Securities

3 Months Ended

Mar. 31, 2023

Note 6 – Securities

The following tables summarize the Bank’s holdings for both securities held-to-maturity and securities available-for-sale as of March 31, 2023 and December 31, 2022 (amounts in thousands):


	March 31, 2023
	Amortized		Gross Unrealized				Fair
	Cost		Gains		Losses		Value
Held-to-maturity
U.S. agency obligations	$	3,634	$	—	$	(423)	$	3,211

Available-for-sale
U.S. Treasuries	$	4,930	$	—	$	(136)	$	4,794
U.S. agency obligations		69,728		—		(8,579)		61,149
Mortgage-backed securities		77,290		—		(10,424)		66,866
Municipals		51,736		—		(10,514)		41,222
Corporates		16,533		—		(977)		15,556

	$	220,217	$	—	$	(30,630)	$	189,587



	December 31, 2022
	Amortized		Gross Unrealized				Fair
	Cost		Gains		Losses		Value
Held-to-maturity
U.S. agency obligations	$	3,639	$	—	$	(504)	$	3,135

Available-for-sale
U.S. Treasuries	$	4,912	$	—	$	(171)	$	4,741
U.S. agency obligations		68,833		—		(9,560)		59,273
Mortgage-backed securities		78,955		—		(11,113)		67,842
Municipals		49,951		—		(12,096)		37,855
Corporates		17,037		—		(961)		16,076

	$	219,688	$	—	$	(33,901)	$	185,787

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Note 6 – Securities (continued)

The following tables summarize the fair value of securities available for sale as of March 31, 2023 and securities available for sale and held-to- maturity as of December 31, 2022 and the corresponding amounts of unrealized losses. Management uses the valuation as of month-end in determining when securities are in an unrealized loss position (amounts in thousands):


March 31. 2023	Less than 12 months				More than 12 months				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Available-for-sale
U.S. Treasuries	$	—	$	—	$	4,794	$	136	$	4,794	$	136
U.S. agency obligations		3,698		404		57,451		8,175		61,149		8,579
Mortgage-backed securities		136		8		66,730		10,416		66,866		10,424
Municipals		4,055		224		37,167		10,290		41,222		10,514
Corporates		926		74		6,631		903		7,557		977

Total temporarily impaired securities	$	8,815	$	710	$	172,773	$	29,920	$	181,588	$	30,630



December 31, 2022	Less than 12 months				More than 12 months				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Held-to-maturity
U.S. agency obligations	$	3,135	$	504	$	—	$	—	$	3,135	$	504

Available-for-sale
U.S. Treasuries		4,741		171		—		—		4,741		171
U.S. agency obligations		27,708		2,838		31,565		6,722		59,273		9,560
Mortgage-backed securities		42,024		5,656		25,818		5,457		67,842		11,113
Municipals		10,847		2,245		27,008		9,851		37,855		12,096
Corporates		6,568		469		1,508		492		8,076		961

Total temporarily impaired securities	$	95,023	$	11,883	$	85,899	$	22,522	$	180,922	$	34,405

The Company has evaluated available for sale securities in an unrealized loss position for credit related impairment at March 31, 2023 and concluded no impairment existed based on a combination of factors, which included: (1) the securities are of high credit quality (2) unrealized losses are primarily the result of market volatility and increases in market interest rates, (3) the contractual terms of the investments do not permit the issuers to settle the securities at a price less than the par value of each investment, (4) issuers continue to make timely principal and interest payments, and (5) the Company does not intend to sell any of the investments before recovery of its amortized cost basis, nor is it likely that management will be required to sell the securities. As such, there was not an allowance for credit losses on available-for-sale securities at March 31, 2023.

As of March 31, 2023, the Bank owned 117 securities in an unrealized loss position that were being evaluated for other than temporary impairment. Of the securities, 45 were S&P rated AAA, 64 were rated AA, six were rated A, one was rated BBB, and one was non-rated. As of March 31, 2023, 54 of these securities were municipal issues, 54 were backed by the US government, and 9 were issues of publicly traded domestic corporations.

The Company’s held-to-maturity portfolio is covered by the explicit or implied guarantee of the United States government or one of its agencies and rated investment grade or higher. As a result, the Company did not have an allowance for credit losses on held-to-maturity securities as of March 31, 2023 or upon adoption of ASC 326.

All held-to-maturity and available for sale securities were current with no securities past due or on nonaccrual as of March 31, 2023.

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Note 6 – Securities (continued)

There were no sales of available-for-sale securities during the three months ended March 31, 2023 and 2022.

The amortized costs and fair values of securities 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 call or prepayment penalties.


	March 31, 2023
	Amortized
	Costs	Fair Value
Held-to-maturity:
Due in one year or less	$ -	$ -
Due after one year through five years	-	-
Due after five years through ten years	2,423	2,176
Due after ten years	1,211	1,035

Total securities Held-to-maturity	$ 3,634	$ 3,211


	Amortized
	Costs	Fair Value
Available-for-sale:
Due in one year or less	$ 7,717	$ 7,566
Due after one year through five years	41,630	38,166
Due after five years through ten years	67,213	58,653
Due after ten years	103,657	85,202

Total securities Available-for-sale	$ 220,217	$ 189,587