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Investments | 6 Months Ended
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Jun. 30, 2024
Investments [Abstract] |
Investments | Note 4 – Investments The amortized cost, gross unrealized gains and losses, and fair value of investment securities at June 30, 2024 and December 31, 2023 were as follows (in thousands):
June 30, 2024 |  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Allowance for Credit Losses |  |  | Fair Value |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. agency securities |  | $ | 61,576 |  |  | $ | 3 |  |  | $ | (5,746 | ) |  | $ | - |  |  | $ | 55,833 |
U.S. treasury securities |  |  | 138,582 |  |  |  | - |  |  |  | (8,509 | ) |  |  | - |  |  |  | 130,073 |
Obligations of state and political subdivisions |  |  | 104,668 |  |  |  | 6 |  |  |  | (7,967 | ) |  |  | - |  |  |  | 96,707 |
Corporate obligations |  |  | 13,422 |  |  |  | 273 |  |  |  | (1,245 | ) |  |  | - |  |  |  | 12,450 |
Mortgage-backed securities in government sponsored entities |  |  | 121,321 |  |  |  | 49 |  |  |  | (13,772 | ) |  |  | - |  |  |  | 107,598 |
Total available-for-sale securities |  | $ | 439,569 |  |  | $ | 331 |  |  | $ | (37,239 | ) |  | $ | - |  |  | $ | 402,661 |
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. agency securities |  | $ | 66,569 |  |  | $ | 1 |  |  | $ | (5,799 | ) |  | $ | - |  |  | $ | 60,771 |
U.S. treasury securities |  |  | 152,485 |  |  |  | - |  |  |  | (9,197 | ) |  |  | - |  |  |  | 143,288 |
Obligations of state and political subdivisions |  |  | 107,945 |  |  |  | 32 |  |  |  | (6,190 | ) |  |  | - |  |  |  | 101,787 |
Corporate obligations |  |  | 13,394 |  |  |  | 245 |  |  |  | (1,236 | ) |  |  | - |  |  |  | 12,403 |
Mortgage-backed securities in government sponsored entities |  |  | 112,950 |  |  |  | 7 |  |  |  | (13,605 | ) |  |  | - |  |  |  | 99,352 |
Total available-for-sale securities |  | $ | 453,343 |  |  | $ | 285 |  |  | $ | (36,027 | ) |  | $ | - |  |  | $ | 417,601 |
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 June 30, 2024 and December 31, 2023 (in thousands). As of June 30, 2024, the Company owned 317 securities whose fair value was less than their cost basis.
June 30, 2024 |  | 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 |  | $ | - |  |  | $ | - |  |  | $ | 53,815 |  |  | $ | (5,746 | ) |  | $ | 53,815 |  |  | $ | (5,746 | )
U.S. treasury securities |  |  | - |  |  |  | - |  |  |  | 130,073 |  |  |  | (8,509 | ) |  |  | 130,073 |  |  |  | (8,509 | )
Obligations of state and political subdivisions |  |  | 3,554 |  |  |  | (23 | ) |  |  | 88,349 |  |  |  | (7,944 | ) |  |  | 91,903 |  |  |  | (7,967 | )
Corporate obligations |  |  | - |  |  |  | - |  |  |  | 9,024 |  |  |  | (1,245 | ) |  |  | 9,024 |  |  |  | (1,245 | )
Mortgage-backed securities in government sponsored entities |  |  | 6,468 |  |  |  | (13 | ) |  |  | 91,736 |  |  |  | (13,759 | ) |  |  | 98,204 |  |  |  | (13,772 | )
Total securities |  | $ | 10,022 |  |  | $ | (36 | ) |  | $ | 372,997 |  |  | $ | (37,203 | ) |  | $ | 383,019 |  |  | $ | (37,239 | )
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. agency securities |  | $ | - |  |  | $ | - |  |  | $ | 58,753 |  |  | $ | (5,799 | ) |  | $ | 58,753 |  |  | $ | (5,799 | )
U.S. treasury securities |  |  | - |  |  |  | - |  |  |  | 143,288 |  |  |  | (9,197 | ) |  |  | 143,288 |  |  |  | (9,197 | )
Obligations of states and political subdivisions |  |  | - |  |  |  | - |  |  |  | 93,535 |  |  |  | (6,190 | ) |  |  | 93,535 |  |  |  | (6,190 | )
Corporate obligations |  |  | 1,487 |  |  |  | (265 | ) |  |  | 8,320 |  |  |  | (971 | ) |  |  | 9,807 |  |  |  | (1,236 | )
Mortgage-backed securities in government sponsored entities |  |  | 9,203 |  |  |  | (31 | ) |  |  | 88,553 |  |  |  | (13,574 | ) |  |  | 97,756 |  |  |  | (13,605 | )
Total securities |  | $ | 10,690 |  |  | $ | (296 | ) |  | $ | 392,449 |  |  | $ | (35,731 | ) |  | $ | 403,139 |  |  | $ | (36,027 | )
Allowance for Credit Losses – Available for Sale Securities The Company measures expected credit losses on available-for-sale debt securities when the Company 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 Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company 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 Company 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 Company 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. Accrued interest receivable on available-for-sale debt securities totaled $2,119,000 and $2,202,000 at June 30, 2024 and December 31,2023 and is included within accrued interest receivable on the consolidated balance sheet. This amount is excluded from the estimate of expected credit losses. Available-for-sale debt securities are typically classified as nonaccrual when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about the further collectability of principal or interest. When available-for-sale debt securities are placed on nonaccrual status, unpaid interest credited to income is reversed. There were no sales of available for sale securities during the three and six months ended June 30, 2024. Proceeds from sales of securities available-for-sale for the three and six months ended June 30, 2023 were $86,504,000. The gross gains and losses were as follows (in thousands):
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Gross gains on available for sale securities |  | $ | - |  |  | $ | 38 |  |  | $ | - |  |  | $ | 38 |
Gross losses on available for sale securities |  |  | - |  |  |  | (89 | ) |  |  | - |  |  |  | (89 | )
Net losses |  | $ | - |  |  | $ | (51 | ) |  | $ | - |  |  | $ | (51 | )
The following table presents the net gains (losses) on the Company’s equity investments recognized in earnings during the three and six month periods ended June 30, 2024 and 2023, and the portion of unrealized gains for the period that relates to equity investments held at June 30, 2024 and 2023(in thousands):
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
Equity securities |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Net losses recognized in equity securities during the period |  | $ | (87 | ) |  | $ | (74 | ) |  | $ | (32 | ) |  | $ | (292 | )
Less: Net (losses) gains realized on the sale of equity securities during the period |  |  | - |  |  |  | - |  |  |  | (4 | ) |  |  | 5 |
Net unrealized losses |  | $ | (87 | ) |  | $ | (74 | ) |  | $ | (28 | ) |  | $ | (297 | )
Investment securities with an approximate carrying value of $345.4 million and $353.3 million at June 30, 2024 and December 31, 2023, 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 June 30, 2024, by contractual maturity, are shown below (in thousands):
|  | Amortized Cost |  |  | Fair Value |
Available-for-sale debt securities: |  |  |  |  |  |
Due in one year or less |  | $ | 48,416 |  |  | $ | 47,437 |
Due after one year through five years |  |  | 143,357 |  |  |  | 132,756 |
Due after five years through ten years |  |  | 85,933 |  |  |  | 77,550 |
Due after ten years |  |  | 161,863 |  |  |  | 144,918 |
Total |  | $ | 439,569 |  |  | $ | 402,661 |

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