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v3.23.1

Investments | 3 Months Ended
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Mar. 31, 2023
Investments [Abstract] |
Investments | Note 4 – Investments The amortized cost, gross unrealized gains and losses, and fair value of investment securities at March 31, 2023 and December 31, 2022 were as follows (in thousands):
March 31, 2023 |  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Allowance For Credit Losses |  |  | Fair Value |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. agency securities |  | $ | 77,060 |  |  | $ | - |  |  | $ | (6,211 | ) |  | $ | - |  |  | $ | 70,849 |
U.S. treasury securities |  |  | 162,300 |  |  |  | - |  |  |  | (10,590 | ) |  |  | - |  |  |  | 151,710 |
Obligations of state and political subdivisions |  |  | 120,128 |  |  |  | 66 |  |  |  | (8,656 | ) |  |  | - |  |  |  | 111,538 |
Corporate obligations |  |  | 10,324 |  |  |  | - |  |  |  | (972 | ) |  |  | - |  |  |  | 9,352 |
Mortgage-backed securities in government sponsored entities |  |  | 112,112 |  |  |  | 12 |  |  |  | (12,158 | ) |  |  | - |  |  |  | 99,966 |
Total available-for-sale securities |  | $ | 481,924 |  |  | $ | 78 |  |  | $ | (38,587 | ) |  | $ | - |  |  | $ | 443,415 |
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. agency securities |  | $ | 78,556 |  |  | $ | - |  |  | $ | (7,879 | ) |  | $ | - |  |  | $ | 70,677 |
U.S. treasury securities |  |  | 162,236 |  |  |  | - |  |  |  | (13,666 | ) |  |  | - |  |  |  | 148,570 |
Obligations of state and political subdivisions |  |  | 120,562 |  |  |  | 35 |  |  |  | (10,297 | ) |  |  | - |  |  |  | 110,300 |
Corporate obligations |  |  | 10,335 |  |  |  | - |  |  |  | (952 | ) |  |  | - |  |  |  | 9,383 |
Mortgage-backed securities in government sponsored entities |  |  | 115,304 |  |  |  | 15 |  |  |  | (14,743 | ) |  |  | - |  |  |  | 100,576 |
Total available-for-sale securities |  | $ | 486,993 |  |  | $ | 50 |  |  | $ | (47,537 | ) |  | $ | - |  |  | $ | 439,506 |
The following table shows the Company’s gross unrealized losses and fair value of the Company’s investments with unrealized losses for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time, which individual securities have been in a continuous unrealized loss position, at March 31, 2023 and December 31, 2022 (in thousands). As of March 31, 2023, the Company owned 340 securities whose fair value was less than their cost basis.
March 31, 2023 |  | Less than Twelve Months |  |  | Twelve Months or Greater |  |  | Total |
|  | Fair Value |  |  | Gross Unrealized Losses |  |  | Fair Value |  |  | Gross Unrealized Losses |  |  | Fair Value |  |  | Gross Unrealized Losses |
U.S. agency securities |  | $ | 23,681 |  |  | $ | (388 | ) |  | $ | 47,167 |  |  | $ | (5,823 | ) |  | $ | 70,848 |  |  | $ | (6,211 | )
U.S. treasury securities |  |  | 4,503 |  |  |  | (112 | ) |  |  | 147,207 |  |  |  | (10,478 | ) |  |  | 151,710 |  |  |  | (10,590 | )
Obligations of state and political subdivisions |  |  | 11,731 |  |  |  | (189 | ) |  |  | 87,625 |  |  |  | (8,467 | ) |  |  | 99,356 |  |  |  | (8,656 | )
Corporate obligations |  |  | 1,241 |  |  |  | (9 | ) |  |  | 8,111 |  |  |  | (963 | ) |  |  | 9,352 |  |  |  | (972 | )
Mortgage-backed securities in government sponsored entities |  |  | 11,008 |  |  |  | (203 | ) |  |  | 86,241 |  |  |  | (11,955 | ) |  |  | 97,249 |  |  |  | (12,158 | )
Total securities |  | $ | 52,164 |  |  | $ | (901 | ) |  | $ | 376,351 |  |  | $ | (37,686 | ) |  | $ | 428,515 |  |  | $ | (38,587 | )
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. agency securities |  | $ | 39,729 |  |  | $ | (1,892 | ) |  | $ | 30,948 |  |  | $ | (5,987 | ) |  | $ | 70,677 |  |  | $ | (7,879 | )
U.S. treasury securities |  |  | 32,673 |  |  |  | (1,337 | ) |  |  | 115,897 |  |  |  | (12,329 | ) |  |  | 148,570 |  |  |  | (13,666 | )
Obligations of states and political subdivisions |  |  | 66,725 |  |  |  | (4,887 | ) |  |  | 35,782 |  |  |  | (5,410 | ) |  |  | 102,507 |  |  |  | (10,297 | )
Corporate obligations |  |  | 2,165 |  |  |  | (165 | ) |  |  | 6,218 |  |  |  | (787 | ) |  |  | 8,383 |  |  |  | (952 | )
Mortgage-backed securities in government sponsored entities |  |  | 40,270 |  |  |  | (3,367 | ) |  |  | 57,319 |  |  |  | (11,376 | ) |  |  | 97,589 |  |  |  | (14,743 | )
Total securities |  | $ | 181,562 |  |  | $ | (11,648 | ) |  | $ | 246,164 |  |  | $ | (35,889 | ) |  | $ | 427,726 |  |  | $ | (47,537 | )
