XML 35 R10.htm IDEA: XBRL DOCUMENT v3.20.1
Securities
 12 Months Ended
Dec. 31, 2019
Securities [Abstract]  
Securities

Note 2. Securities

Amortized costs and fair values of securities available for sale and held to maturity as of December 31, 2019 and 2018 were as follows (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

 

 

 

Gross Unrealized

 

  

 

 

    

Amortized Cost

    

Gains

    

Losses

    

Fair Value

Securities Available for Sale

 

 

  

 

 

  

 

 

  

 

 

  

U.S. Government agencies

 

$

22,104

 

$

51

 

$

(219)

 

$

21,936

State, county and municipal

 

 

95,467

 

 

3,167

 

 

(42)

 

 

98,592

Mortgage backed securities

 

 

48,045

 

 

808

 

 

(113)

 

 

48,740

Asset backed securities

 

 

11,637

 

 

49

 

 

(82)

 

 

11,604

Corporate bonds

 

 

6,016

 

 

84

 

 

(3)

 

 

6,097

Total Securities Available for Sale

 

$

183,269

 

$

4,159

 

$

(459)

 

$

186,969

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities Held to Maturity

 

 

  

 

 

  

 

 

  

 

 

  

U.S. Government agencies

 

$

10,000

 

$

 —

 

$

(12)

 

$

9,988

State, county and municipal

 

 

25,733

 

 

913

 

 

(1)

 

 

26,645

Total Securities Held to Maturity

 

$

35,733

 

$

913

 

$

(13)

 

$

36,633

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

 

 

 

 

Gross Unrealized

 

 

 

 

    

Amortized Cost

    

Gains

    

Losses

    

Fair Value

Securities Available for Sale

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

13,460

 

$

 —

 

$

(336)

 

$

13,124

U.S. Government agencies

 

 

24,689

 

 

71

 

 

(151)

 

 

24,609

State, county and municipal

 

 

112,465

 

 

1,018

 

 

(941)

 

 

112,542

Mortgage backed securities

 

 

46,877

 

 

196

 

 

(656)

 

 

46,417

Asset backed securities

 

 

5,342

 

 

73

 

 

(4)

 

 

5,411

Corporate bonds

 

 

4,685

 

 

 —

 

 

(62)

 

 

4,623

Total Securities Available for Sale

 

$

207,518

 

$

1,358

 

$

(2,150)

 

$

206,726

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities Held to Maturity

 

 

  

 

 

  

 

 

  

 

 

  

U.S. Government agencies

 

$

10,000

 

$

 —

 

$

(210)

 

$

9,790

State, county and municipal

 

 

32,108

 

 

419

 

 

(64)

 

 

32,463

Total Securities Held to Maturity

 

$

42,108

 

$

419

 

$

(274)

 

$

42,253

 

The amortized cost and fair value of securities as of December 31, 2019 by final contractual maturity are shown below.  Expected maturities may differ from final contractual maturities because issuers may have the right to call or prepay obligations without any penalties.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity

 

Available for Sale

(dollars in thousands)

    

Amortized Cost

    

Fair Value

    

Amortized Cost

    

Fair Value

Due in one year or less

 

$

3,052

 

$

3,076

 

$

18,193

 

$

18,324

Due after one year through five years

 

 

25,571

 

 

26,172

 

 

61,066

 

 

61,864

Due after five years through ten years

 

 

6,859

 

 

7,107

 

 

83,314

 

 

85,784

Due after ten years

 

 

251

 

 

278

 

 

20,696

 

 

20,997

Total securities

 

$

35,733

 

$

36,633

 

$

183,269

 

$

186,969

 

Proceeds from sales and calls of securities available for sale were $64.6 million and $37.0 million during the years ended December 31, 2019 and 2018, respectively. Gains and losses on the sale of securities are determined using the specific identification method.  Gross realized gains and losses on sales of securities available for sale during the years ended December 31, 2019 and 2018 were as follows (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

2019

    

2018

Gross realized gains

 

$

507

 

$

187

Gross realized losses

 

 

(272)

 

 

(117)

Net securities gain

 

$

235

 

$

70

 

In estimating other than temporary impairment (OTTI) losses, management considers the length of time and the extent to which the fair value has been less than cost, the financial condition and short-term prospects for the issuer, and the intent and ability of management to hold its investment for a period of time to allow a recovery in fair value. There were no investments held that had OTTI losses for the years ended December 31, 2019 and 2018.

