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Investment Securities

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Investment Securities

NOTE 2 – Investment Securities

The amortized costs and fair value of investment securities are as follows:


		March 31, 2023
		Amortized				Gross Unrealized								Fair
(dollars in thousands)		Cost				Gains				Losses				Value
Available for sale
Corporate bonds		$	2,166				-				250				1,916
US treasuries			999				-				107				892
US government agencies			13,008				-				2,024				10,984
State and political subdivisions			22,844				8				3,203				19,649
Asset-backed securities			5,966				-				147				5,819
Mortgage-backed securities
FHLMC			23,876				1				3,467				20,410
FNMA			34,612				-				5,029				29,583
GNMA			5,471				-				688				4,783
Total mortgage-backed securities			63,959				1				9,184				54,776
Total investment securities available for sale		$	108,942				9				14,915				94,036


		December 31, 2022
		Amortized				Gross Unrealized								Fair
		Cost				Gains				Losses				Value
Available for sale
Corporate bonds		$	2,172				-				289				1,883
US treasuries			999				-				128				871
US government agencies			13,007				-				2,390				10,617
State and political subdivisions			22,910				-				4,004				18,906
Asset-backed securities			6,435				-				206				6,229
Mortgage-backed securities
FHLMC			24,086				-				3,745				20,341
FNMA			35,141				-				5,520				29,621
GNMA			5,573				-				694				4,879
Total mortgage-backed securities			64,800				-				9,959				54,841
Total investment securities available for sale		$	110,323				-				16,976				93,347

Contractual maturities and yields on the Company’s investment securities at March 31, 2023 and December 31, 2022 are shown in the following table. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.


		March 31, 2023
		Less than one year								One to five years								Five to ten years								Over ten years								Total
(dollars in thousands)		Amount				Yield				Amount				Yield				Amount				Yield				Amount				Yield				Amount				Yield
Available for sale
Corporate bonds		$	-				-			$	-				-			$	1,916				2.00	%		$	-				-			$	1,916				2.00	%
US treasuries			-				-				-				-				892				1.27	%			-				-				892				1.27	%
US government agencies			-				-				3,291				0.85	%			7,693				1.55	%			-				-				10,984				1.34	%
State and political subdivisions			-				-				465				2.13	%			5,598				1.80	%			13,586				2.16	%			19,649				2.06	%
Asset-backed securities			-				-				-				-				452				4.43	%			5,367				5.62	%			5,819				5.53	%
Mortgage-backed securities			-				-				4,902				1.17	%			3,712				1.57	%			46,162				1.95	%			54,776				1.85	%
Total investment securities		$	-				-			$	8,658				1.10	%		$	20,263				1.72	%		$	65,115				2.30	%		$	94,036				2.06	%

		December 31, 2022
		Less than one year								One to five years								Five to ten years								Over ten years								Total
(dollars in thousands)		Amount				Yield				Amount				Yield				Amount				Yield				Amount				Yield				Amount				Yield
Available for sale
Corporate bonds		$	-				-			$	-				-			$	1,883				2.00	%		$	-				-			$	1,883				2.00	%
US treasuries			-				-				-				-				871				1.27	%			-				-				871				1.27	%
US government agencies			-				-				3,223				0.85	%			7,394				1.55	%			-				-				10,617				1.34	%
State and political subdivisions			-				-				460				2.13	%			5,382				1.80	%			13,064				2.16	%			18,906				2.05	%
Asset-backed securities			-				-				-				-				554				4.77	%			5,675				5.14	%			6,229				5.10	%
Mortgage-backed securities			-				-				4,594				1.13	%			3,959				1.60	%			46,288				1.90	%			54,841				1.82	%
Total investment securities		$	-				-			$	8,277				1.08	%		$	20,043				1.75	%		$	65,027				2.24	%		$	93,347				2.03	%

The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities at March 31, 2023 and December 31, 2022, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.


		March 31, 2023
		Less than 12 months												12 months or longer												Total
(dollars in thousands)		#				Fair value				Unrealized losses				#				Fair value				Unrealized losses				#				Fair value				Unrealized losses
Available for sale
Corporate bonds			-			$	-			$	-				1			$	1,916			$	250				1			$	1,916			$	250
US treasuries			-				-				-				1				892				107				1				892				107
US government agencies			-				-				-				10				10,984				2,024				10				10,984				2,024
State and political subdivisions			1				465				5				29				18,404				3,198				30				18,869				3,203
Asset-backed			2				1,228				16				6				4,591				131				8				5,819				147
Mortgage-backed securities
FHLMC			1				1,504				12				19				17,486				3,455				20				18,990				3,467
FNMA			1				5				-				36				29,578				5,029				37				29,583				5,029
GNMA			-				-				-				7				4,783				688				7				4,783				688
Total investment securities			5			$	3,202			$	33				109			$	88,634			$	14,882				114			$	91,836			$	14,915

		December 31, 2022
		Less than 12 months												12 months or longer												Total
(dollars in thousands)		#				Fair value				Unrealized losses				#				Fair value				Unrealized losses				#				Fair value				Unrealized losses
Available for sale
Corporate bonds			-			$	-			$	-				1			$	1,883			$	289				1			$	1,883			$	289
US treasuries			-				-				-				1				871				128				1				871				128
US government agencies			-				-				-				10				10,617				2,390				10				10,617				2,390
State and political subdivisions			10				5,101				763				22				13,805				3,241				32				18,906				4,004
Asset-backed			5				4,291				135				3				1,938				71				8				6,229				206
Mortgage-backed securities
FHLMC			4				3,712				155				17				16,629				3,590				21				20,341				3,745
FNMA			9				2,208				201				28				27,413				5,319				37				29,621				5,520
GNMA			1				103				7				6				4,776				687				7				4,879				694
Total investment securities			29			$	15,415			$	1,261				88			$	77,932			$	15,715				117			$	93,347			$	16,976

At March 31, 2023 the Company had 114 individual investments that were in an unrealized loss position. The unrealized losses were primarily attributable to changes in interest rates, rather than deterioration in credit quality. The individual securities are each investment grade securities. The Company considers factors such as the financial condition of the issuer including credit ratings and specific events affecting the operations of the issuer, volatility of the security, underlying assets that collateralize the debt security, and other industry and macroeconomic conditions. The Company does not intend to sell these securities, and it is more likely than not that the Company will not be required to sell these securities before recovery of the amortized cost. The issuers of these securities continue to make timely principal and interest payments under the contractual terms of the securities. As such, there is no allowance for credit losses on available for sale securities recognized as of March 31, 2023.

Other investments are comprised of the following and are recorded at cost which approximates fair value.


(dollars in thousands)		March 31, 2023				December 31, 2022
Federal Home Loan Bank stock		$	7,534				9,250
Other nonmarketable investments			2,160				1,180
Investment in Trust Preferred subsidiaries			403				403
Total other investments		$	10,097				10,833

The Company has evaluated other investments for impairment and determined that the other investments are not impaired as of March 31, 2023 and that ultimate recoverability of the par value of the investments is probable. All of the FHLB stock is used to collateralize advances with the FHLB.