SECURITIES

12 Months Ended

Dec. 31, 2020

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 at December 31 is provided in the tables below.

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)	Cost		Gain		Losses		Value
2020
U.S. government sponsored agencies	$	36,492	$	56	$	(61)	$	36,487
Mortgage-backed securities: residential		270,231		9,289		(17)		279,503
Mortgage-backed securities: commercial		35,877		1,004		—		36,881
State and municipal securities		355,306		26,696		(28)		381,974
Total	$	697,906	$	37,045	$	(106)	$	734,845
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

Information regarding the fair value and amortized cost of available-for-sale debt securities by maturity as of December 31, 2020, 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	$	2,164	$	2,175
Due after one year through five years		11,543		11,850
Due after five years through ten years		35,829		37,960
Due after ten years		342,262		366,476
		391,798		418,461
Mortgage-backed securities		306,108		316,384
Total debt securities	$	697,906	$	734,845

Security proceeds, gross gains and gross losses for 2020, 2019 and 2018 were as follows:

(dollars in thousands)	2020		2019		2018
Sales of securities available-for-sale
Proceeds	$	8,018	$	57,114	$	15,302
Gross gains		433		279		21
Gross losses		—		(137)		(71)
Number of securities		17		46		29

Securities with carrying values of $382.7 million and $59.3 million were pledged as of December 31, 2020 and 2019, respectively, as collateral for borrowings from the FHLB and Federal Reserve Bank and for other purposes as permitted or required by law.

Information regarding securities with unrealized losses as of December 31, 2020 and 2019, 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
2020
U.S. government sponsored agencies	$	19,800	$	61	$	—	$	—	$	19,800	$	61
Mortgage-backed securities: residential		3		—		3,112		17		3,115		17
Mortgage-backed securities: commercial		—		—		—		—		—		—
State and municipal securities		6,921		28		—		—		6,921		28
Total temporarily impaired	$	26,724	$	89	$	3,112	$	17	$	29,836	$	106
2019
Mortgage-backed securities: residential	$	23,436	$	112	$	14,174	$	275	$	37,610	$	387
Mortgage-backed securities: commercial		4,591		2		—		—		4,591		2
State and municipal securities		14,188		228		—		—		14,188		228
Total temporarily impaired	$	42,215	$	342	$	14,174	$	275	$	56,389	$	617

NOTE 2 – SECURITIES (continued)

The number of securities with unrealized losses as of December 31, 2020 and 2019 is presented below.

	Less than	12 months
	12 months	or more	Total
2020
U.S. government sponsored agencies	3	—	3
Mortgage-backed securities: residential	2	1	3
Mortgage-backed securities: commercial	—	—	—
State and municipal securities	2	—	2
Total temporarily impaired	7	1	8
2019
Mortgage-backed securities: residential	7	6	13
Mortgage-backed securities: commercial	1	—	1
State and municipal securities	11	—	11
Total temporarily impaired	19	6	25

There were no debt securities with credit losses recognized in income during 2020, 2019 or 2018.

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 agencies, government-sponsored agencies and municipal securities, based on credit risk monitoring of municipal securities portfolio, management did not have concerns of credit losses and there was nothing to indicate that full principal will not be received. Management considered any 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.