The fair value and gross unrealized losses for securities, segregated by the length of time that individual securities have been in a continuous gross unrealized loss position, at December 31, 2019 and 2018 were as follows (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

Less than 12 Months

 

12 Months or More

 

Total

 

    

Fair Value

    

Unrealized Loss

    

Fair Value

    

Unrealized Loss

    

Fair Value

    

Unrealized Loss

Securities Available for Sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government agencies

 

$

6,396

 

$

(102)

 

$

8,020

 

$

(117)

 

$

14,416

 

$

(219)

State, county and municipal

 

 

7,088

 

 

(32)

 

 

308

 

 

(10)

 

 

7,396

 

 

(42)

Mortgage backed securities

 

 

11,001

 

 

(40)

 

 

4,287

 

 

(73)

 

 

15,288

 

 

(113)

Asset backed securities

 

 

4,861

 

 

(74)

 

 

625

 

 

(8)

 

 

5,486

 

 

(82)

Corporate bonds

 

 

248

 

 

(3)

 

 

 —

 

 

 —

 

 

248

 

 

(3)

Total

 

$

29,594

 

$

(251)

 

$

13,240

 

$

(208)

 

$

42,834

 

$

(459)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities Held to Maturity

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

U.S. Government agencies

 

$

 —

 

$

 —

 

$

9,988

 

$

(12)

 

$

9,988

 

$

(12)

State, county and municipal

 

 

31

 

 

 —

 

 

622

 

 

(1)

 

 

653

 

 

(1)

Total

 

$

31

 

$

 —

 

$

10,610

 

$

(13)

 

$

10,641

 

$

(13)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

 

Less than 12 Months

 

12 Months or More

 

Total

 

    

Fair Value

    

Unrealized Loss

    

Fair Value

    

Unrealized Loss

    

Fair Value

    

Unrealized Loss

Securities Available for Sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

1,480

 

$

(1)

 

$

11,644

 

$

(335)

 

$

13,124

 

$

(336)

U.S. Government agencies

 

 

6,959

 

 

(47)

 

 

5,155

 

 

(104)

 

 

12,114

 

 

(151)

State, county and municipal

 

 

7,918

 

 

(81)

 

 

34,540

 

 

(860)

 

 

42,458

 

 

(941)

Mortgage backed securities

 

 

11,513

 

 

(94)

 

 

15,811

 

 

(562)

 

 

27,324

 

 

(656)

Asset backed securities

 

 

537

 

 

(1)

 

 

294

 

 

(3)

 

 

831

 

 

(4)

Corporate bonds

 

 

3,661

 

 

(47)

 

 

236

 

 

(15)

 

 

3,897

 

 

(62)

Total

 

$

32,068

 

$

(271)

 

$

67,680

 

$

(1,879)

 

$

99,748

 

$

(2,150)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities Held to Maturity

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

U.S. Government agencies

 

$

 —

 

$

 —

 

$

9,790

 

$

(210)

 

$

9,790

 

$

(210)

State, county and municipal

 

 

2,452

 

 

(20)

 

 

3,985

 

 

(44)

 

 

6,437

 

 

(64)

Total

 

$

2,452

 

$

(20)

 

$

13,775

 

$

(254)

 

$

16,227

 

$

(274)

 

The unrealized losses (impairments) in the investment portfolio at December 31, 2019 and 2018 are generally a result of market fluctuations that occur daily. Interest rates increased consistently across the United States Treasury yield curve during 2018, thereby increasing unrealized losses on securities.  Likewise, these interest rates consistently decreased during 2019, thereby decreasing unrealized losses on the Company’s securities. The unrealized losses are from 66 securities at December 31, 2019. Of those, 59 are investment grade, have U.S. government agency guarantees, or are backed by the full faith and credit of local municipalities throughout the United States. Six investment grade asset-backed securities comprised of student loan pools included in corporate obligations and one corporate bond make up the remaining securities with unrealized losses at December 31, 2019. The Company considers the reason for impairment, length of impairment, and intent and ability to hold until the full value is recovered in determining if the impairment is temporary in nature.  Based on this analysis, the Company has determined these impairments to be temporary in nature. The Company does not intend and it is more likely than not that the Company will not be required to sell these securities until they recover in value or reach maturity.

Market prices are affected by conditions beyond the control of the Company. Investment decisions are made by the management group of the Company and reflect the overall liquidity and strategic asset/liability objectives of the Company. Management analyzes the securities portfolio frequently and manages the portfolio to provide an overall positive impact to the Company’s income statement and balance sheet.

Securities with amortized costs of $47.3 million and $56.0 million at December 31, 2019 and 2018, respectively, were pledged to secure public deposits as required or permitted by law. Securities with amortized costs of $5.8 million and $7.0 million at December 31, 2019 and 2018, respectively, were pledged to secure lines of credit at the Federal Reserve discount window with a lendable collateral value of $5.7 million at December 31, 2019. At each of December 31, 2019 and 2018, there were no securities purchased from a single issuer, other than U.S. Treasury securities and other U.S. Government agencies that comprised more than 10% of the consolidated shareholders’ equity.