XML 23 R11.htm IDEA: XBRL DOCUMENT

Available for Sale Securities

9 Months Ended

Mar. 31, 2023

Note 3: Available for Sale Securities

The amortized cost, gross unrealized gains, gross unrealized losses, ACL, and approximate fair value of securities available for sale consisted of the following:


	March 31, 2023
			Gross		Gross		Allowance		Estimated
	Amortized		Unrealized		Unrealized		for		Fair
(dollars in thousands)	Cost		Gains		Losses		Credit Losses		Value
Debt and equity securities:
U.S. government-sponsored enterprises (GSEs)	$	8,476	$	265	$	—	$	—	$	8,741
Obligations of states and political subdivisions		45,740		43		(2,377)		—		43,406
Corporate obligations		36,644		68		(2,416)		—		34,296
Asset backed securities		59,592		850		(95)		—		60,347
Other securities		3,600		46		(60)		—		3,586
Total debt and equity securities		154,052		1,272		(4,948)		—		150,376

Mortgage-backed securities (MBS) and collateralized mortgage obligations (CMOs):
Residential MBS issued by governmental sponsored enterprises (GSEs)		100,054		738		(7,440)		—		93,352
Commercial MBS issued by GSEs		60,485		83		(5,747)		—		54,821
CMOs issued by GSEs		138,512		8		(7,271)		—		131,249
Total MBS and CMOs		299,051		829		(20,458)		—		279,422
Total AFS securities	$	453,103	$	2,101	$	(25,406)	$	—	$	429,798


	June 30, 2022
			Gross		Gross		Allowance		Estimated
	Amortized		Unrealized		Unrealized		for		Fair
(dollars in thousands)	Cost		Gains		Losses		Credit Losses		Value

Debt and equity securities:
Obligations of states and political subdivisions	$	47,383	$	77	$	(2,981)	$	—	$	44,479
Corporate obligations		20,818		32		(963)		—		19,887
Other securities		486		—		(43)		—		443
Total debt and equity securities		68,687		109		(3,987)		—		64,809

Mortgage-backed securities (MBS) and collateralized mortgage obligations (CMOs):
Residential MBS issued by governmental sponsored enterprises (GSEs)		76,345		—		(7,177)		—		69,168
Commercial MBS issued by GSEs		51,435		—		(5,705)		—		45,730
CMOs issued by GSEs		61,293		—		(5,606)		—		55,687
Total MBS and CMOs		189,073		—		(18,488)		—		170,585
Total AFS securities	$	257,760	$	109	$	(22,475)	$	—	$	235,394

The amortized cost and estimated fair value of investment and mortgage-backed securities, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.


	March 31, 2023
	Amortized		Estimated
(dollars in thousands)	Cost		Fair Value
Within one year	$	3,227	$	3,216
After one year but less than five years		29,339		28,156
After five years but less than ten years		64,436		61,923
After ten years		57,050		57,081
Total investment securities		154,052		150,376
MBS and CMOs		299,051		279,422
Total AFS securities	$	453,103	$	429,798

The carrying value of investment and mortgage-backed securities pledged as collateral to secure public deposits amounted to $243.6 million at March 31, 2023, and $198.3 million at June 30, 2022. The securities pledged consist of marketable securities, including $99.1 million and $126.3 million of Mortgage-backed Securities, $111.5 million and $27.3 million of Collateralized Mortgage Obligations, $24.4 million and $42.3 million of State and Political Subdivisions Obligations, and $8.6 million and $2.4 million of other securities at March 31, 2023 and June 30, 2022, respectively.

The following tables show the Company’s investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position for which an ACL has not been recorded at March 31, 2023 and June 30, 2022:


	March 31, 2023
	Less than 12 months				12 months or more				Total
			Unrealized				Unrealized				Unrealized
(dollars in thousands)	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Obligations of state and political subdivisions	$	9,413	$	98	$	26,218	$	2,279	$	35,631	$	2,377
Corporate obligations		18,451		750		13,760		1,666		32,211		2,416
Asset backed securities		7,013		95		—		—		7,013		95
Other securities		1,962		19		354		41		2,316		60
MBS and CMOs		109,361		1,528		135,113		18,930		244,474		20,458
Total AFS securities	$	146,200	$	2,490	$	175,445	$	22,916	$	321,645	$	25,406


	June 30, 2022
	Less than 12 months				12 months or more				Total
			Unrealized				Unrealized				Unrealized
(dollars in thousands)	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Obligations of state and political subdivisions	$	31,985	$	2,639	$	1,600	$	342	$	33,585	$	2,981
Corporate obligations		10,944		420		6,911		543		17,855		963
Other securities		418		43		—		—		418		43
MBS and CMOs		137,590		12,482		29,834		6,006		167,424		18,488
Total AFS securities	$	180,937	$	15,584	$	38,345	$	6,891	$	219,282	$	22,475

Obligations of state and political subdivisions. The unrealized losses on the Company’s investments in obligations of state and political subdivisions include 22 individual securities which have been in an unrealized loss position for less than 12 months and 51 individual securities which have been in an unrealized loss position for more than 12 months. The securities are performing and are of high credit quality. The unrealized losses were caused by increases in market interest rates since purchase or acquisition. Because the Company does not intend to sell these securities and it is likely that the Company will not be required to sell these securities prior to recovery of their amortized cost basis, which may be maturity, the Company has not recorded an ACL on these securities.

Corporate Obligations. The unrealized losses on the Company’s investments in corporate obligations include 13 individual securities which have been in an unrealized loss position for less than 12 months and ten individual securities which have been in an unrealized loss position for more than 12 months. The securities are performing and are of high credit quality. The unrealized losses were caused by increases in market interest rates since purchase or acquisition.

Because the Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell these securities prior to recovery of their amortized cost basis, which may be maturity, the Company has not recorded an ACL on these securities.

At March 31, 2023, corporate obligations included two pooled trust preferred securities with an estimated fair value of $770,000 and unrealized losses of $209,000 in a continuous unrealized loss position for twelve months or more. These unrealized losses were primarily due to the long-term nature of the pooled trust preferred securities, a reduced demand for these securities, and concerns regarding the issuers of the underlying trust preferred securities.

A cash flow analysis performed as of March 31, 2023, for these two securities indicated it is probable the Company will receive all contracted principal and related interest projected. The cash flow analysis used in making this determination was based on anticipated default, recovery, and prepayment rates, and the resulting cash flows were discounted based on the yield spread anticipated at the time the securities were purchased. Because the Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell these securities prior to recovery of their amortized cost basis, which may be maturity, the Company has not recorded an ACL on these securities.

Other securities. The unrealized losses on the Company’s investments in other securities includes ten individual securities which has been in an unrealized loss position for less than 12 months and two individual securities which have been in an unrealized loss position for more than 12 months. The securities are performing and are of high credit quality. The unrealized loss was caused by increases in market interest rates since purchase or acquisition. Because the Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell these securities prior to recovery of their amortized cost basis, which may be maturity, the Company has not recorded an ACL on these securities.

MBS and CMOs. As of March 31, 2023, the unrealized losses on the Company’s investments in MBS and CMOs include 33 individual securities which have been in an unrealized loss position for less than 12 months, and 113 individual securities which have been in an unrealized loss position for 12 months or more. The securities are performing and are of high credit quality. The unrealized losses were caused by increases in market interest rates since purchase or acquisition. Because the Company does not intend to sell these securities and it is likely that the Company will not be required to sell these securities prior to recovery of their amortized cost basis, which may be maturity, the Company has not recorded an ACL on these securities.

The Company does not believe that any individual unrealized loss as of March 31, 2023, is the result of a credit loss. However, the Company could be required to recognize an ACL in future periods with respect to its available for sale investment securities portfolio.

Credit losses recognized on investments. There were no credit losses recognized in income and other losses or recorded in other comprehensive income (loss) for the three- and nine- month periods ended March 31, 2023 and 2022.