Securities

12 Months Ended

Dec. 31, 2023

Debt Securities, Available-for-Sale [Abstract]

NOTE 2. Securities

On January 1, 2023, the Company adopted ASC 326, which made changes to accounting for available for sale debt securities whereby credit losses should be presented as an allowance, rather than as a write-down when management does not intend to sell and does not believe it is more likely than not they will be required to sell a security prior to the recovery of its amortized cost basis. Should the Company classify debt securities as held-to-maturity in future periods, ASC 326 would also require the Company to measure an expected credit losses under the CECL methodology that would require consideration of a broader range of reasonable and supportable information to inform credit loss estimates. All securities information presented as of December 31, 2023 is in accordance with ASC 326. All securities information presented as of December 31, 2022 or a prior date is presented in accordance with previously applicable GAAP.

Amortized costs and fair values of securities available for sale at December 31, 2023 and 2022 were as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
	December 31, 2023
	(in thousands)
Obligations of U.S. government corporations and agencies	$	9,258	$	—	$	(667	)	$	8,591
Mortgage-backed securities		140,052		—		(21,230	)		118,822
Obligations of states and political subdivisions		6,191		1		(261	)		5,931
Subordinated debt		4,750		—		(651	)		4,099
	$	160,251	$	1	$	(22,809	)	$	137,443


	December 31, 2022
	(in thousands)
Obligations of U.S. government corporations and agencies	$	9,993	$	—	$	(858	)	$	9,135
Mortgage-backed securities		153,289		—		(24,136	)		129,153
Obligations of states and political subdivisions		7,027		2		(422	)		6,607
Subordinated debt		4,750		—		(489	)		4,261
	$	175,059	$	2	$	(25,905	)	$	149,156

Accrued interest receivable on debt securities available for sale totaled $393 thousand and $431 thousand at December 31, 2023 and 2022, respectively and is included in the other assets line item in the Consolidated Balance Sheets.

Carrying amounts of restricted securities at December 31, 2023 and 2022 were as follows:


	December 31, 2023		December 31, 2022
	(in thousands)
Federal Reserve Bank Stock	$	344	$	944
Federal Home Loan Bank Stock		9,084		8,149
Community Bankers’ Bank Stock		140		140
	$	9,568	$	9,233

The amortized cost and fair value of securities available for sale at December 31, 2023, by contractual maturity, are shown below. Maturities may differ from contractual maturities primarily in mortgage-backed securities (others could be called) because the mortgages underlying the securities may be called or repaid without any penalties.


	Amortized Cost		Fair Value
	(in thousands)
Due in one year or less	$	1,268	$	1,256
Due after one year through five years		6,114		5,799
Due after five years through ten years		19,434		17,568
Due after ten years		133,435		112,820
	$	160,251	$	137,443

During the twelve months ended December 31, 2023, the Company did not sell any available for sale securities. During the twelve months ended December 31, 2022, the Company sold $15.4 million in available for sale securities with gross gains of $6 thousand and gross losses of $743 thousand.

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 unrealized loss position, at December 31, 2023 and 2022 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
	December 31, 2023
	(in thousands)
Obligations of U.S. government corporations and agencies	$	—	$	—	$	8,591	$	667	$	8,591	$	667
Mortgage-backed securities		—		—		118,822		21,230		118,822		21,230
Obligations of states and political subdivisions		—		—		5,430		261		5,430		261
Subordinated debt		221		29		3,378		622		3,599		651
	$	221	$	29	$	136,221	$	22,780	$	136,442	$	22,809

	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, 2022
	(in thousands)
Obligations of U.S. government corporations and agencies	$	6,140	$	543	$	2,994	$	315	$	9,134	$	858
Mortgage-backed securities		31,771		4,052		97,382		20,084		129,153		24,136
Obligations of states and political subdivisions		6,065		422		—		—		6,065		422
Subordinated debt		2,431		319		1,080		170		3,511		489
	$	46,407	$	5,336	$	101,456	$	20,569	$	147,863	$	25,905

Gross unrealized losses on available for sale securities included one hundred three (103) and one hundred four (104) debt securities at December 31, 2023 and December 31, 2022, respectively. The Company concluded that a credit loss does not exist in its securities portfolio at December 31, 2023, 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 Company intends to hold these investments in debt securities to maturity and it is more-likely-than-not that the Company 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 Company’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 having a carrying value of $13.9 million at December 31, 2023 were pledged as security for trust accounts.