SECURITIES

9 Months Ended

Sep. 30, 2020

SECURITIES

SECURITIES

NOTE 9 - SECURITIES

The following disclosure of the estimated fair value of financial instruments is made in accordance with authoritative guidance. The estimated fair value amounts have been determined using available market information and valuation methodologies that management believes are appropriate. However, considerable judgment is required to interpret market data to develop the estimates of fair value. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

A summary of the amortized cost, fair value of available-for-sale securities at September 30, 2020 and December 31, 2019 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss):

	September 30, 2020
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
($ in thousands)	Cost		Gains		Losses		Value
Available-for-sale securities:
U.S. Treasury	$	9,080	$	370	$	—	$	9,450
Obligations of U.S. government agencies and sponsored entities		97,463		3,168		28		100,603
Tax-exempt and taxable obligations of states and municipal subdivisions		403,518		13,642		593		416,567
Mortgage-backed securities - residential		238,920		9,263		16		248,167
Mortgage-backed securities - commercial		147,766		6,563		38		154,291
Corporate obligations		27,510		912		42		28,380
Total	$	924,257	$	33,918	$	717	$	957,458

	December 31, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
($ in thousands)	Cost		Gains		Losses		Value
Available-for-sale securities:
U.S. Treasury	$	4,967	$	—	$	73	$	4,894
Obligations of U.S. government agencies sponsored entities		76,699		1,475		224		77,950
Tax-exempt and taxable obligations of states and municipal subdivisions		253,527		5,602		147		258,982
Mortgage-backed securities - residential		263,229		4,726		107		267,848
Mortgage-backed securities - commercial		125,292		2,398		223		127,467
Corporate obligations		27,877		218		149		27,946
Total	$	751,591	$	14,419	$	923	$	765,087

The amortized cost and fair value of debt securities are shown by contractual maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

	September 30,2020				December 31, 2019
	Available-for-Sale				Available-for-Sale
	Amortized		Fair		Amortized		Fair
($ in thousands)	Cost		Value		Cost		Value
Due less than one year	$	30,084	$	30,284	$	30,141	$	30,303
Due after one year through five years		123,842		127,542		80,119		81,372
Due after five years through ten years		185,005		192,052		143,811		148,085
Due greater than ten years		198,640		205,122		108,999		110,012
Mortgage-backed securities - residential		238,920		248,167		263,229		267,848
Mortgage-backed securities - commercial		147,766		154,291		125,292		127,467
Total	$	924,257	$	957,458	$	751,591	$	765,087

The carrying value of securities pledged as collateral, to secure public deposits and for other purposes, was $586.3 million and $436.0 million at September 30, 2020 and December 31, 2019, respectively.

The following table summarizes available-for-sale securities with unrealized and unrecognized losses at September 30, 2020 and December 31, 2019, aggregated by major security type and length of time in a continuous unrealized or unrecognized loss position:

	September 30,2020
	Losses < 12 Months				Losses 12 Months or >				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
($ in thousands)	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury	$	—	$	—	$	—	$	—	$	—	$	—
Obligations of U.S government agencies and sponsored entities		7,695		26		366		2		8,061		28
Tax-exempt and taxable obligations of state and municipal subdivisions		35,175		593		—		—		35,175		593
Mortgage-backed securities - residential		3,345		16		11		—		3,356		16
Mortgage-backed securities - commercial		28,549		5		5,690		33		34,239		38
Corporate obligations		4,606		33		39		9		4,645		42
Total	$	79,370	$	673	$	6,106	$	44	$	85,476	$	717

	December 31, 2019
	Losses < 12 Months				Losses 12 Months or >				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
($ in thousands)	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury	$	4,894	$	73	$	—	$	—	$	4,894	$	73
Obligations of U.S government agencies and sponsored entities		22,987		224		—		—		22,987		224
Tax-exempt and taxable obligations of state and municipal subdivisions		27,913		146		322		1		28,235		147
Mortgage-backed securities - residential		22,328		55		7,602		52		29,930		107
Mortgage-backed securities - commercial		10,787		166		17,649		57		28,436		223
Corporate obligations		10,636		49		436		100		11,072		149
Total	$	99,545	$	713	$	26,009	$	210	$	125,554	$	923

At September 30, 2020 and December 31, 2019, the Company’s securities portfolio consisted of 97 and 156 securities, respectively, which were in an unrealized loss position. The Company reviews its investment portfolio quarterly for indications of other-than-temporary impairment (“OTTI”), with attention given to securities in a continuous loss position of at least ten percent for over twelve months. Management believes that none of the losses on available-for-sale securities noted above constitutes an OTTI. The noted losses are considered temporary due to market fluctuations in available interest rates. Management considers the issuers of the securities to be financially sound, the corporate bonds are investment grade, and the collectability of all contractual principal and interest payments is reasonably expected. No OTTI losses were recognized during the nine months ended September 30, 2020 or the year ended December 31, 2019.