Investment Securities

12 Months Ended

Dec. 31, 2021

The following is a summary of the Company's investments in available for sale and held to maturity securities as of December 31, 2021 and 2020:


As of December 31, 2021	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
	(Dollars in thousands)
Available for sale:
Corporate debt obligations	$	500	$	—	$	—	$	500
Residential mortgage-backed securities	12,513		372		42		12,843
Collateralized mortgage obligations	8		—		—		8
Total available for sale	$	13,021	$	372	$	42	$	13,351

Held to maturity:
States and political subdivisions	$	3,761	$	241	$	16	$	3,986
Residential mortgage-backed securities	6,157		—		118		6,039
Total held to maturity	$	9,918	$	241	$	134	$	10,025


As of December 31, 2020	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
	(Dollars in thousands)
Available for sale:
Corporate debt obligations	$	500	$	—	$	—	$	500
Residential mortgage-backed securities	18,736		646		23		19,359
Collateralized mortgage obligations	22		1		—		23
Total available for sale	$	19,258	$	647	$	23	$	19,882

Held to maturity:
States and political subdivisions	$	1,224	$	306	$	—	$	1,530

The amortized cost and fair value of debt securities classified as available for sale and held to maturity, by contractual maturity as of December 31, 2021, are as follows:


	Amortized Cost		Fair Value
	(Dollars in thousands)
Available for sale:
Due within one year	$	10	$	9
Due after one year through five years	610		611
Due after five years through ten years	7,223		7,388
Due after ten years	5,178		5,343
Total available for sale	$	13,021	$	13,351

Held to maturity:
Due within one year	$	—	$	—
Due after one year through five years	—		—
Due after five years through ten years	1,283		1,524
Due after ten years	8,635		8,501
Total held to maturity	$	9,918	$	10,025

Expected maturities may differ from contractual maturities because the issuers of certain debt securities do have the right to call or prepay their obligations without any penalty.

During the year ending December 31, 2021 and 2020, the Company did not sell any investment securities. Also, at December 31, 2021 and 2020, the Company used a letter of credit of $40.0 million as collateral to secure public deposits.

The following tables show the gross unrealized losses and fair value of the Company's investments which are aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2021 and December 31, 2020.


As of December 31, 2021	Less Than 12 Months				12 Months or Greater				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)
Available for sale:
Residential mortgage-backed securities	$	168	$	1	$	1,418	$	41	$	1,586	$	42
Total available for sale	$	168	$	1	$	1,418	$	41	$	1,586	$	42

Held to maturity:
States and political subdivisions	$	2,462	$	16	$	—	$	—	$	2,462	$	16
Residential mortgage-backed securities	6,039		118		—		—		6,039		118
Total held to maturity	$	8,501	$	134	$	—	$	—	$	8,501	$	134


As of December 31, 2020	Less Than 12 Months				12 Months or Greater				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)
Available for sale:
Residential mortgage-backed securities	$	2,142	$	20	$	215	$	3	$	2,357	$	23
Total available for sale	$	2,142	$	20	$	215	$	3	$	2,357	$	23

The Company’s unrealized loss for the debt securities is comprised of 5 securities in the less than 12 months loss position and 3 securities in the 12 months or greater loss position at December 31, 2021 and 2 securities in the less than 12 months loss position and 2 securities in the 12 months or greater loss position at December 31, 2020. The mortgage-backed securities that had unrealized losses were issued or guaranteed by the US government or government sponsored entities. The unrealized losses

associated with those mortgage-backed securities are generally driven by changes in interest rates and not due to credit losses given the explicit or implicit guarantees provided by the U.S. government. The states and political subsdivisions securities that had unrealized losses were issued by a school district, and therefore the loss is attributed to changes in interest rates and not due to credit losses. Additionally, these securities are classified as held to maturity. Because the Company does not intend to sell the securities and it is not more likely than not that the Company will be required to sell these investments before recovery of their amortized cost basis, the Company does not consider the unrealized loss in these securities to be OTTI at December 31, 2021.

Other Than Temporarily Impaired Debt Securities (OTTI)

On at least a quarterly basis, we review all debt securities that are in an unrealized loss position for OTTI. An investment security is deemed impaired if the fair value of the investment is less than its amortized cost. Amortized cost includes adjustments (if any) made to the cost basis of an investment for accretion, amortization, previous other-than-temporary impairments. After an investment security is determined to be impaired, we evaluate whether the decline in value is other-than-temporary. Please refer to Note 1 - Description of Business and Summary of Significant Accounting Policies for a detailed description of our accounting policy for OTTI.