Securities

12 Months Ended

Dec. 31, 2024

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)
	2024
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Available-for-Sale:
U.S. Treasury	$	111,397	$	17	$	(5,415	)	$	105,999
U.S. Government agencies		144,660		-		(9,494	)		135,166
Mortgage-backed securities		133,268		17		(12,654	)		120,631
State and local governments		69,159		28		(4,427	)		64,760
Total available-for-sale securities	$	458,484	$	62	$	(31,990	)	$	426,556


	(In Thousands)
	2023
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Available-for-Sale:
U.S. Treasury	$	87,182	$	1	$	(6,913	)	$	80,270
U.S. Government agencies		140,960		-		(12,738	)		128,222
Mortgage-backed securities		94,061		-		(11,929	)		82,132
State and local governments		73,000		135		(5,281	)		67,854
Total available-for-sale securities	$	395,203	$	136	$	(36,861	)	$	358,478

Investment securities will at times depreciate to an unrealized loss position. The Bank utilizes the following criteria to assess whether the unrealized loss requires an allowance for credit losses on investment securities. No one item by itself will necessarily signal that an allowance for credit losses on investment securities should be established.

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.

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 unrealized loss is determined to be the result of a credit loss, the present value of the cash flows expected to be collected is compared to the amortized cost basis. If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded, limited by the amount that the fair value is less than the amortized cost basis. Adjustments to the allowance are recorded in the Company's consolidated statement of income as a component of the provision for credit losses. The table below is presented by category of security and length of time in a continuous loss position. The Company did not record an allowance for credit losses on its investment securities available for sale as the unrealized losses were attributed to changes in interest rates, not credit quality.

Information pertaining to securities with gross unrealized losses at December 31, 2024 and 2023, aggregated by investment category and length of time that individual securities have been in a continuous loss position follows:


	2024
	(In Thousands)					(In Thousands)
	Less Than Twelve Months					Twelve Months & Over
	Gross					Gross
	Unrealized			Fair		Unrealized			Fair
	Losses			Value		Losses			Value
U.S. Treasury	$	(467	)	$	31,533	$	(4,948	)	$	62,151
U.S. Government agencies		-			-		(9,494	)		131,335
Mortgage-backed securities		(668	)		51,236		(11,986	)		66,877
State and local governments		(224	)		8,631		(4,203	)		53,091
Total available-for-sales securities	$	(1,359	)	$	91,400	$	(30,631	)	$	313,454


	2023
	(In Thousands)					(In Thousands)
	Less Than Twelve Months					Twelve Months & Over
	Gross					Gross
	Unrealized			Fair		Unrealized			Fair
	Losses			Value		Losses			Value
U.S. Treasury	$	(4	)	$	494	$	(6,909	)	$	79,528
U.S. Government agencies		-			-		(12,738	)		128,222
Mortgage-backed securities		(20	)		4,372		(11,909	)		77,759
State and local governments		(2	)		931		(5,279	)		60,402
Total available-for-sales securities	$	(26	)	$	5,797	$	(36,835	)	$	345,911

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 $22.0 million in 2023 generated gross realized losses for the year ended December 31, 2023 as presented below:


	(In Thousands)
	2024		2023			2022
Gross realized gains	$	-	$	-		$	-
Gross realized losses		-		(891	)		-
Net realized losses	$	-	$	(891	)	$	-
Tax benefit related to net realized losses	$	-	$	(187	)	$	-

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

The amortized cost and fair value of debt securities at December 31, 2024, 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	$	50,842	$	50,047
After one year through five years		256,807		239,570
After five years through ten years		17,057		15,811
After ten years		510		497
Total	$	325,216	$	305,925
Mortgage-backed securities		133,268		120,631
Total	$	458,484	$	426,556

Investments with a carrying value and fair value of $221.9 million at December 31, 2024 and $194.1 million at December 31, 2023 were pledged to secure public deposits and securities sold under repurchase agreements. Investments with a carrying value of $29.9 million as of December 31, 2024, were pledged to the Federal Reserve's Discount Window to provide additional borrowing capacity. These investments were reallocated from the $61.7 million that were pledged to the Federal Reserve's Bank Term Funding Program (BTFP) at December 31, 2023. The BTFP was discontinued in March of 2024. The remaining investments pledged to BTFP were released.