Investment Securities

9 Months Ended

Sep. 30, 2024

Investments, Debt and Equity Securities [Abstract]

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


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance for Credit Losses
	(dollars in thousands; unaudited)
September 30, 2024
Available-for-sale

U.S. Agency collateralized mortgage obligations	$	40	$	—	$	(2)	$	38	$	—


Total available-for-sale securities	40		—		(2)		38		—

Held-to-maturity
U.S. Agency residential mortgage-backed securities	48,582		711		(134)		49,159		—

Total investment securities	$	48,622	$	711	$	(136)	$	49,197	$	—


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance for Credit Losses
	(dollars in thousands; unaudited)
December 31, 2023
Available-for-sale
U.S. Treasury securities	$	99,996	$	—	$	(535)	$	99,461	$	—

U.S. Agency collateralized mortgage obligations	45		—		(2)		43		—


Total available-for-sale securities	100,041		—		(537)		99,504		—
Held-to-maturity
U.S. Agency residential mortgage-backed securities	50,860		467		(286)		51,041		—
Total investment securities	$	150,901	$	467	$	(823)	$	150,545	$	—

Accrued interest on available-for-sale securities was less than $1,000 and $718,000 at September 30, 2024 and December 31, 2023, respectively, accrued interest on held-to-maturity securities was $224,000 and $234,000 at September 30, 2024 and December 31, 2023, respectively. Accrued interest on securities is excluded from the balances in the preceding table of securities receivable, and is included in accrued interest receivable on the Company's consolidated balance sheets.

The amortized cost and fair value of debt securities at September 30, 2024, by contractual maturity, are shown below. Currently, the portfolio consists of mortgage-backed securities and collateralized mortgage obligations which are not due at a single maturity date. Expected maturities will differ from contractual maturities because issuers or the underlying borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(dollars in thousands; unaudited)
September 30, 2024




U.S. Agency residential mortgage-backed securities and collateralized mortgage obligations	40		38		48,582		49,159
	$	40	$	38	$	48,582	$	49,159

Investments in debt securities with an amortized cost of $20.4 million at September 30, 2024 and $21.8 million as of December 31, 2023, were pledged to secure public deposits and for other purposes as required or permitted by law and an additional $24.1 million and $25.0 million in securities were pledged for borrowing lines at September 30, 2024 and December 31, 2023, respectively.

During the nine months ended September 30, 2024, two securities matured, consisting of a total of $100.0 million in AFS U.S. Treasury securities. During the nine months ended September 30, 2024, no securities were purchased.

There were no sales of securities during the nine months ended September 30, 2024 or 2023.

There were seven securities with a $136,000 unrealized loss as of September 30, 2024. There were nine securities with a $823,000 unrealized loss as of December 31, 2023. The following table shows the investments’ gross unrealized losses and fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position for which an allowance for credit losses has not been recorded:


	Less Than 12 Months				12 Months or Greater				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(dollars in thousands; unaudited)
September 30, 2024
Available-for-sale

U.S. Agency collateralized mortgage obligations	$	—	$	—	$	38	$	2	$	38	$	2


Total available-for-sale securities	—		—		38		2		38		2
Held-to-maturity
U.S. Agency residential mortgage-backed securities	—		—		11,212		134		11,212		134
Total investment securities	$	—	$	—	$	11,250	$	136	$	11,250	$	136


	Less Than 12 Months				12 Months or Greater				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(dollars in thousands; unaudited)
December 31, 2023
Available-for-sale
U.S. Treasury securities	$	—	$	—	$	99,461	$	535	$	99,461	$	535

U.S. Agency collateralized mortgage obligations	—		—		43		2		43		2


Total available-for-sale securities	—		—		99,504		537		99,504		537
Held-to-maturity
U.S. Agency residential mortgage-backed securities	11,236		173		882		113		12,118		286
Total investment securities	$	11,236	$	173	$	100,386	$	650	$	111,622	$	823

Management has evaluated the above securities and does not believe that any individual unrealized loss as of September 30, 2024, will be recognized into income. Unrealized losses have not been recognized into income because management does not intend to sell and does not expect it will be required to sell the investments. The decline in fair value is largely due to changes in market conditions and interest rates, rather than credit quality. The fair value is expected to recover as the underlying securities in the portfolio approach maturity date and market conditions improve. Management believes there is a high probability of collecting all contractual amounts due, because all of the securities in the portfolio are backed by government agencies or government sponsored enterprises. However, a recovery in value may not occur for some time, if at all, and may be delayed for greater than the one year time horizon or perhaps even until maturity. Based on management's analysis no allowance for credit losses was required on these securities.