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Investment Securities | 3 Months Ended
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Mar. 31, 2024
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | Investment Securities On January 1, 2023, the Company adopted ASC 326, which made changes to accounting for AFS debt securities whereby credit losses should be presented as an allowance, rather than as a write-down when management does not intend to sell and does not believe that it is more likely than not they will be required to sell prior to maturity. In addition, ASC 326 requires an ACL to be recorded on HTM debt securities measured at amortized cost. All securities information presented as of March 31, 2024 and as of December 31, 2023 are in accordance with ASC 326. The following table summarizes the activity in the ACL on HTM securities.
(Dollars in thousands) |  | Three Months Ended March 31, 2024 |  | Three Months Ended March 31, 2023 |  |  |  |
Balance, beginning of period |  | $ | 94 |  |  | $ | — |  |  |  |  |
Other debt securities, provision for credit losses |  | 22 |  |  | 163 |  |  |  |  |
Balance, end of period |  | $ | 116 |  |  | $ | 163 |  |  |  |  |
A provision for credit losses of $22,000 and $0.2 million was recorded for the three months ended March 31, 2024 and March 31, 2023, respectively. The following tables provide information on the amortized cost and estimated fair values of debt securities.
(Dollars in thousands) |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value
Available-for-sale securities: |  |  |  |  |  |  |  |
March 31, 2024 |  |  |  |  |  |  |  |
U.S. Treasury and government agencies |  | $ | 72,701 |  |  | $ | 8 |  |  | $ | 3,168 |  |  | $ | 69,541 |
Mortgage-backed-residential |  | 111,780 |  |  | 20 |  |  | 8,174 |  |  | 103,626 |
Other debt securities |  | 6,102 |  |  | 322 |  |  | 95 |  |  | 6,329 |
Total |  | $ | 190,583 |  |  | $ | 350 |  |  | $ | 11,437 |  |  | $ | 179,496 |
December 31, 2023 |  |  |  |  |  |  |  |
U.S. Treasury and government agencies |  | $ | 23,472 |  |  | $ | 5 |  |  | $ | 3,002 |  |  | $ | 20,475 |
Mortgage-backed-residential |  | 91,280 |  |  | 5 |  |  | 7,258 |  |  | 84,027 |
Other debt securities |  | 6,080 |  |  | 59 |  |  | 120 |  |  | 6,019 |
Total |  | $ | 120,832 |  |  | $ | 69 |  |  | $ | 10,380 |  |  | $ | 110,521 |
No AFS securities were sold during the three months ended March 31, 2024 and 2023.
(Dollars in thousands) |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value |  | Allowance for Credit Losses
Held-to-maturity securities: |  |  |  |  |  |  |  |  |  |
March 31, 2024 |  |  |  |  |  |  |  |  |  |
U.S. Treasury and government agencies |  | $ | 143,215 |  |  | $ | — |  |  | $ | 11,172 |  |  | $ | 132,043 |  |  | $ | — |
Mortgage-backed-residential |  | 348,754 |  |  | — |  |  | 47,343 |  |  | 301,411 |  |  | — |
States and political subdivisions |  | 1,469 |  |  | 44 |  |  | 24 |  |  | 1,489 |  |  | — |
Other debt securities |  | 10,500 |  |  | — |  |  | 1,185 |  |  | 9,315 |  |  | 116 |
Total |  | $ | 503,938 |  |  | $ | 44 |  |  | $ | 59,724 |  |  | $ | 444,258 |  |  | $ | 116 |
December 31, 2023 |  |  |  |  |  |  |  |  |  |
U.S. Treasury and government agencies |  | $ | 143,442 |  |  | $ | — |  |  | $ | 10,377 |  |  | $ | 133,065 |  |  | $ | — |
Mortgage-backed-residential |  | 357,870 |  |  | — |  |  | 43,864 |  |  | 314,006 |  |  | — |
States and political subdivisions |  | 1,470 |  |  | 57 |  |  | 19 |  |  | 1,508 |  |  | — |
Other debt securities |  | 10,500 |  |  | — |  |  | 1,249 |  |  | 9,251 |  |  | 94 |
