Investment Securities

9 Months Ended

Sep. 30, 2020

(5) Investment Securities

The following summarizes the amortized cost of investment securities classified as available-for-sale and their approximate fair values at September 30, 2020 and December 31, 2019:



	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(In thousands)	Basis		Gains		Losses		Value
September 30, 2020
State and municipal securities	$	10,225	$	605	$	—	$	10,830
Asset-backed securities		4,704		321		—		5,025
Government mortgage-backed securities		18,086		491		11		18,566
Total debt securities available-for-sale	$	33,015	$	1,417	$	11	$	34,421
December 31, 2019
State and municipal securities	$	10,808	$	398	$	—	$	11,206
Asset-backed securities		5,433		71		4		5,500
Government mortgage-backed securities		24,954		197		67		25,084
Total debt securities available-for-sale	$	41,195	$	666	$	71	$	41,790

The scheduled maturities of debt securities at September 30, 2020 are summarized in the table below. Actual maturities of mortgage-backed securities may differ from contractual maturities because the mortgages underlying the securities may be repaid without any penalties. Because mortgage-backed securities are not due at a single maturity date, they are not included in the maturity categories in the following maturity summary.



	Available-for-Sale
	Amortized		Fair
(In thousands)	Cost		Value
Due after one year through five years	$	921	$	947
Due after five years through ten years		912		918
Due after ten years		8,392		8,965
Government mortgage-backed securities		18,086		18,566
Asset-backed securities		4,704		5,025
	$	33,015	$	34,421

There were no realized gains or losses on sales and calls during the nine months ended September 30, 2020. During the nine months ended September 30, 2019, gross realized gains on sales and calls were $216,000, and gross realized losses were $103,000.

Securities with carrying amounts of $23.6 million and $30.6 million were pledged to secure available borrowings with the Federal Reserve Bank and Federal Home Loan Bank at September 30, 2020 and December 31, 2019, respectively.

Other-than-temporary impairment assessment: Management assesses whether the decline in fair value of investment securities is other-than-temporary on a regular basis. Unrealized losses on debt securities may occur from current market conditions, increases in interest rates since the time of purchase, a structural change in an investment, volatility of earnings of a specific issuer, or deterioration in credit quality of the issuer. Management evaluates impairments in value both qualitatively and quantitatively to assess whether they are other-than-temporary.

The aggregate fair value and unrealized losses of securities that have been in a continuous unrealized loss position for less than twelve months and for twelve months or longer are as follows at September 30, 2020 and December 31, 2019:



	Less than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(In thousands)	Value		Losses		Value		Losses		Value		Losses
September 30, 2020
Temporarily impaired securities:
Government mortgage-backed securities	$	—	$	—	$	867	$	11	$	867	$	11
Total temporarily impaired debt securities	$	—	$	—	$	867	$	11	$	867	$	11

December 31, 2019
Temporarily impaired securities:
Asset-backed securities	$	606	$	4	$	—	$	—	$	606	$	4
Government mortgage-backed securities		5,207		8		5,418		59		10,625		67
Total temporarily impaired debt securities	$	5,813	$	12	$	5,418	$	59	$	11,231	$	71

Government mortgage-backed securities: The gross unrealized losses on government mortgage-backed securities were primarily attributable to relative changes in interest rates since the time of purchase. Management believes that the unrealized losses on these debt security holdings are a function of changes in investment spreads and interest rate movements and not changes in credit quality. Management expects to recover the entire amortized cost basis of these securities. Furthermore, the Company does not intend to sell these securities and it is not more-likely-than-not that the Company will be required to sell these securities before recovery of their cost basis, which may be maturity. Therefore, management does not consider these investments to be other-than-temporarily impaired at September 30, 2020.