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INVESTMENT SECURITIES | 9 Months Ended
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Sep. 30, 2024
Investment Securities [Abstract] |
Investment Securities | NOTE 2 – INVESTMENT SECURITIES Investment Portfolio Composition . The following table summarizes the amortized cost and related fair value of investment securities available-for-sale (“AFS”) and securities held-to-maturity (“HTM”) and the corresponding amounts of gross unrealized gains and losses. Available for Sale Amortized Unrealized Unrealized Allowance for Fair (Dollars in Thousands) Cost Gains Losses Credit Losses Value September 30, 2024 U.S. Government Treasury $ 51,082 $ 222 $ 658 $ - $ 50,646 U.S. Government Agency 130,176 63 4,909 - 125,330 States and Political Subdivisions 43,258 2 3,239 (4) 40,017 Mortgage-Backed Securities (1) 68,054 1 8,274 - 59,781 Corporate Debt Securities 56,328 - 3,932 (79) 52,317 Other Securities (2) 8,096 - - - 8,096 Total $ 356,994 $ 288 $ 21,012 $ (83) $ 336,187 December 31, 2023 U.S. Government Treasury $ 25,947 $ 1 $ 1,269 $ - $ 24,679 U.S. Government Agency 152,983 104 8,053 - 145,034 States and Political Subdivisions 43,951 1 4,861 (8) 39,083 Mortgage-Backed Securities (1) 73,015 2 9,714 - 63,303 Corporate Debt Securities 63,600 - 6,031 (17) 57,552 Other Securities (2) 8,251 - - - 8,251 Total $ 367,747 $ 108 $ 29,928 $ (25) $ 337,902 Held to Maturity Amortized Unrealized Unrealized Fair (Dollars in Thousands) Cost Gains Losses Value September 30, 2024 U.S. Government Treasury $ 397,977 $ - $ 7,424 $ 390,553 Mortgage-Backed Securities (1) 163,503 156 11,884 151,775 Total $ 561,480 $ 156 $ 19,308 $ 542,328 December 31, 2023 U.S. Government Treasury $ 457,681 $ - $ 16,492 $ 441,189 Mortgage-Backed Securities (1) 167,341 13 16,792 150,562 Total $ 625,022 $ 13 $ 33,284 $ 591,751 (1) Comprised of residential mortgage-backed securities. (2) Includes Federal Home Loan Bank and Federal Reserve Bank stock, recorded at cost of $ 3.0 million and $ 5.1 million, respectively, at September 30, 2024 and $ 3.2 million and $ 5.1 million, respectively, at December 31, 2023. At September 30, 2024 and December 31, 2023, the investment portfolio had $ 7.0 million and $ 3.5 million, respectively, in equity securities. These securities do not have a readily determinable fair value and were not credit impaired. Securities with an amortized cost of $ 413.6 million and $ 578.5 million at September 30, 2024 and December 31, 2023, respectively, were pledged to secure public deposits and for other purposes. The Bank, as a member of the Federal Home Loan Bank of Atlanta (“FHLB”), is required to own capital stock in the FHLB based generally upon the balances of residential and commercial real estate loans and FHLB advances. The Bank’s investment in FHLB stock is a restricted investment carried at par value ($ 100 per share), which approximates its fair value. No ready market exists for the FHLB stock, and it has no quoted market value; however, the Bank may request redemption at par value of any stock in excess of the amount the Bank is required to hold. Stock redemptions are made at the discretion of the FHLB. Investment Sales. There were no sales of investment securities for the three and nine months ended September 30, 2024 and $ 30.4 million in sales for the three and nine months ended September 30, 2023. Maturity Distribution . At September 30, 2024, the Company’s investment securities had the following maturity distribution based on contractual maturity. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations. Mortgage-backed securities (“MBS”) and certain amortizing U.S. government agency securities are shown separately because they are not due at a certain maturity date. Available for Sale Held to Maturity (Dollars in Thousands) Amortized Cost Fair Value Amortized Cost Fair Value Due in one year or less $ 32,570 $ 31,822 $ 227,491 $ 224,457 Due after one year through five years 152,256 145,849 170,486 166,096 Due after five year through ten years 26,898 23,813 - - Mortgage-Backed Securities 68,054 59,781 163,503 151,775 U.S. Government Agency 69,120 66,826 - - Other Securities 8,096 8,096 - - Total $ 356,994 $ 336,187 $ 561,480 $ 542,328 Unrealized Losses on Investment Securities. The following table summarizes the available for sale and held to maturity investment securities with unrealized losses aggregated by major security type and length of time in a continuous unrealized loss position: Less Than Greater Than 12 Months 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in Thousands) Value Losses Value Losses Value Losses September 30, 2024 Available for Sale U.S. Government Treasury $ - $ - $ 17,490 $ 658 $ 17,490 $ 658 U.S. Government Agency 10,677 32 106,912 4,877 117,589 4,909 States and Political Subdivisions 1,904 140 37,262 3,099 39,166 3,239 Mortgage-Backed Securities - - 59,709 8,274 59,709 8,274 Corporate Debt Securities 979 112 51,417 3,820 52,396 3,932 Total $ 13,560 $ 284 $ 272,790 $ 20,728 $ 286,350 $ 21,012 Held to Maturity U.S. Government Treasury 117,561 1,063 272,992 6,361 390,553 7,424 Mortgage-Backed Securities 2,954 4 130,035 11,880 132,989 11,884 Total $ 120,515 $ 1,067 $ 403,027 $ 18,241 $ 523,542 $ 19,308 December 31, 2023 Available for Sale U.S. Government Treasury $ - $ - $ 19,751 $ 1,269 $ 19,751 $ 1,269 U.S. Government Agency 12,890 74 121,220 7,979 134,110 8,053 States and Political Subdivisions 1,149 31 37,785 4,830 38,934 4,861 Mortgage-Backed Securities 23 - 63,195 9,714 63,218 9,714 Corporate Debt Securities - - 57,568 6,031 57,568 6,031 Total $ 14,062 $ 105 $ 299,519 $ 29,823 $ 313,581 $ 29,928 Held to Maturity U.S. Government Treasury 153,880 3,178 287,310 13,314 441,190 16,492 Mortgage-Backed Securities 786 14 148,282 16,778 149,068 16,792 Total $ 154,666 $ 3,192 $ 435,592 $ 30,092 $ 590,258 $ 33,284 At September 30, 2024, there were 818 positions (combined AFS and HTM) with unrealized losses totaling $ 40.3 million. 73 of these positions are U.S. Treasury bonds and carry the full faith and credit of the U.S. Government. 651 are U.S. government agency securities issued by U.S. government sponsored entities. We believe the long history of no credit losses on government securities indicates that the expectation of nonpayment of the amortized cost basis is effectively zero. At September 30, 2024, all collateralized mortgage obligation securities, mortgage-backed securities, Small Business Administration securities, U.S. Agency, and U.S. Treasury bonds held were AAA rated. The remaining 94 positions (municipal securities and corporate bonds) have a credit component. At September 30, 2024, corporate debt securities had an allowance for credit losses of $ 79,000 and municipal securities had an allowance of $ 4,000 . Credit Quality Indicators The Company monitors the credit quality of its investment securities through various risk management procedures, including the monitoring of credit ratings. A majority of the debt securities in the Company’s investment portfolio were issued by a U.S. government entity or agency and are either explicitly or implicitly guaranteed by the U.S. government. The Company believes the long history of no credit losses on these securities indicates that the expectation of nonpayment of the amortized cost basis is effectively zero, even if the U.S. government were to technically default. Further, certain municipal securities held by the Company have been pre-refunded and secured by government guaranteed treasuries. Therefore, for the aforementioned securities, the Company does no t assess or record expected credit losses due to the zero loss assumption. The Company monitors the credit quality of its municipal and corporate securities portfolio via credit ratings which are updated on a quarterly basis. On a quarterly basis, municipal and corporate securities in an unrealized loss position are evaluated to determine if the loss is attributable to credit related factors and if an allowance for credit loss is needed.

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