Investment Securities

3 Months Ended

Mar. 31, 2024

Investments, Debt and Equity Securities [Abstract]

The amortized cost and fair value of debt securities classified as available-for-sale at March 31, 2024 and December 31, 2023 were as follows:


			Gross Unrealized
(in thousands)	Total Amortized Cost		Gains		Losses		Fair Value
March 31, 2024
U.S. Treasury	$	993	$	—	$	—	$	993
U.S. government and federal agency obligations	410		—		(18)		392
U.S. government-sponsored enterprises	13,035		—		(288)		12,747
Obligations of states and political subdivisions	125,834		29		(21,835)		104,028
Mortgage-backed securities	59,841		57		(6,504)		53,394
Other debt securities (a)	11,825		22		(1,152)		10,695
Bank issued trust preferred securities (a)	1,486		—		(281)		1,205
Total available-for-sale securities	$	213,424	$	108	$	(30,078)	$	183,454

December 31, 2023
U.S. Treasury	$	1,977	$	1	$	—	$	1,978
U.S. government and federal agency obligations	446		—		(19)		427
U.S. government-sponsored enterprises	22,042		16		(236)		21,822
Obligations of states and political subdivisions	126,396		55		(19,566)		106,885
Mortgage-backed securities	51,736		27		(6,123)		45,640
Other debt securities (a)	11,825		22		(1026)		10,821
Bank issued trust preferred securities (a)	1,486		—		(317)		1,169
Total available-for-sale securities	$	215,908	$	121	$	(27,287)	$	188,742

(a) Certain hybrid instruments possessing characteristics typically associated with debt obligations.

The Company’s investment securities are classified as available for sale. Agency bonds and notes, loan certificates guaranteed by the Small Business Administration, residential and commercial agency mortgage-backed securities, and agency collateralized mortgage obligations include securities issued by the Government National Mortgage Association, a U.S. government agency, and the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and the FHLB, which are U.S. government-sponsored enterprises.

Debt securities with carrying values aggregating approximately $91.4 million and $89.2 million at March 31, 2024 and December 31, 2023, respectively, were pledged to secure public funds, securities sold under agreements to repurchase, and for other purposes as required or permitted by law.

There were no proceeds from sales of available-for-sale securities for the three months ended March 31, 2024 and 2023. All gains and losses recognized on equity securities during the three months ended March 31, 2024 and 2023 were unrealized.

The amortized cost and fair value of debt securities classified as available-for-sale at March 31, 2024, by contractual maturity are shown below. Accrued interest on investments totaled $1.2 million and $1.4 million at March 31, 2024 and December 31, 2023, respectively, and is included in the accrued interest receivable on the Company's consolidated balance sheets. The total amount of accrued interest is excluded from the amortized cost basis of investments presented below. Further, the Company has elected not to measure an allowance for credit losses for accrued interest receivable. Expected maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without prepayment penalties.


(in thousands)	Amortized Cost		Fair Value
Due in one year or less	$	3,055	$	3,027
Due after one year through five years	15,997		15,783
Due after five years through ten years	26,528		23,585
Due after ten years	108,003		87,665
Total	$	153,583	$	130,060
Mortgage-backed securities	59,841		53,394
Total available-for-sale securities	$	213,424	$	183,454

Other Investment Securities

Other investment securities include equity securities with readily determinable fair values and other investment securities that do not have readily determinable fair values. Investments in FHLB stock, and Midwest Independent BankersBank ("MIB") stock, that do not have readily determinable fair values, are required for membership in those organizations.


(in thousands)	March 31, 2024		December 31, 2023

FHLB stock	$	6,058	$	6,071
MIB stock	151		151
Equity securities with readily determinable fair values	78		78
Total other investment securities	$	6,287	$	6,300

Gross unrealized losses on debt securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at March 31, 2024 and December 31, 2023 were as follows:


	Less than 12 months				12 months or more
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Total Fair Value		Total Unrealized Losses
March 31, 2024

U.S. government and federal agency obligations	$	—	$	—	$	392	$	(18)	$	392	$	(18)
U.S. government-sponsored enterprises	10,994		(41)		1,753		(247)		12,747		(288)
Obligations of states and political subdivisions	1,407		(177)		101,298		(21,658)		102,705		(21,835)
Mortgage-backed securities	3,846		(66)		38,373		(6,438)		42,219		(6,504)
Other debt securities	—		—		8,673		(1,152)		8,673		(1,152)
Bank issued trust preferred securities	—		—		1,205		(281)		1,205		(281)
Total	$	16,247	$	(284)	$	151,694	$	(29,794)	$	167,941	$	(30,078)

(in thousands)
December 31, 2023
U.S. Treasury	$	997	$	—	$	—	$	—	$	997	$	—
U.S. government and federal agency obligations	—		—		427		(19)		427		(19)
U.S. government-sponsored enterprises	11,995		(8)		1,772		(228)		13,767		(236)
Obligations of states and political subdivisions	1,501		(158)		103,283		(19,408)		104,784		(19,566)
Mortgage-backed securities	2,935		(40)		39,793		(6,083)		42,728		(6,123)
Other debt securities	—		—		8,799		(1,026)		8,799		(1,026)
Bank issued trust preferred securities	—		—		1,169		(317)		1,169		(317)
Total	$	17,428	$	(206)	$	155,243	$	(27,081)	$	172,671	$	(27,287)

The total available-for-sale portfolio consisted of approximately 385 securities at March 31, 2024. The portfolio included 370 securities having an aggregate fair value of $167.9 million that were in a loss position at March 31, 2024. Securities identified as temporarily impaired which had been in a loss position for 12 months or longer totaled $151.7 million at fair value at March 31, 2024. The $30.1 million aggregate unrealized loss included in accumulated other comprehensive loss at March 31, 2024 was caused by interest rate changes.

The total available-for-sale portfolio consisted of approximately 385 securities at December 31, 2023. The portfolio included 370 securities having an aggregate fair value of $172.7 million that were in a loss position at December 31, 2023. Securities identified as temporarily impaired which had been in a loss position for 12 months or longer totaled $155.2 million at fair value at December 31, 2023. The $27.3 million aggregate unrealized loss included in accumulated other comprehensive loss at December 31, 2023 was caused by interest rate fluctuations.

The decline in fair value is attributable to changes in interest rates and not credit quality. In the absence of changes in credit quality of these investments, the fair value is expected to recover on all debt securities as they approach their maturity date or re-pricing date, or if market yields for such investments decline. In addition, the Company does not have the intent to sell these investments over the period of recovery, and it is not more likely than not that the Company will be required to sell such investment securities.