Territorial Bancorp Inc. [TBNK] Filings

10-Q 1 tbnk-20230331x10q.htm 10-Q

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended March 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For transition period from to

Commission File Number 001-34403

TERRITORIAL BANCORP INC.

(Exact Name of Registrant as Specified in Charter)

Maryland		26-4674701
(State or Other Jurisdiction of Incorporation)		(I.R.S. Employer Identification No.)

1003 Bishop Street, Pauahi Tower Suite 500, Honolulu, Hawaii		96813
(Address of Principal Executive Offices)		(Zip Code)

(808) 946-1400

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and formal fiscal year, if changed since last report)

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


Title of each class	Trading symbol	Name of each exchange on which registered
Common stock	TBNK	The Nasdaq Stock Market LLC

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 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 ☒.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: 8,924,931 shares of Common Stock, par value $0.01 per share, were issued and outstanding as of April 30, 2023.

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TERRITORIAL BANCORP INC.

Form 10-Q Quarterly Report

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PART I

ITEM 1.	FINANCIAL STATEMENTS	1
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	27
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	38
ITEM 4.	CONTROLS AND PROCEDURES	39

PART II

ITEM 1.	LEGAL PROCEEDINGS	40
ITEM 1A.	RISK FACTORS	40
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	40
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	41
ITEM 4.	MINE SAFETY DISCLOSURES	41
ITEM 5.	OTHER INFORMATION	41
ITEM 6.	EXHIBITS	41

SIGNATURES		43

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PART I

ITEM 1. FINANCIAL STATEMENTS

TERRITORIAL BANCORP INC. AND SUBSIDIARIES

Consolidated Balance Sheets (Unaudited)

(Dollars in thousands, except share data)


	March 31,		December 31,
	2023		2022
ASSETS
Cash and cash equivalents	$	84,860	$	40,553
Investment securities available for sale, at fair value		21,073		20,821
Investment securities held to maturity, at amortized cost (fair value of $602,045 and $591,084 at March 31, 2023 and December 31, 2022, respectively)		715,601		717,773
Loans receivable, net		1,291,310		1,294,764
Federal Home Loan Bank stock, at cost		12,444		8,197
Federal Reserve Bank stock, at cost		3,177		3,170
Accrued interest receivable		6,128		6,115
Premises and equipment, net		7,422		7,599
Right-of-use asset, net		13,901		14,498
Bank-owned life insurance		47,986		47,783
Deferred income tax assets, net		2,097		1,643
Prepaid expenses and other assets		6,828		6,676
Total assets	$	2,212,827	$	2,169,592

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Deposits	$	1,661,973	$	1,716,152
Advances from the Federal Home Loan Bank		246,000		141,000
Securities sold under agreements to repurchase		10,000		10,000
Accounts payable and accrued expenses		22,453		24,180
Lease liability		14,720		15,295
Income taxes payable		1,034		838
Advance payments by borrowers for taxes and insurance		2,886		5,577
Total liabilities		1,959,066		1,913,042

Commitments and contingencies

Stockholders’ Equity:
Preferred stock, $0.01 par value; authorized 50,000,000 shares, no shares issued or outstanding		—		—
Common stock, $0.01 par value; authorized 100,000,000 shares; issued and outstanding 9,006,551 and 9,071,076 shares at March 31, 2023 and December 31, 2022, respectively		90		91
Additional paid-in capital		50,556		51,825
Unearned ESOP shares		(2,814)		(2,936)
Retained earnings		213,336		215,314
Accumulated other comprehensive loss		(7,407)		(7,744)
Total stockholders’ equity		253,761		256,550
Total liabilities and stockholders’ equity	$	2,212,827	$	2,169,592

See accompanying Notes to Consolidated Financial Statements.

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TERRITORIAL BANCORP INC. AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)

(Dollars in thousands, except per share data)


	Three Months Ended
	March 31,
	2023		2022
Interest income:
Loans	$	11,454	$	11,357
Investment securities		4,540		3,423
Other investments		727		176
Total interest income		16,721		14,956

Interest expense:
Deposits		3,530		597
Advances from the Federal Home Loan Bank		1,054		511
Securities sold under agreements to repurchase		46		44
Total interest expense		4,630		1,152

Net interest income		12,091		13,804
Reversal of provision for credit losses		(100)		(168)

Net interest income after reversal of provision for credit losses		12,191		13,972

Noninterest income:
Service and other fees		310		341
Income on bank-owned life insurance		203		197
Net gain on sale of loans		1		18
Other		75		1,097
Total noninterest income		589		1,653

