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Securities
 9 Months Ended
Sep. 30, 2023
Investments, Debt and Equity Securities [Abstract]  
Securities

Note 2 – SECURITIES

Securities consist of the following on September 30, 2023 and December 31, 2022:

 

(Dollars in thousands)

 

Amortized
cost

 

 

Gross
unrealized
gains

 

 

Gross
unrealized
losses

 

 

Fair value

 

September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

23,133

 

 

$

—

 

 

$

(675

)

 

$

22,458

 

U.S. Government agencies

 

 

13,999

 

 

 

—

 

 

 

(1,151

)

 

 

12,848

 

Mortgage-backed securities of government agencies

 

 

74,457

 

 

 

2

 

 

 

(10,008

)

 

 

64,451

 

Asset-backed securities of government agencies

 

 

569

 

 

 

—

 

 

 

(17

)

 

 

552

 

State and political subdivisions

 

 

20,372

 

 

 

—

 

 

 

(1,573

)

 

 

18,799

 

Corporate bonds

 

 

29,158

 

 

 

—

 

 

 

(2,936

)

 

 

26,222

 

Total available-for-sale

 

 

161,688

 

 

 

2

 

 

 

(16,360

)

 

 

145,330

 

Held-to-maturity

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

10,292

 

 

$

—

 

 

$

(1,083

)

 

$

9,209

 

Mortgage-backed securities of government agencies

 

 

217,656

 

 

 

—

 

 

 

(41,334

)

 

 

176,322

 

State and political subdivisions

 

 

2,557

 

 

 

—

 

 

 

(393

)

 

 

2,164

 

Total held-to-maturity

 

 

230,505

 

 

 

—

 

 

 

(42,810

)

 

 

187,695

 

Equity securities

 

 

185

 

 

 

61

 

 

 

—

 

 

 

246

 

Restricted stock

 

 

1,561

 

 

 

—

 

 

 

—

 

 

 

1,561

 

Total securities

 

$

393,939

 

 

$

63

 

 

$

(59,170

)

 

$

334,832

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

23,194

 

 

$

—

 

 

$

(969

)

 

$

22,225

 

U.S. Government agencies

 

 

13,999

 

 

 

—

 

 

 

(1,369

)

 

 

12,630

 

Mortgage-backed securities of government agencies

 

 

77,677

 

 

 

72

 

 

 

(8,859

)

 

 

68,890

 

Asset-backed securities of government agencies

 

 

633

 

 

 

—

 

 

 

(15

)

 

 

618

 

State and political subdivisions

 

 

20,462

 

 

 

—

 

 

 

(985

)

 

 

19,477

 

Corporate bonds

 

 

28,740

 

 

 

—

 

 

 

(2,511

)

 

 

26,229

 

Total available-for-sale

 

 

164,705

 

 

 

72

 

 

 

(14,708

)

 

 

150,069

 

Held-to-maturity

 

 

 

 

 

 

 

 

 

 

 

 

U.S Treasury securities

 

$

12,753

 

 

$

—

 

 

$

(1,136

)

 

$

11,617

 

Mortgage-backed securities of government agencies

 

 

232,068

 

 

 

—

 

 

 

(34,051

)

 

 

198,017

 

State and political subdivisions

 

 

2,580

 

 

 

1

 

 

 

(261

)

 

 

2,320

 

Total held-to-maturity

 

 

247,401

 

 

 

1

 

 

 

(35,448

)

 

 

211,954

 

Equity securities

 

 

185

 

 

 

59

 

 

 

—

 

 

 

244

 

Restricted stock

 

 

3,430

 

 

 

—

 

 

 

—

 

 

 

3,430

 

Total securities

 

$

415,721

 

 

$

132

 

 

$

(50,156

)

 

$

365,697

 

 

Note 2 – SECURITIES (continued)

The amortized cost and fair value of debt securities on September 30, 2023, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

 

 

(Dollars in thousands)

 

Amortized cost

 

 

Fair value

 

