owned $736.7 million and $738.6 million, respectively, of mortgage-backed securities issued by Freddie Mac, Fannie Mae, and Ginnie Mae.
Critical Accounting Policies
On January 1, 2023, we adopted ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which created material changes to our critical accounting policies that existed at December 31, 2022. This standard replaces the “incurred loss” model, which estimates a loss allowance based on current known and inherent losses within a loan portfolio to an “expected loss” model known as current expected credit loss (CECL), which estimates a loss based on losses expected to be recorded over the life of the loan portfolio.
The estimate of the ACL under CECL is based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of cash flows. Refer to Note 2 Summary of Significant Accounting Policies in the accompanying Notes to the Consolidated Financial Statements in this report for further discussions on the risk factors considered by management in establishing the ACL.
Comparison of Financial Condition at March 31, 2023 and December 31, 2022
Assets. Our total assets increased by $43.2 million, or 2.0%, to $2.2 billion at March 31, 2023. The increase in assets was primarily due to a $44.3 million increase in cash.
Cash and Cash Equivalents. Cash and cash equivalents were $84.9 million at March 31, 2023, an increase of $44.3 million, or 109.3%, since December 31, 2022. The increase in cash and cash equivalents was primarily caused by a $105.0 million increase in Federal Home Loan Bank advances, which was partially offset by a $54.2 million decrease in deposits, each as described below.
Loans. Total loans were $1.3 billion at March 31, 2023, or 58.4% of total assets. During the three months ended March 31, 2023, the loan portfolio decreased by $3.5 million, or 0.3%. The decrease in the loan portfolio primarily occurred as principal repayments and loan sales exceeded the origination of new loans.
Securities. Total investment securities, including $21.1 million of investment securities available for sale, were $736.7 million at March 31, 2023, or 33.3% of total assets. During the three months ended March 31, 2023, the investment securities portfolio decreased by $1.9 million, or 0.3%. The decrease in the investment securities balance occurred as principal repayments exceeded purchases.
At March 31, 2023, none of the underlying collateral for the securities consisted of subprime or Alt-A (traditionally defined as nonconforming loans having less than full documentation) loans.
Deposits. Deposits were $1.7 billion at March 31, 2023, a decrease of $54.2 million, or 3.2%, since December 31, 2022. The decrease in deposits was primarily due to a $71.4 million decrease in passbook savings that was partially offset by a $20.8 million increase in certificates of deposit during the three months ended March 31, 2023. The decrease in passbook savings occurred as funds were transferred by customers from savings accounts for higher interest rates and to obtain FDIC insurance on balances over $250,000.
Borrowings. Our borrowings consist of advances from the Federal Home Loan Bank (FHLB) and funds borrowed under securities sold under agreements to repurchase. At March 31, 2023 total borrowings were $256.0 million, an increase of $105.0 million, or 69.5%, from $151.0 million at December 31, 2022. The proceeds from the advances were used to enhance liquidity and fund the decrease in deposits.
Stockholders’ Equity. Total stockholders’ equity was $253.8 million at March 31, 2023, a decrease of $2.8 million, or 1.1% from $256.6 million at December 31, 2022. The decrease in stockholders’ equity occurred primarily as the reduction in retained earnings from the adoption of the CECL accounting standard, dividends declared and shares repurchased exceeded net income.