2021 Annual Report

Less Than 12 Months

12 Months or Greater

Total

Unrealized

Unrealized

Unrealized

(dollars in thousands)

Fair Value Losses Fair Value Losses Fair Value Losses

December 31, 2020 Municipal Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,023 $ (329) $ 223 $ Mortgage-Backed Securities . . . . . . . . . . . . . . . . 45,120 (1,163) 1,699 Corporate Securities . . . . . . . . . . . . . . . . . . . . . . . 23,643 (131) 2,430

(7) $ 12,246 $ (336) (1) 46,819 (1,164) (70) 26,073 (201)

SBA Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,288 Asset-Backed Securities . . . . . . . . . . . . . . . . . . . . 2,471 (16) Total Securities Available for Sale . . . . . . . . . . $ 86,545 $ (1,642) $ 32,545 $ (455) $ 119,090 $ (2,097) At December 31, 2021, 199 debt securities had unrealized losses with aggregate depreciation of approximately 2.1% from the Company’s amortized cost basis. At December 31, 2020, 150 debt securities had unrealized losses with aggregate depreciation of approximately 1.7% from the Company’s amortized cost basis. These unrealized losses related principally to changes in interest rates and were not due to changes in the financial condition of the issuer, the quality of any underlying assets, or applicable credit enhancements. In analyzing whether unrealized losses on debt securities are other than temporary, management considers whether the securities are issued by a government body or agency, whether a rating agency has downgraded the securities, industry analysts’ reports, the financial condition and performance of the issuer, and the quality of any underlying assets or credit enhancements. Since management has the ability and intent to hold these debt securities for the foreseeable future, no declines were deemed to be other than temporary as of December 31, 2021. The following table presents a summary of amortized cost and estimated fair value of debt securities by the lesser of expected call date or contractual maturity as of December 31, 2021. Call date is used when a call of the debt security is expected, determined by the Company when the security has a market value above its amortized cost. Contractual maturities will differ from expected maturities for mortgage-backed, SBA securities and asset-backed securities because borrowers may have the right to call or prepay obligations without penalties. (3) 28,193 (377) 31,481 (380) (16) — — 2,471

(dollars in thousands)

Amortized Cost Fair Value

December 31, 2021 Due in One Year or Less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ Due After One Year Through Five Years . . . . . . . . . . . . . . . . . . . . . . Due After Five Years Through 10 Years. . . . . . . . . . . . . . . . . . . . . . . Due After 10 Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,452 61,045 Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234,346 243,603 Mortgage-Backed Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125,563 124,537 SBA Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,474 30,370 Asset-Backed Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,867 40,852 Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 430,250 $ 439,362 7,632 $ 7,684 90,653 95,274 76,609 79,600

As of December 31, 2021 and 2020, the securities portfolio was unencumbered. The following table presents a summary of the proceeds from sales of securities available for sale, as well as gross gains and losses, for the years ended December 31, 2021, 2020 and 2019:

Year Ended December 31,

(dollars in thousands) 2019 Proceeds From Sales of Securities . . . . . . . . . . . . . . . . . . . . . . $ 11,877 $ 40,862 $ 42,864 Gross Gains on Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200 1,592 774 Gross Losses on Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (450) (89) (258) 2021 2020

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