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Securities | 9 Months Ended
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Sep. 30, 2023
Investments, Debt and Equity Securities [Abstract] |
Securities | Securities The amortized cost and fair value of securities available-for-sale and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income were as follows:
|  | As of September 30, 2023
|  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
|  | (In Thousands)
Available-for-sale: |  |  |  |  |  |  |  |
U.S. treasuries |  | $ | 14,075 |  |  | $ | — |  |  | $ | (534) |  |  | 13,541 |
U.S. government agency securities - government-sponsored enterprises |  | 28,568 |  |  | 40 |  |  | (669) |  |  | 27,939 |
Municipal securities |  | 40,510 |  |  | — |  |  | (7,470) |  |  | 33,040 |
Residential mortgage-backed securities - government issued |  | 59,274 |  |  | — |  |  | (3,514) |  |  | 55,760 |
Residential mortgage-backed securities - government-sponsored enterprises |  | 128,609 |  |  | — |  |  | (15,626) |  |  | 112,983 |
Commercial mortgage-backed securities - government issued |  | 3,272 |  |  | — |  |  | (595) |  |  | 2,677 |
Commercial mortgage-backed securities - government-sponsored enterprises |  | 31,983 |  |  | — |  |  | (5,760) |  |  | 26,223 |
|  | $ | 306,291 |  |  | $ | 40 |  |  | $ | (34,168) |  |  | $ | 272,163 |
|  | As of December 31, 2022
|  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
|  | (In Thousands)
Available-for-sale: |  |  |  |  |  |  |  |
U.S. treasuries |  | $ | 4,977 |  |  | $ | — |  |  | $ | (532) |  |  | $ | 4,445 |
U.S. government agency securities - government-sponsored enterprises |  | 13,666 |  |  | 70 |  |  | (531) |  |  | 13,205 |
Municipal securities |  | 45,088 |  |  | 90 |  |  | (5,867) |  |  | 39,311 |
Residential mortgage-backed securities - government issued |  | 21,790 |  |  | — |  |  | (2,359) |  |  | 19,431 |
Residential mortgage-backed securities - government-sponsored enterprises |  | 119,265 |  |  | — |  |  | (12,942) |  |  | 106,323 |
Commercial mortgage-backed securities - government issued |  | 3,450 |  |  | — |  |  | (518) |  |  | 2,932 |
Commercial mortgage-backed securities - government-sponsored enterprises |  | 31,515 |  |  | — |  |  | (5,138) |  |  | 26,377 |
|  | $ | 239,751 |  |  | $ | 160 |  |  | $ | (27,887) |  |  | $ | 212,024 |
The amortized cost and fair value of securities held-to-maturity and the corresponding amounts of gross unrecognized gains and losses were as follows:
|  | As of September 30, 2023
|  | Amortized Cost |  | Gross Unrecognized Gains |  | Gross Unrecognized Losses |  | Fair Value
|  | (In Thousands)
Held-to-maturity: |  |  |  |  |  |  |  |
Municipal securities |  | $ | 4,213 |  |  | $ | — |  |  | $ | (140) |  |  | $ | 4,073 |
Residential mortgage-backed securities - government issued |  | 1,312 |  |  | — |  |  | (99) |  |  | 1,213 |
Residential mortgage-backed securities - government-sponsored enterprises |  | 1,159 |  |  | — |  |  | (82) |  |  | 1,077 |
Commercial mortgage-backed securities - government-sponsored enterprises |  | 2,005 |  |  | — |  |  | (155) |  |  | 1,850 |
|  | $ | 8,689 |  |  | $ | — |  |  | $ | (476) |  |  | $ | 8,213 |
|  | As of December 31, 2022
|  | Amortized Cost |  | Gross Unrecognized Gains |  | Gross Unrecognized Losses |  | Fair Value
|  | (In Thousands)
Held-to-maturity: |  |  |  |  |  |  |  |
Municipal securities |  | $ | 7,467 |  |  | $ | 7 |  |  | $ | (70) |  |  | $ | 7,404 |
Residential mortgage-backed securities - government issued |  | 1,625 |  |  | — |  |  | (107) |  |  | 1,518 |
Residential mortgage-backed securities - government-sponsored enterprises |  | 1,537 |  |  | — |  |  | (93) |  |  | 1,444 |
Commercial mortgage-backed securities - government-sponsored enterprises |  | 2,006 |  |  | — |  |  | (102) |  |  | 1,904 |
|  | $ | 12,635 |  |  | $ | 7 |  |  | $ | (372) |  |  | $ | 12,270 |
U.S. Treasuries contain treasury bonds issued by the United States Treasury. U.S. government agency securities - government-sponsored enterprises represent securities issued by Federal National Mortgage Association (“FNMA”) and the SBA. Municipal securities include securities issued by various municipalities located primarily within Wisconsin and are primarily general obligation bonds that are tax-exempt in nature. Residential and commercial mortgage-backed securities - government issued represent securities guaranteed by the Government National Mortgage Association. Residential and commercial mortgage-backed securities - government-sponsored enterprises include securities guaranteed by the Federal Home Loan Mortgage Corporation, FNMA, and the FHLB. The Corporation sold no available-for-sale securities during the three months ended September 30, 2023 and 16 available-for-sale securities during the nine months ended September 30, 2023. There were no sales of available-for-sale securities during the three and nine months ended September 30, 2022. At September 30, 2023 and December 31, 2022, securities with a fair value of $43.3 million and $35.9 million, respectively, were pledged to secure various obligations, including interest rate swap contracts and municipal deposits. The amortized cost and fair value of securities by contractual maturity at September 30, 2023 are shown below. Actual maturities may differ from contractual maturities because issuers have the right to call or prepay certain obligations with or without call or prepayment penalties.
