Annual report pursuant to Section 13 and 15(d)

SECURITIES

v3.22.0.1
SECURITIES
12 Months Ended
Dec. 31, 2021
SECURITIES [Abstract]  
SECURITIES
NOTE 2 – SECURITIES
 
The amortized cost and fair value of securities were as follows (dollars in thousands):

   
Amortized
Cost
   
Gross
Unrealized
Gains
   
Gross
Unrealized
Losses
   
Fair
Value
 
December 31, 2021
                       
Available for Sale:
                       
U.S. Treasury and federal agency securities
 
$
208,153
   
$
215
   
$
(1,523
)
 
$
206,845
 
U.S. Agency MBS and CMOs
   
87,343
     
416
     
(962
)
   
86,797
 
Tax-exempt state and municipal bonds
   
36,298
     
1,258
     
     
37,556
 
Taxable state and municipal bonds
   
79,394
     
812
     
(645
)
   
79,561
 
Corporate bonds and other debt securities
   
5,251
     
63
     
(10
)
   
5,304
 
   
$
416,439
   
$
2,764
   
$
(3,140
)
 
$
416,063
 
Held to Maturity
                               
Tax-exempt state and municipal bonds
 
$
137,003
   
$
2,484
   
$
(215
)
 
$
139,272
 
                                 
December 31, 2020
                               
Available for Sale:
                               
U.S. Treasury and federal agency securities
 
$
63,993
   
$
287
   
$
(170
)
 
$
64,110
 
U.S. Agency MBS and CMOs
   
63,652
     
1,376
     
(45
)
   
64,983
 
Tax-exempt state and municipal bonds
   
43,739
     
1,903
     
     
45,642
 
Taxable state and municipal bonds
   
55,383
     
1,801
     
(7
)
   
57,177
 
Corporate bonds and other debt securities
   
4,731
     
189
     
     
4,920
 
   
$
231,498
   
$
5,556
   
$
(222
)
 
$
236,832
 
Held to Maturity
                               
Tax-exempt state and municipal bonds
 
$
79,468
   
$
3,778
   
$
   
$
83,246
 

There were no sales of securities available for sale during the years ended December 31, 2021 and 2020.
 
Contractual maturities of debt securities at December 31, 2021 were as follows (dollars in thousands):

   
Held–to-Maturity Securities
   
Available-for-Sale Securities
 
   
Amortized
Cost
   
Fair
Value
   
Amortized
Cost
   
Fair
Value
 
Due in one year or less
 
$
27,809
   
$
27,922
   
$
22,020
   
$
22,215
 
Due from one to five years
   
74,909
     
75,515
     
196,934
     
197,967
 
Due from five to ten years
   
17,390
     
18,338
     
112,128
     
111,133
 
Due after ten years
   
16,895
     
17,497
     
85,357
     
84,748
 
   
$
137,003
   
$
139,272
   
$
416,439
   
$
416,063
 

NOTE 2 – SECURITIES (Continued)
 
Securities with unrealized losses at December 31, 2021 and 2020, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows (dollars in thousands):

   
Less than 12 Months
   
12 Months or More
   
Total
 
December 31, 2021
 
Fair
Value
   
Unrealized
Loss
   
Fair
Value
   
Unrealized
Loss
   
Fair
Value
   
Unrealized
Loss
 
Available for Sale:
                                   
U.S. Treasury and federal agency securities
 
$
77,066
   
$
(955
)
 
$
18,432
   
$
(568
)
 
$
95,498
   
$
(1,523
)
U.S. Agency MBS and CMOs
   
52,254
     
(830
)
   
4,190
     
(132
)
   
56,444
     
(962
)
Tax-exempt state and municipal bonds
   
     
     
     
     
     
 
Taxable state and municipal bonds
   
37,648
     
(638
)
   
498
     
(7
)
   
38,146
     
(645
)
Corporate bonds and other debt securities
   
1,352
     
(10
)
   
     
     
1,352
     
(10
)
Total
 
$
168,320
   
$
(2,433
)
 
$
23,120
   
$
(707
)
 
$
191,440
   
$
(3,140
)
                                                 
Held to Maturity:
                                               
Tax-exempt state and municipal bonds
 
$
61,166
   
$
(215
)
 
$
   
$
   
$
61,166
   
$
(215
)

   
Less than 12 Months
   
12 Months or More
   
Total
 
December 31, 2020
 
Fair
Value
   
Unrealized
Loss
   
Fair
Value
   
Unrealized
Loss
   
Fair
Value
   
Unrealized
Loss
 
Available for Sale:
                                   
U.S. Treasury and federal agency securities
 
$
22,830
   
$
(170
)
 
$
   
$
   
$
22,830
   
$
(170
)
U.S. Agency MBS and CMOs
   
9,299
     
(45
)
   
     
     
9,299
     
(45
)
Tax-exempt state and municipal bonds
   
     
     
     
     
     
 
Taxable state and municipal bonds
   
2,336
     
(7
)
   
     
     
2,336
     
(7
)
Corporate bonds and other debt securities
   
     
     
     
     
     
 
Total
 
$
34,465
   
$
(222
)
 
$
   
$
   
$
34,465
   
$
(222
)
                                                 
Held to Maturity:
                                               
Tax-exempt state and municipal bonds
 
$
   
$
   
$
   
$
   
$
   
$
 

Other-Than-Temporary-Impairment
 
Management evaluates securities for OTTI at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. At December 31, 2021, 127 securities available for sale with fair values totaling $191.4 million had unrealized losses totaling $3.1 million. At December 31, 2020, 21 securities available for sale with fair values totaling $34.5 million had unrealized losses totaling $222,000. At December 31, 2021, 9 securities held to maturity with fair values totaling $61.2 million had unrealized losses totaling $215,000. There were no securities held to maturity with unrealized losses at December 31, 2020.  Management has the ability and intent to hold the securities classified as held to maturity until they mature, at which time the Company will receive full value for the securities.  In addition, management believes it is more likely than not that the Company will not be required to sell any of its investment securities before a recovery of cost.  Management determined that the unrealized losses for each period were attributable to changes in interest rates and not due to credit quality.  As such, no OTTI charges were necessary during 2021 and 2020.

On January 1, 2022, the Company transferred all of its US Treasury securities from available for sale to held to maturity.  These securities had an amortized cost of $123.5 million and an unrealized gain of $113,000 at the date of transfer.  The transfer was made at fair value, with the unrealized gain becoming part of purchase premium which will be amortized over the remaining life of the securities.  The other comprehensive income component is separated from the remaining available for sale securities and is amortized over the remaining life of the securities transferred.  Management has the ability and intent to hold these securities until they mature, at which time the Company will receive full value for the securities.
 
Securities with a carrying value of approximately $4.9 million and $6.1 million were pledged as security for public deposits, letters of credit and for other purposes required or permitted by law at December 31, 2021 and 2020, respectively.

The Company also has an investment in a fund that invests in projects qualifying for Community Reinvestment Act credit.  As an equity investment, accounting standards require this $1.5 million investment be carried at fair value and reported in other assets at December 31, 2021 and 2020.