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Securities
 12 Months Ended
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Securities

NOTE 2 – SECURITIES

Securities consisted of the following on December 31:

 

(Dollars in thousands)

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Allowance for Credit Losses

 

 

Fair
Value

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

18,110

 

 

$

—

 

 

$

(421

)

 

$

—

 

 

$

17,689

 

U.S. Government agencies

 

 

14,000

 

 

 

—

 

 

 

(848

)

 

 

—

 

 

 

13,152

 

Mortgage-backed securities of government agencies

 

 

72,279

 

 

 

98

 

 

 

(7,332

)

 

 

—

 

 

 

65,045

 

Asset-backed securities of government agencies

 

 

548

 

 

 

—

 

 

 

(25

)

 

 

—

 

 

 

523

 

State and political subdivisions

 

 

17,476

 

 

 

—

 

 

 

(890

)

 

 

—

 

 

 

16,586

 

Corporate bonds

 

 

29,135

 

 

 

6

 

 

 

(2,056

)

 

 

—

 

 

 

27,085

 

Total available-for-sale

 

 

151,548

 

 

 

104

 

 

 

(11,572

)

 

 

—

 

 

 

140,080

 

Held-to-maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

 

10,305

 

 

 

—

 

 

 

(798

)

 

 

—

 

 

 

9,507

 

Mortgage-backed securities of government agencies

 

 

213,425

 

 

 

—

 

 

 

(30,534

)

 

 

—

 

 

 

182,891

 

State and political subdivisions

 

 

2,549

 

 

 

2

 

 

 

(219

)

 

 

—

 

 

 

2,332

 

Total held-to-maturity

 

 

226,279

 

 

 

2

 

 

 

(31,551

)

 

 

—

 

 

 

194,730

 

Equity securities

 

 

185

 

 

 

74

 

 

 

—

 

 

 

—

 

 

 

259

 

Restricted stock

 

 

1,535

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,535

 

Total securities

 

$

379,547

 

 

$

180

 

 

$

(43,123

)

 

$

—

 

 

$

336,604

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

23,194

 

 

$

—

 

 

$

(969

)

 

N/A

 

 

$

22,225

 

U.S. Government agencies

 

 

13,999

 

 

 

—

 

 

 

(1,369

)

 

N/A

 

 

 

12,630

 

Mortgage-backed securities of government agencies

 

 

77,677

 

 

 

72

 

 

 

(8,859

)

 

N/A

 

 

 

68,890

 

Asset-backed securities of government agencies

 

 

633

 

 

 

—

 

 

 

(15

)

 

N/A

 

 

 

618

 

State and political subdivisions

 

 

20,462

 

 

 

—

 

 

 

(985

)

 

N/A

 

 

 

19,477

 

Corporate bonds

 

 

28,740

 

 

 

—

 

 

 

(2,511

)

 

N/A

 

 

 

26,229

 

Total available-for-sale

 

 

164,705

 

 

 

72

 

 

 

(14,708

)

 

N/A

 

 

 

150,069

 

Held-to-maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

 

12,753

 

 

 

—

 

 

 

(1,136

)

 

N/A

 

 

 

11,617

 

Mortgage-backed securities of government agencies

 

 

232,068

 

 

 

—

 

 

 

(34,051

)

 

N/A

 

 

 

198,017

 

State and political subdivisions

 

 

2,580

 

 

 

1

 

 

 

(261

)

 

N/A

 

 

 

2,320

 

Total held-to-maturity

 

 

247,401

 

 

 

1

 

 

 

(35,448

)

 

N/A

 

 

 

211,954

 

Equity securities

 

 

185

 

 

 

59

 

 

 

—

 

 

N/A

 

 

 

244

 

Restricted stock

 

 

3,430

 

 

 

—

 

 

 

—

 

 

N/A

 

 

 

3,430

 

Total securities

 

$

415,721

 

 

$

132

 

 

$

(50,156

)

 

N/A

 

 

$

365,697

 

 

The amortized cost and fair value of debt securities on December 31, 2023, by contractual maturity, are shown below. 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.

 

(Dollars in thousands)

 

Amortized
Cost

 

 

Fair
Value

 

Available-for-sale

 

 

 

 

 

 

Due in one year or less

 

$

18,297

 

 

$

17,833

 

Due after one through five years

 

 

46,446

 

 

 

44,138

 

Due after five through ten years

 

 

18,931

 

 

 

17,157

 

Due after ten years

 

 

67,874

 

 

 

60,952

 

Total debt securities available-for-sale

 

$

151,548

 

 

$

140,080

 

 

 

 

 

 

 

Held-to-maturity

 

 

 

 

 

 

Due in one year or less

 

$

2,497

 

 

$

2,418

 

Due after one through five years

 

 

5,164

 

 

 

4,814

 

Due after five through ten years

 

 

4,905

 

 

 

4,359

 

Due after ten years

 

 

213,713

 

 

 

183,139

 

Total debt securities held-to-maturity

 

$

226,279

 

 

$

194,730

 

 

Securities with a carrying value of approximately $126 million and $110 million were pledged on December 31, 2023, and 2022 respectively, to secure public deposits, as well as other deposits and borrowings as required or permitted by law.

 

Restricted stock primarily consists of investments in FHLB and Federal Reserve Bank stock. The Bank’s investment in FHLB stock amounted to $1.0 million and $2.9 million on December 31, 2023, and 2022, respectively. Federal Reserve Bank stock was $471 thousand on December 31, 2023, and 2022.

