Investment Securities

6 Months Ended

Jun. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Investment Securities

NOTE 2 – Investment Securities

The amortized costs and fair value of investment securities are as follows:

	June 30, 2021
	Amortized		Gross Unrealized				Fair
(dollars in thousands)	Cost		Gains		Losses		Value
Available for sale
US treasuries	$	999		6		-		1,005
US government agencies		7,494		2		142		7,354
SBA securities		492		1		18		475
State and political subdivisions		19,241		650		137		19,754
Asset-backed securities		10,852		72		13		10,911
Mortgage-backed securities
FHLMC		14,146		157		145		14,158
FNMA		31,814		355		230		31,939
GNMA		5,688		13		65		5,636
Total mortgage-backed securities		51,648		525		440		51,733
Total investment securities available for sale	$	90,726		1,256		750		91,232

	December 31, 2020
	Amortized		Gross Unrealized				Fair
	Cost		Gains		Losses		Value
Available for sale
US government agencies	$	6,500		1		8		6,493
SBA securities		504		-		19		485
State and political subdivisions		18,614		804		30		19,388
Asset-backed securities		11,587		15		73		11,529
Mortgage-backed securities
FHLMC		12,157		206		47		12,316
FNMA		35,893		507		91		36,309
GNMA		8,179		53		23		8,209
Total mortgage-backed securities		56,229		766		161		56,834
Total	$	93,434		1,586		291		94,729

Contractual maturities and yields on the Company’s investment securities at June 30, 2021 and December 31, 2020 are shown in the following table. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	June 30, 2021
	Less than one year				One to five years					Five to ten years					Over ten years					Total
(dollars in thousands)	Amount		Yield		Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield
Available for sale
US treasuries	$	-		-		-		-			1,005		1.27	%		-		-			1,005		1.27	%
US government agencies		-		-		2,497		0.36	%		3,887		1.12	%		970		1.48	%		7,354		0.91	%
SBA securities		-		-		-		-			-		-			475		1.00	%		475		1.00	%
State and political subdivisions		-		-		470		2.13	%		2,562		1.77	%		16,722		2.19	%		19,754		2.13	%
Asset-backed securities		-		-		-		-			1,784		1.14	%		9,127		0.93	%		10,911		0.96	%
Mortgage-backed securities		-		-		1,466		1.53	%		7,293		1.66	%		42,974		0.94	%		51,733		1.06	%
Total	$	-		-		4,433		0.93	%		16,531		1.47	%		70,268		1.24	%		91,232		1.27	%

10

	December 31, 2020
	Less than one year				One to five years					Five to ten years					Over ten years					Total
(dollars in thousands)	Amount		Yield		Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield
Available for sale
US government agencies	$	-		-		2,501		0.37	%		2,995		1.07	%		997		1.48	%		6,493		0.86	%
SBA securities		-		-		-		-			-		-			485		0.98	%		485		0.98	%
State and political subdivisions		-		-		470		2.13	%		3,053		1.98	%		15,865		2.23	%		19,388		2.18	%
Asset-backed securities		-		-		-		-			1,983		1.17	%		9,546		1.00	%		11,529		1.03	%
Mortgage-backed securities		-		-		2,044		1.77	%		9,544		1.74	%		45,246		1.36	%		56,834		1.44	%
Total	$	-		-		5,015		1.10	%		17,575		1.60	%		72,139		1.50	%		94,729		1.50	%

The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities at June 30, 2021 and December 31, 2020, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

	June 30, 2021
	Less than 12 months						12 months or longer						Total
			Fair		Unrealized				Fair		Unrealized				Fair		Unrealized
(dollars in thousands)	#		value		losses		#		value		losses		#		value		losses
Available for sale
US government agencies		7	$	6,852	$	142		-	$	-	$	-		7	$	6,852	$	142
SBA securities		-		-		-		1		475		18		1		475		18
State and political subdivisions		5		3,707		95		4		1,598		42		9		5,305		137
Asset-backed securities		2		1,929		4		2		1,884		9		4		3,813		13
Mortgage-backed securities
FHLMC		5		5,744		145		-		-		-		5		5,744		145
FNMA		10		10,861		187		3		4,840		43		13		15,701		230
GNMA		1		1,749		24		2		2,520		41		3		4,269		65
Total		30	$	30,842	$	597		12	$	11,317	$	153		42	$	42,159	$	750

		December 31, 2020
		Less than 12 months					12 months or longer						Total
			Fair		Unrealized				Fair		Unrealized				Fair		Unrealized
(dollars in thousands)	#		value		losses		#		value		losses		#		value		losses
Available for sale
US government agencies		3	$	2,992	$	8		-	$	-	$	-		3	$	2,992	$	8
SBA securities		-		-		-		1		485		19		1		485		19
State and political subdivisions		8		4,861		30		-		-		-		8		4,861		30
Asset-backed securities		-		-		-		6		6,998		73		6		6,998		73
Mortgage-backed securities
FHLMC		4		5,313		47		-		-		-		4		5,313		47
FNMA		9		11,659		66		3		1,984		25		12		13,643		91
GNMA		2		3,838		23		-		-		-		2		3,838		23
Total		26	$	28,663	$	174		10	$	9,467	$	117		36	$	38,130	$	291

At June 30, 2021 the Company had 30 individual investments with a fair market value of $30.8 million that were in an unrealized loss position for less than 12 months and 12 individual investments with a fair market value of $11.3 million that were in an unrealized loss position for 12 months or longer. The unrealized losses were primarily attributable to changes in interest rates, rather than deterioration in credit quality. The individual securities are each investment grade securities. The Company considers the length of time and extent to which the fair value of available-for-sale debt securities have been less than cost to conclude that such securities are not other-than-temporarily impaired. The Company also considers other factors such as the financial condition of the issuer including credit ratings and specific events affecting the operations of the issuer, volatility of the security, underlying assets that collateralize the debt security, and other industry and macroeconomic conditions.

As the Company has no intent to sell securities with unrealized losses and it is not more-likely-than-not that the Company will be required to sell these securities before recovery of amortized cost, the Company has concluded that these securities are not impaired on an other-than-temporary basis.

11

Other investments are comprised of the following and are recorded at cost which approximates fair value.

(dollars in thousands)	June 30, 2021		December 31, 2020
Federal Home Loan Bank stock	$	1,241		3,103
Other investments		1,126		129
Investment in Trust Preferred securities		403		403
Total other investments	$	2,770		3,635

The Company has evaluated the Federal Home Loan Bank (“FHLB”) stock for impairment and determined that the investment in the FHLB stock is not other than temporarily impaired as of June 30, 2021 and that ultimate recoverability of the par value of this investment is probable. All of the FHLB stock is used to collateralize advances with the FHLB.