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Securities
 12 Months Ended
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Securities Securities
Securities are classified as AFS, HTM, and equity securities. Total securities were $714.3 million as of December 31, 2023.
Securities AFS and Securities HTM
Securities AFS and securities HTM are debt securities. Securities AFS are held for indefinite periods of time and are carried at estimated fair value. As of December 31, 2023, the estimated fair value of securities AFS was $570.1 million. The net unrealized loss on securities AFS decreased $12.0 million for the year ended December 31, 2023, resulting in a net unrealized loss of $62.2 million as of December 31, 2023.
Securities HTM, which the Company has the intent and ability to hold until maturity, are carried at amortized cost. As of December 31, 2023, the amortized cost of securities HTM was $141.2 million.
Investment activity for the year ended December 31, 2023, included $163.1 million in maturities, principal repayments, and calls, partially offset by $96.4 million of securities purchased. There were no sales of securities AFS, and there were no purchases or sales of securities HTM for the same period.
The amortized cost and estimated fair value of securities AFS and securities HTM are summarized in the following tables:
December 31, 2023
(in thousands)Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value
Securities AFS:
Mortgage-backed securities$288,793 $395 $(31,228)$257,960 
Municipal bonds211,848 13 (27,732)184,129 
U.S. Treasury securities92,054 — (1,912)90,142 
U.S. agency securities39,563 5 (1,707)37,861 
Total Securities AFS$632,258 $413 $(62,579)$570,092 
Securities HTM:
Mortgage-backed securities$140,314 $— $(22,098)$118,216 
U.S. agency securities922 — (109)813 
Total Securities HTM$141,236 $— $(22,207)$119,029 
December 31, 2022
(in thousands)Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value
Securities AFS:
Mortgage-backed securities$272,253 $— $(31,272)$240,981 
Municipal bonds219,305 6 (35,219)184,092 
U.S. Treasury securities176,380 — (5,902)170,478 
U.S. agency securities20,601 — (1,745)18,856 
Total Securities AFS$688,539 $6 $(74,138)$614,407 
Securities HTM:
Mortgage-backed securities$150,771 $— $(19,142)$131,629 
U.S. agency securities912 — (134)778 
Total Securities HTM$151,683 $— $(19,276)$132,407 
The amortized cost and estimated fair value of securities AFS and securities HTM as of December 31, 2023, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because issuers have the right to call or repay obligations with or without call or prepayment penalties.
December 31, 2023
(in thousands)Amortized
Cost		Fair
Value
Securities AFS:
Within one year$82,041 $80,724 
After one year but within five years52,531 50,789 
After five years but within ten years95,362 89,073 
After ten years402,324 349,506 
Total Securities AFS$632,258 $570,092 
Securities HTM:
Within one year$— $— 
After one year but within five years— — 
After five years but within ten years922 813 
After ten years140,314 118,216 
Total Securities HTM$141,236 $119,029 
Accounting for Credit Losses – Securities AFS and Securities HTM
The Company evaluates securities AFS for impairment when there has been a decline in fair value below the amortized cost basis of a security to determine whether there is a credit loss associated with the decline in fair value on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Due to the zero credit loss assumption and the considerations applied to the securities AFS, no ACL was recorded on January 1, 2023, and there was no ACL for securities AFS as of December 31, 2023. Also, as part of the Company’s evaluation of its intent and ability to hold investments for a period of time sufficient to allow for any anticipated recovery in the market, the Company considers its investment strategy, cash flow needs, liquidity position, capital adequacy, and interest rate risk position. Management does not intend to sell these securities prior to recovery, and it is more likely than not that the Company will have the ability to hold them, primarily due to adequate liquidity, until each security has recovered its cost basis.
Due to the zero credit loss assumption on the securities HTM portfolio, no ACL was recorded on January 1, 2023, and there was no ACL for securities HTM as of December 31, 2023.
Accrued interest receivable totaled $3.0 million as of December 31, 2023 and December 31, 2022, for securities AFS and securities HTM and was reported in accrued interest receivable on the consolidated balance sheets.
Information pertaining to securities AFS and securities HTM with gross unrealized losses as of December 31, 2023 and 2022, aggregated by investment category and length of time that individual securities have been in a continuous loss position, is described as follows:
December 31, 2023
Less than twelve monthsTwelve months or more
(in thousands)Gross
Unrealized
Losses		Fair
Value		Gross
Unrealized
Losses		Fair
Value
Securities AFS:
Mortgage-backed securities$(35)$19,383 $(31,193)$206,518 
Municipal bonds(83)4,815 (27,649)176,098 
U.S. Treasury securities— — (1,912)90,142 
U.S. agency securities(82)19,301 (1,625)14,475 
Total Securities AFS$(200)$43,499 $(62,379)$487,233 
Securities HTM:
Mortgage-backed securities$— $— $(22,098)$118,216 
U.S. agency securities— — (109)813 
Total Securities HTM$— $— $(22,207)$119,029 
December 31, 2022
Less than twelve monthsTwelve months or more
Gross
Unrealized
Losses		Fair
Value		Gross
Unrealized
Losses		Fair
Value
Securities AFS:
Mortgage-backed securities$(10,214)$105,030 $(21,058)$135,607 
Municipal bonds(11,340)84,691 (23,879)98,607 
U.S. Treasury securities(3,852)131,107 (2,050)39,371 
U.S. agency securities(608)10,289 (1,137)8,564 
Total Securities AFS$(26,014)$331,117 $(48,124)$282,149 
Securities HTM:
Mortgage-backed securities$(19,142)$131,629 $— $— 
U.S. agency securities(134)778 — — 
Total Securities HTM$(19,276)$132,407 $— $— 
As of December 31, 2023, the Company held 545 securities AFS and securities HTM that were in unrealized loss positions. The aggregate unrealized loss of these securities as of December 31, 2023, was 10.96% of the amortized cost basis of total debt securities.
The proceeds from sales and calls of debt securities and their gross gain (loss) for the years ended December 31, 2023, 2022, and 2021, are shown below:
Years Ended December 31,
(in thousands)202320222021
Proceeds (1)
$— $41,234 $120,374 
Gross gain— 64 859 
Gross loss— (123)(665)
(1)The proceeds include the gross gain and loss.
Equity Securities
Equity securities are an investment in a CRA mutual fund, consisting primarily of bonds. Equity securities are carried at fair value on the consolidated balance sheets with periodic changes in value recorded through the consolidated statements of income. As of December 31, 2022, equity securities had a fair value of $10.0 million with a recognized loss
of $468,000 for the year ended December 31, 2022. The loss on equity securities during 2022 was due to a significant increase in interest rates. During 2023, the Company sold $7.0 million of the mutual fund. As of December 31, 2023, equity securities had a fair value of $3.0 million with a recognized loss of $14,000 for the year ended December 31, 2023.
Pledged Securities
Securities with carrying values of approximately $230.9 million and $168.2 million were used as collateral as of December 31, 2023 and 2022, respectively.