Investment Securities

9 Months Ended

Sep. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Investment Securities

NOTE 2 – Investment Securities

The amortized costs and fair value of investment securities are as follows:

	September 30, 2022
	Amortized		Gross Unrealized				Fair
(dollars in thousands)	Cost		Gains		Losses		Value
Available for sale
Corporate bonds	$	2,179		-		302		1,877
US treasuries		999		-		136		863
US government agencies		13,006		-		2,371		10,635
State and political subdivisions		22,996		-		4,350		18,646
Asset-backed securities		6,992		-		147		6,845
Mortgage-backed securities
FHLMC		21,378		-		3,853		17,525
FNMA		35,929		-		5,860		30,069
GNMA		5,774		-		713		5,061
Total mortgage-backed securities		63,081		-		10,426		52,655
Total investment securities available for sale	$	109,253		-		17,732		91,521
	December 31, 2021
		Amortized	Gross Unrealized				Fair
	Cost		Gains			Losses	Value
Available for sale
Corporate bonds	$	2,198		-		10		2,188
US treasuries		999		-		7		992
US government agencies		14,504		1		336		14,169
SBA securities		429		9		-		438
State and political subdivisions		24,887		549		260		25,176
Asset-backed securities		10,136		45		17		10,164
Mortgage-backed securities
FHLMC		23,057		102		494		22,665
FNMA		40,924		235		660		40,499
GNMA		4,084		3		97		3,990
Total mortgage-backed securities		68,065		340		1,251		67,154
Total investment securities available for sale	$	121,218		944		1,881		120,281

Contractual maturities and yields on the Company’s investment securities at September 30, 2022 and December 31, 2021 are shown in the following table. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	September 30, 2022
	Less than one year					One to five years					Five to ten years					Over ten years					Total
(dollars in thousands)	Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield
Available for sale
Corporate bonds	$	-		-			-		-			1,877		1.99	%		-		-			1,877		1.99	%
US treasuries		-		-			-		-			863		1.27	%		-		-			863		1.27	%
US government agencies		-		-			3,225		0.85	%		6,661		1.56	%		749		1.48	%		10,635		1.34	%
State and political subdivisions		-		-			447		2.13	%		4,721		1.69	%		13,478		2.18	%		18,646		2.05	%
Asset-backed securities		-		-			-		-			658		3.22	%		6,187		3.50	%		6,845		3.47	%
Mortgage-backed securities		-		-			3,118		1.20	%		4,662		1.44	%		44,875		1.65	%		52,655		1.61	%
Total investment securities	$	-		-			6,790		1.09	%		19,442		1.65	%		65,289		1.93	%		91,521		1.81	%
	December 31, 2021
	Less than one year						One to five years					Five to ten years					Over ten years					Total
(dollars in thousands)	Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield				Amount	Yield
Available for sale
Corporate bonds	$	-		-			-		-			2,188		1.98	%		-		-			2,188		1.98	%
US treasuries		-		-			-		-			992		1.27	%		-		-			992		1.27	%
US government agencies		-		-			2,481		0.36	%		8,756		1.31	%		2,932		1.79	%		14,169		1.24	%
SBA securities		-		-			-		-			-		-			438		1.01	%		438		1.01	%
State and political subdivisions		-		-			471		2.13	%		4,282		1.61	%		20,423		2.21	%		25,176		2.11	%
Asset-backed securities		-		-			-		-			1,614		1.79	%		8,550		0.97	%		10,164		1.10	%
Mortgage-backed securities		387		2.10	%		4,411		1.29	%		9,121		1.59	%		53,235		1.38	%		67,154		1.40	%
Total investment securities	$	387		2.10	%		7,363		1.03	%		26,953		1.53	%		85,578		1.55	%		120,281		1.52	%

The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities at September 30, 2022 and December 31, 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

			September 30, 2022
			Less than 12 months						12 months or longer						Total
(dollars in thousands)	#		Fair value		Unrealized losses		#		Fair value		Unrealized losses		#		Fair value		Unrealized losses
Available for sale
Corporate bonds		1	$	1,877	$	302		-	$	-	$	-		1	$	1,877	$	302
US treasuries		-		-		-		1		863		136		1		863		136
US government agencies		-		-		-		10		10,635		2,371		10		10,635		2,371
State and political subdivisions		19		12,013		2,604		13		6,633		1,746		32		18,646		4,350
Asset-backed		6		5,432		108		2		1,413		39		8		6,845		147
Mortgage-backed securities
FHLMC		7		5,586		740		12		11,939		3,113		19		17,525		3,853
FNMA		19		9,985		1,528		18		20,084		4,332		37		30,069		5,860
GNMA		4		3,566		461		3		1,495		252		7		5,061		713
Total investment securities		56	$	38,459	$	5,743		59	$	53,062	$	11,989		115	$	91,521	$	17,732
	December 31, 2021
			Less than 12 months						12 months or longer									Total
(dollars in thousands)		#		Fair value		Unrealized losses		#		Fair value		Unrealized losses		#		Fair value		Unrealized losses
Available for sale
Corporate bonds		1	$	2,188	$	10		-	$	-	$	-		1	$	2,188	$	10
US treasuries		1		992		7		-		-		-		1		992		7
US government agencies		7		9,831		173		4		3,837		163		11		13,668		336
State and political subdivisions		9		7,821		193		6		2,909		67		15		10,730		260
Asset-backed		2		1,751		9		2		1,717		7		4		3,468		16
Mortgage-backed securities
FHLMC		10		13,705		303		4		4,644		192		14		18,349		495
FNMA		11		16,098		296		9		11,264		364		20		27,362		660
GNMA		2		655		4		3		3,215		93		5		3,870		97
Total investment securities		43	$	53,041	$	995		28	$	27,586	$	886		71	$	80,627	$	1,881

At September 30, 2022 the Company had 115 individual investments that were in an unrealized loss position. The unrealized losses were primarily attributable to changes in interest rates, rather than deterioration in credit quality. The individual securities are each investment grade securities. The Company considers factors such as the financial condition of the issuer including credit ratings and specific events affecting the operations of the issuer, volatility of the security, underlying assets that collateralize the debt security, and other industry and macroeconomic conditions. The Company does not intend to sell these securities, and it is more likely than not that the Company will not be required to sell these securities before recovery of the amortized cost.

Other investments are comprised of the following and are recorded at cost which approximates fair value.

(dollars in thousands)	September 30, 2022		December 31, 2021
Federal Home Loan Bank stock	$	4,036		1,241
Other nonmarketable investments		1,010		2,377
Investment in Trust Preferred subsidiaries		403		403
Total other investments	$	5,449		4,021

The Company has evaluated other investments for impairment and determined that the other investments are not impaired as of September 30, 2022 and that ultimate recoverability of the par value of the investments is probable. All of the FHLB stock is used to collateralize advances with the FHLB.