Debt Securities (Tables)

9 Months Ended

Sep. 30, 2022

Amortized Cost and Fair Value of Debt Securities Available-for-sale

The following table summarizes the amortized cost and fair value of debt securities available-for-sale at September 30, 2022 and December 31, 2021 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss):

(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available-for-sale as of September 30, 2022
U.S. Federal agencies	$	202	$	-	$	(8	)	$	194
Mortgage-backed securities⁽¹⁾⁽²⁾		45,556		-		(5,410	)		40,146
State and political subdivisions		30,871		-		(2,804	)		28,067
U.S. Treasuries		106,041		-		(4,915	)		101,126
Corporate debt securities		5,500		-		(499	)		5,001
Total available-for-sale		188,170		-		(13,636	)		174,534
Total debt securities		188,170		-		(13,636	)		174,534

(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available-for-sale as of December 31, 2021
U.S. Federal agencies	$	311	$	2	$	-		$	313
Mortgage-backed securities⁽¹⁾		33,085		69		-			33,154
State and political subdivisions		45,245		49		-			45,294
U.S. Treasuries		6,052		-		(5	)		6,047
Corporate debt securities		-		-		-			-
Total available-for-sale		84,693		120		(5	)		84,808
Total debt securities		84,693		120		(5	)		84,808

⁽¹⁾ All of our mortgage-backed securities and collateralized mortgage obligations are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored entities.

⁽²⁾Included in mortgage-backed securities is $29.09 million of residential mortgage-backed securities and $16.47 million of commerical mortgage-backed securities.

Contractual Maturity

The amortized cost and estimated fair value of investment securities at September 30, 2022, by contractual maturity, are shown below. The expected life of mortgage-backed securities will differ from contractual maturities because borrowers may have the right to call or prepay the underlying mortgage loans with or without call or prepayment penalties.

(in thousands)	Amortized Cost		Fair Value
Available-for-sale as of September 30, 2022
Due in one year or less	$	2,082	$	2,057
Due after one year through five years		116,636		111,572
Due after five years through ten years		23,268		20,258
Due after ten years		628		501
Mortgage-backed securities		45,556		40,146
Total available-for-sale		188,170		174,534

(in thousands)	Amortized Cost		Fair Value
Available-for-sale as of December 31, 2021
Due in one year or less	$	3,622	$	3,623
Due after one year through five years		22,030		22,076
Due after five years through ten years		22,819		22,821
Due after ten years		3,137		3,134
Mortgage-backed securities		33,085		33,154
Total available-for-sale		84,693		84,808

Realized Gains and Losses from Sale, Repayment and Call of Debt Securities

The following table presents a summary of realized gains and losses from the sale, prepayment and call of debt securities for the nine months ended September 30, 2022 and the three months ended September 30, 2022. Note, the Company did not have available-for-sale debt securities at September 30, 2021.

	Nine Months Ended September 30, 2022			Three Months Ended September 30, 2022
(in thousands)
Proceeds from sales, prepayments and calls	$	28,852		$	9,024
Gross realized gains on sales, prepayments and calls		10			-
Gross realized losses on sales, prepayments and calls		(137	)		(10	)
Total realized (losses), net	$	(127	)	$	(10	)

Pledged Securities

The following table details book value of pledged securities as of September 30, 2022:

(in thousands)		September 30, 2022				December 31, 2021
Book value of pledged securities		$	29,260			$	37,477

Debt Securities in Continuous Unrealized Loss Position

The following table details gross unrealized losses and fair values of investment securities aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at September 30, 2022 and December 31, 2021. As of September 30, 2022, the Company had the ability and intent to hold the debt securities classified as available-for-sale for a period of time sufficient for a recovery of cost. The unrealized losses are due to increases in market interest rates over the yields available at the time the underlying debt securities were purchased or acquired. The fair value of those debt securities having unrealized losses is expected to recover as the securities approach their maturity date or repricing date, or if market yields for such investments decline. Management has no intent or requirement to sell before the recovery of the unrealized loss; therefore, no impairment loss was realized in the Company’s consolidated statements of comprehensive income.

	Less than Twelve Months					Twelve Months or Longer				Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
(in thousands)
Available-for-sale as of September 30, 2022
U.S. Federal agencies	$	194	$	(8	)	$	-	$	-	$	194	$	(8	)
Mortgage-backed securities		40,146		(5,410	)		-		-		40,146		(5,410	)
State and political subdivisions⁽¹⁾		28,067		(2,804	)		-		-		28,067		(2,804	)
U.S. Treasuries		101,126		(4,915	)		-		-		101,126		(4,915	)
Corporate debt securities		5,001		(499	)		-		-		5,001		(499	)
Total available-for-sale	$	174,534	$	(13,636	)	$	-	$	-	$	174,534	$	(13,636	)

	Less than Twelve Months					Twelve Months or Longer				Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
(in thousands)
Available-for-sale as of December 31, 2021
U.S. Federal agencies	$	-	$	-		$	-	$	-	$	-	$	-
Mortgage-backed securities		-		-			-		-		-		-
State and political subdivisions⁽¹⁾		-		-			-		-		-		-
U.S. Treasuries		6,047		(5	)		-		-		6,047		(5	)
Corporate debt securities		-		-			-		-		-		-
Total available-for-sale	$	6,047	$	(5	)	$	-	$	-	$	6,047	$	(5	)

⁽¹⁾ All of our state and political subdivisions securities are rate BBB+ or better.