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SECURITIES
 3 Months Ended
Mar. 31, 2023
SECURITIES [Abstract]  
SECURITIES
NOTE 3 – SECURITIES

The following table summarizes the amortized cost and fair value of securities available for sale and securities held to maturity at March 31, 2023 and December 31, 2022 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive (loss) and gross unrecognized gains and losses, and allowance for credit losses:

Securities Available for Sale
  
Amortized
Cost
    
Gross Unrealized
Gains
    
Gross Unrealized
Losses
    
Estimated
Fair Value
  
March 31, 2023
                        
U.S. Government securities
  
$
57,836
    
$
5
    
$
(2,373
)
  
$
55,468
  
U.S. Government sponsored entity securities
    
6,680
      
—
      
(740
)
    
5,940
  
Agency mortgage-backed securities, residential
    
131,843
      
—
      
(13,498
)
    
118,345
  
Total securities
  
$
196,359
    
$
5
    
$
(16,611
)
  
$
179,753
  
                                 
December 31, 2022
                                
U.S. Government securities
  
$
57,698
    
$
—
    
$
(2,906
)
  
$
54,792
  
U.S. Government sponsored entity securities
    
8,845
      
—
      
(862
)
    
7,983
  
Agency mortgage-backed securities, residential
    
136,282
      
—
      
(14,983
)
    
121,299
  
Total securities
  
$
202,825
    
$
—
    
$
(18,751
)
  
$
184,074
  

Securities Held to Maturity
  
Amortized
Cost
    
Gross Unrecognized
Gains
    
Gross Unrecognized
Losses
    
Estimated
Fair Value
    
Allowance for Credit Losses
  
March 31, 2023
                              
Obligations of states and political subdivisions
  
$
9,003
    
$
29
    
$
(635
)
  
$
8,397
    
$
(3
)
Agency mortgage-backed securities, residential
    
1
      
—
      
—
      
1
      
—
  
Total securities
  
$
9,004
    
$
29
    
$
(635
)
  
$
8,398
    
$
(3
)
                                         
December 31, 2022
                                        
Obligations of states and political subdivisions
  
$
9,225
    
$
32
    
$
(798
)
  
$
8,459
          
Agency mortgage-backed securities, residential
    
1
      
—
      
—
      
1
          
Total securities
  
$
9,226
    
$
32
    
$
(798
)
  
$
8,460
          

The amortized cost and estimated fair value of debt securities at March 31, 2023, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay the debt obligations prior to their contractual maturities.  Securities not due at a single maturity are shown separately.

   
Available for Sale
    
Held to Maturity
  
Debt Securities:
  
Amortized
Cost
    
Estimated
Fair Value
    
Amortized
Cost
    
Estimated
Fair Value
  
                         
Due in one year or less
  
$
10,113
    
$
9,987
    
$
585
    
$
585
  
Due in over one to five years
    
54,403
      
51,421
      
3,899
      
3,706
  
Due in over five to ten years
    
—
      
—
      
2,249
      
2,075
  
Due after ten years
    
—
      
—
      
2,270
      
2,031
  
Agency mortgage-backed securities, residential
    
131,843
      
118,345
      
1
      
1
  
Total debt securities
  
$
196,359
    
$
179,753
    
$
9,004
    
$
8,398
  

There were no sales of securities during the three months ended March 31, 2023 and 2022.

Debt securities with a carrying value of approximately $134,382 at March 31, 2023 and $126,318 at December 31, 2022, respectively, were pledged to secure public deposits, repurchase agreements, and for other purposes required or permitted by law.
The following table summarizes debt securities available for sale in an unrealized loss position for which an allowance for credit losses has not been recorded at March 31, 2023 and December 31, 2022, aggregated by major security type and length of time in a continuous unrealized loss position:

March 31, 2023
  
Less Than 12 Months
    
12 Months or More
    
Total
  
   
Fair Value
    
Unrealized
Loss
    
Fair Value
    
Unrealized
Loss
    
Fair Value
    
Unrealized
Loss
  
Securities Available for Sale
                                    
U.S. Government securities
  
$
20,057
    
$
(257
)
  
$
28,420
    
$
(2,116
)
  
$
48,477
    
$
(2,373
)
U.S. Government sponsored entity
   securities
    
—
      
—
      
5,940
      
(740
)
    
5,940
      
(740
)
Agency mortgage-backed
                                                
   securities, residential
    
9,941
      
(490
)
    
108,405
      
(13,008
)
    
118,346
      
(13,498
)
Total available for sale
  
$
29,998
    
$
(747
)
  
$
142,765
    
$
(15,864
)
  
$
172,763
    
$
(16,611
)

December 31, 2022
  
Less Than 12 Months
    
12 Months or More
    
Total
  
   
Fair Value
    
Unrealized
Loss
    
Fair Value
    
Unrealized
Loss
    
Fair Value
    
Unrealized
Loss
  
Securities Available for Sale
                                    
U.S. Government securities
  
$
36,460
    
$
(977
)
  
$
18,332
    
$
(1,929
)
  
$
54,792
    
$
(2,906
)
U.S. Government sponsored entity
   securities
    
2,786
      
(60
)
    
5,197
      
(802
)
    
7,983
      
(862
)
Agency mortgage-backed securities, residential
    
71,510
      
(7,178
)
    
49,789
      
(7,805
)
    
121,299
      
(14,983
)
Total available for sale
  
$
110,756
    
$
(8,215
)
  
$
73,318
    
$
(10,536
)
  
$
184,074
    
$
(18,751
)

Management evaluates available for sale debt securities in unrealized positions to determine whether impairment is due to credit-related factors. Consideration is given to (1) the extent to which the fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value.

At March 31, 2023, the Company had 99 available for sale debt securities in an unrealized position without an allowance for credit losses, of which 15 were from U.S. Government securities, 3 were from U.S. Government sponsored entity securities, and 81 were from Agency mortgage-backed residential securities. Management does not have the intent to sell any of these securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline. Accordingly, as of March 31, 2023, management believes that the unrealized losses detailed in the previous table are due to noncredit-related factors, including changes in interest rates and other market conditions, and therefore the Company carried no allowance for credit losses on available for sale debt securities at March 31, 2023.

The following table presents the activity in the allowance for credit losses for held to maturity debt securities:

Held to Maturity Debt Securities
  
Three months ended
March 31, 2023
  
Allowance for credit losses:
      
    Beginning balance
  
$
—
  
    Impact of adopting ASC 326
    
3
  
    Credit loss expense
    
—
  
Allowance for credit losses ending balance
  
$
3
  

The Company’s held to maturity securities primarily consist of obligations of states and political subdivisions. The ACL on held to maturity securities is estimated at each measurement date on a collective basis by major security type.  Risk factors such as issuer bond ratings, historical loss rates, financial condition of issuer, and timely principal and interest payments of issuer were evaluated to determine if a credit reserve was required within the portfolio. At March 31, 2023, there were no past due principal and interest payments related to held to maturity securities. The Company identified a cumulative loss rate of .03% using historical loss data provided by S&P and Moody’s bond rating service. This resulted in a $3 credit loss reserve for held to maturity debt securities upon adoption of ASC 326 on January 1, 2023, with no provision expense during the three months ended March 31, 2023.