XML 21 R14.htm IDEA: XBRL DOCUMENT v3.24.3
Investment Securities
 9 Months Ended
Sep. 30, 2024
Investments, Debt and Equity Securities [Abstract]  
Investment Securities

Note 4: Investment Securities

 

The amortized cost and estimated fair value of available-for-sale and held-to-maturity investment securities are summarized as follows:

 

 

 

September 30, 2024

 

 

 

 

 

 

Gross

 

 

Gross

 

 

Estimated

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

Fair

 

(In thousands)

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

Available-for-Sale Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

Debt investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

US Treasury, agencies and GSEs

 

$

79,254

 

 

$

539

 

 

$

(2,963

)

 

$

76,830

 

State and political subdivisions

 

 

34,236

 

 

 

101

 

 

 

(1,295

)

 

 

33,042

 

Corporate

 

 

10,975

 

 

 

248

 

 

 

(267

)

 

 

10,956

 

Asset backed securities

 

 

19,295

 

 

 

31

 

 

 

(166

)

 

 

19,160

 

Residential mortgage-backed - US agency

 

 

35,703

 

 

 

216

 

 

 

(685

)

 

 

35,234

 

Collateralized mortgage obligations - US agency

 

 

14,897

 

 

 

128

 

 

 

(738

)

 

 

14,287

 

Collateralized mortgage obligations - Private label

 

 

84,429

 

 

 

298

 

 

 

(2,465

)

 

 

82,262

 

Total

 

 

278,789

 

 

 

1,561

 

 

 

(8,579

)

 

 

271,771

 

Equity investment securities:

 

 

 

 

 

 

 

 

Common stock - financial services industry

 

 

206

 

 

 

-

 

 

 

-

 

 

 

206

 

Total

 

 

206

 

 

 

-

 

 

 

-

 

 

 

206

 

Total available-for-sale

 

$

278,995

 

 

$

1,561

 

 

$

(8,579

)

 

$

271,977

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held-to-Maturity Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

Debt investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

US Treasury, agencies and GSEs

 

$

3,658

 

 

$

-

 

 

$

(200

)

 

$

3,458

 

State and political subdivisions

 

 

17,341

 

 

 

35

 

 

 

(1,506

)

 

 

15,870

 

Corporate

 

 

44,395

 

 

 

20

 

 

 

(1,742

)

 

 

42,673

 

Asset backed securities

 

 

13,709

 

 

 

19

 

 

 

(491

)

 

 

13,237

 

Residential mortgage-backed - US agency

 

 

6,746

 

 

 

42

 

 

 

(491

)

 

 

6,297

 

Collateralized mortgage obligations - US agency

 

 

12,517

 

 

 

5

 

 

 

(1,060

)

 

 

11,462

 

Collateralized mortgage obligations - Private label

 

 

63,281

 

 

 

270

 

 

 

(1,576

)

 

 

61,975

 

Total

 

 

161,647

 

 

 

391

 

 

 

(7,066

)

 

 

154,972

 

Less: Allowance for credit losses

 

 

262

 

 

 

-

 

 

 

-

 

 

 

-

 

Total held-to-maturity

 

$

161,385

 

 

$

391

 

 

$

(7,066

)

 

$

154,972

 

 

 

 

December 31, 2023

 

 

 

 

 

 

Gross

 

 

Gross

 

 

Estimated

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

Fair

 

(In thousands)

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

Available-for-Sale Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

Debt investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

US Treasury, agencies and GSEs

 

$

82,588

 

 

$

754

 

 

$

(3,259

)

 

$

80,083

 

State and political subdivisions

 

 

34,588

 

 

 

145

 

 

 

(1,809

)

 

 

32,924

 

Corporate

 

 

11,008

 

 

 

276

 

 

 

(365

)

 

 

10,919

 

Asset backed securities

 

 

20,251

 

 

 

-

 

 

 

(359

)

 

 

19,892

 

Residential mortgage-backed - US agency

 

 

25,446

 

 

 

57

 

 

 

(1,085

)

 

 

24,418

 

Collateralized mortgage obligations - US agency

 

 

13,058

 

 

 

116

 

 

 

(995

)

 

 

12,179

 

Collateralized mortgage obligations - Private label

 

 

81,812

 

 

 

128

 

 

 

(3,845

)

 

 

78,095

 

Total

 

 

268,751

 

 

 

1,476

 

 

 

(11,717

)

 

 

258,510

 

Equity investment securities:

