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INVESTMENT SECURITIES
 12 Months Ended
Dec. 31, 2020
INVESTMENT SECURITIES [Abstract]  
INVESTMENT SECURITIES
4. INVESTMENT SECURITIES


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

December 31, 2020
  
Amortized
Cost
    
Gross
Unrealized
Gains
    
Gross
Unrealized
Losses
    
Fair
Value
  
Available-for-sale securities:
                        
U.S. agency securities
  
$
79,065
    
$
2,403
    
$
(52
)
  
$
81,416
  
U.S. Treasuries
    
27,442
      
601
      
-
      
28,043
  
Obligations of state and political subdivisions
    
100,089
      
2,938
      
(55
)
    
102,972
  
Corporate obligations
    
6,413
      
96
      
-
      
6,509
  
Mortgage-backed securities in government sponsored entities
    
74,512
      
1,874
      
(137
)
    
76,249
  
Total available-for-sale securities
  
$
287,521
    
$
7,912
    
$
(244
)
  
$
295,189
  
                                 
December 31, 2019
                                
Available-for-sale securities:
                                
U.S. agency securities
  
$
83,410
    
$
1,523
    
$
(70
)
  
$
84,863
  
U.S. Treasuries
    
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, aggregated by investment category and length of time, that the individual securities have been in a continuous unrealized loss position, at December 31, 2020 and 2019 (in thousands). As of December 31, 2020, the Company owned 29 securities each of  whose fair value was less than its cost basis.

  
Less than Twelve Months
    
Twelve Months or Greater
    
Total
  
 
2020
  
Fair
Value
    
Gross
Unrealized
Losses
    
Fair
Value
    
Gross
Unrealized
Losses
    
Fair
Value
    
Gross
Unrealized
Losses
  
U.S. agency securities
  
$
13,720
    
$
(52
)
  
$
-
    
$
-
    
$
13,720
    
$
(52
)
Obligations of states and political subdivisions
    
5,407
      
(55
)
    
-
      
-
      
5,407
      
(55
)
Mortgage-backed securities in government sponsored entities
    
14,600
      
(99
)
    
5,633
      
(38
)
    
20,233
      
(137
)
Total securities
  
$
33,727
    
$
(206
)
  
$
5,633
    
$
(38
)
  
$
39,360
    
$
(244
)
                                                 
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 December 31, 2020, 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 in government sponsored entities. For fixed maturity available for sale 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 market 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. As of December 31, 2020 and 2019, the Company had 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 company-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 during 2020, 2019 and 2018 were $23,415,000, $10,489,000 and $27,149,000, respectively. The gross gains realized during 2020 consisted of $344,000 from the sales of seventeen mortgage backed securities. The gross losses realized during 2020 consisted of $39,000 from the sale of two mortgage backed securities. The gross gains realized during 2019 consisted of $1,000 and $24,000 from the sales of two agency securities and four treasury securities, respectively. The gross losses realized during 2019 consisted of $1,000 from the sale of one agency security. The gross gains realized during 2018 consisted of $160,000 from the sale of fourteen municipal securities. The gross losses realized during 2018 consisted of $179,000 from the sale of seven agency securities. Gross gains and gross losses were realized as follows on available for sale securities (in thousands):

  
2020
    
2019
    
2018
  
Gross gains
  
$
344
    
$
25
    
$
160
  
Gross losses
    
(39
)
    
(1
)
    
(179
)
Net (losses) gains
  
$
305
    
$
24
    
$
(19
)


The following table presents the net (losses) gains on the Company’s equity investments recognized in earnings during 2020, 2019 and 2019 and the portion of unrealized gains for the period that relates to equity investments held at December 31, 2020 and 2019 (in thousands):

Equity Securities
  
2020
    
2019
    
2018
  
Net gains (losses) recognized in equity securities during the period
  
$
(109
)
  
$
120
    
$
-
  
Less: Net gains realized on the sale of equity securities during the period
    
68
      
-
      
-
  
Net unrealized gains (losses)
  
$
(41
)
  
$
120
    
$
-
  


Investment securities with an approximate carrying value of $245,351,000 and $209,096,000 at December 31, 2020 and 2019, respectively, were pledged to secure public funds and certain other deposits as provided by law and certain borrowing arrangements of the Company.


Expected maturities will 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 at December 31, 2019, by contractual maturity are shown below (in thousands). Municipal securities that have been refunded and will therefore pay-off on the call date are reflected in the table below utilizing the call date as the date of repayment as payment is guaranteed on that date:

  
Amortized
Cost
    
Fair Value
  
Available-for-sale securities:
            
Due in one year or less
  
$
18,786
    
$
19,037
  
Due after one year through five years
    
63,826
      
66,531
  
Due after five years through ten years
    
64,080
      
65,587
  
Due after ten years
    
140,829
      
144,034
  
Total
  
$
287,521
    
$
295,189