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Securities

9 Months Ended

Sep. 30, 2024

Note 3: Securities

The following tables present the amortized cost and estimated fair value of securities with gross unrealized gains and losses at September 30, 2024 and December 31, 2023:


		September 30, 2024
					Gross			Gross
		Amortized			Unrealized			Unrealized
(dollars in thousands)		Cost			Gains			Losses			Fair Value
Securities Available for Sale:
U.S. Treasury Securities		$	105,998		$	—		$	(123)		$	105,875
Municipal Bonds			125,423			74			(13,610)			111,887
Mortgage-Backed Securities			218,550			4,287			(12,366)			210,471
Corporate Securities			144,539			822			(7,254)			138,107
SBA Securities			14,105			217			(56)			14,266
Asset-Backed Securities			83,964			193			(48)			84,109
Total Securities Available for Sale		$	692,579		$	5,593		$	(33,457)		$	664,715


		December 31, 2023
					Gross			Gross
		Amortized			Unrealized			Unrealized
(dollars in thousands)		Cost			Gains			Losses			Fair Value
Securities Available for Sale:
Municipal Bonds		$	151,512		$	47		$	(19,035)		$	132,524
Mortgage-Backed Securities			249,455			2,261			(16,401)			235,315
Corporate Securities			142,098			386			(11,879)			130,605
SBA Securities			18,497			279			(102)			18,674
Asset-Backed Securities			87,054			357			(425)			86,986
Total Securities Available for Sale		$	648,616		$	3,330		$	(47,842)		$	604,104

Securities with a carrying value of $150.4 million and $170.7 million were pledged to secure borrowing capacity at the Federal Reserve Discount Window as of September 30, 2024 and December 31, 2023, respectively.

The following tables present the fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2024 and December 31, 2023:


				Less Than 12 Months						12 Months or Greater						Total
		Number of					Unrealized						Unrealized						Unrealized
(dollars in thousands, except number of holdings)		Holdings		Fair Value			Losses			Fair Value			Losses			Fair Value			Losses
September 30, 2024
U.S. Treasury Securities		1		$	105,875		$	(123)		$	—		$	—		$	105,875		$	(123)
Municipal Bonds		169			—			—			101,085			(13,610)			101,085			(13,610)
Mortgage-Backed Securities		113			12,988			(37)			120,465			(12,329)			133,453			(12,366)
Corporate Securities		103			8,018			(114)			101,053			(7,140)			109,071			(7,254)
SBA Securities		32			458			(1)			4,428			(55)			4,886			(56)
Asset-Backed Securities		9			12,807			(26)			9,419			(22)			22,226			(48)
Total Securities Available for Sale		427		$	140,146		$	(301)		$	336,450		$	(33,156)		$	476,596		$	(33,457)


				Less Than 12 Months						12 Months or Greater						Total
		Number of					Unrealized						Unrealized						Unrealized
(dollars in thousands, except number of holdings)		Holdings		Fair Value			Losses			Fair Value			Losses			Fair Value			Losses
December 31, 2023
Municipal Bonds		212		$	4,052		$	(17)		$	120,527		$	(19,018)		$	124,579		$	(19,035)
Mortgage-Backed Securities		128			35,719			(310)			135,829			(16,091)			171,548			(16,401)
Corporate Securities		110			14,528			(756)			101,311			(11,123)			115,839			(11,879)
SBA Securities		47			1,731			(3)			7,072			(99)			8,803			(102)
Asset-Backed Securities		24			39,011			(234)			13,805			(191)			52,816			(425)
Total Securities Available for Sale		521		$	95,041		$	(1,320)		$	378,544		$	(46,522)		$	473,585		$	(47,842)

At September 30, 2024, 427 debt securities had unrealized losses with aggregate depreciation of approximately 6.6% from the Company’s amortized cost basis. At December 31, 2023, 521 debt securities had unrealized losses with aggregate depreciation of approximately 9.2% from the Company’s amortized cost basis. These unrealized losses have not been recognized into income because management does not intend to sell these securities, and it is not more likely than not it will be required to sell the securities before recovery of its amortized cost basis. Furthermore, the unrealized losses are due to changes in interest rates and other market conditions and were not reflective of credit events. To make this determination, consideration is given to such factors as the credit rating of the issuer, level of credit enhancement, changes in credit ratings, market conditions such as current interest rates, any adverse conditions specific to the security, and delinquency status on contractual payments. As of September 30, 2024 and December 31, 2023, there was no allowance for credit losses carried on the Company’s securities portfolio.

Accrued interest receivable on securities, which is recorded within accrued interest on the balance sheet, totaled $6.3 million and $4.9 million at September 30, 2024 and December 31, 2023, respectively, and was excluded from the estimate of credit losses.

The Company has entered into a fair value hedging transaction to mitigate the impact of changing interest rates on the fair value of U.S. treasury securities. See Note 6 – Derivative Instruments and Hedging Activities for disclosure of the gains and losses recognized on derivative instruments and the cumulative fair value hedging adjustments to the carrying amount of the hedged securities.

The following table presents a summary of the amortized cost and estimated fair value of debt securities by the lesser of expected call date or contractual maturity as of September 30, 2024. Call date is used when a call of the debt security is expected, as determined by the Company when the security has a market value above its amortized cost. Contractual maturities will differ from expected maturities for mortgage-backed, SBA securities and asset-backed securities because borrowers may have the right to call or prepay obligations without penalties.


(dollars in thousands)		Amortized Cost			Fair Value
September 30, 2024
Due in One Year or Less		$	31,330		$	31,668
Due After One Year Through Five Years			48,487			46,985
Due After Five Years Through 10 Years			166,585			151,981
Due After 10 Years			129,558			125,235
Subtotal			375,960			355,869
Mortgage-Backed Securities			218,550			210,471
SBA Securities			14,105			14,266
Asset-Backed Securities			83,964			84,109
Totals		$	692,579		$	664,715

The following table presents a summary of the proceeds from sales of securities available for sale, as well as gross gains and losses, for the three and nine months ended September 30, 2024 and 2023:


		Three Months Ended						Nine Months Ended
		September 30,						September 30,
(dollars in thousands)		2024			2023			2024			2023
Proceeds From Sales of Securities		$	50,779		$	—		$	101,612		$	26,976
Gross Gains on Sales			488			—			1,594			247
Gross Losses on Sales			(516)			—			(1,209)			(253)