 

 

 

 

 

 

 

 

Common stock - financial services industry

 

 

206

 

 

 

-

 

 

 

-

 

 

 

206

 

Total

 

 

206

 

 

 

-

 

 

 

-

 

 

 

206

 

Total available-for-sale

 

$

268,957

 

 

$

1,476

 

 

$

(11,717

)

 

$

258,716

 

 

 

 

 

 

 

 

 

 

 

 

 

Held-to-Maturity Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

Debt investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

US Treasury, agencies and GSEs

 

$

3,760

 

 

$

-

 

 

$

(304

)

 

$

3,456

 

State and political subdivisions

 

 

16,576

 

 

 

28

 

 

 

(1,874

)

 

 

14,730

 

Corporate

 

 

45,427

 

 

 

9

 

 

 

(3,281

)

 

 

42,155

 

Asset backed securities

 

 

16,860

 

 

 

-

 

 

 

(1,180

)

 

 

15,680

 

Residential mortgage-backed - US agency

 

 

6,974

 

 

 

15

 

 

 

(665

)

 

 

6,324

 

Collateralized mortgage obligations - US agency

 

 

13,221

 

 

 

-

 

 

 

(1,293

)

 

 

11,928

 

Collateralized mortgage obligations - Private label

 

 

76,819

 

 

 

120

 

 

 

(3,178

)

 

 

73,761

 

    Total

 

 

179,637

 

 

 

172

 

 

 

(11,775

)

 

 

168,034

 

Less: Allowance for credit losses

 

 

351

 

 

 

-

 

 

 

-

 

 

 

-

 

Total held-to-maturity

 

$

179,286

 

 

$

172

 

 

$

(11,775

)

 

$

168,034

 

 

The amortized cost and estimated fair value of debt investments at September 30, 2024 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties. Amounts disclosed are gross values and do not include any allowance for credit loss.

 

 

 

Available-for-Sale

 

 

Held-to-Maturity

 

 

Amortized

 

 

Estimated

 

 

Amortized

 

 

Estimated

 

(In thousands)

 

Cost

 

 

Fair Value

 

 

Cost

 

 

Fair Value

 

Due in one year or less

 

$

7,075

 

 

$

7,300

 

 

$

6,709

 

 

$

6,672

 

Due after one year through five years

 

 

10,013

 

 

 

9,704

 

 

 

18,439

 

 

 

18,257

 

Due after five years through ten years

 

 

41,457

 

 

 

38,109

 

 

 

38,105

 

 

 

35,584

 

Due after ten years

 

 

85,215

 

 

 

84,875

 

 

 

15,850

 

 

 

14,725

 

Sub-total

 

 

143,760

 

 

 

139,988

 

 

79,103

 

 

 

75,238

 

Residential mortgage-backed - US agency

 

 

35,703

 

 

 

35,234

 

 

 

6,746

 

 

 

6,297

 

Collateralized mortgage obligations - US agency

 

 

14,897

 

 

 

14,287

 

 

 

12,517

 

 

11,462

 

Collateralized mortgage obligations - Private label

 

 

84,429

 

 

82,262

 

 

 

63,281

 

 

 

61,975

 

Totals

 

$

278,789

 

 

$

271,771

 

$

161,647

 

 

$

154,972

 

 

The Company’s investment securities’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:

 

 

 

September 30, 2024

 

 

 

Less than Twelve Months

 

 

Twelve Months or More

 

 

Total

 

 

 

Number of

 

 

 

 

 

 

 

 

Number of

 

 

 

 

 

 

 

 

Number of

 

 

 

 

 

 

 

 

 

Individual

 

 

Unrealized

 

 

Fair

 

 

Individual

 

 

Unrealized

 

 

Fair

 

 

Individual

 

 

Unrealized

 

 

Fair

 

(In thousands)

 

Securities

 

 

Losses

 

 

Value

 

 

Securities

 

 

Losses

 

 

Value

 

 

Securities

 

 

Losses

 

 

Value

 

Available-for-Sale Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US Treasury, agencies and GSEs

 

 

7

 

 

$

(58

)

 

$

21,910

 

 

 

4

 

 

$

(2,905

)

 

$

27,910

 

 

 

11

 

 

$

(2,963

)

 

$

49,820

 

State and political subdivisions

 

 

1

 

 

 

(9

)

 

 

2,009

 

 

 

20

 

 

 

(1,286

)

 

 

25,472

 

 

 

