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v3.23.1

Investment Securities | 3 Months Ended
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Mar. 31, 2023
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | Note 4: Investment Securities The amortized cost and estimated fair value of investment securities are summarized as follows:
|  | March 31, 2023 |
|  |  |  |  | Gross |  |  | Gross |  |  | Estimated |
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  | Fair |
(In thousands) |  | Cost |  |  | Gains |  |  | Losses |  |  | Value |
Available-for-Sale Portfolio |  |  |  |  |  |  |  |  |  |  |  |
Debt investment securities: |  |  |  |  |  |  |  |  |  |  |  |
US Treasury, agencies and GSEs |  | $ | 44,212 |  |  | $ | 353 |  |  | $ | (3,003 | ) |  | $ | 41,562 |
State and political subdivisions |  |  | 35,264 |  |  |  | 23 |  |  |  | (2,303 | ) |  |  | 32,984 |
Corporate |  |  | 11,542 |  |  |  | 581 |  |  |  | (595 | ) |  |  | 11,528 |
Asset backed securities |  |  | 15,423 |  |  |  | - |  |  |  | (585 | ) |  |  | 14,838 |
Residential mortgage-backed - US agency |  |  | 17,439 |  |  |  | - |  |  |  | (1,267 | ) |  |  | 16,172 |
Collateralized mortgage obligations - US agency |  |  | 10,275 |  |  |  | - |  |  |  | (1,015 | ) |  |  | 9,260 |
Collateralized mortgage obligations - Private label |  |  | 64,910 |  |  |  | - |  |  |  | (4,475 | ) |  |  | 60,435 |
Total |  |  | 199,065 |  |  |  | 957 |  |  |  | (13,243 | ) |  |  | 186,779 |
Equity investment securities: |  |  |  |  |  |  |  |  |  |  |  |
Common stock - financial services industry |  |  | 206 |  |  |  | - |  |  |  | - |  |  |  | 206 |
Total |  |  | 206 |  |  |  | - |  |  |  | - |  |  |  | 206 |
Total available-for-sale |  | $ | 199,271 |  |  | $ | 957 |  |  | $ | (13,243 | ) |  | $ | 186,985 |
Held-to-Maturity Portfolio |  |  |  |  |  |  |  |  |  |  |  |
Debt investment securities: |  |  |  |  |  |  |  |  |  |  |  |
US Treasury, agencies and GSEs |  | $ | 3,842 |  |  | $ | - |  |  | $ | (265 | ) |  | $ | 3,577 |
State and political subdivisions |  |  | 15,859 |  |  |  | 12 |  |  |  | (1,865 | ) |  |  | 14,006 |
Corporate |  |  | 45,577 |  |  |  | 5 |  |  |  | (2,703 | ) |  |  | 42,879 |
Asset backed securities |  |  | 18,667 |  |  |  | - |  |  |  | (1,073 | ) |  |  | 17,594 |
Residential mortgage-backed - US agency |  |  | 7,416 |  |  |  | 3 |  |  |  | (636 | ) |  |  | 6,783 |
Collateralized mortgage obligations - US agency |  |  | 14,843 |  |  |  | - |  |  |  | (1,192 | ) |  |  | 13,651 |
Collateralized mortgage obligations - Private label |  |  | 95,462 |  |  |  | 7 |  |  |  | (4,337 | ) |  |  | 91,132 |
Total |  |  | 201,666 |  |  |  | 27 |  |  |  | (12,071 | ) |  |  | 189,622 |
