| SECURITIES |
SECURITIES The amortized cost of securities available-for-sale and their estimated fair values at September 30, 2024 and December 31, 2023 are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Amortized
Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Estimated
Fair
Value | | | (In thousands) | | September 30, 2024 | | | | | | | | | | U.S. Treasury notes | | $ | 36,622 | | | $ | 62 | | | $ | (1,067) | | | $ | 35,617 | | | Corporate bonds | | 77,153 | | | 227 | | | (3,675) | | | 73,705 | | | U.S. Government agency obligations | | 1,125 | | | — | | | (85) | | | 1,040 | | Obligations issued by U.S. states and their political subdivisions | | 6,373 | | | — | | | (243) | | | 6,130 | | Mortgage-backed securities: | | | | | | | | | Residential | | 167,025 | | | 585 | | | (17,879) | | | 149,731 | | Multifamily | | 10,955 | | | — | | | (626) | | | 10,329 | | | Asset-backed securities | | 14,432 | | | 13 | | | (191) | | | 14,254 | | | Total | | $ | 313,685 | | | $ | 887 | | | $ | (23,766) | | | $ | 290,806 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2023 | | | | | | | | | | U.S. Treasury notes | | $ | 36,935 | | | $ | — | | | $ | (1,875) | | | $ | 35,060 | | | Corporate bonds | | 82,248 | | | 56 | | | (5,681) | | | 76,623 | | | U.S. Government agency obligations | | 11,519 | | | — | | | (379) | | | 11,140 | | Obligations issued by U.S. states and their political subdivisions | | 6,423 | | | — | | | (228) | | | 6,195 | | Mortgage-backed securities: | | | | | | | | | Residential | | 149,808 | | | — | | | (21,266) | | | 128,542 | | | Multifamily | | 12,522 | | | — | | | (999) | | | 11,523 | | | Asset-backed securities | | 15,010 | | | — | | | (327) | | | 14,683 | | | Total | | $ | 314,465 | | | $ | 56 | | | $ | (30,755) | | | $ | 283,766 | |
The amortized cost of securities held-to-maturity, allowance for credit losses and their estimated fair values at September 30, 2024 and December 31, 2023, are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Amortized Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | | | Estimated
Fair
Value | | | (In thousands) | | September 30, 2024 | | | | | | | | | | | | Corporate bonds | | $ | 18,600 | | | $ | — | | | $ | (2,989) | | | | | $ | 15,611 | | | | | | | | | | | | | | Asset-backed securities | | 14,641 | | | — | | | (995) | | | | | 13,646 | | | Total | | $ | 33,241 | | | $ | — | | | $ | (3,984) | | | | | $ | 29,257 | | | Allowance for credit loss | | (122) | | | | | | | | | | | | $ | 33,119 | | | | | | | | | | | December 31, 2023 | | | | | | | | | | | | Corporate bonds | | $ | 18,600 | | | $ | — | | | $ | (3,593) | | | | | $ | 15,007 | | | Asset-backed securities | | 14,812 | | | — | | | (1,496) | | | | | 13,316 | | | Total | | $ | 33,412 | | | $ | — | | | $ | (5,089) | | | | | $ | 28,323 | | | Allowance for credit loss | | (158) | | | | | | | | | | | | $ | 33,254 | | | | | | | | | |
At September 30, 2024 and December 31, 2023, the allowance for credit losses on securities held-to-maturity totaled $122 thousand and $158 thousand respectively, and related to the corporate bonds. The asset-backed securities are in a AAA tranche determined by a third party. No loss is expected on these securities. Securities pledged at September 30, 2024 and December 31, 2023 had a carrying amount of $58.6 million and $11.7 million, respectively, and were pledged to our credit line with the Federal Reserve Bank and to secure public deposits. The amortized cost and fair value of debt securities are shown below by contractual maturity as of September 30, 2024. Expected maturities on mortgage and asset-backed securities generally exceed 20 years; however, they may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without penalties. | | | | | | | | | | | | | | | | | Amortized Cost (1) | | Estimated Fair Value | | | (In thousands) | | Available-for-sale | | | | | | Due in one year or less | | $ | 42,941 | | | $ | 42,796 | | | Due from one year to five years | | 28,331 | | | 27,878 | | | Due from five to ten years | | 43,011 | | | 40,700 | | | Due after ten years | | 6,990 | | | 5,118 | | | Mortgage-backed and asset-backed securities | | 192,412 | | | 174,314 | | | Total | | $ | 313,685 | | | $ | 290,806 | | | Held-to-maturity | | | | | | | | | | | | | | | | Due from five to ten years | | 18,600 | | | 15,611 | | | | | | | | Mortgage-backed and asset-backed securities | | 14,641 | | | 13,646 | | | Total | | $ | 33,241 | | | $ | 29,257 | |
