SECURITIES

12 Months Ended

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Debt Securities

The amortized cost of securities available-for-sale and their estimated fair values at December 31, 2023 and 2022 are as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(In thousands)
December 31, 2023
U.S. Treasury Notes	$	36,935	$	—	$	(1,875)	$	35,060
Corporate Bonds	82,248		56		(5,681)		76,623
U.S. Government agency obligations	11,519		—		(379)		11,140
Obligations issued by U.S. states and their political subdivisions	6,423		—		(228)		6,195
Mortgage-backed securities:
Residential one-to-four family	149,808		—		(21,266)		128,542
Multifamily	12,522		—		(999)		11,523
Asset-backed securities	15,010		—		(327)		14,683
Total	$	314,465	$	56	$	(30,755)	$	283,766


December 31, 2022
U.S. Treasury Notes	$	46,937	$	—	$	(3,178)	$	43,759
Corporate Bonds	81,725		4		(5,431)		76,298
U.S. Government agency obligations	12,248		—		(782)		11,466
Obligations issued by U.S. states and their political subdivisions	16,559		49		(340)		16,268
Mortgage-backed securities:
Residential one-to-four family	164,843		—		(24,657)		140,186
Multifamily	19,475		—		(1,317)		18,158
Asset-backed securities	8,644		—		(531)		8,113
Total	$	350,431	$	53	$	(36,236)	$	314,248

The amortized cost of securities held-to-maturity, allowance for credit losses and their estimated fair values at December 31, 2023 and 2022, are as follows:


	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Estimated Fair Value
	(In thousands)
December 31, 2023

Asset-backed securities	$	14,812	$	—	$	(1,496)	$	13,316
Corporate bonds	18,600		—		(3,593)		15,007
Total	$	33,412	$	—	$	(5,089)	28,323
Allowance for credit loss							(158)
							$	28,165

December 31, 2022

Asset-backed securities	$	15,105	$	—	$	(2,309)	$	12,796
Corporate bonds	18,600		—		(2,281)		16,319
Total	$	33,705	$	—	$	(4,590)	$	29,115

At December 31, 2023, the allowance for credit losses on securities held-to-maturity totaled $158 thousand and related to the corporate bonds. The asset-backed securities are in an AAA tranche determined by a third party. No loss is expected on these securities.

During the year ended December 31, 2023, proceeds from sales of securities available-for-sale totaled $9.1 million, resulting in gross realized gains of $49 thousand and $29 thousand gross realized losses and calls of securities totaled $2.5 million with no gains or losses. During the year ended December 31, 2022, there were no sales of securities available-for-sale and calls of securities available-for-sale totaled $4.7 million, resulting in $14 thousand gross realized gains and no gross realized losses.

Securities pledged at December 31, 2023 and December 31, 2022, had a carrying amount of $11.7 million and $4.2 million, respectively, and can be pledged to secure borrowings, public deposits and derivatives, as needed.

The amortized cost and fair value of debt securities are shown below by contractual maturity at December 31, 2023. Expected maturities on mortgage and asset-backed securities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without penalties.



	Amortized Cost		Estimated Fair Value
	(In thousands)
Available-for-sale
Due in one year or less	$	52,015	$	50,812
Due from one year to five years	33,984		32,914
Due from five to ten years	44,138		39,972
Due after ten years	6,988		5,320
	137,125		129,018
Mortgage-backed and asset-backed securities	177,340		154,748
Total	$	314,465	$	283,766
Held-to-maturity

Due from one year to five years	$	—	$	—
Due from five to ten years	18,600		15,007

	18,600		15,007
Mortgage-backed and asset-backed securities	14,812		13,316
Total	$	33,412	$	28,323

Credit Indicators

Credit ratings are a key measure for estimating the probability of a bond’s default and for monitoring credit quality on an on-going basis. For bonds other than U.S. Treasuries and bonds issued or guaranteed by U.S. government agencies, credit ratings issued by one or more nationally recognized statistical rating organization are considered in conjunction with an assessment by the Company’s management. Investment grade reflects a credit quality of BBB- or above. None of the Company’s securities are on non-accrual status, nor are any past due.

The table below indicates the credit profile of the Company’s debt securities held-to-maturity at amortized cost at December 31, 2023.


	AAA		A1		BBB+		BBB		BBB-		Total
	(In thousands)
Corporate bonds	$	—	$	—	$	1,600	$	11,000	$	6,000	$	18,600

Asset-backed securities	8,844		5,968		—		—		—		14,812
Total	$	8,844	$	5,968	$	1,600	$	11,000	$	6,000	$	33,412

At December 31, 2023, there was one security with a value of $2.0 million included in the BBB rating that had a split rating.

