INVESTMENT SECURITIES

6 Months Ended

Jun. 30, 2024

Investments, Debt and Equity Securities [Abstract]

The following is a summary of the Company's investments in available for sale and held to maturity securities as of June 30, 2024 and December 31, 2023:


As of June 30, 2024	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
	(Dollars in thousands)
Available for sale:

Residential mortgage-backed securities	$	6,804	$	1	$	547	$	6,258

Total available for sale	$	6,804	$	1	$	547	$	6,258

Held to maturity:
Residential mortgage-backed securities	$	5,332	$	—	$	1,179	$	4,153
States and political subdivisions	3,919		5		513		3,411
Total held to maturity	$	9,251	$	5	$	1,692	$	7,564


As of December 31, 2023	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
	(Dollars in thousands)
Available for sale:

Residential mortgage-backed securities	$	7,639	$	3	$	547	$	7,095

Total available for sale	$	7,639	$	3	$	547	$	7,095

Held to maturity:
Residential mortgage-backed securities	$	5,406	$	—	$	1,054	$	4,352
States and political subdivisions	3,886		38		384		3,540
Total held to maturity	$	9,292	$	38	$	1,438	$	7,892

The amortized cost and fair value of debt securities classified as available for sale and held to maturity, by contractual maturity as of June 30, 2024 are as follows:


	Amortized Cost		Fair Value
	(Dollars in thousands)
Available for sale:
Due within one year	$	—	$	—
Due after one year through five years	2,576		2,406
Due after five years through ten years	850		788
Due after ten years	3,378		3,064
Total available for sale	$	6,804	$	6,258

Held to maturity:
Due within one year	$	—	$	—
Due after one year through five years	1,446		1,451
Due after five years through ten years	1,507		1,205
Due after ten years	6,298		4,908
Total held to maturity	$	9,251	$	7,564

Expected maturities may differ from contractual maturities because the issuers of certain debt securities do have the right to call or prepay their obligations without any penalty.

The Company did not sell any securities during the three and six months ended June 30, 2024 or 2023. The following tables show the gross unrealized losses and fair value of the Company's available for sale investments for which an allowance for credit losses has not been recorded, which are aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2024 and December 31, 2023:


As of June 30, 2024	Less Than 12 Months				12 Months or Greater				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousand)
Available for sale:
Residential mortgage-backed securities	$	130	$	1	$	6,070	$	546	$	6,200	$	547
Total available for sale	$	130	$	1	$	6,070	$	546	$	6,200	$	547


As of December 31, 2023	Less Than 12 Months				12 Months or Greater				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)
Available for sale:
Residential mortgage-backed securities	$	25	$	—	$	6,870	$	547	$	6,895	$	547
Total available for sale	$	25	$	—	$	6,870	$	547	$	6,895	$	547

On at least a quarterly basis, we review all debt securities that are in an unrealized loss position for a credit loss. An investment security is deemed impaired if the fair value of the investment is less than its amortized cost. Amortized cost includes adjustments (if any) made to the cost basis of an investment for accretion, amortization, and previous other-than-temporary impairments. For individual debt securities classified as available for sale, we determine whether a decline in fair value below the amortized cost has resulted from a credit loss or other factors. If the decline in fair value is due to credit, we will record the portion of the impairment loss relating to credit through an allowance for credit losses. Impairment that has not been recorded through an allowance for credit losses is recorded through other comprehensive income, net of applicable taxes.

The Company’s unrealized loss for the debt securities classified as available for sale is comprised of 11 securities in the less than 12 months loss position and 16 securities in the 12 months or greater loss position at June 30, 2024. These securities are

mortgage-backed securities that had unrealized losses issued or guaranteed by the US government or US government sponsored entities. The unrealized losses associated with those mortgage-backed securities are generally driven by changes in interest rates and are not due to credit losses given the explicit or implicit guarantees provided by the U.S. government. Because the Company does not intend to sell the securities and it is not more likely than not that the Company will be required to sell these investments before recovery of their amortized cost basis, the Company does not consider the unrealized loss in these securities to be credit losses at June 30, 2024.

The Company classifies the held-to-maturity debt securities into the following major security types: residential mortgage backed, and state and political subdivisions. These securities are highly rated with a history of no credit losses, and are assigned ratings based on the most recent data from ratings agencies depending on the availability of data for the security. Credit ratings of held-to-maturity debt securities, which are a significant input in calculating the expected credit loss, are reviewed on a quarterly basis. Based on the credit ratings of our held-to-maturity securities and our historical experience including no losses, we have determined that an allowance for credit loss on the held-to-maturity portfolio is not required. Because the Company does not intend to sell the securities and it is not more likely than not that the Company will be required to sell these investments before recovery of their amortized cost basis, the Company does not consider the unrealized loss in these securities to be credit losses at June 30, 2024.