|  | Available-for-Sale |  | Held-to-Maturity
|  | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
|  | (In Thousands)
Due in one year or less |  | $ | 20,496 |  |  | $ | 20,439 |  |  | $ | 1,060 |  |  | $ | 1,048 |
Due in one year through five years |  | 17,471 |  |  | 16,103 |  |  | 3,153 |  |  | 3,025 |
Due in five through ten years |  | 15,325 |  |  | 13,381 |  |  | — |  |  | — |
Due in over ten years |  | 29,861 |  |  | 24,597 |  |  | — |  |  | — |
|  | 83,153 |  |  | 74,520 |  |  | 4,213 |  |  | 4,073 |
Residential mortgage-backed securities |  | 187,883 |  |  | 168,743 |  |  | 2,471 |  |  | 2,290 |
Commercial mortgage-backed securities |  | 35,255 |  |  | 28,900 |  |  | 2,005 |  |  | 1,850 |
|  | $ | 306,291 |  |  | $ | 272,163 |  |  | $ | 8,689 |  |  | $ | 8,213 |
The tables below show the Corporation’s gross unrealized losses and fair value of available-for-sale investments aggregated by investment category and length of time that individual investments were in a continuous loss position at September 30, 2023 and December 31, 2022. At September 30, 2023, the Corporation held 183 available-for-sale securities that were in an unrealized loss position, 153 of which have been in a continuous unrealized loss position for twelve months or greater. The Corporation also has not specifically identified available-for-sale securities in a loss position that it intends to sell in the near term and does not believe that it will be required to sell any such securities. The Corporation reviews its securities on a quarterly basis to assess declines in fair value for credit losses. Consideration is given to such factors as the credit rating of the borrower, market conditions such as current interest rates, any adverse conditions specific to the security, and delinquency status on contractual payments. For the three and nine months ended September 30, 2023 and 2022, management concluded that in all instances securities with fair value less than carrying value was due to market and other factors; thus, no credit loss provision was required. A summary of unrealized loss information for securities available-for-sale, categorized by security type and length of time for which the security has been in a continuous unrealized loss position, follows:
|  | As of September 30, 2023
|  | Less than 12 Months |  | 12 Months or Longer |  | Total
|  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
|  | (In Thousands)
Available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |
U.S. treasuries |  | $ | 9,079 |  |  | $ | 14 |  |  | $ | 4,462 |  |  | $ | 520 |  |  | $ | 13,541 |  |  | $ | 534 |
U.S. government agency securities - government-sponsored enterprises |  | 16,295 |  |  | 107 |  |  | 2,938 |  |  | 562 |  |  | 19,233 |  |  | 669 |
Municipal securities |  | — |  |  | — |  |  | 33,040 |  |  | 7,470 |  |  | 33,040 |  |  | 7,470 |
Residential mortgage-backed securities - government issued |  | 29,423 |  |  | 907 |  |  | 13,828 |  |  | 2,607 |  |  | 43,251 |  |  | 3,514 |
Residential mortgage-backed securities - government-sponsored enterprises |  | 36,314 |  |  | 1,308 |  |  | 76,669 |  |  | 14,318 |  |  | 112,983 |  |  | 15,626 |
Commercial mortgage-backed securities - government issued |  | — |  |  | — |  |  | 2,677 |  |  | 595 |  |  | 2,677 |  |  | 595 |
Commercial mortgage-backed securities - government-sponsored enterprises |  | 874 |  |  | 42 |  |  | 25,349 |  |  | 5,718 |  |  | 26,223 |  |  | 5,760 |
|  | $ | 91,985 |  |  | $ | 2,378 |  |  | $ | 158,963 |  |  | $ | 31,790 |  |  | $ | 250,948 |  |  | $ | 34,168 |
|  | As of December 31, 2022
|  | Less than 12 Months |  | 12 Months or Longer |  | Total
|  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
|  | (In Thousands)
Available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |
U.S. treasuries |  | $ | — |  |  | $ | — |  |  | $ | 4,446 |  |  | $ | 532 |  |  | $ | 4,446 |  |  | $ | 532 |
U.S. government agency securities - government-sponsored enterprises |  | — |  |  | — |  |  | 2,969 |  |  | 531 |  |  | 2,969 |  |  | 531 |
Municipal securities |  | 26,759 |  |  | 3,132 |  |  | 10,133 |  |  | 2,735 |  |  | 36,892 |  |  | 5,867 |
