SECURITIES

9 Months Ended

Sep. 30, 2020

SECURITIES.

SECURITIES

NOTE 2: SECURITIES

The amortized cost and fair values of investments in securities, including the gross unrealized gains and losses reported net of tax in other comprehensive income, as of the dates shown below were as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized
(Dollars in thousands)	Cost		Gains		Losses		Fair Value
September 30, 2020
Debt securities available for sale:
State and municipal securities	$	75,298	$	3,355		(75)	$	78,578
U.S. agency securities:
Collateralized mortgage obligations		34,040		477		(5)		34,512
Mortgage-backed securities		107,532		4,287		—		111,819
Equity securities		1,172		20		—		1,192
Total	$	218,042	$	8,139	$	(80)	$	226,101

			Gross		Gross
	Amortized		Unrealized		Unrealized
(Dollars in thousands)	Cost		Gains		Losses		Fair Value
December 31, 2019
Debt securities available for sale:
State and municipal securities	$	51,525	$	1,761	$	(7)	$	53,279
U.S. agency securities:
Collateralized mortgage obligations		55,784		324		(119)		55,989
Mortgage-backed securities		119,787		1,315		(255)		120,847
Equity securities		1,155		—		(8)		1,147
Total	$	228,251	$	3,400	$	(389)	$	231,262

The amortized cost and estimated fair value of securities, by contractual maturities, as of the date shown below were as follows:

	Available for Sale
	Amortized		Fair
(Dollars in thousands)	Cost		Value
September 30, 2020
Amounts maturing in:
1 year or less	$	1,731	$	1,757
1 year through 5 years		2,711		2,792
5 years through 10 years		15,499		16,102
After 10 years		198,101		205,450
	$	218,042	$	226,101
December 31, 2019
Amounts maturing in:
1 year or less	$	2,535	$	2,532
1 year through 5 years		3,081		3,145
5 years through 10 years		14,564		14,874
After 10 years		208,071		210,711
	$	228,251	$	231,262

Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Securities with a carrying amount of $20.4 million were sold in the nine months ended September 30, 2019. No securities were sold in the nine months ended September 30, 2020. At September 30, 2020 and December 31, 2019, securities with a carrying amount of $33.9 million and $50.8 million, respectively, were pledged to secure public deposits, repurchase agreements and for other purposes required or permitted by law.

The Company held 19 and 27 securities at September 30, 2020 and December 31, 2019, respectively, that were in a gross unrealized loss position. The unrealized losses are attributable primarily to changes in market interest rates relative to those available when the securities were acquired. There are multiple qualitative factors considered by the Company in its assessment to determine if an ACL was necessary for those securities where the amortized cost basis exceeds the fair value. These factors include, among other things: (i) the extent to which the fair value was less than the amortized cost basis of the security and the length of time; (ii) the structure of the payments and likelihood that the issuer has the ability to make future payments; (iii) adverse conditions related to the security, industry or geographic area; (iv) changes in any credit ratings or financial conditions of the issuer; (v) failure by the issuer to make previous payments; and (vi) past events related to the security, current economic conditions and reasonable and supportable forecasts. Management did not believe that any of the securities the Company held were impaired due to reasons of credit quality and believed the unrealized losses were temporary. No ACL for available for sale securities has been recorded in the Company’s condensed consolidated balance sheets at September 30, 2020 and upon adoption of CECL.

Amortized costs, as defined by GAAP, include acquisition costs, applicable accrued interest and accretion or amortization of premiums and discounts. The Company made a policy election to exclude accrued interest from amortized costs in the determination of ACL. The Company continues its policy of reversing previously accrued interest when it has been deemed uncollectible.

Accrued interest receivable for securities was $736,000 and $1.1 million at September 30, 2020 and December 31, 2019, respectively, and is included in other assets in the condensed consolidated balance sheets.

Securities with unrealized losses as of the dates shown below, aggregated by category and the length of time, were as follows:

	Less Than Twelve Months				Twelve Months or More
			Gross				Gross
	Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Losses		Value		Losses
September 30, 2020
Debt securities available for sale:
State and municipal securities	$	8,502	$	(75)	$	—	$	—
U.S. agency securities:
Collateralized mortgage obligations		1,042		(5)		—		—
Mortgage-backed securities		—		—		—		—
Equity securities		—		—		—		—
	$	9,544	$	(80)	$	—	$	—
December 31, 2019
Debt securities available for sale:
State and municipal securities	$	3,539	$	(7)	$	106	$	—
U.S. agency securities:
Collateralized mortgage obligations		10,687		(46)		7,994		(73)
Mortgage-backed securities		11,628		(26)		21,745		(229)
Equity securities		—		—		1,147		(8)
	$	25,854	$	(79)	$	30,992	$	(310)