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SECURITIES
 6 Months Ended
Jun. 30, 2024
SECURITIES [Abstract]  
SECURITIES
NOTE 3 – SECURITIES

The following table summarizes the amortized cost and fair value of securities AFS and securities HTM at June 30, 2024 and December 31, 2023, and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive (loss) and gross unrecognized gains and losses:

Securities Available for Sale
  
Amortized
Cost
    
Gross Unrealized
Gains
    
Gross Unrealized
Losses
    
Estimated
Fair Value
  
June 30, 2024
                        
U.S. Government securities
  
$
61,843
    
$
88
    
$
(1,922
)
  
$
60,009
  
U.S. Government sponsored entity securities
    
6,485
      
—
      
(635
)
    
5,850
  
Agency mortgage-backed securities, residential
    
109,697
      
—
      
(12,807
)
    
96,890
  
Total securities
  
$
178,025
    
$
88
    
$
(15,364
)
  
$
162,749
  
                                 
December 31, 2023
                                
U.S. Government securities
  
$
52,174
    
$
—
    
$
(1,877
)
  
$
50,297
  
U.S. Government sponsored entity securities
    
6,527
      
—
      
(650
)
    
5,877
  
Agency mortgage-backed securities, residential
    
118,218
      
—
      
(12,134
)
    
106,084
  
Total securities
  
$
176,919
    
$
—
    
$
(14,661
)
  
$
162,258
  

Securities Held to Maturity
  
Amortized
Cost
    
Gross Unrecognized
Gains
    
Gross Unrecognized
Losses
    
Estimated
Fair Value
    
Allowance for Credit Losses
  
June 30, 2024
                              
Obligations of states and political subdivisions
  
$
7,931
    
$
8
    
$
(758
)
  
$
7,181
    
$
(2
)
Agency mortgage-backed securities, residential
    
1
      
—
      
—
      
1
      
—
  
Total securities
  
$
7,932
    
$
8
    
$
(758
)
  
$
7,182
    
$
(2
)
                                         
December 31, 2023
                                        
Obligations of states and political subdivisions
  
$
7,987
    
$
17
    
$
(615
)
  
$
7,389
    
$
(2
)
Agency mortgage-backed securities, residential
    
1
      
—
      
—
      
1
      
—
  
Total securities
  
$
7,988
    
$
17
    
$
(615
)
  
$
7,390
    
$
(2
)

The amortized cost and estimated fair value of debt securities at June 30, 2024, 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
  
$
9,948
    
$
9,884
    
$
905
    
$
784
  
Due in over one to five years
    
58,380
      
55,975
      
3,616
      
3,512
  
Due in over five to ten years
    
—
      
—
      
1,284
      
1,065
  
Due after ten years
    
—
      
—
      
2,126
      
1,820
  
Agency mortgage-backed securities, residential
    
109,697
      
96,890
      
1
      
1
  
Total debt securities
  
$
178,025
    
$
162,749
    
$
7,932
    
$
7,182
  

There were no sales of securities during the three and six months ended June 30, 2024 and 2023, respectively.

Debt securities with a carrying value of approximately $132,552 at June 30, 2024 and $126,994 at December 31, 2023, were pledged to secure public deposits, repurchase agreements, and for other purposes required or permitted by law.



The following table summarizes debt securities AFS in an unrealized loss position for which an ACL has not been recorded at June 30, 2024 and December 31, 2023, aggregated by major security type and length of time in a continuous unrealized loss position:

June 30, 2024
  
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
  
$
9,482
    
$
(129
)
  
$
40,628
    
$
(1,793
)
  
$
50,110
    
$
(1,922
)
U.S. Government sponsored entity securities
    
—
      
—
      
5,850
      
(635
)
    
5,850
      
(635
)
Agency mortgage-backed securities,
                                                
   residential
    
—
      
—
      
96,890
      
(12,807
)
    
96,890
      
(12,807
)
Total available for sale
  
$
9,482
    
$
(129
)
  
$
143,368
    
$
(15,235
)
  
$
152,850
    
$
(15,364
)

December 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
  
$
9,474
    
$
(52
)
  
$
40,823
    
$
(1,825
)
  
$
50,297
    
$
(1,877
)
U.S Government sponsored entity securities
    
—
      
—
      
5,877
      
(650
)
    
5,877
      
(650
)
Agency mortgage-backed securities,
                                                
   residential
    
—
      
—
      
106,084
      
(12,134
)
    
106,084
      
(12,134
)
Total available for sale
  
$
9,474
    
$
(52
)
  
$
152,784
    
$
(14,609
)
  
$
162,258
    
$
(14,661
)

Management evaluates AFS 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 June 30, 2024, the Company had 94 AFS debt securities in an unrealized position without an ACL, of which 13 were from U.S. Government securities, 3 were from U.S. Government sponsored entity securities, and 78 were from Agency mortgage-backed residential securities. Comparatively at December 31, 2023, the Company had 99 AFS debt securities in an unrealized position without an ACL, 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 June 30, 2024, 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 ACL on AFS debt securities at June 30, 2024.

The following table presents the activity in the ACL for HTM debt securities:

Held to Maturity Debt Securities
  
Six months ended
June 30, 2024
    
Six months ended
June 30, 2023
  
Allowance for credit losses:
            
    Beginning balance
  
$
2
    
$
—
  
    Impact of adopting ASC 326
    
—
      
3
  
    Provision for (recovery of) credit loss expense
    
—
      
—
  
Allowance for credit losses ending balance
  
$
2
    
$
3
  

The Company’s HTM securities primarily consist of obligations of states and political subdivisions. The ACL on HTM 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 June 30, 2024 and 2023, there were no past due principal and interest payments related to HTM securities. During the second quarter of 2024, the cumulative loss rate remained at 0.02%, resulting in no change to provision expense during the three and six months ended June 30, 2024. During the first quarter of 2023, the Company identified a cumulative loss rate of 0.03% upon adoption of ASC326 on January 1. This resulted in a $3 credit loss reserve for HTM debt securities, with no provision expense during the three and six months ended June 30, 2023.