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Securities

12 Months Ended

Dec. 31, 2022

NOTE 3: Securities

The Corporation’s debt securities, all of which are classified as available for sale, are summarized as follows:

December 31, 2022

Gross

Gross

Amortized

Unrealized

Unrealized

(Dollars in thousands)

Cost

Gains

Losses

Fair Value

U.S. Treasury securities

$

60,886

$

—

$

(2,053)

$

58,833

U.S. government agencies and corporations

143,241

—

(12,967)

130,274

Mortgage-backed securities

200,393

65

(20,540)

179,918

Obligations of states and political subdivisions

127,317

300

(6,790)

120,827

Corporate and other debt securities

25,291

—

(2,552)

22,739

$

557,128

$

365

$

(44,902)

$

512,591


		December 31, 2021
					Gross			Gross
		Amortized			Unrealized			Unrealized
(Dollars in thousands)		Cost			Gains			Losses			Fair Value
U.S. government agencies and corporations		$	69,583		$	41		$	(1,339)		$	68,285
Mortgage-backed securities			189,985			1,565			(1,201)			190,349
Obligations of states and political subdivisions			91,304			1,642			(280)			92,666
Corporate and other debt securities			21,648			246			(121)			21,773
		$	372,520		$	3,494		$	(2,941)		$	373,073

The amortized cost and estimated fair value of securities at December 31, 2022 and 2021, by the earlier of contractual maturity or expected maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without call or prepayment penalties.


		December 31, 2022
		Amortized
(Dollars in thousands)		Cost			Fair Value
Due in one year or less		$	120,590		$	113,350
Due after one year through five years			276,622			257,306
Due after five years through ten years			152,015			134,619
Due after ten years			7,901			7,316
		$	557,128		$	512,591

The following table presents the gross realized gains and losses on and the proceeds from the sales, maturities and calls of securities. There were no sales of securities during the year ended December 31, 2022. During the years ended December 31, 2021 and 2020, $2.30 million and $5.99 million of proceeds, respectively, were related to sales of securities.


		Year Ended December 31,
(Dollars in thousands)		2022			2021			2020
Realized gains from sales, maturities and calls of securities:
Gross realized gains		$	—		$	42		$	38
Gross realized losses			—			—			—
Net realized gains		$	—		$	42		$	38
Proceeds from sales, maturities, calls and paydowns of securities		$	55,328		$	114,019		$	123,741

The Corporation pledges securities primarily to secure public deposits and repurchase agreements. Securities with an aggregate amortized cost of $237.15 million and an aggregate fair value of $213.58 million were pledged at December 31, 2022. Securities with an aggregate amortized cost of $185.25 million and an aggregate fair value of $186.22 million were pledged at December 31, 2021.

Securities in an unrealized loss position at December 31, 2022, by duration of the period of the unrealized loss, are shown below.

Less Than 12 Months

12 Months or More

Total

Fair

Unrealized

Fair

Unrealized

Fair

Unrealized

(Dollars in thousands)

Value

Loss

Value

Loss

Value

Loss

U.S. Treasury securities

$

50,556

$

1,368

$

8,277

$

685

$

58,833

$

2,053

U.S. government agencies and corporations

71,948

1,578

58,326

11,389

130,274

12,967

Mortgage-backed securities

73,301

5,441

104,563

15,099

177,864

20,540

Obligations of states and political subdivisions

60,838

2,434

32,120

4,356

92,958

6,790

Corporate and other debt securities

15,049

1,702

6,681

850

21,730

2,552

Total temporarily impaired securities

$

271,692

$

12,523

$

209,967

$

32,379

$

481,659

$

44,902

There were 558 debt securities totaling $481.66 million of aggregate fair value considered temporarily impaired at December 31, 2022. The primary cause of the temporary impairments in the Corporation’s investments in debt securities was increases in market interest rates. The Corporation concluded that no other-than-temporary impairment existed in its securities portfolio at December 31, 2022, and no other-than-temporary impairment loss has been recognized in net income, based primarily on the fact that changes in fair value were caused primarily by increases in interest rates, securities with unrealized losses had generally high credit quality, the Corporation intends to hold these investments in debt securities to maturity and it is more-likely-than-not that the Corporation will not be required to sell these investments before a recovery of its investment, and issuers have continued to make timely payments of principal and interest. Additionally, the Corporation’s mortgage-backed securities are entirely issued by either U.S. government agencies or U.S. government-

sponsored enterprises. Collectively, these entities provide a guarantee, which is either explicitly or implicitly supported by the full faith and credit of the U.S. government, that investors in such mortgage-backed securities will receive timely principal and interest payments.

Securities in an unrealized loss position at December 31, 2021, by duration of the period of the unrealized loss, are shown below.


		Less Than 12 Months						12 Months or More						Total
		Fair			Unrealized			Fair			Unrealized			Fair			Unrealized
(Dollars in thousands)		Value			Loss			Value			Loss			Value			Loss
U.S. government agencies and corporations		$	46,561		$	945		$	10,604		$	394		$	57,165		$	1,339
Mortgage-backed securities			126,873			1,127			5,178			74			132,051			1,201
Obligations of states and political subdivisions			16,578			224			2,703			56			19,281			280
Corporate and other debt securities			8,925			121			—			—			8,925			121
Total temporarily impaired securities		$	198,937		$	2,417		$	18,485		$	524		$	217,422		$	2,941

The Corporation’s investment in restricted stock totaled $1.12 million at December 31, 2022 and consisted of FHLB stock. Restricted stock is generally viewed as a long-term investment, which is carried at cost because there is no market for the stock other than the FHLBs. Therefore, when evaluating restricted stock for impairment, its value is based on the ultimate recoverability of the par value rather than by recognizing any temporary decline in value. The Corporation did not consider its investment in restricted stock to be other-than-temporarily impaired at December 31, 2022 and no impairment has been recognized.