| Debt Securities |
Note 5: Debt Securities
The following table summarizes the amortized cost and fair value of debt securities available-for-sale at September 30, 2023 and December 31, 2022
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, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Federal agencies
|
|
$
|
146
|
|
|
$
|
-
|
|
|
$
|
(6
|
)
|
|
$
|
140
|
|
|
Mortgage-backed securities(1)(2)
|
|
|
39,611
|
|
|
|
-
|
|
|
|
(5,531
|
)
|
|
|
34,080
|
|
|
State and political subdivisions
|
|
|
27,707
|
|
|
|
-
|
|
|
|
(2,483
|
)
|
|
|
25,224
|
|
|
U.S. Treasuries
|
|
|
106,032
|
|
|
|
-
|
|
|
|
(2,594
|
)
|
|
|
103,438
|
|
|
Corporate debt securities
|
|
|
5,500
|
|
|
|
-
|
|
|
|
(1,244
|
)
|
|
|
4,256
|
|
|
Total available-for-sale
|
|
|
178,996
|
|
|
|
-
|
|
|
|
(11,858
|
)
|
|
|
167,138
|
|
|
Total debt securities
|
|
|
178,996
|
|
|
|
-
|
|
|
|
(11,858
|
)
|
|
|
167,138
|
|
|
(in thousands)
|
|
Amortized Cost
|
|
|
Gross Unrealized
Gains
|
|
|
Gross Unrealized
Losses
|
|
|
Fair Value
|
|
|
Available-for-sale as of December 31, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Federal agencies
|
|
$
|
1,292
|
|
|
$
|
-
|
|
|
$
|
(150
|
)
|
|
$
|
1,142
|
|
|
Mortgage-backed securities(1)(2)
|
|
|
42,953
|
|
|
|
-
|
|
|
|
(4,879
|
)
|
|
|
38,074
|
|
|
State and political subdivisions
|
|
|
30,632
|
|
|
|
-
|
|
|
|
(2,276
|
)
|
|
|
28,356
|
|
|
U.S. Treasuries
|
|
|
104,940
|
|
|
|
-
|
|
|
|
(4,280
|
)
|
|
|
100,660
|
|
|
Corporate debt securities
|
|
|
5,500
|
|
|
|
-
|
|
|
|
(567
|
)
|
|
|
4,933
|
|
|
Total available-for-sale
|
|
|
185,317
|
|
|
|
-
|
|
|
|
(12,152
|
)
|
|
|
173,165
|
|
|
Total debt securities
|
|
|
185,317
|
|
|
|
-
|
|
|
|
(12,152
|
)
|
|
|
173,165
|
|
(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 $25.37 million and $27.90
million of residential mortgage-backed securities and $14.25 million and $15.05 million of commercial mortgage-backed securities as of September 30, 2023 and December 31, 2022, respectively
The amortized cost and estimated fair value of investment
securities at September 30, 2023 and December 31, 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, 2023
|
|
|
|
|
|
|
|
Due in one year or less
|
|
$
|
104,150
|
|
|
$
|
102,416
|
|
|
Due after one year through five years
|
|
|
16,153
|
|
|
|
14,875
|
|
|
Due after five years through ten years
|
|
|
18,920
|
|
|
|
15,638
|
|
|
Due after ten years
|
|
|
162
|
|
|
|
129
|
|
|
Mortgage-backed securities
|
|
|
39,611
|
|
|
|
34,080
|
|
|
Total available-for-sale
|
|
|
178,996
|
|
|
|
167,138
|
|
|
(in thousands)
|
|
Amortized Cost
|
|
|
Fair Value
|
|
|
Available-for-sale as of December 31, 2022
|
|
|
|
|
|
|
|
Due in one year or less
|
|
$
|
2,133
|
|
|
$
|
2,115
|
|
|
Due after one year through five years
|
|
|
118,108
|
|
|
|
113,415
|
|
|
Due after five years through ten years
|
|
|
21,495
|
|
|
|
19,030
|
|
|
Due after ten years
|
|
|
628
|
|
|
|
531
|
|
|
Mortgage-backed securities
|
|
|
42,953
|
|
|
|
38,074
|
|
|
Total available-for-sale
|
|
|
185,317
|
|
|
|
173,165
|
|
There was one holding of
securities of issuers in an amount greater than 10% of stockholders equity at September 30, 2023, a U.S. Treasury note with a fair value of $98.35 million.
