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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: 0-26128

 

Finward Bancorp

(Exact name of registrant as specified in its charter)

 

 

Indiana

35-1927981

 
 

(State or other jurisdiction of incorporation

(I.R.S. Employer Identification Number)

 
 

or organization)

  
    
 

9204 Columbia Avenue

  
 

       Munster, Indiana      

46321

 
 

(Address of principal executive offices)

(ZIP code)

 

 

Registrant's telephone number, including area code: (219) 8364400

 

 

N/A

 
 

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

 

 

 

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

 

Title of each class

Trading

Symbol(s)

Name of each exchange on which

registered

Common stock, no par value

FNWD

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 (§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, 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 ☒

 

There were 4,297,900 shares of the registrant’s Common Stock, without par value, outstanding at August 15, 2022.

 

 

 

 

 

Finward Bancorp

Index

 

                                                                                                                                                                                                

 

Page

 

Number

PART I. Financial Information

 
   

Item 1.  Unaudited Financial Statements and Notes

1

   

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

29

   

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

42

   

Item 4.  Controls and Procedures

42

   

PART II. Other Information

43

   

SIGNATURES

44

   

EXHIBITS

 

31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

 

31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

 

32.1 Section 1350 Certifications

 

101 XBRL Interactive Data File

 

 

 

 

 

Finward Bancorp

Consolidated Balance Sheet

 

(Dollars in thousands)

 

June 30, 2022

(unaudited)

  

December 31,

2021

 
         

ASSETS

        
         

Cash and non-interest bearing deposits in other financial institutions

 $20,844  $12,725 

Interest bearing deposits in other financial institutions

  55,602   19,987 

Federal funds sold

  2,856   464 
         

Total cash and cash equivalents

  79,302   33,176 
         

Certificates of deposit in other financial institutions

  1,482   1,709 
         

Securities available-for-sale

  400,466   526,889 

Loans held-for-sale

  1,525   4,987 

Loans receivable, net of deferred fees and costs

  1,474,381   966,720 

Less: allowance for loan losses

  (13,406)  (13,343)

Net loans receivable

  1,460,975   953,377 

Federal Home Loan Bank stock

  3,038   3,247 

Accrued interest receivable

  6,892   5,444 

Premises and equipment

  45,985   31,385 

Cash value of bank owned life insurance

  31,571   31,440 

Goodwill

  22,615   11,109 

Other intangible assets

  5,588   3,126 

Other assets

  42,046   14,854 
         

Total assets

 $2,101,485  $1,620,743 
         

LIABILITIES AND STOCKHOLDERS' EQUITY

        
         

Deposits:

        

Non-interest bearing

 $370,567  $295,294 

Interest bearing

  1,546,648   1,138,907 

Total

  1,917,215   1,434,201 

Repurchase agreements

  24,536   14,581 

Accrued expenses and other liabilities

  23,080   15,346 
         

Total liabilities

  1,964,831   1,464,128 
         

Commitments and contingencies

          
         

Stockholders' Equity:

        

Preferred stock, no par or stated value; 10,000,000 shares authorized, none outstanding

  -   - 

Common stock, no par or stated value; 10,000,000 shares authorized; shares issued and outstanding: June 30, 2022 - 4,296,949 December 31, 2021 - 3,480,701

        

Additional paid-in capital

  68,623   30,430 

Accumulated other comprehensive (loss) income

  (57,781)  4,276 

Retained earnings

  125,812   121,909 
         

Total stockholders' equity

  136,654   156,615 
         

Total liabilities and stockholders' equity

 $2,101,485  $1,620,743 

 

See accompanying notes to consolidated financial statements.

