| Securities |
NOTE 6. SecuritiesThis table provides the major components of debt securities available for sale ("AFS") and held to maturity (“HTM”) at amortized cost and estimated fair value at June 30, 2026 and December 31, 2025:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2026 |
|
|
|
|
|
|
Gross |
|
|
Gross |
|
|
|
|
|
|
Amortized |
|
|
unrealized |
|
|
unrealized |
|
|
Estimated |
|
(In thousands) |
|
cost |
|
|
gains |
|
|
losses |
|
|
fair value |
|
Available for sale: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government sponsored entities |
|
$ |
5,000 |
|
|
$ |
— |
|
|
$ |
(35 |
) |
|
$ |
4,965 |
|
State and political subdivisions |
|
|
168 |
|
|
|
— |
|
|
|
(19 |
) |
|
|
149 |
|
Residential mortgage-backed securities |
|
|
12,227 |
|
|
|
25 |
|
|
|
(1,105 |
) |
|
|
11,147 |
|
Asset backed securities |
|
|
19,000 |
|
|
|
17 |
|
|
|
(1 |
) |
|
|
19,016 |
|
Corporate and other securities |
|
|
32,419 |
|
|
|
411 |
|
|
|
(886 |
) |
|
|
31,944 |
|
Total debt securities available for sale |
|
$ |
68,814 |
|
|
$ |
453 |
|
|
$ |
(2,046 |
) |
|
$ |
67,221 |
|
Held to maturity: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government sponsored entities |
|
$ |
28,000 |
|
|
$ |
— |
|
|
$ |
(3,899 |
) |
|
$ |
24,101 |
|
State and political subdivisions |
|
|
2,319 |
|
|
|
58 |
|
|
|
(7 |
) |
|
|
2,370 |
|
Residential mortgage-backed securities |
|
|
7,388 |
|
|
|
— |
|
|
|
(2,492 |
) |
|
|
4,896 |
|
Total debt securities held to maturity |
|
$ |
37,707 |
|
|
$ |
58 |
|
|
$ |
(6,398 |
) |
|
$ |
31,367 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2025 |
|
|
|
|
|
|
Gross |
|
|
Gross |
|
|
|
|
|
|
Amortized |
|
|
unrealized |
|
|
unrealized |
|
|
Estimated |
|
(In thousands) |
|
cost |
|
|
gains |
|
|
losses |
|
|
fair value |
|
Available for sale: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government sponsored entities |
|
$ |
5,000 |
|
|
$ |
— |
|
|
$ |
(31 |
) |
|
$ |
4,969 |
|
State and political subdivisions |
|
|
185 |
|
|
|
— |
|
|
|
(26 |
) |
|
|
159 |
|
Residential mortgage-backed securities |
|
|
12,702 |
|
|
|
27 |
|
|
|
(977 |
) |
|
|
11,752 |
|
Asset backed securities |
|
|
22,001 |
|
|
|
11 |
|
|
|
(12 |
) |
|
|
22,000 |
|
Corporate and other securities |
|
|
32,586 |
|
|
|
314 |
|
|
|
(910 |
) |
|
|
31,990 |
|
Total debt securities available for sale |
|
$ |
72,474 |
|
|
$ |
352 |
|
|
$ |
(1,956 |
) |
|
$ |
70,870 |
|
Held to maturity: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government sponsored entities |
|
$ |
28,000 |
|
|
$ |
— |
|
|
$ |
(3,812 |
) |
|
$ |
24,188 |
|
State and political subdivisions |
|
|
1,299 |
|
|
|
42 |
|
|
|
— |
|
|
|
1,341 |
|
Residential mortgage-backed securities |
|
|
7,277 |
|
|
|
— |
|
|
|
(2,401 |
) |
|
|
4,876 |
|
Total debt securities held to maturity |
|
$ |
36,576 |
|
|
$ |
42 |
|
|
$ |
(6,213 |
) |
|
$ |
30,405 |
|
There was no provision or release for credit losses on securities for the three and six months ended June 30, 2026, compared to $2.0 million release on credit losses for six months ended June 30, 2025. During the three months ended June 30, 2026, the Company entered into a modification agreement with a borrower experiencing financial difficulty. The Company holds $2.0 million par of the original senior debt security. A $185 thousand loss was recognized through Net Securities Gains (Losses) in the Consolidated Statements of Income during the three months ended March 31, 2026 as the Company has plans to sell the security. The contractual maturities of AFS and HTM debt securities at June 30, 2026 are set forth in the following table. Maturities may differ from contractual maturities in residential mortgage-backed securities because the mortgages underlying the securities may be prepaid without any penalties. Therefore, residential mortgage-backed securities are not included in the maturity categories in the following summary.
