NOTE 3 - SECURITIES

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

NOTE 3 - SECURITIES

NOTE 3 - SECURITIES

The composition of securities is as follows:

(in thousands)		Amortized cost basis		Gross un-realized gains		Gross un-realized losses		Fair value
March 31, 2023
Available-for-sale
U.S. Treasury	$	19,299	$	—	$	1,820	$	17,479
U.S. Government Agency notes		29,017		58		2,231		26,844
Municipal bonds		55,099		—		6,900		48,199
Mortgage-backed securities:
U.S. Government agencies and U.S. Government- sponsored enterprises		67,804		19		7,273		60,550
Collateralized mortgage obligations:
U.S. Government agencies		24,954		—		3,039		21,915
Corporate bonds		14,250		—		1,639		12,611
Total securities available-for-sale	$	210,423	$	77	$	22,902	$	187,598
Mutual funds							$	2,068
Non-marketable securities
Federal Home Loan Bank of Boston stock	$	5,030	$	—	$	—	$	5,030

(in thousands)		Amortized cost basis		Gross un-realized gains		Gross un-realized losses		Fair value
December 31, 2022
Available-for-sale
U.S. Treasury	$	19,283	$	—	$	2,150	$	17,133
U.S. Government Agency notes		29,696		94		2,636		27,154
Municipal bonds		55,179		—		8,641		46,538
Mortgage-backed securities:
U.S. Government agencies and U.S. Government- sponsored enterprises		69,866		20		8,011		61,875
Collateralized mortgage obligations:
U.S. Government agencies		25,370		—		3,434		21,936
Corporate bonds		14,250		—		1,476		12,774
Total securities available-for-sale	$	213,644	$	114	$	26,348	$	187,410
Mutual Funds							$	1,933
Non-marketable securities
Federal Home Loan Bank of Boston stock	$	1,285	$	—	$	—	$	1,285

Salisbury did not sell any available-for-sale securities during the three-month periods ended March 31, 2023. Salisbury sold $17.7 million of available-for-sale securities during the three-month period ended March 31, 2022 realizing gains of $451 thousand and losses of $241 thousand resulting in a net gain of $210 thousand and a related tax expense of $44 thousand.

The following tables summarize the aggregate fair value and gross unrealized losses of securities that have been in a continuous unrealized loss position as of the date presented:

	Less than 12 Months				12 Months or Longer				Total
March 31, 2023 (in thousands)	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Available-for-sale
U.S. Treasury	$	—	$	—	$	17,479	$	1,820	$	17,479	$	1,820
U.S. Government Agency notes		2,839		123		18,567		2,108		21,406		2,231
Municipal bonds		8,334		326		39,864		6,574		48,198		6,900
Mortgage- backed securities:
U.S. Government agencies and U.S. Government- sponsored enterprises		4,826		8		53,266		7,265		58,092		7,273
Collateralized mortgage obligations:
U.S. Government agencies		2,648		191		19,267		2,848		21,915		3,039
Corporate bonds		7,892		858		4,719		781		12,611		1,639
Total temporarily impaired securities	$	26,539	$	1,506	$	153,162	$	21,396	$	179,701	$	22,902

	Less than 12 Months				12 Months or Longer				Total
December 31, 2022 (in thousands)	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Available-for-sale
U.S. Treasury	$	6,435	$	484	$	10,698	$	1,666	$	17,133	$	2,150
U.S. Government Agency notes		3,106		158		17,467		2,478		20,573		2,636
Municipal bonds		37,277		5,950		9,261		2,691		46,538		8,641
Mortgage-backed securities:
U.S. Government agencies and U.S. Government - sponsored enterprises		18,861		1,559		39,909		6,452		58,770		8,011
Collateralized mortgage obligations		14,333		1,782		7,603		1,652		21,936		3,434
Corporate bonds		11,251		1,249		1,523		227		12,774		1,476
Total temporarily impaired securities	$	91,263	$	11,182	$	86,461	$	15,166	$	177,724	$	26,348

The table below presents the amortized cost, fair value and tax equivalent yield of securities, by maturity. Debt securities issued by U.S. Government agencies (SBA securities), MBS, and CMOS are disclosed separately in the table below as these securities may prepay prior to the scheduled contractual maturity dates.

March 31, 2023 (in thousands)	Maturity	Amortized cost			Fair value	Yield(1)
U.S. Treasury	After 1 year but within 5 years	$	10,814	$	10,005	1.29	%
	After 5 year but within 10 years		8,485		7,474	1.17
	Total		19,299		17,479	1.24
U.S. Government Agency notes	After 1 year but within 5 years		7,964		7,100	1.05
	After 5 year but within 10 years		7,960		6,863	1.42
	Total		15,924		13,963	1.23
Municipal bonds	After 1 year but within 5 years		1,486		1,343	2.11
	After 5 year but within 10 years		14,308		12,054	2.31
	After 10 years but within 15 years		15,458		13,580	2.33
	After 15 years		23,847		21,222	2.73
	Total		55,099		48,199	2.49
Mortgage-backed securities, U.S. Government Agency and Collateralized mortgage obligations	Securities not due at a single maturity date		105,851		95,346	2.95
	Total		105,851		95,346	2.95
Corporate bonds	After 5 years but within 10 years		14,250		12,611	4.46
	After 10 years but within 15 years		—		—
	Total		14,250		12,611	4.46
Securities available-for-sale		$	210,423	$	187,598	2.79	%

⁽¹⁾ Yield is based on amortized cost.

For the three months ended March 31, 2023 and 2022, the unrealized losses on the Company’s available-for-sale debt securities have not been recognized into income because management does not intend to sell and it is not more-likely-than-not it will be required to sell any of the available-for-sale debt securities before recovery of its amortized cost basis. Furthermore, the unrealized losses were due to changes in interest rates and other market conditions and were not reflective of credit events. The issuers continue to make timely principal and interest payments on the bonds. Agency-backed and government sponsored have a long 40 year history with no credit losses, including during times of severe stress such as the 2007-2008 financial crisis. The principal and interest payments on agency guaranteed debt is backed by the U.S. government. Government-sponsored enterprises similarly guarantee principal and interest payments and carry an implicit guarantee from the U.S. Department of the Treasury. Additionally, government-sponsored enterprise securities are exceptionally liquid, readily marketable, and provide a substantial amount of price transparency and price parity, indicating a perception of zero credit losses.

At March 31, 2023 and December 31, 2022, total accrued interest receivable on available-for-sale debt securities, which has been excluded from the reported amortized cost basis on available-for-sale debt securities, was $0.62 million and $0.56 million, respectively, and was reported within accrued interest receivable on the consolidated balance sheets. An allowance was not carried on the accrued interest receivable at either date.