Securities

9 Months Ended

Sep. 30, 2021

Securities

Securities

Note 2:         Securities

The amortized cost and approximate fair values, together with gross unrealized gains and losses of securities are as follows:

			Gross		Gross
			Unrealized		Unrealized
	Amortized Cost		Gains		Losses		Fair Value
	(In thousands)
Available-for-sale Securities:
September 30, 2021:
Subordinated notes		15,900		76		(46)		15,930
State and municipal obligations		108,084		11,526		—		119,610
Total debt securities	$	123,984	$	11,602	$	(46)	$	135,540
Available-for-sale Securities:
December 31, 2020:
U.S. government agencies	$	10,000	$	53	$	—	$	10,053
Subordinated notes		4,500		6		(1)		4,505
State and municipal obligations	$	129,006	$	14,503	$	—	$	143,509
Total debt securities	$	143,506	$	14,562	$	(1)	$	158,067

The amortized cost and fair value of available-for-sale securities at September 30, 2021, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available-for-sale
	Amortized		Fair
	Cost		Value
	(In thousands)
Within one year	$	—	$	—
One to five years		—		—
Five to ten year		13,150		13,185
Due after ten years		110,834		122,355
Totals	$	123,984	$	135,540

The carrying value of securities pledged to secure public deposits and for other purpose, was $63.8 million and $55.8 million at September 30, 2021 and December 31, 2020, respectively.

Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. The total fair value of these investments at September 30, 2021 and December 31, 2020, was $8.4 million and $1.0 million, which represented approximately 6% and less than 1%, respectively, of the Company’s available-for-sale investment portfolio.

Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these securities are temporary and are a result on an general increase in longer term interest rates.

Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified.

The following tables show the Company’s investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2021 and December 31, 2020:

	September 30, 2021
	Less than 12 Months				12 Months or More				Total
Description of			Unrealized				Unrealized				Unrealized
Securities	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
	(In thousands)
Subordinated notes		8,354		(46)		—		—		8,354		(46)
State and municipal obligations	$	—	$	—	$	—	$	—	$	—	$	—
Total temporarily impaired securities	$	8,354	$	(46)	$	—	$	—	$	8,354	$	(46)

	December 31, 2020
	Less than 12 Months				12 Months or More				Total
Description of	Fair		Unrealized				Unrealized		Fair		Unrealized
Securities	Value		Losses		Fair Value		Losses		Value		Losses
	(In thousands)
Subordinated notes		—		—		1,000		(1)		1,000		(1)
State and municipal obligations	$	—	$	—	$	—	$	—	$	—	$	—
Total temporarily impaired securities	$	—	$	—	$	1,000	$	(1)	$	1,000	$	(1)

The unrealized losses on the Company’s subordinated notes were caused primarily by interest rate changes. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Company does not intend to sell the investments and it is not more likely than not the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at September 30, 2021 and December 31, 2020.

During the nine months ended September 30, 2021 the Company sold $11.1 million of State and Municipal securities for a total gain of approximately $1,250,000. During the nine months ended September 30, 2020 the Company sold $23.7 million of State and Municipal securities for a total gain of approximately $2,525,000 and the Company also sold $8.0 million of US Government Agency bonds for a total gain of approximately $69,000.