Investment Securities

3 Months Ended

Mar. 31, 2025

(4) Investment Securities

(a) Debt securities available for sale

The amortized cost and fair value of the debt securities available for sale are as follows:

	March 31, 2025
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value

U.S. government sponsored enterprises	$	66,859	$	-	$	917	$	65,942
State and political subdivisions		18		-		-		18
Mortgage backed securities and collateralized mortgage obligations - residential		241,111		254		22,032		219,333
Corporate bonds		25,005		-		226		24,779
Small Business Administration - guaranteed participation securities		14,723		-		1,040		13,683
Other		689		9		-		698
Total Securities Available for Sale	$	348,405	$	263	$	24,215	$	324,453

	December 31, 2024
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value

U.S. government sponsored enterprises	$	86,833	$	4	$	1,220	$	85,617
State and political subdivisions		18		-		-		18
Mortgage backed securities and collateralized mortgage obligations - residential		239,420		114		26,406		213,128
Corporate bonds		45,033		-		452		44,581
Small Business Administration - guaranteed participation securities		15,471		-		1,330		14,141
Other		688		12		-		700
Total Securities Available for Sale	$	387,463	$	130	$	29,408	$	358,185

The following table categorizes the debt securities included in the available for sale portfolio as of March 31, 2025, based on the securities’ final maturity. Actual maturities may differ because of securities prepayments and the right of certain issuers to call or prepay their obligations without penalty. Securities not due at a single maturity date are presented separately:

	Amortized		Fair
(dollars in thousands)	Cost		Value

Due in one year or less	$	50,099	$	49,409
Due after one year through five years		30,472		30,115
Due after five years through ten years		12,000		11,913
Mortgage backed securities and collateralized mortgage obligations - residential		241,111		219,333
Small Business Administration - guaranteed participation securities		14,723		13,683
	$	348,405	$	324,453

Gross unrealized losses on debt securities available for sale and the related fair values aggregated by the length of time that individual securities have been in an unrealized loss position, were as follows:

	March 31, 2025
	Less than				12 months
	12 months				or more				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	Value		Loss		Value		Loss		Value		Loss

U.S. government sponsored enterprises	$	11,913	$	87	$	54,029	$	830	$	65,942	$	917
Mortgage backed securities and collateralized mortgage obligations - residential		5,043		161		191,488		21,871		196,531		22,032
Corporate bonds		-		-		19,779		226		19,779		226
Small Business Administration - guaranteed participation securities		-		-		13,683		1,040		13,683		1,040

Total	$	16,956	$	248	$	278,979	$	23,967	$	295,935	$	24,215

	December 31, 2024
	Less than				12 months
	12 months				or more				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	Value		Loss		Value		Loss		Value		Loss

U.S. government sponsored enterprises	$	11,961		38	$	68,651	$	1,182	$	80,612	$	1,220
Mortgage backed securities and collateralized mortgage obligations - residential		12,346		280		194,636		26,126		206,982		26,406
Corporate bonds		-		-		44,581		452		44,581		452
Small Business Administration - guaranteed participation securities		-		-		14,141		1,330		14,141		1,330

Total	$	24,307		318	$	322,009	$	29,090	$	346,316	$	29,408

There were no allowance for credit losses recorded for debt securities available for sale during the three months ended March 31, 2025 and 2024.

The proceeds from sales and calls and maturities of debt securities available for sale, gross realized gains and gross realized losses from sales and calls during the three months ended March 31, 2025 and 2024 are as follows:

	Three months ended March 31,
(dollars in thousands)	2025		2024

Proceeds from sales	$	-	$	-
Proceeds from calls/paydowns		13,723		8,841
Proceeds from maturities		35,000		35,000
Gross realized gains		-		-
Gross realized losses		-		-

There were no transfers of debt securities available for sale during the three months ended March 31, 2025 and 2024.

