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INVESTMENT SECURITIES

6 Months Ended

Jun. 30, 2024

Investments, Debt and Equity Securities [Abstract]

INVESTMENT SECURITIES

NOTE 3 – INVESTMENT SECURITIES

The amortized cost, gross unrealized gains and losses, and estimated fair values of securities AFS at the dates indicated are summarized as follows:


					Gross			Gross
		Amortized			unrealized			unrealized			Estimated
		cost			gains			losses			fair value
June 30, 2024
Municipal securities		$	23,817		$	77		$	(1,477)		$	22,417
Mortgage-backed securities			47,464			98			(3,779)			43,783
Collateralized mortgage obligations			45,536			131			(2,277)			43,390
SBA securities			4,674			43			(77)			4,640
Corporate bonds			81,224			—			(11,821)			69,403
Total		$	202,715		$	349		$	(19,431)		$	183,633


					Gross			Gross
		Amortized			unrealized			unrealized			Estimated
		cost			gains			losses			fair value
December 31, 2023
Municipal securities		$	21,910		$	75		$	(1,158)		$	20,827
Mortgage-backed securities			41,048			194			(3,641)			37,601
Collateralized mortgage obligations			35,019			256			(2,299)			32,976
SBA securities			5,280			49			(77)			5,252
Corporate bonds			80,383			7			(13,894)			66,496
Total		$	183,640		$	581		$	(21,069)		$	163,152

Amortized cost and fair values exclude accrued interest receivable of $1.5 million and $1.2 million at June 30, 2024 and December 31, 2023, respectively, which is included in interest receivable and other assets in the condensed consolidated balance sheets.

During both the three and six months ended June 30, 2024 and 2023, the Company sold no securities AFS.

The amortized cost and estimated fair value of securities AFS at the dates indicated by contractual maturity are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


		June 30, 2024						December 31, 2023
		Amortized			Estimated			Amortized			Estimated
		cost			fair value			cost			fair value

Securities AFS
Due in one year or less		$	34,697		$	34,051		$	6,397		$	6,338
Due after one through five years			84,573			72,430			15,909			14,206
Due after five years through ten years			26,967			24,092			102,430			87,867
Due after ten years			56,478			53,060			58,904			54,741
Total		$	202,715		$	183,633		$	183,640		$	163,152

At both June 30, 2024 and December 31, 2023, there were no securities pledged.

The estimated fair value and gross unrealized losses for securities AFS aggregated by the length of time that individual securities have been in a continuous unrealized loss position at the dates indicated are as follows:


		Less than 12 months						12 months or more						Total
		Estimated			Unrealized			Estimated			Unrealized			Estimated			Unrealized
		fair value			loss			fair value			loss			fair value			loss
June 30, 2024
Municipal securities		$	1,649		$	(12)		$	16,962		$	(1,465)		$	18,611		$	(1,477)
Mortgage-backed securities			2,804			(33)			30,898			(3,746)			33,702			(3,779)
Collateralized mortgage obligations			4			—			26,524			(2,277)			26,528			(2,277)
SBA securities			—			—			1,403			(77)			1,403			(77)
Corporate bonds			—			—			69,403			(11,821)			69,403			(11,821)
Total		$	4,457		$	(45)		$	145,190		$	(19,386)		$	149,647		$	(19,431)


		Less than 12 months						12 months or more						Total
		Estimated			Unrealized			Estimated			Unrealized			Estimated			Unrealized
		fair value			loss			fair value			loss			fair value			loss
December 31, 2023
Municipal securities		$	2,483		$	(28)		$	13,975		$	(1,130)		$	16,458		$	(1,158)
Mortgage-backed securities			1,369			(30)			26,435			(3,611)			27,804			(3,641)
Collateralized mortgage obligations			1,496			(8)			20,713			(2,291)			22,209			(2,299)
SBA securities			—			—			1,610			(77)			1,610			(77)
Corporate bonds			—			—			65,505			(13,894)			65,505			(13,894)
Total		$	5,348		$	(66)		$	128,238		$	(21,003)		$	133,586		$	(21,069)

At June 30, 2024, the Company held 338 securities AFS, of which 315 were in an unrealized loss position for more than twelve months and 18 were in an unrealized loss position for less than twelve months. At December 31, 2023, the Company held 334 investment securities, of which 297 were in an unrealized loss position for more than twelve months and 22 were in an unrealized loss position for less than twelve months. The Company anticipates full recovery of amortized cost with respect to these securities at maturity or sooner in the event of a more favorable market interest rate environment.

Allowance for credit losses on investment debt securities available-for-sale

Securities that were in an unrealized loss position as of June 30, 2024 were evaluated to determine whether the decline in fair value below the amortized cost basis resulted from a credit loss or changes in required yields by investors in these types of securities, among other factors. This assessment first includes a determination of whether the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis less any current-period credit losses. In making this assessment, management considers the nature of the security and any related government guarantees, any changes to the rating of the security by a rating agency, creditworthiness of the issuers/guarantors, the underlying collateral, the financial conditions and prospects of the issuer, and any adverse conditions specifically related to the security, among other factors.

As of June 30, 2024, the Company expects to recover the amortized cost basis of its securities, has no present intent to sell any investment securities with unrealized losses and it is not more likely than not that we will not be required to sell securities with unrealized losses before recovery of their amortized cost and the decline in fair value is largely attributed to changes in interest rates and other market conditions. The issuers of these securities continue to make timely principal and interest payments. No allowances for credit losses have been recognized on investment debt securities AFS in an unrealized loss position, as management does not believe any of the securities are impaired due to reasons of credit quality at June 30, 2024.

Equity Securities

The Company recognized a net loss on equity securities of $321,000 and a net gain on equity securities of $252,000 for the three and six months ended June 30, 2024, and recognized a net loss on equity securities of $917,000 and $1.8 million for the three and six months ended June 30, 2023, respectively. Equity securities were $12.8 million and $12.6 million as of June 30, 2024 and December 31, 2023, respectively.