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Investments
 9 Months Ended
Sep. 30, 2020
Investments [Abstract]  
Investments
Note 4 – Investments


The amortized cost, gross unrealized gains and losses, and fair value of investment securities at September 30, 2020 and December 31, 2019 were as follows (in thousands):

September 30, 2020
  
Amortized
Cost
    
Gross
Unrealized
Gains
    
Gross
Unrealized
Losses
    
Fair
Value
  
Available-for-sale securities:
                        
U.S. agency securities
  
$
78,095
    
$
2,647
    
$
(44
)
  
$
80,698
  
U.S. treasury securities
    
27,430
      
737
      
-
      
28,167
  
Obligations of state and political subdivisions
    
89,678
      
2,297
      
(127
)
    
91,848
  
Corporate obligations
    
6,423
      
84
      
-
      
6,507
  
Mortgage-backed securities in government sponsored entities
    
78,925
      
1,829
      
(136
)
    
80,618
  
Total available-for-sale securities
  
$
280,551
    
$
7,594
    
$
(307
)
  
$
287,838
  
                                 
December 31, 2019
                                
Available-for-sale securities:
                                
U.S. agency securities
  
$
83,410
    
$
1,523
    
$
(70
)
  
$
84,863
  
U.S. treasury securities
    
27,394
      
267
      
-
      
27,661
  
Obligations of state and political subdivisions
    
60,667
      
865
      
(77
)
    
61,455
  
Corporate obligations
    
3,250
      
78
      
-
      
3,328
  
Mortgage-backed securities in government sponsored entities
    
63,086
      
468
      
(155
)
    
63,399
  
Total available-for-sale securities
  
$
237,807
    
$
3,201
    
$
(302
)
  
$
240,706
  


The following table shows the Company’s gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time, which individual securities have been in a continuous unrealized loss position, at September 30, 2020 and December 31, 2019 (in thousands). As of September 30, 2020, the Company owned 30 securities whose fair value was less than their cost basis.

September 30, 2020
  
Less than Twelve Months
    
Twelve Months or Greater
    
Total
  
   
Fair
Value
    
Gross
Unrealized
Losses
    
Fair
Value
    
Gross
Unrealized
Losses
    
Fair
Value
    
Gross
Unrealized
Losses
  
U.S. agency securities
  
$
6,979
    
$
(44
)
  
$
-
    
$
-
    
$
6,979
    
$
(44
)
Obligations of state and  political subdivisions
    
11,257
      
(127
)
    
-
      
-
      
11,257
      
(127
)
Mortgage-backed securities in government sponsored entities
    
8,884
      
(98
)
    
5,779
      
(38
)
    
14,663
      
(136
)
Total securities
  
$
27,120
    
$
(269
)
  
$
5,779
    
$
(38
)
  
$
32,899
    
$
(307
)
                                                 
December 31, 2019
                                                
U.S. agency securities
  
$
14,587
    
$
(63
)
  
$
13,094
    
$
(7
)
  
$
27,681
    
$
(70
)
Obligations of states and
  political subdivisions
    
7,508
      
(75
)
    
1,507
      
(2
)
    
9,015
      
(77
)
Mortgage-backed securities in government sponsored entities
    
27,737
      
(97
)
    
9,559
      
(58
)
    
37,296
      
(155
)
Total securities
  
$
49,832
    
$
(235
)
  
$
24,160
    
$
(67
)
  
$
73,992
    
$
(302
)


As of September 30, 2020 and December 31, 2019, the Company’s investment securities portfolio contained unrealized losses on agency securities issued or backed by the full faith and credit of the United States government or are generally viewed as having the implied guarantee of the U.S. government, obligations of states and political subdivisions and mortgage backed securities issued by government sponsored entities. For fixed maturity investments management considers whether the present value of cash flows expected to be collected are less than the security’s amortized cost basis (the difference defined as the credit loss), the magnitude and duration of the decline, the reasons underlying the decline and the Company’s intent to sell the security or whether it is more likely than not that the Company would be required to sell the security before its anticipated recovery in fair value, to determine whether the loss in value is other than temporary. Once a decline in value is determined to be other than temporary, if the Company does not intend to sell the security, and it is more likely than not that it will not be required to sell the security before recovery of the security’s amortized cost basis, the charge to earnings is limited to the amount of credit loss. Any remaining difference between fair value and amortized cost (the difference defined as the non-credit portion) is recognized in other comprehensive income, net of applicable taxes. Otherwise, the entire difference between fair value and amortized cost is charged to earnings. The Company has concluded that any impairment of its investment securities portfolio outlined in the above table is not other than temporary and is the result of interest rate changes, sector credit rating changes, or issuer-specific rating changes that are not expected to result in the non-collection of principal and interest during the period.


Proceeds from sales of securities available-for-sale for the nine months ended September 30, 2020 and 2019 were $18,621,000 and $5,508,000, respectively. Proceeds from sales of securities available-for-sale for the three months ended September 30, 2020 and 2019 were $13,145,000 and $5,508,000, respectively. The gross gains and losses were as follows (in thousands):

  
Three Months Ended
    
Nine Months Ended
  
   
September 30
    
September 30
  
   
2020
    
2019
    
2020
    
2019
  
Gross gains on available for sale securities
  
$
192
    
$
9
    
$
309
    
$
9
  
Gross losses on available for sale securities
    
(7
)
    
(1
)
    
(7
)
    
(1
)
Net gains
  
$
185
    
$
8
    
$
302
    
$
8
  



The following table presents the net gains (losses) on the Company’s equity investments recognized in earnings during the three and nine month periods ended September 30, 2020 and 2019, and the portion of unrealized gains for the period that relates to equity investments held at September 30, 2020 and 2019 (in thousands):

  
Three Months Ended
September 30,
    
Nine Months Ended
September 30,
  
Equity securities
  
2020
    
2019
    
2020
    
2019
  
Net gains (losses) recognized in equity securities during the period
  
$
(33
)
  
$
29
    
$
(276
)
  
$
70
  
Less: Net gains realized on the sale of equity securities during the period
    
68
      
-
      
68
      
-
  
Net unrealized gains (losses)
  
$
(101
)
  
$
29
    
$
(344
)
  
$
70
  


Investment securities with an approximate carrying value of $250.2 million and $209.1 million at September 30, 2020 and December 31, 2019, respectively, were pledged to secure public funds, certain other deposits and borrowing lines.


Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.   The amortized cost and fair value of debt securities (excludes equity securities) at September 30, 2020, by contractual maturity, are shown below (in thousands):

  
Amortized
Cost
    
Fair Value
  
Available-for-sale debt securities:
            
Due in one year or less
  
$
19,293
    
$
19,530
  
Due after one year through five years
    
65,451
      
68,561
  
Due after five years through ten years
    
58,962
      
60,506
  
Due after ten years
    
136,845
      
139,241
  
Total
  
$
280,551
    
$
287,838