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INVESTMENT SECURITIES
 12 Months Ended
Dec. 31, 2022
INVESTMENT SECURITIES [Abstract]  
INVESTMENT SECURITIES
4. INVESTMENT SECURITIES


The amortized cost, gross unrealized gains and losses, and fair value of investment securities at December 31, 2022 and 2021 were as follows (in thousands):

December 31, 2022
  
Amortized
Cost
    
Gross
Unrealized
Gains
    
Gross
Unrealized
Losses
    
Fair
Value
  
Available-for-sale securities:
                        
U.S. Agency securities
  
$
78,556
    
$
-
    
$
(7,879
)
  
$
70,677
  
U.S. Treasuries
    
162,236
      
-
      
(13,666
)
    
148,570
  
Obligations of state and political subdivisions
    
120,562
      
35
      
(10,297
)
    
110,300
  
Corporate obligations
    
10,335
      
-
      
(952
)
    
9,383
  
Mortgage-backed securities in government sponsored entities
    
115,304
      
15
      
(14,743
)
    
100,576
  
Total available-for-sale securities
  
$
486,993
    
$
50
    
$
(47,537
)
  
$
439,506
  

December 31, 2021
  
Amortized
Cost
    
Gross
Unrealized
Gains
    
Gross
Unrealized
Losses
    
Fair
Value
  
Available-for-sale securities:
                        
U.S. Agency securities
  
$
73,803
    
$
976
    
$
(834
)
  
$
73,945
  
U.S. Treasuries
    
116,743
      
63
      
(1,459
)
    
115,347
  
Obligations of state and political subdivisions
    
109,367
      
2,706
      
(52
)
    
112,021
  
Corporate obligations
    
10,378
      
39
      
(84
)
    
10,333
  
Mortgage-backed securities in government sponsored entities
    
101,727
      
597
      
(1,568
)
    
100,756
  
Total available-for-sale securities
  
$
412,018
    
$
4,381
    
$
(3,997
)
  
$
412,402
  


The following table shows the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time, that the individual securities have been in a continuous unrealized loss position, at December 31, 2022 and 2021 (in thousands). As of December 31, 2022, the Company owned 361 securities each of whose fair value was less than its cost basis.

 
Less than Twelve Months
    
Twelve Months or Greater
    
Total
  
 
2022
  
Fair
Value
    
Gross
Unrealized
Losses
    
Fair
Value
    
Gross
Unrealized
Losses
    
Fair
Value
    
Gross
Unrealized
Losses
  
U.S. agency securities
  
$
39,729
    
$
(1,892
)
  
$
30,948
    
$
(5,987
)
  
$
70,677
    
$
(7,879
)
U.S. Treasuries     32,673       (1,337 )     115,897       (12,329 )     148,570       (13,666 )
Obligations of states and political subdivisions
    
66,725
      
(4,887
)
    
35,782
      
(5,410
)
    
102,507
      
(10,297
)
Corporate obligations     2,165       (165 )     6,218       (787 )     8,383       (952 )
Mortgage-backed securities in government sponsored entities
    
40,270
      
(3,367
)
    
57,319
      
(11,376
)
    
97,589
      
(14,743
)
Total securities
  
$
181,562
    
$
(11,648
)
  
$
246,164
    
$
(35,889
)
  
$
427,726
    
$
(47,537
)

                                               
2021
                                                
U.S. agency securities
  
$
26,754
    
$
(387
)
  
$
7,542
    
$
(447
)
  
$
34,296
    
$
(834
)
U.S. Treasuries
     106,794       (1,459 )     -       -       106,794       (1,459 )
Obligations of states and political subdivisions
    
10,744
      
(26
)
    
2,899
      
(26
)
    
13,643
      
(52
)
Corporate obligations
     6,922       (84 )     -       -       6,922       (84 )
Mortgage-backed securities in government sponsored entities
    
60,182
      
(1,305
)
    
7,975
      
(263
)
    
68,157
      
(1,568
)
Total securities
  
$
211,396
    
$
(3,261
)
  
$
18,416
    
$
(736
)
  
$
229,812
    
$
(3,997
)



As of December 31, 2022, the Company’s investment securities portfolio contained unrealized losses on U.S. Treasuries, agency securities issued or backed by the full faith and credit of the United States government or are generally viewed as having the implied guarantee of the U.S. government, obligations of states and political subdivisions, corporate obligations and mortgage backed securities in government sponsored entities. For fixed maturity available for sale investments management considers whether the present value of cash flows expected to be collected are less than the security’s amortized cost basis (the difference defined as the credit loss), the magnitude and duration of the decline, the reasons underlying the decline and the Company’s intent to sell the security or whether it is more likely than not that the Company would be required to sell the security before its anticipated recovery in market value, to determine whether the loss in value is other than temporary. Once a decline in value is determined to be other than temporary, if the Company does not intend to sell the security, and it is more-likely-than-not that it will not be required to sell the security, before recovery of the security’s amortized cost basis, the charge to earnings is limited to the amount of credit loss. Any remaining difference between fair value and amortized cost (the difference defined as the non-credit portion) is recognized in other comprehensive income, net of applicable taxes. Otherwise, the entire difference between fair value and amortized cost is charged to earnings. As of December 31, 2022 and 2021, the Company had concluded that any impairment of its investment securities portfolio outlined in the above table is not other than temporary and is the result of interest rate changes, sector credit rating changes, or company-specific rating changes that are not expected to result in the non-collection of principal and interest during the period.


Proceeds from sales of securities available-for-sale during 2022, 2021 and 2020 were $7,480,000, $29,198,000 and $23,415,000, respectively. The gross losses realized during 2022 consisted of $14,000 from the sales of three agency securities. The gross gains realized during 2021 consisted of $177,000 and $125,000 from the sales of six treasury securities and three agency securities, respectively. The gross losses realized during 2021 consisted of $90,000 from the sale of one agency security. The gross gains realized during 2020 consisted of $344,000 from the sales of seventeen mortgage backed securities. The gross losses realized during 2020 consisted of $39,000 from the sale of two mortgage backed securities. Gross gains and gross losses were realized as follows on available for sale securities (in thousands):

 
2022
    
2021
    
2020
  
Gross gains
  
$
-
    
$
302
    
$
344
  
Gross losses
    
(14
)
    
(90
)
    
(39
)
Net (losses) gains
  
$
(14
)
  
$
212
    
$
305
  



The following table presents the net gains (losses) on the Company’s equity investments recognized in earnings during 2022, 2021 and 2020 and the portion of unrealized gains for the period that relates to equity investments held at December 31, 2022, 2021 and 2020 (in thousands):

Equity Securities
  
2022
    
2021
    
2020
  
Net (losses) gains on in equity securities held during the period
  
$
(251
)
  
$
339
    
$
(109
)
Less: Net gains realized on the sale of equity securities during the period
    
4
      
-
      
68
  
Net unrealized gains (losses) recognized in earnings
  
$
(247
)
  
$
339
    
$
(41
)


Investment securities with an approximate carrying value of $311,766,000 and $295,028,000 at December 31, 2022 and 2021, respectively, were pledged to secure public funds and certain other deposits as provided by law and certain borrowing arrangements of the Company.


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. The amortized cost and fair value of debt securities at December 31, 2022, by contractual maturity are shown below (in thousands). Municipal securities that have been refunded and will therefore pay-off on the call date are reflected in the table below utilizing the call date as the date of repayment as payment is guaranteed on that date:

Available-for-sale securities:
  
Amortized Cost
    
Fair Value
  
Due in one year or less
  
$
22,327
    
$
21,863
  
Due after one year through five years
    
195,401
      
180,261
  
Due after five years through ten years
    
103,463
      
92,019
  
Due after ten years
    
165,802
      
145,363
  
Total
  
$
486,993
    
$
439,506