Investment securities are classified at the time of purchase as available for sale, held to maturity, trading, or equity. Classification is constantly re-evaluated for consistency with corporate goals and objectives. Trading and equity securities are recorded at fair value with subsequent changes in fair value recorded in earnings. Debt securities that management has the positive intent and ability to hold to maturity are classified as held to maturity and recorded at amortized cost. Securities not classified as held to maturity or trading are classified as available for sale and recorded at fair value, with changes in fair value excluded from earnings and reported in other comprehensive income, net of related tax. Purchase premiums and discounts are recognized in interest income, using the interest method, to arrive at periodic interest income at a constant effective yield, thereby reflecting the securities market yield. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

Accrued interest receivable balances are excluded from the amortized cost of held to maturity securities and the fair value of available for sale securities and are included within other assets on the consolidated balance sheet. Management has elected not to measure an allowance for credit losses on these balances as the Company employs a timely write-off policy. It is the Company's policy that a security is placed on nonaccrual status at the time any principal or interest payments become 90 days delinquent, and interest earned but not collected for a security placed on non-accrual is reversed against interest income.

The Company's available for sale securities are carried at fair value. For available for sale securities in an unrealized loss position, management will first evaluate whether there is intent to sell, or if it is more likely than not that the Company will be required to sell a security prior to anticipated recovery of its amortized cost basis. If either of these criteria are met, the Company will record a write-down of the security's amortized cost basis to fair value through income. For those available for sale securities which do not meet the intent or requirement to sell criteria, management will evaluate whether the decline in fair value is a result of credit related matters or other factors. In performing this assessment, management considers the creditworthiness of the issuer including whether the security is guaranteed by the U.S. Federal Government or other government agency, the extent to which fair value is less than amortized cost, and changes in credit rating during the period, among other factors. If this assessment indicates the existence of credit losses, the security will be written down to fair value, as determined by a discounted cash flow analysis. To the extent the estimated cash flows do not support the amortized cost, the deficiency is considered to be due to credit loss and is recognized in earnings.

The Company measures expected credit losses on held to maturity securities on a collective basis by major security type. Management classifies the held to maturity portfolio into the following major security types: U.S. Government Agency, U.S. Treasury, Agency Mortgage-Backed Securities, Agency Collateralized Mortgage Obligations, Small Business Administration Pooled Securities, and Single Issuer Trust Preferred Securities. Securities in the Company's held to maturity portfolio are primarily guaranteed by either the U.S. Federal Government or other government sponsored agencies with a long history of no credit losses. As a result, management has determined these securities to have a zero loss expectation and therefore does not estimate an allowance for credit losses on these securities.


	Three Months Ended				Nine Months Ended
	September 30				September 30
	2020		2019		2020		2019
	Dollars in thousands
Net gains (losses) recognized during the period on equity securities	$	308	$	211	(107)		1,562
Less: net gains recognized during the period on equity securities sold during the period	—		—		6		6
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date	$	308	$	211	$	(113)	$	1,556


	September 30, 2020										December 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for credit losses		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(Dollars in thousands)

U.S. government agency securities	$	22,475	$	1,798	$	—	$	—	$	24,273	$	32,473	$	642	$	—	$	33,115
Agency mortgage-backed securities	220,150		10,471		(1)		—		230,620		243,548		3,456		(4)		247,000
Agency collateralized mortgage obligations	98,657		3,539		(119)		—		102,077		87,305		1,225		(19)		88,511

State, county, and municipal securities	1,125		20		—		—		1,145		1,377		19		—		1,396
Single issuer trust preferred securities issued by banks	489		—		(20)		—		469		488		5		—		493
Pooled trust preferred securities issued by banks and insurers	1,433		—		(412)		—		1,021		1,488		—		(374)		1,114
Small business administration pooled securities	59,830		4,043		—		—		63,873		54,024		771		—		54,795
Total available for sale securities	$	404,159	$	19,871	$	(552)	$	—	$	423,478	$	420,703	$	6,118	$	(397)	$	426,424

