SECURITIES

12 Months Ended

Dec. 31, 2020

SECURITIES.

SECURITIES

NOTE 2: SECURITIES

The amortized cost, related gross unrealized gains and losses and fair values of investments in securities as of the dates shown below were as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized
(Dollars in thousands)	Cost		Gains		Losses		Fair Value
December 31, 2020
Debt securities available for sale:
State and municipal securities	$	88,741	$	4,296	$	—	$	93,037
U.S. agency securities:
Collateralized mortgage obligations		35,085		347		(30)		35,402
Mortgage-backed securities		103,686		3,963		—		107,649
Equity securities		1,176		17		—		1,193
Total	$	228,688	$	8,623	$	(30)	$	237,281
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 dates shown below were as follows:

(Dollars in thousands)	1 Year or Less		After 1 Year to 5 Years		After 5 Years to 10 Years		After 10 Years		Total
December 31, 2020
Amortized cost:
Debt securities available for sale:
State and municipal securities	$	509	$	1,292	$	9,154	$	77,786	$	88,741
U.S. agency securities:
Collateralized mortgage obligations		—		—		4,910		30,175		35,085
Mortgage-backed securities		33		1,485		798		101,370		103,686
Equity securities		1,176		—		—		—		1,176
Total	$	1,718	$	2,777	$	14,862	$	209,331	$	228,688
Fair value:
Debt securities available for sale:
State and municipal securities	$	512	$	1,298	$	9,540	$	81,687	$	93,037
U.S. agency securities:
Collateralized mortgage obligations		—		—		5,075		30,327		35,402
Mortgage-backed securities		33		1,565		829		105,222		107,649
Equity securities		1,193		—		—		—		1,193
Total	$	1,738	$	2,863	$	15,444	$	217,236	$	237,281

(Dollars in thousands)	1 Year or Less		After 1 Year to 5 Years		After 5 Years to 10 Years		After 10 Years		Total
December 31, 2019
Amortized cost:
Debt securities available for sale:
State and municipal securities	$	1,356	$	1,399	$	7,920	$	40,850	$	51,525
U.S. agency securities:
Collateralized mortgage obligations		—		—		4,742		51,042		55,784
Mortgage-backed securities		24		1,682		1,903		116,178		119,787
Equity securities		1,155		—		—		—		1,155
Total	$	2,535	$	3,081	$	14,565	$	208,070	$	228,251
Fair value:
Debt securities available for sale:
State and municipal securities	$	1,360	$	1,409	$	8,132	$	42,378	$	53,279
U.S. agency securities:
Collateralized mortgage obligations		—		—		4,803		51,186		55,989
Mortgage-backed securities		25		1,736		1,939		117,147		120,847
Equity securities		1,147		—		—		—		1,147
Total	$	2,532	$	3,145	$	14,874	$	210,711	$	231,262

Actual maturities may differ from contractual maturities as 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 and $56.5 million were sold during the years ended December 31, 2019 and 2018, respectively. No securities were sold in the year ended December 31, 2020. At December 31, 2020 and 2019, securities with a carrying amount of approximately $27.3 million and $50.8 million, respectively, were pledged to secure public deposits, repurchase agreements and for other purposes required or permitted by law.

The scope of CECL includes debt securities classified as held to maturity and amended the accounting and reporting for credit losses on available for sale securities. 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 at December 31, 2020 and 2019 were impaired due to reasons of credit quality and believed any unrealized losses were temporary. No ACL for available for sale securities was recorded in the Company’s consolidated balance sheets at December 31, 2020 or upon adoption of CECL on January 1, 2020 and no impairment loss was recorded in 2019 or 2018 under previous accounting guidance.

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 $1.2 million and $1.1 million at December 31, 2020 and 2019, respectively, and is included in other assets in the consolidated balance sheets.

The Company held 18 and 27 securities at December 31, 2020 and 2019, respectively, that were in a gross unrealized loss position. 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
December 31, 2020
Debt securities available for sale:
State and municipal securities	$	263	$	—	$	—	$	—
U.S. agency securities:
Collateralized mortgage obligations		6,913		(30)		—		—
Mortgage-backed securities		—		—		—		—
Equity securities		—		—		—		—
	$	7,176	$	(30)	$	—	$	—
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)