Investment Securities

6 Months Ended

Jun. 30, 2022

Investments, Debt and Equity Securities [Abstract]

INVESTMENT SECURITIES

Details of investment securities available-for-sale and held-to-maturity as of June 30, 2022 and December 31, 2021 were as follows:


	Available-for-Sale
	June 30, 2022
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Mortgage-backed securities:
Residential	$	53,421	$	4	$	(3,740	)	$	49,685
Commercial		20,103		113		(479	)		19,737
Obligations of U.S. government-sponsored agencies		5,138		—		(637	)		4,501
Obligations of states and political subdivisions		4,209		7		(101	)		4,115
Corporate notes		19,856		1		(1,293	)		18,564
U.S. Treasury securities		56,936		—		(3,346	)		53,590
Total	$	159,663	$	125	$	(9,596	)	$	150,192


	Held-to-Maturity
	June 30, 2022
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Mortgage-backed securities:
Commercial	$	1,540	$	—	$	(30	)	$	1,510
Obligations of U.S. government-sponsored agencies		685		—		(53	)		632
Obligations of states and political subdivisions		119		—		(12	)		107
Total	$	2,344	$	—	$	(95	)	$	2,249


	Available-for-Sale
	December 31, 2021
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Mortgage-backed securities:
Residential	$	46,020	$	450	$	(242	)	$	46,228
Commercial		24,647		371		(47	)		24,971
Obligations of U.S. government-sponsored agencies		5,207		—		(15	)		5,192
Obligations of states and political subdivisions		4,247		80		(10	)		4,317
Corporate notes		15,458		76		(52	)		15,482
U.S. Treasury securities		35,097		—		(404	)		34,693
Total	$	130,676	$	977	$	(770	)	$	130,883


	Held-to-Maturity
	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(Dollars in Thousands)
Mortgage-backed securities:
Commercial	$	2,115	$	29	$	—	$	2,144
Obligations of U.S. government-sponsored agencies		768		10		—		778
Obligations of states and political subdivisions		553		2		—		555
Total	$	3,436	$	41	$	—	$	3,477

The scheduled maturities of investment securities available-for-sale and held-to-maturity as of June 30, 2022 are presented in the following table:


	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(Dollars in Thousands)
Maturing within one year	$	2,529	$	2,524	$	—	$	—
Maturing after one to five years		54,274		51,776		—		—
Maturing after five to ten years		83,867		77,672		1,768		1,697
Maturing after ten years		18,993		18,220		576		552
Total	$	159,663	$	150,192	$	2,344	$	2,249

For purposes of the maturity table, mortgage-backed securities, which are not due at a single maturity date, have been allocated over maturity groupings based on the weighted-average contractual maturities of underlying collateral. The mortgage-backed securities generally mature earlier than their weighted-average contractual maturities because of principal prepayments.

The following tables reflect 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, as of June 30, 2022 and December 31, 2021.


	Available-for-Sale
	June 30, 2022
	Less than 12 Months					12 Months or More
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(Dollars in Thousands)
Mortgage-backed securities:
Residential	$	49,170	$	(3,731	)	$	213	$	(9	)
Commercial		12,505		(479	)		1		—
Obligations of U.S. government-sponsored agencies		4,365		(635	)		126		(2	)
Obligations of states and political subdivisions		2,649		(101	)		—		—
Corporate notes		16,567		(1,293	)		—		—
U.S. Treasury securities		53,669		(3,346	)		—		—
Total	$	138,925	$	(9,585	)	$	340	$	(11	)


	Held-to-Maturity
	June 30, 2022
	Less than 12 Months					12 Months or More
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(Dollars in Thousands)
Mortgage-backed securities:
Commercial	$	1,510	$	(30	)	$	—	$	—
Obligations of U.S. government-sponsored agencies		632		(53	)		—		—
Obligations of states and political subdivisions		107		(12	)		—		—
Total	$	2,249	$	(95	)	$	—	$	—


	Available-for-Sale
	December 31, 2021
	Less than 12 Months					12 Months or More
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(Dollars in Thousands)
Mortgage-backed securities:
Residential	$	31,346	$	(240	)	$	253	$	(2	)
Commercial		2,245		(12	)		2,970		(35	)
Obligations of U.S. government-sponsored agencies		4,987		(13	)		194		(2	)
Obligations of states and political subdivisions		561		(10	)		—		—
Corporate notes		9,092		(52	)		—		—
U.S. Treasury securities		34,692		(404	)		—		—
Total	$	82,923	$	(731	)	$	3,417	$	(39	)

There were no held-to-maturity securities in an unrealized loss position as of December 31, 2021.

Due to the increasing interest rate environment in the six months ended June 30, 2022, gross unrealized losses increased significantly, particularly within the Company’s available-for-sale portfolio. Management evaluates securities for other-than-temporary impairment no less frequently than quarterly and more frequently when economic or market concerns warrant such evaluation. Consideration is given to: (i) the length of time and the extent to which fair value has been less than cost; (ii) the financial condition and near-term prospects of the issuer; (iii) whether the Company intends to sell the securities; and (iv) whether it is more likely than not that the Company will be required to sell the securities before recovery of their amortized cost basis.

As of June 30, 2022, 8 debt securities had been in a loss position for more than 12 months, and 126 debt securities had been in a loss position for less than 12 months. As of December 31, 2021, 10 debt securities had been in a loss position for more than 12 months, and 32 debt securities had been in a loss position for less than 12 months. The increase in the number of debt securities in a loss position of less than 12 months resulted from the rising interest rate environment during the three months ended June 30, 2022. As of both June 30, 2022 and December 31, 2021, the losses for all securities were considered to be a direct result of the effect that the prevailing interest rate environment had on the value of debt securities and were not related to the creditworthiness of the issuers. Further, the Company has the current intent and ability to retain its investments for a period of time that management believes to be sufficient to allow for any anticipated recovery in fair value. Therefore, the Company did not recognize any other-than-temporary impairments as of June 30, 2022 or December 31, 2021.

Investment securities with a carrying value of $59.2 million and $52.2 million as of June 30, 2022 and December 31, 2021, respectively, were pledged to secure public deposits and for other purposes.