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Securities

9 Months Ended

Sep. 30, 2024

NOTE 2: Securities

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

September 30, 2024

Gross

Gross

Amortized

Unrealized

Unrealized

(Dollars in thousands)

Cost

Gains

Losses

Fair Value

U.S. Treasury securities

$

10,977

$

—

$

(293)

$

10,684

U.S. government agencies and corporations

70,396

—

(6,727)

63,669

Mortgage-backed securities

177,376

1,022

(11,421)

166,977

Obligations of states and political subdivisions

148,636

1,830

(3,290)

147,176

Corporate and other debt securities

23,408

4

(2,873)

20,539

$

430,793

$

2,856

$

(24,604)

$

409,045


		December 31, 2023
					Gross			Gross
		Amortized			Unrealized			Unrealized
(Dollars in thousands)		Cost			Gains			Losses			Fair Value
U.S. Treasury securities		$	45,883		$	—		$	(780)		$	45,103
U.S. government agencies and corporations			96,407			—			(9,313)			87,094
Mortgage-backed securities			177,734			185			(16,223)			161,696
Obligations of states and political subdivisions			148,875			2,280			(4,044)			147,111
Corporate and other debt securities			25,193			—			(3,753)			21,440
		$	494,092		$	2,465		$	(34,113)		$	462,444

The amortized cost and estimated fair value of securities at September 30, 2024, by the earlier of contractual maturity or expected maturity, are shown below. The Corporation has elected to exclude accrued interest receivable, totaling $2.27 million at September 30, 2024, from the amortized cost basis of securities. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without call or prepayment penalties.


		September 30, 2024
		Amortized
(Dollars in thousands)		Cost			Fair Value
Due in one year or less		$	71,087		$	69,053
Due after one year through five years			175,996			164,747
Due after five years through ten years			117,701			110,577
Due after ten years			66,009			64,668
		$	430,793		$	409,045

The following table presents the gross realized gains and losses on and the proceeds from the sales, maturities and calls of securities. During the three and nine months ended September 30, 2024 and 2023 there were no sales of securities.


		Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in thousands)		2024			2023			2024			2023
Realized gains from sales, maturities and calls of securities:
Gross realized gains		$	—		$	—		$	—		$	—
Gross realized losses			—			—			—			(5)
Net realized losses		$	—		$	—		$	—		$	(5)
Proceeds from sales, maturities, calls and paydowns of securities		$	16,344		$	30,719		$	89,240		$	75,560

The Corporation pledges securities primarily to secure municipal deposits, repurchase agreements and lines of credit that provide liquidity to the Corporation and C&F Bank. Securities with an aggregate amortized cost of $183.10 million and an aggregate fair value of $170.80 million were pledged at September 30, 2024. Securities with an aggregate amortized cost of $215.97 million and an aggregate fair value of $198.85 million were pledged at December 31, 2023.

Securities in an unrealized loss position at September 30, 2024, 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

$

—

$

—

$

10,684

$

293

$

10,684

$

293

U.S. government agencies and corporations

—

—

63,669

6,727

63,669

6,727

Mortgage-backed securities

2,615

27

132,043

11,394

134,658

11,421

Obligations of states and political subdivisions

9,484

60

62,583

3,230

72,067

3,290

Corporate and other debt securities

484

16

19,051

2,857

19,535

2,873

Total

$

12,583

$

103

$

288,030

$

24,501

$

300,613

$

24,604

There were 465 debt securities with a fair value below the amortized cost basis, totaling $300.61 million of aggregate fair value as of September 30, 2024. The Corporation concluded that a credit loss did not exist in its securities portfolio at September 30, 2024, and no impairment loss has been recognized based on the fact that (1) changes in fair value were caused primarily by fluctuations in interest rates, (2) securities with unrealized losses had generally high credit quality, (3) 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 (4) 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, 2023, 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		$	—		$	—		$	45,103		$	780		$	45,103		$	780
U.S. government agencies and corporations			—			—			87,094			9,313			87,094			9,313
Mortgage-backed securities			5,528			68			150,023			16,155			155,551			16,223
Obligations of states and political subdivisions			4,659			72			65,630			3,972			70,289			4,044
Corporate and other debt securities			3,386			364			18,054			3,389			21,440			3,753
Total		$	13,573		$	504		$	365,904		$	33,609		$	379,477		$	34,113

The Corporation’s investment in restricted stock totaled $4.54 million at September 30, 2024 and $2.93 million at December 31, 2023 and consisted of Federal Home Loan Bank of Atlanta (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 to be redeemed or repurchased by the FHLB. 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 impaired at September 30, 2024 and no impairment has been recognized.