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 June 30, 2022
 
OR
 
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 000-30707
 
First Northern Community Bancorp
(Exact name of registrant as specified in its charter)
 
California
 
68-0450397
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification Number)
 
195 N. First Street, Dixon, California
 
95620
(Address of principal executive offices)
 
(Zip Code)

707 -678-3041
(Registrant’s telephone number including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading symbols(s)
 
Name of each exchange on which registered
None
 
Not Applicable
 
Not Applicable

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or Section 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  
 
The number of shares of Common Stock outstanding as of August 8, 2022 was 13,924,049.



FIRST NORTHERN COMMUNITY BANCORP
 
INDEX

 
Page
3
3
3
4
5
6
7
8
32
49
49
49
49
49
51
51
51
51
52
53
 
2

PART I – FINANCIAL INFORMATION
 
FIRST NORTHERN COMMUNITY BANCORP
 
ITEM I.    – FINANCIAL STATEMENTS (UNAUDITED) 

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
 
(in thousands, except share amounts)
 
June 30, 2022
   
December 31, 2021
 
 
           
Assets
           
 
           
Cash and cash equivalents
 
$
245,472
   
$
345,929
 
Certificates of deposit
   
11,333
     
13,272
 
Investment securities – available-for-sale
   
637,765
     
632,213
 
Loans, net of allowance for loan losses of $14,275 at June 30, 2022 and $13,952 at December 31, 2021
   
931,934
     
852,717
 
Loans held-for-sale
   
     
1,063
 
Stock in Federal Home Loan Bank and other equity securities, at cost
   
9,440
     
7,097
 
Premises and equipment, net
   
6,181
     
6,552
 
Interest receivable and other assets
   
54,646
     
40,244
 
 
               
Total Assets
 
$
1,896,771
   
$
1,899,087
 
 
               
Liabilities and Stockholders’ Equity
               
 
               
Liabilities:
               
 
               
Demand deposits
 
$
814,550
   
$
820,412
 
Interest-bearing transaction deposits
   
436,011
     
432,479
 
Savings and MMDA's
   
452,393
     
426,026
 
Time, $250,000 or less
   
37,815
     
38,388
 
Time, over $250,000
   
10,426
     
10,997
 
Total deposits
   
1,751,195
     
1,728,302
 
 
               
Interest payable and other liabilities
   
18,442
     
19,874
 
 
               
Total Liabilities
   
1,769,637
     
1,748,176
 
                 
Commitments and contingencies (Note 7)
   
     
 
                 
Stockholders' Equity:
               
Common stock, no par value; 16,000,000 shares authorized; 13,924,049 shares issued and outstanding at June 30, 2022 and 13,848,904 shares issued and outstanding at December 31, 2021
   
110,407
     
109,793
 
Additional paid-in capital
   
977
     
977
 
Retained earnings
   
50,551
     
44,338
 
Accumulated other comprehensive loss, net
   
(34,801
)
   
(4,197
)
Total Stockholders’ Equity
   
127,134
     
150,911
 
 
               
Total Liabilities and Stockholders’ Equity
 
$
1,896,771
   
$
1,899,087
 
 
See notes to unaudited condensed consolidated financial statements.

3

FIRST NORTHERN COMMUNITY BANCORP
 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
(in thousands, except per share amounts)
 
Three months
ended
June 30, 2022
   
Three months
ended
June 30, 2021
   
Six months
ended
June 30, 2022
   
Six months
ended
June 30, 2021
 
Interest and dividend income:
                       
Loans
 
$
10,465
   
$
10,474
   
$
20,122
   
$
19,711
 
Due from banks interest bearing accounts
   
509
     
144
     
675
     
292
 
Investment securities
                               
Taxable
   
1,933
     
1,491
     
3,661
     
2,977
 
Non-taxable
   
206
     
140
     
384
     
283
 
Other earning assets
   
106
     
103
     
224
     
185
 
Total interest and dividend income
   
13,219
     
12,352
     
25,066
     
23,448
 
Interest expense:
                               