21

 

 

 

(1,295

)

 

 

27,481

 

Corporate

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4

 

 

 

(267

)

 

 

3,434

 

 

 

4

 

 

 

(267

)

 

 

3,434

 

Asset backed securities

 

 

1

 

 

 

(10

)

 

 

1,521

 

 

 

8

 

 

 

(156

)

 

 

9,018

 

 

 

9

 

 

 

(166

)

 

 

10,539

 

Residential mortgage-backed - US agency

 

 

5

 

 

 

(85

)

 

 

7,894

 

 

 

9

 

 

 

(600

)

 

 

6,323

 

 

 

14

 

 

 

(685

)

 

 

14,217

 

Collateralized mortgage obligations - US agency

 

 

1

 

 

 

(1

)

 

 

1,150

 

 

 

11

 

 

 

(737

)

 

 

7,361

 

 

 

12

 

 

 

(738

)

 

 

8,511

 

Collateralized mortgage obligations - Private label

 

 

9

 

 

 

(64

)

 

 

16,640

 

 

 

27

 

 

 

(2,401

)

 

 

30,362

 

 

 

36

 

 

 

(2,465

)

 

 

47,002

 

Totals

 

 

24

 

 

$

(227

)

 

$

51,124

 

 

 

83

 

 

$

(8,352

)

 

$

109,880

 

 

 

107

 

 

$

(8,579

)

 

$

161,004

 

Held-to-Maturity Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US Treasury, agencies and GSEs

 

 

-

 

 

$

-

 

 

$

-

 

 

 

2

 

 

$

(200

)

 

$

3,458

 

 

 

2

 

 

$

(200

)

 

$

3,458

 

State and political subdivisions

 

 

1

 

 

 

(1

)

 

 

501

 

 

 

17

 

 

 

(1,505

)

 

 

13,429

 

 

 

18

 

 

 

(1,506

)

 

 

13,930

 

Corporate

 

 

-

 

 

 

-

 

 

 

-

 

 

 

37

 

 

 

(1,742

)

 

 

30,355

 

 

 

37

 

 

 

(1,742

)

 

 

30,355

 

Asset backed securities

 

 

1

 

 

 

(4

)

 

 

588

 

 

 

5

 

 

 

(487

)

 

 

7,066

 

 

 

6

 

 

 

(491

)

 

 

7,654

 

Residential mortgage-backed - US agency

 

 

-

 

 

 

-

 

 

 

-

 

 

 

7

 

 

 

(491

)

 

 

5,019

 

 

 

7

 

 

 

(491

)

 

 

5,019

 

Collateralized mortgage obligations - US agency

 

 

-

 

 

 

-

 

 

 

-

 

 

 

9

 

 

 

(1,060

)

 

 

10,837

 

 

 

9

 

 

 

(1,060

)

 

 

10,837

 

Collateralized mortgage obligations - Private label

 

 

-

 

 

 

-

 

 

 

-

 

 

 

37

 

 

 

(1,576

)

 

 

46,238

 

 

 

37

 

 

 

(1,576

)

 

 

46,238

 

Totals

 

 

2

 

 

$

(5

)

 

$

1,089

 

 

 

114

 

 

$

(7,061

)

 

$

116,402

 

 

 

116

 

 

$

(7,066

)

 

$

117,491

 

 

 

 

December 31, 2023

 

 

 

Less than Twelve Months

 

 

Twelve Months or More

 

 

Total

 

 

 

Number of

 

 

 

 

 

 

 

 

Number of

 

 

 

 

 

 

 

 

Number of

 

 

 

 

 

 

 

 

 

Individual

 

 

Unrealized

 

 

Fair

 

 

Individual

 

 

Unrealized

 

 

Fair

 

 

Individual

 

 

Unrealized

 

 

Fair

 

(In thousands)

 

Securities

 

 

Losses

 

 

Value

 

 

Securities

 

 

Losses

 

 

Value

 

 

Securities

 

 

Losses

 

 

Value

 

Available-for-Sale Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US Treasury, agencies and GSEs

 

 

3

 

 

$

(13

)

 

$

5,990

 

 

 

3

 

 

$

(3,246

)

 

$

25,794

 

 

 

6

 

 

$

(3,259

)

 

$

31,784

 

State and political subdivisions

 

 

-

 

 

 

-

 

 

 

-

 

 

 

20

 

 

 

(1,809

)

 

 

26,432

 

 

 

20

 

 

 

(1,809

)