The Company did not record an allowance for estimated credit losses on any available for sale securities during the three and nine months ended September 30, 2020. Excluded from the table above is accrued interest on available for sale securities of $1.4 million as of September 30, 2020, which is included within other assets on the consolidated balance sheet. Additionally, the Company did not record any write-offs of accrued interest income on available for sale securities during the three and nine months ended September 30, 2020. No securities held by the Company were delinquent on contractual payments as of September 30, 2020, nor were any securities placed on non-accrual status during the three or nine months then ended.

When securities are sold, the adjusted cost of the specific security sold is used to compute the gain or loss on the sale. The Company had no sales of securities available for sale during the three or nine months ended September 30, 2020, and therefore no gains or losses were realized during the periods presented. The Company had no sales of securities available for sale during the three months ended September 30, 2019 and recorded realized losses of $1.5 million on sales of securities available for sale during the nine months ended September 30, 2019.

The following table shows the gross unrealized losses and fair value of the Company’s available for sale securities which are in an unrealized loss position, and for which the Company has not recorded an allowance for credit losses as of September 30, 2020. These available for sale securities are aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position:


	September 30, 2020
		Less than 12 months				12 months or longer				Total
	# of holdings	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)

Agency mortgage-backed securities	2	399		(1)		—		—		399		(1)
Agency collateralized mortgage obligations	2	27,269		(119)		—		—		27,269		(119)

Single issuer trust preferred securities issued by banks and insurers	1	469		(20)		—		—		469		(20)
Pooled trust preferred securities issued by banks and insurers	1	—		—		1,021		(412)		1,021		(412)

Total impaired available for sale securities	6	$	28,137	$	(140)	$	1,021	$	(412)	$	29,158	$	(552)

The Company does not intend to sell these investments and has determined, based upon available evidence, that it is more likely than not that the Company will not be required to sell each security before the recovery of its amortized cost basis. As a result, the Company did not recognize an allowance for credit losses on these investments during the three or nine months ended September 30, 2020. The Company made this determination by reviewing various qualitative and quantitative factors regarding each investment category, such as current market conditions, extent and nature of changes in fair value, issuer rating changes and trends, volatility of earnings, and current analysts’ evaluations.

•Agency Mortgage-Backed Securities and Agency Collateralized Mortgage Obligations: These portfolios have contractual terms that generally do not permit the issuer to settle the securities at a price less than the current par value of the investment. The decline in market value of these securities is attributable to changes in interest rates and not credit quality. Additionally, these securities are implicitly guaranteed by the U.S. Government or one of its agencies.

•Pooled Trust Preferred Securities: This portfolio consists of one below investment grade security which is performing. The unrealized loss on this security is attributable to the illiquid nature of the trust preferred market in the current economic and regulatory environment. Management evaluates collateral credit and instrument structure, including current and expected deferral and default rates and timing. In addition, discount rates are determined by evaluating comparable spreads observed currently in the market for similar instruments.


	September 30, 2020										December 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for credit losses		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(Dollars in thousands)
U.S. government agency securities	$	—	$	—	$	—	$	—	$	—	$	12,874	$	123	$	—	$	12,997
U.S. Treasury securities	4,021		79		—		—		4,100		4,032		21		—		4,053
Agency mortgage-backed securities	388,106		19,687		—		—		407,793		397,414		8,445		(57)		405,802
Agency collateralized mortgage obligations	237,380		9,557		—		—		246,937		293,662		4,501		(849)		297,314

Single issuer trust preferred securities issued by banks	1,500		—		(2)		—		1,498		1,500		—		(10)		1,490
Small business administration pooled securities	28,566		1,573		—		—		30,139		31,324		338		(55)		31,607

Total held to maturity securities	$	659,573	$	30,896	$	(2)	$	—	$	690,467	$	740,806	$	13,428	$	(971)	$	753,263

The Company did not record an allowance for estimated credit losses on any held to maturity securities during the three and nine months ended September 30, 2020. Excluded from the table above is accrued interest on held to maturity securities of $1.7 million as of September 30, 2020, which is included within other assets on the consolidated balance sheet. Additionally, the Company did not record any write-offs of accrued interest income on held to maturity securities during the three and nine months ended September 30, 2020. No securities held by the Company were delinquent on contractual payments as of September 30, 2020, nor were any securities placed on non-accrual status during the three and nine months then ended.

