Investment Securities

9 Months Ended

Sep. 30, 2023

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, 2023
	Amortized		Gross Unrealized				Fair
(dollars in thousands)	Cost		Gains		Losses		Value
Available for sale
Corporate bonds	$	2,153		-		303		1,850
US treasuries		25,737		2		136		25,603
US government agencies		21,225		-		2,501		18,724
State and political subdivisions		22,708		-		4,398		18,310
Asset-backed securities		29,780		25		164		29,641
Mortgage-backed securities
FHLMC		23,379		-		4,639		18,740
FNMA		33,251		-		6,285		26,966
GNMA		5,111		-		910		4,201
Total mortgage-backed securities		61,741		-		11,834		49,907
Total investment securities available for sale	$	163,344		27		19,336		144,035

	December 31, 2022
	Amortized		Gross Unrealized				Fair
	Cost		Gains		Losses		Value
Available for sale
Corporate bonds	$	2,172		-		289		1,883
US treasuries		999		-		128		871
US government agencies		13,007		-		2,390		10,617
State and political subdivisions		22,910		-		4,004		18,906
Asset-backed securities		6,435		-		206		6,229
Mortgage-backed securities
FHLMC		24,086		-		3,745		20,341
FNMA		35,141		-		5,520		29,621
GNMA		5,573		-		694		4,879
Total mortgage-backed securities		64,800		-		9,959		54,841
Total investment securities available for sale	$	110,323		-		16,976		93,347

Contractual maturities and yields on the Company’s investment securities at September 30, 2023 and December 31, 2022 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, 2023
	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	$	-		-		$	-		-		$	1,850		2.01	%	$	-		-		$	1,850		2.01	%
US treasuries		24,739		5.39	%		864		1.27	%		-		-			-		-			25,603		5.25	%
US government agencies		956		0.45	%		2,293		1.00	%		15,475		4.45	%		-		-			18,724		3.82	%
State and political subdivisions		-		-			872		1.94	%		4,919		1.80	%		12,519		2.17	%		18,310		2.06	%
Asset-backed securities		-		-			-		-			340		6.24	%		29,301		6.61	%		29,641		6.60	%
Mortgage-backed securities		-		-			4,680		1.16	%		5,140		1.59	%		40,087		1.94	%		49,907		1.83	%
Total investment securities	$	25,695		5.21	%	$	8,709		1.20	%	$	27,724		3.31	%	$	81,907		3.64	%	$	144,035		3.71	%

															December 31, 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	$	-		-	$	-		-		$	1,883		2.00	%	$	-		-		$	1,883		2.00	%
US treasuries		-		-		-		-			871		1.27	%		-		-			871		1.27	%
US government agencies		-		-		3,223		0.85	%		7,394		1.55	%		-		-			10,617		1.34	%
State and political subdivisions		-		-		460		2.13	%		5,382		1.80	%		13,064		2.16	%		18,906		2.05	%
Asset-backed securities		-		-		-		-			554		4.77	%		5,675		5.14	%		6,229		5.10	%
Mortgage-backed securities		-		-		4,594		1.13	%		3,959		1.60	%		46,288		1.90	%		54,841		1.82	%
Total investment securities	$	-		-	$	8,277		1.08	%	$	20,043		1.75	%	$	65,027		2.24	%	$	93,347		2.03	%

The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities at September 30, 2023 and December 31, 2022, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

													September 30, 2023
	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	$	1,850	$	303		1	$	1,850	$	303
US treasuries		-		-		-		1		863		136		1		863		136
US government agencies		2		8,156		60		10		10,568		2,441		12		18,724		2,501
State and political subdivisions		2		734		33		30		17,576		4,365		32		18,310		4,398
Asset-backed		5		15,631		83		7		5,039		81		12		20,670		164
Mortgage-backed securities
FHLMC		2		2,726		189		19		16,014		4,450		21		18,740		4,639
FNMA		-		-		-		37		26,966		6,285		37		26,966		6,285
GNMA		-		-		-		6		4,201		910		6		4,201		910
Total investment securities		11	$	27,247	$	365		111	$	83,077	$	18,971		122	$	110,324	$	19,336

															December 31, 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	$	1,883	$	289		1	$	1,883	$	289
US treasuries		-		-		-		1		871		128		1		871		128
US government agencies		-		-		-		10		10,617		2,390		10		10,617		2,390
State and political subdivisions		10		5,101		763		22		13,805		3,241		32		18,906		4,004
Asset-backed		5		4,291		135		3		1,938		71		8		6,229		206
Mortgage-backed securities
FHLMC		4		3,712		155		17		16,629		3,590		21		20,341		3,745
FNMA		9		2,208		201		28		27,413		5,319		37		29,621		5,520
GNMA		1		103		7		6		4,776		687		7		4,879		694
Total investment securities		29	$	15,415	$	1,261		88	$	77,932	$	15,715		117	$	93,347	$	16,976

At September 30, 2023 the Company had 122 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. The issuers of these securities continue to make timely principal and interest payments under the contractual terms of the securities. As such, there is no allowance for credit losses on available for sale securities recognized as of September 30, 2023.

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

(dollars in thousands)	September 30, 2023		December 31, 2022
Federal Home Loan Bank stock	$	16,046		9,250
Other nonmarketable investments		3,151		1,180
Investment in Trust Preferred subsidiaries		403		403
Total other investments	$	19,600		10,833

The Company has evaluated other investments for impairment and determined that the other investments are not impaired as of September 30, 2023 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.