INVESTMENT SECURITIES

3 Months Ended

Mar. 31, 2022

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE 3 - INVESTMENT SECURITIES

The following presents the amortized cost and fair value of securities available-for-sale, with unrealized gains and losses recognized in accumulated other comprehensive income as of the dates noted (dollars in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
March 31, 2022	Cost		Gains		Losses		Value
Investment securities available-for-sale:
U.S. Treasury debt	$	250	$	—	$	(11)	$	239
U.S. Government Agency		2,959		—		(92)		2,867
Corporate bonds		17,110		142		(169)		17,083
GNMA mortgage-backed securities – residential		24,890		4		(1,352)		23,542
FNMA mortgage-backed securities – residential		13,779		3		(780)		13,002
Government CMO and MBS - commercial		672		—		(14)		658
Corporate CMO and MBS		1,362		—		(26)		1,336
Total securities available-for-sale	$	61,022	$	149	$	(2,444)	$	58,727

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2021	Cost		Gains		Losses		Value
Investment securities available-for-sale:
U.S. Treasury debt	$	250	$	—	$	(3)	$	247
U.S. Government Agency		3,522		—		—		3,522
Corporate bonds		8,113		227		(15)		8,325
GNMA mortgage-backed securities – residential		26,611		185		(146)		26,650
FNMA mortgage-backed securities – residential		14,400		43		—		14,443
Government CMO and MBS - commercial		878		—		—		878
Corporate CMO and MBS		1,492		23		(18)		1,497
Total securities available-for-sale	$	55,266	$	478	$	(182)	$	55,562

As of March 31, 2022, the amortized cost and estimated fair value of available-for-sale securities have contractual maturity dates shown in the table below (dollars in thousands). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

	Amortized		Fair
March 31, 2022	Cost		Value
Due within one year	$	254	$	252
Due between one year and five years		374		361
Due between five years and ten years		18,207		18,146
Due after ten years		1,484		1,430
Securities (CMO and MBS)		40,703		38,538
Total	$	61,022	$	58,727

In the first quarter of 2022, the Company committed $3.0 million in capital to a bank technology fund. During the three months ended March 31, 2022, the Company made $0.4 million in contributions to the partnership. As of March 31, 2022, the Company held a balance of $0.4 million, which is included in Other assets in the accompanying Condensed Consolidated Balance Sheets. The Company may be obligated to invest up to an additional $2.5 million in future contributions.

In 2014, the Company began investing in a small business investment company ("SBIC") fund administered by the Small Business Administration. The Company did not make any contributions to the SBIC fund during the three months ended March 31, 2022 or the year ended December 31, 2021 and received a $0.1 million return of capital during each period. As of March 31, 2022 and December 31, 2021, the Company held a balance of $2.0 million with SBIC, which is included in Other assets in the accompanying Condensed Consolidated Balance Sheets. The Company may be obligated to invest up to an additional $1.0 million in future SBIC investments.

As of March 31, 2022 and December 31, 2021, securities with carrying values totaling $15.2 million and $17.3 million, respectively, were pledged to secure various public deposits and credit facilities of the Company.  

As of March 31, 2022 and December 31, 2021, there were no holdings of securities of any one issuer, other than the U.S. Government sponsored entities and agencies, in an amount greater than 10%of shareholders’ equity.

As of March 31, 2022 and December 31, 2021, ninety securities and ten securities were in an unrealized loss position, with unrealized losses totaling $2.4 million and $0.2 million, respectively. Of the securities in an unrealized loss position as of March 31, 2022, two have been in a continuous unrealized loss position for more than twelve months and the remaining have been in a continuous unrealized loss position for less than twelve months. The unrealized loss positions were caused primarily by interest rate changes and market assumptions about prepayments of principal and interest on the underlying mortgages. Because the decline in market value is attributable to market conditions, not credit quality, and because the Company has the ability and intent to hold these investments until a recovery of fair value, which may be near or at maturity, the Company does not consider these investments to be other-than-temporarily impaired as of March 31, 2022.

The following presents securities with unrealized losses aggregated by major security type and length of time in a continuous unrealized loss position as of the dates noted (dollars in thousands, before tax):

	Less than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
March 31, 2022	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury debt	$	239	$	(11)	$	—	$	—	$	239	$	(11)
U.S. Government Agency		2,867		(92)		—		—		2,867		(92)
Corporate bonds		7,112		(138)		469		(31)		7,581		(169)
GNMA mortgage-backed securities – residential		23,132		(1,352)		—		—		23,132		(1,352)
FNMA mortgage-backed securities – residential		12,802		(780)		—		—		12,802		(780)
Government CMO and MBS - commercial		658		(14)		—		—		658		(14)
Corporate CMO and MBS		647		(4)		485		(22)		1,132		(26)
Total	$	47,457	$	(2,391)	$	954	$	(53)	$	48,411	$	(2,444)

	Less than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2021	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury debt	$	247	$	(3)	$	—	$	—	$	247	$	(3)
Corporate bonds		485		(15)		—		—		485		(15)
GNMA mortgage-backed securities – residential		17,205		(146)		—		—		17,205		(146)
Corporate CMO and MBS		—		—		521		(18)		521		(18)
Total	$	17,937	$	(164)	$	521	$	(18)	$	18,458	$	(182)

The Company did not sell any securities during the three months ended March 31, 2022 or during the year ended December 31, 2021.