Available-for-sale

 

 

 

 

 

 

Due in one year or less

 

$

15,006

 

 

$

14,780

 

Due after one through five years

 

 

55,512

 

 

 

51,631

 

Due after five through ten years

 

 

24,135

 

 

 

21,304

 

Due after ten years

 

 

67,035

 

 

 

57,615

 

Total debt securities available-for-sale

 

$

161,688

 

 

$

145,330

 

Held-to-maturity

 

 

 

 

 

 

Due in one year or less

 

$

—

 

 

$

—

 

Due after one through five years

 

 

7,434

 

 

 

6,876

 

Due after five through ten years

 

 

5,138

 

 

 

4,295

 

Due after ten years

 

 

217,933

 

 

 

176,524

 

Total debt securities held-to-maturity

 

$

230,505

 

 

$

187,695

 

 

Securities with a fair value of approximately $129.1 million and $110.1 million were pledged on September 30, 2023 and December 31, 2022, respectively, to secure public deposits, as well as other deposits and borrowings as required or permitted by law.

Restricted stock primarily consists of investments in Federal Home Loan Bank of Cincinnati (FHLB) and Federal Reserve Bank stock. The Bank’s investment in FHLB stock amounted to approximately $1.0 million and $2.9 million on September 30, 2023 and December 31, 2022. The FHLB has redeemed approximately $1.9 million in stock at $100 par value per share during the nine month period ended September 30, 2023. Federal Reserve Bank stock was $471 thousand on September 30, 2023 and December 31, 2022.

There were no proceeds from sales of securities for the three and nine-month periods ended September 30, 2023, and 2022. All gains and losses recognized on equity securities during the three and nine-month periods were unrealized.

Note 2 – SECURITIES (continued)

The following table presents gross unrealized losses and fair value of securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, on September 30, 2023 and December 31, 2022:

 

 

 

Securities in a continuous unrealized loss position

 

 

 

Less than 12 months

 

 

12 months or more

 

 

Total

 

(Dollars in thousands)

 

Gross
unrealized
losses

 

 

Fair
value

 

 

Gross
unrealized
losses

 

 

Fair
value

 

 

Gross
unrealized
losses

 

 

Fair
value

 

September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

—

 

 

$

—

 

 

$

(675

)

 

$

22,458

 

 

$

(675

)

 

$

22,458

 

U.S. Government agencies

 

 

—

 

 

 

—

 

 

 

(1,151

)

 

 

12,848

 

 

 

(1,151

)

 

 

12,848

 

Mortgage-backed securities of government
   agencies

 

 

(235

)

 

 

12,748

 

 

 

(9,773

)

 

 

51,513

 

 

 

(10,008

)

 

 

64,261

 

Asset-backed securities of government
   agencies

 

 

—

 

 

 

—

 

 

 

(17

)

 

 

552

 

 

 

(17

)

 

 

552

 

State and political subdivisions

 

 

(79

)

 

 

1,952

 

 

 

(1,494

)

 

 

16,622

 

 

 

(1,573

)

 

 

18,574

 

Corporate bonds

 

 

(1

)

 

 

492

 

 

 

(2,935

)

 

 

25,730

 

 

 

(2,936

)

 

 

26,222

 

Held-to-maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

 

—

 

 

 

—

 

 

 

(1,083

)

 

 

9,209

 

 

 

(1,083

)

 

 

9,209

 

Mortgage-backed securities of government
   agencies

 

 

(356

)

 

 

8,080

 

 

 

(40,978

)

 

 

168,233

 

 

 

(41,334

)

 

 

176,313

 

State and political subdivisions

 

 

(21

)

 

 

393

 

 

 

(372

)

 

 

1,771

 

 

 

(393

)

 

 

2,164

 

Total securities with unrealized losses

 

$

(692

)

 

$

23,665

 

 

$

(58,478

)

 

$

308,936

 

 

$

(59,170

)

 

$

332,601

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

(798

)

 

