|12 Months Ended|
Dec. 31, 2021
|Investments Debt And Equity Securities [Abstract]|
NOTE 4. INVESTMENT SECURITIES
The amortized cost, gross unrealized gains and losses and approximate fair values of debt securities available for sale are as follows:
There were $281.8 million and $91.5 million in securities pledged at December 31, 2021 and 2020, respectively to collateralize public funds.
The amortized cost and estimated fair value of securities available for sale, by contractual maturity, are as follows:
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 December 31, 2021, the Company’s security portfolio consisted of 105 securities, of which 70 were in an unrealized loss position. The unrealized losses for these securities resulted primarily from changes in interest rates and spreads.
The Company monitors its investment securities for 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 December 31, 2021. The following describes the basis under which the Company has evaluated OTTI:
State and Municipal Obligations:
The unrealized losses associated with state and municipal obligations are primarily driven by changes in interest rates.
Residential Mortgage-Backed Securities (“MBS”):
The unrealized losses associated with residential MBS are primarily driven by changes in interest rates. The majority of residential mortgage-backed securities held by the Company are issued by U.S. government-sponsored entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government.
Corporate Bonds and Other Debt Securities:
The unrealized losses associated with corporate bonds and other debt securities are primarily driven by changes in interest rates.
The Company sold 5 securities during the year ended December 31, 2021 and 46 securities during the year ended December 31, 2020. There were 216 securities sold for the year ended December 31, 2019. Sale proceeds and gross realized gains and losses on the sale of securities available for sale are shown below. The cost of securities sold is based on the specific identification method.
Equity investments at fair value consist of an investment in the CRA Qualified Investment Fund. At December 31, 2021, the fair value of equity securities totalled $23.7 million. Subsequent changes in fair value are recognized in other noninterest income. The Company recorded net losses of $669 thousand in other noninterest income related to unrealized losses and $334 thousand in dividend income during the year ended December 31, 2021. There were no fair value changes subsequent to purchase and through the year ended December 31, 2020.
Taxable interest and dividends on investment securities were $5.7 million, $2.1 million and $4.6 million for the years ended December 31, 2021, 2020 and 2019, respectively. Tax-exempt interest on investment securities was $627 thousand, $193 thousand and $541 thousand for the years ended December 31, 2021, 2020 and 2019, respectively.
The entire disclosure for investments in certain debt and equity securities.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef