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SECURITIES

3 Months Ended

Mar. 31, 2024

Investments, Debt and Equity Securities [Abstract]

Debt securities available-for-sale ("AFS") at March 31, 2024 and December 31, 2023 were as follows:


	March 31, 2024
	Amortized		Unrealized				Allowance For		Fair
	Cost		Gains		Losses		Credit Losses		Value
U.S. Government sponsored entities	$	19,506	$	—	$	(31)	$	—	$	19,475
State & political subdivisions	104,979		6		(13,743)		—		91,242
Residential & multi-family mortgage	220,199		—		(35,417)		—		184,782
Corporate notes & bonds	48,281		3		(5,317)		—		42,967
Pooled SBA	11,029		—		(930)		—		10,099

Total	$	403,994	$	9	$	(55,438)	$	—	$	348,565


	December 31, 2023
	Amortized		Unrealized				Allowance For		Fair
	Cost		Gains		Losses		Credit Losses		Value
U.S. Government sponsored entities	$	5,024	$	—	$	(36)	$	—	$	4,988
State & political subdivisions	105,102		22		(13,315)		—		91,809
Residential & multi-family mortgage	225,871		1		(34,353)		—		191,519
Corporate notes & bonds	48,459		13		(5,333)		—		43,139
Pooled SBA	11,347		—		(847)		—		10,500

Total	$	395,803	$	36	$	(53,884)	$	—	$	341,955

Debt securities held-to-maturity ("HTM") at March 31, 2024 and December 31, 2023 were as follows:


	March 31, 2024
	Amortized		Unrealized				Allowance For		Fair
	Cost		Gains		Losses		Credit Losses		Value
U.S. Government sponsored entities	$	298,024	$	—	$	(19,373)	$	—	$	278,651
Residential & multi-family mortgage	83,682		—		(10,195)		—		73,487





Total	$	381,706	$	—	$	(29,568)	$	—	$	352,138


	December 31, 2023
	Amortized		Unrealized				Allowance For		Fair
	Cost		Gains		Losses		Credit Losses		Value
U.S. Government sponsored entities	$	302,945	$	—	$	(19,038)	$	—	$	283,907
Residential & multi-family mortgage	86,023		—		(9,360)		—		76,663





Total	$	388,968	$	—	$	(28,398)	$	—	$	360,570

The Corporation elected to transfer 74 AFS securities with an aggregate fair value of $213.7 million to a classification of HTM during the twelve months ended December 31, 2022. In accordance with FASB ASC 320-10-55-24, the transfer from AFS to HTM must be recorded at the fair value of the AFS securities at the time of transfer. The net unrealized holding loss of $5.6 million, net of tax, at the date of transfer was retained in accumulated other comprehensive income (loss), with the associated pre-tax amount retained in the carrying value of the HTM securities. Such amounts will be amortized to comprehensive income over the remaining life of the securities.

Information pertaining to security sales on AFS securities is as follows:


	Proceeds		Gross Gains		Gross Losses


Three months ended March 31, 2024	$	—	$	—	$	—
Three months ended March 31, 2023	9,659		22		—

The tax provision related to these net realized gains was zero for the three months ended March 31, 2024 and $5 thousand for the three months ended March 31, 2023.

The table below illustrates the maturity distribution of debt securities at amortized cost and fair value as of March 31, 2024:


	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
1 year or less	$	18,688	$	18,582	$	87,559	$	85,994
1 year – 5 years	50,847		48,517		172,326		160,096
5 years – 10 years	81,804		70,462		38,139		32,561
After 10 years	21,427		16,123		—		—
	172,766		153,684		298,024		278,651
Residential & multi-family mortgage	220,199		184,782		83,682		73,487
Pooled SBA	11,029		10,099		—		—

Total debt securities	$	403,994	$	348,565	$	381,706	$	352,138

Mortgage securities and pooled SBA securities are not due at a single date; periodic payments are received based on the payment patterns of the underlying collateral.

On March 31, 2024 and December 31, 2023, securities carried at $492.4 million and $489.0 million, respectively, were pledged to secure public deposits and for other purposes as provided by law.