$

17,405

 

 

$

(171

)

 

$

4,820

 

 

$

(969

)

 

$

22,225

 

U.S. Government agencies

 

 

—

 

 

 

—

 

 

 

(1,369

)

 

 

12,630

 

 

 

(1,369

)

 

 

12,630

 

Mortgage-backed securities of government
   agencies

 

 

(1,046

)

 

 

16,188

 

 

 

(7,813

)

 

 

44,519

 

 

 

(8,859

)

 

 

60,707

 

Asset-backed securities of government
   agencies

 

 

—

 

 

 

—

 

 

 

(15

)

 

 

618

 

 

 

(15

)

 

 

618

 

State and political subdivisions

 

 

(189

)

 

 

9,079

 

 

 

(796

)

 

 

9,848

 

 

 

(985

)

 

 

18,927

 

Corporate bonds

 

 

(1,165

)

 

 

13,502

 

 

 

(1,346

)

 

 

12,727

 

 

 

(2,511

)

 

 

26,229

 

Held-to-maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

 

—

 

 

 

—

 

 

 

(1,136

)

 

 

11,617

 

 

 

(1,136

)

 

 

11,617

 

Mortgage-backed securities of government
   agencies

 

 

(9,733

)

 

 

79,325

 

 

 

(24,318

)

 

 

118,692

 

 

 

(34,051

)

 

 

198,017

 

State and political subdivisions

 

 

—

 

 

 

—

 

 

 

(261

)

 

 

1,903

 

 

 

(261

)

 

 

1,903

 

Total securities with unrealized losses

 

$

(12,931

)

 

$

135,499

 

 

$

(37,225

)

 

$

217,374

 

 

$

(50,156

)

 

$

352,873

 

 

 

Note 2 – SECURITIES (continued)

 

There were 203 securities in an unrealized loss position on September 30, 2023, 183 of which were in a continuous loss position for twelve (12) months or more. Each quarter the Company conducts a comprehensive security-level impairment assessment on the securities portfolio. Management believes the Company will fully recover the cost of these securities. Unrealized losses on the Company’s fixed-rate debt securities are a result of interest rate increases. U.S. Treasury securities and investments in securities of U.S. government sponsored agency bonds comprise $100 million of total AFS securities. The remaining $45 million of non-agency debt securities is made up of Corporate Bonds and debt securities to State and Political Subdivisions. For non-agency debt securities, the Company verified the current credit ratings remain above investment grade. Non-rated debt securities total $5 million. Annually, management reviews the credit profile of each non-rated issue and assesses whether any impairment to the contractually obligated cash flow is likely to occur. Based on these reviews, management has concluded the underlying creditworthiness for each security remains sufficient to maintain required payment obligations and, therefore, no allowance for credit losses has been recorded. Management believes the value will recover as the securities approach maturity or market interest rates change.

The Bank monitors the credit quality of held-to-maturity debt securities primarily through utilizing their credit rating. The Bank monitors the credit rating on a quarterly basis. There are no nonperforming held-to-maturity securities. As of September 30, 2023, no ACL was required for any held-to-maturity security. The majority of the securities are explicitly or implicitly guaranteed by the United States government, and any estimate of expected credit losses would be insignificant to the Bank. The following table summarizes the amortized cost of held-to maturity debt securities at September 30, 2023, aggregated by credit quality indicator:

 

(Dollars in thousands)

 

U.S. Treasury securities

 

 

Mortgage- backed securities of government agencies

 

 

State and political subdivisions

 

September 30, 2023

 

 

 

 

 

 

 

 

 

Credit rating:

 

 

 

 

 

 

 

 

 

AAA / AA / A

 

$

10,292

 

 

$

217,656

 

 

$

2,557

 

BBB / BB / B

 

 

—

 

 

 

—

 

 

 

—

 

Lower than B

 

 

—

 

 

 

—

 

 

 

—

 

Non-rated

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

10,292

 

 

$

217,656

 

 

$

2,557