(1) Excludes the allowance for credit losses on held-to-maturity securities at September 30, 2024. Credit Quality Indicators Credit ratings are a key measure for estimating the probability of a bond’s default and for monitoring credit quality on an on-going basis. For bonds other than U.S. Treasuries and bonds issued or guaranteed by U.S. government agencies, credit ratings issued by one or more nationally recognized statistical rating organization are considered in conjunction with an assessment by the Company’s management. Investment grade reflects a credit quality of BBB- or above. None of the Company’s securities are on non-accrual status, nor are any past due. The table below indicates the credit profile of the Company’s debt securities held-to-maturity at amortized cost for the periods shown. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | September 30, 2024 | | AAA | | A1 | | BBB+ | | BBB | | BBB- | | | | Total | | | (In thousands) | | | | | | | | | | | | | | | | | Corporate bonds | | $ | — | | | $ | — | | | $ | 1,600 | | | $ | 16,000 | | | $ | 1,000 | | | | | $ | 18,600 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Asset-backed securities | | 8,718 | | | 5,923 | | | — | | | — | | | — | | | | | 14,641 | | | Total held-to-maturity | | $ | 8,718 | | | $ | 5,923 | | | $ | 1,600 | | | $ | 16,000 | | | $ | 1,000 | | | | | $ | 33,241 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2023 | | AAA | | A1 | | BBB+ | | BBB | | BBB- | | | | Total | | | (In thousands) | | | | | | | | | | | | | | | | | Corporate bonds | | $ | — | | | $ | — | | | $ | 1,600 | | | $ | 11,000 | | | $ | 6,000 | | | | | $ | 18,600 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Asset-backed securities | | 8,844 | | | 5,968 | | | — | | | — | | | — | | | | | 14,812 | | | Total held-to-maturity | | $ | 8,844 | | | $ | 5,968 | | | $ | 1,600 | | | $ | 11,000 | | | $ | 6,000 | | | | | $ | 33,412 | |
At September 30, 2024 and December 31, 2023, there was one security with a value of $2.0 million included in the BBB rating that had a split rating. The following tables summarize available-for-sale securities with unrealized losses at September 30, 2024 and December 31, 2023, aggregated by major security type and length of time in a continuous loss position. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Less than 12 Months | | 12 Months or More | | Total | | | Unrealized Losses | | Estimated
Fair Value | | Unrealized Losses | | Estimated
Fair Value | | Number of Securities | | Unrealized Losses | | Estimated
Fair Value | | | (Dollars in thousands) | | September 30, 2024 | | | | | | | | | | | | | | | | U.S. Treasury notes | | $ | — | | | $ | — | | | $ | (1,067) | | | $ | 25,867 | | | 3 | | $ | (1,067) | | | $ | 25,867 | | | Corporate bonds | | (9) | | | 9,994 | | | (3,666) | | | 43,022 | | | 23 | | (3,675) | | | 53,016 | | | U.S. Government agency obligations | | — | | | — | | | (85) | | | 1,040 | | | 2 | | (85) | | | 1,040 | | | Obligations issued by U.S. states and their political subdivisions | | — | | | — | | | (243) | | | 6,130 | | | 5 | | (243) | | | 6,130 | | | Mortgage-backed securities: | | | | | | | | | | | | | | | | Residential | | — | | | — | | | (17,879) | | | 120,805 | | | 42 | | (17,879) | | | 120,805 | | | Multifamily | | (3) | | | 2,120 | | | (623) | | | 8,209 | | | 5 | | (626) | | | 10,329 | | | Asset-backed securities | | — | | | 5,000 | | | (191) | | | 4,242 | | | 3 | | (191) | | | 9,242 | | | Total | | $ | (12) | | | $ | 17,114 | | | $ | (23,754) | | | $ | 209,315 | | | 83 | | $ | (23,766) | | | $ | 226,429 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2023 | | | | | | | | | | | | | | | | U.S. Treasury notes | | $ | — | | | $ | — | | | $ | (1,875) | | | $ | 35,060 | | | 4 | | $ | (1,875) | | | $ | 35,060 | | | Corporate bonds | | (7) | | | 8,260 | | | (5,674) | | | 61,156 | | | 30 | | (5,681) | | | 69,416 | | | U.S. Government agency obligations | | — | | | — | | | (380) | | | 11,140 | | | 3 | | (380) | | | 11,140 | | | Obligations issued by U.S. states and their political subdivisions | | — | | | — | | | (228) | | | 6,195 | | | 5 | | (228) | | | 6,195 | | | Mortgage-backed securities: | | | | | | | | | | | | | | | | Residential | | — | | | 2 | | | (21,266) | | | 128,535 | | | 48 | | (21,266) | | | 128,537 | | | Multifamily | | — | | | — | | | (999) | | | 11,524 | | | 6 | | (999) | | | 11,524 | | | Asset-backed securities | | (21) | | | 4,991 | | | (305) | | | 4,680 | | | 3 | | (326) | | | 9,671 | | | Total | | $ | (28) | | | $ | 13,253 | | | $ | (30,727) | | | $ | 258,290 | | | 99 | | $ | (30,755) | | | $ | 271,543 | |
Of the 83 available-for-sale securities in an unrealized loss position at September 30, 2024, 52 are comprised of U.S. Government agency obligations, Treasury notes, and mortgage-backed securities. These securities were all issued by U.S. Government-sponsored entities and agencies, which the government has affirmed its commitment to support. Corporate bonds, obligations issued by U.S. states and their political subdivisions and asset-backed securities in an unrealized loss position all experienced a decline in fair value, which is attributable to changes in interest rates and liquidity, not credit quality. The Company also does not intend to sell these securities, nor does it foresee being required to sell them before the anticipated recovery or maturity. The following tables summarizes held-to-maturity securities with unrealized losses at September 30, 2024 and December 31, 2023, aggregated by major security type and length of time in a continuous loss position. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Less than 12 Months | | 12 Months or More | | Total | | | Unrealized Losses | | Estimated
Fair Value | | Unrealized Losses | | Estimated
Fair Value | | Number of Securities | | Unrealized Losses | | Estimated
Fair Value | | | (Dollars in thousands) | | September 30, 2024 | | | | | | | | | | | | | | | | Corporate Bonds | | — | | | — | | | (2,989) | | | 15,611 | | | 9 | | (2,989) | | | 15,611 | | | Asset-backed securities | | — | | | — | | | (995) | | | 13,646 | | | 2 | | (995) | | | 13,646 | | | Total | | $ | — | | | $ | — | | | $ | (3,984) | | | $ | 29,257 | | | 11 | | $ | (3,984) | | | $ | 29,257 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Less than 12 Months | | 12 Months or More | | Total | | | Unrealized Losses | | Estimated
Fair Value | | Unrealized Losses | | Estimated
Fair Value | | Number of Securities | | Unrealized Losses | | Estimated
Fair Value | | | (Dollars in thousands) | | December 31, 2023 | | | | | | | | | | | | | | | | Corporate Bonds | | — | | | — | | | (3,593) | | | 15,007 | | | 9 | | (3,593) | | | 15,007 | | | Asset-backed securities | | — | | | — | | | (1,496) | | | 13,316 | | | 2 | | (1,496) | | | 13,316 | | | Total | | $ | — | | | $ | — | | | $ | (5,089) | | | $ | 28,323 | | | 11 | | $ | (5,089) | | | $ | 28,323 | |
The held-to-maturity securities in an unrealized loss position at September 30, 2024, are corporate bonds and asset-backed securities. Unrealized losses are attributable to changes in interest rates and liquidity, not credit quality. The Company also does not intend to sell these securities, nor does it foresee being required to sell them before the anticipated recovery or maturity.
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