The actual maturities of certain available for sale or held to maturity securities may differ from the contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. A schedule of the contractual maturities of available for sale and held to maturity securities as of September 30, 2020 is presented below:


	Due in one year or less				Due after one year to five years				Due after five to ten years				Due after ten years				Total
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(Dollars in thousands)
Available for sale securities
U.S. government agency securities	$	—	$	—	$	10,001	$	10,288	$	12,474	$	13,985	$	—	$	—	$	22,475	$	24,273
Agency mortgage-backed securities	—		—		71,624		73,773		38,956		41,956		109,570		114,891		220,150		230,620
Agency collateralized mortgage obligations	—		—		—		—		—		—		98,657		102,077		98,657		102,077

State, county, and municipal securities	515		516		420		422		190		207		—		—		1,125		1,145
Single issuer trust preferred securities issued by banks	—		—		—		—		—		—		489		469		489		469
Pooled trust preferred securities issued by banks and insurers	—		—		—		—		—		—		1,433		1,021		1,433		1,021
Small business administration pooled securities	—		—		—		—		—		—		59,830		63,873		59,830		63,873
Total available for sale securities	$	515	$	516	$	82,045	$	84,483	$	51,620	$	56,148	$	269,979	$	282,331	$	404,159	$	423,478
Held to maturity securities

U.S. Treasury securities	$	1,001	$	1,019	$	3,020	$	3,081	$	—	$	—	$	—	$	—	$	4,021	$	4,100
Agency mortgage-backed securities	8,510		8,574		1,458		1,509		53,530		56,289		324,608		341,421		388,106		407,793
Agency collateralized mortgage obligations	—		—		—		—		—		—		237,380		246,937		237,380		246,937

Single issuer trust preferred securities issued by banks	—		—		—		—		1,500		1,498		—		—		1,500		1,498
Small business administration pooled securities	—		—		—		—		—		—		28,566		30,139		28,566		30,139

Total held to maturity securities	$	9,511	$	9,593	$	4,478	$	4,590	$	55,030	$	57,787	$	590,554	$	618,497	$	659,573	$	690,467
Total	$	10,026	$	10,109	$	86,523	$	89,073	$	106,650	$	113,935	$	860,533	$	900,828	$	1,063,732	$	1,113,945

Under previous accounting guidance, the Company reviewed both available for sale and held to maturity securities for other-than-temporary-impairment ("OTTI"). However, in accordance with the newly adopted CECL standard, the Company now utilizes separate impairment models for held to maturity and available for sale securities for purposes of estimating credit losses. The following table shows the gross unrealized losses and fair value of the Company’s investments in an unrealized loss position, which the Company had not deemed to be OTTI, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2019:


	December 31, 2019
		Less than 12 months				12 months or longer				Total
	# of holdings	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)

Agency mortgage-backed securities	12	34,009		(59)		243		(2)		34,252		(61)
Agency collateralized mortgage obligations	17	48,476		(215)		37,382		(653)		85,858		(868)

Single issuer trust preferred securities issued by banks and insurers	1	—		—		1,490		(10)		1,490		(10)
Pooled trust preferred securities issued by banks and insurers	1	—		—		1,114		(374)		1,114		(374)
Small business administration pooled securities	1	7,349		(55)		—		—		7,349		(55)
Total temporarily impaired securities	32	$	89,834	$	(329)	$	40,229	$	(1,039)	$	130,063	$	(1,368)