The following table presents a summary of realized gains and losses from the sale, prepayment and call of debt securities:
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sales, maturities, prepayments and calls
|
|
$
|
1,831
|
|
|
$
|
9,024
|
|
|
$
|
6,029
|
|
|
$
|
28,852
|
|
|
Gross realized gains on sales, prepayments and calls
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10
|
|
|
Gross realized losses on sales, prepayments and calls
|
|
|
(7
|
)
|
|
|
(10
|
)
|
|
|
(15
|
)
|
|
|
(137
|
)
|
|
Total realized (losses), net
|
|
$
|
(7
|
)
|
|
$
|
(10
|
)
|
|
$
|
(15
|
)
|
|
$
|
(127
|
)
|
The following table details book value of pledged securities as of September 30, 2023 and December 31, 2022:
(in thousands)
|
|
September 30,
2023
|
|
|
December 31,
2022
|
|
|
Book value of pledged securities
|
|
$
|
21,322
|
|
|
$
|
85,280
|
|
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, 2023
and December 31, 2022. As of September 30, 2023, 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, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Federal agencies
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
140
|
|
|
$
|
(6
|
)
|
|
$
|
140
|
|
|
$
|
(6
|
)
|
|
Mortgage-backed securities
|
|
|
-
|
|
|
|
-
|
|
|
|
34,080
|
|
|
|
(5,531
|
)
|
|
|
34,080
|
|
|
|
(5,531
|
)
|
|
State and political subdivisions(1)
|
|
|
753
|
|
|
|
(7
|
)
|
|
|
24,471
|
|
|
|
(2,476
|
)
|
|
|
25,224
|
|
|
|
(2,483
|
)
|
|
U.S. Treasuries
|
|
|
-
|
|
|
|
-
|
|
|
|
103,438
|
|
|
|
(2,594
|
)
|
|
|
103,438
|
|
|
|
(2,594
|
)
|
|
Corporate debt securities
|
|
|
805
|
|
|
|
(195
|
)
|
|
|
3,451
|
|
|
|
(1,049
|
)
|
|
|
4,256
|
|
|
|
(1,244
|
)
|
|
Total available-for-sale
|
|
$
|
1,558
|
|
|
$
|
(202
|
)
|
|
$
|
165,580
|
|
|
$
|
(11,656
|
)
|
|
$
|
167,138
|
|
|
$
|
(11,858
|
)
|
| |
|
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, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Federal agencies
|
|
$
|
1,142
|
|
|
$
|
(150
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,142
|
|
|
$
|
(150
|
)
|
|
Mortgage-backed securities
|
|
|
38,074
|
|
|
|
(4,879
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
38,074
|
|
|
|
(4,879
|
)
|
|
State and political subdivisions
|
|
|
28,356
|
|
|
|
(2,276
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
28,356
|
|
|
|
(2,276
|
)
|
|
U.S. Treasuries
|
|
|
100,660
|
|
|
|
(4,280
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
100,660
|
|
|
|
(4,280
|
)
|
|
Corporate debt securities
|
|
|
4,933
|
|
|
|
(567
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
4,933
|
|
|
|
(567
|
)
|
|
Total available-for-sale
|
|
$
|
173,165
|
|
|
$
|
(12,152
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
173,165
|
|
|
$
|
(12,152
|
)
|
(1) Of our state and political subdivision securities, $22.49 million are rated BBB+ or better and $2.74 million are not rated.
|