 

 

26,432

 

Corporate

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5

 

 

 

(365

)

 

 

4,351

 

 

 

5

 

 

 

(365

)

 

 

4,351

 

Asset backed securities

 

 

3

 

 

 

(65

)

 

 

5,907

 

 

 

10

 

 

 

(294

)

 

 

13,985

 

 

 

13

 

 

 

(359

)

 

 

19,892

 

Residential mortgage-backed - US agency

 

 

1

 

 

 

(14

)

 

 

2,477

 

 

 

15

 

 

 

(1,071

)

 

 

14,931

 

 

 

16

 

 

 

(1,085

)

 

 

17,408

 

Collateralized mortgage obligations - US agency

 

 

-

 

 

 

-

 

 

 

-

 

 

 

11

 

 

 

(995

)

 

 

8,123

 

 

 

11

 

 

 

(995

)

 

 

8,123

 

Collateralized mortgage obligations - Private label

 

 

10

 

 

 

(274

)

 

 

18,067

 

 

 

33

 

 

 

(3,571

)

 

 

46,483

 

 

 

43

 

 

 

(3,845

)

 

 

64,550

 

Totals

 

 

17

 

 

$

(366

)

 

$

32,441

 

 

 

97

 

 

$

(11,351

)

 

$

140,099

 

 

 

114

 

 

$

(11,717

)

 

$

172,540

 

Held-to-Maturity Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US Treasury, agencies and GSE's

 

 

-

 

 

$

-

 

 

$

-

 

 

 

2

 

 

$

(304

)

 

$

3,456

 

 

 

2

 

 

$

(304

)

 

$

3,456

 

State and political subdivisions

 

 

4

 

 

 

(2

)

 

 

575

 

 

 

14

 

 

 

(1,872

)

 

 

12,718

 

 

 

18

 

 

 

(1,874

)

 

 

13,293

 

Corporate

 

 

1

 

 

 

(61

)

 

 

439

 

 

 

39

 

 

 

(3,220

)

 

 

33,532

 

 

 

40

 

 

 

(3,281

)

 

 

33,971

 

Asset backed securities

 

 

2

 

 

 

(8

)

 

 

2,877

 

 

 

8

 

 

 

(1,172

)

 

 

10,652

 

 

 

10

 

 

 

(1,180

)

 

 

13,529

 

Residential mortgage-backed - US agency

 

 

-

 

 

 

-

 

 

 

-

 

 

 

7

 

 

 

(665

)

 

 

4,942

 

 

 

7

 

 

 

(665

)

 

 

4,942

 

Collateralized mortgage obligations - US agency

 

 

-

 

 

 

-

 

 

 

-

 

 

 

10

 

 

 

(1,293

)

 

 

11,928

 

 

 

10

 

 

 

(1,293

)

 

 

11,928

 

Collateralized mortgage obligations - Private label

 

 

4

 

 

 

(38

)

 

 

5,827

 

 

 

43

 

 

 

(3,140

)

 

 

60,260

 

 

 

47

 

 

 

(3,178

)

 

 

66,087

 

Totals

 

 

11

 

 

$

(109

)

 

$

9,718

 

 

 

123

 

 

$

(11,666

)

 

$

137,488

 

 

 

134

 

 

$

(11,775

)

 

$

147,206

 

 

Excluding the effects of changes in the characteristics of individual debt securities that potentially give rise to credit losses, as described below, the fair market value of a debt security as of a particular measurement date is highly dependent upon prevailing market and economic environmental factors at the measurement date relative to the prevailing market and economic environmental factors present at the time the debt security was acquired. The most significant market and environmental factors include, but are not limited to (1) the general level of interest rates, (2) the relationship between shorter-term interest rates and longer-term interest rates (referred to as the “slope” or "shape"

of the interest rate yield curve), (3) general bond market liquidity, (4) the recent and expected near-term volume of new issuances of similar debt securities, and (5) changes in the market values of individual loan collateral underlying mortgage-backed and asset-backed debt securities. Changes in interest rates affect the fair market values of debt securities by influencing the discount rate applied to the securities’ future expected cash flows. The higher the discount rate, the lower the resultant security fair value at the measurement date. Conversely, the lower the discount rate, the higher the resultant security fair value at the measurement date. In addition, the cumulative amount and timing of undiscounted cash flows of debt securities may also be affected by changes in interest rates. For any given level of movement in the general market and economic environmental factors described above, the magnitude of any particular debt security’s price changes will also depend heavily upon security-specific factors such as (1) the duration of the security, (2) imbedded optionality contractually granted to the issuer of the security with respect to principal prepayments, and (3) changes in the level of market premiums demanded by investors for securities with imbedded credit risk (where applicable).