Noninterest expense:
Salaries and employee benefits		5,404		5,613
Occupancy		1,623		1,594
Equipment		1,312		1,196
Federal deposit insurance premiums		245		141
Other general and administrative expenses		1,029		1,054
Total noninterest expense		9,613		9,598

Income before income taxes		3,167		6,027
Income taxes		851		1,317
Net income	$	2,316	$	4,710

Basic earnings per share	$	0.26	$	0.52
Diluted earnings per share	$	0.26	$	0.52
Cash dividends declared per common share	$	0.23	$	0.23
Basic weighted-average shares outstanding		8,774,634		8,980,135
Diluted weighted-average shares outstanding		8,806,744		9,014,454

See accompanying Notes to Consolidated Financial Statements.

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TERRITORIAL BANCORP INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Unaudited)

(Dollars in thousands)


	Three Months Ended
	March 31,
	2023		2022
Net income	$	2,316	$	4,710

Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on securities		337		(103)
Total other comprehensive income (loss), net of tax		337		(103)
Comprehensive income	$	2,653	$	4,607

See accompanying Notes to Consolidated Financial Statements.

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TERRITORIAL BANCORP INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity (Unaudited)

(Dollars in thousands, except per share data)


										Accumulated
	Common			Additional		Unearned				Other		Total
	Shares	Common		Paid-in		ESOP		Retained		Comprehensive		Stockholders’
	Outstanding	Stock		Capital		Shares		Earnings		Loss		Equity
Balances at December 31, 2021	9,324,060	$	93	$	56,951	$	(3,425)	$	208,227	$	(5,524)	$	256,322

Net income	—		—		—		—		4,710		—		4,710
Other comprehensive loss	—		—		—		—		—		(103)		(103)
Cash dividends declared ($0.23 per share)	—		—		—		—		(2,055)		—		(2,055)
Share-based compensation	15,671		—		134		—		—		—		134
Allocation of 12,234 ESOP shares	—		—		182		122		—		—		304
Repurchase of shares of common stock	(53,741)		—		(1,330)		—		—		—		(1,330)

Balances at March 31, 2022	9,285,990	$	93	$	55,937	$	(3,303)	$	210,882	$	(5,627)	$	257,982

See accompanying Notes to Consolidated Financial Statements.

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TERRITORIAL BANCORP INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity (Unaudited)

(Dollars in thousands, except per share data)


										Accumulated
	Common			Additional		Unearned				Other		Total
	Shares	Common		Paid-in		ESOP		Retained		Comprehensive		Stockholders’
	Outstanding	Stock		Capital		Shares		Earnings		Loss		Equity
Balances at December 31, 2022	9,071,076	$	91	$	51,825	$	(2,936)	$	215,314	$	(7,744)	$	256,550

Net income	—		—		—		—		2,316		—		2,316
Other comprehensive income	—		—		—		—		—		337		337
Cumulative change in accounting principle (1)									(2,319)				(2,319)
Cash dividends declared ($0.23 per share)	—		—		—		—		(1,975)		—		(1,975)
Share-based compensation	4,540		—		(42)		—		—		—		(42)
Allocation of 12,234 ESOP shares	—		—		159		122		—		—		281
Repurchase of shares of common stock	(69,065)		(1)		(1,386)		—		—		—		(1,387)

Balances at March 31, 2023	9,006,551	$	90	$	50,556	$	(2,814)	$	213,336	$	(7,407)	$	253,761

(1) Represents the impact of the adoption of Accounting Standards Update 2016-13. See Note 6 to the consolidated financial statements for additional information.

See accompanying Notes to Consolidated Financial Statements.

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TERRITORIAL BANCORP INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands)


	Three Months Ended
	March 31,
	2023		2022
Cash flows from operating activities:
Net income	$	2,316	$	4,710
Adjustments to reconcile net income to net cash used in operating activities:
Reversal of provision for credit losses		(100)		(168)
Depreciation and amortization		292		317
Deferred income tax expense		266		232
(Accretion) amortization of fees, discounts, and premiums, net		(90)		43
Amortization of right-of-use asset		716		700
Origination of loans held for sale		(355)		(3,032)
Proceeds from sales of loans held for sale		356		1,988
Gain on sale of loans, net		(1)		(7)
ESOP expense		281		304
Share-based compensation expense		(42)		134
Net increase in accrued interest receivable		(13)		(63)
Net increase in bank-owned life insurance		(203)		(197)
Net increase in prepaid expenses and other assets		(154)		(5,661)
Net decrease in accounts payable and accrued expenses		(1,661)		(233)
Net decrease in lease liability		(694)		(702)
Net decrease in advance payments by borrowers for taxes and insurance		(2,691)		(2,649)
Net increase in income taxes payable		196		610

