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Securities

6 Months Ended

Jun. 30, 2024

Note 2: Securities

The amortized cost and fair values, together with gross unrealized gains and losses of securities are as follows:


					Gross			Gross
					Unrealized			Unrealized
		Amortized Cost			Gains			Losses			Fair Value
Available-for-sale Securities:
June 30, 2024:
U.S. government agencies		$	22,500		$	—		$	(415)		$	22,085
State and municipal obligations			202,312			256			(9,959)			192,609
Subordinated notes			28,970			—			(3,540)			25,430
Total debt securities		$	253,782		$	256		$	(13,914)		$	240,124


					Gross			Gross
					Unrealized			Unrealized
		Amortized Cost			Gains			Losses			Fair Value
Available-for-sale Securities:
December 31, 2023:
U.S. government agencies		$	45,000		$	—		$	(732)		$	44,268
State and municipal obligations			177,670			2,264			(5,742)			174,192
Subordinated notes			29,013			—			(4,713)			24,300
Total debt securities		$	251,683		$	2,264		$	(11,187)		$	242,760

There was no allowance for credit losses at June 30, 2024 or December 31, 2023.

The amortized cost and fair value of available-for-sale securities at June 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
		Cost			Value

		(In thousands)
Under 1 year		$	10,000		$	9,947
One to five years			15,070			14,643
Five to ten years			29,569			25,774
Over ten years			199,143			189,760
Totals		$	253,782		$	240,124

The carrying value of securities pledged as collateral, to secure public deposits and for other purposes, was $74.8 million and $72.8 million at June 30, 2024 and December 31, 2023, respectively.

Certain investments in debt securities are reported in the consolidated financial statements at an amount less than their historical cost. The total fair value of these investments at June 30, 2024 was $215.3 million, which represented 90% of the Company’s available-for-sale investment portfolio. The total fair value of these investments at December 31, 2023 was $123.1 million, which represented less than 51% of the Company’s available-for-sale.

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 and are a result of an increase in longer term interest rates.

The following tables show the Company’s investments’ 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 at June 30, 2024:


		June 30, 2024
		Less than 12 Months						12 Months or More						Total
Description of					Unrealized						Unrealized						Unrealized
Securities		Fair Value			Losses			Fair Value			Losses			Fair Value			Losses

		(In thousands)
U.S. Government agencies		$	—		$	—		$	22,085		$	(415)		$	22,085		$	(415)
State and municipal obligations			119,745			(1,762)			48,104			(8,197)			167,849			(9,959)
Subordinated notes			4,325			(175)			21,105			(3,365)			25,430			(3,540)
Total temporarily impaired securities		$	124,070		$	(1,937)		$	91,294		$	(11,977)		$	215,364		$	(13,914)


		December 31, 2023
		Less than 12 Months						12 Months or More						Total
Description of					Unrealized						Unrealized						Unrealized
Securities		Fair Value			Losses			Fair Value			Losses			Fair Value			Losses

		(In thousands)
US government agencies		$	—		$	—		$	44,268		$	(732)		$	44,268		$	(732)
Subordinated notes			3,717			(799)			20,583			(3,914)			24,300			(4,713)
State and municipal obligations			3,365			(12)			51,163			(5,730)			54,528			(5,742)
Total temporarily impaired securities		$	7,082		$	(811)		$	116,014		$	(10,376)		$	123,096		$	(11,187)

The unrealized losses on the Company’s 183 investments in available for sale securities were caused primarily by interest rate changes. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Company does not intend to sell the investments and it is not more likely than not the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does not consider those investments to have credit impairment at June 30, 2024.

The Company recorded a gain on the sale of available – for – sale securities of approximately $78,000 for the three months ended June 30, 2024 and loss of approximately $116,000 for the six month ended June 30, 2024. The Company sold $20.3 million in securities for a loss of $228,000 and sold $7.2 million in securities for a gain of $112,000. The Company wanted to rebalance a portion of its security portfolio during the first half of 2024. There were no sales of investment securities for the three and six months ended June 30, 2023.