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SECURITIES

6 Months Ended

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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The entire disclosure for investments in certain debt and equity securities.

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