Securities

9 Months Ended

Sep. 30, 2021

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:

	September 30, 2021
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
U.S. Treasury securities	$	9,050	$	-	$	(48	)	$	9,002
Obligations of U.S. Government agencies		37,614		212		(58	)		37,768
Obligations of state and political subdivisions		51,128		1,954		(261	)		52,821
Mortgage-backed securities		84,648		1,693		(428	)		85,913
Money market investments		3,799		-		-			3,799
Corporate bonds and other securities		22,942		280		(85	)		23,137
	$	209,181	$	4,139	$	(880	)	$	212,440

	December 31, 2020
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
U.S. Treasury securities	$	6,980	$	63	$	-		$	7,043
Obligations of U.S. Government agencies		36,858		35		(197	)		36,696
Obligations of state and political subdivisions		43,517		2,478		-			45,995
Mortgage-backed securities		70,866		2,759		(124	)		73,501
Money market investments		4,743		-		-			4,743
Corporate bonds and other securities		18,295		158		(22	)		18,431
	$	181,259	$	5,493	$	(343	)	$	186,409

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 nine months ended September 30, 2021 or 2020.

The amortized cost and fair value of securities by contractual maturity are shown below:

	September 30, 2021
(Dollars in thousands)	Amortized Cost		Fair Value
Due in one year or less	$	200	$	200
Due after one year through five years		13,758		14,175
Due after five through ten years		52,437		53,514
Due after ten years		138,987		140,752
Other securities, restricted		3,799		3,799
	$	209,181	$	212,440

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2021		2020		2021		2020
Securities Available-for-sale
Realized gains on sales of securities	$	-	$	1	$	-	$	186
Realized losses on sales of securities		-		-		-		(1	)
Net realized gain	$	-	$	1	$	-	$	185

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 September 30, 2021 and December 31, 2020, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of the dates indicated:

	September 30, 2021
	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
U.S. Treasury securities	$	48	$	9,002	$	-	$	-	$	48	$	9,002
Obligations of U.S. Government agencies		22		4,967		36		5,374		58		10,341
Obligations of state and political subdivisions		261		13,086		-		-		261		13,086
Mortgage-backed securities		306		26,500		122		6,792		428		33,292
Corporate bonds and other securities		85		9,615		-		-		85		9,615
Total securities available-for-sale	$	722	$	63,170	$	158	$	12,166	$	880	$	75,336

	December 31, 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	$	8	$	2,810	$	189	$	17,191	$	197	$	20,001
Mortgage-backed securities		118		14,291		6		1,285		124		15,576
Corporate bonds and other securities		22		5,977		-		-		22		5,977
Total securities available-for-sale	$	148	$	23,078	$	195	$	18,476	$	343	$	41,554

The number of investments in an unrealized loss position as of September 30, 2021 and December 31, 2020 were 45 and 29, respectively. Certain investments within the Company’s portfolio had unrealized losses for more than twelve months at September 30, 2021 and December 31, 2020, 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 September 30, 2021 or December 31, 2020.

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.