Total |  | $ | 513,282 |  |  | $ | 57 |  |  | $ | 55,509 |  |  | $ | 457,830 |  |  | $ | 94 |
Equity securities with an aggregate fair value of $5.7 million at March 31, 2024 and $5.7 million at December 31, 2023 are presented separately on the balance sheet. The fair value adjustment recorded through earnings totaled gain of $61,000 for the three months ended March 31, 2024 and loss of $17,000 for the three months ended March 31, 2023, respectively. Credit Quality Information The Company monitors the credit quality of HTM securities through credit ratings provided by Standard & Poor’s Rating Services and Moody’s Investor Services. Credit ratings express opinions about the credit quality of a security, and are updated at each quarter end. Investment grade securities are rated BBB- or higher by S&P and Baa3 or higher by Moody’s and are generally considered by the rating agencies and market participants to be of low credit risk. Conversely, securities rated below investment grade, which are labeled as speculative grade by the rating agencies, are considered to have distinctively higher credit risk than investment grade securities. There were no speculative grade HTM securities at March 31, 2024 or December 31, 2023. HTM securities that are not rated are agency mortgage-backed securities sponsored by U.S. government agencies, as well as direct obligations of the agencies, with the remainder being sub-debt of other banks. The following table shows the amortized cost of HTM securities based on their lowest publicly available credit rating as of March 31, 2024.
|  | March 31, 2024
|  | Investment Grade
(Dollars in thousands) |  | Aaa |  | Aa1 |  | A3 |  | Baa1 |  | Baa2 |  |  |  | NR |  | Total
U.S. Treasury and government agencies |  | $ | 139,543 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  |  |  | $ | 3,672 |  |  | $ | 143,215 |
Mortgage-backed-residential |  | 348,754 |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  | — |  |  | 348,754 |
States and political subdivisions |  | — |  |  | 1,469 |  |  | — |  |  | — |  |  | — |  |  |  |  | — |  |  | 1,469 |
Other debt securities |  | — |  |  | — |  |  | 4,000 |  |  | 4,000 |  |  | 500 |  |  |  |  | 2,000 |  |  | 10,500 |
Total held-to maturity securities |  | $ | 488,297 |  |  | $ | 1,469 |  |  | $ | 4,000 |  |  | $ | 4,000 |  |  | $ | 500 |  |  |  |  | $ | 5,672 |  |  | $ | 503,938 |
The following table shows the amortized cost of HTM securities based on their lowest publicly available credit rating as of December 31, 2023.
|  | December 31, 2023
|  | Investment Grade
(Dollars in thousands) |  | Aaa |  | Aa1 |  | A3 |  | Baa1 |  | Baa2 |  |  |  | NR |  | Total
U.S. Treasury and government agencies |  | $ | 140,761 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  |  |  | $ | 2,681 |  |  | $ | 143,442 |
Mortgage-backed securities |  | 357,870 |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  | — |  |  | 357,870 |
Obligations of states and political subdivisions |  | — |  |  | 1,470 |  |  | — |  |  | — |  |  | — |  |  |  |  | — |  |  | 1,470 |
Other debt securities |  | — |  |  | — |  |  | 4,000 |  |  | 4,000 |  |  | 500 |  |  |  |  | 2,000 |  |  | 10,500 |
Total held-to-maturity securities |  | $ | 498,631 |  |  | $ | 1,470 |  |  | $ | 4,000 |  |  | $ | 4,000 |  |  | $ | 500 |  |  |  |  | $ | 4,681 |  |  | $ | 513,282 |
The following tables provide information about gross unrealized losses and fair value by length of time that the individual securities have been in a continuous unrealized loss position at March 31, 2024 and December 31, 2023.
