INVESTMENT SECURITIES

12 Months Ended

Dec. 31, 2021

Investments, Debt and Equity Securities [Abstract]

Note 2 – Investment Securities

Amortized cost and fair values of investment securities available-for-sale at December 31, 2021 are summarized as follows:


(Dollars in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
United States government agency securities	$	41,105	$	228	$	(896)	$	40,437
United States sponsored mortgage-backed securities	77,519		222		(1,633)		76,108
United States treasury securities	112,133		—		(1,744)		110,389
Municipal securities	171,044		4,334		(366)		175,012
Corporate debt securities	11,093		49		—		11,142
Other debt securities	7,500		—		—		7,500
Total debt securities	420,394		4,833		(4,639)		420,588
Other securities	878		—		—		878
Total investment securities available-for-sale	$	421,272	$	4,833	$	(4,639)	$	421,466

Amortized cost and fair values of investment securities available-for-sale at December 31, 2020 are summarized as follows:


(Dollars in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
United States government agency securities	$	53,207	$	872	$	(210)	$	53,869
United States sponsored mortgage-backed securities	94,968		972		(171)		95,769
United States treasury securities	3,000		123		—		3,123
Municipal securities	223,642		8,327		(82)		231,887
Corporate debt securities	17,473		146		(71)		17,548
Other debt securities	7,500		—		—		7,500
Total debt securities	399,790		10,440		(534)		409,696
Other securities	928		—		—		928
Total investment securities available-for-sale	$	400,718	$	10,440	$	(534)	$	410,624

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


	December 31, 2021
	Available for sale
(Dollars in thousands)	Amortized Cost		Fair Value
Within one year	$	994	$	1,006
After one year, but within five years	120,932		119,219
After five years, but within ten years	33,898		34,495
After ten years	264,570		265,868
Total	$	420,394	$	420,588

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 $244.6 million and $229.4 million at December 31, 2021 and 2020, respectively, were pledged to secure public funds, repurchase agreements and potential borrowings at the Federal Reserve discount window.

Our investment portfolio includes securities that are in an unrealized loss position as of December 31, 2021, the details of which are included in the following table. Although these securities, if sold at December 31, 2021 would result in a pretax loss of $4.6 million, we have no intent to sell the applicable securities at such fair values, and maintain that we have the ability to hold these securities until all principal has been recovered. It is more likely than not that we 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, we consider 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, our 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 December 31, 2021, we consider all securities with unrealized loss positions to be temporarily impaired, and consequently, does not believe we will sustain material realized losses as a result of the current temporary decline in fair value.

The following table discloses the length of time that investments have remained in an unrealized loss position at December 31, 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 (21)	$	5,101	$	(77)	$	21,770	$	(819)
United States sponsored mortgage-backed securities (30)	55,354		(1,346)		7,845		(287)
United States treasury securities (24)	110,389		(1,744)		—		—
Municipal securities (53)	32,221		(270)		7,001		(96)

	$	203,065	$	(3,437)	$	36,616	$	(1,202)

The following table discloses the length of time that investments have remained in an unrealized loss position at 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)		—		—
Corporate debt securities (5)	3,947		(71)		—		—
	$	50,155	$	(376)	$	15,923	$	(158)

The following table summarizes the investment sales and related gains and losses in 2021, 2020 and 2019:


(Dollars in thousands)	2021		2020		2019
Sales of available-for-sale investments	$	146,011	$	54,023	$	31,220
Gross gains	3,944		948		105

Gross losses	69		34		271

Sales of equity investments	$	543	$	4,622	$	5,968
Gross gains	5		3,501		—
Gross losses	—		—		7

We recognized unrealized holding gains on equity securities of $3.8 million, $0.4 million and $13.8 million in 2021, 2020 and 2019, respectively, and these were recorded in noninterest income.

There were no held-to-maturity securities at December 31, 2021 or December 31, 2020 and we sold no held-to-maturity investments during the years of 2021, 2020 or 2019.

Qualified Affordable Housing Projects

We have invested in limited partnerships that sponsor affordable housing projects utilizing low income house tax credits pursuant to Section 42 of the Internal Revenue Code. In exchange for these investments, we receive our 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 December 31, 2021 we have recognized investments totaling $3.2 million between the four affordable housing investment limited partnerships and have recognized cumulative amortization of $2.3 million and $1.2 million from these funds as of December 31, 2021 and December 31, 2020, respectively.