The following tables summarize available-for-sale securities with unrealized losses at December 31, 2023 and 2022, aggregated by major security type and length of time in a continuous loss position.


	Less than 12 Months				12 Months or More				Total
	Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Number of Securities	Unrealized Losses		Estimated Fair Value
	(Dollars in thousands)
December 31, 2023
U.S. Treasury Note	$	—	$	—	$	(1,875)	$	35,060	4	$	(1,875)	$	35,060
Corporate Bonds	(7)		8,260		(5,674)		61,156		30	(5,681)		69,416
U.S. Government agency obligations	—		—		(380)		11,140		3	(379)		11,140
Obligations issued by U.S. states and their political subdivisions	—		—		(228)		6,195		5	(228)		6,195
Mortgage-backed securities:
Residential one-to-four family	—		2		(21,266)		128,535		48	(21,266)		128,537
Multifamily	—		—		(999)		11,524		6	(999)		11,524
Asset-backed securities	(21)		4,991		(305)		4,680		3	(327)		9,671
Total available-for-sale	$	(28)	$	13,253	$	(30,727)	$	258,290	99	$	(30,755)	$	271,543

December 31, 2022
U.S. Treasury Note	$	(1,342)	$	28,670	$	(1,836)	$	15,089	5	$	(3,178)	$	43,759
Corporate Bonds	(3,608)		58,509		(1,823)		15,522		31	(5,431)		74,031
U.S. Government agency obligations	(5)		696		(777)		10,770		4	(782)		11,466
Obligations issued by U.S. states and their political subdivisions	(65)		5,641		(275)		1,568		8	(340)		7,209
Mortgage-backed securities:
Residential one-to-four family	(8,273)		60,986		(16,384)		79,189		49	(24,657)		140,175
Multifamily	(1,166)		17,689		(151)		469		5	(1,317)		18,158
Asset-backed securities	—		—		(531)		8,113		3	(531)		8,113
Total available-for-sale	$	(14,459)	$	172,191	$	(21,777)	$	130,720	105	$	(36,236)	$	302,911

Of the available-for-sale securities in an unrealized loss position at December 31, 2023, 61 are comprised of U.S. Government agency obligations, Treasury notes, and mortgage-backed securities. These securities were all issued by U.S. Government-sponsored entities and agencies, which the government has affirmed its commitment to support. Corporate bonds, obligations issued by U.S. states and their political subdivisions and asset-backed securities in an unrealized loss position all experienced a decline in fair value, which is attributable to changes in interest rates and liquidity, not credit quality. The Company does not intend to sell these securities, nor does it foresee being required to sell them before the anticipated recovery or maturity.

The following table summarizes held-to-maturity securities with unrealized losses at December 31, 2023 and December 31, 2022 aggregated by major security type and length of time in a continuous loss position.


	Less than 12 Months				12 Months or More				Total
	Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Number of Securities	Unrealized Losses		Estimated Fair Value
	(Dollars in thousands)
December 31, 2023
Corporate Bonds	$	—	$	—	$	(3,593)	$	15,007	9	$	(3,593)	$	15,007
Asset-backed securities	—		—		(1,496)		13,316		2	(1,496)		13,316
Total held-to-maturity	$	—	$	—	$	(5,089)	$	28,323	11	$	(5,089)	$	28,323


	Less than 12 Months				12 Months or More				Total
	Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Number of Securities	Unrealized Losses		Estimated Fair Value
	(In thousands)
December 31, 2022
Corporate Bonds	$	(1,177)	$	10,423	$	(1,104)	$	5,896	9	$	(2,281)	$	16,319
Asset-backed securities	—		—		(2,310)		12,796		2	(2,310)		12,796
Total held-to-maturity	$	(1,177)	$	10,423	$	(3,414)	$	18,692	11	$	(4,591)	$	29,115

The held-to-maturity securities in an unrealized loss position at December 31, 2023, are corporate bonds and asset-backed securities, which experienced a decline in fair value 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 or maturity.

FHLB Stock and Other Investments

At December 31, 2023, other investments primarily consisted of investments in FHLB stock, and to a much lesser extent, investments in a financial technology fund and a community banking core provider cooperative. Other investments carried at fair value totaled $20.2 million and $15.9 million at December 31, 2023 and 2022, respectively. The investment in a financial technology fund is carried at net asset value (“NAV”) and totaled $109 thousand at December 31, 2023 and $157 thousand at December 31, 2022. The Company recorded a net increase in the NAV of $78 thousand for the year ended December 31, 2023 and a net decrease of $7 thousand for the year ended December 31, 2022 as a component of other income. The Company's unfunded commitments related to the financial technology fund totaled $820 thousand at December 31, 2023.