Investment Securities	9 Months Ended
Sep. 30, 2021
Investment Securities [Abstract]
Investment Securities	4. Investment securitiesAgency – Government-sponsored enterprise (GSE) and Mortgage-backed securities (MBS) - GSE residential Agency – GSE and MBS – GSE residential securities consist of short- to long-term notes issued by Federal Home Loan Mortgage Corporation (FHLMC), FNMA, FHLB and Government National Mortgage Association (GNMA). These securities have interest rates that are fixed and adjustable, have varying short to long-term maturity dates and have contractual cash flows guaranteed by the U.S. government or agencies of the U.S. government.Obligations of states and political subdivisions (municipal) The municipal securities are bank qualified or bank eligible, general obligation and revenue bonds rated as investment grade by various credit rating agencies and have fixed rates of interest with mid- to long-term maturities. Fair values of these securities are highly driven by interest rates. Management performs ongoing credit quality reviews on these issues.The amortized cost and fair value of investment securities at September 30, 2021 and December 31, 2020 are summarized as follows: Gross Gross Amortized unrealized unrealized Fair(dollars in thousands) cost gains losses valueSeptember 30, 2021 Available-for-sale debt securities: Agency - GSE $ 112,949 $ 386 $ (1,820) $ 111,515Obligations of states and political subdivisions 335,011 5,527 (4,073) 336,465MBS - GSE residential 238,745 2,402 (2,201) 238,946 Total available-for-sale debt securities $ 686,705 $ 8,315 $ (8,094) $ 686,926 Gross Gross Amortized unrealized unrealized Fair(dollars in thousands) cost gains losses valueDecember 31, 2020 Available-for-sale debt securities: Agency - GSE $ 45,146 $ 392 $ (91) $ 45,447Obligations of states and political subdivisions 192,385 7,480 (152) 199,713MBS - GSE residential 143,557 3,881 (178) 147,260 Total available-for-sale debt securities $ 381,088 $ 11,753 $ (421) $ 392,420 ‎ The amortized cost and fair value of debt securities at September 30, 2021 by contractual maturity are summarized below: Amortized Fair(dollars in thousands) cost valueAvailable-for-sale securities: Debt securities: Due in one year or less $ 985 $ 1,008Due after one year through five years 9,207 9,452Due after five years through ten years 109,420 107,939Due after ten years 328,348 329,581 MBS - GSE residential 238,745 238,946 Total available-for-sale debt securities $ 686,705 $ 686,926 Actual maturities will differ from contractual maturities because issuers and borrowers may have the right to call or repay obligations with or without call or prepayment penalty. Agency – GSE and municipal securities are included based on their original stated maturity. MBS – GSE residential, which are based on weighted-average lives and subject to monthly principal pay-downs, are listed in total. Most of the securities have fixed rates or have predetermined scheduled rate changes and many have call features that allow the issuer to call the security at par before its stated maturity without penalty.The following table presents the fair value and gross unrealized losses of debt securities aggregated by investment type, the length of time and the number of securities that have been in a continuous unrealized loss position as of September 30, 2021 and December 31, 2020: Less than 12 months More than 12 months Total Fair Unrealized Fair Unrealized Fair Unrealized(dollars in thousands) value losses value losses value losses September 30, 2021 Agency - GSE $ 87,844 $ (1,820) $ - $ - $ 87,844 $ (1,820)Obligations of states and political subdivisions 204,710 (3,882) 4,498 (191) 209,208 (4,073)MBS - GSE residential 160,399 (2,201) - - 160,399 (2,201)Total $ 452,953 $ (7,903) $ 4,498 $ (191) $ 457,451 $ (8,094)Number of securities 220 5 225 December 31, 2020 Agency - GSE $ 27,602 $ (91) $ - $ - $ 27,602 $ (91)Obligations of states and political subdivisions 15,256 (152) - - 15,256 (152)MBS - GSE residential 14,753 (178) - - 14,753 (178)Total $ 57,611 $ (421) $ - $ - $ 57,611 $ (421)Number of securities 30 - 30 The Company had 225 debt securities in an unrealized loss position at September 30, 2021, including 35 agency-GSE securities, 47 MBS – GSE residential securities and 143 municipal securities. The severity of these unrealized losses based on their underlying cost basis was as follows at September 30, 2021: 2.03% for agency - GSE, 1.35% for total MBS-GSE residential; and 1.91% for municipals. Five of these securities had been in an unrealized loss position in excess of 12 months. Management has no intent to sell any securities in an unrealized loss position as of September 30, 2021.Management believes the cause of the unrealized losses is related to changes in interest rates, instability in the capital markets or the limited trading activity due to illiquid conditions in the debt market and is not directly related to credit quality. Quarterly, management