|  | Less than 12 Months |  | More than 12 Months |  | Total
(Dollars in thousands) |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
March 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and government agencies |  | $ | 196 |  |  | $ | 1 |  |  | $ | 17,278 |  |  | $ | 3,167 |  |  | $ | 17,474 |  |  | $ | 3,168 |
Mortgage-backed-residential |  | 33,688 |  |  | 526 |  |  | 63,243 |  |  | 7,648 |  |  | 96,931 |  |  | 8,174 |
Other debt securities |  | — |  |  | — |  |  | 1,913 |  |  | 95 |  |  | 1,913 |  |  | 95 |
Total |  | $ | 33,884 |  |  | $ | 527 |  |  | $ | 82,434 |  |  | $ | 10,910 |  |  | $ | 116,318 |  |  | $ | 11,437 |
|  | Less than 12 Months |  | More than 12 Months |  | Total
(Dollars in thousands) |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and government agencies |  | $ | 74 |  |  | $ | — |  |  | $ | 17,750 |  |  | $ | 3,002 |  |  | $ | 17,824 |  |  | $ | 3,002 |
Mortgage-backed-residential |  | 24,405 |  |  | 150 |  |  | 52,864 |  |  | 7,108 |  |  | 77,269 |  |  | 7,258 |
Other debt securities |  | — |  |  | — |  |  | 1,890 |  |  | 120 |  |  | 1,890 |  |  | 120 |
Total |  | $ | 24,479 |  |  | $ | 150 |  |  | $ | 72,504 |  |  | $ | 10,230 |  |  | $ | 96,983 |  |  | $ | 10,380 |
There were 115 AFS debt securities with a fair value below the amortized cost basis, totaling $11.4 million of aggregate fair value as of March 31, 2024. The Company concluded that a credit loss does not exist in its AFS securities portfolio as of March 31, 2024, and no impairment loss has been recognized based on the fact that (1) changes in fair value were caused primarily by fluctuations in interest rates, (2) securities with unrealized losses had generally high credit quality, (3) the Company intends to hold these investments in debt securities to maturity and it is more-likely-than-not the Company will not be required to sell these investments before a recovery of its investment, and (4) issuers have continued to make timely payments of principal and interest. Additionally, the Company’s mortgage-back securities are issued by either U.S. government agencies or U.S. government sponsored enterprises. Collectively, these entities provide a guarantee, which is either explicitly or implicitly supported by the full faith and credit of the U.S. government, that investors in such mortgage-backed securities will receive timely principal and interest payments. All HTM and AFS securities were current with no securities past due or on nonaccrual as of March 31, 2024. The Company has securities which have been pledged as collateral for obligations to federal, state, and local government agencies, and other purpose as required or permitted by law, or sold under agreements to repurchase. At March 31, 2024, the carrying value of pledged AFS securities was $53.1 million and $195.8 million of pledged HTM securities. The comparable amounts for December 31, 2023 were $54.5 million and $185.9 million, respectively. There were no obligations of states or political subdivisions with carrying values, as to any issuer, exceeding 10% of stockholders’ equity at March 31, 2024 or December 31, 2023. The following table provides information on the amortized cost and estimated fair values of investment securities by maturity date at March 31, 2024.
|  | Available for sale |  | Held to maturity
(Dollars in thousands) |  | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Due in one year or less |  | $ | 51,911 |  |  | $ | 51,915 |  |  | $ | 7,000 |  |  | $ | 6,947 |
Due after one year through five years |  | 16,189 |  |  | 15,075 |  |  | 129,497 |  |  | 121,031 |
Due after five years through ten years |  | 42,049 |  |  | 39,399 |  |  | 39,125 |  |  | 35,652 |
Due after ten years |  | 80,434 |  |  | 73,107 |  |  | 328,316 |  |  | 280,628 |
Total |  | $ | 190,583 |  |  | $ | 179,496 |  |  | $ | 503,938 |  |  | $ | 444,258 |
The maturity dates for debt securities are determined using contractual maturity dates.

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