NOTE 2 – SECURITIES

The amortized cost and fair value of securities were as follows (dollars in thousands):

There were no sales of securities available for sale during the years ended December 31, 2023 and 2022.

Contractual maturities of debt securities at December 31, 2023 were as follows (dollars in thousands):

Securities with unrealized losses at December 31, 2023 and 2022, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows (dollars in thousands):

Management evaluates securities in an unrealized loss position at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. In analyzing an issuer's financial condition, Management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred and the results of reviews of the issuer's financial condition.

At December 31, 2023, 402 securities available for sale with fair values totaling $455.0 million had unrealized losses totaling $29.4 million. At December 31, 2022, 444 securities available for sale with fair values totaling $464.4 million had unrealized losses totaling $40.1 million.  For securities available for sale with unrealized losses, management considered the financial condition of the issuer and the Company's intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair value.  At December 31, 2023, 58 securities held to maturity with fair values totaling $288.9 million had unrealized losses totaling $9.7 million. At December 31, 2022, 76 securities held to maturity with fair values totaling $317.0 million had unrealized losses totaling $16.5 million.  Management has the ability and intent to hold the securities classified as held to maturity until they mature, at which time the Company will receive full value for the securities.  Management determined that the unrealized losses for each period and each investment were attributable to changes in interest rates and not due to credit quality.  The Company's investment portfolio contains a significant amount of agency securities which have risk characteristics similar to U.S. government bonds.  All of the Company's municipal and corporate securities were rated AA or higher at December 31, 2023 and 2022.  As such, no impairment charges were recognized on securities available for sale or held to maturity during the year ended December 31, 2022, and no allowance for credit losses on securities available for sale or held to maturity have been established as of December 31, 2023.

On January 1, 2022, the Company reclassified ten U.S. Treasury securities with an amortized cost of $123.5 million from available for sale to held to maturity, as it has the intent and ability to hold these securities to maturity. These securities had net unrealized gains of $113,000 at the date of transfer, which will continue to be reported in accumulated other comprehensive income, and will be amortized over the remaining life of the securities as an adjustment of yield. The effect on interest income of the amortization of net unrealized gains is offset by the amortization of the premium on the securities transferred.

Securities with a carrying value of approximately $3.7 million and $3.5 million were pledged as security for public deposits, letters of credit and for other purposes required or permitted by law at December 31, 2023 and 2022, respectively.

The Company also has an investment in a fund that invests in projects qualifying for Community Reinvestment Act credit which is carried at a fair value of $1.3 million and reported in other assets at December 31, 2023 and 2022.