Securities

6 Months Ended

Jun. 30, 2020

Note 2. Securities

Amortized costs and fair values, with gross unrealized gains and losses, of securities available-for-sale as of the dates indicated are as follows:

	June 30, 2020
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
U.S. Treasury securities	$	6,952	$	142	$	-		$	7,094
Obligations of U.S. Government agencies		33,896		34		(858	)		33,072
Obligations of state and policitcal subdivisions		34,914		1,724		(6	)		36,632
Mortgage-backed securities		67,754		3,118		(44	)		70,828
Money market investments		4,995		-		-			4,995
Corporate bonds and other securities		7,547		150		(17	)		7,680
	$	156,058	$	5,168	$	(925	)	$	160,301

	December 31, 2019
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
U.S. Treasury securities	$	6,925	$	78	$	-		$	7,003
Obligations of U.S. Government agencies		33,998		9		(403	)		33,604
Obligations of state and policitcal subdivisions		24,525		442		(225	)		24,742
Mortbage-backed securities		72,000		460		(552	)		71,908
Money market investments		3,825		-		-			3,825
Corporate bonds and other securities		4,542		94		(3	)		4,633
	$	145,815	$	1,083	$	(1,183	)	$	145,715

The Company has a process in place to identify debt securities that could potentially have a credit or interest-rate related impairment that is other-than-temporary. This process involves monitoring late payments, pricing levels, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts, and cash flow projections as indicators of credit issues. On a quarterly basis, management reviews all securities to determine whether an other-than-temporary decline in value exists and whether losses should be recognized. Management considers relevant facts and circumstances in evaluating whether a credit or interest-rate related impairment of a security is other-than-temporary. Relevant facts and circumstances considered include: (a) the extent and length of time the fair value has been below cost; (b) the reasons for the decline in value; (c) the financial position and access to capital of the issuer, including the current and future impact of any specific events; and (d) for fixed maturity securities, the Company’s intent to sell a security or whether it is more-likely-than-not the Company will be required to sell the security before the recovery of its amortized cost which, in some cases, may extend to maturity.

The Company has not recorded impairment charges through income on securities for the three or six months ended June 30, 2020 or 2019.

The following table summarizes net realized gains and losses on the sale of investment securities during the periods indicated:

	Three Months Ended June 30,					Six Months Ended June 30
(Dollars in thousands)	2020			2019		2020			2019
Securities Available-for-sale
Realized gains on sales of securities	$	185		$	-	$	185		$	36
Realized losses on sales of securities		(1	)		-		(1	)		(10	)
Net realized gain	$	184		$	-	$	184		$	26

The following tables show the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired as of June 30, 2020 and December 31, 2019, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of the dates indicated:

	June 30, 2020
	Less than 12 months				12 months or more				Total
(Dollars in thousands)	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
Obligations of U.S. Government agencies	$	723	$	20,948	$	135	$	8,909	$	858	$	29,857
Obligations of state and policitcal subdivisions		6		1,158		-		-		6		1,158
Mortgage-backed securities		25		9,840		19		3,046		44		12,886
Corporate bonds and other securities		17		4,188		-		-		17		4,188
Total securities available-for-sale	$	771	$	36,134	$	154	$	11,955	$	925	$	48,089

	December 31, 2019
	Less than 12 months				12 months or more				Total
(Dollars in thousands)	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
Obligations of U.S. Government agencies	$	349	$	29,744	$	54	$	2,562	$	403	$	32,306
Obligations of state and policitcal subdivisions		225		10,112		-		-		225		10,112
Mortgage-backed securities		405		44,661		147		14,078		552		58,739
Corporate bonds and other securities		-		-		3		197		3		197
Total securities available-for-sale	$	979	$	84,517	$	204	$	16,837	$	1,183	$	101,354

The number of investments at an unrealized loss position as of June 30, 2020 and December 31, 2019 were 26 and 47, respectively. Certain investments within the Company’s portfolio had unrealized losses for more than twelve months at June 30, 2020 and December 31, 2019, as shown in the tables above. The unrealized losses were caused by changes in market interest rates and not a result of credit deterioration. Because the Company does not intend to sell the investments and management believes it is unlikely that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does not consider the investments to be other-than-temporarily impaired at June 30, 2020 or December 31, 2019.

Restricted Securities

The restricted security category is comprised of stock in the Federal Home Loan Bank of Atlanta (FHLB), the Federal Reserve Bank (FRB), and Community Bankers' Bank (CBB). These stocks are classified as restricted securities because their ownership is restricted to certain types of entities and the securities lack a market. Therefore, FHLB, FRB, and CBB stock are carried at cost and evaluated for impairment. When evaluating these stocks for impairment, their value is determined based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. Restricted stock is viewed as a long-term investment and management believes that the Company has the ability and the intent to hold this stock until its value is recovered.