HOME BANCORP, INC. [HBCP] Filings

10-Q 1 hbcp-20230930.htm 10-Q hbcp-20230930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended: September 30, 2023


☐			Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number: 001-34190

HOME BANCORP, INC.

(Exact name of Registrant as specified in its charter)


Louisiana			71-1051785
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification Number)
503 Kaliste Saloom Road, Lafayette, Louisiana			70508
(Address of Principal Executive Offices)			(Zip Code)

Registrant’s telephone number, including area code: (337) 237-1960

Not Applicable

(Former Name, Former Address and Former Fiscal Year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Exchange Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock	HBCP	NASDAQ Stock Market

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At October 30, 2023, the registrant had 8,147,869 shares of common stock, $0.01 par value, outstanding.

HOME BANCORP, INC. and SUBSIDIARY

TABLE OF CONTENTS



PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	Page
	Consolidated Statements of Financial Condition	1
	Consolidated Statements of Income	2
	Consolidated Statements of Comprehensive Income	3
	Consolidated Statements of Changes in Shareholders’ Equity	4
	Consolidated Statements of Cash Flows	6
	Notes to Unaudited Consolidated Financial Statements	7
Item 2.	Management 's Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	45
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 3.	Defaults Upon Senior Securities	46
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	47
Item 6.	Exhibits	47
SIGNATURES		48

HOME BANCORP, INC. and SUBSIDIARY

GLOSSARY OF DEFINED TERMS

Below is a listing of certain acronyms, abbreviations and defined terms, among others, used throughout this Quarterly Report on Form 10-Q, including in "Item 1. Financial Statements" and "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations." The terms "we," "our" or "us" refer to Home Bancorp, Inc. and its consolidated subsidiaries, unless the context otherwise requires.


ACL	–	Allowance for credit losses
ALL	–	Allowance for loan losses
AOCI	–	Accumulated other comprehensive income
ASC	–	Accounting Standards Codification
ASU	–	Accounting Standards Update
Bank	–	Home Bank, N. A., a wholly-owned subsidiary of the Company
BOLI	–	Bank-owned life insurance
bps	–	basis points, 100 basis points being equal to 1.0%
C&D	–	Construction and land
C&I	–	Commercial and industrial
CARES Act	–	Coronavirus Aid, Relief, and Economic Security Act
CECL	–	Current expected credit losses
Company	–	Home Bancorp, Inc., a Louisiana corporation and the holding company for Home Bank, N. A.
COVID-19	–	The novel coronavirus
CRE	–	Commercial real estate
EPS	–	Earnings per common share
FASB	–	Financial Accounting Standards Board
FHLB	–	Federal Home Loan Bank
GAAP	–	Generally Accepted Accounting Principles
LTV	–	Loan-to-value
NPA(s)	–	Nonperforming asset(s)
OCI	–	Other comprehensive income
ORE	–	Other real estate
PCD	–	Purchased credit deteriorated

PPP	–	Paycheck Protection Program
SBA	–	U.S. Small Business Association
SEC	–	U.S. Securities and Exchange Commission
TDR	–	Troubled debt restructuring
TE	–	Taxable equivalent
U.S.	–	United States