 

 

1

 

 

Finward Bancorp

Consolidated Statements of Income

(unaudited)

 

(Dollars in thousands)

 

Three Months Ended June 30,

  

Six Months Ended June 30,

 

(Unaudited)

 

2022

  

2021

  

2022

  

2021

 

Interest income:

                

Loans receivable

 $15,221  $10,275  $28,507  $21,021 

Securities

  2,469   2,144   5,066   4,105 

Other interest earning assets

  50   16   61   36 
                 

Total interest income

  17,740   12,435   33,634   25,162 
                 

Interest expense:

                

Deposits

  389   549   726   1,200 

Repurchase agreements

  26   12   42   22 

Borrowed funds

  27   2   33   22 
                 

Total interest expense

  442   563   801   1,244 
                 

Net interest income

  17,298   11,872   32,833   23,918 

Provision for loan losses

  -   576   -   1,154 
                 

Net interest income after provision for loan losses

  17,298   11,296   32,833   22,764 
                 

Noninterest income:

                

Fees and service charges

  1,560   1,471   2,864   2,537 

Wealth management operations

  588   576   1,183   1,183 

Gain on sale of loans held-for-sale, net

  291   1,116   898   3,165 

Gain on sale of securities, net

  258   269   639   686 

Increase in cash value of bank owned life insurance

  193   188   445   357 

Gain (loss) on sale of foreclosed real estate

  -   36   -   27 

Other

  6   24   11   38 
                 

Total noninterest income

  2,896   3,680   6,040   7,993 
                 

Noninterest expense:

                

Compensation and benefits

  7,538   5,897   14,905   11,582 

Data processing

  1,246   597   4,300   1,125 

Occupancy and equipment

  1,729   1,324   3,229   2,696 

Marketing

  385   195   1,036   394 

Federal deposit insurance premiums

  380   204   599   384 

Other

  3,898   2,793   7,376   5,322 
                 

Total noninterest expense

  15,176   11,010   31,445   21,503 
                 

Income before income tax expenses

  5,018   3,966   7,428   9,254 

Income tax expenses

  587   395   862   1,140 
                 

Net income

 $4,431  $3,571  $6,566  $8,114 
                 

Earnings per common share:

                

Basic

 $1.04  $1.03  $1.60  $2.33 

Diluted

 $1.04  $1.03  $1.59  $2.33 
                 

Dividends declared per common share

 $0.31  $0.31  $0.62  $0.62 

 

 

See accompanying notes to consolidated financial statements.

 

2

 

 

Finward Bancorp

 

Consolidated Statements of Comprehensive (Loss) Income

 

(unaudited)

 

 

(Dollars in thousands)

 

Three Months Ended June 30,

  

Six Months Ended June 30,

 
  

2022

  

2021

  

2022

  

2021

 
                 

Net income

 $4,431  $3,571  $6,566  $8,114 
                 

Net change in net unrealized gains and losses on securities available-for-sale:

                

Unrealized (loss) gain arising during the period

  (30,521)  5,624   (77,910)  (2,137)

Less: reclassification adjustment for gains included in net income

  (258)  (269)  (639)  (686)

Net securities (loss) gain during the period

  (30,779)  5,355   (78,549)  (2,823)

Tax effect

  6,460   (1,126)  16,492   591 

Other comprehensive (loss) gain, net of tax

  (24,319)  4,229   (62,057)  (2,232)
                 

Comprehensive (loss) gain, net of tax

  (19,888)  7,800   (55,491)  5,882 

 

See accompanying notes to consolidated financial statements.

 

3

 

 

Finward Bancorp

Consolidated Statements of Changes in Stockholder's Equity

(unaudited)

 

          

Accumulated

         
      

Additional

  

Other

         
  

Common

  

Paid-in

  

Comprehensive

  

Retained

  

Total

 

(Dollars in thousands, except per share data)

 

Stock

  

Capital

  

(Loss)/Income

  

Earnings

  

Equity

 
                     
                     

Balance at January 1, 2021

 $-  $29,987  $10,441  $111,261  $151,689 
                     

Net income

  -   -   -   4,543   4,543 

Other comprehensive loss, net of tax

        (6,461)  -   (6,461)

Net surrender value of 1,711 restricted stock awards

  -   (68)  -   -   (68)

Stock-based compensation expense

     146         146 

Cash dividends, $0.31 per share

  -   -   -   (1,079)  (1,079)
                     

Balance at March 31, 2021

 $-  $30,065  $3,980  $114,725  $148,770 
                     

Net income

  -   -   -   3,571   3,571 

Other comprehensive loss, net of tax

        4,229   -   4,229 

Net surrender value of 1,404 restricted stock awards

  -   (63)  -   -   (63)

