(19)	6		—		—	—		4,173		(19)	6
Total	$	26,074	$	(106)	14	$	—	$	—	—	$	26,074	$	(106)	14

	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
Available-for-sale:	Value		Losses		Securities	Value		Losses		Securities	Value		Losses		Securities
December 31, 2020:
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 December 31, 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 December 31, 2021, the Company does not intend to sell any of the securities, does not expect to be required to sell any of the securities, and expects to recover the entire amortized cost of all of the securities.

Other Investments:

Our other investments consist of restricted 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 December 31, 2021, the Company determined that there was no impairment on its other investment securities.

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

	December 31,		December 31,
	2021		2020
Federal Reserve Bank stock	$	9,693	$	8,606
Federal Home Loan Bank stock		6,451		5,838
First National Bankers Bank stock		350		350
Total	$	16,494	$	14,794