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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
Or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 001-40619
BLUE FOUNDRY BANCORP
(Exact name of the registrant as specified in its charter)

Delaware
86-2831373
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification Number)
19 Park Avenue,
Rutherford,New Jersey
07070
(Address of principal executive offices)
(Zip Code)
(201) 939-5000
(Registrant’s telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.    ☐  Yes    ☒  No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    ☒  Yes    ☐  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:
 
Large accelerated filer
 ☐ 
Accelerated filer
 
Non-accelerated filer
 ☒
Smaller reporting company
 
Emerging Growth Company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes    ☒  No

As of July 30, 2021 the registrant had 28,522,500 shares of common stock, par value $0.01 per share, issued and outstanding.





BLUE FOUNDRY BANCORP AND SUBSIDIARY
FORM 10-Q
Index



  
PAGE
 







Part I Financial Information
ITEM 1. FINANCIAL STATEMENTS

BLUE FOUNDRY BANCORP AND SUBSIDIARY
Consolidated Statements of Financial Condition
June 30, 2021 (Unaudited) and December 31, 2020
(In thousands)

 June 30, 2021 December 31, 2020
(In thousands)
ASSETS
Cash and cash equivalents
$925,091 $316,445 
Securities available for sale, at fair value294,484 244,587 
Assets held for sale6,117 5,295 
Securities held to maturity (fair value of $3,001
  at June 30, 2021 and $6,979 at December 31, 2020)
3,002 7,005 
Restricted stock, at cost16,027 16,860 
Loans receivable, net of allowance of $15,593 at June 30, 2021 and $16,959 at December 31, 2020
1,241,176 1,267,114 
Real estate owned, net624 624 
Interest and dividends receivable5,507 5,749 
Premises and equipment, net24,876 19,569 
Right-of-use assets25,700 24,878 
Bank owned life insurance21,423 21,186 
Other assets12,824 13,234 
Total assets$2,576,851 $1,942,546 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits$2,008,068 $1,356,184 
Advances from the Federal Home Loan Bank315,400 329,400 
Advances by borrowers for taxes and insurance10,417 10,841 
Lease liabilities26,765 25,535 
Other liabilities11,289 14,986 
Total liabilities2,371,939 1,736,946 
Shareholders’ equity
Common stock $0.10 par value; 20,000,000 shares
     authorized; 100,000 shares issued and outstanding
10 10 
Additional paid-in capital822 822 
Retained earnings204,051 205,799 
Accumulated other comprehensive income (loss)29 (1,031)
Total shareholders’ equity 204,912 205,600 
Total liabilities and shareholders’ equity$2,576,851 $1,942,546 
See accompanying notes to the consolidated financial statements.
3




BLUE FOUNDRY BANCORP AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
(In thousands)
Interest income:
Loans$12,056 $13,950 $24,318 $28,165 
Taxable investment income1,618 1,769 3,163 3,807 
Non-taxable investment income128 156 263 339 
Total interest income13,802 15,875 27,744 32,311 
Interest expense:
Deposits2,379 4,213 5,197 8,815 
Borrowed funds1,515 1,718 3,039 3,378 
Total interest expense3,894 5,931 8,236 12,193 
Net interest income9,908 9,944 19,508 20,118 
(Recovery of) provision for loan losses(553)1,252 (1,361)2,753 
Net interest income after (recovery of) provision for loan losses10,461 8,692 20,869 17,365 
Noninterest income:
Fees and service charges537 617 1,063 920 
Loss on premises and equipment(86) (86) 
Write-down of real estate owned   (1,390)
Other169 209 310 393 
Total other income (loss)620 826 1,287 (77)
Noninterest expense:
Compensation and employee benefits6,369 5,978 12,391 11,569 
Occupancy and equipment2,043 1,343 3,996 2,742 
Loss on assets held for sale  21 12,765 
Data processing1,885 833 3,652 1,764 
Advertising521 249 991 648 
Professional services546 2,363 1,943 4,478 
Directors fees136 123 277 247 
Provision for commitment and letters of credit(473) (704) 
Federal deposit insurance129 69 254 69 
Goodwill impairment 15,460  15,460 
Other645 550 1,351 1,015 
Total operating expenses11,801 26,968 24,172 50,757 
Loss before income tax expense(720)(17,450)(2,016)(33,469)
Income tax expense (benefit)283 (706)(268)(5,391)
Net loss$(1,003)$(16,744)$(1,748)$(28,078)
See accompanying notes to the consolidated financial statements.
4



