Investment Securities

9 Months Ended

Sep. 30, 2020

Investments Debt And Equity Securities [Abstract]

Investment Securities

Note 3 -- Investment Securities

The amortized cost, gross unrealized gains and losses and estimated fair values for available-for-sale and held-to-maturity securities by major security type at September 30, 2020 and December 31, 2019 were as follows (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
September 30, 2020
Available-for-sale:
U.S. Treasury securities and obligations of U.S.    government corporations & agencies	$	93,990	$	1,011	$	(135	)	$	94,866
Obligations of states and political subdivisions		223,082		10,188		(335	)		232,935
Mortgage-backed securities: GSE residential		386,226		13,082		(8	)		399,300
Other securities		9,990		141		(5	)		10,126
Total available-for-sale	$	713,288	$	24,422	$	(483	)	$	737,227
Held-to-maturity:
U.S. Treasury securities and obligations of    U.S. government corporations & agencies	$	10,015	$	147	$	—		$	10,162
December 31, 2019
Available-for-sale:
U.S. Treasury securities and obligations of U.S.    government corporations & agencies	$	106,428	$	952	$	(60	)	$	107,320
Obligations of states and political subdivisions		172,460		5,990		(17	)		178,433
Mortgage-backed securities: GSE residential		391,307		5,331		(512	)		396,126
Other securities		3,750		7		—			3,757
Total available-for-sale	$	673,945	$	12,280	$	(589	)	$	685,636
Held-to-maturity:
U.S. Treasury securities and obligations of U.S.    government corporations & agencies	$	69,542	$	99	$	(69	)	$	69,572

The Company also had $185,000 and $412,000 of equity securities, at fair value, as of September 30, 2020 and December 31, 2019, respectively. All of the Company's held-to-maturity securities are government agency-backed securities for which the risk of loss is minimal. As such, as of September 30, 2020, the Company did not record an allowance for credit losses on its held-to-maturity securities.

Realized gains and losses resulting from sales of securities were as follows during the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three months ended September 30,					Nine months ended September 30,
	2020			2019		2020			2019
Gross gains	$	116		$	51	$	934		$	365
Gross losses		(21	)		—		(21	)		(42	)

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The following table indicates the expected maturities of investment securities classified as available-for-sale presented at fair value, and held-to-maturity presented at amortized cost, at September 30, 2020 and the weighted average yield for each range of maturities (dollars in thousands):

	One year or less			After 1 through 5 years			After 5 through 10 years			After ten years			Total
Available-for-sale:
U.S. Treasury securities and obligations of    U.S. government corporations and agencies	$	67,365		$	15,561		$	11,940		$	—		$	94,866
Obligations of state and political subdivisions		30,007			75,417			125,585			1,926			232,935
Mortgage-backed securities: GSE residential		67,766			266,128			65,406			—			399,300
Other securities		—			9,127			999			—			10,126
Total available-for-sale investments	$	165,138		$	366,233		$	203,930		$	1,926		$	737,227
Weighted average yield		2.02	%		2.61	%		2.18	%		3.58	%		2.36	%
Full tax-equivalent yield		2.22	%		2.83	%		2.72	%		4.89	%		2.67	%
Held to Maturity:
U.S. Treasury securities and obligations of    U.S. government corporations and agencies	$	4,995		$	5,020		$	—		$	—		$	10,015
Weighted average yield		2.53	%		2.06	%		—	%		—	%		2.29	%
Full tax-equivalent yield		2.53	%		2.06	%		—	%		—	%		2.29	%

The weighted average yields are calculated based on the amortized cost and effective yields weighted for the scheduled maturity of each security. Tax-equivalent yields have been calculated using a 21% tax rate. With the exception of obligations of the U.S. Treasury and other U.S. government agencies and corporations, there were no investment securities of any single issuer, the book value of which exceeded 10% of stockholders' equity at September 30, 2020.

Investment securities carried at approximately $563 million and $688 million at September 30, 2020 and December 31, 2019, respectively, were pledged to secure public deposits and repurchase agreements and for other purposes as permitted or required by law.

The following table presents the aging of gross unrealized losses and fair value by investment category as of September 30, 2020 and December 31, 2019 (in thousands):

	Less than 12 months					12 months or more					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
September 30, 2020
Available-for-sale:
U.S. Treasury securities and obligations of    U.S. government corporations and agencies	$	20,000	$	(135	)	$	—	$	—		$	20,000	$	(135	)
Obligations of states and political subdivisions		27,300		(335	)		—		—			27,300		(335	)
Mortgage-backed securities: GSE residential		5,199		(8	)		4,991		—			10,190		(8	)
Other securities		4,000		(5	)		—		—			4,000		(5	)
Total	$	56,499	$	(483	)	$	4,991	$	—		$	61,490	$	(483	)
December 31, 2019
Available-for-sale:
U.S. Treasury securities and obligations of    U.S. government corporations and agencies	$	23,375	$	(60	)	$	—	$	—		$	23,375	$	(60	)
Obligations of states and political subdivisions		3,469		(16	)		347		(1	)		3,816		(17	)
Mortgage-backed securities: GSE residential		67,080		(322	)		20,888		(190	)		87,968		(512	)
Total	$	93,924	$	(398	)	$	21,235	$	(191	)	$	115,159	$	(589	)
Held-to-maturity:
U.S. Treasury securities and obligations of    U.S. government corporations and agencies	$	14,996	$	(25	)	$	24,565	$	(44	)	$	39,561	$	(69	)

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U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies. At September 30, 2020 and December 31, 2019, there were no available-for sale U.S. Treasury securities and obligations of U.S. government corporations and agencies in a continuous unrealized loss position for twelve months or more. At December 31, 2019, there were four held-to-maturity U.S. Treasury securities and obligations of U.S. government corporations and agencies with a fair value of $24,565,000 and unrealized losses of $44,000 in a continuous unrealized loss position for twelve months or more.

Obligations of states and political subdivisions. At September 30, 2020, there were no obligations of states and political subdivisions in a continuous loss position for twelve months or more. At December 31, 2019, there was one obligation of states and political subdivisions with a fair value of $347,000 and unrealized losses of $1,000 in a continuous unrealized loss position for twelve months or more.

Mortgage-backed Securities: GSE Residential. At September 30, 2020, there were two mortgage-backed securities with a fair value of $4,991,000 and unrealized losses of $0 in a continuous unrealized loss position for twelve months or more. At December 31, 2019 there were fourteen mortgage-backed securities with a fair value of $20,888,000 and unrealized losses of $190,000 in a continuous unrealized loss position for twelve months or more.

Other securities.  At September 30, 2020, and December 31, 2019, there were no other securities in a continuous unrealized loss position for twelve months or more.

The Company does not believe any unrealized losses as of September 30, 2020 represents other than temporary impairment ("OTTI"). However, given the uncertainty of the financial markets, the Company may be required to recognize OTTI losses in future periods with respect to its available for sale investment securities portfolio. The amount and timing of any additional OTTI will depend on the decline in the underlying cash flows of the securities. Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced, and the resulting loss recognized in the period the other-than-temporary impairment is identified.