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MARKETABLE SECURITIES | 9 Months Ended
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Sep. 30, 2022
Investments, Debt and Equity Securities [Abstract] |
MARKETABLE SECURITIES | NOTE 2 - MARKETABLE SECURITIES The following tables summarize the amortized cost and fair value of available for sale and held to maturity securities as of September 30, 2022 and December 31, 2021 and the corresponding amounts of gross unrealized gains and losses:
September 30, 2022 |  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Estimated Fair Value |
Available for sale: |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds |  | $ | 35,003 |  |  | $ | — |  |  | $ | 1,893 |  |  | $ | 33,110 |
Municipal securities |  |  | 9,487 |  |  |  | 33 |  |  |  | 103 |  |  |  | 9,417 |
Mortgage-backed securities |  |  | 150,516 |  |  |  | 5 |  |  |  | 16,906 |  |  |  | 133,615 |
Collateralized mortgage obligations |  |  | 23,484 |  |  |  | 6 |  |  |  | 1,688 |  |  |  | 21,802 |
Total available for sale |  | $ | 218,490 |  |  | $ | 44 |  |  | $ | 20,590 |  |  | $ | 197,944 |
Held to maturity: |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies |  | $ | 9,103 |  |  | $ | — |  |  | $ | 1,277 |  |  | $ | 7,826 |
Treasury securities |  |  | 253,733 |  |  |  | — |  |  |  | 3,409 |  |  |  | 250,324 |
Municipal securities |  |  | 192,101 |  |  |  | 86 |  |  |  | 10,162 |  |  |  | 182,025 |
Mortgage-backed securities |  |  | 135,292 |  |  |  | — |  |  |  | 15,743 |  |  |  | 119,549 |
Collateralized mortgage obligations |  |  | 43,157 |  |  |  | — |  |  |  | 7,037 |  |  |  | 36,120 |
Total held to maturity |  | $ | 633,386 |  |  | $ | 86 |  |  | $ | 37,628 |  |  | $ | 595,844 |
December 31, 2021 |  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Estimated Fair Value |
Available for sale: |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies |  | $ | 10,013 |  |  | $ | — |  |  | $ | 42 |  |  | $ | 9,971 |
Corporate bonds |  |  | 35,080 |  |  |  | 940 |  |  |  | 85 |  |  |  | 35,935 |
Mortgage-backed securities |  |  | 221,610 |  |  |  | 1,477 |  |  |  | 1,779 |  |  |  | 221,308 |
Collateralized mortgage obligations |  |  | 74,925 |  |  |  | 971 |  |  |  | 904 |  |  |  | 74,992 |
Total available for sale |  | $ | 341,628 |  |  | $ | 3,388 |  |  | $ | 2,810 |  |  | $ | 342,206 |
Held to maturity: |  |  |  |  |  |  |  |  |  |  |  |
Municipal securities |  | $ | 181,310 |  |  | $ | 8,364 |  |  | $ | 118 |  |  | $ | 189,556 |
Mortgage-backed securities |  |  | 2,953 |  |  |  | — |  |  |  | 37 |  |  |  | 2,916 |
Total held to maturity |  | $ | 184,263 |  |  | $ | 8,364 |  |  | $ | 155 |  |  | $ | 192,472 |
From time to time, we have reclassified certain securities from available for sale to held to maturity. Such transfers are made at fair value at the date of transfer. The net unrealized holding gains or losses at the date of transfer create a premium or discount, respectively, the value of which is retained in securities held to maturity and other comprehensive income and amortized or accreted, respectively, over the remaining life of the underlying securities as an adjustment of yield. During the second quarter of 2022, we transferred $106,157 of securities from available for sale to held to maturity, which included a net unrealized loss on the date of transfer of $13,186. The net unamortized, unrealized loss remaining on transferred securities included in accumulated other comprehensive loss in the accompanying balance sheets totaled $5,540 at September 30, 2022, compared to a net unamortized, unrealized gain of $8,860 at December 31, 2021. This amount will be amortized out of accumulated other comprehensive loss over the remaining life of the underlying securities as an adjustment of the yield on those securities. There is no allowance for credit losses recorded for our available for sale or held to maturity debt securities as of September 30, 2022 or December 31, 2021. Information pertaining to securities with gross unrealized losses as of September 30, 2022 and December 31, 2021, for which no allowance for credit losses has been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position is detailed in the following tables:
|  | Less Than 12 Months |  |  | 12 Months or Longer |  |  | Total |