Stock-based compensation expense

     139         139 

Cash dividends, $0.31 per share

  -   -   -   (1,077)  (1,077)
                     

Balance at June 30, 2021

 $-  $30,141  $8,209  $117,219  $155,569 
                     
                     

Balance at January 1, 2022

 $-  $30,430  $4,276  $121,909  $156,615 
                     

Net income

  -   -   -   2,135   2,135 

Other comprehensive loss, net of tax

        (37,738)     (37,738)

Net surrender value of 2,336 restricted stock awards

     (115)        (115)

Stock-based compensation expense

  -   169   -   -   169 

Issuance of 795,423 shares at $47.75 per share, for acquisition of Royal Financial, Inc

     37,902         37,902 

Cash dividends, $0.31 per share

  -   -   -   (1,331)  (1,331)
                     

Balance at March 31, 2022

 $-  $68,386  $(33,462) $122,713  $157,637 
                     

Net income

  -   -   -   4,431   4,431 

Other comprehensive loss, net of tax

        (24,319)     (24,319)

Net surrender value of 113 restricted stock awards

     (5)        (5)

Stock-based compensation expense

  -   163   -   -   163 

Other adjustments

  -   79   -   -   79 

Cash dividends, $0.31 per share

  -   -   -   (1,332)  (1,332)
                     

Balance at June 30, 2022

 $-  $68,623  $(57,781) $125,812  $136,654 

 

See accompanying notes to consolidated financial statements.

 

4

 

 

Finward Bancorp

Consolidated Statements of Cash Flows

(unaudited)

 

(Dollars in thousands)

 

Six months ended June 30,

 
  

2022

  

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES:

        

Net income

 $6,566  $8,114 

Adjustments to reconcile net income to net cash provided by operating activities:

        

Origination of loans for sale

  (29,179)  (85,903)

Sale of loans originated for sale

  33,506   94,163 

Depreciation and amortization, net of accretion

  3,121   2,154 

Stock based compensation expense

  332   285 

Gain on sale of securities, net

  (639)  (686)

Gain on sale of loans held-for-sale, net

  (966)  (3,293)

Gain on sale of foreclosed real estate

  -   (27)

Gain on cash value of bank owned life insurance

  (445)  (357)

Loss on derivatives

  68   128 

Provision for loan losses

  -   1,154 

Net change in:

        

Interest receivable

  388   (90)

Other assets

  (3,038)  1,728 

Accrued expenses and other liabilities

  (3,824)  (3,723)

Net cash provided by operating activities

  5,890   13,647 
         

CASH FLOWS FROM INVESTING ACTIVITIES:

        

Proceeds from maturities of certificates of deposit in other financial institutions

  472   426 

Proceeds from maturities and pay downs of securities available-for-sale

  15,596   43,322 

Proceeds from sales of securities available-for-sale

  43,775   19,290 

Purchase of securities available-for-sale

  (11,713)  (119,075)

Proceeds from bank owned life insurance

  314   - 

Net change in loans receivable

  (54,178)  1,660 

Proceeds of Federal Home Loan Bank Stock

  1,512   671 

Purchase of loans receivable

  (2,663)  (5,978)

Purchase of premises and equipment, net

  (2,081)  (470)

Proceeds from sale of foreclosed real estate

  -   197 

Cash and cash equivalents from acquisition activity, net

  33,799   - 

Net cash provided by (used in) investing activities

  24,833   (59,957)
         

CASH FLOWS FROM FINANCING ACTIVITIES:

        

Change in deposits

  7,978   92,757 

Repayment of FHLB advances

  -   (6,000)

Net surrender value of restricted stock awards

  (120)  (131)

Change in repurchase agreements and other borrowed funds

  9,955   10,539 

Dividends paid

  (2,410)  (2,152)

Net cash (used in) provided by financing activities

  15,403   95,013 

Net change in cash and cash equivalents

  46,126   48,703 

Cash and cash equivalents at beginning of period

  33,176   19,922 

Cash and cash equivalents at end of period

 $79,302  $68,625 
         

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

        

Cash paid during the period for:

        

Interest

 $781  $1,262 

Income taxes

  1,157   2,020 

Acquisition activity:

        

Fair value of assets acquired, including cash and cash equivalents

 $528,321  $- 

Value of goodwill and other intangible assets

  14,726   - 

Fair value of liabilities assumed

  486,341   - 

Cash paid for acquisition

  18,725   - 

Issuance of common stock for acquisition

  37,981   - 

Noncash activities:

        

Dividends declared not paid

  1,332   1,077 

Securities purchased not settled

  -   9,764 

 

See accompanying notes to consolidated financial statements.