Allowance for Credit Losses – Available for Sale Securities The Bank measures expected credit losses on available-for-sale debt securities when the Bank does not intend to sell, or when it is not more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available-for-sale debt securities that do not meet the aforementioned criteria, the Bank evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Bank considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this evaluation indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of 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 for the credit loss, equal to the amount that the fair value is less than the amortized cost basis. Economic forecast data is utilized to calculate the present value of expected cash flows. The Bank obtains its forecast data through a subscription to a widely recognized and relied upon company who publishes various forecast scenarios. Management evaluates the various scenarios to determine a reasonable and supportable scenario, and utilizes a single scenario in the model. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. The allowance for credit losses on available-for-sale debt securities is included within Investment securities available-for-sale on the consolidated balance sheet. Changes in the allowance for credit losses are recorded within Provision for credit losses on the consolidated statement of income. Losses are charged against the allowance when the Bank believes the collectability of an available-for-sale security is in jeopardy or when either of the criteria regarding intent or requirement to sell is met. Credit Losses on Investment Securities – Prior to adopting ASU 2016-13 The Bank adopted ASU No. 2016-13 effective January 1, 2023. Financial statement amounts related to Investment Securities recorded as of December 31, 2022 and for the periods ending December 31, 2022 are presented in accordance with the accounting policies described in the following sections. The following sections were carried forward from the Annual Report on Form 10-K for the year ended December 31, 2022 Securities are evaluated on at least a quarterly basis, and more frequently when market conditions warrant such an evaluation, to determine whether a decline in their value is other than temporary. To determine whether a loss is other than temporary, management utilizes criteria such as the reasons underlying the decline, the magnitude and duration of the decline, and whether or not management intends to sell or expects that it is more likely than not that it will be required to sell the security prior to an anticipated recovery of the fair value. The term “other than temporary” is not intended to indicate that the decline is permanent but indicates that the prospects for a near-term recovery of value are not necessarily favorable or that there is a lack of evidence to support a realizable value equal to or greater than the carrying value of the investment. Declines in the fair value of securities below their cost that are deemed to be other than temporary are separated into (a) the amount of the total other-than-temporary impairment related to a decrease in cash flows expected to be collected from the debt security (the credit loss), and (b) the amount of the total other-than-temporary impairment related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the total other-than-temporary impairment related to all other factors is recognized in other comprehensive (loss) income. There were no sales of available for sale securities during the three months ended March 31, 2023 or March 31, 2022. The following table presents the net gains (losses) on the Company’s equity investments recognized in earnings during the three month periods ended March 31, 2023 and 2022, and the portion of unrealized gains for the period that relates to equity investments held at March 31, 2023 and 2022 (in thousands):
|  | Three Months Ended March 31, |
Equity securities |  |  | 2023 |  |  |  | 2022 |
Net losses recognized in equity securities during the period |  | $ | (218 | ) |  | $ | (45 | )
Less: Net gains realized on the sale of equity securities during the period |  |  | 5 |  |  |  | - |
Net unrealized losses |  | $ | (223 | ) |  | $ | (45 | )
Investment securities with an approximate carrying value of $349.9 million and $311.8 million at March 31, 2023 and December 31, 2022, respectively, were pledged to secure public funds, certain other deposits and borrowing lines. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The amortized cost and fair value of debt securities at March 31, 2023, by contractual maturity, are shown below (in thousands):
|  | Amortized Cost |  |  | Fair Value |
Available-for-sale debt securities: |  |  |  |  |  |
Due in one year or less |  | $ | 33,318 |  |  | $ | 32,672 |
Due after one year through five years |  |  | 186,057 |  |  |  | 174,441 |
Due after five years through ten years |  |  | 99,003 |  |  |  | 90,031 |
Due after ten years |  |  | 163,546 |  |  |  | 146,271 |
Total |  | $ | 481,924 |  |  | $ | 443,415 |

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI https://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2176304 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher SEC -Name Regulation S-K (SK) -Number 229 -Section 1403 -Paragraph (b) + Details
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