Securities Available for Sale

6 Months Ended

Jun. 30, 2022

Debt Securities, Available-for-Sale [Abstract]

NOTE 2 – SECURITIES AVAILABLE FOR SALE

Debt Securities

The fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income at June 30, 2022 and December 31, 2021 were as follows:


June 30, 2022	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S Government sponsored entities	$	3,000	$	—	$	(519	)	$	2,481
Municipal- taxable		14,533		25		(2,248	)		12,310
Municipal- tax exempt		1,365		2		(47	)		1,320
Residential MBS (1)		9,151		1		(365	)		8,787
Commercial MBS		1,915		—		(17	)		1,898
SBA(2) guaranteed debenture		857		—		(55	)		802
Total	$	30,821	$	28	$	(3,251	)	$	27,598

December 31, 2021	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S Government sponsored entities	$	3,000	$	—	$	(43	)	$	2,957
Municipal- taxable		13,839		375		(57	)		14,157
Municipal- tax exempt		1,365		34		—			1,399
Residential MBS		1,638		35		(4	)		1,669
SBA guaranteed debenture		1,120		11		—			1,131
Total	$	20,962	$	455	$	(104	)	$	21,313

(1) Mortgage-backed security

(2) Small Business Administration

NOTE 2 – SECURITIES AVAILABLE FOR SALE (Continued)

The Company’s mortgage-backed securities are primarily issued by GSEs and agencies such as Fannie Mae and Ginnie Mae as denoted in the tables above and below as GSE.

The proceeds from sales and calls of securities and the associated gains and losses for the six months ended June 30, 2022 and 2021are listed below:


	2022		2021
Proceeds	$	—	$	705
Gross gains		—		—
Gross losses		—		—

There were no sales or tax expense related to sales of securities in the six months ended June 30, 2022 or the six months ended June 30, 2021.

Equity Securities

There was one equity security with a readily determinable fair value amount of $1.0 million held as of June 30, 2022. Net gains of $10 thousand and $5 thousand were recognized for the three and six months ended June 30, 2022 respectively.

The amortized cost and fair value of the debt securities portfolio are shown below by expected maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Debt securities not due at a single maturity date are shown separately.


	June 30, 2022
	Amortized Cost		Estimated Fair Value
Due one year or less	$	—	$	—
Due from one to five years		1,401		1,388
Due from five to ten years		3,443		3,203
Due after ten years		14,054		11,520
Residential mortgage-backed		9,151		8,787
Commercial mortgage-backed		1,915		1,898
SBA guaranteed debenture		857		802
Total	$	30,821	$	27,598

NOTE 2 – SECURITIES AVAILABLE FOR SALE (Continued)

Carrying amounts of securities pledged to secure public deposits as of June 30, 2022 and December 31, 2021 were $23,830 and $9,261, respectively. At June 30, 2022 and December 31, 2021, 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.

Debt securities with unrealized losses at June 30, 2022 and December 31, 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:


	Less than 12 months					12 months or more					Total
June 30, 2022	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S Government sponsored entities	$	2,481	$	(519	)	$	—	$	—		$	2,481	$	(519	)
Municipal- taxable		9,292		(1,751	)		2,126		(497	)		11,418		(2,248	)
Municipal- tax free		648		(47	)		—		—			648		(47	)
Residential MBS		8,562		(365	)		—		—			8,562		(365	)
Commercial MBS		1,915		(17	)		—		—			1,915		(17	)
SBA guaranteed debenture		802		(55	)		—		—			802		(55	)
Total temporarily impaired	$	23,700	$	(2,754	)	$	2,126	$	(497	)	$	25,826	$	(3,251	)


	Less than 12 months					12 months or more					Total
December 31, 2021	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S Government sponsored entities	$	2,957	$	(43	)	$	—	$	—		$	2,957	$	(43	)
Municipal- taxable		805		(16	)		1,771		(41	)		2,576		(57	)
Residential MBS		503		(4	)		—		—			503		(4	)
Total temporarily impaired		4,265		(63	)		1,771		(41	)	$	6,036	$	(104	)

NOTE 2 – SECURITIES AVAILABLE FOR SALE (Continued)

The Company evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. The Company considers the length of time and the extent to which the fair value has been less than cost and the financial condition and near-term prospects of the issuer. Additionally, the Company considers its intent to sell or whether it will be more likely than not it will be required to sell the security prior to the security’s anticipated recovery in fair value. In analyzing an issuer’s financial condition, the Company may consider whether the securities are issued by the federal Government sponsored agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition.

There were three U.S. government agencies, 20 municipal-taxable securities, three municipal-tax free, one SBA guaranteed debenture and 10 mortgage backed securities with unrealized losses at June 30, 2022. None of the unrealized losses for these securities have been recognized into net income for the six months ended June 30, 2022 because the issuer’s bonds are of high credit quality, management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates. The fair value is expected to recover as the bonds approach their maturity date or reset date.