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Investment Securities

12 Months Ended

Dec. 31, 2024

(3)	Investment Securities

(a)	Debt securities available for sale

The amortized cost and fair value of the securities available for sale are as follows:

(dollars in thousands)	December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

U.S. government sponsored enterprises	$	86,833	$	4	$	1,220	$	85,617
State and political subdivisions		18		-		-		18
Mortgage backed securities and collateralized mortgage obligations - residential		239,420		114		26,406		213,128
Corporate bonds		45,033		-		452		44,581
Small Business Administration - guaranteed participation securities		15,471		-		1,330		14,141
Other		688		12		-		700
Total securities available for sale	$	387,463	$	130	$	29,408	$	358,185

(dollars in thousands)	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

U.S. government sponsored enterprises	$	121,728	$	5	$	3,065	$	118,668
State and political subdivisions		26		-		-		26
Mortgage backed securities and collateralized mortgage obligations - residential		263,182		270		25,775		237,677
Corporate bonds		80,150		-		2,098		78,052
Small Business Administration - guaranteed participation securities		18,740		-		1,554		17,186
Other		687		11		18		680
Total securities available for sale	$	484,513	$	286	$	32,510	$	452,289

The following table categorizes the amortized cost and fair value of debt securities included in the available for sale portfolio as of December 31, 2024, based on the securities’ final maturity. Actual maturities may differ because of securities prepayments and the right of certain issuers to call or prepay their obligations without penalty. Securities not due at a single maturity are shown separately:

(dollars in thousands)	Amortized Cost		Fair Value

Due in one year or less	$	70,130	$	69,623
Due in after one year through five years		50,442		49,332
Due after five years through ten years		12,000		11,961
Mortgage backed securities and collateralized mortgage obligations - residential		239,420		213,128
Small Business Administration - guaranteed participation securities		15,471		14,141
	$	387,463	$	358,185

Gross unrealized losses on securities available for sale and the related fair values aggregated by the length of time that individual securities have been in an unrealized loss position, were as follows:

(dollars in thousands)	December 31, 2024
	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unreal. Loss		Fair Value		Gross Unreal. Loss		Fair Value		Gross Unreal. Loss
U.S. government sponsored enterprises	$	11,961	$	38	$	68,651	$	1,182	$	80,612	$	1,220
Mortgage backed securities and collateralized mortgage obligations - residential		12,346		280		194,636		26,126		206,982		26,406
Corporate bonds		-		-		44,581		452		44,581		452
Small Business Administration - guaranteed participation securities		-		-		14,141		1,330		14,141		1,330

Total	$	24,307	$	318	$	322,009	$	29,090	$	346,316	$	29,408

(dollars in thousands)	December 31, 2023
	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unreal. Loss		Fair Value		Gross Unreal. Loss		Fair Value		Gross Unreal. Loss
U.S. government sponsored enterprises	$	-	$	-	$	116,163	$	3,065	$	116,163	$	3,065
Mortgage backed securities and collateralized mortgage obligations - residential		-		-		227,891		25,775		227,891		25,775
Corporate bonds		-		-		78,052		2,098		78,052		2,098
Small Business Administration - guaranteed participation securities		-		-		17,186		1,554		17,186		1,554
Other		-		-		631		18		631		18

Total	$	-	$	-	$	439,923	$	32,510	$	439,923	$	32,510

The proceeds from sales, calls/paydowns and maturities of securities available for sale, and gross realized gains and gross realized losses from sales during 2024, 2023, and 2022 are as follows:

	Years ended December 31,
(dollars in thousands)	2024		2023		2022

Proceeds from sales	$	-	$	-	$	-
Proceeds from calls/paydowns		68,119		53,503		68,954
Proceeds from maturities		70,608		5,008		15,057
Gross realized losses		-		-		-
Gross realized gains		-		-		-

The amount of securities pledged to secure short-term borrowings and for other purposes amounted to $149.5 million and $155.3 million at December 31, 2024 and 2023, respectively. There was no allowance for credit losses recorded for securities available for sale as of December 31, 2024 and 2023, respectively. All securities are performing in accordance with contractual terms.