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION


	(Unaudited)		(Audited)
(dollars in thousands)	September 30, 2023		December 31, 2022
Assets
Cash and cash equivalents	$	84,520	$	87,401
Interest-bearing deposits in banks	99		349
Investment securities available for sale, at fair value	427,019		486,518
Investment securities held to maturity (fair values of $1,052 and $1,072, respectively)	1,065		1,075
Mortgage loans held for sale	467		98
Loans, net of unearned income	2,569,094		2,430,750
Allowance for loan losses	(31,123)		(29,299)
Total loans, net of unearned income and allowance for loan losses	2,537,971		2,401,451
Office properties and equipment, net	42,402		43,560
Cash surrender value of bank-owned life insurance	47,054		46,276
Goodwill and core deposit intangibles	86,749		87,973
Accrued interest receivable and other assets	90,383		73,579
Total Assets	$	3,317,729	$	3,228,280
Liabilities
Deposits:
Noninterest-bearing	$	785,448	$	904,301
Interest-bearing	1,812,036		1,728,880
Total Deposits	2,597,484		2,633,181
Other borrowings	5,539		5,539
Subordinated debt, net of issuance cost	54,187		54,013
Short-term Federal Home Loan Bank advances	241,000		155,000
Long-term Federal Home Loan Bank advances	42,826		21,213
Accrued interest payable and other liabilities	31,361		29,380
Total Liabilities	2,972,397		2,898,326
Shareholders’ Equity
Preferred stock, $0.01 par value - 10,000,000 shares authorized; none issued	—		—
Common stock, $0.01 par value - 40,000,000 shares authorized; 8,163,655 and 8,286,084 shares issued and outstanding, respectively	81		83
Additional paid-in capital	165,149		164,942
Unallocated common stock held by:
Employee Stock Ownership Plan (ESOP)	(1,785)		(2,053)
Recognition and Retention Plan (RRP)	(2)		(7)
Retained earnings	227,649		206,296
Accumulated other comprehensive loss	(45,760)		(39,307)
Total Shareholders’ Equity	345,332		329,954
Total Liabilities and Shareholders’ Equity	$	3,317,729	$	3,228,280

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands, except per share data)	2023		2022		2023		2022
Interest Income
Loans, including fees	$	38,490	$	29,859	$	109,518	$	79,834
Investment securities:
Taxable interest	2,863		2,812		8,772		6,576
Tax-exempt interest	76		146		295		338
Other investments and deposits	649		1,447		1,679		2,587
Total interest income	42,078		34,264		120,264		89,335
Interest Expense
Deposits	8,181		1,270		16,968		3,266
Other borrowings	53		53		161		160
Subordinated debt expense	845		859		2,546		859
Short-term Federal Home Loan Bank advances	3,150		—		8,382		—
Long-term Federal Home Loan Bank advances	340		105		797		321
Total interest expense	12,569		2,287		28,854		4,606
Net interest income	29,509		31,977		91,410		84,729
Provision for loan losses	351		1,696		1,676		5,502
Net interest income after provision for loan losses	29,158		30,281		89,734		79,227
Noninterest Income
Service fees and charges	1,277		1,300		3,757		3,722
Bank card fees	1,903		1,623		5,405		4,713
Gain on sale of loans, net	687		78		770		641
Income from bank-owned life insurance	265		231		778		658
Loss on sale of securities, net	—		—		(249)		—
(Loss) gain on sale of assets, net	—		18		(20)		17
Other income	267		224		717		795
Total noninterest income	4,399		3,474		11,158		10,546
Noninterest Expense
Compensation and benefits	12,492		12,128		37,532		34,870
Occupancy	2,410		2,297		7,207		6,454
Marketing and advertising	638		658		1,387		1,713
Data processing and communication	2,496		2,284		6,949		7,012
Professional services	402		331		1,225		1,348
Forms, printing and supplies	195		185		586		584
Franchise and shares tax	542		633		1,624		1,415
Regulatory fees	511		467		1,451		1,611
Foreclosed assets and ORE, net	99		101		(590)		493
Amortization of acquisition intangible	389		453		1,224		1,159
Provision for credit losses on unfunded commitments	—		146		361		448
Other expenses	1,164		1,040		3,281		3,621
Total noninterest expense	21,338		20,723		62,237		60,728
Income before income tax expense	12,219		13,032		38,655		29,045
Income tax expense	2,465		2,598		7,800		5,749
Net Income	$	9,754	$	10,434	$	30,855	$	23,296
Earnings per share:
Basic	$	1.22	$	1.29	$	3.84	$	2.86
Diluted	$	1.22	$	1.28	$	3.82	$	2.84
Cash dividends declared per common share	$	0.25	$	0.23	$	0.75	$	0.69

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Net Income	$	9,754	$	10,434	$	30,855	$	23,296
Other Comprehensive Loss
Unrealized losses on available for sale investment securities	(10,218)		(25,149)		(8,894)		(58,980)
Unrealized gains on cash flow hedges	183		1,297		476		3,793
Reclassification adjustment for losses included in net income	—		—		249		—
Tax effect	2,108		5,009		1,716		11,589
Other comprehensive loss, net of taxes	(7,927)		(18,843)		(6,453)		(43,598)
Comprehensive Income (Loss)	$	1,827	$	(8,409)	$	24,402	$	(20,302)

