XML 21 R11.htm IDEA: XBRL DOCUMENT

Available for Sale Securities

6 Months Ended

Dec. 31, 2022

Note 3: Available for Sale Securities

The amortized cost, gross unrealized gains, gross unrealized losses, ACL, and approximate fair value of securities available for sale consisted of the following:


	December 31, 2022
			Gross		Gross		Allowance		Estimated
	Amortized		Unrealized		Unrealized		for		Fair
(dollars in thousands)	Cost		Gains		Losses		Credit Losses		Value
Debt and equity securities:
Obligations of states and political subdivisions	$	47,396	$	25	$	(2,860)	$	—	$	44,561
Corporate obligations		20,825		—		(1,516)		—		19,309
Other securities		2,431		—		(61)		—		2,370
Total debt and equity securities		70,652		25		(4,437)		—		66,240

Mortgage-backed securities (MBS) and collateralized mortgage obligations (CMOs):
Residential MBS issued by governmental sponsored enterprises (GSEs)		74,177		—		(6,720)		—		67,457
Commercial MBS issued by GSEs		53,131		—		(6,163)		—		46,968
CMOs issued by GSEs		57,454		—		(6,730)		—		50,724
Total MBS and CMOs		184,762		—		(19,613)		—		165,149
Total AFS securities	$	255,414	$	25	$	(24,050)	$	—	$	231,389


	June 30, 2022
			Gross		Gross		Allowance		Estimated
	Amortized		Unrealized		Unrealized		for		Fair
(dollars in thousands)	Cost		Gains		Losses		Credit Losses		Value

Debt and equity securities:
Obligations of states and political subdivisions	$	47,383	$	77	$	(2,981)	$	—		44,479
Corporate obligations		20,818		32		(963)		—		19,887
Other securities		486		—		(43)		—		443
Total debt and equity securities		68,687		109		(3,987)		—		64,809

Mortgage-backed securities (MBS) and collateralized mortgage obligations (CMOs):
Residential MBS issued by governmental sponsored enterprises (GSEs)		76,345		—		(7,177)		—		69,168
Commercial MBS issued by GSEs		51,435		—		(5,705)		—		45,730
CMOs issued by GSEs		61,293		—		(5,606)		—		55,687
Total MBS and CMOs		189,073		—		(18,488)		—		170,585
Total AFS securities	$	257,760	$	109	$	(22,475)	$	—	$	235,394

The amortized cost and estimated fair value of investment and mortgage-backed securities, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.


	December 31, 2022
	Amortized		Estimated
(dollars in thousands)	Cost		Fair Value
Within one year	$	2,512	$	2,491
After one year but less than five years		12,943		12,444
After five years but less than ten years		37,320		34,602
After ten years		17,877		16,703
Total investment securities		70,652		66,240
MBS and CMOs		184,762		165,149
Total AFS securities	$	255,414	$	231,389

The carrying value of investment and mortgage-backed securities pledged as collateral to secure public deposits amounted to $183.6 million at December 31, 2022, and $198.3 million at June 30, 2022. The securities pledged consist of marketable securities, including $120.9 million and $126.3 million of Mortgage-backed Securities, $24.9 million and $27.3 million of Collateralized Mortgage Obligations, $35.9 million and $42.3 million of State and Political Subdivisions Obligations, and $2.0 million and $2.4 million of other securities at December 31, 2022 and June 30, 2022, respectively.

