Investment Securities

12 Months Ended

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Investment Securities

(3) Investment Securities

The following table summarizes the amortized cost and fair value of securities available-for-sale and securities held-to-maturity and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss). Investment securities available-for-sale and held-to-maturity at December 31, 2023 and 2022 are as follows (amounts in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2023:
Securities available-for-sale:
Residential mortgage-backed	$	413,179	$	102	$	(55,981	)	$	357,300
U.S. treasuries		130,713		-		(10,661	)		120,052
U.S. govt. sponsored enterprises		68,751		-		(5,185	)		63,566
State, county, and municipal		73,514		4		(8,857	)		64,661
Corporate debt obligations		17,758		5		(2,251	)		15,512
Totals	$	703,915	$	111	$	(82,935	)	$	621,091

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2023:
Securities held-to-maturity:
Residential mortgage-backed	$	63,953	$	-	$	(12,022	)	$	51,931
State, county, and municipal		62,840		-		(11,597	)		51,243
Totals	$	126,793	$	-	$	(23,619	)	$	103,174

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2022:
Securities available-for-sale:
Residential mortgage-backed	$	449,348	$	-	$	(59,311	)	$	390,037
U.S. treasuries		130,971		-		(13,342	)		117,629
U.S. govt. sponsored enterprises		72,889		-		(6,527	)		66,362
State, county, and municipal		87,347		71		(11,555	)		75,863
Corporate debt obligations		17,873		16		(1,893	)		15,996
Totals	$	758,428	$	87	$	(92,628	)	$	665,887

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2022:
Securities held-to-maturity:
Residential mortgage-backed	$	68,688	$	-	$	(12,624	)	$	56,064
State, county, and municipal		62,893		-		(13,680	)		49,213
Totals	$	131,581	$	-	$	(26,304	)	$	105,277

The Company reassessed classification of certain investments and effective February 2022 the Company transferred $75 million of residential mortgage-backed securities from available-for-sale to held-to-maturity. The transfer occurred at fair value. The related unrealized loss of $3.4 million included in accumulated other comprehensive loss remained in accumulated other comprehensive loss, to be amortized out of accumulated other comprehensive loss with an offsetting entry to interest income as a yield adjustment through earnings over the remaining term of the securities. No gain or loss was recorded at the time of transfer.

The following tables summarize securities with unrealized and unrecognized losses at December 31, 2023 and 2022, aggregated by major security type and length of time in a continuous unrealized or unrecognized loss position (amounts in thousands):

	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
December 31, 2023:
Securities available-for-sale:
Residential mortgage-backed	$	2,028	$	2	$	352,807	$	55,979	$	354,835	$	55,981
U.S. treasuries		-		-		120,053		10,661		120,053		10,661
U.S. govt. sponsored enterprises		1,689		7		61,877		5,178		63,566		5,185
State, county & municipal		-		-		63,657		8,857		63,657		8,857
Corporate debt obligations		926		29		13,131		2,222		14,057		2,251
Totals	$	4,643	$	38	$	611,525	$	82,897	$	616,168	$	82,935
December 31, 2022:
Securities available-for-sale:
Residential mortgage-backed	$	133,675	$	15,215	$	253,994	$	44,096	$	387,669	$	59,311
U.S. treasuries		-		-		117,629		13,342		117,629		13,342
U.S. govt. sponsored enterprises		32,695		2,449		33,523		4,078		66,218		6,527
State, county & municipal		53,744		7,250		17,905		4,305		71,649		11,555
Corporate debt obligations		3,190		310		11,352		1,583		14,542		1,893
Totals	$	223,304	$	25,224	$	434,403	$	67,404	$	657,707	$	92,628

	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
December 31, 2023:
Securities held-to-maturity:
Residential mortgage-backed	$	-	$	-	$	51,931	$	12,022	$	51,931	$	12,022
State, county & municipal		-		-		45,898		11,597		45,898		11,597
Totals	$	-	$	-	$	97,829	$	23,619	$	97,829	$	23,619
December 31, 2022:
Securities held-to-maturity:
Residential mortgage-backed	$	-	$	-	$	56,064	$	12,624	$	56,064	$	12,624
State, county & municipal		10,057		2,706		33,811		10,974		43,868		13,680
Totals	$	10,057	$	2,706	$	89,875	$	23,598	$	99,932	$	26,304

The Company adopted ASU No. 2016-13 effective January 1, 2023 which requires credit losses on available-for-sale securities to be recorded in an allowance for credit losses. If the Company intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis, then the security is written down to fair value through income. As of December 31, 2023, the Company did not have the intent to sell, nor was it more likely than not that we would be required to sell any of the securities in an unrealized loss position prior to recovery. As of December 31, 2023, the Company also determined that no individual securities in an unrealized loss position represented credit losses that would require an allowance for credit losses. The Company concluded that the unrealized losses were primarily attributable to increases in market interest rates since these securities were purchased and other market conditions. As a result, no allowance for credit loss was recorded on available-for-sale securities at December 31, 2023. Accrued interest receivable is not included in available-for-sale security balances and is presented in accrued interest receivable on the consolidated statement of financial condition. Interest receivable on securities was approximately $2.1 million as of December 31, 2023, and was excluded from the estimate of credit losses.

As of December 31, 2022, the Company believed the unrealized losses on securities available for sale were due to market conditions rather than reduced estimated cash flows. At December 31, 2022, the Company did not intend to sell the securities, did not anticipate these securities will be required to be sold before anticipated recovery, and expected full principal and interest to be collected. Therefore, under the accounting principles effective at December 31, 2022, the Company did not consider these securities to have other than temporary impairment as of December 31, 2022. As of December 31, 2023 and December 31, 2022, there were, respectively, 332 and 346 securities in unrealized loss positions.

The proceeds and gross gains and gross losses from sales of securities available-for-sale for the years ended December 31, 2023 and 2022 are as follows (in thousands):

	Year ended December 31:
	2023			2022
Realized Gains (Losses)-Securities Sales:
Gross gains	$	150		$	1,351
Gross losses		(145	)		(3,417	)
Investment securities gains (losses), net	$	5		$	(2,066	)
Proceeds from sales of investment securities	$	15,252		$	168,627

At December 31, 2023 and 2022, securities with a carrying value of approximately $268.2 million and $242.3 million, respectively, were pledged to secure public deposits as required by law. At December 31, 2023 and 2022, the carrying value of securities pledged to secure repurchase agreements was approximately $26.9 million and $16.2 million, respectively.

The amortized cost and estimated fair value of debt securities at December 31, 2023 and 2022, by contractual maturity, are shown below (in thousands). Expected maturities will differ from contractual maturities because borrowers 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.

	December 31, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Securities available-for-sale
Less than 1 year	$	2,500	$	2,424	$	1,055	$	1,054
1 to 5 years		163,927		150,501		141,565		127,459
5 to 10 years		51,970		46,415		77,174		68,737
After 10 years		72,339		64,451		89,286		78,600
		290,736		263,791		309,080		275,850
Residential mortgage-backed securities		413,179		357,300		449,348		390,037
Totals	$	703,915	$	621,091	$	758,428	$	665,887

	December 31, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Securities held-to-maturity
5 to 10 years	$	19,706	$	16,192	$	10,208	$	8,118
After 10 years		43,134		35,051		52,685		41,095
		62,840		51,243		62,893		49,213
Residential mortgage-backed securities		63,953		51,931		68,688		56,064
Totals	$	126,793	$	103,174	$	131,581	$	105,277

At December 31, 2023 and 2022, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholders’ equity.