Securities

9 Months Ended

Sep. 30, 2024

Debt Securities, Available-for-Sale [Abstract]

Securities

NOTE 4. Securities

Amortized costs and fair values of securities available for sale at September 30, 2024 and December 31, 2023 were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
	September 30, 2024
	(in thousands)
Obligations of U.S. government corporations and agencies	$	8,199	$	—	$	(347	)	$	7,852
Mortgage-backed securities		130,457		—		(16,918	)		113,539
Obligations of states and political subdivisions		4,921		—		(200	)		4,721
Subordinated debt		4,750		—		(811	)		3,939
	$	148,327	$	—	$	(18,276	)	$	130,051

	December 31, 2023
	(in thousands)
Obligations of U.S. government corporations and agencies	$	9,258	$	—	$	(667	)	$	8,591
Mortgage-backed securities		140,052		—		(21,230	)		118,822
Obligations of states and political subdivisions		6,191		1		(261	)		5,931
Subordinated debt		4,750		—		(651	)		4,099
	$	160,251	$	1	$	(22,809	)	$	137,443

The Company has elected to exclude accrued interest receivable, totaling $356 thousand at September 30, 2024, from the amortized cost basis of securities. The deferred tax asset on the securities portfolio at September 30, 2024 and December 31, 2023 was $3.8 million and $4.8 million, respectively, and is included in Other Assets in the Consolidated Balance Sheets. The amortized cost and estimated fair value of securities at September 30, 2024, by the earlier of contractual maturity or expected maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Fair Value
	(in thousands)
Due in one year or less	$	—	$	—
Due after one year through five years		10,692		10,374
Due after five years through ten years		12,804		11,379
Due after ten years		124,831		108,298
	$	148,327	$	130,051

There were no sales of available for sale securities during the nine months ended September 30, 2024 or 2023.

The fair value and gross unrealized losses for securities available for sale, totaled by the length of time that individual securities have been in a continuous gross unrealized loss position, at September 30, 2024 and December 31, 2023 were as follows:

	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	September 30, 2024
	(in thousands)
Obligations of U.S. government corporations and agencies	$	—	$	—	$	7,852	$	347	$	7,852	$	347
Mortgage-backed securities		—		—		113,539		16,918		113,539		16,918
Obligations of states and political subdivisions		500		—		4,221		200		4,721		200
Subordinated debt		—		—		3,439		811		3,439		811
	$	500	$	—	$	129,051	$	18,276	$	129,551	$	18,276

	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	December 31, 2023
	(in thousands)
Obligations of U.S. government corporations and agencies	$	—	$	—	$	8,591	$	667	$	8,591	$	667
Mortgage-backed securities		—		—		118,822		21,230		118,822		21,230
Obligations of states and political subdivisions		—		—		5,430		261		5,430		261
Subordinated debt		221		29		3,378		622		3,599		651
	$	221	$	29	$	136,221	$	22,780	$	136,442	$	22,809

The reference point for determining when securities are in an unrealized loss position is month end. As such, it is possible that a security's market value exceeded its amortized cost on other days during the past twelve-month period.

There were 101 debt securities with a fair value below the amortized cost basis, totaling $129.6 million of aggregate fair value as of September 30, 2024. The Company concluded that a credit loss does not exist in its securities portfolio at September 30, 2024 based on the fact that (1) changes in fair value were caused by non-credit-related factors, primarily fluctuations in interest rates, (2) securities with unrealized losses had generally high credit quality, (3) the Company intends to hold these investments in debt securities to maturity and it is more-likely-than-not that the Company will not be required to sell these investments before a recovery of its investment, and (4) issuers have continued to make timely payments of principal and interest. Additionally, the Company’s mortgage-backed securities and obligations of U.S. government corporations and agencies are entirely issued by either U.S. government agencies or U.S. government-sponsored enterprises. Collectively, these entities provide a guarantee, which is either explicitly or implicitly supported by the full faith and credit of the U.S. government, that investors in such mortgage-backed securities will receive timely principal and interest payments.

Securities having carrying values of $8.3 million and $110.2 million at September 30, 2024 were pledged as security for trust accounts and for borrowing capacity at the Federal Reserve Bank discount window, respectively.

The composition of restricted investments at September 30, 2024 and December 31, 2023 was as follows:

	September 30, 2024		December 31, 2023
	(in thousands)
Federal Reserve Bank Stock	$	344	$	344
Federal Home Loan Bank Stock		9,483		9,084
Community Bankers’ Bank Stock		140		140
	$	9,967	$	9,568