Company: EMYB
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001449794-25-000009
Chunk: 34

Company: Embassy Bancorp, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 34
---
 in its entirety, as “available for sale.” Management believes that a portfolio classification of available for sale allows complete flexibility in the investment portfolio. Using this classification, the Company intends to hold these securities for an indefinite amount of time, but not necessarily to maturity. Such securities are carried at fair value with unrealized gains or losses reported as a separate component of stockholders’ equity. The portfolio is structured to provide a return on investments while providing a consistent source of liquidity and meeting strict risk standards. Investment securities consist primarily of mortgage-backed securities issued by FHLMC or FNMA, taxable and non-taxable municipal bonds, government agency bonds, and Treasury bonds. The Company holds no high-risk or direct internationally exposed securities or derivatives as of March 31, 2025. The Company has not made any investments in non-U.S. government agency mortgage backed securities or sub-prime loans. The current liquidity of the portfolio has been impacted by the increase in market interest rates. Selling of securities would not be expected as a primary source of short term liquidity given the unrealized losses currently in the portfolio. Total securities at March 31, 2025 were $327.0 million compared to $280.8 million at December 31, 2024. The increase in the investment portfolio resulted from the purchase of seventeen (17) Treasury bonds and five (5) government agency bonds totaling $66.5 million and a decrease in unrealized losses of $3.5 million, offset by principal pay downs on mortgage-backed securities, the maturity of one (1) government agency bond, and the maturity of four (4) Treasury bonds totaling $24.1 million. The carrying value of the securities portfolio as of March 31, 2025 includes a net unrealized loss of $60.6 million, which is recorded as accumulated other comprehensive loss in stockholders’ equity net of income tax effect. This compares to a net unrealized loss of $64.1 million at December 31, 2024. The current unrealized loss position of the securities portfolio is due to increasing market interest rates in 2022 through 2023 in response to economic conditions since initial purchase. Management determined the Company does not have the intent to sell, nor is it more likely than not that it will be required to sell, securities in an unrealized loss position at March 31, 2025. Further, management reviewed the Company's securities as of March 31, 2025 and concluded there were no credit-related declines in fair value.