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Investment Securities
 9 Months Ended
Sep. 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:

 

 

September 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

 

$

11,935

 

 

$

442

 

 

$

—

 

 

$

—

 

 

$

12,377

 

Obligations of state and political subdivisions

 

 

51,124

 

 

 

134

 

 

 

(2,663

)

 

 

—

 

 

 

48,595

 

Mortgage-backed securities in government-sponsored entities

 

 

88,528

 

 

 

1,333

 

 

 

(2,033

)

 

 

—

 

 

 

87,828

 

Other securities

 

 

524

 

 

 

—

 

 

 

(9

)

 

 

—

 

 

 

515

 

 

 

$

152,111

 

 

$

1,909

 

 

$

(4,705

)

 

$

—

 

 

$

149,315

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Fair
 Value

 

 

Allowance for
Credit Losses

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debentures

 

$

15,000

 

 

$

—

 

 

$

(1,198

)

 

$

13,802

 

 

$

(471

)

Structured mortgage-backed securities

 

 

19,626

 

 

 

2

 

 

 

(607

)

 

 

19,021

 

 

 

—

 

 

 

$

34,626

 

 

$

2

 

 

$

(1,805

)

 

$

32,823

 

 

$

(471

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

 

 

September 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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of state and political subdivisions

 

 

5,216

 

 

 

(76

)

 

 

32,544

 

 

 

(2,587

)

 

 

37,760

 

 

 

(2,663

)

Mortgage-backed securities in government-sponsored entities

 

 

4,146

 

 

 

—

 

 

 

32,078

 

 

 

(2,033

)

 

 

36,224

 

 

 

(2,033

)

Other securities

 

 

—

 

 

 

—

 

 

 

481

 

 

 

(9

)

 

 

481

 

 

 

(9

)

 

 

$

9,362

 

 

$

(76

)

 

$

65,103

 

 

$

(4,629

)

 

$

74,465

 

 

$

(4,705

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 September 30, 2024 or December 31, 2023. The Company reviews its position quarterly and believes that as of September 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 175 and 164 available for sale debt securities with unrealized losses at September 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 $710 thousand at September 30, 2024 and is excluded from the estimate of credit losses.

There were 11 and 12 held to maturity debt securities with unrealized losses at September 30, 2024 and December 31, 2023, respectively.

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 nine months ended September 30, 2024 and 2023.

 

 

For the Three Months Ended September 30,

 

(in Thousands)

 

2024

 

 Balance, June 30, 2024

 

$

502

 

 Changes in the allowance for credit losses

 

 

(31

)

 Balance September 30, 2024

 

$

471

 

 

 

 

 

 

 

For the Three Months Ended September 30,

 

(in Thousands)

 

2023

 

 Balance, June 30, 2023

 

$

586

 

 Changes in the allowance for credit losses

 

 

(74

)

 Balance September 30, 2023

 

$

512

 

 

 

 

For the Nine Months Ended September 30,

 

(in Thousands)

 

2024

 

 Balance, December 31, 2023

 

$

512

 

 Changes in the allowance for credit losses

 

 

(41

)

 Balance September 30, 2024

 

$

471

 

 

 

 

 

 

 

For the Nine Months Ended September 30,

 

(in Thousands)

 

2023

 

 Balance, December 31, 2022

 

$

-

 

 Impact of adopting ASC 326

 

 

602

 

 Changes in the allowance for credit losses

 

 

51

 

 Securities charged-off

 

 

(141

)

 Balance, September 30, 2023

 

$

512

 

Accrued interest receivable on held-to-maturity debt securities totaled $180 thousand at September 30, 2024 which is excluded from the estimate of credit losses.

As of September 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

 

$

2,072

 

 

$

2,068

 

 

$

3,000

 

 

$

2,980

 

Due after one year through five years

 

 

13,693

 

 

 

13,621

 

 

 

3,000

 

 

 

2,959

 

Due after five years through ten years

 

 

20,162

 

 

 

19,749

 

 

 

9,000

 

 

 

7,863

 

Due after ten years

 

 

27,132

 

 

 

25,534

 

 

 

—

 

 

 

—

 

Mortgage-backed securities and Collateralized mortgage obligations

 

 

88,528

 

 

 

87,828

 

 

 

19,626

 

 

 

19,021

 

Other securities

 

 

524

 

 

 

515

 

 

 

—

 

 

 

—

 

 

 

$

152,111

 

 

$

149,315

 

 

$

34,626

 

 

$

32,823

 

 

The following tables summarize sales of debt securities for the three and nine months ended September 30, 2024 and 2023. There were no sales of debt securities for the three months ended September 30, 2024 and 2023.

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 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 September 30, 2024 and 2023, respectively.

 

The Company had pledged debt securities with a carrying value of $61.4 million and $65.9 million to secure public deposits and certain borrowing capacity as of September 30, 2024 and December 31, 2023, respectively.