Securities

6 Months Ended

Jun. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Note 3. Securities

The amortized cost and fair values of securities available for sale as of June 30, 2022 and December 31, 2021 were as follows (dollars in thousands):


June 30, 2022			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value
U.S. Government treasuries	$	162,019	$	-	$	(1,010	)	$	161,009
U.S. Government agencies		35,313		-		(4,781	)		30,532
Mortgage-backed securities/CMOs		197,121		19		(21,177	)		175,962
Corporate bonds		11,483		4		(334	)		11,154
Municipal bonds		104,027		7		(20,861	)		83,173
Total Securities Available for Sale	$	509,963	$	30	$	(48,163	)	$	461,830


December 31, 2021			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value
U.S. Government agencies	$	32,424	$	24	$	(867	)	$	31,581
Mortgage-backed securities/CMOs		172,975		248		(2,259	)		170,964
Municipal bonds		101,136		1,162		(1,026	)		101,272
Total Securities Available for Sale	$	306,535	$	1,434	$	(4,152	)	$	303,817

As of June 30, 2022, there were $455.5 million, or 278 issues of individual securities, held in an unrealized loss position. These securities have an unrealized loss of $48.2 million and consist of 117 mortgage-backed/collateralized mortgage obligations, 124 municipal bonds, 20 agency bonds, 11 treasury bonds and 6 corporate bonds.

The following table summarizes all securities with unrealized losses, segregated by length of time in a continuous unrealized loss position at June 30, 2022, and December 31, 2021 (dollars in thousands):



	Less than 12 Months					12 Months or More					Total
June 30, 2022	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
U.S. Government treasuries	$	161,009	$	(1,010	)	$	—	$	—		$	161,009	$	(1,010	)
U.S. Government agencies		11,960		(1,207	)		18,572		(3,574	)		30,532		(4,781	)
Mortgage-backed/CMOs		133,182		(15,276	)		39,881		(5,901	)		173,063		(21,177	)
Corporate bonds		9,152		(334	)		—		—			9,152		(334	)
Municipal bonds		67,453		(16,097	)		14,277		(4,764	)		81,730		(20,861	)
	$	382,756	$	(33,924	)	$	72,730	$	(14,239	)	$	455,486	$	(48,163	)



	Less than 12 Months					12 Months or More					Total
December 31, 2021	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
U.S. Government agencies	$	14,443	$	(340	)	$	15,220	$	(527	)	$	29,663	$	(867	)
Mortgage-backed/CMOs		131,876		(1,735	)		15,192		(524	)		147,068		(2,259	)
Municipal bonds		40,352		(722	)		10,409		(304	)		50,761		(1,026	)
	$	186,671	$	(2,797	)	$	40,821	$	(1,355	)	$	227,492	$	(4,152	)

The Company’s securities portfolio is primarily made up of fixed rate instruments, the prices of which move inversely with interest rates. Any unrealized losses are considered by management to be driven by increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the instruments approach their maturity date or repricing date or if market yields for such investments decline. At the end of any accounting period, the portfolio may have both unrealized gains and losses. Management does not believe any of the securities in an unrealized loss position are impaired due to credit quality. Accordingly, as of June 30, 2022, management believes the impairments detailed in the table above are temporary, and no impairment loss has been realized in the Company’s consolidated income statement.

An “other-than-temporary impairment” is considered to exist if either of the following conditions are met: it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, or the Company does not expect to recover the security’s entire amortized cost basis (even if the Company does not intend to sell). In the event that a security would suffer impairment for a reason that was “other than temporary,” the Company would be expected to write down the security’s value to its new fair value, and the amount of the write down would be included in earnings as a realized loss. As of June 30, 2022, management has concluded that none of its investment securities have an OTTI based upon the information available. Additionally, management has the ability to hold any security with an unrealized loss until maturity or until such time as the value of the security has recovered from its unrealized loss position.

Securities having carrying values of $5.4 million at June 30, 2022 were pledged as collateral to secure deposits and facilitate borrowing from the Federal Reserve Bank of Richmond. At December 31, 2021, securities having carrying values of $12.7 million were similarly pledged.

For the three and six months ended June 30, 2022 and June 30, 2021, there were no sales of securities.

Restricted securities are securities with limited marketability and consist of stock in the FRB, the Federal Home Loan Bank of Atlanta, CBB Financial Corporation (the holding company for Community Bankers Bank) and an investment in an SBA loan fund. These restricted securities, totaling $5.1 million and $5.0 million as of June 30, 2022 and December 31, 2021, are carried at cost.

The amortized cost and fair value of AFS debt securities at June 30, 2022 are presented below based upon contractual maturities, by major investment categories (dollars in thousands). Expected maturities may differ from contractual maturities because issuers have the right to call or prepay obligations.


	Amortized Cost		Fair Value
U.S. Government treasuries
One year or less	$	69,543	$	69,071
After one year to five years		92,476		91,938
	$	162,019	$	161,009
U.S. Government agencies
After one year to five years	$	649	$	584
After five years to ten years		28,664		25,088
Ten years or more		6,000		4,860
	$	35,313	$	30,532
Mortgage-backed securities/CMOs
After one year to five years	$	11,389	$	10,897
After five years to ten years		3,211		2,971
Ten years or more		182,521		162,094
	$	197,121	$	175,962
Corporate bonds
After one year to five years	$	5,848	$	5,798
After five years to ten years		5,635		5,356
	$	11,483	$	11,154
Municipal bonds
One year or less	$	502	$	502
After one year to five years		610		601
After five years to ten years		17,259		16,039
Ten years or more		85,656		66,031
	$	104,027	$	83,173

Total Debt Securities Available for Sale	$	509,963	$	461,830