Investment Securities

6 Months Ended

Jun. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Note 2 – Investment Securities

The following tables present amortized cost and fair values of investment securities available-for-sale as of the periods indicated:


	June 30, 2021
(Dollars in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
United States government agency securities	$	43,428	$	341	$	(567)	$	43,202
United States sponsored mortgage-backed securities	87,082		340		(1,186)		86,236
United States treasury securities	106,869		78		(291)		106,656
Municipal securities	191,010		5,517		(278)		196,249
Other debt securities	7,500		—		—		7,500
Total debt securities	435,889		6,276		(2,322)		439,843
Other securities	10,787		178		(36)		10,929
Total investment securities available-for-sale	$	446,676	$	6,454	$	(2,358)	$	450,772


	December 31, 2020
(Dollars in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
United States government agency securities	$	56,207	$	995	$	(210)	$	56,992
United States sponsored mortgage-backed securities	94,968		972		(171)		95,769
Municipal securities	223,642		8,327		(82)		231,887
Other debt securities	7,500		—		—		7,500
Total debt securities	382,317		10,294		(463)		392,148
Other securities	18,401		146		(71)		18,476
Total investment securities available-for-sale	$	400,718	$	10,440	$	(534)	$	410,624

The following table presents amortized cost and fair values of available-for-sale debt securities by contractual maturity as of the period indicated:


	June 30, 2021
(Dollars in thousands)	Amortized Cost		Fair Value
Within one year	$	—	$	—
After one year, but within five years	87,689		87,564
After five years, but within ten years	59,339		59,499
After ten years	288,861		292,780
Total	$	435,889	$	439,843

The table above reflects contractual maturities. Actual results will differ as the loans underlying the mortgage-backed securities may repay sooner than scheduled.

Investment securities with a carrying value of $232.4 million and $229.4 million at June 30, 2021 and December 31, 2020, respectively, 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 June 30, 2021, the details of which are included in the following table. Although these securities, if sold at June 30, 2021, would result in a pretax loss of $2.4 million, the Company has no intention of selling the applicable securities at such fair values and maintains the Company has the ability to hold these securities until all principal has been recovered. It is more likely than not that the Company will not, for liquidity purposes, sell any securities at a loss. 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 June 30, 2021, 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 decline in fair value.

The following tables present investments in an unrealized loss position as of the periods indicated:


	June 30, 2021
(Dollars in thousands)	Less than 12 months				12 months or more
Description and number of positions	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
United States government agency securities (22)	$	23,645	$	(498)	$	6,493	$	(69)
United States sponsored mortgage-backed securities (21)	65,666		(1,177)		1,946		(9)
United States treasury securities (18)	82,564		(291)		—		—
Municipal securities (39)	28,119		(271)		1,049		(7)
Other securities (1)	—		—		1,464		(36)
	$	199,994	$	(2,237)	$	10,952	$	(121)


	December 31, 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
United States government agency securities (27)	$	19,021	$	(68)	$	12,574	$	(142)
United States sponsored mortgage-backed securities (9)	15,331		(155)		3,349		(16)
Municipal securities (14)	11,856		(82)		—		—
Other securities (5)	3,947		(71)		—		—
	$	50,155	$	(376)	$	15,923	$	(158)

The following table summarizes investment sales, related gains and losses, and unrealized holding gains for the periods shown:


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in thousands)	2021		2020		2021		2020
Sales of available-for-sale securities	$	34,279	$	30,860	$	75,316	$	41,160
Gains, gross	1,708		554		2,864		830

Losses, gross	—		—		13		—

Sales of equity securities	$	61	$	357	$	61	$	357
Gain, gross	5		30		5		30
Losses, gross	—		—		—		—

Unrealized holding gains on equity securities	699		3		1,214		17

Qualified Affordable Housing Projects

The Company has invested, as a limited partner, in three Section 42 affordable housing investment funds. In exchange for these investments, the Company receives its pro-rata share of income, expense, gains and losses, including tax credits, that are received by the projects using the proportional amortization method. As of both June 30, 2021 and December 31, 2020, the Company has recognized, as an investment, $2.8 million in the aggregate between the three affordable housing investment funds and has recognized cumulative losses of $1.4 million and $1.2 million from these funds as of June 30, 2021 and December 31, 2020, respectively.