Investment Securities

3 Months Ended

Mar. 31, 2024

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Note 3 – Investment Securities

The following summarizes the amortized cost and fair value of securities available-for-sale at March 31, 2024 and December 31, 2023 with gross unrealized gains and losses therein:

	March 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
			(In thousands)
Available-for-sale
Mortgage-backed securities - U.S. government sponsored enterprises (GSEs)	$	71,266	$	153	$	(6,578	)	$	64,841
U.S. government agency securities		11,260		—		(1,078	)		10,182
Obligations of state and political subdivisions		44,056		2		(3,378	)		40,680
Small business association (SBA) securities		2,392		5		(2	)		2,395
Total	$	128,974	$	160	$	(11,036	)	$	118,098

	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
			(In thousands)
Available-for-sale
Mortgage-backed securities - U.S. government sponsored enterprises (GSEs)	$	48,399	$	219	$	(5,984	)	$	42,634
U.S. government agency securities		6,260		—		(969	)		5,291
Obligations of state and political subdivisions		44,059		12		(3,262	)		40,809
Small business association (SBA) securities		2,617		2		(1	)		2,618
Total	$	101,335	$	233	$	(10,216	)	$	91,352

The unrealized losses, categorized by the length of time of continuous loss position, and the fair value of related securities available-for-sale at March 31, 2024 and December 31, 2023 are as follows:

	Less than 12 Months					More than 12 Months					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
						(In thousands)
March 31, 2024
Mortgage-backed securities - U.S. government sponsored enterprises (GSEs)	$	7,494	$	(114	)	$	30,206	$	(6,464	)	$	37,700	$	(6,578	)
U.S. government agency securities		4,998		(2	)		5,184		(1,076	)		10,182		(1,078	)
Obligations of state and political subdivisions		6,788		(108	)		31,196		(3,270	)		37,984		(3,378	)
Small business association (SBA) securities		816		(2	)		—		—			816		(2	)
Total	$	20,096	$	(226	)	$	66,586	$	(10,810	)	$	86,682	$	(11,036	)

	Less than 12 Months					More than 12 Months					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
						(In thousands)
December 31, 2023
Mortgage-backed securities - U.S. government sponsored enterprises (GSEs)	$	2,858	$	(14	)	$	31,398	$	(5,970	)	$	34,256	$	(5,984	)
U.S. government agency securities		—		—			5,291		(969	)		5,291		(969	)
Obligations of state and political subdivisions		5,117		(102	)		30,646		(3,160	)		35,763		(3,262	)
Small business association (SBA) securities		723		(1	)		—		—			723		(1	)
	$	8,698	$	(117	)	$	67,335	$	(10,099	)	$	76,033	$	(10,216	)

The amortized cost and fair value of securities available-for-sale at March 31, 2024 by contractual maturity are shown below. Expected maturities will differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties:

	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	285	$	284
Due after one year through five years		8,454		8,263
Due after five years through ten years		34,437		32,065
Due after ten years		12,140		10,250
Mortgage-backed securities (GSEs)		71,266		64,841
Small business association (SBA) securities		2,392		2,395
	$	128,974	$	118,098

Proceeds from calls and maturities of securities available-for-sale were not significant for the three-month period ended March 31, 2024.

The Company uses a defined CECL methodology for allowance for credit losses on its investment securities available-for-sale. The Company did not have an allowance for credit losses on its investment securities available-for-sale as of March 31, 2024.

The Company’s securities primarily consist of the following types of instruments; U.S. guaranteed mortgage-backed securities, U.S guaranteed agency bonds, state and political subdivision issued bonds and mortgage related securities guaranteed by the SBA We believe it is reasonable to expect that the securities with a credit guarantee of the U.S. government will have a zero-credit loss. Therefore, no reserve was recorded for U.S. guaranteed securities or bonds at March 31, 2024. The state and political subdivision securities carry a minimum investment rating of A by either Moody’s or Standard and Poor. Some of the smaller municipalities also have insurance to cover the Company in the event of default. Therefore, the Company did not project a credit loss and therefore no reserve was recorded as of March 31, 2024.

At March 31, 2024, the Company’s available-for-sale securities portfolio consisted of approximately 227 securities, of which 164 available-for-sale securities were in an unrealized loss position for more than twelve months and 30 available-for-sale securities were in a loss position for less than twelve months. The available-for-sale securities in a loss position for more than twelve months consisted of 98 municipal securities aggregating $31.2 million with a loss of $3.3 million, 62 mortgage-backed securities-GSE aggregating $30.2 million with a loss of $6.5 million and four agency securities aggregating $5.2 million with a loss of $1.1 million. The Company does not intend to sell these securities, and it is not more likely than not that we will be required to sell these securities before recovery of their amortized cost basis. Unrealized losses primarily relate to interest rate fluctuations and not credit concerns.

There are no securities pledged as of March 31, 2024, and December 31, 2023.