Securities

9 Months Ended

Sep. 30, 2024

Note 6 – Securities

The following tables summarize the Bank’s holdings for both securities held-to-maturity and securities available-for-sale as of September 30, 2024 and December 31, 2023 (amounts in thousands):


	September 30, 2024
	Amortized		Gross Unrealized				Fair
	Cost		Gains		Losses		Value
Held-to-maturity
U.S. agency obligations	$	3,610	$	—	$	(282)	$	3,328

Available-for-sale
U.S. agency obligations	$	75,352	$	274	$	(5,409)	$	70,217
Mortgage-backed securities		72,395		61		(7,759)		64,697
Municipals		51,718		56		(8,394)		43,380
Corporates		15,513		—		(1,338)		14,175

	$	214,978	$	391	$	(22,900)	$	192,469



	December 31, 2023
	Amortized		Gross Unrealized				Fair
	Cost		Gains		Losses		Value
Held-to-maturity
U.S. agency obligations	$	3,622	$	—	$	(391)	$	3,231

Available-for-sale
U.S. Treasuries	$	4,985	$	—	$	(38)	$	4,947
U.S. agency obligations		68,515		—		(7,560)		60,955
Mortgage-backed securities		103,992		608		(9,521)		95,079
Municipals		50,856		—		(10,067)		40,789
Corporates		15,523		—		(783)		14,740

	$	243,871	$	608	$	(27,969)	$	216,510

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Note 6 – Securities (continued)

The following tables summarize the fair value of securities available-for-sale as of September 30, 2024 and as of December 31, 2023 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):


September 30, 2024	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. agency obligations	$	—	$	—	$	62,867	$	5,409	$	62,867	$	5,409
Mortgage-backed securities		3,073		38		58,764		7,721		61,837		7,759
Municipals		—		—		42,379		8,394		42,379		8,394
Corporates		7,310		689		6,865		649		14,175		1,338

	$	10,383	$	727	$	170,875	$	22,173	$	181,258	$	22,900



December 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		—		—		4,947		38		4,947		38
U.S. agency obligations		—		—		60,955		7,560		60,955		7,560
Mortgage-backed securities		—		—		62,242		9,521		62,242		9,521
Municipals		1,799		25		38,990		10,042		40,789		10,067
Corporates		—		—		6,740		783		6,740		783

	$	1,799	$	25	$	173,874	$	27,944	$	175,673	$	27,969

As of September 30, 2024, the Company owned 121 securities in an unrealized loss position. Of the securities, 28 were S&P rated AAA, 81 were rated AA, three were rated A, three were rated BBB, and six were non-rated. As of September 30, 2024, 53 of these securities were municipal issues, 55 were backed directly or indirectly by the U.S. government, and 13 were issues of publicly traded domestic corporations. The Company monitors its municipal and corporate securities by periodically reviewing the issuer’s cash-flow and revenue streams, as well as other economic factors that could affect the issuer’s ability to service and/or repay the debt.

The Company has evaluated available-for-sale securities in an unrealized loss position for credit related impairment at September 30, 2024 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 September 30, 2024.

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 September 30, 2024 or December 31, 2023.

All held-to-maturity and available-for-sale securities were current with no securities past due or on nonaccrual as of September 30, 2024.

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Note 6 – Securities (continued)

Sales of available-for-sale securities were $8,754,000 and $30,298,000 during the three and nine months ended September 30, 2024, which resulted in a net gain of $42,000 and $82,000 for the three and nine months ended September 30, 2024. There were no sales of available-for-sale securities during the three and nine months ended September 30, 2023. As of September 30, 2024, the Company had $46,865,000 (book value) pledged as collateral for public deposits.

The amortized costs and fair values of securities at September 30, 2024, 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.


Investment Portfolio Maturities (in thousands):	September 30, 2024
	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	2,420	2,270
Due after ten years	1,190	1,058

Total securities Held-to-maturity	$ 3,610	$ 3,328


	Amortized
	Costs	Fair Value
Available-for-sale:
Due in one year or less	$ 14,520	$ 14,309
Due after one year through five years	40,249	37,643
Due after five years through ten years	61,910	55,795
Due after ten years	98,299	84,722

Total securities Available-for-sale	$ 214,978	$ 192,469