Net cash used in operating activities		(1,581)		(3,674)

Cash flows from investing activities:
Purchases of investment securities held to maturity		(6,693)		(46,832)
Purchases of investment securities available for sale		—		(5,408)
Principal repayments on investment securities held to maturity		8,879		19,403
Principal repayments on investment securities available for sale		220		—
Principal repayments on loans receivable, net of loan originations		409		7,680
Purchases of Federal Home Loan Bank stock		(5,087)		(24)
Proceeds from redemption of Federal Home Loan Bank stock		840		—
Purchases of Federal Reserve Bank stock		(7)		(5)
Proceeds from bank-owned life insurance		—		4,431
Purchases of premises and equipment		(116)		(138)

Net cash used in investing activities		(1,555)		(20,893)

(Continued)

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TERRITORIAL BANCORP INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands)


	2023		2022
Cash flows from financing activities:
Net decrease in deposits	$	(54,179)	$	(6,260)
Proceeds from advances from the Federal Home Loan Bank		126,000		—
Repayments of advances from the Federal Home Loan Bank		(21,000)		—
Repurchases of common stock		(1,345)		(1,135)
Cash dividends paid		(2,033)		(2,113)

Net cash provided by (used in) financing activities		47,443		(9,508)

Net change in cash and cash equivalents		44,307		(34,075)

Cash and cash equivalents at beginning of the year		40,553		99,859

Cash and cash equivalents at end of the year	$	84,860	$	65,784

Supplemental disclosure of cash flow information:
Cash paid for:
Interest on deposits and borrowings	$	4,318	$	1,141
Income taxes		390		475

Supplemental disclosure of noncash investing and financing activities:
Company stock repurchased through stock swap and net settlement transactions	$	43	$	194
Establishment of right-of-use asset, net of incentives and modifications		118		4,798
Establishment of lease liability, net of modifications		118		4,798

See accompanying Notes to Consolidated Financial Statements.

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TERRITORIAL BANCORP INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

(1) Organization

Territorial Bancorp Inc. (the Company) is a Maryland corporation and is the holding company for Territorial Savings Bank (the Bank). Territorial Savings Bank is a Hawaii state-chartered bank headquartered in Honolulu, Hawaii and is a member of the Federal Reserve System. Territorial Savings Bank has an inactive subsidiary, Territorial Financial Services, Inc.

(2) Summary of Significant Accounting Policies

(a)

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements of Territorial Bancorp Inc. have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited interim condensed consolidated financial statements and notes should be read in conjunction with the Company’s consolidated financial statements and notes thereto filed as part of the Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, all adjustments necessary for a fair presentation have been made and consist only of normal recurring adjustments. Interim results of operations are not necessarily indicative of results to be expected for the year.

(b)

Allowance of Credit Losses (ACL) on Loans and Securities

The current expected credit losses (CECL) accounting standard requires an estimate of the credit losses expected over the life of the financial instrument. CECL replaces the incurred loss approach that delayed the recognition of a credit loss until it was probable and a loss event occurred.

The estimate of expected credit losses is based on information about past events, current conditions and reasonable and supportable forecasts that affect the collectability of financial instruments. Historical loss experience is generally the starting point for estimating expected credit losses. The Company considers whether the historical loss experience should be adjusted for asset specific risk characteristics or current conditions at the reporting date that did not exist over the historical reporting period. These qualitative adjustment can include changes in the economy, loan underwriting standards, and delinquency trends. The Company then considers future economic conditions as part of the one year reasonable and supportable forecast period.

The Bank’s loan portfolio is segmented into three pools: real estate, commercial and consumer loans. Only three pools are used to segment the Bank’s loan portfolio because they share the same risk characteristics and were originated using similar underwriting standards. Loans that do not share similar risk characteristics would be evaluated on an individual basis and excluded from the collective evaluation.

The real estate pool consists primarily of residential mortgage loans secured by real estate in Hawaii. These loans have fixed interest rates, loan terms of up to 30 years, and were originated using similar loan terms. The commercial loan pool consists of business loans. The consumer loan pool consists primarily of home equity lines of credit secured by real estate in Hawaii.

