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MARKETABLE SECURITIES
 12 Months Ended
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
MARKETABLE SECURITIES

NOTE 2 - MARKETABLE SECURITIES

The following tables summarize the amortized cost and fair value of available for sale and held to maturity securities as of December 31, 2023 and 2022 and the corresponding amounts of gross unrealized gains and losses:

December 31, 2023

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Estimated
Fair
Value

 

Available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

$

29,882

 

 

$

—

 

 

$

3,077

 

 

$

26,805

 

Municipal securities

 

 

2,322

 

 

 

182

 

 

 

—

 

 

 

2,504

 

Mortgage-backed securities

 

 

164,419

 

 

 

1,014

 

 

 

15,621

 

 

 

149,812

 

Collateralized mortgage obligations

 

 

18,757

 

 

 

19

 

 

 

1,702

 

 

 

17,074

 

Total available for sale

 

$

215,380

 

 

$

1,215

 

 

$

20,400

 

 

$

196,195

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agencies

 

$

9,292

 

 

$

—

 

 

$

1,066

 

 

$

8,226

 

Treasury securities

 

 

69,432

 

 

 

—

 

 

 

1,038

 

 

 

68,394

 

Municipal securities

 

 

168,175

 

 

 

923

 

 

 

6,123

 

 

 

162,975

 

Mortgage-backed securities

 

 

119,872

 

 

 

—

 

 

 

15,105

 

 

 

104,767

 

Collateralized mortgage obligations

 

 

37,437

 

 

 

—

 

 

 

7,276

 

 

 

30,161

 

Total held to maturity

 

$

404,208

 

 

$

923

 

 

$

30,608

 

 

$

374,523

 

 

December 31, 2022

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Estimated
Fair
Value

 

Available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

$

29,964

 

 

$

—

 

 

$

2,177

 

 

$

27,787

 

Municipal securities

 

 

10,324

 

 

 

326

 

 

 

8

 

 

 

10,642

 

Mortgage-backed securities

 

 

145,896

 

 

 

1

 

 

 

15,556

 

 

 

130,341

 

Collateralized mortgage obligations

 

 

21,981

 

 

 

3

 

 

 

1,827

 

 

 

20,157

 

Total available for sale

 

$

208,165

 

 

$

330

 

 

$

19,568

 

 

$

188,927

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agencies

 

$

9,141

 

 

$

—

 

 

$

1,259

 

 

$

7,882

 

Treasury securities

 

 

133,735

 

 

 

—

 

 

 

2,921

 

 

 

130,814

 

Municipal securities

 

 

191,680

 

 

 

658

 

 

 

8,285

 

 

 

184,053

 

Mortgage-backed securities

 

 

132,693

 

 

 

—

 

 

 

14,708

 

 

 

117,985

 

Collateralized mortgage obligations

 

 

41,759

 

 

 

—

 

 

 

7,425

 

 

 

34,334

 

Total held to maturity

 

$

509,008

 

 

$

658

 

 

$

34,598

 

 

$

475,068

 

From time to time, we have reclassified certain securities from available for sale to held to maturity. Such transfers are made at fair value at the date of transfer. The unrealized holding gains and losses at the date of transfer are retained in accumulated other comprehensive loss and in the carrying value of the held to maturity securities and are amortized or

accreted over the remaining life of the security. During the second quarter of 2022, we transferred $106,157 of securities from available for sale to held to maturity, which included a net unrealized loss on the date of transfer of $13,186. During the third quarter of 2021, we transferred $172,292 of securities from available for sale to held to maturity, which included a net unrealized gain on the date of transfer of $10,235. These unamortized unrealized losses and unaccreted unrealized gains on our transferred securities are included in accumulated other comprehensive loss on our balance sheet and they netted to an unrealized loss of $6,964 at December 31, 2023 compared to an unrealized gain of $5,860 at December 31, 2022. This amount will continue to be amortized and accreted out of accumulated other comprehensive loss over the remaining life of the underlying securities as an adjustment of the yield on those securities.

