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Investment Securities
 6 Months Ended
Jun. 30, 2024
Investments, Debt and Equity Securities [Abstract]  
Investment Securities
3.
INVESTMENT SECURITIES

The amortized cost, gross unrealized gains and losses, and fair value of investment securities available for sale are summarized as follows:

 

 

June 30, 2024

 

(In Thousands)

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Allowance for Credit Losses

 

 

Fair
Value

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US Government Agency securities

 

$

12,841

 

 

$

120

 

 

$

(5

)

 

$

—

 

 

$

12,956

 

US Government Treasury securities

 

 

3,979

 

 

 

—

 

 

 

(2

)

 

 

—

 

 

 

3,977

 

Obligations of state and political subdivisions

 

 

49,242

 

 

 

39

 

 

 

(3,865

)

 

 

—

 

 

 

45,416

 

Mortgage-backed securities in government-sponsored entities

 

 

80,363

 

 

 

178

 

 

 

(3,308

)

 

 

—

 

 

 

77,233

 

Other securities

 

 

550

 

 

 

—

 

 

 

(11

)

 

 

—

 

 

 

539

 

 

 

$

146,975

 

 

$

337

 

 

$

(7,191

)

 

$

—

 

 

$

140,121

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Fair
 Value

 

 

Allowance for
Credit Losses

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debentures

 

$

15,000

 

 

$

—

 

 

$

(1,794

)

 

$

13,206

 

 

$

(502

)

Structured mortgage-backed securities

 

 

20,845

 

 

 

—

 

 

 

(843

)

 

 

20,002

 

 

 

—

 

 

 

$

35,845

 

 

$

—

 

 

$

(2,637

)

 

$

33,208

 

 

$

(502

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2023

 

(In Thousands)

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Allowance for Credit Losses

 

 

Fair
Value

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US Government Agency securities

 

$

12,711

 

 

$

279

 

 

$

(5

)

 

$

—

 

 

$

12,985

 

US Government Treasury securities

 

 

4,925

 

 

 

17

 

 

 

—

 

 

 

—

 

 

 

4,942

 

Obligations of state and political subdivisions

 

 

49,640

 

 

 

420

 

 

 

(3,015

)

 

 

—

 

 

 

47,045

 

Mortgage-backed securities in government-sponsored entities

 

 

50,795

 

 

 

515

 

 

 

(3,129

)

 

 

—

 

 

 

48,181

 

Other securities

 

 

2,301

 

 

 

49

 

 

 

(13

)

 

 

—

 

 

 

2,337

 

 

 

$

120,372

 

 

$

1,280

 

 

$

(6,162

)

 

$

—

 

 

$

115,490

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized Cost

 

 

Gross Unrealized Gains

 

 

Gross Unrealized Losses

 

 

Fair Value

 

 

Allowance for Credit Losses

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debentures

 

$

15,000

 

 

$

—

 

 

$

(1,592

)

 

$

13,408

 

 

$

(512

)

Structured mortgage-backed securities

 

 

21,735

 

 

 

—

 

 

 

(907

)

 

 

20,828

 

 

 

—

 

 

 

$

36,735

 

 

$

—

 

 

$

(2,499

)

 

$

34,236

 

 

$

(512

)

 

 

The following tables summarize the Company's debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by security type and length of time in a continuous unrealized loss position.

 

 

June 30, 2024

 

 

 

Less Than Twelve Months

 

 

Twelve Months or Greater

 

 

Total

 

(In Thousands)

 

Fair Value

 

 

Gross Unrealized Loss

 

 

Fair Value

 

 

Gross Unrealized Loss

 

 

Fair Value

 

 

Gross Unrealized Loss

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US Government Agency securities

 

$

3,837

 

 

$

(5

)

 

$

—

 

 

$

—

 

 

$

3,837

 

 

$

(5

)

US Government Treasury securities

 

 

3,977

 

 

 

(2

)

 

 

—

 

 

 

—

 

 

 

3,977

 

 

 

(2

)

Obligations of state and political subdivisions

 

 

11,384

 

 

 

(263

)

 

 

31,154

 

 

 

(3,602

)

 

 

42,538

 

 

 

(3,865

)

Mortgage-backed securities in government-sponsored entities

 

 

32,758

 

 

 

(175

)

 

 

32,640

 

 

 

(3,133

)

 

 

65,398

 

 

 

(3,308

)

Other securities

 

 

—

 

 

 

—

 

 

 

539

 

 

 

(11

)

 

 

539

 

 

 

(11

)

 

 

$

51,956

 

 

$

(445

)

 

$

64,333

 

 

$

(6,746

)

 

$

116,289

 

 

$

(7,191

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2023

 

 

 

Less Than Twelve Months

 

 

Twelve Months or Greater

 

 

Total

 

(In Thousands)

 

Fair Value

 

 

Gross Unrealized Loss

 

 

Fair Value

 

 

Gross Unrealized Loss

 

 

Fair Value

 

 

Gross Unrealized Loss

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US Government Agency Securities

 

$

1,995

 

 

$

(5

)

 

$

—

 

 

$

—

 

 

$

1,995

 

 

$

(5

)

Obligations of state and political subdivisions

 

 

4,836

 

 

 

(247

)

 

 

27,736

 

 

 

(2,768

)

 

