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SECURITIES | 6 Months Ended
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Jun. 30, 2023
Investments, Debt and Equity Securities [Abstract] |
SECURITIES | SECURITIES The amortized cost of securities available-for-sale and their estimated fair values at June 30, 2023 and December 31, 2022 are as follows:
|  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value
|  | (In thousands)
June 30, 2023 |  |  |  |  |  |  |  |
U.S. Treasury Note |  | $ | 46,936 |  |  | $ | — |  |  | $ | (2,826) |  |  | $ | 44,110 |
Corporate Bonds |  | 81,609 |  |  | 37 |  |  | (6,646) |  |  | 75,000 |
U.S. Government agency obligations |  | 15,561 |  |  | — |  |  | (864) |  |  | 14,697 |
Obligations issued by U.S. states and their political subdivisions |  | 16,466 |  |  | 26 |  |  | (358) |  |  | 16,134 |
Mortgage-backed securities: |  |  |  |  |  |  |  |
Residential one-to-four family |  | 157,461 |  |  | — |  |  | (23,869) |  |  | 133,592 |
Multifamily |  | 14,309 |  |  | — |  |  | (1,138) |  |  | 13,171 |
Asset-backed securities |  | 4,524 |  |  | — |  |  | (305) |  |  | 4,219 |
Total |  | $ | 336,866 |  |  | $ | 63 |  |  | $ | (36,006) |  |  | $ | 300,923 |
December 31, 2022 |  |  |  |  |  |  |  |
U.S. Treasury Note |  | $ | 46,937 |  |  | $ | — |  |  | $ | (3,178) |  |  | $ | 43,759 |
Corporate Bonds |  | 81,725 |  |  | 4 |  |  | (5,431) |  |  | 76,298 |
U.S. Government agency obligations |  | 16,367 |  |  | — |  |  | (944) |  |  | 15,423 |
Obligations issued by U.S. states and their political subdivisions |  | 16,559 |  |  | 49 |  |  | (340) |  |  | 16,268 |
Mortgage-backed securities: |  |  |  |  |  |  |  |
Residential one-to-four family |  | 164,843 |  |  | — |  |  | (24,657) |  |  | 140,186 |
Multifamily |  | 19,475 |  |  | — |  |  | (1,317) |  |  | 18,158 |
Asset-backed securities |  | 4,525 |  |  | — |  |  | (369) |  |  | 4,156 |
Total |  | $ | 350,431 |  |  | $ | 53 |  |  | $ | (36,236) |  |  | $ | 314,248 |
The amortized cost of securities held-to-maturity, allowance for credit losses and their estimated fair values at June 30, 2023 and December 31, 2022, are as follows:
|  | Amortized Cost |  | Gross Unrecognized Gains |  | Gross Unrecognized Losses |  |  |  | Estimated Fair Value
|  | (In thousands)
June 30, 2023 |  |  |  |  |  |  |  |  |  |
Corporate bonds |  | $ | 18,600 |  |  | $ | — |  |  | $ | (3,567) |  |  |  |  | $ | 15,033 |
Asset-backed securities |  | 15,015 |  |  | — |  |  | (2,062) |  |  |  |  | 12,953 |
Total |  | $ | 33,615 |  |  | $ | — |  |  | $ | (5,629) |  |  |  |  | $ | 27,986 |
December 31, 2022 |  |  |  |  |  |  |  |  |  |
Corporate bonds |  | $ | 18,600 |  |  | $ | — |  |  | $ | (2,281) |  |  |  |  | $ | 16,319 |
Asset-backed securities |  | 15,105 |  |  | — |  |  | (2,309) |  |  |  |  | 12,796 |
Total |  | $ | 33,705 |  |  | $ | — |  |  | $ | (4,590) |  |  |  |  | $ | 29,115 |
At June 30, 2023, the allowance for credit losses on securities held-to-maturity totaled $170 thousand and related to the corporate bonds. The asset-backed securities are in a AAA tranche determined by a third party. No loss is expected on these securities. There were no sales or calls of available-for-sale securities for the three and six months ended June 30, 2023. Proceeds from sales and calls of securities available-for-sale totaled $2.4 million, resulting in gross realized gains of $14 thousand and no gross realized losses for the three and six months ended June 30, 2022. Securities pledged at both June 30, 2023 and December 31, 2022, had a carrying amount of $4.2 million and were pledged to secure public deposits and our credit line with the Federal Reserve Bank. The amortized cost and fair value of debt securities are shown below by contractual maturity as of June 30, 2023. Expected maturities on mortgage and asset-backed securities generally exceed 20 years; however, they may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without penalties. Securities not due at a single maturity are shown separately.
| Amortized Cost (1) |  | Estimated Fair Value
| (In thousands)
Available-for-sale |  |  |
Due in one year or less | $ | 38,147 |  |  | $ | 37,447 |
Due from one year to five years | 96,863 |  |  | 90,914 |
Due from five to ten years | 21,864 |  |  | 18,102 |
Due after ten years | 3,698 |  |  | 3,478 |
Mortgage-backed and asset-backed securities | 176,294 |  |  | 150,982 |
Total | $ | 336,866 |  |  | $ | 300,923 |
Held-to-maturity |  |  |
Due from one year to five years | $ | 16,600 |  |  | $ | 13,400 |
Due from five to ten years | 2,000 |  |  | 1,633 |
Mortgage-backed and asset-backed securities | $ | 15,015 |  |  | $ | 12,953 |
Total | $ | 33,615 |  |  | $ | 27,986 |
(1) Excludes the allowance for credit losses on held-to-maturity securities at June 30, 2023. Credit Quality Indicators Credit ratings are a key measure for estimating the probability of a bond’s default and for monitoring credit quality on an on-going basis. For bonds other than U.S. Treasuries and bonds issued or guaranteed by U.S. government agencies, credit ratings issued by one or more nationally recognized statistical rating organization are considered in conjunction with an assessment by the Company’s management. Investment grade reflects a credit quality of BBB- or above. None of the Company’s securities are on non-accrual status, nor are any past due. The table below indicates the credit profile of the Company’s debt securities held-to-maturity at amortized cost at June 30, 2023.
|  | AAA |  | A1 |  | BBB+ |  | BBB |  | BBB- |  |  |  | Total
|  | (In thousands)
Corporate bonds |  | $ | — |  |  | $ | — |  |  | $ | 1,600 |  |  | $ | 11,000 |  |  | $ | 6,000 |  |  |  |  | $ | 18,600 |
Asset-backed securities |  | 9,022 |  |  | 5,993 |  |  | — |  |  | — |  |  | — |  |  |  |  | 15,015 |
Total held-to-maturity |  | $ | 9,022 |  |  | $ | 5,993 |  |  | $ | 1,600 |  |  | $ | 11,000 |  |  | $ | 6,000 |  |  |  |  | $ | 33,615 |
At June 30, 2023, there was one security with a value of $2.0 million included in the BBB ratings that had a split rating. The following tables summarize available-for-sale securities with unrealized losses at June 30, 2023 and December 31, 2022, aggregated by major security type and length of time in a continuous loss position.
|  | Less than 12 Months |  | 12 Months or More |  | Total
|  | Unrealized Losses |  | Estimated Fair Value |  | Unrealized Losses |  | Estimated Fair Value |  | Number of Securities |  | Unrealized Losses |  | Estimated Fair Value
|  | (In thousands)
June 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury Note |  | $ | — |  |  | $ | — |  |  | $ | (2,826) |  |  | $ | 44,110 |  |  | 5 |  | $ | (2,826) |  |  | $ | 44,110 |
Corporate Bonds |  | (844) |  |  | 7,156 |  |  | (5,802) |  |  | 53,144 |  |  | 27 |  | (6,646) |  |  | 60,300 |
U.S. Government agency obligations |  | (5) |  |  | 634 |  |  | (859) |  |  | 14,063 |  |  | 4 |  | (864) |  |  | 14,697 |
Obligations issued by U.S. states and their political subdivisions |  | (18) |  |  | 6,074 |  |  | (340) |  |  | 6,116 |  |  | 13 |  | (358) |  |  | 12,190 |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential one-to-four family |  | (1) |  |  | 51 |  |  | (23,868) |  |  | 133,535 |  |  | 48 |  | (23,869) |  |  | 133,586 |
Multifamily |  | — |  |  | — |  |  | (1,138) |  |  | 13,171 |  |  | 6 |  | (1,138) |  |  | 13,171 |
Asset-backed securities |  | — |  |  | — |  |  | (305) |  |  | 4,219 |  |  | 2 |  | (305) |  |  | 4,219 |
Total |  | $ | (868) |  |  | $ | 13,915 |  |  | $ | (35,138) |  |  | $ | 268,358 |  |  | 105 |  | $ | (36,006) |  |  | $ | 282,273 |
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury Note |  | $ | (1,342) |  |  | $ | 28,670 |  |  | $ | (1,836) |  |  | $ | 15,089 |  |  | 5 |  | $ | (3,178) |  |  | $ | 43,759 |
Corporate Bonds |  | (3,608) |  |  | 58,509 |  |  | (1,823) |  |  | 15,522 |  |  | 31 |  | (5,431) |  |  | 74,031 |
U.S. Government agency obligations |  | (5) |  |  | 696 |  |  | (939) |  |  | 14,727 |  |  | 5 |  | (944) |  |  | 15,423 |
Obligations issued by U.S. states and their political subdivisions |  | (65) |  |  | 5,641 |  |  | (275) |  |  | 1,568 |  |  | 8 |  | (340) |  |  | 7,209 |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential one-to-four family |  | (8,273) |  |  | 60,986 |  |  | (16,384) |  |  | 79,189 |  |  | 49 |  | (24,657) |  |  | 140,175 |
Multifamily |  | (1,166) |  |  | 17,689 |  |  | (151) |  |  | 469 |  |  | 5 |  | (1,317) |  |  | 18,158 |
Asset-backed securities |  | — |  |  | — |  |  | (369) |  |  | 4,156 |  |  | 2 |  | (369) |  |  | 4,156 |
Total |  | $ | (14,459) |  |  | $ | 172,191 |  |  | $ | (21,777) |  |  | $ | 130,720 |  |  | 105 |  | $ | (36,236) |  |  | $ | 302,911 |
Of the available-for-sale securities in an unrealized loss position at June 30, 2023, 57 are comprised of U.S. Government agency obligations, Treasury notes, and mortgage-backed securities. These securities were all issued by U.S. Government-sponsored entities and agencies, which the government has affirmed its commitment to support. The municipal bonds, investment-grade corporate bonds and asset-backed securities in an unrealized loss position all experienced a decline in fair value, which is attributable to changes in interest rates and liquidity, not credit quality. The Company also does not intend to sell these securities, nor does it foresee being required to sell them before the anticipated recovery or maturity. The following tables summarizes held-to-maturity securities with unrealized losses at June 30, 2023 and December 31, 2022, aggregated by major security type and length of time in a continuous loss position.
|  | Less than 12 Months |  | 12 Months or More |  | Total
|  | Unrecognized Losses |  | Estimated Fair Value |  | Unrecognized Losses |  | Estimated Fair Value |  | Number of Securities |  | Unrecognized Losses |  | Estimated Fair Value
|  | (In thousands)
June 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate Bonds |  | (500) |  |  | 3,500 |  |  | (3,067) |  |  | 11,533 |  |  | 9 |  | (3,567) |  |  | 15,033 |
Asset-backed securities |  | — |  |  | — |  |  | (2,062) |  |  | 12,953 |  |  | 2 |  | (2,062) |  |  | 12,953 |
Total |  | $ | (500) |  |  | $ | 3,500 |  |  | $ | (5,129) |  |  | $ | 24,486 |  |  | 11 |  | $ | (5,629) |  |  | $ | 27,986 |
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate Bonds |  | (1,177) |  |  | 10,423 |  |  | (1,104) |  |  | 5,896 |  |  | 9 |  | (2,281) |  |  | 16,319 |
Asset-backed securities |  | — |  |  | — |  |  | (2,310) |  |  | 12,796 |  |  | 2 |  | (2,310) |  |  | 12,796 |
Total |  | $ | (1,177) |  |  | $ | 10,423 |  |  | $ | (3,414) |  |  | $ | 18,692 |  |  | 11 |  | $ | (4,591) |  |  | $ | 29,115 |
The held-to-maturity securities in an unrecognized loss position at June 30, 2023, are asset-backed securities and investment grade corporate bonds, which experienced a decline in fair value attributable to changes in interest rates and liquidity, not credit quality. The Company also does not intend to sell these securities, nor does it foresee being required to sell them before the anticipated recovery or maturity.

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