conducts a formal review of investment securities for the presence of other than temporary impairment (OTTI). The accounting guidance related to OTTI requires the Company to assess whether OTTI is present when the fair value of a debt security is less than its amortized cost as of the balance sheet date. Under those circumstances, OTTI is considered to have occurred if: (1) the entity has the intent to sell the security; (2) more likely than not the entity will be required to sell the security before recovery of its amortized cost basis; or (3) the present value of expected cash flows is not sufficient to recover the entire amortized cost. The accounting guidance requires that credit-related OTTI be recognized in earnings while non-credit-related OTTI on securities not expected to be sold be recognized in other comprehensive income (OCI). Non-credit-related OTTI is based on other factors affecting market value, including illiquidity. The Company’s OTTI evaluation process also follows the guidance set forth in topics related to debt securities. The guidance set forth in the pronouncements require the Company to take into consideration current market conditions, fair value in relationship to cost, extent and nature of changes in fair value, issuer rating changes and trends, volatility of earnings, current analysts’ evaluations, all available information relevant to the collectability of debt securities, the ability and intent to hold investments until a recovery of fair value which may be to maturity and other factors when evaluating for the existence of OTTI. The guidance requires that credit-related OTTI be recognized as a realized loss through earnings when there has been an adverse change in the holder’s expected cash flows such that the full amount (principal and interest) will probably not be received. This requirement is consistent with the impairment model in the guidance for accounting for debt securities.For all debt securities, as of September 30, 2021, the Company applied the criteria provided in the recognition and presentation guidance related to OTTI. That is, management has no intent to sell the securities and nor any conditions were identified by management that, more likely than not, would require the Company to sell the securities before recovery of their amortized cost basis. The results indicated there was no presence of OTTI in the Company’s security portfolio. In addition, management believes the change in fair value is attributable to changes in interest rates.

Investment Securities

9 Months Ended

Sep. 30, 2021

4. Investment securitiesAgency – Government-sponsored enterprise (GSE) and Mortgage-backed securities (MBS) - GSE residential Agency – GSE and MBS – GSE residential securities consist of short- to long-term notes issued by Federal Home Loan Mortgage Corporation (FHLMC), FNMA, FHLB and Government National Mortgage Association (GNMA). These securities have interest rates that are fixed and adjustable, have varying short to long-term maturity dates and have contractual cash flows guaranteed by the U.S. government or agencies of the U.S. government.Obligations of states and political subdivisions (municipal) The municipal securities are bank qualified or bank eligible, general obligation and revenue bonds rated as investment grade by various credit rating agencies and have fixed rates of interest with mid- to long-term maturities. Fair values of these securities are highly driven by interest rates. Management performs ongoing credit quality reviews on these issues.The amortized cost and fair value of investment securities at September 30, 2021 and December 31, 2020 are summarized as follows: Gross Gross Amortized unrealized unrealized Fair(dollars in thousands) cost gains losses valueSeptember 30, 2021 Available-for-sale debt securities: Agency - GSE $ 112,949 $ 386 $ (1,820) $ 111,515Obligations of states and political subdivisions 335,011 5,527 (4,073) 336,465MBS - GSE residential 238,745 2,402 (2,201) 238,946 Total available-for-sale debt securities $ 686,705 $ 8,315 $ (8,094) $ 686,926 Gross Gross Amortized unrealized unrealized Fair(dollars in thousands) cost gains losses valueDecember 31, 2020 Available-for-sale debt securities: Agency - GSE $ 45,146 $ 392 $ (91) $ 45,447Obligations of states and political subdivisions 192,385 7,480 (152) 199,713MBS - GSE residential 143,557 3,881 (178) 147,260 Total available-for-sale debt securities $ 381,088 $ 11,753 $ (421) $ 392,420 ‎ The amortized cost and fair value of debt securities at September 30, 2021 by contractual maturity are summarized below: Amortized Fair(dollars in thousands) cost valueAvailable-for-sale securities: Debt securities: Due in one year or less $ 985 $ 1,008Due after one year through five years 9,207 9,452Due after five years through ten years 109,420 107,939Due after ten years 328,348 329,581 MBS - GSE residential 238,745 238,946 Total available-for-sale debt securities $ 686,705 $ 686,926 Actual maturities will