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Investments
 6 Months Ended
Jun. 30, 2021
Investments [Abstract]  
Investments Note 4. Investments

Available for Sale (AFS) Securities

The amortized cost and estimated fair value of AFS securities as of June 30, 2021 and December 31, 2020 are as follows:

(Dollars in thousands)

Gross

Gross

Amortized

unrealized

unrealized

Fair

June 30, 2021

cost

gains

losses

value

U.S. Government and Agency securities

$

79,377

$

358

$

(17)

$

79,718

Municipal securities

219,690

8,724

(1,146)

227,268

Corporate securities

24,275

295

(159)

24,411

Agency mortgage-backed securities

115,849

1,694

(420)

117,123

Private-label mortgage-backed securities

20,087

35

(60)

20,062

Asset-backed securities

43,367

381

(83)

43,665

$

502,645

$

11,487

$

(1,885)

$

512,247

(Dollars in thousands)

Gross

Gross

Amortized

unrealized

unrealized

Fair

December 31, 2020

cost

gains

losses

value

U.S. Government and Agency securities

$

12,594

$

20

$

(40)

$

12,574

Municipal securities

236,253

11,020

(219)

247,054

Corporate securities

20,421

22

(155)

20,288

Agency mortgage-backed securities

70,443

1,905

(107)

72,241

Private-label mortgage-backed securities

8,412

56

(15)

8,453

Asset-backed securities

36,246

249

(165)

36,330

$

384,369

$

13,272

$

(701)

$

396,940

At June 30, 2021 and December 31, 2020, the fair value of debt securities pledged to secure public funds and trust deposits totaled $137.4 million in both periods. The Bank has no investment in a single issuer that exceeds 10% of shareholders’ equity, except for securities issued by the U.S. Treasury and U.S. government sponsored entities.

The amortized cost and estimated fair value of debt securities at June 30, 2021, by contractual maturity are shown below. Actual maturities may differ from contractual maturities because of prepayment or call options embedded in the securities. Securities not due at a single maturity date are presented separately.

(Dollars in thousands)

Amortized
‎cost

Fair
‎value

Due in one year or less

$

2,804

$

2,829

Due after one year through five years

22,439

23,044

Due after five years through ten years

248,520

256,445

Due after ten years

49,579

49,079

323,342

331,397

Mortgage-backed and asset-backed securities

179,303

180,850

$

502,645

$

512,247

The composition of the net realized gains (losses) on debt securities for the three months ended are as follows:

For the Three Months Ended

For the Six Months Ended

June 30,

June 30,

(Dollars in thousands)

2021

2020

2021

2020

Proceeds

$

16,060

$

—

$

16,060

$

165

Gross gains realized

169

—

169

—

Gross losses realized

(78)

—

(78)

(10)

Net gains (losses) realized

$

91

$

—

$

91

$

(10)

Tax (provision) benefit on net gains (losses) realized

$

(19)

$

—

$

(19)

$

2

Impairment:

The debt securities portfolio contained 136 securities with $128.9 million of temporarily impaired fair value and $1.9 million in unrealized losses at June 30, 2021. The total unrealized loss position has increased $1.2 million since year-end 2020.

For securities with an unrealized loss, Management applies a systematic methodology in order to perform an assessment of the potential for other-than-temporary impairment. In the case of debt securities, investments considered for other-than-temporary impairment: (1) had a specified maturity or repricing date; (2) were generally expected to be redeemed at par; and (3) were expected to achieve a recovery in market value within a reasonable period of time. In addition, the Bank considers whether it intends to sell these securities or whether it will be forced to sell these securities before the earlier of amortized cost recovery or maturity. The impairment identified on debt securities and subject to assessment at June 30, 2021, was deemed to be temporary and required no further adjustments to the financial statements, unless otherwise noted.


‎

The following table reflects temporary impairment in the AFS portfolio, aggregated by investment category, length of time that individual securities have been in a continuous unrealized loss position and the number of securities in each category as of June 30, 2021 and December 31, 2020:

June 30, 2021

Less than 12 months

12 months or more

Total

Fair

Unrealized

Fair

Unrealized

Fair

Unrealized

(Dollars in thousands)

Value

Losses

Count

Value

Losses

Count

Value

Losses

Count

U.S. Government and Agency
‎  securities

$

—

$

—

—

$

5,870 

$

(17)

7 

$

5,870 

$

(17)

7 

Municipal securities

45,357 

(1,135)

47 

1,040 

(11)

1 

46,397 

(1,146)

48 

Corporate securities

8,413 

(87)

17 

2,830 

(72)

3 

11,243 

(159)

20 

Agency mortgage-backed securities

44,250 

(415)

37 

1,403 

(5)

3 

45,653 

(420)

40 

Private-label mortgage-backed securities

8,239 

(60)

6 

—

—

—

8,239 

(60)

6 

Asset-backed securities

4,518 

(27)

5 

6,983 

(56)

10 

11,501 

(83)

15 

Total temporarily impaired
‎  securities

$

110,777 

$

(1,724)

112 

$

18,126 

$

(161)

24 

$

128,903 

$

(1,885)

136 

December 31, 2020

Less than 12 months

12 months or more

Total

Fair

Unrealized

Fair

Unrealized

Fair

Unrealized

(Dollars in thousands)

Value

Losses

Count

Value

Losses

Count

Value

Losses

Count

U.S. Government and Agency
‎  securities

$

3,966 

$

(21)

5 

$

4,185 

$

(19)

11 

$

8,151 

$

(40)

16 

Municipal securities

27,022 

(219)

28 

—

—

—

27,022 

(219)

28 

Corporate securities

7,576 

(37)

13 

3,040 

(118)

4 

10,616 

(155)

17 

Agency mortgage-backed securities

18,390 

(101)

17 

3,355 

(6)

5 

21,745 

(107)

22 

Private-label mortgage-backed securities

2,506 

(15)

2 

—

—

—

2,506 

(15)

2 

Asset-backed securities

1,458 

(12)

2 

11,452 

(153)

15 

12,910 

(165)

17 

Total temporarily impaired
‎  securities

$

60,918 

$

(405)

67 

$

22,032 

$

(296)

35 

$

82,950 

$

(701)

102 

The following table represents the cumulative credit losses on debt securities recognized in earnings for:

Six Months Ended

(Dollars in thousands)

June 30,

2021

2020

Balance of cumulative credit-related OTTI at January 1

$

272

$

272

Decreases for previously recognized credit losses on securities that paid off

(15)

—

Balance of credit-related OTTI at June 30

$

257

$

272

Equity Securities at Fair Value

The Corporation owns one equity investment with a readily determinable fair value. At June 30, 2021 and December 31, 2020, this investment was reported at fair value of $482 thousand and $391 thousand, respectively, with changes in value reported through income.