BLUE FOUNDRY BANCORP AND SUBSIDIARY
Consolidated Statements of Comprehensive (Loss) Income
(Unaudited)



Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
(In thousands)
Net loss$(1,003)$(16,744)$(1,748)$(28,078)
Other comprehensive (loss) income:
Unrealized gains on securities available for sale:
Unrealized holding gain (loss) arising during the period1,888 2,366 (1,753)3,854 
1,888 2,366 (1,753)3,854 
Unrealized losses on cash flow hedge:
Reclassification adjustment for losses (gains) included in net income(353)(97)(690)(95)
Unrealized holding (loss) gain arising during the period(892)(842)4,056 (6,450)
(1,245)(939)3,366 (6,545)
Defined benefit plans:
Reclassification adjustment for amortization of:
Net actuarial gain (loss)52 (288)104 (244)
52 (288)104 (244)
Total tax effect(232)(319)(657)824 
Total other comprehensive income (loss)463 820 1,060 (2,111)
Comprehensive loss$(540)$(15,924)$(688)$(30,189)
See accompanying notes to the consolidated financial statements.
5



    
BLUE FOUNDRY BANCORP AND SUBSIDIARY
Consolidated Statements of Changes in Shareholders’ Equity
Six Months Ended June 30, 2021 and 2020
(Unaudited)

    
Common
Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Shareholders’
Equity
(In thousands)
Balance at December 31, 2019$10 $822 $237,306 $(517)$237,621 
Net loss— — (11,334)— (11,334)
Other comprehensive loss— — — (2,931)(2,931)
Balance at March 31, 2020$10 $822 $225,972 $(3,448)$223,356 
Net loss— — $(16,744)— (16,744)
Other comprehensive income— — — 820 820 
Balance at June 30, 2020$10 $822 $209,228 $(2,628)$207,432 
Balance at December 31, 2020$10 $822 205,799 $(1,031)$205,600 
Net loss— — (745)— (745)
Other comprehensive income— — — 597 597 
Balance at March 31, 2021$10 $822 $205,054 $(434)$205,452 
Net loss— — $(1,003)— (1,003)
Other comprehensive income— — — 463 463 
Balance at June 30, 2021$10 $822 $204,051 $29 $204,912 
See accompanying notes to the consolidated financial statements.
6

BLUE FOUNDRY BANCORP AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)



Six Months Ended June 30,
20212020
(In thousands)
Cash flows from operating activities
Net loss$(1,748)$(28,078)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of premises and equipment1,028 1,026 
Change in right-of-use asset1,346 138 
(Accretion) amortization of:
Deferred loan fees, costs, and discounts, net
(1,954)548 
Premiums and discounts on securities377 91 
Goodwill impairment 15,460 
Deferred income tax benefit (5,173)
Dividends on CRA fund (15)
(Recovery) provision for loan losses(1,361)2,753 
Loss on assets held for sale21 12,765 
Loss on premises and equipment86  
Net loss on Real Estate Owned 1,390 
Increase in BOLI cash surrender value(237)(316)
Increase (decrease) in interest and dividends receivable242 (902)
Increase in other assets(198)(1,101)
Increase in other liabilities(227)(628)
Change in lease liability(939)2 
Net cash provided by operating activities(3,564)(2,040)
Cash flows from investing activities
Net decrease in loans29,253 2,017 
Purchases of securities available for sale(91,349)(95,019)
Sales of equity securities 4,178 
Proceeds from calls of securities held to maturity4,000  
Proceeds from sales and calls of securities available for sale4,000 4,950 
Principal payments and maturities on securities available for sale35,326 40,099 
Redemption (purchase) of restricted stock833 (2,934)
Proceeds from Bank owned life insurance 275 
Purchases of premises and equipment(7,312)(2,003)
Net cash used in investing activities(25,249)(48,437)
Cash flows from financing activities
Net increase in deposits651,883 47,876 
Proceeds of advances from Federal Home Loan Bank319,000 350,500 
Repayments of advances from Federal Home Loan Bank(333,000)(285,000)
Net (decrease) increase in advances by borrowers for taxes and insurance(424)11 
Net cash provided by financing activities637,459 113,387 
Net (decrease) increase in cash and cash equivalents608,646 62,910 

