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Available-For-Sale Securities

9 Months Ended

Sep. 30, 2024

Available-for-Sale Securities [Abstract]

Note 3 – AVAILABLE-FOR-SALE Securities

The amortized cost and appropriate fair values, together with gross unrealized gains and losses, of securities at September 30, 2024, and December 31, 2023, were as follows:

($ in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
September 30, 2024
U.S. Treasury and Government agencies	$	6,687	$	1	$	(592	)	$	6,096
Mortgage-backed securities		207,956		6		(27,490	)		180,472
State and political subdivisions		11,148		-		(1,080	)		10,068
Other corporate securities		17,200		-		(2,325	)		14,875

Totals	$	242,991	$	7	$	(31,487	)	$	211,511

		Amortized Cost		Gross Unrealized Gains		Gross Unrealized 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

The amortized cost and fair value of securities available-for-sale at September 30, 2024, by contractual maturity, are shown below. Expected maturities will 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	$	950	$	948
Due after one year through five years		1,126		1,104
Due after five years through ten years		25,396		22,376
Due after ten years		7,563		6,611
		35,035		31,039
Mortgage-backed securities		207,956		180,472

Totals	$	242,991	$	211,511

The fair value of securities pledged as collateral, to secure public deposits and for other purposes, was $147.4 million at September 30, 2024, and $89.7 million at December 31, 2023. The fair value of securities delivered for repurchase agreements was $18.4 million at September 30, 2024, and $19.7 million at December 31, 2023.

There were no realized gains or losses from sales of available-for-sale securities for the three and nine months ended September 30, 2024, or September 30, 2023.

Certain investments in debt securities are reported in the consolidated financial statements at an amount less than their historical cost. Total fair value of these investments was $210.3 million at September 30, 2024, and $217.0 million at December 31, 2023, which consisted of 135 securities, or approximately 99 percent, and 139 securities, or approximately 99 percent, respectively, of the Company’s available-for-sale investment portfolio at such dates. 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.

Securities with unrealized losses, aggregated by investment class and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2024, and December 31, 2023, are as follows:

($ in thousands)	Less than 12 Months					12 Months or Longer					Total
September 30, 2024	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses

U.S. Treasury and Government agencies	$	-	$	-		$	5,599	$	(592	)	$	5,599	$	(592	)
Mortgage-backed securities		-		-			180,131		(27,490	)		180,131		(27,490	)
State and political subdivisions		933		(5	)		8,731		(1,075	)		9,664		(1,080	)
Other corporate securities		365		(135	)		14,510		(2,190	)		14,875		(2,325	)

Totals	$	1,298	$	(140	)	$	208,971	$	(31,347	)	$	210,269	$	(31,487	)

	Less than 12 Months					12 Months or Longer					Total
December 31, 2023	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses

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	)

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.

Changes in the ACL are recorded as provision for (or reversal of) credit losses. Available-for-sale securities are charged-off against the allowance or, in the absence of any allowance, written down through income when deemed uncollectible by management or when either of the aforementioned criteria regarding intent or requirement to sell is met. At September 30, 2024, and December 31, 2023, no ACL on available-for-sale securities was recorded.

Management has made the accounting policy election to exclude accrued interest receivable on available-for-sale securities from the estimate of credit losses. Accrued interest receivable on available-for-sale debt securities totaled $0.6 million at September 30, 2024 and $0.7 million at December 31, 2023. Should the decline in fair value be the result of credit losses or other factors, the security would be moved to nonaccrual status and all accrued interest reversed.