INVESTMENT SECURITIES

6 Months Ended

Jun. 30, 2022

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE 5. INVESTMENT SECURITIES

Investment securities have been classified according to management’s intent. The amortized cost of securities and their approximate fair values are as follows:

	June 30, 2022
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available-for-sale
Mortgage-backed securities	$	74,230	$	6	$	(7,108)	$	67,128
U.S. Government and agency obligations		10,976		-		(787)		10,189
Municipal obligations		5,481		7		(529)		4,959
Total available-for-sale	$	90,687	$	13	$	(8,424)	$	82,276
Securities held-to-maturity
U.S. Government and agency obligations	$	13,013	$	-	$	(1,953)	$	11,060
Municipal obligations		473		-		(31)		442
Total held-to-maturity	$	13,486	$	-	$	(1,984)	$	11,502

	December 31, 2021
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available-for-sale
Mortgage-backed securities	$	75,374	$	87	$	(798)	$	74,663
U.S. Government and agency obligations		9,347		1		(111)		9,237
Municipal obligations		4,482		-		(43)		4,439
Total available-for-sale	$	89,203	$	88	$	(952)	$	88,339
Securities held-to-maturity
U.S. Government and agency obligations	$	13,019	$	23	$	(375)	$	12,667
Municipal obligations		479		6		-		485
Total held-to-maturity	$	13,498	$	29	$	(375)	$	13,152

There were no securities transferred between classifications during the six months ended June 30, 2022 or 2021.

Investment securities with a carrying amount of approximately $11.6 million and $10.2 million, respectively, were pledged to secure deposits as required or permitted by law at June 30, 2022 and December 31, 2021.

The following is a summary of maturities of securities held-to-maturity and available-for-sale at June 30, 2022 and December 31, 2021:

	June 30, 2022
	Available-for-Sale				Held-to-Maturity
(Dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Amounts maturing in:
One year or less	$	-	$	-	$	-	$	-
After one through five years		11,371		10,749		-		-
After five through ten years		13,890		12,951		9,473		8,096
After ten years		65,426		58,576		4,013		3,406
Total	$	90,687	$	82,276	$	13,486	$	11,502

	December 31, 2021
	Available-for-Sale				Held-to-Maturity
(Dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Amounts maturing in:
One year or less	$	-	$	-	$	-	$	-
After one through five years		8,431		8,396		-		-
After five through ten years		12,695		12,604		9,479		9,157
After ten years		68,077		67,339		4,019		3,995
Total	$	89,203	$	88,339	$	13,498	$	13,152

Securities are classified according to their contractual maturities without consideration of principal amortization, potential prepayments, or call options. The expected maturities may differ from contractual maturities because of the exercise of call options and potential paydowns. Accordingly, actual maturities may differ from contractual maturities.

Information pertaining to securities with gross 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 loss position, follows:

	June 30, 2022
	Less than 12 Months				12 Months or Greater				Total
(Dollars in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Securities available-for-sale
Mortgage-backed securities	$	58,861	$	(5,993)	$	7,129	$	(1,115)	$	65,990	$	(7,108)
U.S. Government and agency obligations		8,505		(471)		1,684		(316)		10,189		(787)
Municipal obligations		2,899		(388)		1,023		(141)		3,922		(529)
Total available-for-sale	$	70,265	$	(6,852)	$	9,836	$	(1,572)	$	80,101	$	(8,424)
Securities held-to-maturity
U.S. Government and agency obligations	$	2,623	$	(389)	$	8,436	$	(1,564)	$	11,059	$	(1,953)
Municipal obligations		443		(31)		-		-		443		(31)
Total held-to-maturity	$	3,066	$	(420)	$	8,436	$	(1,564)	$	11,502	$	(1,984)
Total	$	73,331	$	(7,272)	$	18,272	$	(3,136)	$	91,603	$	(10,408)

	December 31, 2021
	Less than 12 Months				12 Months or Greater				Total
(Dollars in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Securities available-for-sale
Mortgage-backed securities	$	68,412	$	(746)	$	1,889	$	(52)	$	70,301	$	(798)
U.S. Government and agency obligations		5,697		(24)		1,913		(87)		7,610		(111)
Municipal obligations		3,283		(24)		1,156		(19)		4,439		(43)
Total available-for-sale	$	77,392	$	(794)	$	4,958	$	(158)	$	82,350	$	(952)
Securities held-to-maturity
U.S. Government and agency obligations	$	1,940	$	(61)	$	7,685	$	(314)	$	9,625	$	(375)
Municipal obligations		-		-		-		-		-		-
Total held-to-maturity	$	1,940	$	(61)	$	7,685	$	(314)	$	9,625	$	(375)
Total	$	79,332	$	(855)	$	12,643	$	(472)	$	91,975	$	(1,327)

Management evaluates securities for other-than-temporary impairment at least quarterly, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to the length of time and the extent to which that fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

At June 30, 2022, the Company held 90 securities with an unrealized loss, compared to 67 securities with an unrealized loss at December 31, 2021. The securities in unrealized loss positions consisted of government-sponsored mortgage-backed securities and debt obligations guaranteed by federal, state and local government entities. These unrealized losses relate principally to current interest rates for similar types of securities. In analyzing an issuer's financial condition, management considers whether the securities are issued by the federal government, its agencies, or other governments, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer's financial condition. As management has the intent and ability to hold securities until maturity, or for the foreseeable future if classified as available-for-sale, no declines are deemed to be other-than-temporary.