|
|
|
|
|
|
|
|
|
|
|
Amortized |
|
|
Fair |
|
(In thousands) |
|
Cost |
|
|
Value |
|
Available for sale: |
|
|
|
|
|
|
Due in one year |
|
$ |
7,000 |
|
|
$ |
6,966 |
|
Due after one year through five years |
|
|
13,063 |
|
|
|
12,729 |
|
Due after five years through ten years |
|
|
22,356 |
|
|
|
22,222 |
|
Due after ten years |
|
|
14,168 |
|
|
|
14,157 |
|
Residential mortgage-backed securities |
|
|
12,227 |
|
|
|
11,147 |
|
Total |
|
$ |
68,814 |
|
|
$ |
67,221 |
|
Held to maturity: |
|
|
|
|
|
|
Due in one year |
|
$ |
986 |
|
|
$ |
979 |
|
Due after one year through five years |
|
|
3,000 |
|
|
|
2,983 |
|
Due after five years through ten years |
|
|
4,000 |
|
|
|
3,556 |
|
Due after ten years |
|
|
22,333 |
|
|
|
18,953 |
|
Residential mortgage-backed securities |
|
|
7,388 |
|
|
|
4,896 |
|
Total |
|
$ |
37,707 |
|
|
$ |
31,367 |
|
Actual maturities of AFS and HTM debt securities may differ from those presented above since certain obligations provide the issuer the right to call or prepay the obligation prior to scheduled maturity without penalty. The fair value of debt securities in an unrealized loss position, categorized by the length of time each security has been in a continuous unrealized loss position at June 30, 2026 and December 31, 2025, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2026 |
|
|
|
Less than 12 months |
|
|
12 months and greater |
|
|
Total |
|
|
|
Estimated |
|
|
Unrealized |
|
|
Estimated |
|
|
Unrealized |
|
|
Estimated |
|
|
Unrealized |
|
(In thousands) |
|
fair value |
|
|
loss |
|
|
fair value |
|
|
loss |
|
|
fair value |
|
|
loss |
|
Available for sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government sponsored entities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,965 |
|
|
$ |
(35 |
) |
|
$ |
4,965 |
|
|
$ |
(35 |
) |
State and political subdivisions |
|
|
— |
|
|
|
— |
|
|
|
149 |
|
|
|
(19 |
) |
|
|
149 |
|
|
|
(19 |
) |
Residential mortgage-backed securities |
|
|
— |
|
|
|
— |
|
|
|
11,043 |
|
|
|
(1,105 |
) |
|
|
11,043 |
|
|
|
(1,105 |
) |
Asset backed securities |
|
|
3,999 |
|
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
3,999 |
|
|
|
(1 |
) |
Corporate and other securities |
|
|
1,994 |
|
|
|
(6 |
) |
|
|
10,218 |
|
|
|
(880 |
) |
|
|
12,212 |
|
|
|
(886 |
) |
Total temporarily impaired AFS securities |
|
$ |
5,993 |
|
|
$ |
(7 |
) |
|
$ |
26,375 |
|
|
$ |
(2,039 |
) |
|
$ |
32,368 |
|
|
$ |
(2,046 |
) |
Held to maturity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government sponsored entities |
|
$ |
3,971 |
|
|
$ |
(30 |
) |
|
$ |
20,131 |
|
|
$ |
(3,869 |
) |
|
$ |
24,101 |
|
|
$ |
(3,899 |
) |
State and political subdivisions |
|
|
979 |
|
|
|
(7 |
) |
|
|
— |
|
|
|
— |
|
|
|
979 |
|
|
|
(7 |
) |
Residential mortgage-backed securities |
|
|
— |
|
|
|
— |
|
|
|
4,896 |
|
|
|
(2,492 |
) |
|
|
4,896 |
|
|
|
(2,492 |
) |
Total temporarily impaired HTM securities |
|
$ |
4,950 |
|
|
$ |
(37 |
) |
|
$ |
25,027 |
|
|
$ |
(6,361 |
) |
|
$ |
29,976 |
|
|
$ |
(6,398 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2025 |
|
|
|
Less than 12 months |
|
|
12 months and greater |
|
|
Total |
|
|
|
Estimated |
|
|
Unrealized |
|
|
Estimated |
|
|
Unrealized |
|
|
Estimated |
|
|
Unrealized |
|
(In thousands) |
|
fair value |
|
|
loss |
|
|
fair value |
|
|
loss |
|
|
fair value |
|
|
loss |
|
Available for sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government sponsored entities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,969 |
|
|
$ |
(31 |
) |
|
$ |
4,969 |
|
|
$ |
(31 |
) |
State and political subdivisions |
|
|
— |
|
|
|
— |