There is no allowance for credit losses recorded for our available for sale or held to maturity debt securities as of December 31, 2023 or 2022.

Information pertaining to available for sale securities with gross unrealized losses as of December 31, 2023 and 2022, for which no allowance for credit losses has been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position is detailed in the following tables:

 

Less Than 12 Months

 

 

12 Months or Longer

 

 

Total

 

December 31, 2023

 

Gross
Unrealized
Losses

 

 

Estimated
Fair
Value

 

 

Gross
Unrealized
Losses

 

 

Estimated
Fair
Value

 

 

Gross
Unrealized
Losses

 

 

Estimated
Fair
Value

 

Available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

$

—

 

 

$

—

 

 

$

(3,077

)

 

$

26,805

 

 

$

(3,077

)

 

$

26,805

 

Mortgage-backed securities

 

 

(742

)

 

 

13,308

 

 

 

(14,879

)

 

 

101,889

 

 

 

(15,621

)

 

 

115,197

 

Collateralized mortgage obligations

 

 

—

 

 

 

—

 

 

 

(1,702

)

 

 

13,976

 

 

 

(1,702

)

 

 

13,976

 

Total available for sale

 

$

(742

)

 

$

13,308

 

 

$

(19,658

)

 

$

142,670

 

 

$

(20,400

)

 

$

155,978

 

 

 

 

Less Than 12 Months

 

 

12 Months or Longer

 

 

Total

 

December 31, 2022

 

Gross
Unrealized
Losses

 

 

Estimated
Fair
Value

 

 

Gross
Unrealized
Losses

 

 

Estimated
Fair
Value

 

 

Gross
Unrealized
Losses

 

 

Estimated
Fair
Value

 

Available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

$

(1,518

)

 

$

20,323

 

 

$

(659

)

 

$

7,464

 

 

$

(2,177

)

 

$

27,787

 

Municipal securities

 

 

(8

)

 

 

1,659

 

 

 

—

 

 

 

—

 

 

 

(8

)

 

 

1,659

 

Mortgage-backed securities

 

 

(6,150

)

 

 

74,146

 

 

 

(9,406

)

 

 

55,826

 

 

 

(15,556

)

 

 

129,972

 

Collateralized mortgage obligations

 

 

(908

)

 

 

16,575

 

 

 

(919

)

 

 

3,411

 

 

 

(1,827

)

 

 

19,986

 

Total available for sale

 

$

(8,584

)

 

$

112,703

 

 

$

(10,984

)

 

$

66,701

 

 

$

(19,568

)

 

$

179,404

 

There were 233 investments in an unrealized loss position at December 31, 2023, of which 74 were available for sale debt securities in an unrealized loss position with no recorded allowance for credit losses as of December 31, 2023. The available for sale securities in a loss position were composed of corporate bonds, collateralized mortgage obligations and mortgage-backed securities as of December 31, 2023, along with municipal securities as of December 31, 2022. Management evaluates available for sale debt securities in an unrealized loss position to determine whether the impairment is due to credit-related factors or noncredit-related factors. With respect to the collateralized mortgage obligations and mortgage-backed securities issued by the U.S. government and its agencies, the Company has determined that a decline in fair value is mainly attributable to rate, and not due to credit-related factors. The Company monitors the credit quality of other debt securities through the use of credit ratings and other factors specific to an individual security in assessing whether or not the decline in fair value of municipal or corporate securities, relative to their amortized cost, is due to credit-related factors. Triggers to prompt further investigation of securities when the fair value is less than the amortized cost are when a security has been downgraded and falls below an A credit rating, and the security’s unrealized loss exceeds 20% of its book value. Consideration is given to (1) the extent to which fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value. Based on evaluation of available evidence, management believes the unrealized losses on the securities as of December 31, 2023 and 2022 are not credit-related. Management does not have the intent to sell any of these securities and believes that it is more likely than not the Company will not have to sell any such securities before recovery of cost. The fair values are expected to recover as the securities approach their maturity date or repricing date or if market yields for the investments decline. Accordingly, no allowance for credit losses has been recorded for these securities.