7

BLUE FOUNDRY BANCORP AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)



Cash and cash equivalents at beginning of period316,445 124,034 
Cash and cash equivalents at end of period$925,091 $186,945 

Six Months Ended June 30,
20212020
(In thousands)
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest$8,197 $12,172 
Income taxes150 103 
Supplemental noncash disclosures
Transfers of assets to held for sale$892 $5,695 
Lease liabilities arising from obtaining right-of-use assets2,168 26,467 
See accompanying notes to the consolidated financial statements.
8



NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation: The accompanying consolidated financial statements include the accounts of Blue Foundry Bancorp (the “Company”, formerly Boiling Springs Bancorp), and its wholly owned subsidiary, Blue Foundry Bank (the “Bank”), and the Bank’s wholly owned subsidiaries, Blue Foundry Service Corp., Rutherford Center Development Corp., Blue Foundry Investment Company (collectively, the “Company”). The Company’s name change was effective July 1, 2019. All significant intercompany accounts and transactions have been eliminated in consolidation. Blue Foundry Bancorp owns 100% of the common stock of Blue Foundry Bank. Blue Foundry, MHC, a New Jersey chartered mutual holding company, (the “Corporation”), owns all of the common stock of the Company. Blue Foundry, MHC is not consolidated in these financial statements.

Basis of Financial Statement Presentation: The consolidated financial statements of the Company have been prepared in conformity with U.S. generally accepted accounting principles. The financial statements were prepared in accordance with the instructions for Form 10-Q and with Regulation S-X and do not include information or footnotes necessary for a complete presentation of the financial condition, results of operations, and cash flows in conformity with U.S. generally accepted accounting principles (“GAAP”). The interim unaudited consolidated financial statements reflect all normal and recurring adjustments, which are, in the opinion of management, considered necessary for a fair presentation of the financial condition and results of operations for the periods presented. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statement of financial condition and revenues and expenses for the period. Actual results could differ from those estimates. Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year net income or shareholders’ equity. The results of operations and other data presented for the three and six months ended June 30, 2021 are not necessarily indicative of the results of operations that may be expected for subsequent periods or the full year results. These financial statements should be read in conjunction with the annual financial statements and notes thereto included in Company’s prospectus, filed with the Securities and Exchange Commission pursuant to Rule 424(b)(3) on May 21, 2021.

Loans Receivable: Loans receivable are stated at unpaid principal balance, net of deferred fees, costs, and discounts, and the allowance for loan losses. Interest on loans is recognized based upon the principal amount outstanding. Loan fees and certain direct loan origination costs are deferred, and the net fee or cost is recognized in interest income using the level yield method over the contractual life of the individual loans, adjusted for actual prepayments.

For all loan classes, the accrual of income on loans, including impaired loans, is generally discontinued when a loan becomes more than 90 days delinquent or when certain factors indicate reasonable doubt as to the ability of the borrower to meet contractual principal and/or interest obligations. Loans on which the accrual of income has been discontinued are designated as nonaccrual loans. All previously accrued interest is reversed and income is recognized subsequently only in the period received, provided the remaining principal balance is deemed collectible. A nonaccrual loan is not returned to an accrual status until principal and interest payments are brought current and factors indicating doubtful collection no longer exist.

