Securities

9 Months Ended

Sep. 30, 2021

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

Securities

DEBT SECURITIES

Debt Securities Available for Sale

The amortized cost, unrealized gains, unrealized losses and estimated fair values of debt securities available for sale at September 30, 2021 and December 31, 2020 are summarized as follows:

	September 30, 2021
	Amortized		Unrealized				Estimated
Dollars in thousands	Cost		Gains		Losses		Fair Value
Debt Securities Available for Sale
Taxable debt securities
U.S. Government and agencies and corporations	$	38,611	$	242	$	343	$	38,510
Residential mortgage-backed securities:
Government-sponsored agencies	62,313		1,482		467		63,328
Nongovernment-sponsored entities	20,061		67		222		19,906
State and political subdivisions
General obligations	81,480		431		1,497		80,414
Water and sewer revenues	15,958		360		64		16,254
Lease revenues	5,811		240		33		6,018
Income tax revenues	6,489		293		5		6,777
Sales tax revenues	7,337		22		128		7,231
Other revenues	29,988		835		328		30,495
Corporate debt securities	30,973		97		233		30,837
Asset-backed securities	46,291		286		85		46,492
Total taxable debt securities	345,312		4,355		3,405		346,262
Tax-exempt debt securities
State and political subdivisions
General obligations	48,494		1,479		632		49,341
Water and sewer revenues	7,474		488		—		7,962
Lease revenues	5,635		521		—		6,156
Other revenues	14,565		576		121		15,020
Total tax-exempt debt securities	76,168		3,064		753		78,479
Total debt securities available for sale	$	421,480	$	7,419	$	4,158	$	424,741

	December 31, 2020
	Amortized		Unrealized				Estimated
Dollars in thousands	Cost		Gains		Losses		Fair Value
Debt Securities Available for Sale
Taxable debt securities
U.S. Government and agencies and corporations	$	35,190	$	361	$	394	$	35,157
Residential mortgage-backed securities:
Government-sponsored agencies	57,399		1,996		349		59,046
Nongovernment-sponsored entities	16,799		132		244		16,687
State and political subdivisions
General obligations	15,065		804		4		15,865
Water and sewer revenues	10,176		620		—		10,796
Lease revenues	4,825		341		—		5,166
College and university revenues	3,022		315		—		3,337
Income tax revenues	5,052		376		—		5,428
Other revenues	9,406		907		—		10,313
Corporate debt securities	26,483		56		112		26,427
Asset-backed securities	46,579		172		625		46,126
Total taxable debt securities	229,996		6,080		1,728		234,348
Tax-exempt debt securities
State and political subdivisions
General obligations	22,213		2,416		9		24,620
Water and sewer revenues	8,266		709		—		8,975
Lease revenues	7,195		799		—		7,994
Other revenues	9,487		711		8		10,190
Total tax-exempt debt securities	47,161		4,635		17		51,779
Total debt securities available for sale	$	277,157	$	10,715	$	1,745	$	286,127

Accrued interest receivable on debt securities available for sale totaled $2.2 million and $1.7 million at September 30, 2021 and December 31, 2020 and is included in accrued interest and fees receivable in the accompanying consolidated balance sheets.

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

	September 30, 2021
	Amortized		Unrealized				Estimated
Dollars in thousands	Cost		Gains		Losses		Fair Value
California	$	44,932	$	797	$	809	$	44,920
Texas	26,731		564		410		26,885
Oregon	14,760		—		269		14,491
Florida	13,630		391		109		13,912
Michigan	12,498		155		214		12,439

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 debt securities available for sale at September 30, 2021, are summarized as follows:

Dollars in thousands	Amortized Cost		Estimated Fair Value
Due in one year or less	$	36,859	$	37,229
Due from one to five years	87,349		89,178
Due from five to ten years	84,030		84,348
Due after ten years	213,242		213,986
Total	$	421,480	$	424,741

The proceeds from sales, calls and maturities of debt securities available for sale, including principal payments received on mortgage-backed obligations, and the related gross gains and losses realized, for the nine months ended September 30, 2021 and 2020 are as follows:

	Proceeds from						Gross realized
Dollars in thousands	Sales		Calls and Maturities		Principal Payments		Gains		Losses
For the Nine Months Ended   September 30,
2021	$	15,704	$	6,455	$	22,925	$	628	$	94
2020	$	105,597	$	2,810	$	17,952	$	2,560	$	—

Provided below is a summary of debt securities available for sale which were in an unrealized loss position at September 30, 2021 and December 31, 2020.

