Investment Securities

9 Months Ended

Sep. 30, 2024

Investments, Debt and Equity Securities [Abstract]

The amortized cost, gross unrealized gains and losses, and fair values of our investment securities portfolio at September 30, 2024 and December 31, 2023 are as follows, no allowance for credit losses required on any category on investments for either period presented:


	September 30, 2024
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(In Thousands)	Cost		Gains		Losses		Value
Available for sale (AFS):
U.S. Government and agency securities	$	2,000	$	9	$	(17)	$	1,992
Mortgage-backed securities	37,905		625		(153)		38,377

State and political securities	108,459		488		(2,797)		106,150
Other debt securities	52,356		310		(1,719)		50,947
Total debt securities	$	200,720	$	1,432	$	(4,686)	$	197,466

Investment equity securities:

Equity securities	$	1,300	$	—	$	(155)	$	1,145


	December 31, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(In Thousands)	Cost		Gains		Losses		Value
Available for sale (AFS):
U.S. Government and agency securities	$	4,000	$	3	$	(60)	$	3,943
Mortgage-backed securities	15,457		120		(222)		15,355

State and political securities	120,740		162		(5,287)		115,615
Other debt securities	58,844		97		(2,909)		56,032
Total debt securities	$	199,041	$	382	$	(8,478)	$	190,945

Investment equity securities:

Equity securities	$	1,300	$	—	$	(178)	$	1,122

The following tables show the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time, that the individual debt securities have been in a continuous unrealized loss position, at September 30, 2024 and December 31, 2023.


	September 30, 2024
	Less than Twelve Months				Twelve Months or Greater				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(In Thousands)	Value		Losses		Value		Losses		Value		Losses
Available for sale (AFS):
U.S. Government and agency securities	$	—	$	—	$	983	$	(17)	$	983	$	(17)
Mortgage-backed securities	7,610		(26)		901		(127)		8,511		(153)

State and political securities	5,228		(48)		78,414		(2,749)		83,642		(2,797)
Other debt securities	7,689		(142)		26,491		(1,577)		34,180		(1,719)
Total debt securities	$	20,527	$	(216)	$	106,789	$	(4,470)	$	127,316	$	(4,686)


	December 31, 2023
	Less than Twelve Months				Twelve Months or Greater				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(In Thousands)	Value		Losses		Value		Losses		Value		Losses
Available for sale (AFS):
U.S. Government and agency securities	$	—	$	—	$	2,940	$	(60)	$	2,940	$	(60)
Mortgage-backed securities	7,559		(78)		984		(144)		8,543		(222)

State and political securities	6,051		(128)		99,405		(5,159)		105,456		(5,287)
Other debt securities	12,976		(218)		35,449		(2,691)		48,425		(2,909)
Total debt securities	$	26,586	$	(424)	$	138,778	$	(8,054)	$	165,364	$	(8,478)

At September 30, 2024, there were a total of 22 securities in a continuous unrealized loss position for less than twelve months and 143 individual securities that were in a continuous unrealized loss position for twelve months or greater. No credit losses occurred for the period ended September 30, 2024.

The Company reviews its position quarterly and has determined that, at September 30, 2024, the declines outlined in the above table represent temporary non-credit declines and the Company does not intend to sell, and does not believe it will be required to sell, these securities before recovery of their cost basis, which may be at maturity. The Company has concluded that the unrealized losses disclosed above are not credit-related but are the result of interest rate changes, sector credit ratings changes, or company-specific ratings changes that are not expected to result in the non-collection of principal and interest during the period.

The amortized cost and fair value of debt securities at September 30, 2024, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities since borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


(In Thousands)	Amortized Cost		Fair Value
Due in one year or less	$	24,566	$	24,290
Due after one year to five years	71,959		70,340
Due after five years to ten years	79,142		77,509
Due after ten years	25,053		25,327
Total	$	200,720	$	197,466

Total gross proceeds from sales of debt securities available for sale for the nine months ended September 30, 2024 was $9,775,000, compared to $24,701,000 for the corresponding 2023 period.

The following table represents gross realized gains and losses from the sales of debt securities available for sale:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In Thousands)	2024		2023		2024		2023
Available for sale (AFS):
Gross realized gains:



State and political securities	$	53	$	1	$	53	$	146
Other debt securities	49		—		49		—
Total gross realized gains	$	102	$	1	$	102	$	146

Gross realized losses:



State and political securities	$	(8)	$	(46)	$	(43)	$	(271)
Other debt securities	(99)		—		(99)		—
Total gross realized losses	$	(107)	$	(46)	$	(142)	$	(271)

Investment securities with a carrying value of approximately $115,569,000 and $107,800,000 at September 30, 2024 and December 31, 2023, respectively, were pledged to secure certain deposits, repurchase agreements, and for other purposes as required by law.

At September 30, 2024 and December 31, 2023, we had $1,145,000 and $1,122,000, respectively, in equity securities recorded at fair value. The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during the three and nine months ended September 30, 2024 and 2023:



	Three Months Ended September 30,				Nine Months Ended September 30,
(In Thousands)	2024		2023		2024		2023
Net gains (losses) recognized in equity securities during the period	$	41	$	(37)	$	24	$	(36)
Less: Net losses realized on the sale of equity securities during the period	—		(1)		—		(1)
Unrealized gains (losses) recognized in equity securities held at reporting date	$	41	$	(36)	$	24	$	(35)

PENNS WOODS BANCORP INC 10-Q