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Available-for-Sale Securities

12 Months Ended

Dec. 31, 2023

Available-for-Sale Securities [Abstract]

Available-for-Sale Securities

Note 3: Available-for-Sale Securities

The amortized cost and appropriate fair values, together with gross unrealized gains and losses, of available-for-sale securities are as follows:

						Gross				Gross
		Amortized				Unrealized				Unrealized
($ in thousands)		Cost				Gains				Losses				Fair Value
December 31, 2023
U.S. Treasury and Government agencies		$	7,339			$	1			$	(823	)		$	6,517
Mortgage-backed securities			221,717				3				(32,853	)			188,867
State and political subdivisions			11,212				8				(1,322	)			9,898
Other corporate securities			17,200				-				(2,774	)			14,426
Totals		$	257,468			$	12			$	(37,772	)		$	219,708

						Gross				Gross
		Amortized				Unrealized				Unrealized
		Cost				Gains				Losses				Fair Value
December 31, 2022
U.S. Treasury and Government agencies		$	7,636			$	-			$	(872	)		$	6,764
Mortgage-backed securities			241,741				4				(35,910	)			205,835
State and political subdivisions			12,862				10				(1,769	)			11,103
Other corporate securities			17,200				-				(2,122	)			15,078
Totals		$	279,439			$	14			$	(40,673	)		$	238,780

The amortized cost and fair value of securities available-for-sale at December 31, 2023, by contractual maturity, are shown below. Expected maturities differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

		Amortized				Fair
($ in thousands)		Cost				Value

Within one year		$	809			$	800
Due after one year through five years			1,903				1,839
Due after five years through ten years			24,483				20,824
Due after ten years			8,556				7,378
			35,751				30,841
Mortgage-backed securities			221,717				188,867

Totals		$	257,468			$	219,708

The fair value of securities pledged as collateral, to secure public deposits and for other purposes, was $89.7 million at December 31, 2023, and $53.9 million at December 31, 2022. Securities delivered for repurchase agreements (not included above) were $19.7 million at December 31, 2023 and $17.8 million at December 31, 2022.

During the 4th quarter of 2023, the Company sold all of the equity shares it owned in Visa Class “B” shares. As a result of this sale, the Company no longer owns any Visa Class B shares. The carrying value of the Visa Class B shares on the Company’s balance sheet was nominal as the Company had a historical cost basis of $0.01 per share. After transaction costs, the Company realized a pre-tax gain on the sale of $1.45 million.

Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. There were 139 securities and 144 securities reported with amounts less than their historical value at December 31, 2023 and 2022, respectively. Total fair value of these investments was $217.0 million and $235.5 million at December 31, 2023 and 2022, respectively, which was approximately 99 percent and 99 percent, respectively, of the Company’s available-for-sale investment portfolio.

The following tables present securities with unrealized losses at December 31, 2023 and 2022:

($ in thousands)		Less than 12 Months								12 Months or Longer								Total
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
December 31, 2023
U.S. Treasury and Government agencies		$	-			$	-			$	6,022			$	(823	)		$	6,022			$	(823	)
Mortgage-backed securities			-				-				188,508				(32,853	)			188,508				(32,853	)
State and political subdivisions			-				-				8,541				(1,322	)			8,541				(1,322	)
Other corporate securities			-				-				13,926				(2,774	)			13,926				(2,774	)
Totals		$	-			$	-			$	216,997			$	(37,772	)		$	216,997			$	(37,772	)

		Less than 12 Months								12 Months or Longer								Total
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
December 31, 2022
U.S. Treasury and Government agencies		$	3,788			$	(452	)		$	2,974			$	(420	)		$	6,762			$	(872	)
Mortgage-backed securities			52,351				(5,234	)			153,055				(30,676	)			205,406				(35,910	)
State and political subdivisions			7,461				(1,370	)			1,268				(399	)			8,729				(1,769	)
Other corporate securities			12,015				(1,736	)			2,564				(386	)			14,579				(2,122	)
Totals		$	75,615			$	(8,792	)		$	159,861			$	(31,881	)		$	235,476			$	(40,673	)

Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these securities are temporary. Management reviews these securities on a quarterly basis and evaluates if any security has a fair value less than its amortized cost. Once these securities are identified, management determines whether a decline in fair value resulted from a credit loss or other factors. In making the assessment, the Company may consider various factors including the extent to which fair value is less than amortized cost, performance on any underlying collateral, downgrades in the ratings of the security by a rating agency, the failure of the issuer to make scheduled interest or principal payments and adverse conditions specifically related to the security. If the assessment indicates that a credit loss exists, a provision is recorded to the ACL.