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Securities

3 Months Ended

Mar. 31, 2025

NOTE 6. Securities

This table provides the major components of debt securities available for sale ("AFS") and held to maturity (“HTM”) at amortized cost and estimated fair value at March 31, 2025 and December 31, 2024:

March 31, 2025

Gross

Amortized

unrealized

Valuation

Estimated

(In thousands)

cost

gains

losses

Allowance

fair value

Available for sale:

U.S. Government sponsored entities

15,000

—

(147)

—

14,853

State and political subdivisions

355

—

(25)

—

330

Residential mortgage-backed securities

13,560

(1,272)

—

12,316

Asset backed securities

35,250

(12)

—

35,275

Corporate and other securities

30,652

180

(1,609)

(1,559)

27,664

Total debt securities available for sale

94,817

245

(3,065)

(1,559)

90,438

Held to maturity:

U.S. Government sponsored entities

28,000

—

(4,153)

—

23,847

State and political subdivisions

1,250

—

1,281

Residential mortgage-backed securities

11,697

(2,369)

—

9,330

Total debt securities held to maturity

40,947

(6,522)

—

34,458


	December 31, 2024
			Gross		Gross
	Amortized		unrealized		unrealized			Valuation	Estimated
(In thousands)	cost		gains		losses			Allowance	fair value
Available for sale:
U.S. Government sponsored entities	$	15,000	$	—	$	(241)	$	—	$	14,759
State and political subdivisions		357		—		(24)		—		333
Residential mortgage-backed securities		13,814		27		(1,555)		—		12,286
Asset backed securities		39,300		94		(2)		—		39,392
Corporate and other securities		31,741		165		(1,968)		(2,824)		27,114
Total debt securities available for sale	$	100,212	$	286	$	(3,790)	$	(2,824)	$	93,884
Held to maturity:
U.S. Government sponsored entities	$	28,000	$	—	$	(4,932)	$	—	$	23,068
State and political subdivisions		1,234		59		—		—		1,293
Residential mortgage-backed securities		12,060		—		(2,607)		—		9,453
Total debt securities held to maturity	$	41,294	$	59	$	(7,539)	$	—	$	33,814

There was no provision for credit losses on AFS debt securities for the three months ended March 31, 2025 and the three months ended March 31, 2024. During the three months ended March 31, 2025, Unity entered into a modification agreement with the issuer of the troubled AFS debt security. Prior to the modification, Unity held the $5.0 million par of the original senior debt security. As a component of the modification agreement, $2.1 million par of senior debt was converted to common equity of the issuer. The common equity was held as restricted equity as of March 31, 2025. The remaining $2.9 million senior debt also had modified terms, including an extension of the maturity date, an increase in the bond’s coupon, agreement to paid-in-kind interest, early call-rights by the issuer and certain convertible rights. The net carrying value of the aggregate position was $2.0 million as of March 31, 2025.

The contractual maturities of AFS and HTM debt securities at March 31, 2025 are set forth in the following table. Maturities may differ from contractual maturities in residential mortgage-backed securities because the mortgages underlying the securities may be prepaid without any penalties. Therefore, residential mortgage-backed securities are not included in the maturity categories in the following summary.



		Amortized		Fair
(In thousands)		Cost		Value
Available for sale:
Due in one year	$	3,285	$	3,272
Due after one year through five years		30,200		27,930
Due after five years through ten years		26,582		25,741
Due after ten years		21,190		21,179
Residential mortgage-backed securities		13,560		12,316
Total	$	94,817	$	90,438
Held to maturity:
Due in one year	$	—	$	—
Due after one year through five years		3,000		2,964
Due after five years through ten years		—		—
Due after ten years		26,250		22,164
Residential mortgage-backed securities		11,697		9,330
Total	$	40,947	$	34,458

Actual maturities of AFS and HTM debt securities may differ from those presented above since certain obligations provide the issuer the right to call or prepay the obligation prior to scheduled maturity without penalty.

The fair value of debt securities with unrealized losses by length of time that the individual securities have been in a continuous unrealized loss position at March 31, 2025 and December 31, 2024 are as follows:

March 31, 2025

Less than 12 months

12 months and greater

Total

Estimated

Unrealized

Estimated

Unrealized

Estimated

Unrealized

(In thousands)

fair value

loss

fair value

loss

fair value

loss

Available for sale:

U.S. Government sponsored entities

—

14,853

(147)

14,853

(147)

State and political subdivisions

—

330

(25)

330

(25)

Residential mortgage-backed securities

—

12,180

(1,272)

12,180

(1,272)

Asset backed securities

14,738

(11)

3,000

(1)

17,738

(12)

Corporate and other securities

—

12,448

(1,609)

12,448

(1,609)

Total

14,738

(11)

42,811

(3,054)

57,549

(3,065)

Held to maturity:

U.S. Government sponsored entities

—

23,847

(4,153)

23,847

(4,153)

Residential mortgage-backed securities

—

4,745

(2,369)

4,745

(2,369)

Total

—

28,592

(6,522)

28,592

(6,522)


	December 31, 2024
	Less than 12 months				12 months and greater				Total

	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
(In thousands)	fair value		loss		fair value		loss		fair value		loss
Available for sale:
U.S. Government sponsored entities	$	—	$	—	$	14,759	$	(241)	$	14,759	$	(241)
State and political subdivisions		—		—		333		(24)		333		(24)
Residential mortgage-backed securities		8		(1)		12,145		(1,554)		12,153		(1,555)
Asset backed securities		3,998		(1)		3,000		(1)		6,998		(2)
Corporate and other securities		—		—		14,609		(1,968)		14,609		(1,968)
Total temporarily impaired AFS securities	$	4,006	$	(2)	$	44,846	$	(3,788)	$	48,852	$	(3,790)
Held to maturity:
U.S. Government sponsored entities	$	—	$	—	$	23,068	$	(4,932)	$	23,068	$	(4,932)
Residential mortgage-backed securities		—		—		4,453		(2,607)		4,453		(2,607)
Total temporarily impaired HTM securities	$	—	$	—	$	27,521	$	(7,539)	$	27,521	$	(7,539)

Unrealized losses in each of the categories presented in the tables above were primarily driven by market interest rate fluctuations. Residential mortgage-backed securities are guaranteed by either Ginnie Mae, Freddie Mac or Fannie Mae.

The Company is using the practical expedient to exclude accrued interest receivable from credit loss measurement. At March 31, 2025, there was $1.4 million of accrued interest on securities. At December 31, 2024, there was $1.2 million of accrued interest on securities.

Realized Gains and Losses on Debt Securities

Net realized gains on debt securities are included in noninterest income in the Consolidated Statements of Income as net security gains. There was a $3 thousand loss on available for sale debt securities during the three months ended March 31, 2025, compared to no realized gains or losses during the three months ended March 31, 2024. There were no realized gains or losses for held to maturity debt securities during the three months ended March 31, 2025 and 2024.

Equity Securities

Included in this category are Community Reinvestment Act ("CRA") investments and the Company’s current other equity holdings of financial institutions. Equity securities are defined to include (a) preferred, common and other ownership interests in entities including partnerships, joint ventures and limited liability companies and (b) rights to acquire or dispose of ownership interests in entities at fixed or determinable prices.

The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during the three months ended March 31, 2025 and 2024:


	For the three months ended March 31,
(In thousands)	2025		2024
Net unrealized (losses) gains occurring during the period on equity securities	$	(34)	$	33
Net (losses) gains recognized during the period on equity securities sold during the period		(12)		21
(Losses) gains recognized during the reporting period on equity securities	$	(46)	$	54