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Investment Securities | 9 Months Ended
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Sep. 30, 2024
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | Note 3 - Investment Securities The amortized cost and estimated fair values of investment securities are summarized below. As of September 30, 2024 and December 31, 2023, there was no allowance for credit losses on available-for-sale securities. Schedule of Amortized Cost and Estimated Fair Values of Investment Securities Available-For-Sale AVAILABLE-FOR-SALE:
|  |  |  |  | Gross |  |  | Gross |  |  |  |
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  |  |
(Dollars in thousands) |  | Cost |  |  | Gains |  |  | Losses |  |  | Fair Value |
September 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Treasury securities |  | $ | 15,815 |  |  | $ | — |  |  | $ | (2,061 | ) |  | $ | 13,754 |
Government Sponsored Enterprises |  |  | 2,500 |  |  |  | — |  |  |  | (289 | ) |  |  | 2,211 |
Mortgage-backed securities |  |  | 245,975 |  |  |  | 70 |  |  |  | (13,264 | ) |  |  | 232,781 |
Small Business Administration pools |  |  | 13,199 |  |  |  | 27 |  |  |  | (296 | ) |  |  | 12,930 |
Corporate and other securities |  |  | 8,757 |  |  |  | — |  |  |  | (880 | ) |  |  | 7,877 |
Total |  | $ | 286,246 |  |  | $ | 97 |  |  | $ | (16,790 | ) |  | $ | 269,553 |
|  |  |  |  | Gross |  |  | Gross |  |  |  |
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  |  |
(Dollars in thousands) |  | Cost |  |  | Gains |  |  | Losses |  |  | Fair Value |
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Treasury securities |  | $ | 20,791 |  |  | $ | — |  |  | $ | (2,445 | ) |  | $ | 18,346 |
Government Sponsored Enterprises |  |  | 2,500 |  |  |  | — |  |  |  | (371 | ) |  |  | 2,129 |
Mortgage-backed securities |  |  | 255,757 |  |  |  | 15 |  |  |  | (17,613 | ) |  |  | 238,159 |
Small Business Administration pools |  |  | 16,108 |  |  |  | 24 |  |  |  | (411 | ) |  |  | 15,721 |
Corporate and other securities |  |  | 8,759 |  |  |  | — |  |  |  | (888 | ) |  |  | 7,871 |
Total |  | $ | 303,915 |  |  | $ | 39 |  |  | $ | (21,728 | ) |  | $ | 282,226 |
HELD-TO-MATURITY: Schedule of Amortized Cost and Estimated Fair Values of Investment Securities Held-To-Maturity
|  |  |  |  | Gross |  |  | Gross |  |  |  |
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  |  |
(Dollars in thousands) |  | Cost |  |  | Gains |  |  | Losses |  |  | Fair Value |
September 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  | $ | 108,094 |  |  | $ | — |  |  | $ | (5,931 | ) |  | $ | 102,163 |
State and local government |  |  | 104,149 |  |  |  | 104 |  |  |  | (1,771 | ) |  |  | 102,482 |
Allowance for credit losses on Held-to-Maturity Securities |  |  | (24 | ) |  |  | — |  |  |  | — |  |  |  | (24 | )
Total |  | $ | 212,219 |  |  | $ | 104 |  |  | $ | (7,702 | ) |  | $ | 204,621 |
(Dollars in thousands) |  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Fair Value |
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  | $ | 112,740 |  |  |  | — |  |  |  | (8,490 | ) |  | $ | 104,250 |
State and local government |  |  | 104,460 |  |  |  | 283 |  |  |  | (3,445 | ) |  |  | 101,298 |
Allowance for credit losses on Held-to-Maturity Securities |  |  | (30 | ) |  |  | — |  |  |  | — |  |  |  | (30 | )
Total |  | $ | 217,170 |  |  |  | 283 |  |  |  | (11,935 | ) |  | $ | 205,518 |
There were no gross realized gains or gross realized losses from the sale of available-for-sale investment securities during the three and nine months ended September 30, 2024, and $1.2 million gross realized losses from the sale of available -for-sale securities during the three and nine months ended September 30, 2023. For available-for-sale securities, management evaluates all investments in an unrealized loss position on a quarterly basis, or more frequently when economic or market conditions warrant such evaluation. If the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security, the security is written down to fair value and the entire loss is recorded in earnings. If either of the above criteria is not met, the Company evaluates whether the decline in fair value is the result of credit losses or other factors. In making the assessment, the Company may consider various factors including the extent to which fair value is less than amortized cost, performance on any underlying collateral, downgrades in the ratings of the security by a rating agency, the failure of the issuer to make scheduled interest or principal payments and adverse conditions specifically related to the security. If the assessment indicates that a credit loss exists, the present value of cash flows expected to be collected are compared to the amortized cost basis of the security and any excess is recorded as an allowance for credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any amount of unrealized loss that has not been recorded through an allowance for credit loss is recognized in other comprehensive income. Changes in the allowance for credit loss are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance for credit loss when management believes an available-for-sale security is confirmed to be uncollectible or when either of the criteria regarding intent or requirement to sell is met. At September 30, 2024 and December 31, 2023, there was no allowance for credit loss related to the available-for-sale securities portfolio. The following tables show gross unrealized losses and fair values of available-for-sale securities for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous loss position, as of September 30, 2024. Schedule of gross unrealized losses and fair values, aggregated by investment category and length of time that individual securities have been in a continuous loss position.