Residential mortgage-backed securities - government issued |  | 9,624 |  |  | 436 |  |  | 9,807 |  |  | 1,923 |  |  | 19,431 |  |  | 2,359 |
Residential mortgage-backed securities - government-sponsored enterprises |  | 71,474 |  |  | 6,433 |  |  | 34,849 |  |  | 6,509 |  |  | 106,323 |  |  | 12,942 |
Commercial mortgage-backed securities - government issued |  | 1,236 |  |  | 112 |  |  | 1,696 |  |  | 406 |  |  | 2,932 |  |  | 518 |
Commercial mortgage-backed securities - government-sponsored enterprises |  | 7,758 |  |  | 984 |  |  | 18,619 |  |  | 4,154 |  |  | 26,377 |  |  | 5,138 |
|  | $ | 116,851 |  |  | $ | 11,097 |  |  | $ | 82,519 |  |  | $ | 16,790 |  |  | $ | 199,370 |  |  | $ | 27,887 |
The tables below show the Corporation’s gross unrealized losses and fair value of held-to-maturity investments, aggregated by investment category and length of time that individual investments were in a continuous loss position at September 30, 2023 and December 31, 2022. At September 30, 2023, the Corporation held 30 held-to-maturity securities that were in an unrealized loss position, 24 of which have been in a continuous unrealized loss position for twelve months or greater. Management assesses held-to-maturity securities for credit losses on a quarterly basis. The assessment includes review of credit ratings, identification of delinquency and evaluation of market factors. Based on this analysis, management concludes the decline in fair value is due to market factors, specifically changes in interest rates. Accordingly, no credit loss provision was recorded in the unaudited Consolidated Statements of Income for the three and nine months ended September 30, 2023 and 2022. A summary of unrecognized loss information for securities held-to-maturity, categorized by security type and length of time for which the security has been in a continuous unrealized loss position, follows:
|  | As of September 30, 2023
|  | Less than 12 Months |  | 12 Months or Longer |  | Total
|  | Fair Value |  | Unrecognized Losses |  | Fair Value |  | Unrecognized Losses |  | Fair Value |  | Unrecognized Losses
|  | (In Thousands)
Held-to-maturity: |  |  |  |  |  |  |  |  |  |  |  |
Municipal securities |  | $ | 1,896 |  |  | $ | 46 |  |  | $ | 2,177 |  |  | $ | 94 |  |  | $ | 4,073 |  |  | $ | 140 |
Residential mortgage-backed securities - government issued |  | — |  |  | — |  |  | 1,213 |  |  | 99 |  |  | 1,213 |  |  | 99 |
Residential mortgage-backed securities - government-sponsored enterprises |  | — |  |  | — |  |  | 1,077 |  |  | 82 |  |  | 1,077 |  |  | 82 |
Commercial mortgage-backed securities - government-sponsored enterprises |  | — |  |  | — |  |  | 1,850 |  |  | 155 |  |  | 1,850 |  |  | 155 |
|  | $ | 1,896 |  |  | $ | 46 |  |  | $ | 6,317 |  |  | $ | 430 |  |  | $ | 8,213 |  |  | $ | 476 |
|  | As of December 31, 2022
|  | Less than 12 Months |  | 12 Months or Longer |  | Total
|  | Fair Value |  | Unrecognized Losses |  | Fair Value |  | Unrecognized Losses |  | Fair Value |  | Unrecognized Losses
|  | (In Thousands)
Held-to-maturity: |  |  |  |  |  |  |  |  |  |  |  |
Municipal securities |  | $ | 6,035 |  |  | $ | 52 |  |  | $ | 267 |  |  | $ | 18 |  |  | $ | 6,302 |  |  | $ | 70 |
Residential mortgage-backed securities - government issued |  | 1,518 |  |  | 107 |  |  | — |  |  | — |  |  | 1,518 |  |  | 107 |
Residential mortgage-backed securities - government-sponsored enterprises |  | 1,444 |  |  | 93 |  |  | — |  |  | — |  |  | 1,444 |  |  | 93 |
Commercial mortgage-backed securities - government-sponsored enterprises |  | 1,904 |  |  | 102 |  |  | — |  |  | — |  |  | 1,904 |  |  | 102 |
|  | $ | 10,901 |  |  | $ | 354 |  |  | $ | 267 |  |  | $ | 18 |  |  | $ | 11,168 |  |  | $ | 372 |
On January 1, 2023, the Corporation adopted ASU 2016-13, which replaced the legacy GAAP other-than-temporary impairment (“OTTI”) model with a credit loss model. ASU 2016-13 requires an allowance on lifetime expected credit losses on held to maturity debt securities. As of January 1, 2023 and September 30, 2023, the Corporation estimated the expected credit losses to be immaterial based on the composition of the securities portfolio.

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