Deposits
   
211
     
231
     
420
     
455
 
Total interest expense
   
211
     
231
     
420
     
455
 
Net interest income
   
13,008
     
12,121
     
24,646
     
22,993
 
Provision for loan losses
   
300
     
     
600
     
300
 
Net interest income after provision for loan losses
   
12,708
     
12,121
     
24,046
     
22,693
 
Non-interest income:
                               
Service charges on deposit accounts
   
451
     
406
     
894
     
766
 
Gains on sales of loans held-for-sale
   
50
     
407
     
118
     
1,046
 
Investment and brokerage services income
   
145
     
152
     
306
     
296
 
Mortgage brokerage income
   
11
     
14
     
11
     
14
 
Loan servicing income
   
107
     
105
     
491
     
460
 
Debit card income
   
657
     
672
     
1,280
     
1,271
 
Losses on sales/calls of available-for-sale securities
   
(152
)
   
(191
)
   
(152
)
   
(201
)
Other income
   
223
     
219
     
462
     
422
 
Total non-interest income
   
1,492
     
1,784
     
3,410
     
4,074
 
Non-interest expenses:
                               
Salaries and employee benefits
   
5,731
     
5,589
     
11,414
     
11,228
 
Occupancy and equipment
   
883
     
879
     
1,749
     
1,706
 
Data processing
   
836
     
927
     
1,675
     
1,718
 
Stationery and supplies
   
64
     
76
     
128
     
133
 
Advertising
   
74
     
84
     
177
     
150
 
Directors’ fees
   
73
     
84
     
136
     
122
 
Other expense
   
1,667
     
1,717
     
3,151
     
2,800
 
Total non-interest expenses
   
9,328
     
9,356
     
18,430
     
17,857
 
Income before provision for income taxes
   
4,872
     
4,549
     
9,026
     
8,910
 
Provision for income taxes
   
1,326
     
1,243
     
2,439
     
2,426
 
 
                               
Net income
 
$
3,546
   
$
3,306
   
$
6,587
   
$
6,484
 
 
                               
Basic earnings per common share
 
$
0.26
   
$
0.23
   
$
0.48
   
$
0.46
 
Diluted earnings per common share
 
$
0.26
   
$
0.23
   
$
0.48
   
$
0.45
 

See notes to unaudited condensed consolidated financial statements.

4

FIRST NORTHERN COMMUNITY BANCORP

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(in thousands)
 
Three months
ended
June 30, 2022
   
Three months
ended
June 30, 2021
   
Six months
ended
June 30, 2022
   
Six months
ended
June 30, 2021
 
Net income
 
$
3,546
   
$
3,306
   
$
6,587
   
$
6,484
 
Other comprehensive income (loss), net of tax:
                               
Unrealized holding (losses) gains arising during the period, net of tax effect of $(4,335) and $5 for the three months ended June 30, 2022 and June 30, 2021, respectively, and $(12,389) and $(1,682) for the six months ended June 30, 2022 and June 30, 2021, respectively
   
(10,749
)
   
10
     
(30,712
)
   
(4,169
)
Less: reclassification adjustment due to losses realized on sales of securities, net of tax effect of $44 and $55 for the three months ended June 30, 2022 and June 30, 2021, respectively, and $44 and $58 for the six months ended June 30, 2022 and June 30, 2021, respectively
   
108
     
136
     
108
     
143
 
Other comprehensive income (loss), net of tax
 
$
(10,641
)
 
$
146
   
$
(30,604
)
 
$
(4,026
)
 
                               
Comprehensive income (loss)
 
$
(7,095
)
 
$
3,452
   
$
(24,017
)
 
$
2,458
 

See notes to unaudited condensed consolidated financial statements.

