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Investments
 3 Months Ended
Mar. 31, 2024
Investments [Abstract]  
Investments
Note 4 – Investments


The amortized cost, gross unrealized gains and losses, and fair value of investment securities at March 31, 2024 and December 31, 2023 were as follows (in thousands):

March 31, 2024
  
Amortized
Cost
    
Gross
Unrealized
Gains
    
Gross
Unrealized
Losses
      
Allowance
for Credit
Losses
    
Fair
Value
  
Available-for-sale securities:
                              
U.S. agency securities
  
$
63,572
    
$
2
    
$
(6,173
)
   $ -    
$
57,401
  
U.S. treasury securities
    
143,534
      
-
      
(9,421
)
     -      
134,113
  
Obligations of state and political subdivisions
    
106,054
      
12
      
(6,699
)
     -      
99,367
  
Corporate obligations
    
13,409
      
234
      
(1,340
)
     -      
12,303
  
Mortgage-backed securities in government sponsored entities
    
116,357
      
5
      
(14,681
)
     -      
101,681
  
Total available-for-sale securities
  
$
442,926
    
$
253
    
$
(38,314
)
   $ -    
$
404,865
  
                                         
December 31, 2023
                                        
Available-for-sale securities:
                          
           
U.S. agency securities
  
$
66,569
    
$
1
    
$
(5,799
)
   $ -    
$
60,771
  
U.S. treasury securities
    
152,485
      
-
      
(9,197
)
     -      
143,288
  
Obligations of state and political subdivisions
    
107,945
      
32
      
(6,190
)
     -      
101,787
  
Corporate obligations
    
13,394
      
245
      
(1,236
)
     -      
12,403
  
Mortgage-backed securities in government sponsored entities
    
112,950
      
7
      
(13,605
)
     -      
99,352
  
Total available-for-sale securities
  
$
453,343
    
$
285
    
$
(36,027
)
   $
-    
$
417,601
  


The following table shows the Company’s gross unrealized losses and fair value of the Company’s investments with unrealized losses for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time, which individual securities have been in a continuous unrealized loss position, at March 31, 2024 and December 31, 2023 (in thousands). As of March 31, 2024, the Company owned 323 securities whose fair value was less than their cost basis.

March 31, 2024
  
Less than Twelve Months
    
Twelve Months or Greater
    
Total
  
 
Fair
Value
    
Gross
Unrealized
Losses
    
Fair
Value
    
Gross
Unrealized
Losses
    
Fair
Value
    
Gross
Unrealized
Losses
  
U.S. agency securities
  
$
-
    
$
-
 
$
55,384
    
$
(6,173
)
  
$
55,384
    
$
(6,173
)
U.S. treasury securities
    
-
      
-
   
134,113
      
(9,421
)
    
134,113
      
(9,421
)
Obligations of state and political subdivisions
    
881
      
(1
)
    
91,299
      
(6,698
)
    
92,180
      
(6,699
)
Corporate obligations
    
1,494
      
(263
)
    
8,203
      
(1,077
)
    
9,697
      
(1,340
)
Mortgage-backed securities in government sponsored entities
    
14,650
      
(188
)
    
85,547
      
(14,493
)
    
100,197
      
(14,681
)
Total securities
  
$
17,025
    
$
(452
)
  
$
374,546
    
$
(37,862
)
  
$
391,571
    
$
(38,314
)
                                                 
December 31, 2023
                                                
U.S. agency securities
  
$
-
    
$
-
 
$
58,753
    
$
(5,799
)
  
$
58,753
    
$
(5,799
)
U.S. treasury securities
    -       -     143,288       (9,197 )     143,288       (9,197 )
Obligations of states and political subdivisions
    
-
      
-
   
93,535
      
(6,190
)
    
93,535
      
(6,190
)
Corporate obligations
    1,487       (265 )     8,320       (971 )     9,807       (1,236 )
Mortgage-backed securities in government sponsored entities
    
9,203
      
(31
)
    
88,553
      
(13,574
)
    
97,756
      
(13,605
)
Total securities
  
$
10,690
    
$
(296
)
  
$
392,449
    
$
(35,731
)
  
$
403,139
    
$
(36,027
)


Allowance for Credit Losses – Available for Sale Securities



The Company measures expected credit losses on available-for-sale debt securities when the Company does not intend to sell, or when it is not more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available-for-sale debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this evaluation indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, equal to the amount that the fair value is less than the amortized cost basis. Economic forecast data is utilized to calculate the present value of expected cash flows. The Company obtains its forecast data through a subscription to a widely recognized and relied upon company who publishes various forecast scenarios. Management evaluates the various scenarios to determine a reasonable and supportable scenario, and utilizes a single scenario in the model. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.



The allowance for credit losses on available-for-sale debt securities is included within Investment securities available-for-sale on the consolidated balance sheet. Changes in the allowance for credit losses are recorded within Provision for credit losses on the consolidated statement of income. Losses are charged against the allowance when the Company believes the collectability of an available-for-sale security is in jeopardy or when either of the criteria regarding intent or requirement to sell is met.



Accrued interest receivable on available-for-sale debt securities totaled $1,987,000 and $2,202,000 at March 31, 2024 and December 31, 2023 and is included within accrued interest receivable on the consolidated balance sheet. This amount is excluded from the estimate of expected credit losses. Available-for-sale debt securities are typically classified as nonaccrual when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about the further collectability of principal or interest. When available-for-sale debt securities are placed on nonaccrual status, unpaid interest credited to income is reversed.



There were no sales of available for sale securities during the three months ended March 31, 2024 or March 31, 2023.



The following table presents the net gains (losses) on the Company’s equity investments recognized in earnings during the three month periods ended March 31, 2024 and 2023, and the portion of unrealized gains for the period that relates to equity investments held at March 31, 2024 and 2023 (in thousands):
 
Three Months Ended
March 31,
  
Equity securities
  
2024
    
2023
  
Net gains (losses) recognized in equity securities during the period
  
$
59
    
$
(223
)
Less: Net (losses) gains realized on the sale of equity securities during the period
    
(4
)
    
5
  
Net unrealized gains (losses)
  
$
55
    
$
(218
)


Investment securities with an approximate carrying value of $349.6 million and $353.3 million at March 31, 2024 and December 31, 2023, respectively, were pledged to secure public funds, certain other deposits and borrowing lines.


Actual maturities may 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 March 31, 2024, by contractual maturity, are shown below (in thousands):

 
Amortized
Cost
    
Fair Value
  
Available-for-sale debt securities:
            
Due in one year or less
  
$
44,010
    
$
43,073
  
Due after one year through five years
    
151,832
      
140,532
  
Due after five years through ten years
    
90,457
      
81,505
  
Due after ten years
    
156,627
      
139,755
  
Total
  
$
442,926
    
$
404,865