(b)	Held to maturity securities

The amortized cost and fair value of the held to maturity securities are as follows:

	December 31, 2024
(dollars in thousands)	Amortized Cost			Gross Unrecognized Gains			Gross Unrecognized Losses			Fair Value
Mortgage backed securities and collateralized mortgage obligations - residential		$	5,365		$	45		$	104		$	5,306
Total held to maturity		$	5,365		$	45		$	104		$	5,306

	December 31, 2023
(dollars in thousands)	Amortized Cost			Gross Unrecognized Gains			Gross Unrecognized Losses			Fair Value
Mortgage backed securities and collateralized mortgage obligations - residential		$	6,458		$	74		$	136		$	6,396
Total held to maturity		$	6,458		$	74		$	136		$	6,396

The following table categorizes the debt securities included in the held to maturity portfolio as of December 31, 2024, based on the securities’ final maturity. Actual maturities may differ because of securities prepayments and the right of certain issuers to call or prepay their obligations without penalty. Securities not due at a single maturity date are shown separately.

(dollars in thousands)	Amortized Cost		Fair Value
Mortgage backed securities and collateralized mortgage obligations - residential	$	5,365		5,306
	$	5,365		5,306

Gross unrealized losses on held to maturity securities and the related fair values aggregated by the length of time that individual securities have been in an unrealized loss position, were as follows:

	December 31, 2024
(dollars in thousands)	Less than 12 months						12 months or more						Total
	Fair Value			Gross Unrec. Loss			Fair Value			Gross Unrec. Loss			Fair Value			Gross Unrec. Loss
Mortgage backed securities and collateralized mortgage obligations - residential		$	592		$	7		$	2,047		$	97		$	2,639		$	104
Total		$	592		$	7		$	2,047		$	97		$	2,639		$	104

	December 31, 2023
(dollars in thousands)	Less than 12 months						12 months or more						Total
	Fair Value			Gross Unrec. Loss			Fair Value			Gross Unrec. Loss			Fair Value			Gross Unrec. Loss
Mortgage backed securities and collateralized mortgage obligations - residential		$	283		$	3		$	2,703		$	133		$	2,986		$	136
Total		$	283		$	3		$	2,703		$	133		$	2,986		$	136

There were no allowance for credit losses recorded for held to maturity securities during 2024 and 2023 and as of December 31, 2024 and 2023. As of December 31, 2024 and 2023, there were no securities on non-accrual status and all securities were performing in accordance with contractual terms. All securities were investment grade.

(c)	Equity Securities

During the year ended December 31, 2024, Visa Inc. accepted the Company’s tender of its 6,528 shares of Visa Class B-1 common stock in exchange for a combination of Visa Class B-2 common stock and Visa Class C common stock. As a result, the Company marked its Visa Class C common stock to fair value and recorded an unrealized gain of $1.4 million. The Visa Class C common stock was sold during the year, thus resulting in no remaining carrying value on the Company’s Statement of Financial Condition. The Company originally obtained the shares in 2008. The carrying value of Visa B-2 shares is nominal as of December 31, 2024.

(d)	Concentrations

The Company has the following balances of securities held in the available for sale and held to maturity portfolios as of December 31, 2024 that represent greater than 10% of shareholders’ equity:

(dollars in thousands)	Amortized Cost		Fair Value
Federal National Mortgage Association	$	145,419	$	130,046
Federal Home Loan Mortgage Corporation		98,208		89,081

(e)	Securities in an unrealized loss position

As of December 31, 2024, the Company’s security portfolio included certain securities which were in an unrealized loss position, and are discussed below.

U.S. government sponsored enterprises

In the case of unrealized losses on U.S. government sponsored enterprises, because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the securities are investment grade rated and there were no material underlying credit downgrades during 2024. All securities are performing.

Mortgage backed securities and collateralized mortgage obligations – residential

At December 31, 2024, all mortgage backed securities and collateralized mortgage obligations held by the Company were issued by U.S. government sponsored entities and agencies, primarily Ginnie Mae, Fannie Mae and Freddie Mac, institutions which the government has affirmed its commitment to support. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the securities are investment grade rated and there were no material underlying credit downgrades during 2024. All securities are performing.

Small Business Administration (SBA) - guaranteed participation securities:

At December 31, 2024, all of the SBA securities held by the Company were issued and guaranteed by the U.S. Small Business Administration. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the securities are investment grade rated and there were no material underlying credit downgrades during 2024. All securities are performing.

Corporate Bonds

At December 31, 2024, corporate bonds held by the Company are investment grade quality. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the securities are investment grade rated and there were no material underlying credit downgrades during 2024. All securities are performing.