 

5

 

Finward Bancorp

Notes to Condensed Consolidated Financial Statements

(unaudited)

 

 

Note 1 - Basis of Presentation

 

Organization and Description of Business

 

The consolidated financial statements include the accounts of Finward Bancorp (the “Bancorp” or “FNWD”), its wholly-owned subsidiaries NWIN Risk Management, Inc. (a captive insurance subsidiary) and Peoples Bank (the “Bank”), and the Bank’s wholly-owned subsidiaries, Peoples Service Corporation, NWIN, LLC, NWIN Funding, Incorporated, 1683 Real Estate LLC, and Columbia Development Company, LLC. The Bancorp’s business activities include being a holding company for the Bank as well as a holding company for NWIN Risk Management, Inc. The Bancorp’s earnings are primarily dependent upon the earnings of the Bank. The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include all disclosures required by U.S. generally accepted accounting principles for complete presentation of consolidated financial statements. In the opinion of management, the consolidated financial statements contain all adjustments necessary to present fairly the consolidated balance sheets of the Bancorp as of June 30, 2022, and December 31, 2021, and the consolidated statements of income, comprehensive income (loss), and changes in stockholders’ equity for the three and six months ended June 30, 2022, and 2021, and consolidated statements of cash flows for the six months ended June 30, 2022, and 2021. The income reported for the six month period ended June 30, 2022, is not necessarily indicative of the results to be expected for the full year.

 

The Notes to the Consolidated Financial Statements appearing in Finward Bancorp’s Annual Report on Form 10-K (2021 Annual Report), which include descriptions of significant accounting policies, should be read in conjunction with these interim financial statements. The Consolidated Balance Sheet at December 31, 2021 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. Certain amounts in the prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on net income.

 

 

Note 2 - Use of Estimates

Preparing financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period, as well as the disclosures provided. Actual results could differ from those estimates. Estimates associated with the allowance for loan losses, fair values of foreclosed real estate, loan servicing rights, investment securities, deferred tax assets, goodwill, and the status of contingencies are particularly susceptible to material change in the near term.

 

 

Note 3 - Acquisition Activity

On January 31, 2022, Finward Bancorp (“Finward”) completed its previously announced acquisition of Royal Financial, Inc., a Delaware corporation (“RYFL”), pursuant to an Agreement and Plan of Merger dated July 28, 2021 (the “Merger Agreement”) between Finward and RYFL. The stockholders of both Finward and RYFL approved the Merger Agreement at the respective stockholder meetings of the companies held on December 13, 2021. Pursuant to the Merger Agreement, RYFL merged with and into Finward, with Finward as the surviving corporation (the “Merger”), and Royal Savings Bank, an Illinois state-chartered savings bank and wholly-owned subsidiary of RYFL, merged with and into Peoples Bank, the wholly-owned Indiana state-chartered commercial bank subsidiary of Finward, with Peoples Bank as the surviving bank.

 

Under the terms of the merger agreement, RYFL stockholders who owned 101 or more shares of RYFL common stock were permitted to elect to receive either 0.4609 shares of Finward common stock or $20.14 in cash, or a combination of both, for each share of RYFL common stock owned, subject to proration and allocation provisions such that 65% of the shares of RYFL common stock outstanding immediately prior to the closing of the merger were converted into the right to receive shares of Finward common stock and the remaining 35% of the outstanding RYFL shares were converted into the right to receive cash. Stockholders holding less than 101 shares of RYFL common stock received fixed consideration of $20.14 in cash per share and no stock consideration.