Less: Allowance for credit losses |  |  | 450 |  |  |  | - |  |  |  | - |  |  |  | - |
Total held-to-maturity |  | $ | 201,216 |  |  | $ | 27 |  |  | $ | (12,071 | ) |  | $ | 189,622 |
|  | December 31, 2022 |
|  |  |  |  | Gross |  |  | Gross |  |  | Estimated |
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  | Fair |
(In thousands) |  | Cost |  |  | Gains |  |  | Losses |  |  | Value |
Available-for-Sale Portfolio |  |  |  |  |  |  |  |  |  |  |  |
Debt investment securities: |  |  |  |  |  |  |  |  |  |  |  |
US Treasury, agencies and GSEs |  | $ | 32,533 |  |  | $ | 37 |  |  | $ | (3,206 | ) |  | $ | 29,364 |
State and political subdivisions |  |  | 48,002 |  |  |  | 384 |  |  |  | (3,001 | ) |  |  | 45,385 |
Corporate |  |  | 11,803 |  |  |  | 676 |  |  |  | (650 | ) |  |  | 11,829 |
Asset backed securities |  |  | 16,059 |  |  |  | - |  |  |  | (659 | ) |  |  | 15,400 |
Residential mortgage-backed - US agency |  |  | 17,982 |  |  |  | - |  |  |  | (1,582 | ) |  |  | 16,400 |
Collateralized mortgage obligations - US agency |  |  | 13,070 |  |  |  | - |  |  |  | (1,362 | ) |  |  | 11,708 |
Collateralized mortgage obligations - Private label |  |  | 65,781 |  |  |  | 8 |  |  |  | (4,355 | ) |  |  | 61,434 |
Total |  |  | 205,230 |  |  |  | 1,105 |  |  |  | (14,815 | ) |  |  | 191,520 |
Equity investment securities: |  |  |  |  |  |  |  |  |  |  |  |
Common stock - financial services industry |  |  | 206 |  |  |  | - |  |  |  | - |  |  |  | 206 |
Total |  |  | 206 |  |  |  | - |  |  |  | - |  |  |  | 206 |
Total available-for-sale |  | $ | 205,436 |  |  | $ | 1,105 |  |  | $ | (14,815 | ) |  | $ | 191,726 |
Held-to-Maturity Portfolio |  |  |  |  |  |  |  |  |  |  |  |
Debt investment securities: |  |  |  |  |  |  |  |  |  |  |  |
US Treasury, agencies and GSEs |  | $ | 3,852 |  |  | $ | - |  |  | $ | (280 | ) |  | $ | 3,572 |
State and political subdivisions |  |  | 15,211 |  |  |  | - |  |  |  | (2,340 | ) |  |  | 12,871 |
Corporate |  |  | 45,086 |  |  |  | 2 |  |  |  | (2,586 | ) |  |  | 42,502 |
Asset backed securities |  |  | 19,158 |  |  |  | - |  |  |  | (1,291 | ) |  |  | 17,867 |
Residential mortgage-backed - US agency |  |  | 7,489 |  |  |  | - |  |  |  | (739 | ) |  |  | 6,750 |
Collateralized mortgage obligations - US agency |  |  | 15,109 |  |  |  | - |  |  |  | (1,251 | ) |  |  | 13,858 |
Collateralized mortgage obligations - Private label |  |  | 88,497 |  |  |  | 4 |  |  |  | (4,430 | ) |  |  | 84,071 |
Total held-to-maturity |  | $ | 194,402 |  |  | $ | 6 |  |  | $ | (12,917 | ) |  | $ | 181,491 |
The amortized cost and estimated fair value of debt investments at March 31, 2023 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.
