Securities

6 Months Ended

Jun. 30, 2024

Debt Securities, Available-for-Sale [Abstract]

Securities

NOTE 4. Securities

Amortized costs and fair values of securities available for sale at June 30, 2024 and December 31, 2023 were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
	June 30, 2024
	(in thousands)
Obligations of U.S. government corporations and agencies	$	8,959	$	—	$	(696	)	$	8,263
Mortgage-backed securities		133,819		—		(22,070	)		111,749
Obligations of states and political subdivisions		5,722		—		(347	)		5,375
Subordinated debt		4,750		—		(648	)		4,102
	$	153,250	$	—	$	(23,761	)	$	129,489

	December 31, 2023
	(in thousands)
Obligations of U.S. government corporations and agencies	$	9,258	$	—	$	(667	)	$	8,591
Mortgage-backed securities		140,052		—		(21,230	)		118,822
Obligations of states and political subdivisions		6,191		1		(261	)		5,931
Subordinated debt		4,750		—		(651	)		4,099
	$	160,251	$	1	$	(22,809	)	$	137,443

The amortized cost and estimated fair value of securities at June 30, 2024, by the earlier of contractual maturity or expected maturity, are shown below. The Company has elected to exclude accrued interest receivable, totaling $379 thousand at June 30, 2024, from the amortized cost basis of securities. The deferred tax asset on the securities portfolio at June 30, 2024 and December 31, 2023 was $5.0 million and $4.8 million, respectively, and is included in Other Assets in the Consolidated Balance Sheets. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Fair Value
	(in thousands)
Due in one year or less	$	800	$	799
Due after one year through five years		9,946		9,384
Due after five years through ten years		14,644		12,965
Due after ten years		127,860		106,341
	$	153,250	$	129,489

There have been no sales of available for sale securities during the six months ended June 30, 2024 or 2023.

The fair value and gross unrealized losses for securities available for sale, totaled by the length of time that individual securities have been in a continuous gross unrealized loss position, at June 30, 2024 and December 31, 2023 were as follows:

	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	June 30, 2024
	(in thousands)
Obligations of U.S. government corporations and agencies	$	—	$	—	$	8,263	$	696	$	8,263	$	696
Mortgage-backed securities		—		—		111,749		22,070		111,749		22,070
Obligations of states and political subdivisions		489		11		4,386		336		4,875		347
Subordinated debt		—		—		3,602		648		3,602		648
	$	489	$	11	$	128,000	$	23,750	$	128,489	$	23,761

	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	December 31, 2023
	(in thousands)
Obligations of U.S. government corporations and agencies	$	—	$	—	$	8,591	$	667	$	8,591	$	667
Mortgage-backed securities		—		—		118,822		21,230		118,822		21,230
Obligations of states and political subdivisions		—		—		5,430		261		5,430		261
Subordinated debt		221		29		3,378		622		3,599		651
	$	221	$	29	$	136,221	$	22,780	$	136,442	$	22,809

The reference point for determining when securities are in an unrealized loss position is month end. As such, it is possible that a security's market value exceeded its amortized cost on other days during the past twelve-month period.

There were 102 debt securities with a fair value below the amortized cost basis, totaling $128.5 million of aggregate fair value as of June 30, 2024. The Company concluded that a credit loss does not exist in its securities portfolio at June 30, 2024 based on the fact that (1) changes in fair value were caused by non-credit-related factors, primarily fluctuations in interest rates, (2) securities with unrealized losses had generally high credit quality, (3) the Company intends to hold these investments in debt securities to maturity and it is more-likely-than-not that the Company will not be required to sell these investments before a recovery of its investment, and (4) issuers have continued to make timely payments of principal and interest. Additionally, the Company’s mortgage-backed securities and obligations of U.S. government corporations and agencies are entirely issued by either U.S. government agencies or U.S. government-sponsored enterprises. Collectively, these entities provide a guarantee, which is either explicitly or implicitly supported by the full faith and credit of the U.S. government, that investors in such mortgage-backed securities will receive timely principal and interest payments.

Securities having a carrying value of $6.9 million at June 30, 2024 were pledged as security for trust accounts.

The composition of restricted investments at June 30, 2024 and December 31, 2023 was as follows:

	June 30, 2024		December 31, 2023
	(in thousands)
Federal Reserve Bank Stock	$	344	$	344
Federal Home Loan Bank Stock		8,296		9,084
Community Bankers’ Bank Stock		140		140
	$	8,780	$	9,568