INVESTMENT SECURITIES

9 Months Ended

Sep. 30, 2021

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE 2 - INVESTMENT SECURITIES

The following presents the amortized cost and fair value of securities available-for-sale, with unrealized gains and losses recognized in accumulated other comprehensive income as of September 30, 2021 and December 31, 2020 (in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
September 30, 2021	Cost		Gains		Losses		Value
Investment securities available-for-sale:
U.S. Treasury debt	$	250	$	—	$	(1)	$	249
Corporate bonds		8,117		249		(10)		8,356
GNMA mortgage-backed securities – residential		20,488		351		(28)		20,811
FNMA mortgage-backed securities – residential		1,102		53		—		1,155
Corporate CMO and MBS		1,645		35		(18)		1,662
Total securities available-for-sale	$	31,602	$	688	$	(57)	$	32,233

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2020	Cost		Gains		Losses		Value
Investment securities available-for-sale:
U.S. Treasury debt	$	250	$	4	$	—	$	254
Corporate bonds		6,000		55		(11)		6,044
GNMA mortgage-backed securities – residential		23,806		798		—		24,604
FNMA mortgage-backed securities – residential		1,616		61		—		1,677
Corporate CMO and MBS		4,078		62		(53)		4,087
Total securities available-for-sale	$	35,750	$	980	$	(64)	$	36,666

As of September 30, 2021, the amortized cost and estimated fair value of available-for-sale securities have contractual maturity dates shown in the table below (in thousands). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

	Amortized		Fair
September 30, 2021	Cost		Value
Due within one year	$	—	$	—
Due between one year and five years		250		249
Due between five years and ten years		8,117		8,356
Securities (agency, Corporate CMO, and MBS)		23,235		23,628
Total	$	31,602	$	32,233

In 2014, the Company began investing in a small business investment company ("SBIC") fund administered by the Small Business Administration. During the nine months ended September 30, 2021, the Company did not make any contributions to the SBIC fund.  During the year ended December 31, 2020, the Company invested $0.5 million in SBIC. As of September 30, 2021 and  December 31, 2020, the Company held a balance of $2.1 million with SBIC, which is included in Other assets in the accompanying Condensed Consolidated Balance Sheets. The Company may be obligated to invest up to an additional $0.9 million in future SBIC investments.

As of September 30, 2021 and December 31, 2020, securities with carrying values totaling $2.3 million and $3.7 million, respectively, were pledged to secure various public deposits and credit facilities of the Company.

As of September 30, 2021 and December 31, 2020, there were no holdings of securities of any one issuer, other than the U.S. Government sponsored entities and agencies, in an amount greater than 10%of shareholders’ equity.

As of both September 30, 2021 and December 31, 2020, there were seven securities in an unrealized loss position, with unrealized losses totaling $0.1 million. Of the securities in an unrealized loss position as of September 30, 2021, one has been in a continuous unrealized loss position for more than twelve months and the remaining have been in a continuous unrealized loss position for less than twelve months. The unrealized loss positions were caused primarily by interest rate changes and market assumptions about prepayments of principal and interest on the underlying mortgages. Because the decline in market value is attributable to market conditions, not credit quality, and because the Company has the ability and intent to hold these investments until a recovery of fair value, which may be near or at maturity, the Company does not consider these investments to be other-than-temporarily impaired as of September 30, 2021.

The following table summarizes securities with unrealized losses as of September 30, 2021 and December 31, 2020, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands, before tax):

	Less than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
September 30, 2021	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury debt	$	249	$	(1)	$	—	$	—	$	249	$	(1)
GNMA mortgage-backed securities – residential		7,555		(28)		—		—		7,555		(28)
Corporate bonds		490		(10)		—		—		490		(10)
Corporate CMO and MBS		—		—		556		(18)		556		(18)
Total	$	8,294	$	(39)	$	556	$	(18)	$	8,850	$	(57)

	Less than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2020	Value		Losses		Value		Losses		Value		Losses
Corporate bonds	$	3,489	$	(11)	$	—	$	—	$	3,489	$	(11)
Corporate CMO and MBS		880		(40)		566		(13)		1,446		(53)
Total	$	4,369	$	(51)	$	566	$	(13)	$	4,935	$	(64)

The Company did not sell any securities during the three and nine months ended September 30, 2021 or during the year ended December 31, 2020.