When the fair value of any individual security categorized as available-for-sale ("AFS") or held-to-maturity ("HTM") is less than its amortized cost basis, an assessment is made as to whether or not a charge to current earnings for credit loss is required. In assessing potential credit losses, management also makes a quantitative determination of potential credit loss for all HTM securities even if the risk of credit loss is considered remote and uses a best estimate threshold for securities categorized as AFS. The Company considers numerous factors when determining whether a potential credit loss exists. The principal factors considered are (1) the financial condition of the issue and (guarantor, if any) any adverse conditions specifically related to the security, industry or geographic area, (2) failure of the issuer of the security to make scheduled interest or principal payments, (3) any changes to the rating of the security by a nationally recognized statistical rating organization (“NRSRO”), and (4) the presence of contractual credit enhancements, if any, including the guarantee of the federal government or any of its agencies.

 

The Company carries all of its AFS investments at fair value with any unrealized gains or losses reported, net of income tax effects, as an adjustment to shareholders' equity and included in accumulated other comprehensive income (loss), except for the credit-related portion of debt securities’ credit losses, if any, which are charged to earnings. The Company's ability to fully realize the value of its investments in various securities, including corporate debt securities, is dependent on the underlying creditworthiness of the issuing organization. In evaluating the debt securities portfolio (both AFS and HTM) for credit losses, management considers (1) if we intend to sell the security; (2) if it is “more likely than not” we will be required to sell the security before recovery of its amortized cost basis; or (3) if the present value of expected cash flows is insufficient to recover the entire amortized cost basis.

 

The portion of the investment securities portfolio, categorized as AFS, with an aggregate amortized historical cost of $279.0 million, had an aggregate fair value that was less than its aggregate amortized historical cost by $7.0 million, or -2.5%, at September 30, 2024. The AFS securities portfolio, with an aggregate amortized historical cost of $269.0 million, had an aggregate fair value that was less than its aggregate amortized historical cost by $10.2 million, or -3.8%, at December 31, 2023. The resultant $3.2 million total improvement in the fair value of the AFS investment portfolio's aggregate fair value, relative to its aggregate amortized historical cost, in the nine months ended September 30, 2024, was primarily due to changes in the interest rate environment (the general interest rate level and the relationships between shorter-term and longer-term interest rates, known as the 'yield curve') that occurred in that period. These changes in aggregate fair value relative to aggregate amortized historical cost that occurred in the nine months ended September 30, 2024 did not represent any changes in credit loss estimations within the portfolio.

 

The portion of the investment securities portfolio, categorized as HTM, with an aggregate amortized historical cost of $161.6 million, had an aggregate fair value that was less than its aggregate amortized historical cost by $6.7 million, or -4.1%, at September 30, 2024. The portion of the investment securities portfolio, categorized as HTM, with an aggregate amortized historical cost of $179.6 million, had an aggregate fair value that was less than its aggregate amortized historical cost by $11.6 million, or -6.5%, at December 31, 2023. The resultant $4.9 million improvement in the aggregate fair value of the HTM investment portfolio, relative to its aggregate amortized historical cost, during the nine months ended September 30, 2024, was primarily due to changes in the interest rate environment (the general interest rate level and the relationships between shorter-term and longer-term interest rates, known as the 'yield curve') that occurred in that period. These changes in aggregate fair value relative to aggregate amortized historical cost that occurred in the nine months ended September 30, 2024 did not represent any changes in credit loss estimations within

the portfolio. The Company does not intend to sell these securities, nor is it more likely than not that the Company will be required to sell these securities prior to the recovery of the amortized cost.