The following tables show the Company’s investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position for which an ACL has not been recorded at December 31, 2022 and June 30, 2022:


	December 31, 2022
	Less than 12 months				12 months or more				Total
			Unrealized				Unrealized				Unrealized
(dollars in thousands)	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Obligations of state and political subdivisions	$	26,509	$	721	$	13,953	$	2,139	$	40,462	$	2,860
Corporate obligations		7,957		493		11,352		1,023		19,309		1,516
Other securities		1,960		21		386		40		2,346		61
MBS and CMOs		92,777		6,264		72,372		13,349		165,149		19,613
Total AFS securities	$	129,203	$	7,499	$	98,063	$	16,551	$	227,266	$	24,050


	June 30, 2022
	Less than 12 months				12 months or more				Total
			Unrealized				Unrealized				Unrealized
(dollars in thousands)	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Obligations of state and political subdivisions	$	31,985	$	2,639	$	1,600	$	342	$	33,585	$	2,981
Corporate obligations		10,944		420		6,911		543		17,855		963
Other securities		418		43		—		—		418		43
MBS and CMOs		137,590		12,482		29,834		6,006		167,424		18,488
Total AFS securities	$	180,937	$	15,584	$	38,345	$	6,891	$	219,282	$	22,475

Obligations of state and political subdivisions. The unrealized losses on the Company’s investments in obligations of state and political subdivisions include 59 individual securities which have been in an unrealized loss position for less than 12 months and 27 individual securities which have been in an unrealized loss position for more than 12 months. The securities are performing and are of high credit quality. The unrealized losses were caused by increases in market interest rates since purchase or acquisition. Because the Company does not intend to sell these securities and it is likely that the Company will not be required to sell these securities prior to recovery of their amortized cost basis, which may be maturity, the Company has not recorded an ACL on these securities.

Corporate Obligations. The unrealized losses on the Company’s investments in corporate obligations include seven individual securities which have been in an unrealized loss position for less than 12 months and ten individual securities which have been in an unrealized loss position for more than 12 months. The securities are performing and are of high credit quality. The unrealized losses were caused by increases in market interest rates since purchase or acquisition. Because the Company does not intend to sell these securities and it likely that the Company will not be required to sell

these securities prior to recovery of their amortized cost basis, which may be maturity, the Company has not recorded an ACL on these securities.

At December 31, 2022, corporate obligations included two pooled trust preferred securities with an estimated fair value of $797,000 and unrealized losses of $182,000 in a continuous unrealized loss position for twelve months or more. These unrealized losses were primarily due to the long-term nature of the pooled trust preferred securities, a reduced demand for these securities, and concerns regarding the issuers of the underlying trust preferred securities.

A cash flow analysis performed as of December 31, 2022, for these two securities indicated it is probable the Company will receive all contracted principal and related interest projected. The cash flow analysis used in making this determination was based on anticipated default, recovery, and prepayment rates, and the resulting cash flows were discounted based on the yield spread anticipated at the time the securities were purchased. Because the Company does not intend to sell these securities and it is likely that the Company will not be required to sell these securities prior to recovery of their amortized cost basis, which may be maturity, the Company has not recorded an ACL on these securities.

Other securities. The unrealized losses on the Company’s investments in other securities includes eight individual securities which has been in an unrealized loss position for less than 12 months and one individual securities which have been in an unrealized loss position for more than 12 months. The securities are performing and are of high credit quality. The unrealized loss was caused by increases in market interest rates since purchase or acquisition. Because the Company does not intend to sell these securities and it likely that the Company will not be required to sell these securities prior to recovery of their amortized cost basis, which may be maturity, the Company has not recorded an ACL on these securities.

MBS and CMOs. As of December 31, 2022, the unrealized losses on the Company’s investments in MBS and CMOs include 85 individual securities which have been in an unrealized loss position for less than 12 months, and 40 individual securities which have been in an unrealized loss position for 12 months or more. The securities are performing and are of high credit quality. The unrealized losses were caused by increases in market interest rates since purchase or acquisition. Because the Company does not intend to sell these securities and it is likely that the Company will not be required to sell these securities prior to recovery of their amortized cost basis, which may be maturity, the Company has not recorded an ACL on these securities.

The Company does not believe that any individual unrealized loss as of December 31, 2022, is the result of a credit loss. However, the Company could be required to recognize an ACL in future periods with respect to its available for sale investment securities portfolio.

Credit losses recognized on investments. There were no credit losses recognized in income and other losses or recorded in other comprehensive income (loss) for the three- and six- month periods ended December 31, 2022 and 2021.