September 30, 2022 |  | Gross Unrealized Losses |  |  | Estimated Fair Value |  |  | Gross Unrealized Losses |  |  | Estimated Fair Value |  |  | Gross Unrealized Losses |  |  | Estimated Fair Value |
Available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds |  | $ | (1,711 | ) |  | $ | 31,159 |  |  | $ | (182 | ) |  | $ | 1,951 |  |  | $ | (1,893 | ) |  | $ | 33,110 |
Municipal securities |  |  | (103 | ) |  |  | 4,392 |  |  |  | — |  |  |  | — |  |  |  | (103 | ) |  |  | 4,392 |
Mortgage-backed securities |  |  | (11,585 | ) |  |  | 94,622 |  |  |  | (5,321 | ) |  |  | 26,174 |  |  |  | (16,906 | ) |  |  | 120,796 |
Collateralized mortgage obligations |  |  | (1,688 | ) |  |  | 21,359 |  |  |  | — |  |  |  | — |  |  |  | (1,688 | ) |  |  | 21,359 |
Total available for sale |  | $ | (15,087 | ) |  | $ | 151,532 |  |  | $ | (5,503 | ) |  | $ | 28,125 |  |  | $ | (20,590 | ) |  | $ | 179,657 |
Held to maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies |  | $ | (1,277 | ) |  | $ | 7,826 |  |  | $ | — |  |  | $ | — |  |  | $ | (1,277 | ) |  | $ | 7,826 |
Treasury securities |  |  | (3,409 | ) |  |  | 250,324 |  |  |  | — |  |  |  | — |  |  |  | (3,409 | ) |  |  | 250,324 |
Municipal securities |  |  | (8,800 | ) |  |  | 144,467 |  |  |  | (1,362 | ) |  |  | 3,171 |  |  |  | (10,162 | ) |  |  | 147,638 |
Mortgage-backed securities |  |  | (12,393 | ) |  |  | 102,475 |  |  |  | (3,350 | ) |  |  | 17,074 |  |  |  | (15,743 | ) |  |  | 119,549 |
Collateralized mortgage obligations |  |  | (7,037 | ) |  |  | 36,120 |  |  |  | — |  |  |  | — |  |  |  | (7,037 | ) |  |  | 36,120 |
Total held to maturity |  | $ | (32,916 | ) |  | $ | 541,212 |  |  | $ | (4,712 | ) |  | $ | 20,245 |  |  | $ | (37,628 | ) |  | $ | 561,457 |
|  | Less Than 12 Months |  |  | 12 Months or Longer |  |  | Total |
December 31, 2021 |  | Gross Unrealized Losses |  |  | Estimated Fair Value |  |  | Gross Unrealized Losses |  |  | Estimated Fair Value |  |  | Gross Unrealized Losses |  |  | Estimated Fair Value |
Available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies |  | $ | (42 | ) |  | $ | 9,971 |  |  | $ | — |  |  | $ | — |  |  | $ | (42 | ) |  | $ | 9,971 |
Corporate bonds |  |  | (85 | ) |  |  | 11,418 |  |  |  | — |  |  |  | — |  |  |  | (85 | ) |  |  | 11,418 |
Mortgage-backed securities |  |  | (1,383 | ) |  |  | 144,367 |  |  |  | (396 | ) |  |  | 11,317 |  |  |  | (1,779 | ) |  |  | 155,684 |
Collateralized mortgage obligations |  |  | (904 | ) |  |  | 40,172 |  |  |  | — |  |  |  | — |  |  |  | (904 | ) |  |  | 40,172 |
Total available for sale |  | $ | (2,414 | ) |  | $ | 205,928 |  |  | $ | (396 | ) |  | $ | 11,317 |  |  | $ | (2,810 | ) |  | $ | 217,245 |
Held to maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal securities |  | $ | (37 | ) |  | $ | 7,772 |  |  | $ | (81 | ) |  | $ | 2,996 |  |  | $ | (118 | ) |  | $ | 10,768 |
Mortgage-backed securities |  |  | (37 | ) |  |  | 2,916 |  |  |  | — |  |  |  | — |  |  |  | (37 | ) |  |  | 2,916 |
Total held to maturity |  | $ | (74 | ) |  | $ | 10,688 |  |  | $ | (81 | ) |  | $ | 2,996 |  |  | $ | (155 | ) |  | $ | 13,684 |
There were 311 investments in an unrealized loss position, of which 82 were available for sale debt securities with no recorded allowance for credit losses as of September 30, 2022. The available for sale securities in a loss position were composed of corporate bonds, municipal securities, collateralized mortgage obligations and mortgage-backed securities. Management evaluates available for sale debt securities in an unrealized loss position to determine whether the impairment is due to credit-related factors or noncredit-related factors. With respect to the collateralized mortgage obligations and mortgage-backed securities issued by the U.S. Government and its agencies, the Company has determined that a decline in fair value is not due to credit-related factors. The Company monitors the credit quality of other debt securities through the use of credit ratings and other factors specific to an individual security in assessing whether or not the decline in fair value of municipal or corporate securities, relative to their amortized cost, is due to credit-related factors. Triggers to prompt further investigation of securities when the fair value is less than the amortized cost are when