Securities

3 Months Ended

Mar. 31, 2021

Securities

Securities

NOTE 3: Securities

The Corporation’s debt securities, all of which are classified as available for sale, are summarized as follows:

	March 31, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized
(Dollars in thousands)	Cost		Gains		Losses		Fair Value
U.S. government agencies and corporations	$	54,900	$	105	$	(1,324)	$	53,681
Mortgage-backed securities		148,307		2,769		(558)		150,518
Obligations of states and political subdivisions		101,601		1,923		(370)		103,154
Corporate and other debt securities		13,915		79		(62)		13,932
	$	318,723	$	4,876	$	(2,314)	$	321,285

	December 31, 2020
			Gross		Gross
	Amortized		Unrealized		Unrealized
(Dollars in thousands)	Cost		Gains		Losses		Fair Value
U.S. government agencies and corporations	$	48,171	$	121	$	(10)	$	48,282
Mortgage-backed securities		120,664		3,165		(115)		123,714
Obligations of states and political subdivisions		100,405		2,436		(36)		102,805
Corporate and other debt securities		11,584		47		(43)		11,588
	$	280,824	$	5,769	$	(204)	$	286,389

The amortized cost and estimated fair value of securities at March 31, 2021, by the earlier of contractual maturity or expected maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without call or prepayment penalties.

	March 31, 2021
	Amortized
(Dollars in thousands)	Cost		Fair Value
Due in one year or less	$	63,112	$	62,695
Due after one year through five years		171,500		175,068
Due after five years through ten years		75,592		75,334
Due after ten years		8,519		8,188
	$	318,723	$	321,285

The following table presents the gross realized gains and losses on and the proceeds from the sales, maturities and calls of securities. During the three months ended March 31, 2021 and 2020, $2.30 million and $5.99 million of proceeds, respectively, were related to sales of securities.

	Three Months Ended March 31,
(Dollars in thousands)	2021		2020
Realized gains from sales, maturities and calls of securities:
Gross realized gains	$	32	$	4
Gross realized losses		—		—
Net realized gains	$	32	$	4
Proceeds from sales, maturities, calls and paydowns of securities	$	33,712	$	39,063

The Corporation pledges securities primarily to secure public deposits and repurchase agreements. Securities with an aggregate amortized cost of $135.46 million and an aggregate fair value of $138.11 million were pledged at March 31, 2021. Securities with an aggregate amortized cost of $146.66 million and an aggregate fair value of $150.13 million were pledged at December 31, 2020.

Securities in an unrealized loss position at March 31, 2021, by duration of the period of the unrealized loss, are shown below.

	Less Than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Loss		Value		Loss		Value		Loss
U.S. government agencies and corporations	$	42,067	$	1,324	$	—	$	—	$	42,067	$	1,324
Mortgage-backed securities		48,067		558		—		—		48,067		558
Obligations of states and political subdivisions		21,881		370		—		—		21,881		370
Corporate and other debt securities		6,258		62		—		—		6,258		62
Total temporarily impaired securities	$	118,273	$	2,314	$	—	$	—	$	118,273	$	2,314

There were 106 debt securities totaling $118.27 million of aggregate fair value considered temporarily impaired at March 31, 2021. The primary cause of the temporary impairments in the Corporation’s investments in debt securities was fluctuations in interest rates. The Corporation concluded that no other-than-temporary impairment existed in its securities portfolio at March 31, 2021, and no other-than-temporary impairment loss has been recognized in net income, based primarily on the fact that changes in fair value were caused primarily by fluctuations in interest rates, there were no securities with unrealized losses that were significant relative to their carrying amounts, no securities have been in an unrealized loss position continuously for more than 12 months, securities with unrealized losses had generally high credit quality, the Corporation intends to hold these investments in debt securities to maturity and it is more-likely-than-not that the Corporation will not be required to sell these investments before a recovery of its investment, and issuers have continued to make timely payments of principal and interest. Additionally, the Corporation’s mortgage-backed securities are entirely issued by either U.S. government agencies or U.S. government-sponsored enterprises.  Collectively, these entities provide a guarantee, which is either explicitly or implicitly supported by the full faith and credit of the U.S. government, that investors in such mortgage-backed securities will receive timely principal and interest payments. 

Securities in an unrealized loss position at December 31, 2020, by duration of the period of the unrealized loss, are shown below.

	Less Than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Loss		Value		Loss		Value		Loss
U.S. government agencies and corporations	$	12,719	$	10	$	—	$	—	$	12,719	$	10
Mortgage-backed securities		15,691		115		—		—		15,691		115
Obligations of states and political subdivisions		5,110		36		—		—		5,110		36
Corporate and other debt securities		4,271		43		—		—		4,271		43
Total temporarily impaired securities	$	37,791	$	204	$	—	$	—	$	37,791	$	204

The Corporation’s investment in restricted stock totaled $1.03 million at March 31, 2021 and consisted of Federal Home Loan Bank (FHLB) stock.  Restricted stock is generally viewed as a long-term investment, which is carried at cost because there is no market for the stock other than the FHLBs. Therefore, when evaluating restricted stock for impairment, its value is based on the ultimate recoverability of the par value rather than by recognizing any temporary decline in value. The Corporation did not consider its investment in restricted stock to be other-than-temporarily impaired at March 31, 2021 and no impairment has been recognized.