Investment Securities

12 Months Ended

Jun. 30, 2023

Investment Securities

Investment Securities

Note 5 – Investment Securities

The amortized cost, gross unrealized gains and losses, and estimated fair value of investments in debt securities are as follows:

	June 30, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
Available For Sale:
Mortgage-backed securities	$	124,252	$	21	$	(17,517)	$	106,756
U.S. agency collateralized mortgage obligations		10,074		—		(1,782)		8,292
U.S. government agency securities		3,881		140		(89)		3,932
Municipal bonds		20,081		—		(5,102)		14,979
Corporate bonds		37,200		—		(6,032)		31,168
Total Available For Sale	$	195,488	$	161	$	(30,522)	$	165,127
Held To Maturity:
Mortgage-backed securities	$	94,648	$	—	$	(17,275)	$	77,373
U.S. government agency securities		4,982		—		(102)		4,880
Municipal bonds		60		—		—		60
Total Held To Maturity	$	99,690	$	—	$	(17,377)	$	82,313

	June 30, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
Available For Sale:
Mortgage-backed securities	$	130,146	$	85	$	(12,725)	$	117,506
U.S. agency collateralized mortgage obligations		11,001		—		(1,292)		9,709
U.S. government agency securities		5,082		11		(55)		5,038
Municipal bonds		20,160		—		(4,518)		15,642
Corporate bonds		36,300		16		(1,466)		34,850
Total Available For Sale	$	202,689	$	112	$	(20,056)	$	182,745
Held To Maturity:
Mortgage-backed securities	$	102,135	$	—	$	(13,814)	$	88,321
Total Held To Maturity	$	102,135	$	—	$	(13,814)	$	88,321

The Company did not sell any investment securities during the year ended June 30, 2023. The Company recognized $62 thousand of gross gains on the sale of $5.0 million of investment securities during the year ended June 30, 2022.

The amortized cost and fair value of debt securities, by contractual maturity, are shown below. Maturities for mortgage-backed securities are dependent upon the rate environment and prepayments of the underlying loans. Expected maturities may differ from contractual maturities because the securities may be called or prepaid with or without penalties.

	June 30, 2023
	Available For Sale				Held To Maturity
	Amortized		Fair		Amortized		Fair
(Dollars in thousands)	Cost		Value		Cost		Value
Due in one year or less	$	—	$	—	$	552	$	551
Due after one year through five years		19		19		4,490		4,389
Due after five years through ten years		41,685		34,937		—		—
Due after ten years		153,784		130,171		94,648		77,373
	$	195,488	$	165,127	$	99,690	$	82,313

The following tables provide information on the gross unrealized losses and fair market value of the Company's investments with unrealized losses that are not deemed to be other than temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2023 and 2022:

	June 30, 2023
	Less than 12 Months				12 Months or More				Total		Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
Available For Sale:
Mortgage-backed securities	$	16,794	$	(967)	$	86,371	$	(16,550)	$	103,165	$	(17,517)
U.S. agency collateralized mortgage obligations		—		—		8,292		(1,782)		8,292		(1,782)
U.S. government agency securities		—		—		943		(89)		943		(89)
Municipal bonds		—		—		14,979		(5,102)		14,979		(5,102)
Corporate bonds		10,715		(1,435)		20,453		(4,597)		31,168		(6,032)
		27,509		(2,402)		131,038		(28,120)		158,547		(30,522)
Held To Maturity:
Mortgage-backed securities		—		—		77,373		(17,275)		77,373		(17,275)
U.S. government agency securities		4,880		(102)		—		—		4,880		(102)
		4,880		(102)		77,373		(17,275)		82,253		(17,377)
Total Temporarily Impaired Securities	$	32,389	$	(2,504)	$	208,411	$	(45,395)	$	240,800	$	(47,899)

	June 30, 2022
	Less than 12 Months				12 Months or More				Total		Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
Available For Sale:
Mortgage-backed securities	$	93,726	$	(10,351)	$	13,750	$	(2,374)	$	107,476	$	(12,725)
U.S. agency collateralized mortgage obligations		2,968		(488)		6,741		(804)		9,709		(1,292)
U.S. government agency securities		61		(3)		1,556		(52)		1,617		(55)
Municipal bonds		7,415		(1,979)		8,227		(2,539)		15,642		(4,518)
Corporate bonds		25,584		(1,466)		—		—		25,584		(1,466)
		129,754		(14,287)		30,274		(5,769)		160,028		(20,056)
Held To Maturity:
Mortgage-backed securities		88,321		(13,814)		—		—		88,321		(13,814)
		88,321		(13,814)		—		—		88,321		(13,814)
Total Temporarily Impaired Securities	$	218,075	$	(28,101)	$	30,274	$	(5,769)	$	248,349	$	(33,870)

The Company evaluates its investment securities holdings for other-than-temporary impairment (“OTTI”) on at least a quarterly basis. As part of this process, management considers its intent to sell each debt security and whether it is more likely than not the Company will be required to sell the security before its anticipated recovery. If either of these conditions is met, OTTI is recognized in earnings equal to the entire difference between the security’s amortized cost basis and its fair value at the Statement of Financial Condition date. For securities that meet neither of these conditions, management performs analysis to determine whether any of these securities are at

risk for OTTI. To determine which individual securities are at risk for OTTI and should be quantitatively evaluated utilizing a detailed analysis, management uses indicators which consider various characteristics of each security including, but not limited to, the following: the credit rating; the duration and level of the unrealized loss; prepayment assumptions; and certain other collateral-related characteristics such as delinquency rates, the security’s performance, and the severity of expected collateral losses.

The unrealized loss on securities greater than 12 months is due to current interest rate levels relative to the Company’s cost. Because the unrealized losses are due to current interest rate levels relative to the Company’s cost and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell these investments before recovery of its amortized cost, which may be at maturity, the Company does not consider these investments to be other-than temporarily impaired at June 30, 2023 and 2022. There were 126 investment securities that were temporarily impaired at June 30, 2023. There were 115 investment securities that were temporarily impaired at June 30, 2022.

At June 30, 2023 and 2022, $2.5 million and $2.0 million, respectively, of investment securities were pledged to secure municipal deposits.

Equity Securities

The Company had one equity security with a fair value of $1.6 million and $2.3 million as of June 30, 2023 and 2022, respectively.  During the year ended June 30, 2023 and 2022, the Company recorded $629 thousand and $242 thousand of unrealized losses, respectively, which were recorded in Unrealized loss on equity securities in the Consolidated Statements of Income.