5

FIRST NORTHERN COMMUNITY BANCORP
 
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

(in thousands, except share data)

 
 
Common Stock
   
Additional
Paid-in
   
Retained
   
Accumulated
Other
Comprehensive
Income (Loss),
       
 
 
Shares
   
Amounts
   
Capital
   
Earnings
   
net of tax
   
Total
 
 
                                   
Balance at December 31, 2020
   
13,634,463
   
$
107,527
   
$
977
   
$
37,115
   
$
5,038
   
$
150,657
 
Net income
                           
3,178
             
3,178
 
Other comprehensive loss, net of taxes
                                   
(4,172
)
   
(4,172
)
Stock dividend adjustment
   
1,282
     
329
             
(329
)
           
 
Cash in lieu of fractional shares
   
(168
)
                   
(8
)
           
(8
)
Stock-based compensation
           
144
                             
144
 
Common shares issued related to restricted stock grants
   
38,400
     
                             
 
Stock options exercised, net
   
6,108
     
                             
 
Balance at March 31, 2021
   
13,680,085
   
$
108,000
   
$
977
   
$
39,956
   
$
866
   
$
149,799
 
Net income
                           
3,306
             
3,306
 
Other comprehensive income, net of taxes
                                   
146
     
146
 
Stock-based compensation
           
148
                             
148
 
Common shares issued related to restricted stock grants
    3,000                                        
Stock repurchase and retirement
    (82,549 )     (925 )                             (925 )
Balance at June 30, 2021
   
13,600,536
   
$
107,223
   
$
977
   
$
43,262
   
$
1,012
   
$
152,474
 
                                                 
Balance at December 31, 2021
   
13,848,904
   
$
109,793
   
$
977
   
$
44,338
   
$
(4,197
)
 
$
150,911
 
Net income
                           
3,041
             
3,041
 
Other comprehensive loss, net of taxes
                                   
(19,963
)
   
(19,963
)
Stock dividend adjustment
   
3,276
     
366
             
(366
)
           
 
Cash in lieu of fractional shares
   
(161
)
                   
(8
)
           
(8
)
Stock-based compensation
           
164
                             
164
 
Common shares issued related to restricted stock grants
   
67,596
     
                             
 
Stock options exercised, net
   
11,615
     
                             
 
Stock repurchase and retirement
    (1,401 )     (15 )                             (15 )
Balance at March 31, 2022
   
13,929,829
   
$
110,308
   
$
977
   
$
47,005
   
$
(24,160
)
 
$
134,130
 
Net income
                           
3,546
             
3,546
 
Other comprehensive loss, net of taxes
                                   
(10,641
)
   
(10,641
)
Stock-based compensation
           
168
                             
168
 
Common shares issued related to restricted stock grants
   
1,500
     
                             
 
Stock repurchase and retirement
   
(7,280
)
   
(69
)
                           
(69
)
Balance at June 30, 2022
   
13,924,049
   
$
110,407
   
$
977
   
$
50,551
   
$
(34,801
)
 
$
127,134
 

See notes to unaudited condensed consolidated financial statements.

6

FIRST NORTHERN COMMUNITY BANCORP
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
 
 
(in thousands)
 
 
 
Six months ended
June 30, 2022
   
Six months ended
June 30, 2021
 
Cash Flows From Operating Activities
           
Net income
 
$
6,587
   
$
6,484
 
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation
   
383
     
377
 
Accretion and amortization of investment securities premiums and discounts, net
   
2,523
     
1,879
 
Valuation adjustment on mortgage servicing rights
   
(276
)
   
(34
)
(Decrease) increase in deferred loan origination fees and costs, net
   
(2,252
)
   
1,614
 
Provision for loan losses
   
600
     
300
 
Stock-based compensation
   
332
     
292
 
Losses on sales/calls of available-for-sale securities
   
152
     
201
 
Amortization of operating lease right-of-use asset
   
560
     
503
 
Gains on sales of loans held-for-sale
   
(118
)
   
(1,046
)
Proceeds from sales of loans held-for-sale
   
8,796
     
44,091
 
Originations of loans held-for-sale
   
(7,615
)
   
(36,926
)
Changes in assets and liabilities:
               
Increase in interest receivable and other assets
   
(1,634
)
   
(547
)
Decrease in interest payable and other liabilities
   
(2,139
)
   
(2,682
)
Net cash provided by operating activities
   
5,899
     
14,506
 
 
               
