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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.