Investment Securities

9 Months Ended

Sep. 30, 2019

Investments, Debt and Equity Securities [Abstract]

Note 3 – Investment Securities

There were no held-to-maturity securities at September 30, 2019 or December 31, 2018.

Amortized cost and fair values of investment securities available-for-sale at September 30, 2019 are summarized as follows:


(Dollars in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
U. S. Agency securities	$	53,205	$	283	$	(218)	$	53,270
U.S. Sponsored Mortgage-backed securities	50,378		142		(538)		49,982
Municipal securities	108,361		3,693		(30)		112,024
Total debt securities	211,944		4,118		(786)		215,276
Other securities	10,663		128		(3)		10,788
Total investment securities available-for-sale	$	222,607	4,246		$	(789)	$	226,064

Amortized cost and fair values of investment securities available-for-sale at December 31, 2018 are summarized as follows:


(Dollars in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
U. S. Agency securities	$	79,041	$	14	$	(1,625)	$	77,430
U.S. Sponsored Mortgage-backed securities	52,154		—		(2,039)		50,115
Municipal securities	84,747		206		(1,192)		83,761
Total debt securities	215,942		220		(4,856)		211,306
Other securities	10,308		68		(68)		10,308
Total investment securities available-for-sale	$	226,250	$	288	$	(4,924)	$	221,614

The following table summarizes amortized cost and fair values of debt securities by maturity:


	September 30, 2019
	Available for sale
(Dollars in thousands)	Amortized Cost		Fair Value
Within one year	$	90	$	(375)
After one year, but within five	18,959		19,079
After five years, but within ten	29,137		29,316
After ten years	163,758		167,256
Total	$	211,944	$	215,276

Investment securities with a carrying value of $60.2 million at September 30, 2019, were pledged to secure public funds, repurchase agreements, and potential borrowings at the Federal Reserve discount window.

The Company’s investment portfolio includes securities that are in an unrealized loss position as of September 30, 2019, the details of which are included in the following table. Although these securities, if sold at September 30, 2019 would result in a pretax loss of $789 thousand, the Company has no intent to sell the applicable securities at such fair values, and maintains the Company has the ability to hold these securities until all principal has been recovered. Management does not intend to sell these securities and it is unlikely that the Company will be required to sell these securities before recovery of their amortized cost basis. Declines in the fair values of these securities can be traced to general market conditions which reflect the prospect for the economy as a whole. When determining other-than-temporary impairment on securities, the Company considers such factors as adverse conditions specifically related to a certain security or to specific conditions in an industry or geographic area, the time frame securities have been in an unrealized loss position, the Company’s ability to hold the security for a period of time sufficient to allow for anticipated recovery in value, whether or not the security has been downgraded by a rating agency, and whether or not the financial condition of the security issuer has severely deteriorated. As of September 30, 2019, the Company considers all securities with unrealized loss positions to be temporarily impaired, and consequently, does not believe the Company will sustain any material realized losses as a result of the current temporary decline in fair value.

The following table discloses investments in an unrealized loss position at September 30, 2019:


(Dollars in thousands)	Less than 12 months						12 months or more
Description and number of positions	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Agency securities (26)	$	8,244	$	(18)	$	23,455	$	(200)
U.S. Sponsored Mortgage-backed securities (33)	4,175		(6)		32,237		(532)
Municipal securities (6)	2,173		(14)		831		(16)
Other securities (1)	—		—		510		(3)
	$	14,592	$	(38)	$	57,033	$	(751)

The following table discloses investments in an unrealized loss position at December 31, 2018:


(Dollars in thousands)	Less than 12 months						12 months or more
Description and number of positions	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Agency securities (54)	$	9,762	$	(123)	$	63,740	$	(1,502)
U.S. Sponsored Mortgage-backed securities (42)	2,360		(32)		47,755		(2,007)
Municipal securities (78)	5,936		(46)		35,955		(1,146)
Other securities (2)	2,452		(48)		1,018		(20)
	$	20,510	$	(249)	$	148,468	$	(4,675)

For the three-month periods ended September 30, 2019 and 2018, the Company sold investments available-for-sale of $380 thousand and $2.1 million, respectively. These sales resulted in gross gains of $0 and $27 thousand and gross losses of $11 thousand and $26 thousand, respectively.

For the three-month periods ended September 30, 2019 and 2018, the Company sold equity investments of $0 and $0, respectively.

For the nine-month periods ended September 30, 2019 and 2018, the Company sold investments available-for-sale of $27.0 million and $2.8 million, respectively. These sales resulted in gross gains of $80 thousand and $352 thousand and gross losses of $259 thousand and $25 thousand, respectively.

For the nine-month periods ended September 30, 2019 and 2018, the Company sold equity investments of $6.0 million and $0, respectively. These sales resulted in gross gains of $0 and $0 and gross losses of $7 thousand and $0, respectively.

For the three and nine months ended September 30, 2019, the Company recognized unrealized holding gains of $0 and $13.8 million, respectively, on equity securities held as of September 30, 2019, which was recorded in noninterest income in the consolidated statements of income.

For the three and nine months ended September 30, 2018, the Company recognized unrealized holding losses of $623 thousand and $583 thousand, respectively, on equity securities held as of September 30, 2018, which was recorded in noninterest income in the consolidated statements of income.