Cash Flows From Investing Activities
               
Proceeds from calls or maturities of available-for-sale securities
   
8,590
     
10,190
 
Proceeds from sales of available-for-sale securities
   
6,349
     
19,447
 
Principal repayments on available-for-sale securities
   
54,926
     
43,134
 
Purchases of available-for-sale securities
   
(121,041
)
   
(206,980
)
Proceeds from maturities of certificates of deposit
   
3,926
     
3,920
 
Proceeds from sales of certificates of deposit
    493        
Purchases of certificates of deposit
   
(2,480
)
   
 
Net (increase) decrease in loans
   
(77,565
)
   
2,931
 
Purchases of Federal Home Loan Bank stock and other equity securities, at cost     (2,343 )     (617 )
Purchases of premises and equipment
   
(12
)
   
(245
)
Net cash used in investing activities
   
(129,157
)
   
(128,220
)
 
               
Cash Flows From Financing Activities
               
Net increase in deposits
   
22,893
     
185,065
 
Principal payments on Federal Home Loan Bank advances           (5,000 )
Cash dividends paid in lieu of fractional shares
   
(8
)
   
(8
)
Repurchases of common stock
   
(84
)
   
(925
)
Net cash provided by financing activities
   
22,801
     
179,132
 
 
               
Net (decrease) increase in Cash and Cash Equivalents
   
(100,457
)
   
65,418
 
Cash and Cash Equivalents, beginning of period
   
345,929
     
267,177
 
Cash and Cash Equivalents, end of period
 
$
245,472
   
$
332,595
 
 
               
Supplemental Disclosures of Cash Flow Information:
               
Cash paid during the period for:
               
Interest
 
$
395
   
$
452
 
Income taxes
  $ 2,610     $ 2,670  
Supplemental disclosures of non-cash investing and financing activities:
               
Stock dividend distributed
 
$
6,992
   
$
6,636
 
Unrealized holding losses on available for sale securities, net of taxes
 
$
(30,604
)
 
$
(4,026
)
Transfer of loans held-for-sale to loans held-for-investment
 
$
    $
1,765
 
Market value of shares tendered in-lieu of cash to pay for exercise of options
  $ 65     $ 32  
Recognition of right-of-use assets obtained in exchange for operating lease liabilities
  $
707     $
 

See notes to unaudited condensed consolidated financial statements.

7

FIRST NORTHERN COMMUNITY BANCORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022 and 2021 and December 31, 2021

1.
BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of First Northern Community Bancorp (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission.  Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included.  The results of operations for any interim period are not necessarily indicative of results expected for the full year.  These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the Securities and Exchange Commission ("SEC"). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as reported amounts of revenue and expense during the reporting period.  Actual results could differ from those estimates.  All material intercompany balances and transactions have been eliminated in consolidation.

2.
ACCOUNTING POLICIES


The most significant accounting policies followed by the Company are presented in Note 1 to the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. These policies, along with the disclosures presented in the other financial statement notes and in this discussion, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined. Based on the valuation techniques used and the sensitivity of financial statement amounts to the methods, assumptions, and estimates underlying those amounts, Management has identified the allowance for loan losses accounting to be the accounting area requiring the most subjective or complex judgments, and as such the accounting area that could be most subject to revision as new information becomes available. A discussion of the factors affecting accounting for the allowance for loan losses is included in the “Asset Quality” and “Allowance for Loan Losses” discussions below.

 

Application of these principles requires the Company to make certain estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available as of the date of the financial statements; accordingly, as this information changes, the financial statements could reflect different estimates, assumptions, and judgments. Certain accounting policies inherently have a greater reliance on the use of estimates, assumptions and judgments and as such have a greater possibility of producing results that could be materially different than originally reported. Estimates, assumptions and judgments are necessary when assets and liabilities are required to be recorded at fair value, when a decline in the value of an asset not carried on the financial statements at fair value warrants an impairment writedown or valuation reserve to be established, or when an asset or liability needs to be recorded contingent upon a future event. Carrying assets and liabilities at fair value inherently results in more financial statement volatility. The fair values and the information used to record valuation adjustments for certain assets and liabilities are based either on quoted market prices or are provided by other third-party sources, when available.

