INVESTMENT SECURITIES

12 Months Ended

Dec. 31, 2021

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE 3 - INVESTMENT SECURITIES

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

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2021	Cost		Gains		Losses		Value
Investment securities available-for-sale:
U.S. Treasury debt	$	250	$	—	$	(3)	$	247
U.S. Government Agency		3,522		—		—		3,522
Corporate bonds		8,113		227		(15)		8,325
GNMA mortgage-backed securities – residential		26,611		185		(146)		26,650
FNMA mortgage-backed securities – residential		14,400		43		—		14,443
Government CMO and MBS - commercial		878		—		—		878
Corporate CMO and MBS		1,492		23		(18)		1,497
Other		649		—		—		649
Total securities available-for-sale	$	55,915	$	478	$	(182)	$	56,211

			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

Net amortization of premiums and discounts related to mortgage securities during each of the years ended December 31, 2021 and 2020 was $0.1 million and $0.4 million, respectively, and is included in Net interest income in the Consolidated Statements of Income.

As of December 31, 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
December 31, 2021	Cost		Value
Due within one year	$	506	$	506
Due between one year and five years		414		411
Due between five years and ten years		9,303		9,515
Due after ten years		1,662		1,662
Securities (CMO and MBS)		44,030		44,117
Total	$	55,915	$	56,211

In 2014, the Company began investing in a small business investment company ("SBIC") fund administered by the Small Business Administration. During the year ended December 31, 2021, the Company did not make any contributions to the SBIC fund and received a $0.1 million return of capital. During the year ended December 31, 2020, the Company invested $0.5 million in SBIC. As of December 31, 2021 and 2020, the Company held a balance of $2.0 million and $2.1 million, respectively, with SBIC, which is included in Other assets in the accompanying Consolidated Balance Sheets. The Company may be obligated to invest up to an additional $1.0 million in future SBIC investments.

As of December 31, 2021, securities with carrying values totaling $17.3 million, which includes $14.9 million acquired from the Teton Acquisition, were pledged to secure various public deposits and credit facilities of the Company. As of December 31, 2020, securities with carrying values totaling $3.7 million were pledged.

As of December 31, 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 December 31, 2021 and December 31, 2020, ten securities and seven securities were in an unrealized loss position, with unrealized losses totaling $0.2 million and $0.1 million, respectively. One of the securities in an unrealized loss position as of December 31, 2021 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 December 31, 2021.

The following presents securities with unrealized losses as of December 31, 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
December 31, 2021	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury debt	$	247	$	(3)	$	—	$	—	$	247	$	(3)
Corporate bonds		485		(15)		—		—		485		(15)
GNMA mortgage-backed securities – residential		17,205		(146)		—		—		17,205		(146)
Corporate CMO and MBS		—		—		521		(18)		521		(18)
Total	$	17,937	$	(164)	$	521	$	(18)	$	18,458	$	(182)

	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 years ended December 31, 2021 or 2020.