INVESTMENT SECURITIES

3 Months Ended

Mar. 31, 2021

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE 5: INVESTMENT SECURITIES

The amortized cost and fair values of securities classified as available-for-sale were as follows:

	March 31, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In Thousands)
AVAILABLE-FOR-SALE SECURITIES:
Agency mortgage-backed securities	$	159,967	$	11,283	$	1,482	$	169,768
Agency collateralized mortgage obligations		226,494		4,182		3,594		227,082
States and political subdivisions		39,833		1,546		149		41,230
Small Business Administration securities		19,272		316		—		19,588
	$	445,566	$	17,327	$	5,225	$	457,668

	December 31, 2020
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In Thousands)
AVAILABLE-FOR-SALE SECURITIES:
Agency mortgage-backed securities	$	151,106	$	19,665	$	831	$	169,940
Agency collateralized mortgage obligations		168,472		8,524		375		176,621
States and political subdivisions		45,196		2,135		6		47,325
Small Business Administration securities		20,033		1,014		—		21,047
	$	384,807	$	31,338	$	1,212	$	414,933

The amortized cost and fair value of available-for-sale securities at March 31, 2021, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized		Fair
	Cost		Value
	(In Thousands)
One year or less	$	—	$	—
After one through five years		—		—
After five through ten years		9,929		10,471
After ten years		29,904		30,759
Securities not due on a single maturity date		405,733		416,438
	$	445,566	$	457,668

There were no securities classified as held to maturity at March 31, 2021 or December 31, 2020.

Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments at March 31, 2021 and December 31, 2020, was approximately $134.5 million and $24.2 million, respectively, which is approximately 29.4% and 5.8% of the Company’s available-for-sale investment portfolio, respectively.

Based on an evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes any declines in fair value for these debt securities are temporary.

The following table shows the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2021 and December 31, 2020:

	March 31, 2021
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Description of Securities	Value		Losses		Value		Losses		Value		Losses
	(In Thousands)
Agency mortgage-backed securities	$	19,668	$	(1,482)	$	—	$	—	$	19,668	$	(1,482)
Agency collateralized mortgage obligations		105,043		(3,594)		—		—		105,043		(3,594)
States and political subdivisions securities		9,773		(149)		—		—		9,773		(149)
	$	134,484	$	(5,225)	$	—	$	—	$	134,484	$	(5,225)

	December 31, 2020
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Description of Securities	Value		Losses		Value		Losses		Value		Losses
	(In Thousands)
Agency mortgage-backed securities	$	10,279	$	(831)	$	—	$	—	$	10,279	$	(831)
Agency collateralized mortgage obligations		12,727		(375)		—		—		12,727		(375)
Small Business Administration securities		—		—		—		—		—		—
States and political subdivisions securities		1,164		(6)		—		—		1,164		(6)
	$	24,170	$	(1,212)	$	—	$	—	$	24,170	$	(1,212)

There were no sales of available-for-sale securities during the three months ended March 31, 2021 or March 31, 2020. Gains and losses on sales of securities are determined on the specific-identification method.

Allowance for Credit Losses Beginning January 1, 2021, the Company evaluates all securities quarterly to determine if any securities in a loss position require a provision for credit losses in accordance with ASC 326, Measurement of Credit Losses on Financial Instruments. All of the mortgage-backed, collateralized mortgage, and SBA securities held by the Company are issued by U.S. government-sponsored entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. Likewise, the Company has not experienced historical losses on these types of securities. Accordingly, no allowance for credit losses has been recorded for these securities.

Regarding securities issued by state and political subdivisions, management considers the following when evaluating these securities: (i) current issuer bond ratings, (ii) historical loss rates for given bond ratings, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, (iv) updated financial information of the issuer, (v) internal forecasts and (vi) whether such securities provide insurance or other credit enhancement or are pre-refunded by the issuers. These securities are highly rated by major rating agencies and have a long history of no credit losses. Likewise, the Company has not experienced historical losses on these types of securities. Accordingly, no allowance for credit losses has been recorded for these securities.

Amounts Reclassified Out of Accumulated Other Comprehensive Income. There were no amounts reclassified from accumulated other comprehensive income during the three months ended March 31, 2021 and 2020.