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v3.23.1

Investments | 3 Months Ended
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Mar. 31, 2023
Investments [Abstract] |
Investments | ‎ Note 4. Investments Available for Sale (AFS) Securities The amortized cost and estimated fair value of AFS securities as of March 31, 2023 and December 31, 2022 are as follows:
(Dollars in thousands) |  |  |  |  | Gross |  | Gross |  |  |
|  | Amortized |  | unrealized |  | unrealized |  | Fair
March 31, 2023 |  | cost |  | gains |  | losses |  | Value
U.S. Treasury |  | $ | 84,025 |  | $ | — |  | $ | (9,762) |  | $ | 74,263
Municipal |  |  | 170,095 |  |  | — |  |  | (24,590) |  |  | 145,505
Corporate |  |  | 26,381 |  |  | — |  |  | (2,382) |  |  | 23,999
Agency mortgage & asset-backed |  |  | 156,934 |  |  | 68 |  |  | (10,910) |  |  | 146,092
Non-Agency mortgage & asset-backed |  |  | 72,601 |  |  | 28 |  |  | (4,721) |  |  | 67,908
Total |  | $ | 510,036 |  | $ | 96 |  | $ | (52,365) |  | $ | 457,767
(Dollars in thousands) |  |  |  |  | Gross |  | Gross |  |  |
|  | Amortized |  | unrealized |  | unrealized |  | Fair
December 31, 2022 |  | cost |  | gains |  | losses |  | value
U.S. Treasury |  | $ | 101,980 |  | $ | — |  | $ | (11,723) |  | $ | 90,257
Municipal |  |  | 186,007 |  |  | 14 |  |  | (30,566) |  |  | 155,455
Corporate |  |  | 26,316 |  |  | — |  |  | (2,077) |  |  | 24,239
Agency mortgage & asset-backed |  |  | 163,274 |  |  | 19 |  |  | (12,358) |  |  | 150,935
Non-Agency mortgage & asset-backed |  |  | 70,756 |  |  | 1 |  |  | (4,807) |  |  | 65,950
Total |  | $ | 548,333 |  | $ | 34 |  | $ | (61,531) |  | $ | 486,836
At March 31, 2023 and December 31, 2022, the fair value of debt securities pledged to secure public funds and trust deposits totaled $147.1 million and $208.9 million, respectively. The Bank has no investment in a single issuer that exceeds 10% of shareholders’ equity, except for securities issued by the U.S. Treasury and U.S. government sponsored entities. The amortized cost and estimated fair value of debt securities at March 31, 2023, by contractual maturity are shown below. Actual maturities may differ from contractual maturities because of prepayment or call options embedded in the securities. Securities not due at a single maturity date are presented separately.
(Dollars in thousands) |  | Amortized ‎cost |  | Fair ‎value
Due in one year or less |  | $ | — |  | $ | —
Due after one year through five years |  |  | 10,911 |  |  | 9,946
Due after five years through ten years |  |  | 144,217 |  |  | 127,268
Due after ten years |  |  | 125,373 |  |  | 106,553
|  |  | 280,501 |  |  | 243,767
Mortgage & asset-backed |  |  | 229,535 |  |  | 214,000
|  | $ | 510,036 |  | $ | 457,767
The composition of the net realized gains (losses) on debt securities for the three months ended are as follows:
|  | For the Three Months Ended
|  | March 31,
(Dollars in thousands) |  | 2023 |  | 2022
Proceeds |  | $ | 32,855 |  | $ | —
Gross gains realized |  |  | 12 |  |  | —
Gross losses realized |  |  | (614) |  |  | —
Net (losses) gains realized |  | $ | (602) |  | $ | —
Tax benefit (provision) on net (losses) gains realized |  | $ | 126 |  | $ | —
Impairment: The debt securities portfolio contained 571 securities with $448.6 million of temporarily impaired fair value and $52.4 million in unrealized losses at March 31, 2023. The total unrealized loss position has decreased $9.2 million since year-end 2022 due primarily to a decrease in long-term market interest rates. AFS securities in an unrealized loss position are evaluated for credit impairment at least quarterly. For these securities, the Bank considers: (1) the extent to which the fair value is less than amortized cost; (2) adverse conditions specifically related to the security, industry or geographic area; (3) the payment structure of the debt security and the likelihood of the issuer being able to make payments that increase in the