Securities

9 Months Ended

Sep. 30, 2022

Available For Sale Securities [Abstract]

NOTE 4. Securities

Amortized costs and fair values of securities available for sale at September 30, 2022 and December 31, 2021 were as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
	September 30, 2022
	(in thousands)
Obligations of U.S. government corporations and agencies	$	9,994	$	—	$	(783	)	$	9,211
Mortgage-backed securities		156,879		—		(25,337	)		131,542
Obligations of states and political subdivisions		7,027		—		(408	)		6,619
Subordinated debt		4,750		—		(369	)		4,381
	$	178,650	$	—	$	(26,897	)	$	151,753


	December 31, 2021
	(in thousands)
Obligations of U.S. government corporations and agencies	$	14,541	$	417	$	(37	)	$	14,921
U.S. treasury notes		2,003		—		—			2,003
Mortgage-backed securities		152,391		753		(2,132	)		151,012
Obligations of states and political subdivisions		21,104		773		—			21,877
Subordinated debt		2,500		11		(3	)		2,508
	$	192,539	$	1,954	$	(2,172	)	$	192,321

During the nine months ended September 30, 2022, the Company sold $15.4 million of available for sale securities recognizing $6 thousand in gross gains and $743 thousand in gross losses. During the nine months ended September 30, 2021, the Company sold $15.9 million of available for sale securities recognizing $143 thousand in gross gains and $119 thousand in gross losses.

The fair value and gross unrealized losses for securities available for sale, totaled by the length of time that individual securities have been in a continuous gross unrealized loss position, at September 30, 2022 and December 31, 2021 were as follows:


	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	September 30, 2022
	(in thousands)
Obligations of U.S. government corporations and agencies	$	9,210	$	783	$	—	$	—	$	9,210	$	783
Mortgage-backed securities		33,673		4,519		97,869		20,818		131,542		25,337
Obligations of states and political subdivisions		6,580		408		—		—		6,580		408
Subordinated debt		3,631		369		—		—		3,631		369
	$	53,094	$	6,079	$	97,869	$	20,818	$	150,963	$	26,897


	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	December 31, 2021
	(in thousands)
Obligations of U.S. government corporations and agencies	$	2,616	$	37	$	—	$	—	$	2,616	$	37
Mortgage-backed securities		101,080		1,214		29,555		918		130,635		2,132
Subordinated debt		247		3		—		—		247		3
	$	103,943	$	1,254	$	29,555	$	918	$	133,498	$	2,172

Gross unrealized losses on available for sale securities included one hundred five (105) and forty one (41) debt securities at September 30, 2022 and December 31, 2021, respectively. The Company evaluates securities for other-than-temporary impairment on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to the length of time and the amount of an unrealized loss, the financial condition of the issuer, and the intent and ability of the Company to retain its investment in the issuer long enough to allow for an anticipated recovery in fair value. The fair value of a security reflects its liquidity as compared to similar instruments, current market rates on similar instruments, and the creditworthiness of the issuer. Absent any change in the liquidity of a security or the creditworthiness of the issuer, prices will decline as market rates rise and vice-versa. The primary cause of the unrealized losses at September 30, 2022 and December 31, 2021 was changes in market interest rates and other market conditions and not credit concerns of the issuers. Since the losses can be primarily attributed to changes in market interest rates and conditions and not expected cash flows or an issuer’s financial condition and management does not intend to sell and it is more likely than not that management will not be required to sell the securities prior to their anticipated recovery, the unrealized losses were deemed to be temporary. The Company’s mortgage-backed securities are issued by U.S. government agencies, which guarantee payments to investors regardless of the status of the underlying mortgages. The Company monitors the financial condition of these issuers continuously and will record other-than-temporary impairment if the recovery of value is unlikely.

The Company’s securities are exposed to various risks, such as interest rate, market, currency and credit risks. Due to the level of risk associated with certain securities and the level of uncertainty related to changes in the value of securities, it is at least reasonably possible that changes in risks in the near term would materially affect the securities balance reported in the financial statements.

Securities having a carrying value of $8.5 million at September 30, 2022 were pledged as security for trust accounts.

The composition of restricted investments at September 30, 2022 and December 31, 2021 was as follows:


	September 30, 2022		December 31, 2021
	(in thousands)
Federal Reserve Bank Stock	$	944	$	344
Federal Home Loan Bank Stock		3,524		565
Community Bankers’ Bank Stock		140		140
	$	4,608	$	1,049