Principal and interest payments received on non-accrual loans for which the remaining principal balance is not deemed collectible are applied as a reduction to principal and interest income is not recognized. If the principal balance on the loan is later deemed collectible and the loan is returned to accrual status, any interest payments that were applied to principal while on non-accrual are recorded as an unearned discount on the loan, classified as deferred fees, costs and discounts, and are recognized into interest income using the level-yield method over the remaining contractual life the individual loan, adjusted for actual prepayments.

Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable and reasonably estimable incurred credit losses in the loan portfolio as of the balance sheet date. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required for all portfolio segments using past loan loss experience, the nature and volume of the portfolio, information about specific borrower



9


situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off.

The allowance consists of specific and general components. The specific component of the allowance relates to loans that are individually classified as impaired. A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans for which the terms have been modified resulting in a concession and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

Impaired loans are measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, or, as a practical expedient, at the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. Large groups of smaller balance (generally $400,000 or less) homogeneous loans, such as consumer and residential real estate loans, are collectively evaluated for impairment. Impaired loans also include all nonaccrual non-residential, multifamily and construction and land loans, and troubled debt restructurings.

Troubled debt restructured loans are those loans whose terms have been modified such that a concession has been granted because of deterioration in the financial condition of the borrower. Modifications could include extension of the terms of the loan, reduced interest rates, and forgiveness of accrued interest and/or principal. Once an obligation has been classified a troubled debt restructuring, it continues to be considered a troubled debt restructuring and is individually evaluated for impairment until paid in full. For a cash flow dependent loan, the Company records an impairment charge equal to the difference between the present value of the estimated future cash flows under the restructured terms discounted at the loans original effective interest rate, and the original loan’s carrying amount. For a collateral dependent loan, the Company records an impairment when the current estimated fair value, net of estimated costs to sell when necessary, of the property that collateralizes the impaired loan is less than the recorded investment in the loan.

The general component of the allowance covers non impaired loans and is based on historical loss experience adjusted for current qualitative factors. The historical loss experience is a quantitative factor determined by portfolio segment and is based on the actual loss history experienced by the Company. These factors include consideration of the following:

•    Changes in lending policies and procedures, including underwriting standards, collections, and internal loan review practices;
•    Changes in the nature and volume of the portfolio – increase (decrease) in portfolio category;
•    Changes in the volume and severity of past due loans – increase (decrease) in loans past due and on non-accrual;
•    Changes in the volume and severity of past due loans – increase (decrease) in classified loans;
•    Changes in the ratings for loans from Pass to Watch to Special Mention to Substandard;
•    Management assessment based on historical Bank performance and peer market data for Probability-Driven Loss Given Default (PD/LGD) for each loan type, weighted by:
o    State of the local economy, including regional economic conditions;
o    Local and regional unemployment;
o    Delinquency and foreclosure rates in the local market;
o    Valuations and level of activity in the local housing market;



10


o    Other factors, including local and federal government intervention in economic situations which could support or impair credit and valuation, and broader macroeconomic considerations, as well as evolving marketplace, regulatory and legal risk factors

The loan portfolio is categorized according to collateral type, loan purpose, lien position, or borrower type (i.e., commercial, consumer). The categories used include residential one-to-four family, multifamily, non-residential, construction and land, junior liens, commercial and industrial (consisting of Paycheck Protection Program, or “PPP”, loans), and consumer and other.

Retirement Benefits: Effective January 1, 2020 the Defined Benefit Plan adopted by the Company has been amended to freeze the plan, eliminating all future benefit accruals. The plan was a noncontributory, defined benefit, multiemployer pension plan which covered employees who meet certain eligibility requirements of the plan. Pension plan costs, based upon actuarial assumptions of current and future benefits for employees, are charged to expense and are funded based on the maximum amount that can be deducted for federal income tax purposes.