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)


(dollars in thousands, except per share data)	Common stock		Additional Paid-in capital		Unallocated Common Stock Held by ESOP		Unallocated Common Stock Held by RRP		Retained Earnings		Accumulated Other Comprehensive Loss		Total
Balance, June 30, 2022	$	84	$	164,177	$	(2,231)	$	(9)	$	191,114	$	(24,011)	$	329,124
Net income									10,434				10,434
Other comprehensive loss											(18,843)		(18,843)
Purchase of Company’s common stock at cost, 77,021 shares	(1)		(770)						(2,084)				(2,855)
Cash dividends declared, $0.23 per share									(1,910)				(1,910)
Common Stock issued under incentive plans, net of shares surrendered in payment, including tax benefit, 3,260 shares	—		97						(1)				96
Exercise of stock options	—		53										53
RRP shares released for allocation			(1)				1						—
ESOP shares released for allocation			309		89								398
Share-based compensation cost			159										159
Balance, September 30, 2022	$	83	$	164,024	$	(2,142)	$	(8)	$	197,553	$	(42,854)	$	316,656
Balance, June 30, 2023	$	82	$	164,945	$	(1,875)	$	(3)	$	220,801	$	(37,833)	$	346,117
Net income									9,754				9,754
Other comprehensive loss											(7,927)		(7,927)
Purchase of Company’s common stock at cost, 37,805 shares	(1)		(378)						(856)				(1,235)
Cash dividends declared, $0.25 per share									(2,049)				(2,049)
Common Stock issued under incentive plans, net of shares surrendered in payment, including tax benefit, 2,801 shares	—		71						(1)				70
Exercise of stock options	—		17										17
RRP shares released for allocation			(1)				1						—
ESOP shares released for allocation			264		90								354
Share-based compensation cost			231										231
Balance, September 30, 2023	$	81	$	165,149	$	(1,785)	$	(2)	$	227,649	$	(45,760)	$	345,332

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY - CONTINUED

(Unaudited)


(dollars in thousands, except per share data)	Common stock		Additional Paid-in capital		Unallocated Common Stock Held by ESOP		Unallocated Common Stock Held by RRP		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balance, December 31, 2021	$	85	$	164,982	$	(2,410)	$	(13)	$	188,515	$	744	$	351,903

Net income									23,296				23,296
Other comprehensive loss											(43,598)		(43,598)
Purchase of Company’s common stock at cost, 287,035 shares	(2)		(2,868)						(8,407)				(11,277)
Cash dividends declared, $0.69 per share									(5,790)				(5,790)
Common Stock issued under incentive plans, net of shares surrendered in payment, including tax benefit, 22,837 shares	—		304						(61)				243
Exercise of stock options	—		182										182
RRP shares released for allocation			(5)				5						—
ESOP shares released for allocation			933		268								1,201
Share-based compensation cost			496										496
Balance, September 30, 2022	$	83	$	164,024	$	(2,142)	$	(8)	$	197,553	$	(42,854)	$	316,656
Balance, December 31, 2022	$	83	$	164,942	$	(2,053)	$	(7)	$	206,296	$	(39,307)	$	329,954
Net income									30,855				30,855
Other comprehensive loss											(6,453)		(6,453)
Purchase of Company’s common stock at cost, 147,738 shares	(2)		(1,476)						(3,240)				(4,718)
Cash dividends declared, $0.75 per share									(6,185)				(6,185)
Common Stock issued under incentive plans, net of shares surrendered in payment, including tax benefit, 20,259 shares			98						(77)				21
Exercise of stock options	—		102										102
RRP shares released for allocation			(5)				5						—
ESOP shares released for allocation			821		268								1,089
Share-based compensation cost			667										667
Balance, September 30, 2023	$	81	$	165,149	$	(1,785)	$	(2)	$	227,649	$	(45,760)	$	345,332