|  | Available-for-Sale |  |  | Held-to-Maturity |
|  | Amortized |  |  | Estimated |  |  | Amortized |  |  | Estimated |
(In thousands) |  | Cost |  |  | Fair Value |  |  | Cost |  |  | Fair Value |
Due in one year or less |  | $ | 7,059 |  |  | $ | 7,636 |  |  | $ | 1,131 |  |  | $ | 1,114 |
Due after one year through five years |  |  | 9,760 |  |  |  | 9,528 |  |  |  | 17,335 |  |  |  | 16,898 |
Due after five years through ten years |  |  | 39,087 |  |  |  | 36,222 |  |  |  | 41,600 |  |  |  | 38,624 |
Due after ten years |  |  | 50,535 |  |  |  | 47,526 |  |  |  | 23,879 |  |  |  | 21,420 |
Sub-total |  |  | 106,441 |  |  |  | 100,912 |  |  |  | 83,945 |  |  |  | 78,056 |
Residential mortgage-backed - US agency |  |  | 17,439 |  |  |  | 16,172 |  |  |  | 7,416 |  |  |  | 6,783 |
Collateralized mortgage obligations - US agency |  |  | 10,275 |  |  |  | 9,260 |  |  |  | 14,843 |  |  |  | 13,651 |
Collateralized mortgage obligations - Private label |  |  | 64,910 |  |  |  | 60,435 |  |  |  | 95,462 |  |  |  | 91,132 |
Totals |  | $ | 199,065 |  |  | $ | 186,779 |  |  | $ | 201,666 |  |  | $ | 189,622 |
The Company’s investment securities’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:
|  | March 31, 2023 |
|  | Less than Twelve Months |  |  | Twelve Months or More |  |  | Total |
|  | Number of |  |  |  |  |  |  |  |  | Number of |  |  |  |  |  |  |  |  | Number of |  |  |  |  |  |  |
|  | Individual |  |  | Unrealized |  |  | Fair |  |  | Individual |  |  | Unrealized |  |  | Fair |  |  | Individual |  |  | Unrealized |  |  | Fair |
(Dollars in thousands) |  | Securities |  |  | Losses |  |  | Value |  |  | Securities |  |  | Losses |  |  | Value |  |  | Securities |  |  | Losses |  |  | Value |
Available-for-Sale Portfolio |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Treasury, agencies and GSEs |  |  | 1 |  |  | $ | (1 | ) |  | $ | 1,998 |  |  |  | 3 |  |  | $ | (3,002 | ) |  | $ | 26,380 |  |  |  | 4 |  |  | $ | (3,003 | ) |  | $ | 28,378 |
State and political subdivisions |  |  | 1 |  |  |  | (9 | ) |  |  | 512 |  |  |  | 23 |  |  |  | (2,294 | ) |  |  | 29,064 |  |  |  | 24 |  |  |  | (2,303 | ) |  |  | 29,576 |
Corporate |  |  | 2 |  |  |  | (3 | ) |  |  | 1,697 |  |  |  | 6 |  |  |  | (592 | ) |  |  | 5,140 |  |  |  | 8 |  |  |  | (595 | ) |  |  | 6,837 |
Asset backed securities |  |  | 2 |  |  |  | (116 | ) |  |  | 4,384 |  |  |  | 8 |  |  |  | (469 | ) |  |  | 10,454 |  |  |  | 10 |  |  |  | (585 | ) |  |  | 14,838 |
Residential mortgage-backed - US agency |  |  | 4 |  |  |  | (8 | ) |  |  | 628 |  |  |  | 11 |  |  |  | (1,259 | ) |  |  | 15,544 |  |  |  | 15 |  |  |  | (1,267 | ) |  |  | 16,172 |
Collateralized mortgage obligations - US agency |  |  | 2 |  |  |  | (214 | ) |  |  | 3,374 |  |  |  | 9 |  |  |  | (801 | ) |  |  | 5,886 |  |  |  | 11 |  |  |  | (1,015 | ) |  |  | 9,260 |
Collateralized mortgage obligations - Private label |  |  | 6 |  |  |  | (424 | ) |  |  | 8,021 |  |  |  | 29 |  |  |  | (4,051 | ) |  |  | 48,666 |  |  |  | 35 |  |  |  | (4,475 | ) |  |  | 56,687 |
Totals |  |  | 18 |  |  | $ | (775 | ) |  | $ | 20,614 |  |  |  | 89 |  |  | $ | (12,468 | ) |  | $ | 141,134 |  |  |  | 107 |  |  | $ | (13,243 | ) |  | $ | 161,748 |
Held-to-Maturity Portfolio |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Treasury, agencies and GSEs |  |  | 2 |  |  | $ | (265 | ) |  | $ | 3,576 |  |  |  | - |  |  | $ | - |  |  | $ | - |  |  |  | 2 |  |  | $ | (265 | ) |  | $ | 3,576 |
State and political subdivisions |  |  | 5 |  |  |  | (131 | ) |  |  | 2,557 |  |  |  | 12 |  |  |  | (1,734 | ) |  |  | 10,620 |  |  |  | 17 |  |  |  | (1,865 | ) |  |  | 13,177 |
