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v3.23.1

Available-for-Sale Securities | 3 Months Ended
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Mar. 31, 2023
Investments [Abstract] |
Available-for-Sale Securities | Available-for-Sale Securities The amortized cost, gross unrealized gains, gross unrealized losses and fair values of available-for-sale securities at March 31, 2023 and December 31, 2022 are as follows:
(In thousands) | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized (Losses) |  | Fair Value
March 31, 2023: |  |  |  |  |  |  |
U. S. Government agency and mortgage-backed securities | $ | 81,084 |  |  | $ | 4 |  |  | $ | (13,551) |  |  | $ | 67,537 |
Corporate bonds | 18,010 |  |  | — |  |  | (4,348) |  |  | 13,662 |
Subordinated notes | 5,000 |  |  | — |  |  | (479) |  |  | 4,521 |
SBA loan pools | 6,487 |  |  | — |  |  | (982) |  |  | 5,505 |
Municipal bonds | 560 |  |  | — |  |  | (49) |  |  | 511 |
Total available-for-sale securities | $ | 111,141 |  |  | $ | 4 |  |  | $ | (19,409) |  |  | $ | 91,736 |
December 31, 2022: |  |  |  |  |  |  |
U. S. Government agency and mortgage-backed securities | $ | 73,480 |  |  | $ | — |  |  | $ | (14,434) |  |  | $ | 59,046 |
Corporate bonds | 19,773 |  |  | 7 |  |  | (5,125) |  |  | 14,655 |
Subordinated notes | 5,000 |  |  | — |  |  | (398) |  |  | 4,602 |
SBA loan pools | 6,791 |  |  | — |  |  | (1,073) |  |  | 5,718 |
Municipal bonds | 561 |  |  | — |  |  | (62) |  |  | 499 |
Total available-for-sale securities | $ | 105,605 |  |  | $ | 7 |  |  | $ | (21,092) |  |  | $ | 84,520 |
The following table presents the available-for-sale securities’ gross unrealized losses and fair value, aggregated by the length of time the individual securities have been in a continuous loss position as of March 31, 2023 and December 31, 2022:
(In thousands) | Less than 12 Months |  | 12 Months or More |  | Total
| Fair Value |  | Unrealized (Loss) |  | Fair Value |  | Unrealized (Loss) |  | Fair Value |  | Unrealized (Loss)
March 31, 2023: |  |  |  |  |  |  |  |  |  |  |
U. S. Government agency and mortgage-backed securities | $ | 15,559 |  |  | $ | (560) |  |  | $ | 48,506 |  |  | $ | (12,991) |  |  | $ | 64,065 |  |  | $ | (13,551) |
Corporate bonds | 1,967 |  |  | (48) |  |  | 11,695 |  |  | (4,300) |  |  | 13,662 |  |  | (4,348) |
Subordinated notes | 2,748 |  |  | (252) |  |  | 1,773 |  |  | (227) |  |  | 4,521 |  |  | (479) |
SBA loan pools | 1,355 |  |  | (13) |  |  | 4,150 |  |  | (969) |  |  | 5,505 |  |  | (982) |
Municipal bonds | — |  |  | — |  |  | 511 |  |  | (49) |  |  | 511 |  |  | (49) |
Total available-for-sale securities | $ | 21,629 |  |  | $ | (873) |  |  | $ | 66,635 |  |  | $ | (18,536) |  |  | $ | 88,264 |  |  | $ | (19,409) |
December 31, 2022: |  |  |  |  |  |  |  |  |  |  |
U. S. Government agency and mortgage-backed securities | $ | 11,126 |  |  | $ | (633) |  |  | $ | 47,920 |  |  | $ | (13,801) |  |  | $ | 59,046 |  |  | $ | (14,434) |
Corporate bonds | 1,959 |  |  | (64) |  |  | 10,934 |  |  | (5,061) |  |  | 12,893 |  |  | (5,125) |
Subordinated notes | 4,602 |  |  | (398) |  |  | — |  |  | — |  |  | 4,602 |  |  | (398) |
SBA loan pools | 1,437 |  |  | (12) |  |  | 4,280 |  |  | (1,061) |  |  | 5,717 |  |  | (1,073) |
Municipal bonds | — |  |  | — |  |  | 498 |  |  | (62) |  |  | 498 |  |  | (62) |
Total available-for-sale securities | $ | 19,124 |  |  | $ | (1,107) |  |  | $ | 63,632 |  |  | $ | (19,985) |  |  | $ | 82,756 |  |  | $ | (21,092) |
As of March 31, 2023 and December 31, 2022, forty-eight of forty-nine and forty-six of forty-seven available-for-sale securities had unrealized losses with an aggregate decline of (18.0)% and (20.3)% from the amortized cost of those securities, respectively. At March 31, 2023, no allowance for credit losses has been recognized on available for sale debt securities in an unrealized loss position as the Company does not believe any of the debt securities are credit impaired. This is based on the Company’s analysis of the risk characteristics, including credit ratings, and other qualitative factors related to available for sale debt securities. The issuers of these debt securities continue to make timely principal and interest payments under the contractual terms of the securities. The Company does not intend to sell these debt securities and it is more likely than not that the Company will not be required to sell the debt securities before recovery of their amortized cost, which may be at maturity. The unrealized losses are due to increases in market interest rates over the yields available at the time the debt securities were purchased. With regard to U.S. mortgage-backed securities and municipal bonds issued by the U.S. government, or agencies thereof, it is expected that the securities will not be settled at prices less than the amortized cost bases of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. Accordingly, no allowance for credit losses has been recorded for these securities. With regard to corporate bonds, management