Available for Sale Securities

3 Months Ended

Sep. 30, 2023

Available for Sale Securities

Available for Sale Securities

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:

	September 30, 2023
			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	$	44,905	$	2	$	(3,710)	$	—	$	41,197
Corporate obligations		35,740		36		(2,640)		—		33,136
Asset backed securities		66,764		1,332		(454)		—		67,642
Other securities		2,662		28		(48)		—		2,642
Total debt and equity securities		150,071		1,398		(6,852)		—		144,617
Mortgage-backed securities (MBS) and collateralized mortgage obligations (CMOs):
Residential MBS issued by governmental sponsored enterprises (GSEs)		95,058		240		(8,905)		—		86,393
Commercial MBS issued by GSEs		61,188		—		(8,123)		—		53,065
CMOs issued by GSEs		131,090		—		(9,967)		—		121,123
Total MBS and CMOs		287,336		240		(26,995)		—		260,581
Total AFS securities	$	437,407	$	1,638	$	(33,847)	$	—	$	405,198

	June 30, 2023
			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	$	45,285	$	20	$	(2,737)	$	—	$	42,568
Corporate obligations		35,700		19		(3,181)		—		32,538
Asset backed securities		67,897		1,274		(545)				68,626
Other securities		3,587		39		(56)		—		3,570
Total debt and equity securities		152,469		1,352		(6,519)		—		147,302
Mortgage-backed securities (MBS) and collateralized mortgage obligations (CMOs):
Residential MBS issued by governmental sponsored enterprises (GSEs)		97,612		122		(7,610)		—		90,124
Commercial MBS issued by GSEs		60,333		11		(6,959)		—		53,385
CMOs issued by GSEs		135,202		9		(8,468)		—		126,743
Total MBS and CMOs		293,147		142		(23,037)		—		270,252
Total AFS securities	$	445,616	$	1,494	$	(29,556)	$	—	$	417,554

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.

	September 30, 2023
	Amortized		Estimated
(dollars in thousands)	Cost		Fair Value
Within one year	$	2,465	$	2,459
After one year but less than five years		27,412		26,235
After five years but less than ten years		56,993		53,581
After ten years		63,201		62,342
Total investment securities		150,071		144,617
MBS and CMOs		287,336		260,581
Total AFS securities	$	437,407	$	405,198

The carrying value of investment and mortgage-backed securities pledged as collateral to secure public deposits amounted to $261.0 million and $253.9 million at September 30, 2023 and June 30, 2023, respectively. The securities pledged consist of marketable securities, including $140.9 million and $129.2 million of Mortgage-backed Securities, $91.8 million and $94.8 million of Collateralized Mortgage Obligations, $25.2 million and $26.5 million of State and Political Subdivisions Obligations, and $3.1 million and $3.4 million of Other Securities at September 30, 2023 and June 30, 2023, 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 September 30, 2023 and June 30, 2023:

	September 30, 2023
	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	$	9,443	$	236	$	30,959	$	3,474	$	40,402	$	3,710
Corporate obligations		14,235		724		16,015		1,916		30,250		2,640
Asset backed securities		18,683		180		705		274		19,388		454
Other securities		—		—		1,546		48		1,546		48
MBS and CMOs		85,241		2,146		146,151		24,849		231,392		26,995
Total AFS securities	$	127,602	$	3,286	$	195,376	$	30,561	$	322,978	$	33,847

	June 30, 2023
	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	$	11,574	$	184	$	26,763	$	2,553	$	38,337	$	2,737
Corporate obligations		14,709		1,074		13,821		2,107		28,530		3,181
Asset backed securities		22,628		263		698		282		23,326		545
Other securities		1,970		11		350		45		2,320		56
MBS and CMOs		87,354		1,525		145,673		21,512		233,027		23,037
Total AFS securities	$	138,235	$	3,057	$	187,305	$	26,499	$	325,540	$	29,556

Obligations of state and political subdivisions. The unrealized losses on the Company’s investments in obligations of state and political subdivisions include 23 individual securities which have been in an unrealized loss position for less than 12 months and 64 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 and other Obligations. The unrealized losses on the Company’s investments in corporate obligations include 13 individual securities which have been in an unrealized loss position for less than 12 months and 14 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 more likely than not 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.

Asset-Backed securities. The unrealized losses on the Company’s investments in asset-backed securities includes six individual securities which has been in an unrealized loss position for less than 12 months and two 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 variations in market interest rates since purchase or acquisition. Because the Company does not intend to sell these securities and it is more likely than not 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 September 30, 2023, the unrealized losses on the Company’s investments in MBS and CMOs include 25 individual securities which have been in an unrealized loss position for less than 12 months, and 124 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 September 30, 2023, 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 loss for the three-month periods ended September 30, 2023 and 2022.