Corporate |  |  | 16 |  |  |  | (696 | ) |  |  | 13,045 |  |  |  | 25 |  |  |  | (2,007 | ) |  |  | 22,886 |  |  |  | 41 |  |  |  | (2,703 | ) |  |  | 35,931 |
Asset backed securities |  |  | 4 |  |  |  | (353 | ) |  |  | 7,571 |  |  |  | 5 |  |  |  | (720 | ) |  |  | 5,651 |  |  |  | 9 |  |  |  | (1,073 | ) |  |  | 13,222 |
Residential mortgage-backed - US agency |  |  | 5 |  |  |  | (54 | ) |  |  | 2,267 |  |  |  | 5 |  |  |  | (582 | ) |  |  | 3,606 |  |  |  | 10 |  |  |  | (636 | ) |  |  | 5,873 |
Collateralized mortgage obligations - US agency |  |  | 4 |  |  |  | (152 | ) |  |  | 4,766 |  |  |  | 7 |  |  |  | (1,040 | ) |  |  | 8,885 |  |  |  | 11 |  |  |  | (1,192 | ) |  |  | 13,651 |
Collateralized mortgage obligations - Private label |  |  | 22 |  |  |  | (1,328 | ) |  |  | 36,162 |  |  |  | 28 |  |  |  | (3,009 | ) |  |  | 39,587 |  |  |  | 50 |  |  |  | (4,337 | ) |  |  | 75,749 |
Totals |  |  | 58 |  |  | $ | (2,979 | ) |  | $ | 69,944 |  |  |  | 82 |  |  | $ | (9,092 | ) |  | $ | 91,235 |  |  |  | 140 |  |  | $ | (12,071 | ) |  | $ | 161,179 |
|  | December 31, 2022 |
|  | Less than Twelve Months |  |  | Twelve Months or More |  |  | Total |
|  | Number of |  |  |  |  |  |  |  |  | Number of |  |  |  |  |  |  |  |  | Number of |  |  |  |  |  |  |
|  | Individual |  |  | Unrealized |  |  | Fair |  |  | Individual |  |  | Unrealized |  |  | Fair |  |  | Individual |  |  | Unrealized |  |  | Fair |
(Dollars in thousands) |  | Securities |  |  | Losses |  |  | Value |  |  | Securities |  |  | Losses |  |  | Value |  |  | Securities |  |  | Losses |  |  | Value |
Available-for-Sale Portfolio |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Treasury, agencies and GSEs |  |  | - |  |  | $ | - |  |  | $ | - |  |  |  | 3 |  |  | $ | (3,206 | ) |  | $ | 26,167 |  |  |  | 3 |  |  | $ | (3,206 | ) |  | $ | 26,167 |
State and political subdivisions |  |  | 10 |  |  |  | (830 | ) |  |  | 12,601 |  |  |  | 17 |  |  |  | (2,171 | ) |  |  | 20,128 |  |  |  | 27 |  |  |  | (3,001 | ) |  |  | 32,729 |
Corporate |  |  | 7 |  |  |  | (269 | ) |  |  | 5,720 |  |  |  | 2 |  |  |  | (381 | ) |  |  | 1,319 |  |  |  | 9 |  |  |  | (650 | ) |  |  | 7,039 |
Asset backed securities |  |  | 5 |  |  |  | (148 | ) |  |  | 5,473 |  |  |  | 5 |  |  |  | (511 | ) |  |  | 9,926 |  |  |  | 10 |  |  |  | (659 | ) |  |  | 15,399 |
Residential mortgage-backed - US agency |  |  | 10 |  |  |  | (131 | ) |  |  | 2,747 |  |  |  | 5 |  |  |  | (1,451 | ) |  |  | 13,653 |  |  |  | 15 |  |  |  | (1,582 | ) |  |  | 16,400 |
Collateralized mortgage obligations - US agency |  |  | 6 |  |  |  | (238 | ) |  |  | 4,009 |  |  |  | 6 |  |  |  | (1,124 | ) |  |  | 7,700 |  |  |  | 12 |  |  |  | (1,362 | ) |  |  | 11,709 |
Collateralized mortgage obligations - Private label |  |  | 15 |  |  |  | (1,684 | ) |  |  | 20,429 |  |  |  | 19 |  |  |  | (2,671 | ) |  |  | 33,707 |  |  |  | 34 |  |  |  | (4,355 | ) |  |  | 54,136 |
Totals |  |  | 53 |  |  | $ | (3,300 | ) |  | $ | 50,979 |  |  |  | 57 |  |  | $ | (11,515 | ) |  | $ | 112,600 |  |  |  | 110 |  |  | $ | (14,815 | ) |  | $ | 163,579 |
Held-to-Maturity Portfolio |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Treasury, agencies and GSE's |  |  | 2 |  |  | $ | (280 | ) |  | $ | 3,573 |  |  |  | - |  |  |  | - |  |  | $ | - |  |  |  | 2 |  |  | $ | (280 | ) |  | $ | 3,573 |
State and political subdivisions |  |  | 7 |  |  | $ | (871 | ) |  | $ | 7,277 |  |  |  | 7 |  |  | $ | (1,469 | ) |  | $ | 5,077 |  |  |  | 14 |  |  | $ | (2,340 | ) |  | $ | 12,354 |