	September 30, 2021
		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	39	$	4,979	$	13	$	22,296	$	330	$	27,275	$	343
Residential mortgage-backed securities:
Government-sponsored agencies	17	15,256		258		7,598		209		22,854		467
Nongovernment-sponsored entities	7	9,505		90		2,923		132		12,428		222
State and political subdivisions:
General obligations	44	66,087		1,497		—		—		66,087		1,497
Water and sewer revenues	3	5,548		64		—		—		5,548		64
Lease revenues	2	1,460		33		—		—		1,460		33
Income tax revenues	1	720		5		—		—		720		5
Sales tax revenues	2	6,451		128		—		—		6,451		128
Other revenues	11	13,335		328		—		—		13,335		328
Corporate debt securities	10	10,631		220		986		13		11,617		233
Asset-backed securities	9	8,680		34		9,333		51		18,013		85
Tax-exempt debt securities
State and political subdivisions:
General obligations	15	30,345		617		902		15		31,247		632
Other revenues	7	5,846		120		156		1		6,002		121
Total	167	$	178,843	$	3,407	$	44,194	$	751	$	223,037	$	4,158

	December 31, 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	36	$	12,611	$	54	$	14,384	$	340	$	26,995	$	394
Residential mortgage-backed securities:
Government-sponsored agencies	10	3,127		34		8,593		315		11,720		349
Nongovernment-sponsored entities	6	6,770		35		2,751		209		9,521		244
State and political subdivisions:
General obligations	1	362		4		—		—		362		4
Corporate debt securities	6	3,952		16		1,904		96		5,856		112
Asset-backed securities	16	2,010		2		31,862		623		33,872		625
Tax-exempt debt securities
State and political subdivisions:
General obligations	1	924		9		—		—		924		9
Other revenues	2	415		1		151		7		566		8
Total	78	$	30,171	$	155	$	59,645	$	1,590	$	89,816	$	1,745

We do not intend to sell the above 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 changes in market interest rates, and in some cases limited market liquidity and is not due to credit quality as none of these securities are in default and all carry above investment grade ratings. Accordingly, no allowance for credit losses has been recognized relative to these securities.

Debt Securities Held to Maturity

The amortized cost, unrealized gains, unrealized losses and estimated fair values of debt securities held to maturity at September 30, 2021 and December 31, 2020 are summarized as follows:

	September 30, 2021
	Amortized		Unrealized				Estimated
Dollars in thousands	Cost		Gains		Losses		Fair Value
Debt Securities Held to Maturity
Tax-exempt debt securities
State and political subdivisions
General obligations	$	72,154	$	1,928	$	15	$	74,067
Water and sewer revenues	8,238		135		7		8,366
Lease revenues	4,336		21		—		4,357
Sales tax revenues	4,599		68		19		4,648
Other revenues	9,201		184		30		9,355
Total debt securities held to maturity	$	98,528	$	2,336	$	71	$	100,793

	December 31, 2020
	Amortized		Unrealized				Estimated
Dollars in thousands	Cost		Gains		Losses		Fair Value
Debt Securities Held to Maturity
Tax-exempt debt securities
State and political subdivisions
General obligations	$	73,179	$	2,524	$	—	$	75,703
Water and sewer revenues	8,375		256		—		8,631
Lease revenues	4,395		88		—		4,483
Sales tax revenues	4,649		94		3		4,740
Other revenues	9,316		309		25		9,600
Total debt securities held to maturity	$	99,914	$	3,271	$	28	$	103,157

Accrued interest receivable on debt securities held to maturity totaled $937,000 and $1.2 million at September 30, 2021 and December 31, 2020, respectively and is included in accrued interest and fees receivable in the accompanying consolidated balance sheets.

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

	September 30, 2021
	Amortized		Unrealized				Estimated
Dollars in thousands	Cost		Gains		Losses		Fair Value
Texas	$	15,475	$	439	$	7	$	15,907
California	9,927		262		4		10,185
Pennsylvania	8,672		253		—		8,925
Florida	7,628		139		—		7,767
Michigan	7,065		130		24		7,171

The following table displays the amortized cost of held to maturity debt securities by credit rating at September 30, 2021 and December 31, 2020.

	September 30, 2021
Dollars in thousands	AAA		AA		A		BBB		Below Investment Grade
Tax-exempt state and political subdivisions	$	15,522	$	75,490	$	7,516	$	—	$	—
	December 31, 2020
Dollars in thousands	AAA		AA		A		BBB		Below Investment Grade
Tax-exempt state and political subdivisions	$	15,735	$	76,585	$	7,594	$	—	$	—

We owned no past due or nonaccrual held to maturity debt securities at September 30, 2021 or December 31, 2020.

The maturities, amortized cost and estimated fair values of held to maturity debt securities at September 30, 2021, are summarized as follows:

Dollars in thousands	Amortized Cost		Estimated Fair Value
Due in one year or less	$	—	$	—
Due from one to five years	—		—
Due from five to ten years	2,006		2,024
Due after ten years	96,522		98,769
Total	$	98,528	$	100,793

There were no proceeds from calls and maturities of debt securities held to maturity for the nine months ended September 30, 2021.

The proceeds from calls and maturities of debt securities held to maturity totaled $1.0 million for the nine month ended September 30, 2020.

At September 30, 2021, no allowance for credit losses on debt securities held to maturity has been recognized.