INVESTMENT SECURITIES

12 Months Ended

Dec. 31, 2020

Investments, Debt and Equity Securities [Abstract]

INVESTMENT SECURITIES

5. INVESTMENT SECURITIES

The amortized cost and estimated fair value of investment securities at December 31, 2020 and 2019 consisted of the following (dollars in thousands):

Available-for-Sale
	2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Debt securities:
U.S. Government Agencies and Sponsored Agencies	$	276,191	$	8,474	$	(832	)	$	283,833
Obligations of states and political subdivisions		15,288		1,013		—			16,301
Corporate Debt Securities		6,748		85		(1	)		6,832
	$	298,227	$	9,572	$	(833	)	$	306,966

AMERICAN RIVER BANKSHARES AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

5. INVESTMENT SECURITIES (Continued)

	2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Debt securities:
U.S. Government Agencies and Sponsored Agencies	$	239,617	$	3,371	$	(1,101	)	$	241,887
Obligations of states and political subdivisions		13,308		212		(73	)		13,447
Corporate Debt Securities		6,496		135		—			6,631
	$	259,421	$	3,718	$	(1,174	)	$	261,965

U.S. Government Agencies and U.S. Government-sponsored Agencies consist predominately of residential mortgage-backed securities. Net unrealized gains on available-for-sale investment securities totaling $8,739,000 were recorded, net of $2,583,000 in tax liabilities, as accumulated other comprehensive income within shareholders’ equity at December 31, 2020. Proceeds and gross realized gains from the sale and call of available-for-sale investment securities for the year ended December 31, 2020 totaled $4,229,000 and $38,000, respectively. There were no transfers of available-for-sale investment securities during the year ended December 31, 2020.

Net unrealized gains on available-for-sale investment securities totaling $2,544,000 were recorded, net of $752,000 in tax liabilities, as accumulated other comprehensive income within shareholders’ equity at December 31, 2019. Proceeds and gross realized gains from the sale and call of available-for-sale investment securities for the year ended December 31, 2019 totaled $63,325,000 and $115,000, respectively. There were no transfers of available-for-sale investment securities during the year ended December 31, 2019.

Proceeds and gross realized gains from the sale, impairment and call of available-for-sale investment securities for the year ended December 31, 2018 totaled $27,003,000 and $31,000, respectively.

Held-to-Maturity

	2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Debt securities:
U.S. Government Agencies and Sponsored Agencies	$	12	$	1	$	—	$	13
	2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Debt securities:
U.S. Government Agencies and Sponsored Agencies	$	248	$	18	$	—	$	266

AMERICAN RIVER BANKSHARES AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

5. INVESTMENT SECURITIES (Continued)

There were no sales or transfers of held-to-maturity investment securities for the years ended December 31, 2020, 2019 and 2018.

The amortized cost and estimated fair value of investment securities at December 31, 2020 by contractual maturity are shown below (dollars in thousands).

	Available-for-Sale				Held-to-Maturity
			Estimated				Estimated
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Within one year	$	2,278	$	2,301
After one year through five years		360		361
After five years through ten years		16,878		17,810
After ten years		2,520		2,661
		22,036		23,133
Investment securities not due at a single maturity date:
U.S. Government Agencies and Sponsored Agencies		276,191		283,833	$	12	$	13
	$	298,227	$	306,966	$	12	$	13

Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to call or prepay obligations with or without call or prepayment penalties.

Investment securities with amortized costs totaling $131,549,000 and $127,307,000 and estimated fair values totaling $137,031,000 and $129,643,000 were pledged to secure State Treasury funds on deposit, public agency and bankruptcy trustee deposits and borrowing arrangements (see Note 10) at December 31, 2020 and 2019, respectively.

Investment securities with unrealized losses at December 31, 2020 and 2019 are summarized and classified according to the duration of the loss period as follows (dollars in thousands):

	2020
	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
Available-for-Sale
Debt securities:
U.S. Government Agencies and Sponsored Agencies	$	58,886	$	(403	)	$	31,138	$	(429	)	$	90,024	$	(832	)
Corporate Debt Securities		749		(1	)		—		—			749		(1	)
	$	59,635	$	(404	)	$	31,138	$	(429	)	$	90,773	$	(833	)

AMERICAN RIVER BANKSHARES AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

5. INVESTMENT SECURITIES (Continued)

	2019
	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
Available-for-Sale
Debt securities:
U.S. Government Agencies and Sponsored Agencies	$	65,082	$	(438	)	$	38,380	$	(663	)	$	103,462	$	(1,101	)
Obligations of states and political subdivisions		8,060		(73	)		—		—			8,060		(73	)
	$	73,142	$	(511	)	$	38,380	$	(663	)	$	111,522	$	(1,174	)

At December 31, 2020, the Company held 204 securities of which 29 were in a loss position for less than twelve months and 21 were in a loss position for twelve months or more. These 50 securities consisted of mortgage-backed and corporate securities.

The unrealized loss on the Company’s investments in securities is primarily driven by interest rates. Because the decline in market value is attributable to a change in interest rates and not credit quality, and because the Company has the ability and intent to hold these investments until recovery of fair value, which may be maturity, management does not consider these investments to be other-than-temporarily impaired.