The Company provides certain healthcare benefits, subject to certain limitations, to eligible retirees, based upon years of service and a retirement date prior to January 1, 2019. The Company also provides supplemental retirement benefits to certain directors. The Company measures the cost of these benefits based upon various estimates and assumptions. Costs are recognized as directors render service.

Adoption of New Accounting Standards: Effective January 1, 2020, the Company adopted ASU No. 2016-02, “Leases (Topic 842)” which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard permits entities to use an optional transition method which allows an entity to continue to use guidance from ASC 840 in the comparative periods presented in the adoption year of ASC 842. The optional election also allows entities to utilize several practical expedients including the recognition of a cumulative-effect adjustment to the opening balance of retained earnings in the adoption year. Since all leases at the Company were accounted for as operating leases under ASC 840 and are still considered to be operating leases under ASC 842, no adjustment was needed to retained earnings as of the beginning of the period. Other practical expedients utilized included:

Carry over of historical lease determination and lease classification conclusions
Carry over of historical initial direct cost balances for existing leases
Accounting for lease and non-lease components in contracts in which the Company is a lessee as a single lease component

Adoption of the leasing standard resulted in the recognition of operating right-of-use assets of $6.0 million and operating lease liabilities of $6.0 million as of January 1, 2020. These amounts were determined based on the present value of remaining minimum lease payments, discounted using the Company’s incremental borrowing rate at the later of the date of adoption or the date of the lease. There was no material impact to the timing of expense or income recognition in the Company’s Consolidated Income Statements.

Accounting Standards Not Yet Adopted: The FASB issued, but the Company has not yet adopted, ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” to replace the incurred loss model for loans and other financial assets with an expected loss models, which is referred to as the current expected credit loss (CECL) model. The CECL model is applicable to the measurement of credit losses on financial assets measured at amortized costs, including loan receivables and held-to maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in certain leases recognized by a lessor. In addition, the amendments in Topic 326 require credit losses on available-for-sale to be presented as a valuation allowance rather than a direct write-down on the basis of the securities. The Company is required to adopt this standard on January 1, 2023. At this time, the Company cannot reasonably



11


estimate the impact that the adoption of CECL will have on the financial statements, but is in process of developing a methodology to implement the standard.




12


NOTE 2 – SECURITIES

The amortized cost of securities available for sale and their estimated fair values at June 30, 2021 and December 31, 2020 are as follows:

Amortized
Cost
Gross Unrealized Gains
Gross Unrealized Losses
Estimated
Fair
Value
(In thousands)
June 30, 2021
Available for sale
U.S. Treasury Note$6,899 $ $(97)6,802 
Corporate Bonds66,237 2,070 (60)68,247 
U.S. Government agency obligations40,003 100 (269)39,834 
Obligations issued by U.S. states and their political
   subdivisions
21,164 1,346  22,510 
Mortgage-backed securities:
Residential one-to-four family
111,658 430 (567)111,521 
Multifamily
44,559 1,065 (54)45,570 
Total available-for-sale$290,520 $5,011 $(1,047)$294,484 
    
December 31, 2020
Available for sale
U.S. Treasury Note$9,989 $11 $ 10,000 
Corporate Bonds57,478 1,863  59,341 
U.S. Government agency obligations19,787 89 (201)19,675 
Obligations issued by U.S. states and their political
   subdivisions
23,280 1,515  24,795 
Mortgage-backed securities:
Residential one-to-four family
71,773 951 (8)72,716 
Multifamily
56,563 1,499 (2)58,060 
Total available-for-sale$238,870 $5,928 $(211)$244,587 





13



The amortized cost of securities held-to-maturity and their estimated fair values at June 30, 2021 and December 31, 2020, are as follows:

Amortized Cost
Gross Unrecognized Gains
Gross Unrecognized Losses
Estimated
Fair
Value
(In thousands)
June 30, 2021
Held-to-maturity
Collateralized loan obligation$3,002 $ $(1)$3,001 
Total held-to-maturity$3,002 $ $(1)$3,001 
Amortized Cost
Gross Unrecognized Gains
Gross Unrecognized Losses
Estimated
Fair
Value
(In thousands)
December 31, 2020
Held-to-maturity
Collateralized loan obligation$7,005 $ $(26)$6,979 
Total Held-to-maturity$7,005 $ $(26)$6,979 

Proceeds from sales and calls of available-for-sale securities totaled $2.3 million and $4.0 million in the three and six months ended June 30, 2021 and $2.3 million and $5.0 million in the three and six months ended June 30, 2020.

