Investment Securities

9 Months Ended

Sep. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Note 3 – Investment Securities

There were no held-to-maturity securities at September 30, 2020 or December 31, 2019.

Amortized cost and fair values of investment securities available-for-sale at September 30, 2020 are summarized as follows:


(Dollars in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
U.S. agency securities	$	52,602	$	994	$	(214)	$	53,382
U.S. sponsored mortgage-backed securities	67,931		382		(216)		68,097
Municipal securities	148,019		5,503		(178)		153,344
Other debt securities	7,500		—		—		7,500
Total debt securities	276,052		6,879		(608)		282,323
Other securities	15,556		171		(86)		15,641
Total investment securities available-for-sale	$	291,608	7,050		$	(694)	$	297,964

Amortized cost and fair values of investment securities available-for-sale at December 31, 2019 are summarized as follows:


(Dollars in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
U.S. agency securities	$	52,046	$	199	$	(249)	$	51,996
U.S. sponsored mortgage-backed securities	58,748		188		(624)		58,312
Municipal securities	108,750		4,399		(57)		113,092
Total debt securities	219,544		4,786		(930)		223,400
Other securities	12,247		181		(7)		12,421
Total investment securities available-for-sale	$	231,791	$	4,967	$	(937)	$	235,821

The following table summarizes amortized cost and fair values of available-for-sale debt securities by contractual maturity:


	September 30, 2020

(Dollars in thousands)	Amortized Cost		Fair Value
Within one year	$	—	$	—
After one year, but within five years	8,524		8,892
After five years, but within ten years	40,339		41,084
After ten years	227,189		232,347
Total	$	276,052	$	282,323

Investment securities with a carrying value of $260.4 million at September 30, 2020, 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, 2020, the details of which are included in the following table. Although these securities, if sold at September 30, 2020 would result in a pretax loss of $694 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. 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, 2020, 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, 2020:


(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 (25)	$	11,520	$	(62)	$	13,166	$	(152)
U.S. sponsored mortgage-backed securities (8)	14,701		(201)		1,996		(15)
Municipal securities (20)	18,566		(178)		292		—
Other securities (4)	3,937		(86)		—		—
	$	48,724	$	(527)	$	15,454	$	(167)

The following table discloses investments in an unrealized loss position at December 31, 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)	$	8,160	$	(59)	$	15,399	$	(190)
U.S. sponsored mortgage-backed securities (40)	16,660		(170)		27,498		(454)
Municipal securities (13)	6,018		(40)		828		(17)
Other securities (2)	1,093		(7)		—		—
	$	31,931	$	(276)	$	43,725	$	(661)

For the three-month periods ended September 30, 2020 and 2019, the Company sold investments available-for-sale of $7.4 million and $380 thousand, respectively. These sales resulted in gross gains of $69 thousand and $0 and gross losses of $34 thousand and $11 thousand, respectively.

For the nine-month periods ended September 30, 2020 and 2019, the Company sold investments available-for-sale of $48.6 million and $27.0 million, respectively. These sales resulted in gross gains of $899 thousand and $80 thousand and gross losses of $34 thousand and $259 thousand, respectively.

For the three-month periods ended September 30, 2020 and 2019, the Company sold equity investments totaling $669 thousand and $6.0 million. These sales resulted in gross gains of $18 thousand and $0 and gross losses of $0 and $0, respectively.

For the nine-month periods ended September 30, 2020 and 2019, the Company sold equity investments totaling $669 thousand and $6.0 million, respectively. These sales resulted in gross gains of $48 thousand and $0 and gross losses of $0 and $7 thousand, respectively.

For the three-month periods ended September 30, 2020 and 2019, the Company recognized unrealized holding gains on equity securities of $94 thousand and $0, respectively. For the nine-month periods ended September 30, 2020 and 2019, the Company recognized unrealized holding gains on equity securities of $111 thousand and $13.8 million, respectively. These were recorded in noninterest income in the consolidated statements of income.

MVB has invested, as a limited partner, in three Section 42 affordable housing investment funds. In exchange for these investments, MVB receives its pro rata share of income, expense, gains, and losses, including tax credits, that are received by the projects. As of September 30, 2020 and December 31, 2019, MVB has recognized, as an investment, $2.8 million and $3.1 million in the aggregate between the three affordable housing investment funds. In addition, MVB has recognized no gains or losses from the three affordable housing investment funds.