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INVESTMENT SECURITIES

12 Months Ended

Dec. 31, 2023

2.	INVESTMENT SECURITIES

The amortized cost and estimated fair value of investment securities are as follows:

	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
Securities available-for-sale	(in thousands)
U.S. government agency notes	$	3,318	$	13	$	(1	)	$	3,330
U.S. government agency collateralized mortgage obligations (“CMOs”)		4,114		—		(170	)		3,944
Corporate debt securities		9,250		—		(1,292	)		7,958
Total		16,682		13		(1,463	)		15,232

Securities held-to-maturity
U.S. government agency MBS	$	2,135	$	8	$	(87	)	$	2,056
Total	$	2,135	$	8	$	(87	)	$	2,056

Securities measured at fair value
Equity securities: Farmer Mac class A stock	$	66	$	316	$	—		$	382
Total	$	66	$	316	$	—		$	382

	December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
Securities available-for-sale	(in thousands)
U.S. government agency notes	$	4,081	$	26	$	—		$	4,107
U.S. government agency CMOs		4,475		—		(179	)		4,296
U.S. Treasury securities		9,984		—		(14	)		9,970
Corporate debt securities		9,250		—		(935	)		8,315
Total		27,790		26		(1,128	)		26,688

Securities held-to-maturity
U.S. government agency MBS	$	2,557	$	3	$	(137	)	$	2,423
Total	$	2,557	$	3	$	(137	)	$	2,423

Securities measured at fair value
Equity securities: Farmer Mac class A stock	$	66	$	159	$	—		$	225
Total	$	66	$	159	$	—		$	225

At December 31, 2023 and 2022, $9.3 million and $21.1 million of securities at carrying value, respectively, were pledged to the FHLB as collateral for current and future advances.

At December 31, 2023 and 2022, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.

The Company had no sales of investment securities during 2023, 2022, or 2021.

The maturity periods and weighted average yields of investment securities at December 31, 2023 and 2022 were as follows:

	December 31, 2023
	Less than One Year				One to Five Years				Five to Ten Years					Over Ten Years					Total
	Amount		Yield		Amount		Yield		Amount		Yield			Amount		Yield			Amount		Yield
Securities available-for-sale	(dollars in thousands)
U.S. government agency notes	$	—		—	$	—		—	$	469		5.85	%	$	2,861		6.89	%	$	3,330		6.74	%
U.S. government agency CMOs		—		—		—		—		453		3.43	%		3,491		5.66	%		3,944		5.40	%
Corporate debt securities		—		—		—		—		7,958		3.74	%		—		—			7,958		3.74	%
Total	$	—		—	$	—		—	$	8,880		3.84	%	$	6,352		6.21	%	$	15,232		4.83	%

Securities held-to-maturity
U.S. government agency MBS	$	—		—	$	—		—	$	826		3.99	%	$	1,309		4.57	%	$	2,135		4.35	%
Total	$	—		—	$	—		—	$	826		3.99	%	$	1,309		4.57	%	$	2,135		4.35	%

	December 31, 2022
	Less than One Year					One to Five Years				Five to Ten Years					Over Ten Years					Total
	Amount		Yield			Amount		Yield		Amount		Yield			Amount		Yield			Amount		Yield
Securities available-for-sale	(dollars in thousands)
U.S. government agency notes	$	—		—		$	—		—	$	519		3.59	%	$	3,588		4.40	%	$	4,107		4.30	%
U.S. government agency CMOs		—		—			—		—		—		—			4,296		4.63	%		4,296		4.63	%
U.S. Treasury securities		9,970		2.06	%		—		—		—		—			—		—			9,970		2.06	%
Corporate debt securities		—		—			—		—		8,315		3.74	%		—		—			8,315		3.74	%
Total	$	9,970		2.06	%	$	—		—	$	8,834		3.73	%	$	7,884		4.53	%	$	26,688		3.34	%

Securities held-to-maturity
U.S. government agency MBS	$	—		—		$	—		—	$	746		3.60	%	$	1,811		3.68	%	$	2,557		3.66	%
Total	$	—		—		$	—		—	$	746		3.60	%	$	1,811		3.68	%	$	2,557		3.66	%

The amortized cost and fair value of investment securities by contractual maturities as of the periods presented were as shown below:

	December 31,
	2023				2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Securities available for sale	(in thousands)
Due in one year or less	$	—	$	—	$	9,984	$	9,970
After one year through five years		—		—		—		—
After five years through ten years		10,206		8,880		9,768		8,834
After ten years		6,476		6,352		8,038		7,884
Total	$	16,682	$	15,232	$	27,790	$	26,688
Securities held to maturity
Due in one year or less	$	—	$	—	$	—	$	—
After one year through five years		—		—		—		—
After five years through ten years		826		792		746		705
After ten years		1,309		1,264		1,811		1,718
Total	$	2,135	$	2,056	$	2,557	$	2,423

Actual maturities may differ from contractual maturities as borrowers or issuers have the right to prepay or call the investment securities. Changes in interest rates may also impact prepayments.

As of December 31, 2023 and 2022, securities that were in an unrealized loss position and length of time that individual securities have been in a continuous loss position are summarized as follows:

	December 31, 2023
	Less Than Twelve Months					More Than Twelve Months						Total
	Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value			Gross Unrealized Losses			Fair Value
Securities available-for-sale	(in thousands)
U.S. government agency notes	$	(1	)	$	988	$	—		$	—		$	(1	)	$	988
U.S. government agency CMOs		—			—		(170	)		3,944			(170	)		3,944
Corporate debt securities		—			—		(1,292	)		7,958			(1,292	)		7,958
Total	$	(1	)	$	988	$	(1,462	)	$	11,902		$	(1,463	)	$	12,890
Securities held-to-maturity
U.S. government agency MBS	$	—		$	—	$	(87	)	$	(1,718	)	$	(87	)	$	(1,718	)
Total	$	—		$	—	$	(87	)	$	(1,718	)	$	(87	)	$	(1,718	)

	December 31, 2022
	Less Than Twelve Months					More Than Twelve Months					Total
	Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value
Securities available-for-sale	(in thousands)
U.S. government agency CMOs	$	(130	)	$	3,690	$	(49	)	$	606	$	(179	)	$	4,296
U.S. Treasury securities		(14	)		9,970		—			—		(14	)		9,970
Corporate debt securities		(764	)		6,986		(171	)		1,329		(935	)		8,315
Total	$	(908	)	$	20,646	$	(220	)	$	1,935	$	(1,128	)	$	22,581
Securities held-to-maturity
U.S. government agency MBS	$	(137	)	$	2,115	$	—		$	—	$	(137	)	$	2,115
Total	$	(137	)	$	2,115	$	—		$	—	$	(137	)	$	2,115

As of December 31, 2023 and 2022, there were 36 and 37 securities, respectively, in an unrealized loss position.

At December 31, 2023 and 2022, there were no available-for-sale or held-to-maturity securities that were on nonaccrual status. All securities in the portfolio were current with their contractual principal and interest payments. Accrued interest receivable related to available-for-sale and held-to-maturity securities was $130 thousand and $77 thousand December 31, 2023 and 2022, respectively. Accrued interest receivable is included in other assets on the consolidated balance sheets.

There were no collateral dependent available-for-sale or held-to-maturity securities at December 31, 2023 or 2022.

The Company did not record an allowance for credit losses for available-for-sale or held-to-maturity investment securities as of December 31, 2023. For available-for-sale securities where the security’s estimated fair value was below its amortized cost, such declines were deemed non-credit related and recorded as an adjustment to accumulated other comprehensive income, net of tax. Non-credit related declines in the fair value of available-for-sale investment securities can be attributed to changes in interest rates and other market-related factors. The Company did not record an allowance for credit losses for held-to maturity securities as of December 31, 2023, because the likelihood of non-repayment is remote. There was no provision for credit losses recognized for investment securities during the year ended December 31, 2023.

Prior to the adoption of ASC 326, declines in the fair value of held-to-maturity and available-for-sale securities below their cost that were deemed to be other-than-temporary were reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considered, among other things: (i) the length of time and the extent to which the fair value had been less than cost; (ii) the financial condition and near-term prospects of the issuer; and (iii) the Company’s intent to sell an impaired security and if it was more likely than not that it would have been required to sell the security before the recovery of its amortized basis. Management concluded that none of the Company’s securities were impaired due to reasons of credit quality as of December 31, 2022, and therefore management believes the impairments detailed in the table above were temporary and no other-than-temporary impairment loss was recorded in the Company’s consolidated income statements.