Securities

12 Months Ended

Dec. 31, 2022

Investments, Debt and Equity Securities [Abstract]

Note 3 – Securities

The amortized cost and fair value of securities, with gross unrealized gains and losses, follows:


	(In Thousands)
	2022
			Gross		Gross			Fair
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Available-for-Sale:
U.S. Treasury	$	104,507	$	-	$	(9,829	)	$	94,678
U.S. Government agencies		156,817		-		(17,050	)		139,767
Mortgage-backed securities		101,068		-		(14,141	)		86,927
State and local governments		76,794		69		(7,446	)		69,417
Total available-for-sale securities	$	439,186	$	69	$	(48,466	)	$	390,789


	(In Thousands)
	2021
			Gross		Gross			Fair
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Available-for-Sale:
U.S. Treasury	$	90,775	$	-	$	(1,598	)	$	89,177
U.S. Government agencies		159,673		695		(3,482	)		156,886
Mortgage-backed securities		118,550		839		(1,462	)		117,927
State and local governments		64,964		1,498		(521	)		65,941
Total available-for-sale securities	$	433,962	$	3,032	$	(7,063	)	$	429,931

Investment securities will at times depreciate to an unrealized loss position. The Bank utilizes the following criteria to assess whether impairment is other than temporary. No one item by itself will necessarily signal that a security should be recognized as other than temporarily impaired.

The fair value of the security has significantly declined from book value.

A downgrade has occurred that lowered the credit rating to below investment grade (below Baa3 by Moody and BBB – by Standard and Poors.)

Dividends have been reduced or eliminated or scheduled interest payments have not been made.

The underwater security has longer than 10 years to maturity and the loss position had existed for more than 3 years.

Management does not possess both the intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value.

If the impairment is judged to be other than temporary, the cost basis of the individual security shall be written down to fair value, thereby establishing a new cost basis. The new cost basis shall not be changed for subsequent recoveries in fair value. The amount of the write down shall be included in current earnings as a realized loss. The recovery in fair value, if any, shall be recognized in earnings when the security is sold. The table below is presented by category of security and length of time in a continuous loss position. The Bank currently does not hold any securities with other than temporary impairment.

Information pertaining to securities with gross unrealized losses at December 31, 2022 and 2021, aggregated by investment category and length of time that individual securities have been in a continuous loss position follows:


	2022
	(In Thousands)					(In Thousands)
	Less Than Twelve Months					Twelve Months & Over
	Gross					Gross
	Unrealized			Fair		Unrealized			Fair
	Losses			Value		Losses			Value
U.S. Treasury	$	(207	)	$	9,121	$	(9,622	)	$	85,557
U.S. Government agencies		(1,081	)		24,560		(15,969	)		114,906
Mortgage-backed securities		(2,454	)		26,905		(11,687	)		60,022
State and local governments		(3,223	)		38,771		(4,223	)		25,610
Total available-for-sales securities	$	(6,965	)	$	99,357	$	(41,501	)	$	286,095


	2021
	(In Thousands)					(In Thousands)
	Less Than Twelve Months					Twelve Months & Over
	Gross					Gross
	Unrealized			Fair		Unrealized			Fair
	Losses			Value		Losses			Value
U.S. Treasury	$	(1,598	)	$	89,177	$	-		$	-
U.S. Government agencies		(1,898	)		86,739		(1,584	)		41,738
Mortgage-backed securities		(1,050	)		63,157		(412	)		16,434
State and local governments		(296	)		17,727		(225	)		5,487
Total available-for-sales securities	$	(4,842	)	$	256,800	$	(2,221	)	$	63,659

Unrealized losses on securities have not been recognized into income because the issuers’ bonds are of high credit quality, values have only been impacted by rate changes, and the Company has the intent and ability to hold the securities for the foreseeable future. The fair value is expected to recover as the bonds approach the maturity date.

Sales of $9.3 and $11.8 million for 2021 and 2020, respectively, generated gross realized gains for the years ended December 31, as presented below:


	(In Thousands)
	2022		2021		2020
Gross realized gains	$	-	$	293	$	270
Gross realized losses		-		-		-
Net realized gains	$	-	$	293	$	270
Tax expense related to net realized gains	$	-	$	62	$	57

The net realized gain on sales and related tax expense is a reclassification out of accumulated other comprehensive income (loss). The net realized gain is included in net gain on sale of securities available-for-sale and the related tax expense is included in income taxes in the consolidated statements of income.

The amortized cost and fair value of debt securities at December 31, 2022, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	(In Thousands)
	Amortized
	Cost		Fair Value
One year or less	$	20,732	$	20,283
After one year through five years		209,735		190,333
After five years through ten years		105,681		91,379
After ten years		1,970		1,867
Total	$	338,118	$	303,862
Mortgage-backed securities		101,068		86,927
Total	$	439,186	$	390,789

Investments with a carrying value and fair value of $134.8 million at December 31, 2022 and $115.0 million at December 31, 2021 were pledged to secure public deposits and securities sold under repurchase agreements.