Securities

6 Months Ended

Jun. 30, 2022

Securities [Abstract]

Securities

Note 4. Securities

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

	June 30, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
Available-for-sale:	Cost		Gains		Losses		Value
U.S. Treasury	$	238,546	$	—	$	(13,525)	$	225,021
U.S. Government-sponsored enterprises (GSEs)		428		—		(5)		423
Municipal securities		53,575		95		(513)		53,157
Other debt securities		28,974		—		(1,123)		27,851
Mortgage-backed securities (GSEs)		235,060		4		(16,652)		218,412
Total	$	556,583	$	99	$	(31,818)	$	524,864

	June 30, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
Held-to-maturity:	Cost		Gains		Losses		Value
U.S. Treasury	$	150,413	$	—	$	(3,694)	$	146,719
U.S. Government-sponsored enterprises (GSEs)		51,135		—		(6,120)		45,015
Municipal securities		54,166		—		(7,684)		46,482
Mortgage-backed securities (GSEs)		32,649		—		(3,187)		29,462
Total	$	288,363	$	—	$	(20,685)	$	267,678

	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

At June 30, 2022 and December 31, 2021, securities with a carrying value totaling approximately $257.0 million and $201.2 million, respectively, were pledged to secure public funds and securities sold under agreements to repurchase.

During the first quarter of 2022, the Company transferred $162.4 million of available-for-sale 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 $2.0 million of unrealized holding loss that was included in the transfer is retained in accumulated other comprehensive income, net of tax, 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 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.

The amortized cost and estimated fair value of securities at June 30, 2022 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.

	June 30, 2022
	Amortized		Fair
Available-for-sale:	Cost		Value
Due in one year or less	$	346	$	345
Due from one year to five years		177,974		170,268
Due from five years to ten years		99,298		92,108
Due after ten years		43,905		43,731
		321,523		306,452
Mortgage-backed securities		235,060		218,412
Total	$	556,583	$	524,864
Held-to-maturity:
Due in one year or less	$	—	$	—
Due from one year to five years		150,413		146,719
Due from five years to ten years		30,283		27,432
Due after ten years		75,018		64,065
		255,714		238,216
Mortgage-backed securities		32,649		29,462
Total	$	288,363	$	267,678

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 held-to-maturity have been in a continuous unrealized loss position (in thousands):

	June 30, 2022
	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	$	225,022	$	(13,525)	19	$	—	$	—	—	$	225,022	$	(13,525)	19
U.S. Government-sponsored enterprises (GSEs)		—		—	—		423		(5)	2		423		(5)	2
Municipal securities		39,081		(513)	32		—		—	—		39,081		(513)	32
Other debt securities		26,402		(1,073)	23		1,450		(50)	1		27,852		(1,123)	24
Mortgage-backed securities (GSEs)		210,200		(16,427)	96		7,459		(225)	6		217,659		(16,652)	102
Total	$	500,705	$	(31,538)	170	$	9,332	$	(280)	9	$	510,037	$	(31,818)	179
	June 30, 2022
	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. Treasury	$	146,919	$	(3,694)	4	$	—	$	—	—	$	146,919	$	(3,694)	4
U.S. Government-sponsored enterprises (GSEs)		22,393		(2,777)	6		22,622		(3,343)	7		45,015		(6,120)	13
Municipal securities		46,482		(7,684)	35		—		—	—		46,482		(7,684)	35
Mortgage-backed securities (GSEs)		29,462		(3,187)	5		—		—	—		29,462		(3,187)	5
Total	$	245,256	$	(17,342)	50	$	22,622	$	(3,343)	7	$	267,878	$	(20,685)	57

	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

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 June 30, 2022, 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 June 30, 2022, 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.

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 June 30, 2022, 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):

	June 30,		December 31,
	2022		2021
Federal Reserve Bank stock	$	9,768	$	9,693
Federal Home Loan Bank stock		6,451		6,451
First National Bankers Bank stock		350		350
Total	$	16,569	$	16,494