Management assesses held to maturity securities sharing similar risk characteristics on a collective basis for expected credit losses under the current expected credit loss model ("CECL"). As of December 31, 2023 and 2022, our held to maturity securities consisted of U.S. government agencies, municipal securities, treasury securities, collateralized mortgage obligations and mortgage-backed securities issued by the U.S. government and its agencies. With regard to the treasuries, collateralized mortgage obligations and mortgage-backed securities issued by the U.S. government, or agencies thereof, it is expected that the securities will not be settled at prices less than the amortized cost bases of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. Mortgage-backed securities and collateralized mortgage obligations are backed by pools of mortgages that are insured or guaranteed by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association or the government National Mortgage Association. For municipal securities, management reviewed key risk indicators, including ratings by credit agencies when available, and determined that there is no current expectation of credit loss. Accordingly, no allowance for credit losses has been recorded for these securities.

As of December 31, 2023, there were no holdings of securities of any one issuer, other than the collateralized mortgage obligations, treasuries and mortgage-backed securities issued by the U.S. government and its agencies, in an amount greater than 10% of shareholders’ equity. As of December 31, 2022, there were no holdings of securities of any one issuer, other than the collateralized mortgage obligations and mortgage-backed securities issued by the U.S. government and its agencies, in an amount greater than 10% of shareholders’ equity.

There were no held to maturity securities past due on interest or principal payments, and none that were on nonaccrual as of December 31, 2023.

Securities with fair values of approximately $317,112 and $396,584 at December 31, 2023 and 2022, respectively, were pledged to secure public fund deposits and for other purposes as required or permitted by law.

Proceeds from the sales of available for sale securities and the associated gains and losses for the years ended December 31, 2023 and 2022 are listed below. There were no securities sold during the year ended December 31, 2021.

 

 

 

 

 

 

 

 

 

 

 

 

2023

 

 

2022

 

 

2021

 

Proceeds from sales

 

$

21,268

 

 

$

26,130

 

 

$

—

 

Gross gains

 

 

184

 

 

 

234

 

 

 

—

 

Gross losses

 

 

(413

)

 

 

(62

)

 

 

—

 

There were no held to maturity securities sold during the years ended December 31, 2023, 2022 or 2021.

The contractual maturities at December 31, 2023 of available for sale and held to maturity securities at carrying value and estimated fair value are shown below. The Company invests in securities that may have expected maturities that differ from their contractual maturities. These differences arise because borrowers and/or issuers may have the right to call or prepay their obligation with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

 

 

Available for Sale

 

 

Held to Maturity

 

December 31, 2023

 

Amortized
Cost

 

 

Estimated
Fair
Value

 

 

Amortized
Cost

 

 

Estimated
Fair
Value

 

Due within one year

 

$

2,003

 

 

$

1,979

 

 

$

47,009

 

 

$

46,674

 

Due after one year through five years

 

 

7,540

 

 

 

7,229

 

 

 

68,564

 

 

 

66,189

 

Due after five years through ten years

 

 

22,661

 

 

 

20,101

 

 

 

79,950

 

 

 

77,878

 

Due after ten years

 

 

—

 

 

 

—

 

 

 

51,376

 

 

 

48,854

 

Mortgage-backed securities

 

 

164,419

 

 

 

149,812

 

 

 

119,872

 

 

 

104,767

 

Collateralized mortgage obligations

 

 

18,757

 

 

 

17,074

 

 

 

37,437

 

 

 

30,161

 

Total securities

 

$

215,380

 

 

$

196,195

 

 

$

404,208

 

 

$

374,523