There were no OTTI charges for the three and six months ended June 30, 2021 or June 30, 2020, respectively.

The amortized cost and fair value of debt securities are shown below by contractual maturity. Expected maturities on mortgage-backed securities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without penalties. Securities not due at a single maturity are shown separately:

June 30, 2021
Amortized
Cost
Estimated
Fair Value
(In thousands)
Available-for-sale
Due in one year or less$25,539 $25,575 
Due from one year to five years67,762 70,051 
Due from five to ten years36,020 36,897 
Due after ten years4,982 4,870 
Mortgage-backed securities156,217 157,091 
Total$290,520 $294,484 
Held-to-maturity
Due in one year or less$3,002 $3,001 
Total$3,002 $3,001 






14


The following tables summarize available-for-sale securities with unrealized losses at June 30, 2021 and December 31, 2020, aggregated by major security type and length of time in a continuous loss position.

Less than 12 Months12 Months or MoreTotal
Unrealized Losses
Estimated
Fair Value
Unrealized Losses
Estimated
Fair Value
Unrealized Losses
Estimated
Fair Value
(In thousands)
June 30, 2021
Available for sale
U.S. Treasury Note$(97)$6,802 $ $ $(97)$6,802 
Corporate Bonds(60)7,581   (60)7,581 
U.S. Government
   agency obligations
(85)12,096 (184)9,036 (269)21,132 
Obligations issued by
   U.S. states and their
   political subdivisions
      
Mortgage-backed
   securities:
Residential one-to-four
    family
(566)68,762 (1)28 (567)68,790 
Multifamily(54)1,228  229 (54)1,457 
Total available-for-sale$(862)$96,469 $(185)$9,293 $(1,047)$105,762 
December 31, 2020
Available for sale
U.S. Treasury Note$ $ $ $ $ $ 
Corporate Bonds      
U.S. Government
   agency obligations
(54)3,559 (147)10,014 (201)13,573 
Obligations issued by
   U.S. states and their
   political subdivisions
      
Mortgage-backed
   securities:
Residential one-to-four
    family
(7)3,228 (1)115 (8)3,343 
Multifamily(2)738  313 (2)1,051 
Total available-for-sale$(63)$7,525 $(148)$10,442 $(211)$17,967 

There were no held to maturity securities in an unrecognized loss position for more than twelve months at June 30, 2021. There was one collateralized loan obligation held to maturity security with a fair value of $3.0 million, in an unrecognized loss position of $26 thousand at December 31, 2020. At June 30, 2021 there was one collateralized loan obligation held to maturity security with a fair value of $3.0 million, in an unrecognized loss position of $1 thousand.

On June 30, 2021, six U.S. Government agency obligations, one U.S Treasury, and nineteen mortgage-backed securities held by the Company were in an unrealized loss position in the available-for-sale portfolio. These securities were all issued by U.S. Government-sponsored entities and agencies, which the government has affirmed its commitment to support. There were also five investment grade corporate bonds in an unrealized loss position. The Company does not consider these securities to be other-than-temporarily impaired due to the decline in fair value being attributable to changes in interest rates and liquidity, not credit quality. The Company also does not intend to sell these securities, nor does it foresee being required to sell them before the anticipated recovery (maturity).

Securities pledged at June 30, 2021 and December 31, 2020, had a carrying amount of $10.7 million and $12.7 million, respectively, and were pledged to secure public deposits, FHLB Advances, repurchase agreements and derivatives.




15





NOTE 3 –