Debt Securities

6 Months Ended

Jun. 30, 2024

Note 5: Debt Securities

The following table summarizes the amortized cost and fair value of debt securities available-for-sale at June 30, 2024 and December 31, 2023 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss):

(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available-for-sale as of June 30, 2024
U.S. Federal agencies	$	84	$	-	$	(2	)	$	82
Mortgage-backed securities⁽¹⁾⁽²⁾		36,501		-		(3,968	)		32,533
State and political subdivisions		25,668		-		(1,640	)		24,028
U.S. Treasuries		6,025		-		(762	)		5,263
Corporate debt securities		5,500		-		(1,122	)		4,378
Total available-for-sale		73,778		-		(7,494	)		66,284
Total debt securities		73,778		-		(7,494	)		66,284

(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available-for-sale as of December 31, 2023
U.S. Federal agencies	$	138	$	-	$	(3	)	$	135
Mortgage-backed securities⁽¹⁾⁽²⁾		38,465		-		(3,963	)		34,502
State and political subdivisions		27,368		-		(1,512	)		25,856
U.S. Treasuries		106,030		-		(1,373	)		104,657
Corporate debt securities		5,500		-		(1,163	)		4,337
Total available-for-sale		177,501		-		(8,014	)		169,487
Total debt securities		177,501		-		(8,014	)		169,487

⁽¹⁾	All of our mortgage-backed securities and collateralized mortgage obligations are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored entities.

⁽²⁾	Included in amortized cost of mortgage-backed securities is $23.48 million and $24.80 million of residential mortgage-backed securities and $13.02 million and $13.67 million of commercial mortgage-backed securities as of June 30, 2024 and December 31, 2023, respectively.

The amortized cost and estimated fair value of investment securities at June 30, 2024 and December 31, 2023, by contractual maturity, are shown below. The expected life of mortgage-backed securities will differ from contractual maturities because borrowers may have the right to call or prepay the underlying mortgage loans with or without call or prepayment penalties.

(in thousands)	Amortized Cost		Fair Value
Available-for-sale as of June 30, 2024
Due in one year or less	$	4,742	$	4,694
Due after one year through five years		16,527		15,399
Due after five years through ten years		15,846		13,516
Due after ten years		162		142
Mortgage-backed securities		36,501		32,533
Total available-for-sale		73,778		66,284

(in thousands)	Amortized Cost		Fair Value
Available-for-sale as of December 31, 2023
Due in one year or less	$	105,944	$	105,186
Due after one year through five years		15,654		14,675
Due after five years through ten years		17,276		14,980
Due after ten years		162		144
Mortgage-backed securities		38,465		34,502
Total available-for-sale		177,501		169,487

There were no holdings of securities of issuers in an amount greater than 10% of stockholders' equity at June 30, 2024.

The following table presents a summary of realized gains and losses from the sale, prepayment and call of debt securities:

	Three Months Ended June 30,					Six Months Ended June 30,
	2024		2023			2024		2023
(in thousands)
Proceeds from sales, maturities, prepayments and calls	$	86,214	$	1,784		$	188,536	$	4,198
Gross realized losses on sales, prepayments and calls		-		(7	)		-		(8	)
Total realized (losses), net	$	-	$	(7	)	$	-	$	(8	)

The following table details book value of pledged securities as of June 30, 2024 and December 31, 2023:

(in thousands)		June 30, 2024				December 31, 2023
Book value of pledged securities		$	19,928			$	121,283

The following table details gross unrealized losses and fair values of investment securities aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at June 30, 2024 and December 31, 2023. As of June 30, 2024, the Company had the ability and intent to hold the debt securities classified as available-for-sale for a period of time sufficient for a recovery of cost. The unrealized losses are due to increases in market interest rates over the yields available at the time the underlying debt securities were purchased or acquired. The fair value of those debt securities having unrealized losses is expected to recover as the securities approach their maturity date or repricing date, or if market yields for such investments decline. Management has no intent or requirement to sell before the recovery of the unrealized loss; therefore, no impairment loss was realized in the Company’s consolidated statements of comprehensive income.

	Less than Twelve Months					Twelve Months or Longer					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
(in thousands)
Available-for-sale as of June 30, 2024
U.S. Federal agencies	$	-	$	-		$	82	$	(2	)	$	82	$	(2	)
Mortgage-backed securities		-		-			32,533		(3,968	)		32,533		(3,968	)
State and political subdivisions⁽¹⁾		171		(4	)		23,857		(1,636	)		24,028		(1,640	)
U.S. Treasuries		-		-			5,263		(762	)		5,263		(762	)
Corporate debt securities		-		-			4,378		(1,122	)		4,378		(1,122	)
Total available-for-sale	$	171	$	(4	)	$	66,113	$	(7,490	)	$	66,284	$	(7,494	)

	Less than Twelve Months					Twelve Months or Longer					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
(in thousands)
Available-for-sale as of December 31, 2023
U.S. Federal agencies	$	-	$	-		$	135	$	(3	)	$	135	$	(3	)
Mortgage-backed securities		-		-			34,502	$	(3,963	)		34,502		(3,963	)
State and political subdivisions⁽¹⁾		1,160		(5	)		24,696	$	(1,507	)		25,856		(1,512	)
U.S. Treasuries		-		-			104,657	$	(1,373	)		104,657		(1,373	)
Corporate debt securities		-		(195	)		4,337	$	(968	)		4,337		(1,163	)
Total available-for-sale	$	1,160	$	(200	)	$	168,327	$	(7,814	)	$	169,487	$	(8,014	)

⁽¹⁾	Of our state and political subdivision securities, $21.13 million and $22.84 million are rated BBB+ or better and $2.89 million and $3.02 million are not rated as of June 30, 2024 and December 31, 2023, respectively.