MARKETABLE SECURITIES

9 Months Ended

Sep. 30, 2021

Investments Debt And Equity Securities [Abstract]

NOTE 2 - MARKETABLE SECURITIES

The following tables summarize the amortized cost and fair value of available for sale and held to maturity securities as of September 30, 2021 and securities available for sale as of December 31, 2020 and the corresponding amounts of gross unrealized gains and losses:


September 30, 2021	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available for sale:
U.S. government agencies	$	10,013	$	46	$	—	$	10,059
Corporate bonds		34,105		1,233		92		35,246
Mortgage-backed securities		157,846		2,143		847		159,142
Collateralized mortgage obligations		63,272		1,405		54		64,623
Total available for sale	$	265,236	$	4,827	$	993	$	269,070

Held to maturity:
Municipal securities	$	170,634	$	9,139	$	147	$	179,626
Mortgage-backed securities		3,042		—		37		3,005
Total held to maturity	$	173,676	$	9,139	$	184	$	182,631


December 31, 2020	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available for sale:
Corporate bonds	$	29,608	$	1,382	$	8	$	30,982
Municipal securities		164,668		11,036		—		175,704
Mortgage-backed securities		104,210		3,041		87		107,164
Collateralized mortgage obligations		64,611		2,335		1		66,945
Total available for sale	$	363,097	$	17,794	$	96	$	380,795

There is no allowance for credit losses recorded for our available for sale or held to maturity debt securities as of September 30, 2021 or December 31, 2020.

Information pertaining to securities with gross unrealized losses as of September 30, 2021 and December 31, 2020, for which no allowance for credit losses has been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position is detailed in the following tables:


	Less Than 12 Months					12 Months or Longer					Total
September 30, 2021	Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value
Available for sale:
Corporate bonds	$	(92	)	$	7,678	$	—		$	—	$	(92	)	$	7,678
Mortgage-backed securities		(803	)		68,150		(44	)		3,276		(847	)		71,426
Collateralized mortgage obligations		(54	)		18,203		—			—		(54	)		18,203
Total available for sale	$	(949	)	$	94,031	$	(44	)	$	3,276	$	(993	)	$	97,307

Held to maturity:
Municipal securities	$	(147	)	$	4,381	$	—		$	—	$	(147	)	$	4,381
Mortgage-backed securities		(37	)		3,006		—			—		(37	)		3,006
Total held to maturity	$	(184	)	$	7,387	$	—		$	—	$	(184	)	$	7,387


	Less Than 12 Months					12 Months or Longer					Total
December 31, 2020	Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value
Available for sale:
Corporate bonds	$	(8	)	$	2,493	$	—		$	—	$	(8	)	$	2,493
Mortgage-backed securities		(87	)		25,775		—			—		(87	)		25,775
Collateralized mortgage obligations		—			—		(1	)		106		(1	)		106
Total available for sale	$	(95	)	$	28,268	$	(1	)	$	106	$	(96	)	$	28,374

There were 26 investments in an unrealized loss position, and 22 available for sale debt securities in an unrealized loss position with no recorded allowance for credit losses at September 30, 2021. The available for sale securities in a loss position were composed of corporate bonds, collateralized mortgage obligations and mortgage-backed securities. Management evaluates available for sale debt securities in an unrealized loss position to determine whether the impairment is due to credit-related factors or noncredit-related factors. With respect to the collateralized mortgage obligations and mortgage-backed securities issued by the U.S. Government and its agencies, the Company has determined that a decline in fair value is not due to credit-related factors. The Company monitors the credit quality of other debt securities through the use of credit ratings and other factors specific to an individual security in assessing whether or not the decline in fair value of municipal or corporate securities, relative to their amortized cost, is due to credit-related factors. Triggers to prompt further investigation of securities when the fair value is less than the amortized cost are when a security has been downgraded and falls below an A credit rating, and the security’s unrealized loss exceeds 20% of its book value. Consideration is given to (1) the extent to which fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value. Based on evaluation of available evidence, management believes the unrealized losses on the securities as of September 30, 2021 is not credit-related. Management does not have the intent to sell any of these securities and believes that it is more likely than not the Company will not have to sell any such securities before recovery

of cost. The fair values are expected to recover as the securities approach their maturity date or repricing date or if market yields for the investments decline.

Management assesses held to maturity securities sharing similar risk characteristics on a collective basis for expected credit losses under CECL. As of September 30, 2021, our held to maturity securities consisted of municipal bonds and mortgage-backed securities issued by the U.S. Government and its agencies. With regard to the mortgage-backed securities issued by the U.S. government, or agencies thereof, it is expected that the securities will not be settled at prices less than the amortized cost bases of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. For municipal securities, management reviewed key risk indicators, including ratings by credit agencies when available, and determined that there is no current expectation of credit loss. Accordingly, no allowance for credit losses has been recorded for these securities.

Mortgage-backed securities and collateralized mortgage obligations are backed by pools of mortgages that are insured or guaranteed by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association or the Government National Mortgage Association.

As of September 30, 2021, there were no holdings of securities of any one issuer, other than the collateralized mortgage obligations and mortgage-backed securities issued by the U.S. government and its agencies, in an amount greater than 10% of shareholders’ equity.

Securities with fair values of approximately $279,726 and $314,962 at September 30, 2021 and December 31, 2020, respectively, were pledged to secure public fund deposits and for other purposes as required or permitted by law.

There were no securities sold during the three or nine months ended September 30, 2021 or 2020.

From time to time, we have reclassified certain securities from available for sale to held to maturity. Such transfers are made at fair value at the date of transfer. The unrealized holding gains at the date of transfer are retained in other comprehensive income and in the carrying value of the held to maturity securities and are amortized over the remaining life of the security. The net unamortized, unrealized gain remaining on transferred securities included in accumulated other comprehensive income in the accompanying balance sheet totaled $9,684 at September 30, 2021. This amount will be amortized out of accumulated other comprehensive income over the remaining life of the underlying securities as an adjustment of the yield on those securities.

The contractual maturities at September 30, 2021 of available for sale securities at carrying value and estimated fair value are shown below. The Company invests in mortgage-backed securities and collateralized mortgage obligations that have expected maturities that differ from their contractual maturities. These differences arise because borrowers and/or issuers may have the right to call or prepay their obligation with or without call or prepayment penalties.


	Available for Sale				Held to Maturity
September 30, 2021	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due within one year	$	—	$	—	$	4,802	$	4,868
Due after one year through five years		14,645		15,430		48,612		50,466
Due after five years through ten years		29,473		29,875		50,369		53,350
Due after ten years		—		—		66,851		70,942
Mortgage-backed securities		157,846		159,142		3,042		3,005
Collateralized mortgage obligations		63,272		64,623		—		—
Total securities	$	265,236	$	269,070	$	173,676	$	182,631