|
|
|
159 |
|
|
|
(26 |
) |
|
|
159 |
|
|
|
(26 |
) |
Residential mortgage-backed securities |
|
|
— |
|
|
|
— |
|
|
|
11,625 |
|
|
|
(977 |
) |
|
|
11,625 |
|
|
|
(977 |
) |
Asset backed securities |
|
|
9,988 |
|
|
|
(12 |
) |
|
|
— |
|
|
|
— |
|
|
|
9,988 |
|
|
|
(12 |
) |
Corporate and other securities |
|
|
2,483 |
|
|
|
(18 |
) |
|
|
9,681 |
|
|
|
(892 |
) |
|
|
12,164 |
|
|
|
(910 |
) |
Total temporarily impaired AFS securities |
|
$ |
12,471 |
|
|
$ |
(30 |
) |
|
$ |
26,434 |
|
|
$ |
(1,926 |
) |
|
$ |
38,905 |
|
|
$ |
(1,956 |
) |
Held to maturity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government sponsored entities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
24,188 |
|
|
$ |
(3,812 |
) |
|
$ |
24,188 |
|
|
$ |
(3,812 |
) |
Residential mortgage-backed securities |
|
|
— |
|
|
|
— |
|
|
|
4,876 |
|
|
|
(2,401 |
) |
|
|
4,876 |
|
|
|
(2,401 |
) |
Total temporarily impaired HTM securities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
29,064 |
|
|
$ |
(6,213 |
) |
|
$ |
29,064 |
|
|
$ |
(6,213 |
) |
Unrealized losses in each of the categories presented in the tables above were primarily driven by market interest rate fluctuations. Residential mortgage-backed securities are guaranteed by either Ginnie Mae, Freddie Mac or Fannie Mae. The Company is using the practical expedient to exclude accrued interest receivable from credit loss measurement. At June 30, 2026, there was $0.7 million of accrued interest on securities. At December 31, 2025, there was $0.8 million of accrued interest on securities. Securities with a carrying value of $67.0 million and $69.2 million at June 30, 2026 and December 31, 2025, respectively, were held at the FHLB or FRB and were pledged for borrowing purposes; however, there were no securities borrowed against at June 30, 2026 and December 31, 2025. Realized Gains and Losses on Debt SecuritiesNet realized gains (losses) on debt securities are included in noninterest income in the Consolidated Statements of Income as net security gains (losses). There were no gains or losses on sales of AFS debt securities during the three and six months ended June 30, 2026 compared to a $11 thousand loss on AFS debt securities during the six months ended June 30, 2025 and no loss during the three months ended June 30, 2025. There were no realized gains or losses on HTM debt securities during the three and six months ended June 30, 2026 and 2025. Equity SecuritiesIncluded in this category are Community Reinvestment Act (“CRA”) investments and the Company’s current other equity holdings of financial institutions. Equity securities are defined to include (a) preferred, common and other ownership interests in entities including partnerships, joint ventures and limited liability companies and (b) rights to acquire or dispose of ownership interests in entities at fixed or determinable prices. The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during the three and six months ended June 30, 2026 and 2025:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended June 30, |
|
|
For the six months ended June 30, |
|
(In thousands) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
Net unrealized (losses) gains occurring during the period on equity securities |
|
$ |
(779 |
) |
|
$ |
91 |
|
|
$ |
(1,283 |
) |
|
$ |
53 |
|
Net gains recognized during the period on equity securities sold during the period |
|
|
136 |
|
|
|
3,509 |
|
|
|
743 |
|
|
|
3,509 |
|
(Losses) gains recognized during the reporting period on equity securities |
|
$ |
(643 |
) |
|
$ |
3,600 |
|
|
$ |
(540 |
) |
|
$ |
3,562 |
|
|