Corporate |  |  | 31 |  |  |  | (1,786 | ) |  |  | 29,213 |  |  |  | 9 |  |  |  | (800 | ) |  |  | 6,803 |  |  |  | 40 |  |  |  | (2,586 | ) |  |  | 36,016 |
Asset backed securities |  |  | 6 |  |  |  | (625 | ) |  |  | 9,742 |  |  |  | 3 |  |  |  | (666 | ) |  |  | 3,674 |  |  |  | 9 |  |  |  | (1,291 | ) |  |  | 13,416 |
Residential mortgage-backed - US agency |  |  | 10 |  |  |  | (736 | ) |  |  | 6,577 |  |  |  | 1 |  |  |  | (3 | ) |  |  | 107 |  |  |  | 11 |  |  |  | (739 | ) |  |  | 6,684 |
Collateralized mortgage obligations - US agency |  |  | 10 |  |  |  | (1,236 | ) |  |  | 12,965 |  |  |  | 1 |  |  |  | (15 | ) |  |  | 892 |  |  |  | 11 |  |  |  | (1,251 | ) |  |  | 13,857 |
Collateralized mortgage obligations - Private label |  |  | 38 |  |  |  | (2,719 | ) |  |  | 58,061 |  |  |  | 8 |  |  |  | (1,711 | ) |  |  | 12,532 |  |  |  | 46 |  |  |  | (4,430 | ) |  |  | 70,593 |
Totals |  |  | 104 |  |  | $ | (8,253 | ) |  | $ | 127,408 |  |  |  | 29 |  |  | $ | (4,664 | ) |  | $ | 29,085 |  |  |  | 133 |  |  | $ | (12,917 | ) |  | $ | 156,493 |
Excluding the effects of changes in the characteristics of individual debt securities that potentially give rise to credit losses, as described below, the fair market value of a debt security as of a particular measurement date is highly dependent upon prevailing market and economic environmental factors at the measurement date relative to the prevailing market and economic environmental factors present at the time the debt security was acquired. The most significant market and environmental factors include, but are not limited to (1) the general level of interest rates, (2) the relationship between shorter-term interest rates and longer-term interest rates (referred to as the “slope” or "shape" of the interest rate yield curve), (3) general bond market liquidity, (4) the recent and expected near-term volume of new issuances of similar debt securities, and (5) changes in the market values of individual loan collateral underlying mortgage-backed an asset-backed debt securities. Changes in interest rates affect the fair market values of debt securities by influencing the discount rate applied to the securities’ future expected cash flows. The higher the discount rate, the lower the resultant security fair value at the measurement date. Conversely, the lower the discount rate, the higher the resultant security fair value at the measurement date. In addition, the cumulative amount and timing of undiscounted cash flows of debt securities may also be affected by changes in interest rates. For any given level of movement in the general market and economic environmental factors described above, the magnitude of any particular debt security’s price changes will also depend heavily upon security-specific factors such as (1) the duration of the security, (2) imbedded optionality contractually granted to the issuer of the security with respect to principal prepayments, and (3) changes in the level of market premiums demanded by investors for securities with imbedded credit risk (where applicable). When the fair value of any individual security categorized as available-for-sale ("AFS") or held-to-maturity ("HTM") is less than its amortized cost basis, an assessment is made as to whether or not a charge to current earnings for credit loss is required. In assessing potential credit losses, management also makes a quantitative determination of potential credit loss for all HTM securities even if the risk of credit loss is considered remote and uses a best estimate threshold for securities categorized as AFS. The Company considers numerous factors when determining whether a potential credit loss exists. The principal