INVESTMENT SECURITIES

12 Months Ended

Dec. 31, 2022

Investments, Debt and Equity Securities [Abstract]

The amortized cost and estimated fair value of securities available-for-sale and held-to-maturity, along with gross unrealized gains and losses are summarized as follows:


(dollars in thousands)
December 31, 2022	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities Available for Sale:
U.S. treasury securities	$	1,644	$	—	$	(22)	$	1,622
U.S. agency	5,035		—		(450)		4,585
Asset backed securities	31,468		—		(1,480)		29,988
State, county and municipal securities	126,119		—		(21,363)		104,756
Corporate debt securities	54,741		164		(5,320)		49,585
Mortgage-backed securities	271,199		9		(29,191)		242,017
Total	$	490,206	$	173	$	(57,826)	$	432,553

December 31, 2022	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities Held to Maturity:
U.S. treasury securities	$	91,615	$	—	$	(4,149)	$	87,466
U.S. agency	16,409		—		(1,838)		14,571
State, county & municipal securities	136,138		32		(19,518)		116,652
Mortgage-backed securities	221,696		—		(29,121)		192,575
Total	$	465,858	$	32	$	(54,626)	$	411,264


December 31, 2021	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities Available for Sale:
U.S. treasury securities	$	88,638	$	—	$	(1,087)	$	87,551
U.S. agency	17,916		5		(140)		17,781
State, county and municipal securities	252,632		877		(3,356)		250,153
Corporate debt securities	48,153		520		(265)		48,408
Mortgage-backed securities	539,172		2,160		(7,061)		534,271
Total	$	946,511	$	3,562	$	(11,909)	$	938,164

The Company transferred certain agency-issued securities from the available-for-sale to held-to-maturity portfolio on January 1, 2022 and September 1, 2022, having a combined book value of approximately $511.0 million and a combined market value of approximately $477.0 million. As of the date of each transfer, the related pre-tax net unrecognized losses of approximately $34.0 million included in other comprehensive loss and remained in other comprehensive loss, to be amortized out of other comprehensive loss over the remaining term of the securities using the effective interest method. This transfer was completed after careful consideration of the Company’s intent and ability to hold these securities to maturity. Factors used in assessing the ability to hold these securities to maturity were future liquidity needs and sources of funding.

Information pertaining to available-for-sale securities with gross unrealized losses at December 31, 2022 and December 31, 2021 aggregated by investment category and length of time that securities have been in a continuous unrealized loss position are summarized as follows:


	Less Than 12 Months				12 Months or More				Total
(dollars in thousands)	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
December 31, 2022
U.S. treasury securities	$	1,377	$	(17)	$	245	$	(5)	$	1,622	$	(22)
U.S. agency	3,221		(257)		1,364		(193)		4,585		(450)
Asset backed securities	10,780		(319)		19,208		(1,161)		29,988		(1,480)
State, county and municipal securities	29,284		(3,629)		75,472		(17,734)		104,756		(21,363)
Corporate debt securities	17,258		(1,463)		30,651		(3,857)		47,909		(5,320)
Mortgage-backed securities	122,031		(7,890)		119,409		(21,301)		241,440		(29,191)
Total debt securities	$	183,951	$	(13,575)	$	246,349	$	(44,251)	$	430,300	$	(57,826)

December 31, 2021
U.S. treasury securities	$	87,302	$	(1,087)	$	—	$	—	$	87,302	$	(1,087)
U.S. agency	10,969		(140)		—		—		10,969		(140)
State, county and municipal securities	180,551		(3,131)		5,970		(225)		186,521		$	(3,356)
Corporate debt securities	31,977		(265)		—		—		31,977		(265)
Mortgage-backed securities	377,413		(6,421)		21,129		(640)		398,542		(7,061)
Total debt securities	$	688,212	$	(11,044)	$	27,099	$	(865)	$	715,311	$	(11,909)

Information pertaining to held-to-maturity securities with gross unrealized losses at December 31, 2022 aggregated by investment category and length of time that individual securities have been in a continuous loss position is summarized as follows:


	Less Than 12 Months				12 Months or Greater				Total
(dollars in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
December 31, 2022
U.S. Treasury	$	—	$	—	$	87,466	$	(4,149)	$	87,466	$	(4,149)
U.S. agency	—		—		14,571		(1,838)		14,571		(1,838)
State, county & municipal securities	9,858		(1,392)		105,734		(18,126)		115,592		(19,518)
Mortgage-backed securities	13,580		(729)		178,995		(28,392)		192,575		(29,121)
	$	23,438	$	(2,121)	$	386,766	$	(52,505)	$	410,204	$	(54,626)

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

At December 31, 2022, there were 286 available-for-sale securities and 160 held-to-maturity securities that have unrealized losses from the Company’s amortized cost basis. These securities are guaranteed by either the U.S. Government, other governments or U.S. corporations. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred and the results of reviews of the issuer’s financial condition. The unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. As management has the ability to hold debt securities until maturity, or for the foreseeable future if classified as available-for-sale, no declines are deemed to be other than temporary.

The amortized cost and fair value of investment securities as of December 31, 2022, by contractual maturity, are shown hereafter. Expected maturities may differ from contractual maturities for certain investments because issuers may have the right

to call or prepay obligations with or without call or prepayment penalties. This is often the case with mortgage-backed securities, which are disclosed separately in the table below.


	Available for Sale				Held to Maturity
(dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	1,319	$	1,304	$	—	$	—
Due after one year through five years	14,126		12,871		79,306		75,759
Due after five years through ten years	89,731		76,895		78,975		69,275
Due after ten years	113,831		99,466		85,881		73,655
	$	219,007	$	190,536	$	244,162	$	218,689

Mortgage-backed securities	271,199		242,017		221,696		192,575
	$	490,206	$	432,553	$	465,858	$	411,264

Proceeds from sales of investments available for sale were $60.9 million in 2022 and $96.8 million in 2021. Gross realized gains totaled $24,000 in 2022 and $391,000 in 2021. Gross realized losses totaled $106,000 in 2022 and $478,000 in 2021.

Investment securities having a carrying value totaling $541.8 million and $247.4 million as of December 31, 2022 and 2021, respectively, were pledged to secure public deposits and for other purposes.