September 30, 2024 |  | Less than 12 months |  |  | 12 months or more |  |  | Total |
Available-for-sale securities: |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |
(Dollars in thousands) |  | Value |  |  | Loss |  |  | Value |  |  | Loss |  |  | Value |  |  | Loss |
US Treasury Securities |  | $ | — |  |  | $ | — |  |  | $ | 13,754 |  |  | $ | 2,061 |  |  | $ | 13,754 |  |  | $ | 2,061 |
Government Sponsored Enterprise |  |  | — |  |  |  | — |  |  |  | 2,211 |  |  |  | 289 |  |  |  | 2,211 |  |  |  | 289 |
Mortgage-backed securities |  |  | 318 |  |  |  | — |  |  |  | 222,197 |  |  |  | 13,264 |  |  |  | 222,515 |  |  |  | 13,264 |
Small Business Administration pools |  |  | 700 |  |  |  | — |  |  |  | 9,104 |  |  |  | 296 |  |  |  | 9,804 |  |  |  | 296 |
Corporate and other securities |  |  | 1,495 |  |  |  | 263 |  |  |  | 6,377 |  |  |  | 617 |  |  |  | 7,872 |  |  |  | 880 |
Total |  | $ | 2,513 |  |  | $ | 263 |  |  | $ | 253,643 |  |  | $ | 16,527 |  |  | $ | 256,156 |  |  | $ | 16,790 |
The following table shows gross unrealized losses by fair values of available-for-sale securities, aggregated by investment category and length of time that individual securities have been in a continuous loss position as of December 31, 2023.
December 31, 2023 |  | Less than 12 months |  |  | 12 months or more |  |  | Total |
Available-for-sale securities: |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |
(Dollars in thousands) |  | Value |  |  | Loss |  |  | Value |  |  | Loss |  |  | Value |  |  | Loss |
US Treasury Securities |  | $ | — |  |  | $ | — |  |  | $ | 18,346 |  |  | $ | 2,445 |  |  | $ | 18,346 |  |  | $ | 2,445 |
Government Sponsored Enterprise |  |  | — |  |  |  | — |  |  |  | 2,129 |  |  |  | 371 |  |  |  | 2,129 |  |  |  | 371 |
Mortgage-backed securities |  |  | 8,164 |  |  |  | 423 |  |  |  | 223,844 |  |  |  | 17,190 |  |  |  | 232,008 |  |  |  | 17,613 |
Small Business Administration pools |  |  | 4,253 |  |  |  | 45 |  |  |  | 7,638 |  |  |  | 366 |  |  |  | 11,891 |  |  |  | 411 |
Corporate and other securities |  |  | 1,880 |  |  |  | 115 |  |  |  | 4,236 |  |  |  | 773 |  |  |  | 6,116 |  |  |  | 888 |
Total |  | $ | 14,297 |  |  | $ | 583 |  |  | $ | 256,193 |  |  | $ | 21,145 |  |  | $ | 270,490 |  |  | $ | 21,728 |
The following table shows a roll forward of the allowance for credit losses on held to maturity securities for the three and nine months ended September 30, 2024 and 2023.