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	For the Nine Months Ended September 30,
(dollars in thousands)	2023		2022
Cash flows from operating activities:
Net income	$	30,855	$	23,296
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	1,676		5,502
Depreciation	2,659		2,538
Amortization and accretion of purchase accounting valuations and intangibles	2,807		3,020

Federal Home Loan Bank stock dividends	(391)		(22)
Net amortization of discount on investments	292		871
Amortization of subordinated debt issuance cost	174		60
Loss on sale of securities, net	249		—
Gain on loans sold, net	(770)		(641)
Proceeds, including principal payments, from loans held for sale	12,510		64,755
Originations of loans held for sale	(12,749)		(63,179)
Loss (gain) on sale of assets, net	20		(17)
Non-cash compensation	1,756		1,697
Deferred income tax (benefit) expense	31		(425)
Increase in accrued interest receivable and other assets	(9,641)		(9,207)
Increase in cash surrender value of bank-owned life insurance	(778)		(658)
Decrease in accrued interest payable and other liabilities	2,469		9,085
Net cash provided by operating activities	31,169		36,675
Cash flows from investing activities:
Purchases of securities available for sale	—		(236,236)
Proceeds from maturities, prepayments and calls on securities available for sale	36,561		44,692
Proceeds from maturities, prepayments and calls on securities held to maturity	—		1,000
Proceeds from sales of securities available for sale	13,762		—
Increase in loans, net	(139,803)		(151,039)
Decrease in interest-bearing deposits in banks	250		—
Proceeds from sale of foreclosed assets	426		2,557
Purchases of office properties and equipment	(1,525)		(1,904)
Net cash disbursed in sale of banking center	—		(11,182)
Net cash disbursed in business combination	—		(16,123)
Purchase of bank-owned life insurance	—		(5,000)

Proceeds from sale of office properties and equipment	4		73
Purchase of Federal Home Loan Bank stock	(5,215)		—
Net cash used in investing activities	(95,540)		(373,162)
Cash flows from financing activities:
Decrease in deposits, net	(35,340)		(150,411)
Borrowings on Federal Home Loan Bank advances	15,695,975		—
Repayments of Federal Home Loan Bank advances	(15,588,365)		(1,245)
Proceeds from issuance of subordinated debt, net of issuance cost	—		53,898
Proceeds from exercise of stock options	102		182
Issuance of stock under incentive plans, net	21		243
Dividends paid to shareholders	(6,185)		(5,790)
Purchase of Company’s common stock	(4,718)		(11,277)
Net cash provided by (used in) financing activities	61,490		(114,400)
Net change in cash and cash equivalents	(2,881)		(450,887)
Cash and cash equivalents, beginning	87,401		601,443
Cash and cash equivalents, ending	$	84,520	$	150,556

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The accompanying unaudited consolidated financial statements of the Company were prepared in accordance with instructions for Form 10-Q and Regulation S-X and do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, comprehensive income, changes in shareholders’ equity and cash flows in conformity with accounting principles generally accepted in the United States of America. However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial statements have been included. Certain reclassifications have been made to prior period balances to conform to the current period presentation. The results of operations for the three and nine months ended September 30, 2023 and 2022 are not necessarily indicative of the results which may be expected for the entire fiscal year. These statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2022.

Critical Accounting Policies and Estimates

Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties and could reflect materially different results under different assumptions and conditions. Methodologies the Company uses when applying critical accounting policies and developing critical accounting estimates are included in its Annual Report on Form 10-K for the year ended December 31, 2022.

There have been no material changes from the critical accounting policies previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. In preparing its financial statements, the Company is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Reclassifications

Certain reclassifications have been made to prior period balances to conform to the current period presentation.

