Securities

6 Months Ended

Jun. 30, 2020

Debt Securities, Available-for-sale and Held-to-maturity [Abstract]

Securities

DEBT SECURITIES

The amortized cost, unrealized gains, unrealized losses and estimated fair values of securities at June 30, 2020 and December 31, 2019 are summarized as follows:

	June 30, 2020
	Amortized		Unrealized				Estimated
Dollars in thousands	Cost		Gains		Losses		Fair Value
Available for Sale
Taxable debt securities
U.S. Government and agencies and corporations	$	38,201	$	388	$	450	$	38,139
Residential mortgage-backed securities:
Government-sponsored agencies	64,206		2,260		404		66,062
Nongovernment-sponsored entities	12,820		159		344		12,635
State and political subdivisions
General obligations	17,607		710		5		18,312
Water and sewer revenues	10,724		552		2		11,274
Lease revenues	5,310		411		—		5,721
Income tax revenues	5,057		392		—		5,449
University revenues	5,912		548		—		6,460
Other revenues	13,988		989		34		14,943
Corporate debt securities	23,304		37		685		22,656
Asset-backed securities	47,763		—		2,459		45,304
Total taxable debt securities	244,892		6,446		4,383		246,955
Tax-exempt debt securities
State and political subdivisions
General obligations	36,328		3,289		—		39,617
Water and sewer revenues	8,873		627		1		9,499
Lease revenues	7,306		722		—		8,028
Transportation revenues	6,600		290		—		6,890
Other revenues	10,865		699		14		11,550
Total tax-exempt debt securities	69,972		5,627		15		75,584
Total securities available for sale	$	314,864	$	12,073	$	4,398	$	322,539

	June 30, 2020
	Amortized		Unrealized				Estimated
Dollars in thousands	Cost		Gains		Losses		Fair Value
Held to Maturity
Tax-exempt debt securities
State and political subdivisions
General obligations	66,626		918		34		67,510
Water and sewer revenues	6,644		86		—		6,730
Sales tax revenues	2,923		—		2		2,921
Other revenues	4,304		146		2		4,448
Total tax-exempt debt securities	80,497		1,150		38		81,609
Total securities held to maturity	$	80,497	$	1,150	$	38	$	81,609

	December 31, 2019
	Amortized		Unrealized				Estimated
Dollars in thousands	Cost		Gains		Losses		Fair Value
Available for Sale
Taxable debt securities
U.S. Government and agencies and corporations	$	21,036	$	212	$	384	$	20,864
Residential mortgage-backed securities:
Government-sponsored agencies	70,379		1,031		435		70,975
Nongovernment-sponsored entities	10,253		17		41		10,229
State and political subdivisions
General obligations	12,603		25		171		12,457
Water and sewer revenues	7,170		71		114		7,127
Lease revenues	5,310		25		77		5,258
University revenues	5,917		164		16		6,065
Other revenues	18,831		344		109		19,066
Corporate debt securities	18,268		81		149		18,200
Asset-backed securities	33,826		—		812		33,014
Total taxable debt securities	203,593		1,970		2,308		203,255
Tax-exempt debt securities
State and political subdivisions
General obligations	36,673		2,526		—		39,199
Water and sewer revenues	9,565		633		—		10,198
Lease revenues	8,455		598		—		9,053
Other revenues	13,929		728		7		14,650
Total tax-exempt debt securities	68,622		4,485		7		73,100
Total securities available for sale	$	272,215	$	6,455	$	2,315	$	276,355

The below information is relative to the five states where issuers with the highest volume of state and political subdivision securities held in our portfolio are located.  We own no such securities of any single issuer which we deem to be a concentration.

	June 30, 2020
	Amortized		Unrealized				Estimated
Dollars in thousands	Cost		Gains		Losses		Fair Value
Available for Sale
California	$	32,464	$	1,811	$	48	$	34,227
Texas	28,261		1,099		—		29,360
Florida	16,289		692		4		16,977
Michigan	15,117		842		—		15,959
New York	13,332		922		—		14,254

Management performs pre-purchase and ongoing analysis to confirm that all investment securities meet applicable credit quality standards.  

