Securities

6 Months Ended

Jun. 30, 2025

Investments, Debt and Equity Securities [Abstract]

Note 2 Securities

The amortized cost and fair values, together with gross unrealized gains and losses of securities, are as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Held-to-Maturity Securities:
June 30, 2025
Certificates of deposit	$	245,000	$	—	$	(2,362	)	$	242,638

December 31, 2024
Certificates of deposit	$	980,144	$	—	$	(11,737	)	$	968,407


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available-for-sale Securities:
June 30, 2025
Municipal bonds, taxable	$	7,640,576	$	—	$	(939,324	)	$	6,701,252
Municipal bonds, non-taxable		1,782,989		—		(96,657	)		1,686,332
U.S. Government treasuries		7,997,214		—		(552,944	)		7,444,270
U.S. Government agencies		1,137,958		—		(144,446	)		993,512
Residential mortgage-backed securities		16,728,569		27,545		(2,219,533	)		14,536,581
Collateralized mortgage obligations		14,431,309		—		(1,539,547	)		12,891,762
	$	49,718,615	$	27,545	$	(5,492,451	)	$	44,253,709


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available-for-sale Securities:
December 31, 2024
Municipal bonds, taxable	$	8,021,120	$	—	$	(1,108,722	)	$	6,912,398
Municipal bonds, non-taxable		2,338,983		—		(118,010	)		2,220,973
U.S. Government treasuries		7,996,739		—		(738,449	)		7,258,290
U.S. Government agencies		1,157,342		—		(175,751	)		981,591
Residential mortgage-backed securities		17,444,497		—		(2,564,667	)		14,879,830
Collateralized mortgage obligations		15,056,234		—		(1,896,977	)		13,159,257
	$	52,014,915	$	—	$	(6,602,576	)	$	45,412,339

The amortized cost and fair value of securities at June 30, 2025, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties:


	Amortized		Fair
	Cost		Value
June 30, 2025
Available-for-sale
Within one year	$	485,000	$	484,302
One to five years		12,008,464		11,161,201
Five to ten years		5,565,273		4,776,928
After ten years		500,000		402,935
		18,558,737		16,825,366
Mortgage-backed securities		31,159,878		27,428,343
Totals	$	49,718,615	$	44,253,709


	Amortized		Fair
	Cost		Value
June 30, 2025
Held-to-maturity
Within one year	$	245,000	$	242,638

The carrying value of securities pledged as collateral, to secure public deposits and for other purposes, was approximately $12.5 million and $13.1 million at June 30, 2025 and December 31, 2024, respectively.

The Company had no sales of investment securities during the six months ended June 30, 2025 and 2024.

Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. Based on evaluation of available evidence, including recent changes in market interest rates and information obtained from regulatory filings, management believes the declines in fair value for these securities are not attributable to credit related events.

The following table shows the number of securities and aggregate depreciation from the Bank’s amortized cost basis at June 30, 2025 and December 31, 2024.


	June 30, 2025					December 31, 2024
	Number of		Aggregate			Number of		Aggregate
Description of Securities	securities		depreciation			securities		depreciation
Available-for-sale Securities:
Municipal bonds, taxable		15		(12.3	)%		16		(13.8	)%
Municipal bonds, non-taxable		5		(5.4	)%		7		(5.0	)%
U.S. Government treasuries		2		(6.9	)%		2		(9.2	)%
U.S. Government agencies		4		(12.7	)%		4		(15.2	)%
Residential mortgage-backed securities		59		(16.5	)%		61		(14.7	)%
Collateralized mortgage obligations		14		(10.7	)%		14		(12.6	)%
Total		99		(11.8	)%		104		(12.5	)%

Should of any of these securities experience credit related impairment, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the credit-related impairment is identified.

The following tables show the Bank’s investments’ gross unrealized losses and fair value of the Bank’s investments with unrealized losses, aggregated by investment class and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2025 and December 31, 2024:


	June 30, 2025
	Less than 12 Months				12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Available-for-sale Securities:
Municipal bonds, taxable	$	—	$	—	$	6,701,252	$	(939,324	)	$	6,701,252	$	(939,324	)
Municipal bonds, non-taxable		—		—		1,686,332		(96,657	)		1,686,332		(96,657	)
U.S. Government treasuries		—		—		7,444,270		(552,944	)		7,444,270		(552,944	)
U.S. Government agencies		—		—		993,512		(144,446	)		993,512		(144,446	)
Residential mortgage-backed securities		—		—		11,198,670		(2,219,533	)		11,198,670		(2,219,533	)
Collateralized mortgage obligations		—		—		12,891,763		(1,539,547	)		12,891,763		(1,539,547	)
	$	—	$	—	$	40,915,799	$	(5,492,451	)	$	40,915,799	$	(5,492,451	)


	December 31, 2024
	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Available-for-sale Securities:
Municipal bonds, taxable	$	—	$	—		$	6,912,398	$	(1,108,722	)	$	6,912,398	$	(1,108,722	)
Municipal bonds, non-taxable		—		—			2,220,973		(118,010	)		2,220,973		(118,010	)
U.S. Government treasuries		—		—			7,258,290		(738,449	)		7,258,290		(738,449	)
U.S. Government agencies		—		—			981,591		(175,751	)		981,591		(175,751	)
Residential mortgage-backed securities		1,528,223		(38,095	)		13,351,607		(2,526,572	)		14,879,830		(2,564,667	)
Collateralized mortgage obligations		—		—			13,159,257		(1,896,977	)		13,159,257		(1,896,977	)
	$	1,528,223	$	(38,095	)	$	43,884,116	$	(6,564,481	)	$	45,412,339	$	(6,602,576	)

U. S. Government Treasuries, U.S. Government Agencies, and Municipal Bonds

Unrealized losses on these securities have not been recognized into income because the issuers' bonds are of high credit quality, values have only been impacted by changes in interest rates since the securities were purchased, and the Bank does not intend to sell the

investments and it is not more likely than not the Bank will be required to sell the investments before recovery of their amortized cost basis. The fair value is expected to recover as the bonds approach the maturity date.

Mortgage-backed Securities and Collateralized Mortgage Obligations

The unrealized losses on the Bank’s investment in residential mortgage-backed securities and collateralized mortgage obligations were caused by changes in interest rates and illiquidity. The Bank expects to recover the amortized cost basis over the term of the securities. The decline in market value is attributable to changes in interest rates and illiquidity, not credit quality, and the Bank does not intend to sell the investments and it is not more likely than not the Bank will be required to sell the investments before recovery of their amortized cost basis. The fair value is expected to recover as the securities approach the maturity date.

Certificates of Deposit

Unrealized losses on these certificates of deposit have not been recognized into income because the issuers of the certificates are of high credit quality, values have only been impacted by changes in interest rates since the certificates were purchased, and the Bank does not intend to sell the certificates and it is not more likely than not the Bank will be required to sell the certificates before recovery of their amortized cost basis. The fair value is expected to recover as the certificates approach the maturity date.

Security Midwest Bancorp, Inc. 10-Q