2. Recent Accounting Pronouncements

Accounting Standards Adopted in 2023

ASU 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method.” Under prior guidance, entities can apply the last-of-layer hedging method to hedge the exposure of a closed portfolio of prepayable financial assets to fair value changes due to changes in interest rates for a portion of the portfolio that is not expected to be affected by prepayments, defaults, and other events affecting the timing and amount of cash flows. ASU 2022-01 expands the last-of-layer method, which permits only one hedge layer, to allow multiple hedged layers of a single closed portfolio. To reflect that expansion, the last-of-layer method is renamed the portfolio layer method. ASU 2022-01 also (i) expands the scope of the portfolio layer method to include non-prepayable financial assets, (ii) specifies eligible hedging instruments in a single-layer hedge, (iii) provides additional guidance on the accounting for and disclosure of hedge basis adjustments under the portfolio layer method and (iv) specifies how hedge basis adjustments should be considered when determining credit losses for the assets included in the closed portfolio. ASU 2022-01 is effective for fiscal years and interim periods after December, 15, 2022. The adoption of ASU 2022-01 did not impact our Consolidated Financial Statements.

ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.” ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings in Accounting Standards Codification (“ASC”) Subtopic 310-40, Receivables - Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. Additionally, ASU 2022-02 requires entities to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of ASC Subtopic 326-20, Financial Instruments - Credit Losses - Measured at Amortized Cost. ASU 2022-02 is effective for fiscal years and interim periods after December, 15, 2022. The Company adopted ASU 2022-02 on a prospective basis on January 1, 2023. The adoption of ASU 2022-02 did not have a significant impact on our Consolidated Financial Statements.

Issued but Not Yet Adopted Accounting Standards

Accounting Standard Update (“ASU”) ASU 2023-01, “Leases (Topic 842): Common Control Arrangements” (“ASU 2023-01”) clarifies the accounting for leasehold improvements associated with common control leases to public business entities. This update is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The adoption of ASU 2023-01 is not expected to have a significant impact on our consolidated financial statements.

ASU 2023-02, “Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method” (“ASU 2023-02”) permits reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. This update is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The adoption of ASU 2023-02 is not expected to have a significant impact on our consolidated financial statements.

3. Investment Securities

The following tables summarize the Company’s available for sale and held to maturity investment securities at September 30, 2023 and December 31, 2022.


(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2023
Available for sale:
U.S. agency mortgage-backed	$	324,459	$	2	$	44,290	$	280,171
Collateralized mortgage obligations	84,009		1		5,731		78,279
Municipal bonds	55,705		1		10,669		45,037
U.S. government agency	19,278		—		1,834		17,444
Corporate bonds	6,982		—		894		6,088
Total available for sale	$	490,433	$	4	$	63,418	$	427,019
Held to maturity:
Municipal bonds	$	1,065	$	—	$	13	$	1,052
Total held to maturity	$	1,065	$	—	$	13	$	1,052


(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2022
Available for sale:
U.S. agency mortgage-backed	$	355,014	$	63	$	38,245	$	316,832
Collateralized mortgage obligations	91,217		1		4,873		86,345
Municipal bonds	67,476		50		9,901		57,625
U.S. government agency	20,600		—		1,267		19,333
Corporate bonds	6,980		—		597		6,383
Total available for sale	$	541,287	$	114	$	54,883	$	486,518
Held to maturity:
Municipal bonds	$	1,075	$	—	$	3	$	1,072
Total held to maturity	$	1,075	$	—	$	3	$	1,072

The estimated fair value and amortized cost by contractual maturity of the Company’s investment securities as of September 30, 2023 are shown in the following tables. Securities are classified according to their contractual maturities without consideration of principal amortization, potential prepayments or call options. The expected maturity of a security may differ from its contractual maturity because of prepayments or the exercise of call options. Accordingly, actual maturities may differ from contractual maturities. The Company’s investment securities portfolio had an effective duration of 4.5 years at September 30, 2023 and December 31, 2022.


(dollars in thousands)	One Year or Less		After One Year through Five Years		After Five Years through Ten Years		After Ten Years		Total
Fair Value
Available for sale:
U.S. agency mortgage-backed	$	2,885	$	64,645	$	88,804	$	123,837	$	280,171
Collateralized mortgage obligations	430		54,915		4,636		18,298		78,279
Municipal bonds	1,705		1,707		19,721		21,904		45,037
U.S. government agency	—		5,164		11,964		316		17,444
Corporate bonds	—		—		6,088		—