| INVESTMENT SECURITIES |
3. INVESTMENT SECURITIES The amortized cost and approximate fair value of investment securities consisted of the following at the dates indicated (in thousands): | | | | | | | | | | | | | | | | | | Gross | | Gross | | Estimated | | | Amortized | | Unrealized | | Unrealized | | Fair | | | Cost | | Gains | | Losses | | Value | March 31, 2025 | | | | | | | | | | | | | Available for sale: | | | | | | | | | | | | | Municipal securities | | $ | 37,280 | | $ | 1 | | $ | (6,262) | | $ | 31,019 | Agency securities | | | 32,944 | | | — | | | (2,741) | | | 30,203 | Real estate mortgage investment conduits (1) | | | 28,597 | | | — | | | (5,107) | | | 23,490 | Residential mortgage-backed securities (1) | | | 10,802 | | | 13 | | | (589) | | | 10,226 | Other mortgage-backed securities (2) | | | 27,317 | | | 4 | | | (2,823) | | | 24,498 | Total available for sale | | $ | 136,940 | | $ | 18 | | $ | (17,522) | | $ | 119,436 | | | | | | | | | | | | | | Held to maturity: | | | | | | | | | | | | | Municipal securities | | $ | 10,296 | | $ | — | | $ | (2,667) | | $ | 7,629 | Agency securities | | | 42,279 | | | — | | | (2,723) | | | 39,556 | Real estate mortgage investment conduits (1) | | | 28,499 | | | — | | | (4,231) | | | 24,268 | Residential mortgage-backed securities (1) | | | 101,933 | | | — | | | (15,448) | | | 86,485 | Other mortgage-backed securities (3) | | | 20,072 | | | — | | | (2,618) | | | 17,454 | Total held to maturity | | $ | 203,079 | | $ | — | | $ | (27,687) | | $ | 175,392 |
| | | | | | | | | | | | | | | | | | Gross | | Gross | | | | | | Amortized | | Unrealized | | Unrealized | | Estimated | | | Cost | | Gains | | Losses | | Fair Value | March 31, 2024 | | | | | | | | | | | | | Available for sale: | | | | | | | | | | | | | Municipal securities | | $ | 41,657 | | $ | 20 | | $ | (6,541) | | $ | 35,136 | Agency securities | | | 47,818 | | | — | | | (4,241) | | | 43,577 | Real estate mortgage investment conduits (1) | | | 31,424 | | | — | | | (5,759) | | | 25,665 | Residential mortgage-backed securities (1) | | | 13,519 | | | 3 | | | (971) | | | 12,551 | Other mortgage-backed securities (2) | | | 29,998 | | | 3 | | | (3,734) | | | 26,267 | Total available for sale | | $ | 164,416 | | $ | 26 | | $ | (21,246) | | $ | 143,196 | | | | | | | | | | | | | | Held to maturity: | | | | | | | | | | | | | Municipal securities | | $ | 10,321 | | $ | — | | $ | (2,789) | | $ | 7,532 | Agency securities | | | 54,123 | | | — | | | (4,522) | | | 49,601 | Real estate mortgage investment conduits (1) | | | 31,752 | | | — | | | (5,171) | | | 26,581 | Residential mortgage-backed securities (1) | | | 112,834 | | | — | | | (18,196) | | | 94,638 | Other mortgage-backed securities (3) | | | 20,480 | | | — | | | (3,313) | | | 17,167 | Total held to maturity | | $ | 229,510 | | $ | — | | $ | (33,991) | | $ | 195,519 |
(1) Comprised of FHLMC, Federal National Mortgage Association (“FNMA”) and Ginnie Mae (“GNMA”) issued securities. (2) Comprised of U.S. Small Business Administration (“SBA”) issued securities and commercial real estate (“CRE”) secured securities issued by FNMA and FHLMC. (3) Comprised of FHLMC and FNMA issued securities. The contractual maturities of investment securities as of March 31, 2025 are as follows (in thousands): | | | | | | | | | | | | | | | Available for Sale | | Held to Maturity | | | | | | Estimated | | | | | Estimated | | | Amortized | | Fair | | Amortized | | Fair | | | Cost | | Value | | Cost | | Value | Due in one year or less | | $ | 248 | | $ | 246 | | $ | 13,791 | | $ | 13,583 | Due after one year through five years | | | 45,091 | | | 41,599 | | | 25,532 | | | 23,877 | Due after five years through ten years | | | 32,658 | | | 28,312 | | | 24,033 | | | 20,703 | Due after ten years | | | 58,943 | | | 49,279 | | | 139,723 | | | 117,229 | Total | | $ | 136,940 | | $ | 119,436 | | $ | 203,079 | | $ | 175,392 |
Expected maturities of investment securities may differ from contractual maturities because borrowers may have the right to prepay obligations with or without prepayment penalties. The fair value of temporarily impaired investment securities, the amount of unrealized losses and the length of time these unrealized losses existed are as follows at the dates indicated (in thousands): | | | | | | | | | | | | | | | | | | | | | Less than 12 months | | 12 months or longer | | Total | | | Estimated | | | | | Estimated | | | | | Estimated | | | | | | Fair | | Unrealized | | Fair | | Unrealized | | Fair | | Unrealized | March 31, 2025 | | Value | | Losses | | Value | | Losses | | Value | | Losses | | | | | | | | | | | | | | | | | | | | Available for sale: | | | | | | | | | | | | | | | | | | | Municipal securities | | $ | — | | $ | — | | $ | 29,849 | | $ | (6,262) | | $ | 29,849 | | $ | (6,262) | Agency securities | | | — | | | — | | | 30,203 | | | (2,741) | | | 30,203 | | | (2,741) | Real estate mortgage investment conduits (1) | | | — | | | — | | | 23,490 | | | (5,107) | | | 23,490 | | | (5,107) | Residential mortgage-backed securities (1) | | | — | | | — | | | 9,540 | | | (589) | | | 9,540 | | | (589) | Other mortgage-backed securities (2) | | | 418 | | | (3) | | | 23,816 | | | (2,820) | | | 24,234 | | | (2,823) | Total available for sale | | $ | 418 | | $ | (3) | | $ | 116,898 | | $ | (17,519) | | $ | 117,316 | | $ | (17,522) | | | | | | | | | | | | | | | | | | | | Held to maturity: | | | | | | | | | | | | | | | | | | | Municipal securities | | $ | — | | $ | — | | $ | 7,629 | | $ | (2,667) | | $ | 7,629 | | $ | (2,667) | Agency securities | | | — | | | — | | | 39,556 | | | (2,723) | | | 39,556 | | | (2,723) | Real estate mortgage investment conduits (1) | | | — | | | — | | | 24,268 | | | (4,231) | | | 24,268 | | | (4,231) | Residential mortgage-backed securities (1) | | | — | | | — | | | 86,485 | | | (15,448) | | | 86,485 | | | (15,448) | Other mortgage-backed securities (3) | | | — | | | — | | | 17,454 | | | (2,618) | | | 17,454 | | | (2,618) | Total held to maturity | | $ | — | | $ | — | | $ | 175,392 | | $ | (27,687) | | $ | 175,392 | | $ | (27,687) | | | | | | | | | | | | | | | | | | | | March 31, 2024 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Available for sale: | | | | | | | | | | | | | | | | | | | Municipal securities | | $ | — | | $ | — | | $ | 32,748 | | $ | (6,541) | | $ | 32,748 | | $ | (6,541) | Agency securities | | | — | | | — | | | 43,577 | | | (4,241) | | | 43,577 | | | (4,241) | Real estate mortgage investment conduits (1) | | | — | | | — | | | 25,665 | | | (5,759) | | | 25,665 | | | (5,759) | Residential mortgage-backed securities (1) | | | — | | | — | | | 12,073 | | | (971) | | | 12,073 | | | (971) | Other mortgage-backed securities (2) | | | 534 | | | (1) | | | 25,403 | | | (3,733) | | | 25,937 | | | (3,734) | Total available for sale | | $ | 534 | | $ | (1) | | $ | 139,466 | | $ | (21,245) | | $ | 140,000 | | $ | (21,246) | | | | | | | | | | | | | | | | | | | | Held to maturity: | | | | | | | | | | | | | | | | | | | Municipal securities | | $ | — | | $ | — | | $ | 7,532 | | $ | (2,789) | | $ | 7,532 | | $ | (2,789) | Agency securities | | | — | | | — | | | 49,601 | | | (4,522) | | | 49,601 | | | (4,522) | Real estate mortgage investment conduits (1) | | | — | | | — | | | 26,581 | | | (5,171) | | | 26,581 | | | (5,171) | Residential mortgage-backed securities (1) | | | — | | | — | | | 94,638 | | | (18,196) | | | 94,638 | | | (18,196) | Other mortgage-backed securities (3) | | | — | | | — | | | 17,167 | | | (3,313) | | | 17,167 | | | (3,313) | Total held to maturity | | $ | — | | $ | — | | $ | 195,519 | | $ | (33,991) | | $ | 195,519 | | $ | (33,991) |
(1) Comprised of FHLMC, FNMA and GNMA issued securities. (2) Comprised of SBA and CRE secured securities issued by FHLMC and FNMA. (3) Comprised of CRE secured securities issued by FHLMC and FNMA. The Company does not believe that the unrealized losses at March 31, 2025 and 2024, were related to credit quality. The Company expects the fair value of these securities to recover as the securities approach their maturity dates or sooner if market yields for such securities decline. The declines in fair market values of these securities were mainly attributable to changes in market interest rates, credit spreads, market volatility and liquidity conditions. As such, the Company determined that no ACL was required. Based on management’s evaluation and intent, the unrealized losses related to the investment securities in the above tables are considered temporary. Investment securities available for sale with an amortized cost of $2.1 million and $2.6 million and a fair value of $2.0 million and $2.4 million at March 31, 2025 and 2024, respectively, were pledged as collateral for government public funds held by the Bank. Investment securities held to maturity with an amortized cost of $12.2 million and $11.2 million and a fair value of $10.4 million and $9.3 million at March 31, 2025 and 2024, respectively, were pledged as collateral for government public funds held by the Bank. Investment securities held to maturity with an amortized cost of $141.3 million and $151.2 million and a fair value of $120.5 million and $126.1 million at March 31, 2025 and March 31, 2024, respectively, were pledged as collateral to the FRB.
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