factors considered are (1) the financial condition of the issue and (guarantor, if any) and adverse conditions specifically related to the security, industry or geographic area, (2) failure of the issuer of the security to make scheduled interest or principal payments, (3) any changes to the rating of the security by a nationally recognized statistical rating organization (“NRSRO”), and (4) the presence of contractual credit enhancements, if any, including the guarantee of the federal government or any of its agencies. The Company carries all of its AFS investments at fair value with any unrealized gains or losses reported, net of income tax effects, as an adjustment to shareholders' equity and included in accumulated other comprehensive income (loss), except for the credit-related portion of debt securities’ impairment losses, if any, which are charged to earnings. The Company's ability to fully realize the value of its investments in various securities, including corporate debt securities, is dependent on the underlying creditworthiness of the issuing organization. In evaluating the debt securities portfolio (both AFS and HTM) for credit losses, management considers (1) if we intend to sell the security; (2) if it is “more likely than not” we will be required to sell the security before recovery of its amortized cost basis; or (3) if the present value of expected cash flows is insufficient to recover the entire amortized cost basis. The portion of the investment securities portfolio, categorized as AFS, with an aggregate amortized historical cost of $199.3 million, had an aggregate fair value that was less than its aggregate amortized historical cost by $13.2 million, or -6.7%, at March 31, 2023. The AFS securities portfolio, with an aggregate amortized historical cost of $205.4 million, had an aggregate fair value that was less than its aggregate amortized historical cost by $14.8 million, or -7.2%, at December 31, 2022. The resultant $1.6 million total improvement in the fair value of the AFS investment portfolio's aggregate fair value relative to its aggregate amortized historical cost, in the three months ended March 31, 2023, was primarily due to the modest decline in general interest rates that occurred in that period and did not represent any changes in credit loss estimations within the portfolio occurring during the three months ended March 31, 2023. Management evaluated the individual securities within the AFS securities portfolio and determined that there was no material credit loss in that portfolio at the adoption date of the CECL methodology on January 1, 2023 or at the reporting date of March 31, 2023. Accordingly, no transition adjustment related to the adoption of ASU 2016-13 was recorded on January 1, 2023 and no provision for credit losses was recorded for the AFS investment securities portfolio in the quarter ended March 31, 2023. The portion of the investment securities portfolio, categorized as HTM, with an aggregate amortized historical cost of $201.7 million, had an aggregate fair value that was less than its aggregate amortized historical cost by $12.1 million, or -4.5%, at March 31, 2023. The resultant $846,000 total improvement in the aggregate fair value of the HTM investment portfolio, relative to its aggregate amortized historical cost, during the three months ended March 31, 2023, was primarily due to the modest decline in general interest rates that occurred in that period. The Company does not intend to sell these securities, nor is it more likely than not that the Company will be required to sell these securities prior to the recovery