future; (4) failure of the issuer of the security to make scheduled interest or principal payments; and (5) any changes to the rating of the security by a rating agency. In addition, the Bank considers whether it intends to sell these securities or whether it will be forced to sell these securities before the earlier of amortized cost recovery or maturity. The Bank does not have the intent to sell and does not believe it will more likely than not be required to sell any of these securities prior to a recovery of their fair value to amortized cost. The impairment identified on debt securities and subject to evaluation at March 31, 2023, was determined not to be attributable to credit related factors; therefore, the Bank does not have an allowance for credit loss for these investments. During the first quarter of 2023, approximately $33 million of securities was sold as part of a portfolio restructuring to take advantage of higher market interest rates. The loss on these sales was $602 thousand. ‎ The following table reflects impairment in the AFS portfolio, aggregated by investment category, length of time that individual securities have been in a continuous unrealized loss position and the number of securities in each category as of March 31, 2023 and December 31, 2022:
| March 31, 2023
| Less than 12 months |  | 12 months or more |  | Total
| Fair |  | Unrealized |  |  |  | Fair |  | Unrealized |  |  |  | Fair |  | Unrealized |  |
(Dollars in thousands) | Value |  | Losses |  | Count |  | Value |  | Losses |  | Count |  | Value |  | Losses |  | Count
U.S. Treasury | $ | — |  | $ | — |  | — |  | $ | 74,263 |  | $ | (9,762) |  | 28 |  | $ | 74,263 |  | $ | (9,762) |  | 28
Municipal |  | 1,332 |  |  | (171) |  | 3 |  |  | 144,173 |  |  | (24,419) |  | 173 |  |  | 145,505 |  |  | (24,590) |  | 176
Corporate |  | 7,462 |  |  | (576) |  | 17 |  |  | 16,537 |  |  | (1,806) |  | 34 |  |  | 23,999 |  |  | (2,382) |  | 51
Agency mortgage & asset-backed |  | 17,046 |  |  | (479) |  | 58 |  |  | 124,043 |  |  | (10,431) |  | 192 |  |  | 141,089 |  |  | (10,910) |  | 250
Non-Agency mortgage & asset-backed |  | 27,105 |  |  | (1,416) |  | 29 |  |  | 36,632 |  |  | (3,305) |  | 37 |  |  | 63,737 |  |  | (4,721) |  | 66
Total temporarily impaired | $ | 52,945 |  | $ | (2,642) |  | 107 |  | $ | 395,648 |  | $ | (49,723) |  | 464 |  | $ | 448,593 |  | $ | (52,365) |  | 571
| December 31, 2022
| Less than 12 months |  | 12 months or more |  | Total
| Fair |  | Unrealized |  |  |  | Fair |  | Unrealized |  |  |  | Fair |  | Unrealized |  |
(Dollars in thousands) | Value |  | Losses |  | Count |  | Value |  | Losses |  | Count |  | Value |  | Losses |  | Count
U.S. Treasury | $ | 17,598 |  | $ | (183) |  | 3 |  | $ | 72,659 |  | $ | (11,540) |  | 28 |  | $ | 90,257 |  | $ | (11,723) |  | 31
Municipal |  | 73,644 |  |  | (9,586) |  | 90 |  |  | 80,503 |  |  | (20,981) |  | 104 |  |  | 154,147 |  |  | (30,566) |  | 194
Corporate |  | 12,221 |  |  | (851) |  | 25 |  |  | 10,368 |  |  | (1,226) |  | 21 |  |  | 22,589 |  |  | (2,077) |  | 46
Agency mortgage & asset-backed |  | 55,393 |  |  | (2,747) |  | 139 |  |  | 88,953 |  |  | (9,611) |  | 113 |  |  | 144,346 |  |  | (12,358) |  | 252
Non-Agency mortgage & asset-backed |  | 49,301 |  |  | (3,092) |  | 52 |  |  | 14,207 |  |  | (1,715) |  | 16 |  |  | 63,508 |  |  | (4,807) |  | 68
Total temporarily impaired | $ | 208,157 |  | $ | (16,459) |  | 309 |  | $ | 266,690 |  | $ | (45,072) |  | 282 |  | $ | 474,847 |  | $ | (61,531) |  | 591
Equity Securities at Fair Value The Corporation owns one equity investment with a readily determinable fair value. At March 31, 2023 and December 31, 2022, this investment was reported at fair value of $387 thousand and $411 thousand, respectively, with changes in value reported through income.

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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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