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SECURITIES
12 Months Ended
Dec. 31, 2023
SECURITIES  
SECURITIES

NOTE 2 — SECURITIES

Debt Securities

There was no allowance for credit losses for Available-For-Sale debt securities as of December 31, 2023; therefore, it is not present in the table below. The amortized cost, related estimated fair value, and unrealized gains and losses for debt securities classified as Available-For-Sale were as follows at December 31, 2023 and 2022:

Debt Securities Available-for-Sale

(Dollars in thousands)

    

    

Gross

    

Gross

    

Amortized

Unrealized

Unrealized

Fair

December 31, 2023:

Cost

Gains

Losses

Value

U.S. Treasury securities

$

7,881

$

$

(840)

$

7,041

Obligations of U.S. Government Agencies and Sponsored Agencies:

 

 

 

 

Mortgage-backed

152,510

(14,518)

137,992

Other

 

7,560

 

126

 

(54)

 

7,632

Other mortgage backed securities

 

36,623

 

168

 

(2,741)

 

34,050

Obligations of state and political subdivisions

 

97,899

 

18

 

(10,214)

 

87,703

Asset-backed securities

 

82,852

 

150

 

(840)

 

82,162

Corporate debt securities

 

40,647

 

74

 

(4,333)

 

36,388

Total

$

425,972

$

536

$

(33,540)

$

392,968

Debt Securities Available-for-Sale

(Dollars in thousands)

    

    

Gross

    

Gross

    

Amortized

Unrealized

Unrealized

Fair

December 31, 2022:

Cost

Gains

Losses

Value

U.S. Treasury securities

$

7,853

$

$

(1,052)

$

6,801

Obligations of U.S. Government Agencies and Sponsored Agencies:

 

 

 

 

Mortgage-backed

146,707

(15,032)

131,675

Other

 

10,992

 

233

 

(45)

 

11,180

Other mortgage backed securities

 

36,767

 

 

(3,079)

 

33,688

Obligations of state and political subdivisions

 

125,176

 

266

 

(14,753)

 

110,689

Asset-backed securities

 

37,526

 

 

(1,108)

 

36,418

Corporate debt securities

 

45,838

 

183

 

(3,028)

 

42,993

Total

$

410,859

$

682

$

(38,097)

$

373,444

Debt securities available-for-sale with an aggregate fair value of $249,114,000 at December 31, 2023 and $315,836,000 at December 31, 2022, were pledged to secure public funds, trust funds, securities sold under agreements to repurchase and the Federal Discount Window aggregating $182,050,000 at December 31, 2023 and $241,385,000 at December 31, 2022.

The amortized cost and fair value of securities, by contractual maturity, are shown below at December 31, 2023. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(Dollars in thousands)

Available-for-Sale

    

Amortized

    

Cost

Fair Value

1 year or less

$

9,283

$

9,282

Over 1 year through 5 years

 

27,963

 

26,457

Over 5 years through 10 years

 

66,364

 

58,915

Over 10 years

 

133,230

 

126,272

Mortgage-backed securities

 

189,132

 

172,042

Total

$

425,972

$

392,968

At December 31, 2023 and 2022, the Corporation had holdings of securities from the following issuers in excess of ten percent of consolidated stockholders’ equity (excluding holdings of the U.S. Government and U.S. Government Agencies and Corporations).

(Dollars in thousands)

    

 

Fair

 

December 31, 2023:

Value

 

Issuer

Sallie Mae Bank

$

25,737

Nelnet Student Loan Trust

 

15,486

Navient Student Loan Trust

13,179

(Dollars in thousands)

    

Fair

December 31, 2022:

Value

Issuer

Sallie Mae Bank

$

17,362

Proceeds from sales of investments in debt securities available-for-sale during 2023 and 2022 were $23,230,000 and $58,675,000 respectively. Gross gains realized on these sales were $447,000 and $221,000 respectively. Gross losses on these sales were $348,000 and $974,000 respectively.

