Investment Securities

9 Months Ended

Sep. 30, 2021

Investments, Debt and Equity Securities [Abstract]

NOTE 2 – Investment Securities

The amortized costs and fair value of investment securities are as follows:


	September 30, 2021
	Amortized		Gross Unrealized				Fair
(dollars in thousands)	Cost		Gains		Losses		Value
Available for sale
US treasuries	$	999		1		-		1,000
US government agencies		14,503		2		228		14,277
SBA securities		435		10		-		445
State and political subdivisions		22,418		515		226		22,707
Asset-backed securities		10,526		56		13		10,569
Mortgage-backed securities
FHLMC		20,678		141		386		20,433
FNMA		39,479		325		452		39,352
GNMA		5,078		11		70		5,019
Total mortgage-backed securities		65,235		477		908		64,804
Total investment securities available for sale	$	114,116		1,061		1,375		113,802


	December 31, 2020
	Amortized		Gross Unrealized				Fair
	Cost		Gains		Losses		Value
Available for sale
US government agencies	$	6,500		1		8		6,493
SBA securities		504		-		19		485
State and political subdivisions		18,614		804		30		19,388
Asset-backed securities		11,587		15		73		11,529
Mortgage-backed securities
FHLMC		12,157		206		47		12,316
FNMA		35,893		507		91		36,309
GNMA		8,179		53		23		8,209
Total mortgage-backed securities		56,229		766		161		56,834
Total	$	93,434		1,586		291		94,729

Contractual maturities and yields on the Company’s investment securities at September 30, 2021 and December 31, 2020 are shown in the following table. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.


	September 30, 2021
	Less than one year				One to five years					Five to ten years					Over ten years					Total
(dollars in thousands)	Amount		Yield		Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield
Available for sale
US treasuries	$	-		-		-		-			1,000		1.27	%		-		-			1,000		1.27	%
US government agencies		-		-		2,498		0.36	%		8,847		1.31	%		2,932		1.79	%		14,277		1.24	%
SBA securities		-		-		-		-			-		-			445		1.00	%		445		1.00	%
State and political subdivisions		-		-		471		2.13	%		3,476		1.60	%		18,760		2.17	%		22,707		2.08	%
Asset-backed securities		-		-		-		-			1,710		1.52	%		8,859		0.95	%		10,569		1.04	%
Mortgage-backed securities		-		-		1,321		1.85	%		10,065		1.46	%		53,418		1.37	%		64,804		1.40	%
Total	$	-		-		4,290		1.01	%		25,098		1.42	%		84,414		1.52	%		113,802		1.48	%


	December 31, 2020
	Less than one year				One to five years					Five to ten years					Over ten years					Total
(dollars in thousands)	Amount		Yield		Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield
Available for sale
US government agencies	$	-		-		2,501		0.37	%		2,995		1.07	%		997		1.48	%		6,493		0.86	%
SBA securities		-		-		-		-			-		-			485		0.98	%		485		0.98	%
State and political subdivisions		-		-		470		2.13	%		3,053		1.98	%		15,865		2.23	%		19,388		2.18	%
Asset-backed securities		-		-		-		-			1,983		1.17	%		9,546		1.00	%		11,529		1.03	%
Mortgage-backed securities		-		-		2,044		1.77	%		9,544		1.74	%		45,246		1.36	%		56,834		1.44	%
Total	$	-		-		5,015		1.10	%		17,575		1.60	%		72,139		1.50	%		94,729		1.50	%

The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities at September 30, 2021 and December 31, 2020, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.


	September 30, 2021
	Less than 12 months						12 months or longer						Total
			Fair		Unrealized				Fair		Unrealized				Fair		Unrealized
(dollars in thousands)	#		value		losses		#		value		losses		#		value		losses
Available for sale
US government agencies		9	$	11,846	$	157		2	$	1,929	$	71		11	$	13,775	$	228
State and political subdivisions		9		7,280		168		5		2,565		58		14		9,845		226
Asset-backed securities		-		-		-		2		1,794		13		2		1,794		13
Mortgage-backed securities		25		34,823		664		9		11,296		244		34		46,119		908
Total		43	$	53,949	$	989		18	$	17,584	$	386		61	$	71,533	$	1,375


		December 31, 2020
		Less than 12 months					12 months or longer						Total
			Fair		Unrealized				Fair		Unrealized				Fair		Unrealized
(dollars in thousands)	#		value		losses		#		value		losses		#		value		losses
Available for sale
US government agencies		3	$	2,992	$	8		-	$	-	$	-		3	$	2,992	$	8
SBA securities		-		-		-		1		484		19		1		484		19
State and political subdivisions		8		4,861		30		-		-		-		8		4,861		30
Asset-backed securities		-		-		-		6		6,998		73		6		6,998		73
Mortgage-backed securities		15		20,810		136		3		1,984		25		18		22,794		161
Total		26	$	28,663	$	174		10	$	9,466	$	117		36	$	38,129	$	291

At September 30, 2021 the Company had 43 individual investments with a fair market value of $53.9 million that were in an unrealized loss position for less than 12 months and 18 individual investments with a fair market value of $17.6 million that were in an unrealized loss position for 12 months or longer. The unrealized losses were primarily attributable to changes in interest rates, rather than deterioration in credit quality. The individual securities are each investment grade securities. The Company considers the length of time and extent to which the fair value of available-for-sale debt securities have been less than cost to conclude that such securities are not other-than-temporarily impaired. The Company also considers other factors such as the financial condition of the issuer including credit ratings and specific events affecting the operations of the issuer, volatility of the security, underlying assets that collateralize the debt security, and other industry and macroeconomic conditions.

As the Company has no intent to sell securities with unrealized losses and it is not more-likely-than-not that the Company will be required to sell these securities before recovery of amortized cost, the Company has concluded that these securities are not impaired on an other-than-temporary basis.

Other investments are comprised of the following and are recorded at cost which approximates fair value.


(dollars in thousands)	September 30, 2021		December 31, 2020
Federal Home Loan Bank stock	$	1,241		3,103
Other investments		1,176		129
Investment in Trust Preferred securities		403		403
Total other investments	$	2,820		3,635

The Company has evaluated the Federal Home Loan Bank (“FHLB”) stock for impairment and determined that the investment in the FHLB stock is not other than temporarily impaired as of September 30, 2021 and that ultimate recoverability of the par value of this investment is probable. All of the FHLB stock is used to collateralize advances with the FHLB.