(b) Held to maturity securities

The amortized cost and fair value of the held to maturity securities are as follows:

	March 31, 2025
			Gross		Gross
	Amortized		Unrecognized		Unrecognized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value

Mortgage backed securities and collateralized mortgage obligations - residential	$	5,090	$	64	$	73	$	5,081
Total held to maturity	$	5,090	$	64	$	73	$	5,081

	December 31, 2024
			Gross		Gross
	Amortized		Unrecognized		Unrecognized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value

Mortgage backed securities and collateralized mortgage obligations - residential	$	5,365	$	45	$	104	$	5,306
Total held to maturity	$	5,365	$	45	$	104	$	5,306

The following table categorizes the debt securities included in the held to maturity portfolio as of March 31, 2025, based on the securities’ final maturity. Actual maturities may differ because of securities prepayments and the right of certain issuers to call or prepay their obligations without penalty. Securities not due at a single maturity date are presented separately:

(dollars in thousands)	Amortized		Fair
	Cost		Value
Mortgage backed securities and collateralized mortgage obligations - residential	$	5,090	$	5,081
	$	5,090	$	5,081

All held to maturity securities are held at cost on the financial statements.

Gross unrecognized losses on held to maturity securities and the related fair values aggregated by the length of time that individual securities have been in an unrecognized loss position, were as follows:

	March 31, 2025
	Less than				12 months
(dollars in thousands)	12 months				or more				Total
			Gross				Gross				Gross
	Fair		Unrec.		Fair		Unrec.		Fair		Unrec.
	Value		Loss		Value		Loss		Value		Loss
Mortgage backed securities and collateralized mortgage obligations - residential	$	406	$	4	$	1,922	$	69	$	2,328	$	73

Total	$	406	$	4	$	1,922	$	69	$	2,328	$	73

	December 31, 2024
	Less than				12 months
(dollars in thousands)	12 months				or more				Total
			Gross				Gross				Gross
	Fair		Unrec.		Fair		Unrec.		Fair		Unrec.
	Value		Loss		Value		Loss		Value		Loss
Mortgage backed securities and collateralized mortgage obligations - residential	$	592	$	7	$	2,047	$	97	$	2,639	$	104

Total	$	592	$	7	$	2,047	$	97	$	2,639	$	104

There were no sales or transfers of held to maturity securities during the three months ended March 31, 2025 and 2024.

There were no allowance for credit losses recorded for held to maturity securities during the three months ended March 31, 2025 and 2024. There were no securities on non-accrual status and all securities were performing in accordance with contractual terms.

As of March 31, 2025, the Company’s securities portfolio included certain securities, which were in an unrealized loss position, and are discussed below.

U.S. government sponsored enterprises:

In the case of unrealized losses on U.S. government sponsored enterprises, because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company 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, the securities are investment grade rated and there were no material underlying credit downgrades during the first quarter of 2025. As of March 31, 2025 10 out of 10 securities were in an unrealized loss position. All securities are performing.

Mortgage backed securities and collateralized mortgage obligations – residential:

As of March 31, 2025, all mortgage backed securities and collateralized mortgage obligations held by the Company were issued by U.S. government sponsored entities and agencies, primarily Ginnie Mae, Fannie Mae and Freddie Mac, institutions which the government has affirmed its commitment to support. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company 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, the securities are investment grade rated and there were no material underlying credit downgrades during the first quarter of 2025. As of March 31, 2025 109 out of 118 securities were in an unrealized loss position. All securities are performing.

Small Business Administration (SBA) - guaranteed participation securities:

As of March 31, 2025, all of the SBA securities held by the Company were issued and guaranteed by the U.S. Small Business Administration. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company 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, the securities are investment grade rated and there were no material underlying credit downgrades during the first quarter of 2025. As of March 31, 2025 8 out of 8 securities were in an unrealized loss position. All securities are performing.

Corporate Bonds:

As of March 31, 2025, corporate bonds held by the Company are investment grade quality. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company 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, the securities are investment grade rated and there were no material underlying credit downgrades during the first quarter of 2025. As of March 31, 2025 3 out of 4 securities were in an unrealized loss position. All securities are performing.