Recently Issued Accounting Pronouncements:


In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2020-02, Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842).  This ASU adds an SEC paragraph pursuant to the issuance of SEC Staff Accounting Bulletin No. 119 on loan losses to the FASB Codification Topic 326. This ASU also updates the SEC section of the Codification for the change in the effective date of Topic 842.  This ASU was effective upon addition to the FASB Codification.  The Company adopted ASU 2016-02, Leases (Topic 842), on January 1, 2019.  ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), is effective on January 1, 2023 for smaller reporting companies with less than $250 million in public float as defined in the SEC's rules.  The Company presently is a smaller reporting company.  The Company will apply the amendment's provisions as a cumulative-effect adjustment to retained earnings at the beginning of the first period the amendment is effective.  The Company has formed a team that is working on an implementation plan to adopt the amendment.  The implementation plan will include developing policies, procedures and internal controls over the model.  The Company is also working with a software vendor to measure expected losses required by the amendment.  The Company is currently evaluating the effects that the adoption of this amendment will have on its consolidated financial statements and expects that the portfolio composition and economic conditions at the time of adoption will influence the accounting adjustment made at the time the amendment is adopted.


In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848).  This ASU provides temporary optional guidance to ease the potential burden in accounting for reference rate reform.  This ASU provides optional expedients and exceptions for contracts, hedging relationships, and other transactions that reference LIBOR or other reference rates expected to be discontinued because of reference rate reform.  This ASU was effective for all entities as of March 12, 2020 through December 31, 2022.  As of January 1, 2022, the Company is no longer originating LIBOR-based loans and is originating new variable rate loans using the Secured Overnight Financing Rate (SOFR).  For existing LIBOR based loans, the Company is monitoring the development and reporting of fallback indices.  The Company does not expect this ASU to have a material impact on the Company’s consolidated financial statements.



In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848).  This ASU applies to contracts, hedging relationships and other transactions that reference LIBOR or other rate references expected to be discontinued because of reference rate reform. The amendments in this ASU are elective and apply to all entities that have derivative instruments that use an interest rate that will be modified by reference rate reform. This ASU provides implementation guidance to clarify that certain optional expedients and exceptions in Topic 848 may be applied to derivative instruments. This ASU may be elected on a full retrospective basis for any interim period subsequent to March 12, 2020, or on a prospective basis to new modifications from any date subsequent to the date of issuance.  The Company is evaluating the optional election of this ASU for the transition from LIBOR to a new reference rate.  The Company does not expect this ASU to have a material impact on the Company’s consolidated financial statements.



In March 2022, the FASB issued ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.  These amendments eliminate the TDR recognition and measurement guidance and, instead, require that an entity evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an existing loan. The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty.  For public business entities, these amendments require that an entity disclose current-period gross writeoffs by year of origination for financing receivables and net investment in leases within the scope of Subtopic 326-20.  This ASU is effective on January 1, 2023, the same effective date as ASU 2016-13.  The Company is currently evaluating the effects that the adoption of this amendment will have on its consolidated financial statements.



In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Salre Restrictions.  These amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.   This ASU is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2023.  The Company does not expect this ASU to have a material impact on the Company’s consolidated financial statements.

9

3. 
INVESTMENT SECURITIES

The amortized cost, unrealized gains and losses and estimated fair values of investments in debt and other securities at June 30, 2022 are summarized as follows:

(in thousands)
 
Amortized
cost
   
Unrealized
gains
   
Unrealized
losses
   
Estimated
fair value
 
 
                       
Investment securities available-for-sale:
                       
U.S. Treasury securities
 
$
117,097
   
$
7
   
$
(4,171
)
 
$
112,933
 
Securities of U.S. government agencies and corporations
   
113,506
     
1
     
(7,170
)
   
106,337
 
Obligations of states and political subdivisions
   
53,053
     
89
     
(4,807
)
   