considers (i) issuer bond ratings, (ii) historical loss rates for given bond ratings, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, and (iv) internal forecasts. Securities under the U.S. Small Business Administration (“SBA”) government guaranteed loan pools program were purchased at a premium and the impairment was attributable primarily to increased prepayment speeds. The timely payment of principal and interest on these securities is guaranteed by the U.S. Government agency. The contractual terms of the subordinated notes do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Furthermore, as of March 31, 2023, there were no past due principal or interest payments associated with these securities. Based upon (i) the issuer’s strong bond ratings and (ii) a zero historical loss rate, no allowance for credit losses has been recorded for available-for-sale securities at March 31, 2023. All debt securities in an unrealized loss position as of March 31, 2023 continue to perform as scheduled and the Company does not believe there is a possible credit loss or that an allowance for credit loss on these debt securities is necessary. As of March 31, 2023 and December 31, 2022, available-for-sale securities of $72.9 million and $30.8 million, respectively, were pledged to the Federal Reserve Bank (“FRB”). The securities were pledged primarily to secure borrowings from the Federal Home Loan Bank and municipal deposits. The following summarizes, by class and contractual maturity, the amortized cost and estimated fair value of available-for-sale debt securities held as of March 31, 2023 and December 31, 2022. The mortgages underlying the mortgage-backed securities are not due at a single maturity date. Additionally, these mortgages often are and generally may be pre-paid without penalty, creating a degree of uncertainty that such investments can be held until maturity. For convenience, mortgage-backed securities have been included in the summary as a separate line item.
(In thousands) | Amortized Cost |  | Fair Value
| Due Within 5 years |  | Due After 5 years through 10 years |  | Due After 10 years |  | Total |  | Due Within 5 years |  | Due After 5 years through 10 years |  | Due After 10 years |  | Total
March 31, 2023: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds | $ | 2,015 |  |  | $ | 15,995 |  |  | $ | — |  |  | $ | 18,010 |  |  | $ | 1,967 |  |  | $ | 11,695 |  |  | $ | — |  |  | $ | 13,662 |
Subordinated notes | 3,000 |  |  | 2,000 |  |  | — |  |  | 5,000 |  |  | 2,748 |  |  | 1,773 |  |  | — |  |  | 4,521 |
SBA loan pools | — |  |  | 1,367 |  |  | 5,120 |  |  | 6,487 |  |  | — |  |  | 1,355 |  |  | 4,150 |  |  | 5,505 |
Municipal bonds | 154 |  |  | 406 |  |  | — |  |  | 560 |  |  | 141 |  |  | 370 |  |  | — |  |  | 511 |
Available-for-sale securities with stated maturity dates | 5,169 |  |  | 19,768 |  |  | 5,120 |  |  | 30,057 |  |  | 4,856 |  |  | 15,193 |  |  | 4,150 |  |  | 24,199 |
U. S. Government agency and mortgage-backed securities | — |  |  | 5,254 |  |  | 75,830 |  |  | 81,084 |  |  | — |  |  | 4,230 |  |  | 63,307 |  |  | 67,537 |
Total available-for-sale securities | $ | 5,169 |  |  | $ | 25,022 |  |  | $ | 80,950 |  |  | $ | 111,141 |  |  | $ | 4,856 |  |  | $ | 19,423 |  |  | $ | 67,457 |  |  | $ | 91,736 |
December 31, 2022: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds | $ | 3,778 |  |  | $ | 15,995 |  |  | $ | — |  |  | $ | 19,773 |  |  | $ | 3,721 |  |  | $ | 10,934 |  |  | $ | — |  |  | $ | 14,655 |
Subordinated notes | 3,000 |  |  | 2,000 |  |  | — |  |  | 5,000 |  |  | 2,830 |  |  | 1,772 |  |  | — |  |  | 4,602 |
SBA loan pools | — |  |  | 1,449 |  |  | 5,342 |  |  | 6,791 |  |  | — |  |  | 1,438 |  |  | 4,280 |  |  | 5,718 |
Municipal bonds | 154 |  |  | 407 |  |  | — |  |  | 561 |  |  | 139 |  |  | 360 |  |  | — |  |  | 499 |
Available-for-sale securities with stated maturity dates | 6,932 |  |  | 19,851 |  |  | 5,342 |  |  | 32,125 |  |  | 6,690 |  |  | 14,504 |  |  | 4,280 |  |  | 25,474 |
U. S. Government agency and mortgage-backed securities | — |  |  | 5,276 |  |  | 68,204 |  |  | 73,480 |  |  | — |  |  | 4,129 |  |  | 54,917 |  |  | 59,046 |
Total available-for-sale securities | $ | 6,932 |  |  | $ | 25,127 |  |  | $ | 73,546 |  |  | $ | 105,605 |  |  | $ | 6,690 |  |  | $ | 18,633 |  |  | $ | 59,197 |  |  | $ | 84,520 |
During the three months ended March 31, 2023, the Bank purchased $8.3 million U.S. Government agency mortgage-backed securities and sold $1.8 million available-for-sale securities and recognized a net gain on sale of $24,000. During the three months ended March 31, 2022, the Bank purchased $1.0 million corporate bonds, and did not sell any available-for-sale securities.

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI https://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2176304 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher SEC -Name Regulation S-K (SK) -Number 229 -Section 1403 -Paragraph (b) + Details
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