|3 Months Ended|
Mar. 31, 2021
|Investments Debt And Equity Securities [Abstract]|
NOTE 3. INVESTMENT SECURITIES
The amortized cost, gross unrealized gains and losses and approximate fair values of securities available for sale are as follows:
Taxable interest and dividends on investment securities were $957 thousand and $465 thousand for the three months ended March 31, 2021 and 2020, respectively. Tax-exempt interest and dividends on investment securities were $158 thousand and $39 thousand for the three months ended March 31, 2021 and 2020, respectively.
There were $138.6 million and $91.5 million of securities pledged to collateralize public funds at March 31, 2021 and December 31, 2020, respectively.
The amortized cost and estimated fair value of securities available for sale, by contractual maturity, are as follows for the period presented:
For purposes of the maturity table, residential mortgage-backed securities, the principal of which are repaid periodically, are presented as a single amount. The expected lives of these securities will differ from contractual maturities because borrowers may have the right to prepay the underlying loans with or without prepayment penalties.
The following tables present the estimated fair values and gross unrealized losses on investment securities available for sale, aggregated by investment category and length of time individual securities have been in a continuous unrealized loss position as of the periods presented:
At March 31, 2021, the Company’s securities portfolio consisted of 108 securities, 74 of which were in an unrealized loss position. None of the 74 securities in an unrealized loss position at March 31, 2021 were in an unrealized loss position for more than 12 months.
The Company monitors its investment securities for other-than-temporary-impairment (“OTTI”). Impairment is evaluated on an individual security basis considering numerous factors, and its relative significance. The Company has evaluated the nature of unrealized losses in the investment securities portfolio to determine if OTTI exists. The unrealized losses relate to changes in market interest rates and specific market conditions that do not represent credit-related impairments. Furthermore, the Company does not intend to sell nor is it more likely than not that it will be required to sell these investments before the recovery of their amortized cost basis. Management has completed an assessment of each security in an unrealized loss position for credit impairment and has determined that no individual security was other-than-temporarily impaired at March 31, 2021. The following describes the basis under which the Company has evaluated OTTI:
U.S. Treasury Securities, and Residential Mortgage-Backed Securities (“MBS”):
The unrealized losses associated with U.S. Treasury securities, and residential MBS are primarily driven by changes in interest rates. These securities have either an explicit or implicit U.S. government guarantee. At March 31, 2021, the unrealized losses for these securities resulted primarily from changes in interest rates and spreads.
Sales proceeds from the sale of available for sale securities for the three months ended March 31, 2021 were $6.9 million, which resulted in gross realized gains of $5 thousand. There were no securities sold for the three months ended March 31, 2020.
Equity investments at fair value consist of an investment in the CCM Community Impact Bond Fund. At March 31, 2021 and December 31, 2020, the fair value of equity securities totaled $23.7 million and $24.0 million, respectively. Subsequent changes in fair value are recognized in other noninterest income. For the three months ended March 31, 2021 a loss of $400 thousand was included in other noninterest income. There were no fair value changes for the three months ended March 31, 2020.
The entire disclosure for investments in certain debt and equity securities.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef