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Investment Securities

12 Months Ended

Dec. 31, 2024

(2) Investment Securities

Investment securities available for sale at December 31, 2024 and 2023 are as follows:

(Dollars in thousands)
	December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Treasuries	$	7,981		-		724		7,257
U.S. Government sponsored enterprises		9,243		-		511		8,732
GSE - Mortgage-backed securities		248,837		162		23,207		225,792
Private label mortgage-backed securities		43,118		74		1,425		41,767
State and political subdivisions		129,659		-		25,204		104,455
Total	$	438,838		236		51,071		388,003

(Dollars in thousands)
	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Treasuries	$	10,974		-		830		10,144
U.S. Government sponsored enterprises		11,111		-		596		10,515
GSE - Mortgage-backed securities		257,705		185		22,988		234,902
Private label mortgage-backed securities		33,317		16		2,063		31,270
State and political subdivisions		129,922		-		24,829		105,093
Total	$	443,029		201		51,306		391,924

The current fair value and associated unrealized losses on investments in debt securities with unrealized losses at December 31, 2024 and 2023 are summarized in the tables below, with the length of time the individual securities have been in a continuous loss position.

(Dollars in thousands)
	December 31, 2024
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasuries	$	-		-		7,257		724		7,257		724
U.S. government sponsored enterprises		-		-		8,732		511		8,732		511
GSE -Mortgage-backed securities		20,458		669		197,497		22,538		217,955		23,207
Private label mortgage-backed securities		4,010		9		21,727		1,416		25,737		1,425
State and political subdivisions		-		-		104,455		25,204		104,455		25,204
Total	$	24,468		678		339,668		50,393		364,136		51,071

(Dollars in thousands)
	December 31, 2023
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasuries	$	-		-		10,144		830		10,144		830
U.S. government sponsored enterprises		-		-		10,515		596		10,515		596
GSE -Mortgage-backed securities		24,167		546		203,234		22,442		227,401		22,988
Private label mortgage-backed securities		3,416		43		23,095		2,020		26,511		2,063
State and political subdivisions		-		-		105,093		24,829		105,093		24,829
Total	$	27,583		589		352,081		50,717		379,664		51,306

At December 31, 2024, unrealized losses in the investment securities portfolio relating to debt securities totaled $51.1 million. The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary. From the December 31, 2024 tables above, both of the U.S. Treasury securities, all 108 of the securities issued by state and political subdivisions contained unrealized losses, all seven of the securities issued by U.S. Government sponsored enterprises (“GSE”), 114 of the 119 GSE mortgage-backed securities, and 11 of the 16 private label mortgage-backed securities contained unrealized losses. The Company did not have any reserves on securities at December 31, 2024, as no credit related losses were identified in the Company’s December 31, 2024 analysis. At December 31, 2023, unrealized losses in the investment securities portfolio relating to debt securities totaled $51.3 million. The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary. From the December 31, 2023 tables above, all three of the U.S. Treasury securities, all 108 of the securities issued by state and political subdivisions contained unrealized losses, all seven of the securities issued by GSE, 114 of the 121 GSE mortgage-backed securities, and 12 of the 14 private label mortgage backed securities contained unrealized losses. The Company did not have an allowance for credit losses on available for sale securities at December 31, 2023, as no credit related losses were identified in the Company’s December 31, 2023 analysis.

The amortized cost and estimated fair value of investment securities available for sale, other than GSE mortgage-backed securities, at December 31, 2024, are shown below by contractual maturity. Expected maturities of mortgage-backed securities will differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

December 31, 2024
(Dollars in thousands)
	Amortized Cost		Fair Value
Due within one year	$	7,999		7,991
Due from one to five years		32,911		29,586
Due from five to ten years		76,298		61,674
Due after ten years		72,793		62,960
GSE-Mortgage-backed securities		248,837		225,792
Total	$	438,838		388,003

During 2024, proceeds from sales of securities available for sale were $11.7 million and resulted in gross gains of $33,000 and gross losses of $28,000. During 2023, proceeds from sales of securities available for sale were $51.0 million and resulted in gross losses of $2.7 million and gross gains of $177,000. No securities available for sale were sold during 2022.

Securities with a fair value of approximately $40.0 million and $132.0 million at December 31, 2024 and 2023, respectively, were pledged to secure public deposits and for other purposes as required by law.

Taxable interest income on investment securities was $14.6 million and $13.4 million for the years ended December 31, 2024 and 2023, respectively. Non-taxable interest income on investment securities was $425,000 and $765,000 for the years ended December 31, 2024 and 2023, respectively.