 

6

 

As a result of RYFL stockholder stock and cash elections and the related allocation and proration provisions of the merger agreement, Finward issued 795,423 shares of its common stock and paid cash consideration of approximately $18.7 million in the Merger. Based on the January 28, 2022, closing price of $47.75 per share of Finward common stock, the transaction had an implied valuation of approximately $56.7 million. In connection with the acquisition, Robert W. Youman, was appointed to the boards of directors of Finward and Peoples Bank effective as of the closing of the Merger. RYFL had a home office and eight branch offices in Cook County and DuPage County, Illinois. The acquisition has further expanded the Bank’s banking center network in Cook County and DuPage County, Illinois.

 

Under the acquisition method of accounting, the total purchase price is allocated to net tangible and intangible assets based on their current estimated fair values on the date of the acquisition. Based on the valuations of the fair value of tangible and intangible assets acquired and liabilities assumed, which are based on estimates and assumptions that are subject to change, the final purchase price for the RYFL acquisition is allocated as follows:

 

ASSETS

    

LIABILITIES

    

Cash and due from banks

 $52,524 

Deposits

    

Investment securities, available for sale

  - 

Non-interest bearing

 $32,095 

Certificate of deposit in other financial institutions

  245 

NOW accounts

  63,639 
     

Savings and money market

  184,149 

Total Loans

  450,757 

Certificates of deposits

  195,153 
     

Total Deposits

  475,036 

Premises and equipment, net

  13,896      

FHLB stock

  1,303 

Interest payable

  75 

Goodwill

  11,506 

Other liabilities

  11,228 

Core deposit intangible

  3,220      

Interest receivable

  1,836      

Other assets

  7,758      

Total assets purchased

 $543,045      

Common shares issued

  37,981      

Cash paid

  18,725      

Total purchase price

 $56,706 

Total liabilities assumed

 $486,339 

 

 

During the second quarter of 2022, an adjustment was made to the carrying value of other assets of $189 thousand, due to the valuation of prepaids brought over in the acquisition, and premises and equipment, net, of $48 thousand, due to a correction in the valuation of buildings, in addition, a correction was made to the valuation of shares issued increasing the value by $79 thousand. The resulting impact of these changes was a decrease to the goodwill balance related to the RYFL acquisition of $158 thousand.

 

Final estimates of fair value on the date of acquisition have not been finalized yet. Prior to the end of the one-year measurement period for finalizing the purchase price allocation, if information becomes available which would indicate adjustments are required to the purchase price allocation, such adjustments will be included in the purchase price allocation prospectively. If any adjustments are made to the preliminary assumptions (provisional amounts), disclosures will be made in the notes to the financial statements of the amounts recorded in the current period earnings by line item that have been recorded in previous reporting periods as if the adjustments to the provisional amounts had been recognized as of the acquisition date.

 

Goodwill of approximately $11.5 million, which is the excess of the acquisition consideration over the fair value of net assets acquired, is expected to be recorded in the RYFL acquisition and is the result of expected operational synergies and other factors. This goodwill is not expected to be deductible for tax purposes. To the extent that management revises any of the above fair value adjustments as a result of its continuing evaluation, the amount of goodwill recorded in the RYFL acquisition will change.

 

Gross loans acquired during the RYFL transaction totaled $456.7 million. As of the six months ended June 30, 2022, the remaining outstanding principal of loans directly related to the RYFL acquisition total $425.8 million, of which $8.1 million are expected to be uncollectable.

 

7

 

The following pro-forma and earnings (unaudited) of the combined company are presented as if the RYFL merger had occurred on January 1, 2022 and January 1, 2021:

 

  

For the three months ended

  

For the three months ended

  

For the six months ended

  

For the six months ended

 

(in thousands)

 

June 30, 2022

  

June 30, 2021

  

June 30, 2022

  

June 30, 2021

 

Selected Financial Data

                

Interest income

 $17,740  $17,263  $35,329  $34,654 

Interest expense

  (442)  (998)  (902)  (2,189)

Recovery of (provision for) loan losses

  -   (816)  -   (1,094)

Non-interest income

  2,896   3,902   6,179   8,418 

Non-interest expense (1)

  (15,176)  (13,831)  (29,573)  (26,776)

Income before provision for income taxes

  5,018   5,520   11,033   13,013 

Income tax expense

  (587)  (639)  (1,619)  (1,812)

Net income

 $4,431  $4,881  $9,414  $11,201 
                 

Earnings per common share:

                

Basic

 $1.04  $1.40  $2.29  $3.22 

Diluted

 $1.04  $1.40  $2.28  $3.22 

 

 (1)

Excludes $2.9 million in pre-tax merger expenses for the six months ended June 30, 2022.