At March 31, 2024 and December 31, 2023, there were no holdings of securities of any one issuer, other than the U.S. Government sponsored entities, in an amount greater than 10% of shareholders’ equity. The Corporation’s residential and multi-family mortgage securities are issued by government sponsored entities.

AFS debt securities with unrealized losses at March 31, 2024 and December 31, 2023, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:

March 31, 2024


	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Government sponsored entities	$	18,028	$	(7)	$	1,447	$	(24)	$	19,475	$	(31)
State & political subdivisions	5,266		(188)		81,595		(13,555)		86,861		(13,743)
Residential & multi-family mortgage	112		(3)		184,580		(35,414)		184,692		(35,417)
Corporate notes and bonds	986		(14)		41,314		(5,303)		42,300		(5,317)
Pooled SBA	84		(1)		9,924		(929)		10,008		(930)

	$	24,476	$	(213)	$	318,860	$	(55,225)	$	343,336	$	(55,438)

December 31, 2023


	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Government sponsored entities	$	2,487	$	(1)	$	1,956	$	(35)	$	4,443	$	(36)
State & political subdivisions	749		—		84,828		(13,315)		85,577		(13,315)
Residential & multi-family mortgage	—		—		191,436		(34,353)		191,436		(34,353)
Corporate notes and bonds	978		(22)		41,488		(5,311)		42,466		(5,333)
Pooled SBA	—		—		10,409		(847)		10,409		(847)

	$	4,214	$	(23)	$	330,117	$	(53,861)	$	334,331	$	(53,884)

HTM debt securities with unrealized losses at March 31, 2024 and December 31, 2023, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:

March 31, 2024


	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Government sponsored entities	$	—	$	—	$	278,651	$	(19,373)	$	278,651	$	(19,373)
Residential & multi-family mortgage	—		—		73,487		(10,195)		73,487		(10,195)





	$	—	$	—	$	352,138	$	(29,568)	$	352,138	$	(29,568)

December 31, 2023


	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Government sponsored entities	$	—	$	—	$	283,907	$	(19,038)	$	283,907	$	(19,038)
Residential & multi-family mortgage	—		—		76,663		(9,360)		76,663		(9,360)





	$	—	$	—	$	360,570	$	(28,398)	$	360,570	$	(28,398)

At March 31, 2024 and December 31, 2023, management performed an assessment for possible impairment related to credit losses of the Corporation’s debt securities, relying on information obtained from various sources, including publicly available financial data, ratings by external agencies, brokers and other sources. Based on the results of the assessment, management believes there is no credit related impairment of these debt securities at March 31, 2024 and December 31, 2023.

For the securities that comprise corporate notes and bonds and the securities that are issued by state and political subdivisions, management monitors publicly available financial information, such as filings with the Securities and Exchange Commission, in order to evaluate the securities for potential credit impairment. For financial institution issuers, management monitors information from quarterly "call" report filings that are used to generate Uniform Bank Performance Reports. All other securities that were in an unrealized loss position at the balance sheet date were reviewed by management, and issuer-specific documents were reviewed as appropriate given the following considerations; the financial condition and near-term prospects of the issuer and whether downgrades by bond rating agencies have occurred, the length of time and extent to which fair value has been less than cost, and whether management does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery.

As of March 31, 2024 and December 31, 2023, management concluded the debt securities described in the previous paragraphs were not impaired for reasons due to credit quality for the following reasons:

•There is no indication of any significant deterioration of the creditworthiness of the institutions that issued the securities.

•All contractual interest payments on the securities have been received as scheduled, and no information has come to management’s attention through the processes previously described which would lead to a conclusion that future contractual payments will not be timely received.

•The unrealized losses were deemed to be temporary changes in value related to market movements in interest yields.

The Corporation does not intend to sell and it is not more likely than not that it will be required to sell the securities in an unrealized loss position before recovery of its amortized cost basis.

Equity securities at March 31, 2024 and December 31, 2023 were as follows:


	March 31, 2024		December 31, 2023
Corporate equity securities	$	5,416	$	5,341
Mutual funds	2,278		2,223
Money market funds	1355		1,103
Corporate notes	532		634

Total	$	9,581	$	9,301