INVESTMENT SECURITIES

12 Months Ended

Dec. 31, 2022

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE 4. 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:

	December 31, 2022
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available-for-sale
Mortgage-backed securities	$	74,044	$	15	$	(9,892)	$	64,167
U.S. Government and agency obligations		10,979		-		(1,062)		9,917
Municipal obligations		6,065		4		(551)		5,518
Total available-for-sale	$	91,088	$	19	$	(11,505)	$	79,602
Securities held-to-maturity
U.S. Government and agency obligations	$	13,006	$	-	$	(2,718)	$	10,288
Municipal obligations		469		-		(33)		436
Total held-to-maturity	$	13,475	$	-	$	(2,751)	$	10,724

	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 years ended December 31, 2022 and 2021.

Investment securities with a carrying amount of approximately $20.4 million and $10.2 million, respectively, were pledged to secure deposits as required or permitted by law at December 31, 2022 and December 31, 2021.

At December 31, 2022, we had no investments in a single issuer other than securities issued by U.S. Government agencies or U.S. Government sponsored enterprises, which had an aggregate book value in excess of 10% of the Company’s shareholders’ equity.

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

	December 31, 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	$	1,000	$	962	$	-	$	-
After one through five years		11,496		10,634		2,343		2,031
After five through ten years		17,139		15,699		7,125		5,611
After ten years		61,453		52,307		4,007		3,082
Total	$	91,088	$	79,602	$	13,475	$	10,724

	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 December 31, 2022 and December 31, 2021 aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows:

	December 31, 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	$	9,759	$	(546)	$	53,402	$	(9,346)	$	63,161	$	(9,892)
U.S. Government and agency obligations		-		-		9,917		(1,062)		9,917		(1,062)
Municipal obligations		602		(16)		3,885		(535)		4,487		(551)
Total available-for-sale	$	10,361	$	(562)	$	67,204	$	(10,943)	$	77,565	$	(11,505)
Securities held-to-maturity
U.S. Government and agency obligations	$	-	$	-	$	10,288	$	(2,718)	$	10,288	$	(2,718)
Municipal obligations		120		(6)		316		(27)		436		(33)
Total held-to-maturity	$	120	$	(6)	$	10,604	$	(2,745)	$	10,724	$	(2,751)
Total	$	10,481	$	(568)	$	77,808	$	(13,688)	$	88,289	$	(14,256)

	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 December 31, 2022, the Company held 96 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 were deemed to be other-than-temporary.