48,335
 
Collateralized mortgage obligations
   
122,389
     
1
     
(13,585
)
   
108,805
 
Mortgage-backed securities
   
278,548
     
11
     
(17,204
)
   
261,355
 
                                 
Total debt securities
 
$
684,593
   
$
109
   
$
(46,937
)
 
$
637,765
 

The amortized cost, unrealized gains and losses and estimated fair values of investments in debt and other securities at December 31, 2021 are summarized as follows:

(in thousands)
 
Amortized
cost
   
Unrealized
gains
   
Unrealized
losses
   
Estimated
fair value
 
 
                       
Investment securities available-for-sale:
                       
U.S. Treasury securities
 
$
86,534
   
$
388
   
$
(711
)
 
$
86,211
 
Securities of U.S. government agencies and corporations
   
104,106
     
330
     
(1,826
)
   
102,610
 
Obligations of states and political subdivisions
   
44,842
     
1,444
     
(301
)
   
45,985
 
Collateralized mortgage obligations
   
137,872
     
665
     
(2,885
)
   
135,652
 
Mortgage-backed securities
   
262,738
     
1,971
     
(2,954
)
   
261,755
 
                                 
Total debt securities
 
$
636,092
   
$
4,798
   
$
(8,677
)
 
$
632,213
 

The Company had $6,349,000 and $15,804,000 in proceeds from sales  of available-for-sale securities for the three-month periods ended June 30, 2022 and 2021, respectively.  The Company had $6,349,000 and $19,447,000 in proceeds from sales of available-for-sale securities for the six-month periods ended June 30, 2022 and 2021, respectively.  Gross realized gains on sales of available-for-sale securities were $0 and $297,000 for the three-month periods ended June 30, 2022 and 2021, respectively.  Gross realized losses on sales of available-for-sale securities were $152,000 and $488,000 for the three-month periods ended June 30, 2022 and 2021, respectively.  Gross realized gains on sales of available-for-sale securities were $0 and $322,000 for the six-month periods ended June 30, 2022 and 2021, respectively.  Gross realized losses on sales of available-for-sale securities were $152,000 and $523,000 for the six-month periods ended June 30, 2022 and 2021, respectively.

The amortized cost and estimated market value of debt and other securities at June 30, 2022, by contractual maturity, are shown in the following table:

(in thousands)
 
Amortized
cost
   
Estimated
fair value
 
 
           
Maturity in years:
           
Due in one year or less
 
$
25,795
   
$
25,664
 
Due after one year through five years
   
181,126
     
172,968
 
Due after five years through ten years
   
48,069
     
44,164
 
Due after ten years
   
28,666
     
24,809
 
Subtotal
   
283,656
     
267,605
 
Mortgage-backed securities & Collateralized mortgage obligations    
400,937
     
370,160
 
Total
 
$
684,593
   
$
637,765
 

Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.  In addition, factors such as prepayments and interest rates may affect the yield on the carrying value of mortgage-related securities.

10

An analysis of gross unrealized losses of the available-for-sale investment securities portfolio as of June 30, 2022, follows:


 
Less than 12 months
   
12 months or more
   
Total
 
(in thousands)  
Fair Value
   
Unrealized
losses
   
Fair Value
   
Unrealized
losses
   
Fair Value
   
Unrealized
losses
 
 
                                   
U.S. Treasury securities
 
$
96,676
   
$
(3,562
)
 
$
11,766
   
$
(609
)
 
$
108,442
   
$
(4,171
)
Securities of U.S. government agencies and corporations
   
56,053
     
(1,766
)
   
49,282
     
(5,404
)
   
105,335
     
(7,170
)
Obligations of states and political subdivisions
   
37,968
     
(4,188
)
   
2,687
     
(619
)
   
40,655
     
(4,807
)
Collateralized mortgage obligations
   
92,906
     
(11,268
)
   
15,085
     
(2,317
)
   
107,991
     
(13,585
)
Mortgage-backed securities
   
155,111
     
(7,850
)
   
94,453
     
(9,354
)