|  | Three Months |
|  | Ended |
(Dollars in thousands) |  | September 30, 2024 |
Allowance for Credit Losses on Held-to-Maturity Securities: |  |  |  |
State and local government |  |  |  |
Beginning balance, June 30, 2024 |  | $ | 27 |
Provision for credit losses |  |  | (3 | )
Ending balance, September 30, 2024 |  | $ | 24 |
|  | Three Months |
|  | Ended |
(Dollars in thousands) |  | September 30, 2023 |
Allowance for Credit Losses on Held-to-Maturity Securities: |  |  |  |
State and local government |  |  |  |
Beginning balance, June 30, 2023 |  | $ | 37 |
Provision for credit losses |  |  | (5 | )
Ending balance, September 30, 2023 |  | $ | 32 |
|  | Nine Months |
|  | Ended |
(Dollars in thousands) |  | September 30, 2024 |
Allowance for Credit Losses on Held-to-Maturity Securities: |  |  |  |
State and local government |  |  |  |
Beginning balance, December 31, 2023 |  | $ | 30 |
Provision for credit losses |  |  | (6 | )
Ending balance, September 30, 2024 |  | $ | 24 |
|  | Nine Months |
|  | Ended |
(Dollars in thousands) |  | September 30, 2023 |
Allowance for Credit Losses on Held-to-Maturity Securities: |  |  |  |
State and local government |  |  |  |
Beginning balance, December 31, 2022 |  | $ | — |
Adjustment for adoption of ASC 326 |  |  | 43 |
Provision for credit losses |  |  | (11 | )
Ending balance, September 30, 2023 |  | $ | 32 |
At September 30, 2024, the Company had no securities held-to-maturity that were past due 30 days or more as to principal or interest payments. The Company had no securities held-to-maturity classified as non-accrual at September 30, 2024. Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type. The held-to-maturity portfolio consists of mortgage-backed and municipal securities. Securities are generally rated BBB- or higher. Securities are analyzed individually to establish a CECL reserve. The estimate of expected credit losses is primarily based on the ratings assigned to the securities by debt rating agencies and the average of the annual historical loss rates associated with those ratings. The Company then multiplies those loss rates, as adjusted for any modifications to reflect current conditions and reasonable and supportable forecasts as considered necessary, by the remaining lives of each individual security to arrive at a lifetime expected loss amount. Management classifies the held-to-maturity portfolio into the following major security types: mortgage-backed securities or state and local governments. All the mortgage-backed securities (“MBS”) held by the Company are issued by government-sponsored corporations. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. As a result, no allowance for credit losses was recorded on held-to-maturity MBS as of September 30, 2024 and December 31, 2023. The state and local governments securities held by the Company are highly rated by major rating agencies. The Company monitors the credit quality of the debt securities held to maturity through the use of credit ratings (Moody’s) on a quarterly basis. In the event that Moody’s does not provide a rating, the comparable S&P rating is used and converted to a Moody’s rating. The following table summarizes the amortized cost of debt securities held to maturity at September 30, 2024 and December 31, 2023, aggregated by credit quality indicators. Schedule of Amortized Cost and Fair Value of Investment Securities
|  | As of |  |  | As of |
(Dollars in thousands) |  | September 30, 2024 |  |  | December 31, 2023 |
Rating: |  |  |  |  |  |  |  |
Aaa |  | $ | 153,394 |  |  | $ | 156,749 |
Aa1/Aa2/Aa3 |  |  | 53,792 |  |  |  | 55,388 |
A1/A2 |  |  | 5,057 |  |  |  | 5,063 |
Allowance for Credit Losses on Held-to-Maturity Securities |  |  | (24 | ) |  |  | (30 | )
Total |  | $ | 212,219 |  |  | $ | 217,170 |
The following table shows the amortized cost and fair value of investment securities at September 30, 2024, by expected maturity. Expected maturities differ from contractual maturities because borrowers may have the right to call or prepay the obligations with or without prepayment penalties. Mortgage-backed securities are included in the year corresponding with the remaining expected life. Schedule of Amortized Cost and Fair Value of Investment Securities
|  | Available-for-sale |
September 30, 2024 |  | Amortized |  |  | Fair |
(Dollars in thousands) |  | Cost |  |  | Value |
Due in one year or less |  | $ | 244 |  |  | $ | 240 |
Due after one year through five years |  |  | 12,505 |  |  |  | 12,315 |
Due after five years through ten years |  |  | 33,492 |  |  |  | 30,028 |
Due after ten years |  |  | 240,005 |  |  |  | 226,970 |
Total |  | $ | 286,246 |  |  | $ | 269,553 |
|  | Held-To-Maturity |
September 30, 2024 |  | Amortized |  |  | Fair |
(Dollars in thousands) |  | Cost |  |  | Value |
Due in one year or less |  | $ | 4,665 |  |  | $ | 4,631 |
Due after one year through five years |  |  | 56,606 |  |  |  | 55,635 |
Due after five years through ten years |  |  | 60,346 |  |  |  | 59,285 |
Due after ten years |  |  | 90,626 |  |  |  | 85,094 |
Allowance for Credit Losses on Held-to-Maturity Securities |  |  | (24 | ) |  |  | (24 | )
Total |  | $ | 212,219 |  |  | $ | 204,621 |

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