a security has been downgraded and falls below an A credit rating, and the security’s unrealized loss exceeds 20% of its book value. Consideration is given to (1) the extent to which fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value. Based on evaluation of available evidence, management believes the unrealized losses on the securities as of September 30, 2022 are not credit-related. Management does not have the intent to sell any of these securities and believes that it is more likely than not the Company will not have to sell any such securities before recovery of cost. The fair values are expected to recover as the securities approach their maturity date or repricing date or if market yields for the investments decline. Accordingly, no allowance for credit losses has been recorded for these securities. Management assesses held to maturity securities sharing similar risk characteristics on a collective basis for expected credit losses under CECL. As of September 30, 2022, our held to maturity securities consisted of U.S. government agencies, municipal bonds, treasury securities and mortgage-backed securities issued by the U.S. Government and its agencies. With regard to the treasuries, collateralized mortgage obligations and mortgage-backed securities issued by the U.S. government, or agencies thereof, it is expected that the securities will not be settled at prices less than the amortized cost bases of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. For municipal securities, management reviewed key risk indicators, including ratings by credit agencies when available, and determined that there is no current expectation of credit loss. Accordingly, no allowance for credit losses has been recorded for these securities. Mortgage-backed securities and collateralized mortgage obligations are backed by pools of mortgages that are insured or guaranteed by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association or the Government National Mortgage Association. As of September 30, 2022, there were no holdings of securities of any one issuer, other than the collateralized mortgage obligations, treasuries and mortgage-backed securities issued by the U.S. government and its agencies, in an amount greater than 10% of total equity attributable to Guaranty Bancshares, Inc. Securities with fair values of approximately $354,200 and $310,958 at September 30, 2022 and December 31, 2021, respectively, were pledged to secure public fund deposits and for other purposes as required or permitted by law. There were no securities sold during the nine months ended September 30, 2022 or 2021. The contractual maturities at September 30, 2022 of available for sale and held to maturity securities at carrying value and estimated fair value are shown below. The Company invests in mortgage-backed securities and collateralized mortgage obligations that have expected maturities that differ from their contractual maturities. These differences arise because borrowers and/or issuers may have the right to call or prepay their obligation with or without call or prepayment penalties.
|  | Available for Sale |  |  | Held to Maturity |
September 30, 2022 |  | Amortized Cost |  |  | Estimated Fair Value |  |  | Amortized Cost |  |  | Estimated Fair Value |
Due within one year |  | $ | 5,019 |  |  | $ | 4,967 |  |  | $ | 208,372 |  |  | $ | 206,824 |
Due after one year through five years |  |  | 10,100 |  |  |  | 9,743 |  |  |  | 107,637 |  |  |  | 105,615 |
Due after five years through ten years |  |  | 26,285 |  |  |  | 24,833 |  |  |  | 67,053 |  |  |  | 62,297 |
Due after ten years |  |  | 3,086 |  |  |  | 2,984 |  |  |  | 71,875 |  |  |  | 65,439 |
Mortgage-backed securities |  |  | 150,516 |  |  |  | 133,615 |  |  |  | 135,292 |  |  |  | 119,549 |
Collateralized mortgage obligations |  |  | 23,484 |  |  |  | 21,802 |  |  |  | 43,157 |  |  |  | 36,120 |
Total securities |  | $ | 218,490 |  |  | $ | 197,944 |  |  | $ | 633,386 |  |  | $ | 595,844 |

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI https://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2176304 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher SEC -Name Regulation S-K (SK) -Number 229 -Section 1403 -Paragraph (b) + Details
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