Investment Securities

12 Months Ended

Dec. 31, 2023

Investment Securities [Abstract]

Investment Securities

Note 3 – Investment Securities

The amortized cost and fair value of securities are as follows:

	December 31, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in thousands)
SECURITIES
Debt Securities Available for Sale
U.S. government agencies	$	2,007	$	—	$	(133	)	$	1,874
Municipal bonds		40,774		—		(7,724	)		33,050
Mortgage-backed securities:
Collateralized mortgage obligations-private label		10		—		—			10
Collateralized mortgage obligations-government sponsored entities		11,844		1		(1,445	)		10,400
Government National Mortgage Association		57		—		(2	)		55
Federal National Mortgage Association		11,872		1		(1,684	)		10,189
Federal Home Loan Mortgage Corporation		5,737		2		(926	)		4,813
Asset-backed securities-private label		—		31		—			31
Asset-backed securities-government sponsored entities		2		—		—			2
Total Debt Securities Available for Sale	$	72,303	$	35	$	(11,914	)	$	60,424
Equity Securities		22		—		(4	)		18
Total Securities	$	72,325	$	35	$	(11,918	)	$	60,442

	December 31, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in thousands)
SECURITIES
Debt Securities Available for Sale
U.S. government agencies	$	2,008	$	—	$	(175	)	$	1,833
Municipal bonds		50,734		16		(8,336	)		42,414
Mortgage-backed securities:
Collateralized mortgage obligations-private label		12		—		(1	)		11
Collateralized mortgage obligations-government sponsored entities		13,790		1		(1,636	)		12,155
Government National Mortgage Association		61		—		(2	)		59
Federal National Mortgage Association		13,232		1		(1,987	)		11,246
Federal Home Loan Mortgage Corporation		6,277		—		(1,056	)		5,221
Asset-backed securities-private label		—		96		—			96
Asset-backed securities-government sponsored entities		4		—		—			4
Total Debt Securities Available for Sale	$	86,118	$	114	$	(13,193	)	$	73,039
Equity Securities		22		—		(14	)		8
Total Securities	$	86,140	$	114	$	(13,207	)	$	73,047

Debt Securities

All of our collateralized mortgage obligations are backed by one- to four-family residential mortgages.

At December 31, 2023, no securities were pledged as collateral to the Federal Reserve Bank (“FRB”), and at December 31, 2022 thirty-eight municipal bonds with a cost of $14.4 million and fair value of $12.2 million were pledged under a collateral agreement with the FRB of New York for liquidity borrowing. In addition, at December 31, 2023 and December 31, 2022, sixteen and twenty-two municipal bonds with a cost of $4.9 million and $6.6 million and fair value of $3.7 million and $5.6 million, respectively, were pledged as collateral for customer deposits in excess of the Federal Deposit Insurance Corporation ("FDIC") insurance limits.

The following table sets forth the Company’s investment in securities with gross unrealized losses of less than twelve months and gross unrealized losses of twelve months or more and associated fair values as of the dates indicated:

	Less than 12 months					12 months or more					Total
			Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
	Fair Value		Losses			Fair Value		Losses			Fair Value		Losses
	(Dollars in thousands)
December 31, 2023
U.S. government agencies	$	—	$	—		$	1,874	$	(133	)	$	1,874	$	(133	)
Municipal bonds		6,513		(1,065	)		26,537		(6,659	)		33,050		(7,724	)
Mortgage-backed securities		57		(2	)		25,293		(4,055	)		25,350		(4,057	)
	$	6,570	$	(1,067	)	$	53,704	$	(10,847	)	$	60,274	$	(11,914	)
December 31, 2022
U.S. government agencies	$	1,833	$	(175	)	$	—	$	—		$	1,833	$	(175	)
Municipal bonds		12,227		(1,114	)		23,259		(7,222	)		35,486		(8,336	)
Mortgage-backed securities		6,981		(410	)		21,561		(4,272	)		28,542		(4,682	)
	$	21,041	$	(1,699	)	$	44,820	$	(11,494	)	$	65,861	$	(13,193	)

As of December 31, 2023, the Company’s investment portfolio included 23 securities in the “unrealized losses less than twelve months” category and 150 securities in the “unrealized losses twelve months or more” category.

As of December 31, 2023, the Company determined that for its available-for-sale debt securities in an unrealized loss position, it did not intend to sell nor was it more likely than not that it would be required to sell the security and that the decline in fair value was not due to credit factors, but due to changes in interest rates and other factors. Accordingly, the Company did not record an allowance for credit losses for its available-for-sale securities as of December 31, 2023.

As of December 31, 2022, the Company had the intent and ability to hold those securities in an unrealized loss position until maturity and management believed the temporary impairments were due to declines in fair value resulting from changes in interest rates and/or increased credit liquidity spreads since the securities were purchased. Therefore, under accounting principles effective at December 31, 2022, the Company did not consider these securities to have other-than-temporary impairment.

The unrealized losses on debt securities shown in the previous tables were recorded as a component of other comprehensive income (loss), net of tax benefit on the Company’s consolidated statements of stockholders’ equity.

During the years ended December 31, 2023 the Company sold 40 municipal bonds and 2 mortgage-backed securities resulting in gross realized losses of $59,000, with an amortized cost of $9.8 million. During the year ended December 31, 2022, the Company did not sell any debt securities.

Scheduled contractual maturities of debt securities are as follows:

	Amortized		Fair
	Cost		Value
	(Dollars in thousands)
December 31, 2023:
Less than one year	$	—	$	—
After one year through five years		2,118		1,979
After five years through ten years		9,170		8,089
After ten years		31,493		24,856
Mortgage-backed securities		29,520		25,467
Asset-backed securities		2		33
	$	72,303	$	60,424

The Company's mortgage-backed securities and asset-backed securities have stated maturities that may differ from actual maturities due to the borrowers' ability to prepay obligations. Cash flows from such investments are dependent upon the performance of the underlying assets and are generally influenced by interest rates. In the table above, mortgage-backed securities and asset-backed securities are shown in the aggregate.

Equity Securities

At December 31, 2023 and 2022, equity securities consisted of 22,368 shares of Federal Home Loan Mortgage Corporation (“FHLMC”) common stock. During the years ended December 31, 2023 and 2022, the Company recognized an unrealized gain of $11,000 and an unrealized loss of $11,000, respectively, on the equity securities, which was recorded in non-interest income in the consolidated statements of income. There were no sales of equity securities during the years ended December 31, 2023 and 2022.