differ from contractual maturities because issuers and borrowers may have the right to call or repay obligations with or without call or prepayment penalty. Agency – GSE and municipal securities are included based on their original stated maturity. MBS – GSE residential, which are based on weighted-average lives and subject to monthly principal pay-downs, are listed in total. Most of the securities have fixed rates or have predetermined scheduled rate changes and many have call features that allow the issuer to call the security at par before its stated maturity without penalty.The following table presents the fair value and gross unrealized losses of debt securities aggregated by investment type, the length of time and the number of securities that have been in a continuous unrealized loss position as of September 30, 2021 and December 31, 2020: Less than 12 months More than 12 months Total Fair Unrealized Fair Unrealized Fair Unrealized(dollars in thousands) value losses value losses value losses September 30, 2021 Agency - GSE $ 87,844 $ (1,820) $ - $ - $ 87,844 $ (1,820)Obligations of states and political subdivisions 204,710 (3,882) 4,498 (191) 209,208 (4,073)MBS - GSE residential 160,399 (2,201) - - 160,399 (2,201)Total $ 452,953 $ (7,903) $ 4,498 $ (191) $ 457,451 $ (8,094)Number of securities 220 5 225 December 31, 2020 Agency - GSE $ 27,602 $ (91) $ - $ - $ 27,602 $ (91)Obligations of states and political subdivisions 15,256 (152) - - 15,256 (152)MBS - GSE residential 14,753 (178) - - 14,753 (178)Total $ 57,611 $ (421) $ - $ - $ 57,611 $ (421)Number of securities 30 - 30 The Company had 225 debt securities in an unrealized loss position at September 30, 2021, including 35 agency-GSE securities, 47 MBS – GSE residential securities and 143 municipal securities. The severity of these unrealized losses based on their underlying cost basis was as follows at September 30, 2021: 2.03% for agency - GSE, 1.35% for total MBS-GSE residential; and 1.91% for municipals. Five of these securities had been in an unrealized loss position in excess of 12 months. Management has no intent to sell any securities in an unrealized loss position as of September 30, 2021.Management believes the cause of the unrealized losses is related to changes in interest rates, instability in the capital markets or the limited trading activity due to illiquid conditions in the debt market and is not directly related to credit quality. Quarterly, management conducts a formal review of investment securities for the presence of other than temporary impairment (OTTI). The accounting guidance related to OTTI requires the Company to assess whether OTTI is present when the fair value of a debt security is less than its amortized cost as of the balance sheet date. Under those circumstances, OTTI is considered to have occurred if: (1) the entity has the intent to sell the security; (2) more likely than not the entity will be required to sell the security before recovery of its amortized cost basis; or (3) the present value of expected cash flows is not sufficient to recover the entire amortized cost. The accounting guidance requires that credit-related OTTI be recognized in earnings while non-credit-related OTTI on securities not expected to be sold be recognized in other comprehensive income (OCI). Non-credit-related OTTI is based on other factors affecting market value, including illiquidity. The Company’s OTTI evaluation process also follows the guidance set forth in topics related to debt securities. The guidance set forth in the pronouncements require the Company to take into consideration current market conditions, fair value in relationship to cost, extent and nature of changes in fair value, issuer rating changes and trends, volatility of earnings, current analysts’ evaluations, all available information relevant to the collectability of debt securities, the ability and intent to hold investments until a recovery of fair value which may be to maturity and other factors when evaluating for the existence of OTTI. The guidance requires that credit-related OTTI be recognized as a realized loss through earnings when there has been an adverse change in the holder’s expected cash flows such that the full amount (principal and interest) will probably not be received. This requirement is consistent with the impairment model in the guidance for accounting for debt securities.For all debt securities, as of September 30, 2021, the Company applied the criteria provided in the recognition and presentation guidance related to OTTI. That is, management has no intent to sell the securities and nor any conditions were identified by management that, more likely than not, would require the Company to sell the securities before recovery of their amortized cost basis. The results indicated there was no presence of OTTI in the Company’s security portfolio. In addition, management believes the change in fair value is attributable to changes in interest rates.