SECURITIES

12 Months Ended

Dec. 31, 2019

SECURITIES

SECURITIES

NOTE 2 – SECURITIES

Information related to the fair value and amortized cost of securities available-for-sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) at December 31 is provided in the tables below.

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)	Cost		Gain		Losses		Value
2019
Mortgage-backed securities: residential	$	283,817	$	4,751	$	(387)	$	288,181
Mortgage-backed securities: commercial		36,712		262		(2)		36,972
State and municipal securities		270,480		12,828		(228)		283,080
Total	$	591,009	$	17,841	$	(617)	$	608,233
2018
U.S. Treasury securities	$	994	$	0	$	(7)	$	987
U.S. government sponsored agencies		4,435		0		(85)		4,350
Mortgage-backed securities: residential		329,516		1,392		(5,496)		325,412
Mortgage-backed securities: commercial		38,712		0		(571)		38,141
State and municipal securities		217,964		1,403		(2,708)		216,659
Total	$	591,621	$	2,795	$	(8,867)	$	585,549

NOTE 2 – SECURITIES (continued)

Information regarding the fair value and amortized cost of available-for-sale debt securities by maturity as of December 31, 2019, is presented below. Maturity information is based on contractual maturity for all securities other than mortgage-backed securities. Actual maturities of securities may differ from contractual maturities because borrowers may have the right to prepay the obligation without prepayment penalty.

	Amortized		Fair
(dollars in thousands)	Cost		Value
Due in one year or less	$	4,587	$	4,610
Due after one year through five years		15,115		15,453
Due after five years through ten years		24,962		26,061
Due after ten years		225,816		236,956
		270,480		283,080
Mortgage-backed securities		320,529		325,153
Total debt securities	$	591,009	$	608,233

Security proceeds, gross gains and gross losses for 2019, 2018 and 2017 were as follows:

(dollars in thousands)	2019		2018		2017
Sales of securities available-for-sale
Proceeds	$	57,114	$	15,302	$	40,877
Gross gains		279		21		267
Gross losses		(137)		(71)		(235)
Number of securities		46		29		50

Securities with carrying values of $59.3 million and $164.7 million were pledged as of December 31, 2019 and 2018, respectively, as collateral for securities sold under agreements to repurchase, borrowings from the FHLB and for other purposes as permitted or required by law.

Information regarding securities with unrealized losses as of December 31, 2019 and 2018, is presented below. The tables distribute the securities between those with unrealized losses for less than twelve months and those with unrealized losses for twelve months or more.

	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
2019
Mortgage-backed securities: residential	$	23,436	$	112	$	14,174	$	275	$	37,610	$	387
Mortgage-backed securities: commercial		4,591		2		0		0		4,591		2
State and municipal securities		14,188		228		0		0		14,188		228
Total temporarily impaired	$	42,215	$	342	$	14,174	$	275	$	56,389	$	617
2018
U.S. Treasury securities	$	0	$	0	$	987	$	7	$	987	$	7
U.S. government sponsored agencies		0		0		4,350		85		4,350		85
Mortgage-backed securities: residential		11,619		12		217,182		5,484		228,801		5,496
Mortgage-backed securities: commercial		0		0		38,141		571		38,141		571
State and municipal securities		26,229		124		85,982		2,584		112,211		2,708
Total temporarily impaired	$	37,848	$	136	$	346,642	$	8,731	$	384,490	$	8,867

NOTE 2 – SECURITIES (continued)

The number of securities with unrealized losses as of December 31, 2019 and 2018 is presented below.

	Less than	12 months
	12 months	or more	Total
2019
Mortgage-backed securities: residential	7	6	13
Mortgage-backed securities: commercial	1	0	1
State and municipal securities	11	0	11
Total temporarily impaired	19	6	25
2018
U.S. Treasury securities	0	1	1
U.S. government sponsored agencies	0	2	2
Mortgage-backed securities: residential	5	84	89
Mortgage-backed securities: commercial	0	9	9
State and municipal securities	35	111	146
Total temporarily impaired	40	207	247

There were no debt securities with credit losses recognized in income during 2019, 2018 or 2017.

Ninety-nine percent of the securities are backed by the U.S. government, government agencies, government sponsored agencies or are rated above investment grade, except for certain non-local or local municipal securities, which are not rated. For the government, government-sponsored agency and municipal securities, management did not have concerns of credit losses and there was nothing to indicate that full principal will not be received. Management considered the unrealized losses on these securities to be primarily interest rate driven and does not expect material losses given current market conditions unless the securities are sold. However, at this time management does not have the intent to sell and it is more likely than not that it will not be required to sell these securities before the recovery of their amortized cost basis.

The Company does not have a history of actively trading securities, but keeps the securities available-for-sale should liquidity for interest rate risk management or other needs develop that would warrant the sale of securities. While these securities are held in the available-for-sale portfolio, it is management’s current intent and ability to hold them until a recovery in fair value or maturity.