 

 

For the six months ended June 30, 2022, the Bancorp has recorded $2.9 million in pre-tax one-time merger expenses related to the RYFL acquisition, and these expenses have been allocated to the following non-interest expense line items within the income statement:

 

(in thousands)

 

Six months ended

 

Noninterest expense:

 

June 30, 2022

 

Compensation and benefits

 $132 

Data processing

  1,929 

Marketing

  135 

Other

  656 
     

Period merger expense

 $2,852 

 

 

Note 4 - Securities

The estimated fair value of available-for-sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income were as follows:

 

  

(Dollars in thousands)

 
      

Gross

  

Gross

  

Estimated

 
  

Cost

  

Unrealized

  

Unrealized

  

Fair

 
  

Basis

  

Gains

  

Losses

  

Value

 

June 30, 2022

                

U.S. government sponsored entities

 $8,883  $-  $(949) $7,934 

U.S. treasury securities

  594   -   -   594 

Collateralized mortgage obligations and residential mortgage-backed securities

  171,286   2   (21,227)  150,061 

Municipal securities

  290,675   20   (49,848)  240,847 

Collateralized debt obligations

  2,173   -   (1,143)  1,030 

Total securities available-for-sale

 $473,611  $22  $(73,167) $400,466 

 

  

(Dollars in thousands)

 
      

Gross

  

Gross

  

Estimated

 
  

Cost

  

Unrealized

  

Unrealized

  

Fair

 
  

Basis

  

Gains

  

Losses

  

Value

 

December 31, 2021

                

U.S. government sponsored entities

 $8,883  $-  $(214) $8,669 

U.S. treasury securities

  400   -   -   400 

Collateralized mortgage obligations and residential mortgage-backed securities

  187,279   961   (3,539)  184,701 

Municipal securities

  322,750   9,904   (527)  332,127 

Collateralized debt obligations

  2,173   -   (1,181)  992 

Total securities available-for-sale

 $521,485  $10,865  $(5,461) $526,889 

 

8

 

The cost basis and estimated fair value of available-for-sale debt securities at June 30, 2022, by contractual maturity, were as follows. Securities not due at a single maturity date, primarily collateralized mortgage obligations and residential mortgage-backed securities, are shown separately.

 

  

(Dollars in thousands)

 
  

Available-for-sale

 
      

Estimated

 
  

Cost

  

Fair

 

June 30, 2022

 

Basis

  

Value

 

Due in one year or less

 $494  $495 

Due from one to five years

  1,954   1,956 

Due from five to ten years

  26,832   24,869 

Due over ten years

  273,045   223,085 
         

Collateralized mortgage obligations and residential mortgage-backed securities

  171,286   150,061 

Total

 $473,611  $400,466 

 

 

Sales of available-for-sale securities were as follows for the three months ended:

 

  

(Dollars in thousands)

 
  

June 30,

  

June 30,

 
  

2022

  

2021

 
         

Proceeds

 $27,539  $12,386 

Gross gains

  295   289 

Gross losses

  (37)  (20)

 

 

Sales of available-for-sale securities were as follows for the six months ended:

 

  

(Dollars in thousands)

 
  

June 30,

  

June 30,

 
  

2022

  

2021

 
         

Proceeds

 $43,775  $19,290 

Gross gains

  692   706 

Gross losses

  (53)  (20)

 

9

 

Accumulated other comprehensive income/(loss) balances, net of tax, related to available-for-sale securities, were as follows:

 

  

(Dollars in thousands)

 
  

Unrealized
gain/(loss)

 

Ending balance, December 31, 2021

 $4,276 

Current period change

  (62,057)

Ending balance, June 30, 2022

 $(