The maturities, amortized cost and estimated fair values of securities at June 30, 2020, are summarized as follows:

Dollars in thousands	Amortized Cost		Estimated Fair Value
Due in one year or less	$	32,467	$	32,616
Due from one to five years	88,501		89,412
Due from five to ten years	78,187		78,589
Due after ten years	115,709		121,922
Available for Sale	$	314,864	$	322,539

Dollars in thousands	Amortized Cost		Estimated Fair Value
Due in one year or less	$	1,001	$	1,002
Due from one to five years	—		—
Due from five to ten years	2,059		2,083
Due after ten years	77,437		78,524
Held to Maturity	$	80,497	$	81,609

The proceeds from sales, calls and maturities of securities available for sale, including principal payments received on mortgage-backed obligations, and the related gross gains and losses realized, for the six months ended June 30, 2020 and 2019 are as follows:

		Proceeds from						Gross realized
Dollars in thousands		Sales		Calls and Maturities		Principal Payments		Gains		Losses
For the Six Months Ended   June 30,
2020
	Securities available for sale	$	74,750	$	2,200	$	12,278	$	1,038	$	—
2019
	Securities available for sale	$	114,171	$	1,445	$	13,822	$	1,213	$	131

We held 87 available for sale securities and 7 held to maturity securities having an unrealized loss at June 30, 2020.  We do not intend to sell these securities, and it is more likely than not that we will not be required to sell these securities before recovery of their amortized cost bases.  We believe that this decline in value is primarily attributable to the lack of market liquidity and to changes in market interest rates and is not due to credit quality.  Accordingly, no other-than-temporary impairment charge to earnings is warranted at this time.

An allowance for credit losses on held to maturity securities is a contra-asset valuation account, calculated in accordance with ASC 326, that is deducted from the amortized cost basis of held-to-maturity securities to present management's best estimate of the net amount expected to be collected. Held to maturity securities are charged-off against the allowance when deemed uncollectible by management. Adjustments to the allowance are reported in our income statement as a component of credit loss expense. Management measures expected credit losses on held to maturity securities on a collective basis by major security type with each type sharing similar risk characteristics, and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Management has made the accounting policy election to exclude accrued interest receivable on held to maturity securities from the estimate of credit losses. At June 30, 2020, no allowance for credit losses on held to maturity securities has been recognized.

Provided below is a summary of securities available for sale and held to maturity which were in an unrealized loss position at June 30, 2020 and December 31, 2019.

	June 30, 2020
		Less than 12 months				12 months or more				Total
Dollars in thousands	# of securities in loss position	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Taxable debt securities
U.S. Government agencies and corporations	34	$	16,401	$	65	$	13,092	$	385	$	29,493	$	450
Residential mortgage-backed securities:
Government-sponsored agencies	10	2,626		26		10,218		378		12,844		404
Nongovernment-sponsored entities	6	5,203		59		3,462		285		8,665		344
State and political subdivisions:
General obligations	1	501		5		—		—		501		5
Water and sewer revenues	1	1,113		2		—		—		1,113		2
Other revenues	1	1,095		34		—		—		1,095		34
Corporate debt securities	11	8,941		569		1,884		116		10,825		685
Asset-backed securities	21	14,956		474		30,348		1,985		45,304		2,459
Tax-exempt debt securities
State and political subdivisions:
Water and sewer revenues	1	558		1		—		—		558		1
Other revenues	1	145		14		—		—		145		14
Total available to sale	87	$	51,539	$	1,249	$	59,004	$	3,149	$	110,543	$	4,398

	June 30, 2020
		Less than 12 months				12 months or more				Total
Dollars in thousands	# of securities in loss position	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Tax-exempt debt securities
State and political subdivisions:
General obligations	4	6,662		34		—		—		6,662		34
Sales tax revenues	2	2,921		2		—		—		2,921		2
Other revenues	1	630		2		—		—		630		2
Total held to maturity	7	$	10,213	$	38	$	—	$	—	$	10,213	$	38

	December 31, 2019
		Less than 12 months				12 months or more				Total
Dollars in thousands	# of securities in loss position	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Taxable debt securities
U.S. Government agencies and       corporations	15	$	—	$	—	$	14,903	$	384	$	14,903	$	384
Residential mortgage-backed securities:
Government-sponsored agencies	21	12,298		96		15,174		339		27,472		435
Nongovernment-sponsored entities	4	8,323		41		—		—		8,323		41
State and political subdivisions:
General obligations	10	10,581		171		—		—		10,581		171
Water and sewer revenues	4	4,421		114		—		—		4,421		114
Lease revenues	4	4,235		77		—		—		4,235		77
University revenues	1	1,307		16		—		—		1,307		16
Other revenues	6	6,517		109		—		—		6,517		109
Corporate debt securities	6	1,686		3		3,739		146		5,425		149
Asset-backed securities	15	3,441		34		29,573		778		33,014		812
Tax-exempt debt securities
State and political subdivisions:
Other revenues	2	1,183		7		—		—		1,183		7
Total	88	$	53,992	$	668	$	63,389	$	1,647	$	117,381	$	2,315