The summary below shows the gross unrealized losses and fair value of the Corporation’s debt securities, aggregated by investment category, of which individual securities have been in a continuous unrealized loss position for less than 12 months or 12 months or more as of December 31, 2023 and 2022:

December 31, 2023

(Dollars in thousands)

Less Than 12 Months

12 Months or More

Total

Fair

Unrealized

Fair

Unrealized

Fair

Unrealized

Available-for-Sale:

    

Value

    

Loss

    

Value

    

Loss

    

Value

    

Loss

U.S. Treasury securities

$

$

$

7,041

$

(840)

$

7,041

$

(840)

Obligations of U.S. Government Agencies and Sponsored Agencies:

 

  

 

  

 

  

 

  

 

  

 

  

Mortgage-backed

23,103

(242)

102,608

(14,276)

125,711

(14,518)

Other

 

3,029

(54)

 

3,029

 

(54)

Other mortgage-backed debt securities

 

1,568

(1)

25,042

(2,740)

 

26,610

 

(2,741)

Obligations of state and political subdivisions

 

82,113

(10,214)

 

82,113

 

(10,214)

Asset-backed securities

 

52,862

(342)

12,726

(498)

 

65,588

 

(840)

Corporate debt securities

 

2,813

(270)

30,501

(4,063)

 

33,314

 

(4,333)

Total

$

80,346

$

(855)

$

263,060

$

(32,685)

$

343,406

$

(33,540)

December 31, 2022

(Dollars in thousands)

Less Than 12 Months

12 Months or More

Total

    

Fair

    

Unrealized

    

Fair

    

Unrealized

    

Fair

    

Unrealized

Available-for-Sale:

Value

Loss

Value

Loss

Value

Loss

U.S. Treasury securities

$

$

$

6,801

$

(1,052)

$

6,801

$

(1,052)

Obligations of U.S. Government Agencies and Sponsored Agencies:

 

  

 

  

 

  

 

  

 

  

 

  

Mortgage-backed

61,067

(2,184)

65,174

(12,848)

126,241

(15,032)

Other

 

1,589

(2)

3,168

(43)

 

4,757

 

(45)

Other mortgage-backed debt securities

 

16,167

(962)

17,521

(2,117)

 

33,688

 

(3,079)

Obligations of state and political subdivisions

 

56,565

(5,881)

35,704

(8,872)

 

92,269

 

(14,753)

Asset-backed securities

 

24,136

(405)

12,282

(703)

 

36,418

 

(1,108)

Corporate debt securities

 

15,827

(1,073)

18,345

(1,955)

 

34,172

 

(3,028)

Total

$

175,351

$

(10,507)

$

158,995

$

(27,590)

$

334,346

$

(38,097)

There were 177 individual debt securities in an unrealized loss position as of December 31, 2023, with a combined decline in value representing 7.75% of the debt securities portfolio. There were 183 individual debt securities in an unrealized loss position as of December 31, 2022, with their combined decline in value representing 9.11% of the debt securities portfolio.

The Corporation made a policy election to exclude accrued interest receivable from the amortized cost basis of debt securities available for sale. Accrued interest receivable on debt securities available for sale is reported as a component of accrued interest receivable on the Corporation’s consolidated balance sheet and totaled $2,487,000 as of December 31, 2023. Accrued interest receivable on debt securities available for sale is excluded from the estimate of credit losses.

All debt securities available for sale in an unrealized loss position, as of December 31, 2023, continue to perform as scheduled and we do not believe that there is a credit loss or that a provision for credit losses is necessary. Also, as part of our evaluation of our intent and ability to hold debt securities for a period of time sufficient to allow for any anticipated recovery in the market, we consider our investment strategies, cash flow needs, liquidity position, capital

adequacy and interest rate risk position. We do not currently intend to sell the debt securities within the portfolio and it is not more-likely-than-not that we will be required to sell the debt securities.

Management continues to monitor all of our debt securities with a high degree of scrutiny. There can be no assurance that we will not conclude in future periods that conditions existing at that time indicate some or all of its debt securities may be sold or would require a charge to earnings as a provision for credit losses in such periods.

Equity Securities

At December 31, 2023 and 2022, the Corporation had $1,482,000 and $1,699,000, respectively, in equity securities recorded at fair value. The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during 2023 and 2022:

(Dollars in thousands)

    

December 31, 2023

    

December 31, 2022

Net losses from market value fluctuations recognized during the period on equity securities

$

(217)

$

(93)

Less: Net gains recognized during the period on equity securities sold during the period

 

 

27

Net losses recognized during the reporting period on equity securities still held at the reporting date

$

(217)

$

(120)

The Corporation monitors the equity securities portfolio monthly with particular attention given to securities in a continuous loss position of at least ten percent for over twelve months. Based on the factors described above, management did not consider any equity securities to be impaired at December 31, 2023 or 2022.