 

32,572

 

 

 

(3,015

)

Mortgage-backed securities in government-sponsored entities

 

 

4,703

 

 

 

(136

)

 

 

31,249

 

 

 

(2,993

)

 

 

35,952

 

 

 

(3,129

)

Other securities

 

 

—

 

 

 

—

 

 

 

601

 

 

 

(13

)

 

 

601

 

 

 

(13

)

 

 

$

11,534

 

 

$

(388

)

 

$

59,586

 

 

$

(5,774

)

 

$

71,120

 

 

$

(6,162

)

No allowance for credit losses on available for sale debt securities was needed at June 30, 2024 or December 31, 2023. The Company reviews its position quarterly and believes that as of June 30, 2024 and December 31, 2023, the declines outlined in the above tables represent temporary declines, and the Company does not intend to sell, and does not believe it will be required to sell, these debt securities before recovery of their cost basis, which may be at maturity. There were 204 and 164 available for sale debt securities with unrealized losses at June 30, 2024 and December 31, 2023, respectively. The Company has concluded that the unrealized losses disclosed above are the result of interest rate changes and market conditions that are not expected to

result in the non-collection of principal and interest during the year. Accrued interest receivable on available for sale debt securities totaled $782 at June 30, 2024 and is excluded from the estimate of credit losses.

There were 12 held to maturity debt securities with unrealized losses at June 30, 2024 and December 31, 2023.

The Company monitors the credit quality of corporate debentures held to maturity through the use of credit ratings, where available, and financial analysis, including capital monitoring and financial performance analysis. The Company monitors these securities on a quarterly basis.

The following tables present the activity in the allowance for credit losses for corporate debentures held to maturity for the three and six months ended June 30, 2024 and 2023.

 

 

For the Three Months Ended June 30,

 

(in Thousands)

 

2024

 

 Balance, March 31, 2024

 

$

507

 

 Changes in the allowance for credit losses

 

 

(5

)

 Balance June 30, 2024

 

$

502

 

 

 

 

 

 

 

For the Three Months Ended June 30,

 

(in Thousands)

 

2023

 

 Balance, March 31, 2023

 

$

533

 

 Changes in the allowance for credit losses

 

 

53

 

 Balance, June 30, 2023

 

$

586

 

 

 

 

For the Six Months Ended June 30,

 

(in Thousands)

 

2024

 

 Balance, December 31, 2023

 

$

512

 

 Changes in the allowance for credit losses

 

 

(10

)

 Balance June 30, 2024

 

$

502

 

 

 

 

 

 

 

For the Six Months Ended June 30,

 

(in Thousands)

 

2023

 

 Balance, December 31, 2022

 

$

-

 

 Impact of adopting ASC 326

 

 

602

 

 Changes in the allowance for credit losses

 

 

52

 

 Securities charged-off

 

 

(68

)

 Balance, June 30, 2023

 

$

586

 

Accrued interest receivable on held-to-maturity debt securities totaled $281 at June 30, 2024 which is excluded from the estimate of credit losses.

As of June 30, 2024, amortized cost and fair value by contractual maturity, where applicable, are shown below. Actual maturities may differ from contractual maturities because the borrower may have the right to prepay obligations with or without penalty.

 

 

Available for Sale Securities

 

 

Held to Maturity Securities

 

(In Thousands)

 

Amortized
Cost

 

 

Fair
Value

 

 

Amortized
Cost

 

 

Fair
Value

 

Due within one year

 

$

7,119

 

 

$

7,106

 

 

$

3,000

 

 

$

2,959

 

Due after one year through five years

 

 

13,202

 

 

 

12,915

 

 

 

3,000

 

 

 

2,885

 

Due after five years through ten years

 

 

18,830

 

 

 

17,751

 

 

 

9,000

 

 

 

7,362

 

Due after ten years

 

 

26,911

 

 

 

24,577

 

 

 

—

 

 

 

—

 

Mortgage-backed securities and Collateralized mortgage obligations

 

 

80,363

 

 

 

77,233

 

 

 

20,845

 

 

 

20,002

 

Other securities

 

 

550

 

 

 

539

 

 

 

—

 

 

 

—

 

 

 

$

146,975

 

 

$

140,121

 

 

$

35,845

 

 

$

33,208

 

 

The following tables summarize sales of debt securities for the three and six months ended June 30, 2024 and 2023.

 

 

 

For the Three Months Ended June 30,

 

(In Thousands)

 

2024

 

2023

 

 Proceeds

$

1,691

 

 

$

—

 

 Gross gains

 

4

 

 

 

—

 

 Gross losses

 

—

 

 

 

—

 

 Net gains (losses)

$

4

 

 

$

—

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

(In Thousands)

 

2024

 

2023

 

 Proceeds

$

1,691

 

 

$

1,847

 

 Gross gains

 

 

4

 

 

 

—

 

 Gross losses

 

—

 

 

 

2,370

 

 Net gains (losses)

$

4

 

 

$

(2,370

)

 

 

The tax (provision) benefit related to these realized gains and losses was approximately ($1) and $498 as of June 30, 2024 and 2023, respectively.

 

The Company had pledged debt securities with a carrying value of $60,917 and $65,935 to secure public deposits and certain borrowing capacity as of June 30, 2024 and December 31, 2023, respectively.