of the amortized cost. The Company does not intend to sell these securities, nor is it more likely than not that the Company will be required to sell these securities prior to the recovery of the amortized cost. As a result of the Company's adoption of ASU 2016-13, the Company established a reserve against the recorded aggregate value of the HTM investment securities portfolio in the amount of $450,000 at January 1, 2023. The reserve was determined using a discounted probability of default ("PD") - loss given default ("LGD") model consistent with the methodologies used to calculate the Company's ACL. Given that the securities classified as HTM that were subject to potential credit losses were substantially unchanged during the three months ended March 31, 2023, no provision for credit losses was recorded for the HTM investment securities portfolio in the quarter ended March 31, 2023. The following table depicts a rollforward of the allowance for credit losses on investment securities classified as held-to-maturity for the three months ended March 31, 2023:
(dollars in thousands) | Government Issued and Government Sponsored Enterprise Securities |  | Mortgage and Asset-backed Securities |  | Securities Issued By State and Political Subdivisions |  | Corporate Securities |
Balance, December 31, 2022 | $ | - |  | $ | - |  | $ | - |  | $ | - |
Adjustment for the adoption of ASU 2016-13 |  | - |  |  | 40 |  |  | 1 |  |  | 409 |
Provision for credit losses |  | - |  |  | - |  |  | - |  |  | - |
Allowance on purchased financial assets with credit deterioration |  | - |  |  | - |  |  | - |  |  | - |
Charge-offs of securities |  | - |  |  | - |  |  | - |  |  | - |
Recoveries |  | - |  |  | - |  |  | - |  |  | - |
Balance, March 31, 2023 | $ | - |  | $ | 40 |  | $ | 1 |  | $ | 409 |
The Company monitors the credit quality of the debt securities categorized as HTM primarily through the use of NRSRO credit ratings. These assessments are made on a quarterly basis. The following table summarizes the amortized cost of debt securities categorized as HTM at March 31, 2023, aggregated by credit quality indicators:
(dollars in thousands) |  |
AAA or equivalent | $ | 38,247 |
AA or equivalent, including securities issued by the United States Government or Government Sponsored Enterprises |  | 44,013 |
A or equivalent |  | 23,823 |
BBB or equivalent |  | 19,268 |
Unrated |  | 76,315 |
Total | $ | 201,666 |
Gross realized gains (losses) on sales and redemptions of securities for the indicated periods are detailed below:
|  | For the three months
|  | ended March 31,
(In thousands) |  | 2023 |  |  | 2022 |  |
Realized gains on investments |  | $ | 2,021 |  |  | $ | - |  |
Realized losses on investments |  |  | (1,948 | ) |  |  | (6 | ) |
|  | $ | 73 |  |  | $ | (6 | ) |
As of March 31, 2023 and December 31, 2022, securities with a fair value of $134.6 million and $86.0 m illion, respectively, were pledged to collateralize certain municipal deposit relationships. As of the same dates, securities with a fair value of $75.5 million and $39.9 million, respectively, were pledged against certain borrowing arrangements. Management has reviewed its loan and mortgage-backed securities portfolios and determined that, to the best of its knowledge, only minimal exposure exists to sub-prime or other high-risk residential mortgages. With limited exceptions in the Company’s investment portfolio involving the most senior tranches of securitized bonds, the Company is not in the practice of investing in, or originating, these types of investments or loans.

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