The ACL on loans is estimated by calculating the total present value of expected cash flows discounted by the loan’s effective interest rate. The expected cash flows includes estimates of loan charge-offs and recoveries, loan prepayments, and credit utilization. The expected cash flows on the loans are adjusted using forecasts of economic variables which have a strong correlation with loan charge-offs and recoveries, prepayments, and credit utilization during the one year reasonable and supportable forecast period. After the reasonable and supportable forecast period, the

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historical reversion rate is used to calculate loan charge-offs and recoveries, prepayments, and credit utilization. The reversion rate is based on historical averages. Qualitative adjustments may be made to account for current conditions and forward looking events not captured in the historical information.

The ACL is calculated on a loan by loan basis. If the loan’s amortized cost basis is less than the total present value of cash flows calculated using a discounted cash flow approach, the ACL is equal to the amortized cost basis minus the total present value of cash flows on the loan discounted by the loan’s effective interest rate. Charge-offs to the ACL are made when management determines that the collectability of all or a portion of a loan is doubtful and available collateral is insufficient to repay the loan.

A loan is considered to be collateral dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. For loans which are considered to be collateral-dependent, the Company has elected to estimate the expected credit loss based on the fair value of the collateral less selling costs. If the fair value of the collateral less selling costs is less than the loan’s fair value, the Company records a partial charge-off to reduce the loan’s amortized cost basis for the difference between the collateral fair value less selling costs and the amortized cost basis.

Loans receivable are stated at amortized cost which includes the principal amount outstanding, less the allowance for credit losses, deferred loan origination fees and costs, commitment fees, and cumulative net charge-offs. Interest income on loans receivable is accrued as earned.

The Company has a policy of placing loans on a nonaccrual basis when 90 days or more contractually delinquent or when, in the opinion of management, collection of all or part of the principal balance appears doubtful, unless the loans are well secured and in the process of collection. When a loan is placed on nonaccrual status, all interest previously accrued and not collected is reversed against current period interest income. For nonaccrual loans, the Company records payments received as a reduction in principal. A nonaccrual loan may be restored to an accrual basis when principal and interest payments are current and full payment of principal and interest is expected.

Accrued interest receivable on loans was $4.5 million as of March 31, 2023 and is included in Accrued interest receivable on the Consolidated Balance Sheet.

The Company is required to utilize the CECL methodology to estimate expected credit losses with respect to held-to-maturity (HTM) investment securities. Since all of the Company’s HTM investment securities were issued by U.S. government agencies or U.S. government sponsored enterprises, which include the explicit and/or implicit guarantee of the U.S. government and have a long history of no credit losses, the Company did not record a credit loss on these securities. The unrealized losses on these securities were due to changes in interest rates, relative to when the securities were purchased, and are not due to decreases in the credit quality of the securities.

Available for sale (AFS) investment securities in an unrealized loss position are evaluated for impairment. The Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the investment securities amortized cost basis is written down to fair value through income. For AFS debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the investment security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an ACL is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an ACL is recognized in other comprehensive income.

Changes in the ACL are recorded as a provision for (or reversal of) credit losses. Losses are charged against the ACL when management believes the uncollectibility of an AFS security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

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Since all of the Company’s AFS investment securities were issued by U.S. government agencies or U.S. government sponsored enterprises and include the explicit and/or implicit guarantee of the U.S. government, the Company did not record a credit loss on these securities. The unrealized loss on AFS securities were due to changes in interest rates, relative to when the securities were purchased. Management has concluded that the long history with no credit losses from these issuers indicates an expectation that nonpayment of the amortized cost basis is zero and an ACL was not recorded.

(3) Recently Issued Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU changes the threshold for recognizing losses from a “probable” to an “expected” model. The new model is referred to as the current expected credit loss model and applies to loans, leases, held-to-maturity investments, loan commitments, and financial guarantees. The standard requires the measurement of all expected credit losses for financial assets as of the reporting date (including historical experience, current conditions, and reasonable and supportable forecasts) and enhanced disclosures that will help financial statement users understand the estimates and judgments used in estimating credit losses and evaluating the credit quality of an organization’s portfolio. The amendment was effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. In November 2019, the FASB issued an update that delays the effective date of the amendment for smaller reporting companies, as defined by the Securities and Exchange Commission, to fiscal years beginning after December 15, 2022. The Company is a smaller reporting company. The Company adopted the standard on January 1, 2023, and applied the standard’s provisions as a cumulative-effect adjustment to retained earnings as of January 1, 2023. Upon adoption of the standard, the Company recorded a $3.2 million increase to the reserve for credit losses, which resulted in a $2.3 million after-tax decrease to retained earnings as of January 1, 2023. The tax effect resulted in an increase to deferred tax assets.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The ASU eliminates the accounting guidance for loans modified as troubled debt restructurings by creditors while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Additionally, the ASU requires public business entities to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases. This ASU was effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, upon the Company’s adoption of the amendments in ASU 2016-13. The Company adopted the standard on January 1, 2023, and it did not have a material effect on the Company’s consolidated financial statements.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions to clarify that contractual sale restrictions should not be considered in the measurement of the fair value of an equity security. The Company owns stock in the Federal Reserve Bank (FRB) and in the Federal Home Loan Bank (FHLB) which is valued at historical cost which approximates fair value. Ownership of stock is a condition for services the Company receives from the FRB and FHLB. The stock is not publically traded and can only be issued, exchanged, redeemed or repurchased by the FRB and the FHLB. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023. The Company does not expect the adoption of this ASU to have a material effect on its consolidated financial statements.

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(4) Cash and Cash Equivalents

The table below presents the balances of cash and cash equivalents:


	March 31,		December 31,
(Dollars in thousands)	2023		2022
Cash and due from banks	$	11,782	$	9,722
Interest-earning deposits in other banks		73,078		30,831
Cash and cash equivalents	$	84,860	$	40,553

Interest-earning deposits in other banks consist primarily of deposits at the Federal Reserve Bank of San Francisco.

(5) Investment Securities

The amortized cost, gross unrealized gains and losses, fair value, and related ACL of investment securities are as follows:


	Amortized		Gross Unrealized				Estimated
(Dollars in thousands)	Cost		Gains		Losses		Fair Value			ACL
March 31, 2023:
Available-for-sale:
Mortgage-backed securities issued by U.S. government-sponsored enterprises	$	23,337	$	—	$	(2,264)	$	21,073	$	—
Held-to-maturity:
Mortgage-backed securities issued by U.S. government agencies or U.S. government-sponsored enterprises		715,601		80		(113,636)		602,045		—

Total	$	738,938	$	80	$	(115,900)	$	623,118	$	—

December 31, 2022:
Available-for-sale:
Mortgage-backed securities issued by U.S. government-sponsored enterprises	$	23,544	$	—	$	(2,723)	$	20,821	$	—
Held-to-maturity:
Mortgage-backed securities issued by U.S. government agencies or U.S. government-sponsored enterprises		717,773		62		(126,751)		591,084		—

Total	$	741,317	$	62	$	(129,474)	$	611,905	$	—

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The amortized cost and estimated fair value of investment securities by maturity date at March 31, 2023 are shown below. Incorporated in the maturity schedule are mortgage-backed securities, which are allocated using the contractual maturity as a basis. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.


	Amortized		Estimated
(Dollars in thousands)	Cost		Fair Value
Available-for-sale:
Due after 10 years	$	23,337	$	21,073
Total	$	23,337	$	21,073

Held-to-maturity:
Due within 5 years	$	19	$	19
Due after 5 years through 10 years		9		8
Due after 10 years		715,573		602,018
Total	$	715,601	$	602,045

The Company did not sell any held-to-maturity or available-for-sale securities during the three months ended March 31, 2023 and 2022.

Investment securities with amortized costs of $241.5 million and $272.8 million at March 31, 2023 and December 31, 2022, respectively, were pledged to secure deposits made by state and local governments, securities sold under agreements to repurchase, transaction clearing accounts, and Federal Reserve Bank borrowings. The Company did not have any outstanding borrowings at the Federal Reserve Bank at March 31, 2023 or December 31, 2022.

Table of Contents

Provided below is a summary of investment securities which were in an unrealized loss position at March 31, 2023 and December 31, 2022. The Company does not intend to sell securities until such time as the value recovers or the securities mature and it is not more likely than not that the Company will be required to sell the securities prior to recovery of value or the securities mature.


	Less Than 12 Months				12 Months or Longer				Total
			Unrealized				Unrealized		Number of			Unrealized
Description of securities	Fair Value		Losses		Fair Value		Losses		Securities	Fair Value		Losses
(Dollars in thousands)
March 31, 2023:
Available-for-sale:
Mortgage-backed securities issued by U.S. government-sponsored enterprises	$	4,414	$	(250)	$	16,659	$	(2,014)	4	$	21,073	$	(2,264)
Held-to-maturity:
Mortgage-backed securities issued by U.S. government agencies or U.S. government-sponsored enterprises		92,902		(3,738)		502,468		(109,898)	150		595,370		(113,636)

Total	$	97,316	$	(3,988)	$	519,127	$	(111,912)	154	$	616,443	$	(115,900)
December 31, 2022: