Securities

9 Months Ended

Sep. 30, 2022

2. SECURITIES

The amortized cost of securities and their approximate fair value at September 30, 2022 and December 31, 2021 were as follows:



	September 30, 2022
	(in thousands)

	Amortized		Unrealized				Fair
	Cost		Gains		Losses		Value

Available for Sale:
Debt securities:
U.S. treasuries and government agencies	$	166,351	$	2	$	(25,289)	$	141,064
States and political subdivisions		23,573		2		(1,721)		21,854
Total debt securities		189,924		4		(27,010)		162,918

Mortgage-backed securities:
FNMA		76,916		-		(13,272)		63,644
FHLMC		47,544		-		(7,160)		40,384
GNMA		40,741		-		(6,019)		34,722
SBA		23,044		-		(2,397)		20,647
CMO		55,037		-		(8,211)		46,826
Total mortgage-backed securities		243,282		-		(37,059)		206,223

Total securities designated as available for sale	$	433,206	$	4	$	(64,069)	$	369,141

Held to Maturity:
Debt securities
States and political subdivisions	$	7,572	$	-	$	(159)	$	7,413

Total securities designated as held to maturity	$	7,572	$	-	$	(159)	$	7,413



	December 31, 2021
	(in thousands)

	Amortized		Unrealized				Fair
	Cost		Gains		Losses		Value

Available for Sale:
Debt securities:
U.S. treasuries and government agencies	$	99,005	$	199	$	(2,386)	$	96,818
States and political subdivisions		6,150		96		-		6,246
Total debt securities		105,155		295		(2,386)		103,064

Mortgage-backed securities:
FNMA		64,056		222		(1,068)		63,210
FHLMC		38,796		62		(424)		38,434
GNMA		31,814		15		(615)		31,214
SBA		17,919		343		(54)		18,208
CMO		52,488		175		(834)		51,829
Total mortgage-backed securities		205,073		817		(2,995)		202,895

Total securities designated as available for sale	$	310,228	$	1,112	$	(5,381)	$	305,959

Held to Maturity:
Debt securities
States and political subdivisions	$	3,165	$	17	$	(3)	$	3,179

Total securities designated as held to maturity	$	3,165	$	17	$	(3)	$	3,179

Available for sale securities with a total fair value of $244 million and $207 million were pledged as collateral to secure public deposits and for other purposes required or permitted by law at September 30, 2022 and December 31, 2021, respectively.

‎

The scheduled maturities of debt and mortgage-backed securities at September 30, 2022 are summarized below. All maturity amounts are contractual maturities. Actual maturities may differ from contractual maturities because certain issuers have the right to call or prepay obligations with or without call premiums.




	September 30, 2022
	Amortized		Estimated
	cost		fair value
	(in thousands)

Debt securities available for sale:

Due in one year or less	$	6,839	$	6,769
Due after one year through five years		79,801		73,585
Due after five years through ten years		74,294		62,431
Due after ten years		28,990		20,133
		189,924		162,918

Mortgage-backed securities
available for sale		243,282		206,223
Total	$	433,206	$	369,141

Debt securities held to maturity:

Due in one year or less	$	6,665	$	6,615
Due after one year through five years		495		456
Due after five years through ten years		412		342
Due after ten years		-		-
Total	$	7,572	$	7,413

Contractual maturities of the Company’s mortgage-backed securities generally exceed ten years; however, the effective lives may be significantly shorter due to prepayments of the underlying loans and due to the nature of these securities.

There were no gross realized gains or losses from sales of investment securities for the three and nine month periods ended September 30, 2022 and 2021.

Management has assessed the securities available for sale in an unrealized loss position at September 30, 2022 and December 31, 2021 and determined the decline in fair value below amortized cost to be temporary. In making this determination, management considered the period of time the securities were in a loss position, the percentage decline in comparison to the securities’ amortized cost, and the financial condition of the issuer (primarily government or government-sponsored enterprises). In addition, management does not intend to sell these securities and it is not more likely than not that the Company will be required to sell these securities before recovery of their amortized cost. Management believes the decline in fair value is primarily related to market interest rate fluctuations and not to the credit deterioration of the individual issuers.

The Company has not recorded any other-than-temporary impairment (“OTTI”) charges during the nine month period ended September 30, 2022 and did not record any OTTI charges during 2021. The credit worthiness of the Company’s securities portfolio is largely reliant on the ability of U.S. government sponsored agencies such as Federal Home Loan Bank (“FHLB”), Federal National Mortgage Association (“FNMA”), Government National Mortgage Association (“GNMA”), and Federal Home Loan Mortgage Corporation (“FHLMC”), and municipalities throughout New York State to meet their obligations. In addition, dysfunctional markets could materially alter the liquidity, interest rate, and pricing risk of the portfolio. The stable past performance is not a guarantee for similar performance of the Company’s securities portfolio in future periods.

‎

Information regarding unrealized losses within the Company’s available for sale securities at September 30, 2022 and December 31, 2021 is summarized below.



	September 30, 2022

		Less than 12 months				12 months or longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
		(in thousands)
Available for Sale:
Debt securities:
U.S. treasuries and government agencies	$	91,283	$	(9,992)	$	48,781	$	(15,297)	$	140,064	$	(25,289)
States and political subdivisions		20,748		(1,721)		-		-		20,748		(1,721)
Total debt securities		112,031		(11,713)		48,781		(15,297)		160,812		(27,010)

Mortgage-backed securities:
FNMA		31,695		(5,178)		31,889		(8,094)		63,584		(13,272)
FHLMC		24,908		(3,503)		15,458		(3,657)		40,366		(7,160)
GNMA		20,125		(2,675)		14,597		(3,344)		34,722		(6,019)
SBA		17,478		(1,966)		3,169		(431)		20,647		(2,397)
CMO		29,286		(3,855)		17,540		(4,356)		46,826		(8,211)
Total mortgage-backed securities		123,492		(17,177)		82,653		(19,882)		206,145		(37,059)

Held to Maturity:
Debt securities:
States and political subdivisions		7,335		(149)		78		(10)		7,413		(159)

Total temporarily impaired
securities	$	242,858	$	(29,039)	$	131,512	$	(35,189)	$	374,370	$	(64,228)


	December 31, 2021

		Less than 12 months				12 months or longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
		(in thousands)
Available for Sale:
Debt securities:
U.S. treasuries and government agencies	$	50,381	$	(884)	$	27,488	$	(1,502)	$	77,869	$	(2,386)
States and political subdivisions		-		-		-		-		-		-
Total debt securities		50,381		(884)		27,488		(1,502)		77,869		(2,386)

Mortgage-backed securities:
FNMA		48,008		(903)		2,941		(165)		50,949		(1,068)
FHLMC		35,851		(423)		76		(1)		35,927		(424)
GNMA		30,252		(615)		143		-		30,395		(615)
SBA		2,824		(25)		1,218		(29)		4,042		(54)
CMO		38,313		(833)		25		(1)		38,338		(834)
Total mortgage-backed securities		155,248		(2,799)		4,403		(196)		159,651		(2,995)

Held to Maturity:
Debt securities:
States and political subdivisions		1,782		(3)		-		-		1,782		(3)

Total temporarily impaired
securities	$	207,411	$	(3,686)	$	31,891	$	(1,698)	$	239,302	$	(5,384)