Note

– Securities –

The amortized cost and fair values of securities available for sale as of

December 31, 2019

and

2018

are summarized as follows:

	December 31, 2019
	(Dollars in thousands)
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
U.S. Government Agencies	$	15,654	$	303	$	20	$	15,937
Corporate Securities		23,774		98		158		23,714
Mortgage-Backed Securities		137,817		2,139		497		139,459
Municipal Securities		97,641		1,447		5		99,083

Total Securities Available for Sale	$	274,886	$	3,987	$	680	$	278,193

	December 31, 2018
	(Dollars in thousands)
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
U.S. Government Agencies	$	17,529	$	54	$	144	$	17,439
Corporate Securities		13,052		76		436		12,692
Mortgage-Backed Securities		168,854		328		3,564		165,618
Municipal Securities		114,472		250		955		113,767

Total Securities Available for Sale	$	313,907	$	708	$	5,099	$	309,516

The following table is a summary of securities with gross unrealized losses and fair values at

December 31, 2019

and

2018,

aggregated by investment category and length of time in a continued unrealized loss position. Due to the nature of these investments and current prevailing market prices, these unrealized losses are considered a temporary impairment of the securities.

	December 31, 2019
	Less Than 12 Months				12 Months or Greater				Total
	(Dollars in thousands)
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S. Government Agencies	$	2,486	$	20	$	-	$	-	$	2,486	$	20
Corporate Securities		-		-		6,360		158		6,360		158
Mortgage-Backed Securities		950		4		44,366		493		45,316		497
Municipal Securities		948		4		1,261		1		2,209		5

Total Securities Available for Sale	$	4,384	$	28	$	51,987	$	652	$	56,371	$	680

	December 31, 2018
	Less Than 12 Months				12 Months or Greater				Total
	(Dollars in thousands)
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S. Government Agencies	$	4,399	$	28	$	4,610	$	116	$	9,009	$	144
Corporate Securities		6,274		260		2,324		176		8,598		436
Mortgage-Backed Securities		67,770		1,264		61,271		2,300		129,041		3,564
Municipal Securities		40,473		484		29,782		471		70,255		955

Total Securities Available for Sale	$	118,916	$	2,036	$	97,987	$	3,063	$	216,903	$	5,099

Management evaluates securities for other than temporary impairment when economic and market conditions warrant such evaluations. Consideration is given to the extent and length of time the fair value has been below cost, the reasons for the decline in value, and the Company’s intent to sell a security or whether it is more likely than

not

that the Company will be required to sell the security before the recovery of its amortized cost. The Company developed a process to identify securities that could potentially have a credit impairment that is other than temporary. This process involves evaluating each security for impairment by monitoring credit performance, collateral type, collateral geography, loan-to-value ratios, credit scores, loss severity levels, pricing levels, downgrades by rating agencies, cash flow projections and other factors as indicators of potential credit issues. When the Company determines that a security is deemed to be other than temporarily impaired, an impairment loss is recognized.

The amortized cost and fair values of securities available for sale as of

December 31, 2019

by contractual maturity are shown below. Actual maturities

may

differ from contractual maturities in mortgage-backed securities because the mortgages underlying the securities

may

be called or repaid without any penalties.

	Amortized		Fair
	Cost		Value
	(Dollars in thousands)
Less Than One Year	$	26,988	$	27,017
One to Five Years		50,511		51,099
Over Five to Ten Years		129,486		131,158
Over Ten Years		67,901		68,919

Total Securities Available for Sale	$	274,886	$	278,193

Securities available for sale with a fair value of

$165.9

million and

$172.2

million, respectively, were pledged as collateral on public deposits and for other purposes as required or permitted by law as of

December 31, 2019

and

2018.

There were

$112,000,

$7,000

and

$31,000

realized gross gains from sales or redemptions of securities for the years ended

December 31, 2019,

2018

and

2017,

respectively. There were

$6,000

realized gross losses from sales or redemptions of securities for the year ended

December 31, 2019,

and

realized gross losses from sales or redemptions of securities for the years ended

December 31, 2018

and

2017,

respectively.

Other Equity Securities

The Company has invested in the Federal Home Loan Bank of Dallas which is included in other equity securities and reflected at cost in these financial statements. The cost of these securities was

$6.1

million and

$3.6

million, respectively, at

December 31, 2019

and

2018.

The Federal Home Loan Bank stock is pledged to secure advances from the Federal Home Loan Bank of Dallas at both

December 31, 2019

and

2018.

The Company also has investments of

$202,000

and

$202,000

in The Independent Bankers Bank,

$310,000

and

$621,000

in Bankers Insurance, LLC, and

$655,000

and

$655,000

in First National Bankers Bank at

December 31, 2019

and

2018,

respectively. These investments are carried at cost due to the lack of a quoted market price and a ready market for these types of investments. Additionally, the Company has invested

$1.9

million and

$1.5

million in McLarty Capital Partners SBIC, L.P.,

$1.8

million and

$1.6

million in McLarty Capital Partners SBIC II, L.P.,

$1.6

million and

$1.1

million in Bluehenge Capital Secured Debt SBIC, L.P.,

$12,000

and

$13,000

in New Louisiana Angel Fund

LLC, at

December 31, 2019

and

2018,

respectively. These investments are accounted for utilizing the equity method of accounting as the Company.