Securities

6 Months Ended

Jun. 30, 2024

NOTE 3 – Securities

The following table summarizes the amortized cost and fair value of the available-for-sale investment securities portfolios as of the dates indicated and the corresponding amounts of unrealized gains and losses which were recognized in accumulated other comprehensive loss:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)
June 30, 2024:
Federal agency mortgage-backed securities	$	67,240	$	4	$	(10,209	)	$	57,035
Federal agency collateralized mortgage obligations (“CMO”)		23,180		7		(1,451	)		21,736
Federal agency debt		46,733		–		(2,933	)		43,800
Municipal bonds		4,817		–		(482	)		4,335
U. S. Treasuries		127,534		–		(2,250	)		125,284
U.S. Small Business Administration (“SBA”) pools		10,907		6		(1,649	)		9,264
Total available-for-sale securities	$	280,411	$	17	$	(18,974	)	$	261,454
December 31, 2023:
Federal agency mortgage-backed securities	$	76,091	$	3	$	(9,316	)	$	66,778
Federal agency CMOs		24,720		–		(1,381	)		23,339
Federal agency debt		50,893		–		(3,057	)		47,836
Municipal bonds		4,833		–		(460	)		4,373
U. S. Treasuries		167,055		–		(3,175	)		163,880
SBA pools		12,386		4		(1,646	)		10,744
Total available-for-sale securities	$	335,978	$	7	$	(19,035	)	$	316,950

As of June 30, 2024, investment securities with a fair value of $70.9 million were pledged as collateral for securities sold under agreements to repurchase and included $30.5 million of federal agency debt securities, $30.1 million of U.S. Treasury securities and $10.3 million of federal agency mortgage-backed securities. As of December 31, 2023, investment securities with a fair value of $89.0 million were pledged as collateral for securities sold under agreements to repurchase and included $47.8 million of U.S. Treasury securities, $30.2 million of federal agency debt securities, and $11.0 million of federal agency mortgage-backed securities. Investment securities with a fair value of $94.0 million and $98.3 million were pledged as collateral for the BTFP borrowing as of June 30, 2024 and December 31, 2023, respectively (See Note 6 – Borrowings). Accrued interest receivable on securities was $1.0 million and $1.4 million at June 30, 2024 and December 31, 2023, respectively, and is included in the consolidated statements of financial condition under accrued interest receivable.

At June 30, 2024, and December 31, 2023, there were no holdings of securities by any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.

The amortized cost and estimated fair value of all investment securities available-for-sale at June 30, 2024, by contractual maturities are shown below. Contractual maturities may differ from expected maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)
Due in one year or less	$	98,666	$	–	$	(1,322	)	$	97,344
Due after one year through five years		74,828		–		(3,899	)		70,929
Due after five years through ten years		27,551		10		(1,757	)		25,804
Due after ten years⁽¹⁾		79,366		7		(11,996	)		67,377
	$	280,411	$	17	$	(18,974	)	$	261,454

⁽¹⁾	^{Mortgage-backed securities, collateralized mortgage obligations and SBA pools do not have a single stated maturity date and therefore have been included in the “Due after ten years” category.}

The table below indicates the length of time individual securities had been in a continuous unrealized loss position:

	Less than 12 Months					12 Months or Longer					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(In thousands)
June 30, 2024:
Federal agency mortgage-backed securities	$	–	$	–		$	56,791	$	(10,209	)	$	56,791	$	(10,209	)
Federal agency CMOs		–		–			20,962		(1,451	)		20,962		(1,451	)
Federal agency debt		–		–			43,800		(2,933	)		43,800		(2,933	)
Municipal bonds		–		–			4,335		(482	)		4,335		(482	)
U. S. Treasuries		–		–			125,284		(2,250	)		125,284		(2,250	)
SBA pools		–		–			8,082		(1,649	)		8,082		(1,649	)
Total unrealized loss position investment securities	$	–	$	–		$	259,254	$	(18,974	)	$	259,254	$	(18,974	)

December 31, 2023:
Federal agency mortgage-backed securities	$	–	$	–		$	66,575	$	(9,316	)	$	66,575	$	(9,316	)
Federal agency CMOs		–		–			23,339		(1,381	)		23,339		(1,381	)
Federal agency debt		3,018		(37	)		44,818		(3,020	)		47,836		(3,057	)
Municipal bonds		–		–			4,373		(460	)		4,373		(460	)
U. S. Treasuries		–		–			163,880		(3,175	)		163,880		(3,175	)
SBA pools		286		(1	)		9,439		(1,645	)		9,725		(1,646	)
Total unrealized loss position investment securities	$	3,304	$	(38	)	$	312,424	$	(18,997	)	$	315,728	$	(19,035	)

At June 30, 2024, and December 31, 2023, there were no securities in nonaccrual status. All securities in the portfolio were current with their contractual principal and interest payments. At June 30, 2024, and December 31, 2023, there were no securities purchased with deterioration in credit quality since their origination. At June 30, 2024, and December 31, 2023, there were no collateral dependent securities.

The Company’s assessment of available-for-sale investment securities as of June 30, 2024 and December 31, 2023, indicated that an allowance for credit losses (“ACL”) was not required. The Company analyzed available-for-sale investment securities that were in an unrealized loss position and determined the decline in fair value for those securities was not related to credit, but rather related to changes in interest rates and general market conditions. As such, no ACL was recorded for available-for-sale securities as of June 30, 2024 and December 31, 2023.