There were no proceeds from sales of debt securities for the years ended December 31, 2023 and 2022. Unrealized gains and (losses) recognized on equity securities on the consolidated statements of income were $15 thousand and $(3) thousand, respectively for the years ended December 31, 2023 and 2022.

The Bank monitors the credit quality of held-to-maturity debt securities primarily through utilizing their credit rating. The Bank monitors the credit rating on a quarterly basis. There are no nonperforming held-to-maturity securities. As of December 31, 2023, no ACL was required for any held-to-maturity security. The majority of the securities are explicitly or implicitly guaranteed by the United States government, and any estimate of expected credit losses would be insignificant to the Bank. The following table summarizes the amortized cost of held-to maturity debt securities at December 31, 2023, aggregated by credit quality indicator:

 

(Dollars in thousands)

 

U.S. Treasury securities

 

 

Mortgage- backed securities of government agencies

 

 

State and political subdivisions

 

December 31, 2023

 

 

 

 

 

 

 

 

 

Credit rating:

 

 

 

 

 

 

 

 

 

AAA / AA / A

 

$

10,305

 

 

$

213,425

 

 

$

2,549

 

BBB / BB / B

 

 

—

 

 

 

—

 

 

 

—

 

Lower than B

 

 

—

 

 

 

—

 

 

 

—

 

Non-rated

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

10,305

 

 

$

213,425

 

 

$

2,549

 

 

 

The following table presents gross unrealized losses, fair value of securities, aggregated by investment category, and length of time individual available-for-sale securities have been in a continuous unrealized loss position, on December 31 2023:

 

 

 

Less Than 12 Months

 

 

12 Months or More

 

 

Total

 

(Dollars in thousands)

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

—

 

 

$

—

 

 

$

(421

)

 

$

17,689

 

 

$

(421

)

 

$

17,689

 

U.S. Government agencies

 

 

—

 

 

 

—

 

 

 

(848

)

 

 

13,152

 

 

 

(848

)

 

 

13,152

 

Mortgage-backed securities of government
   agencies

 

 

(3

)

 

 

1,909

 

 

 

(7,329

)

 

 

52,144

 

 

 

(7,332

)

 

 

54,053

 

Asset-backed securities of government
   agencies

 

 

—

 

 

 

—

 

 

 

(25

)

 

 

523

 

 

 

(25

)

 

 

523

 

State and political subdivisions

 

 

(28

)

 

 

1,783

 

 

 

(862

)

 

 

14,263

 

 

 

(890

)

 

 

16,046

 

Corporate bonds

 

 

—

 

 

 

—

 

 

 

(2,056

)

 

 

26,586

 

 

 

(2,056

)

 

 

26,586

 

Total temporarily impaired available-for-sale securities

 

$

(31

)

 

$

3,692

 

 

$

(11,541

)

 

$

124,357

 

 

$

(11,572

)

 

$

128,049

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

(798

)

 

$

17,405

 

 

$

(171

)

 

$

4,820

 

 

$

(969

)

 

$

22,225

 

U.S. Government agencies

 

 

—

 

 

 

—

 

 

 

(1,369

)

 

 

12,630

 

 

 

(1,369

)

 

 

12,630

 

Mortgage-backed securities of government
   agencies

 

 

(1,046

)

 

 

16,188

 

 

 

(7,813

)

 

 

44,519

 

 

 

(8,859

)

 

 

60,707

 

Asset-backed securities of government
   agencies

 

 

—

 

 

 

—

 

 

 

(15

)

 

 

618

 

 

 

(15

)

 

 

618

 

State and political subdivisions

 

 

(189

)

 

 

9,079

 

 

 

(796

)

 

 

9,848

 

 

 

(985

)

 

 

18,927

 

Corporate bonds

 

 

(1,165

)

 

 

13,502

 

 

 

(1,346

)

 

 

12,727

 

 

 

(2,511

)

 

 

26,229

 

Held-to-maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

 

—

 

 

 

—

 

 

 

(1,136

)

 

 

11,617

 

 

 

(1,136

)

 

 

11,617

 

Mortgage-backed securities of government
   agencies

 

 

(9,733

)

 

 

79,325

 

 

 

(24,318

)

 

 

118,692

 

 

 

(34,051

)

 

 

198,017

 

State and political subdivisions

 

 

—

 

 

 

—

 

 

 

(261

)

 

 

1,903

 

 

 

(261

)

 

 

1,903

 

Total temporarily impaired securities

 

$

(12,931

)

 

$

135,499

 

 

$

(37,225

)

 

$

217,374

 

 

$

(50,156

)

 

$

352,873

 

 

There were 126 available-for-sale securities in an unrealized loss position on December 31, 2023, 114 of which were in a continuous loss position for twelve (12) months or more. Each quarter the Company conducts a comprehensive security-level impairment assessment on the securities portfolio. Management believes the Company will fully recover the cost of these securities. Unrealized losses on the Company’s fixed-rate debt securities are a result of interest rate increases. U.S. Treasury securities and investments in securities of U.S. government sponsored agency bonds comprise $96 million of total AFS securities. The remaining $44 million of non-agency debt securities is made up of Corporate Bonds and debt securities of State and Political Subdivisions. For non-agency debt securities, the Company verified the current credit ratings remain above investment grade. Non-rated debt securities total $10 million. Annually, management reviews the credit profile of each non-rated issue and assesses whether any impairment to the contractually obligated cash flow is likely to occur. Based on these reviews, management has concluded the underlying creditworthiness for each security remains sufficient to maintain required payment obligations and, therefore, no allowance for credit losses has been recorded. Management believes the value will recover as the securities approach maturity or market interest rates decline.