 

The following tables depicts a rollforward of the allowance for credit losses on investment securities classified as held-to-maturity for the three months ended September 30, 2024 and 2023:

 

(In thousands)

Government Issued and Government Sponsored Enterprise Securities

 

Mortgage and Asset-backed Securities

 

Securities Issued By State and Political Subdivisions

 

Corporate Securities

 

Total

 

Balance, June 30, 2024

$

-

 

$

-

 

$

1

 

$

292

 

$

293

 

Provision for credit losses

 

-

 

 

-

 

 

-

 

 

(31

)

 

(31

)

Allowance on purchased financial assets with credit deterioration

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Charge-offs of securities

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Recoveries

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Balance, September 30, 2024

$

-

 

$

-

 

$

1

 

$

261

 

$

262

 

 

 

Government Issued and Government Sponsored Enterprise Securities

 

Mortgage and Asset-backed Securities

 

Securities Issued By State and Political Subdivisions

 

Corporate Securities

 

Total

 

Balance, June 30, 2023

$

-

 

$

22

 

$

2

 

$

397

 

$

421

 

Provision for credit losses

 

-

 

 

-

 

 

-

 

 

5

 

 

5

 

Allowance on purchased financial assets with credit deterioration

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Charge-offs of securities

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Recoveries

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Balance, September 30, 2023

$

-

 

$

22

 

$

2

 

$

402

 

$

426

 

 

The following tables depicts a rollforward of the allowance for credit losses on investment securities classified as held-to-maturity for the nine months ended September 30, 2024 and 2023:

 

(In thousands)

Government Issued and Government Sponsored Enterprise Securities

 

Mortgage and Asset-backed Securities

 

Securities Issued By State and Political Subdivisions

 

Corporate Securities

 

Total

 

Balance, December 31, 2023

$

-

 

$

-

 

$

2

 

$

350

 

$

352

 

Provision for credit losses

 

-

 

 

 

 

(1

)

 

(89

)

 

(90

)

Allowance on purchased financial assets with credit deterioration

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Charge-offs of securities

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Recoveries

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Balance, September 30, 2024

$

-

 

$

-

 

$

1

 

$

261

 

$

262

 

 

(In thousands)

Government Issued and Government Sponsored Enterprise Securities

 

Mortgage and Asset-backed Securities

 

Securities Issued By State and Political Subdivisions

 

Corporate Securities

 

Total

 

Balance, December 31, 2022

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

Adjustment for the adoption of ASU 2016-13

 

-

 

 

40

 

 

1

 

 

409

 

 

450

 

Provision for credit losses

 

-

 

 

(18

)

 

1

 

 

(7

)

 

(24

)

Allowance on purchased financial assets with credit deterioration

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Charge-offs of securities

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Recoveries

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Balance, September 30, 2023

$

-

 

$

22

 

$

2

 

$

402

 

$

426

 

The Company monitors the credit quality of the debt securities categorized as HTM primarily through the use of NRSRO credit ratings. These assessments are made on a quarterly basis. Amounts disclosed are gross values and do not include any allowance for credit loss. The following table summarizes the amortized cost of debt securities categorized as HTM at September 30, 2024 and December 31, 2023, aggregated by credit quality indicators:

 

(In thousands)

September 30, 2024

 

December 31, 2023

 

AAA or equivalent

$

33,922

 

$

42,476

 

AA or equivalent, including securities issued by the United States Government or Government Sponsored Enterprises

 

35,121

 

 

49,479

 

A or equivalent

 

13,030

 

 

19,021

 

BBB or equivalent

 

16,777

 

 

16,304

 

BB or equivalent

 

986

 

 

983

 

Unrated

 

61,811

 

 

51,374

 

Total

$

161,647

 

$

179,637

 

 

Gross realized (losses) gains on sales and redemptions of available-for-sale and held-to-maturity securities for the indicated periods are detailed below:

 

 

 

For the three months

For the nine months

 

 

 

ended September 30,

ended September 30,

 

(In thousands)

 

2024

 

 

2023

 

 

 

2024

 

 

2023

 

Realized gains on investments

 

$

-

 

 

$

-

 

 

 

$

750

 

 

$

2,021

 

Realized losses on investments

 

 

(188

)

 

 

(13

)

 

 

 

(1,070

)

 

 

(1,961

)

Total

 

$

(188

)

$

(13

)

 

 

$

(320

)

$

60

 

 

As of September 30, 2024 and December 31, 2023, securities with a fair value of $126.7 million and $110.3 million, respectively, were pledged to collateralize certain municipal deposit relationships. As of the same dates, securities with a fair value of $108.9 million and $114.3 million, respectively, were pledged against certain borrowing arrangements.

 

Management has reviewed its loan and mortgage-backed securities portfolios and determined that, to the best of its knowledge, only minimal exposure exists to sub-prime or other high-risk residential mortgages. With limited exceptions in the Company’s investment portfolio involving the most senior tranches of securitized bonds, the Company is not in the practice of investing in, or originating, these types of investment securities.