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Investment securities

6 Months Ended

Jun. 30, 2022

Investment securities

Investment securities

4. Investment securities:

The amortized cost and fair value of investment securities aggregated by investment category at June 30, 2022 and December 31, 2021 are summarized as follows:


					Gross			Gross
		Amortized			Unrealized			Unrealized			Fair
June 30, 2022		Cost			Gains			Losses			Value
Available-for-sale:
U.S. Treasury securities		$	252,706		$	24		$	16,272		$	236,458
U.S. government-sponsored enterprises			23,616			2			453			23,165
State and municipals:
Taxable			69,950			49			10,027			59,972
Tax-exempt			100,547			80			11,355			89,272
Residential mortgage-backed securities:
U.S. government agencies			1,290						14			1,276
U.S. government-sponsored enterprises			102,500						14,544			87,956
Commercial mortgage-backed securities:
U.S. government-sponsored enterprises			12,374						272			12,102
Corporate debt securities			4,000						290			3,710
Total		$	566,983		$	155		$	53,227		$	513,911
Held-to-maturity:
Tax-exempt state and municipals		$	11,257		$	10		$	978		$	10,289
Residential mortgage-backed securities:
U.S. government agencies			18,168						1,894			16,274
U.S. government-sponsored enterprises			65,021						7,508			57,513
Total		$	94,446		$	10		$	10,380		$	84,076


					Gross			Gross
		Amortized			Unrealized			Unrealized			Fair
December 31, 2021		Cost			Gains			Losses			Value
Available-for-sale:
U.S. Treasury securities		$	193,849		$	107		$	2,382		$	191,574
U.S. government-sponsored enterprises			33,435			343						33,778
State and municipals:
Taxable			69,066			994			1,082			68,978
Tax-exempt			96,412			2,452			614			98,250
Residential mortgage-backed securities:
U.S. government agencies			1,790			53						1,843
U.S. government-sponsored enterprises			109,018			939			2,925			107,032
Commercial mortgage-backed securities:
U.S. government-sponsored enterprises			12,542			406						12,948
Corporate debt securities			3,000						82			2,918
Total		$	519,112		$	5,294		$	7,085		$	517,321
Held-to-maturity:
Tax-exempt state and municipals		$	11,476		$	126		$	56		$	11,546
Residential mortgage-backed securities:
U.S. government agencies			18,802						392			18,410
U.S. government-sponsored enterprises			40,935			3			448			40,490
Total		$	71,213		$	129		$	896		$	70,446

Restricted Investment In Stock

Restricted investment in stock includes Federal Home Loan Bank (“FHLB”) stock with a carrying cost of $8,495 and $4,003 at June 30, 2022 and December 31, 2021, respectively, and Atlantic Community Bankers Bank (“ACBB”) stock with a carrying cost of $42 at June 30, 2022 and December 31, 2021, respectively, which are included in other assets in the consolidated balance sheets. FHLB and ACBB stock was issued as a requirement to facilitate participation in borrowing and other banking services. The investment in FHLB stock may fluctuate, as it is based on the member bank’s use of FHLB’s services.

These restricted investments are carried at cost and evaluated for other-than-temporary impairment (“OTTI”) quarterly. As of June 30, 2022, there was no OTTI associated with these investments.

The maturity distribution of the fair value, which is the net carrying amount, of the debt securities classified as available-for-sale at June 30, 2022, is summarized as follows:


		Fair
June 30, 2022		Value
Within one year		$	29,255
After one but within five years			205,194
After five but within ten years			83,195
After ten years			92,422
			410,066
Mortgage-backed and other amortizing securities			103,845
Total		$	513,911

The maturity distribution of the amortized cost and fair value, of debt securities classified as held-to-maturity at June 30, 2022, is summarized as follows:


		Amortized			Fair
June 30, 2022		Cost			Value
Within one year		$			$
After one but within five years
After five but within ten years			8,092			7,429
After ten years			3,165			2,860
			11,257			10,289
Mortgage-backed securities			83,189			73,787
Total		$	94,446		$	84,076

Securities with a carrying value of $176,683 and $203,580 at June 30, 2022 and December 31, 2021, respectively, were pledged to secure public deposits and certain other deposits as required or permitted by law.

Securities and short-term investment activities are conducted with a diverse group of government entities, corporations and state and local municipalities. The counterparty’s creditworthiness and type of collateral is evaluated on a case-by-case basis. At June 30, 2022 and December 31, 2021, there were no significant concentrations of credit risk from any one issuer, with the exception of U.S. government agencies and sponsored enterprises, that exceeded 10.0 percent of stockholders’ equity.

The fair value and gross unrealized losses of investment securities with unrealized losses for which an OTTI has not been recognized at June 30, 2022 and December 31, 2021, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, are summarized as follows:



				Less Than 12 Months								12 Months or Greater								Total
		Number of								Number of								Number of
		Securities in a		Fair			Unrealized			Securities in a		Fair			Unrealized			Securities in a		Fair			Unrealized
June 30, 2022		Loss Position		Value			Losses			Loss Position		Value			Losses			Loss Position		Value			Losses
U.S. Treasury securities		53		$	232,013		$	16,272				$			$			53		$	232,013		$	16,272
U.S. government-sponsored enterprises		5			16,662			453										5			16,662			453
State and municipals:
Taxable		50			45,783			7,083		14			10,707			2,944		64			56,490			10,027
Tax-exempt		92			70,020			9,523		23			12,370			2,810		115			82,390			12,333
Residential mortgage-backed securities:
U.S. government agencies		9			17,550			1,908										9			17,550			1,908
U.S. government-sponsored enterprises		30			91,177			11,118		10			53,591			10,934		40			144,768			22,052
Commercial mortgage-backed securities:
U.S. government-sponsored enterprises		4			12,102			272										4			12,102			272
Corporate debt securities		4			2,811			189		2			899			101		6			3,710			290
Total		247		$	488,118		$	46,818		49		$	77,567		$	16,789		296		$	565,685		$	63,607


				Less Than 12 Months								12 Months or Greater								Total
		Number of								Number of								Number of
		Securities in a		Fair			Unrealized			Securities in a		Fair			Unrealized			Securities in a		Fair			Unrealized
December 31, 2021		Loss Position		Value			Losses			Loss Position		Value			Losses			Loss Position		Value			Losses
U.S. Treasury securities		42		$	179,974		$	2,382				$			$			42		$	179,974		$	2,382
State and municipals:
Taxable		27			26,827			718		8			8,008			364		35			34,835			1,082
Tax-exempt		61			38,693			358		2			10,319			313		63			49,012			671
Residential mortgage-backed securities:
U.S. government agencies		3			18,398			391										3			18,398			391
U.S. government-sponsored enterprises		13			77,875			1,454		7			48,276			1,920		20			126,151			3,374
Corporate debt securities		4			2,449			51		1			470			30		5			2,919			81
Total		150		$	344,216		$	5,354		18		$	67,073		$	2,627		168		$	411,289		$	7,981

Management does not consider the unrealized losses on the debt securities, as a result of significantly higher market interest rates, to be OTTI based on historical evidence that indicates the cost of these securities is recoverable within a reasonable period of time in relation to normal cyclical changes in the market rates of interest. Moreover, because there has been no known material change in the credit quality of the issuers or other events or circumstances that may cause a significant adverse impact on the fair value of these securities, and management does not intend to sell these securities and it is unlikely that the Company will be required to sell these securities before recovery of their amortized cost basis, which may be maturity, the Company does not consider the unrealized losses to be OTTI at June 30, 2022. There was no OTTI recognized for the three or six months ended June 30, 2022 and 2021.