Note 3 - Securities

3 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 3 – Securities

Debt securities

The following tables summarize the Corporation’s debt securities as of September 30, 2021 and June 30, 2021:

Available –for-Sale	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
September 30, 2021
Obligations of U.S. government-sponsored entities and agencies	$	14,248	$	186	$	(115	)	$	14,319
Obligations of state and political subdivisions		77,315		3,091		(225	)		80,181
U.S. Government-sponsored mortgage-backed securities–residential		104,215		1,097		(1,110	)		104,202
U.S. Government-sponsored mortgage-backed securities– commercial		8,636		37		(23	)		8,650
U.S. Government-sponsored collateralized mortgage obligations– residential		22,010		100		(121	)		21,989
Other debt securities		16,063		77		(67	)		16,073
Total securities available-for-sale	$	242,487	$	4,588	$	(1,661	)	$	245,414

Held-to-Maturity	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
September 30, 2021
Obligations of state and political subdivisions	$	7,896	$	323	$	—	$	8,219

Available–for-Sale	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2021
Obligations of U.S. government-sponsored entities and agencies	$	14,746	$	301	$	(14	)	$	15,033
Obligations of state and political subdivisions		73,013		3,561		(75	)		76,499
U.S. Government-sponsored mortgage-backed securities – residential		90,065		1,136		(684	)		90,517
U.S. Government-sponsored mortgage-backed securities – commercial		8,641		204		—			8,845
U.S. Government-sponsored collateralized mortgage obligations – residential		16,302		129		(57	)		16,374
Other debt securities		500		—		(8	)		492
Total securities available-for-sale	$	203,267	$	5,331	$	(838	)	$	207,760

Held-to-Maturity	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
June 30, 2021
Obligations of state and political subdivisions	$	7,996	$	356	$	—	$	8,352

The amortized cost and fair values of debt securities at September 30, 2021, by expected maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately. 

Available-for-Sale	Amortized Cost		Estimated Fair Value
Due in one year or less	$	5,366	$	5,401
Due after one year through five years		25,848		26,285
Due after five years through ten years		22,183		22,527
Due after ten years		54,229		56,360
Total		107,626		110,573
U.S. Government-sponsored mortgage-backed and related securities		134,861		134,841
Total securities available-for-sale	$	242,487	$	245,414
Held-to-Maturity
Due after one year through five years	$	294	$	305
Due after five years through ten years		5,367		4,854
Due after ten years		2,235		3,060
Total securities held-to-maturity	$	7,896	$	8,219

Securities with a carrying value of approximately $114,320 and $96,970 were pledged at September 30, 2021 and June 30, 2021, respectively, to secure public deposits and commitments as required or permitted by law.

The following table summarizes the securities with unrealized losses at September 30, 2021 and June 30, 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

	Less than 12 Months					12 Months or more				Total
Available-for-sale	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
September 30, 2021
Obligations of U.S. government-sponsored entities and agencies	$	5,696	$	(115	)	$	—	$	—	$	5,696	$	(115	)
Obligations of state and political subdivisions		14,428		(225	)		—		—		14,428		(225	)
U.S. Government-sponsored mortgage-backed securities – residential		62,030		(1,110	)		—		—		62,030		(1,110	)
U.S. Government-sponsored mortgage-backed securities – commercial		2,783		(23	)		—		—		2,783		(23	)
Collateralized mortgage obligations - residential		14,488		(121	)		—		—		14,488		(121	)
Other debt securities		9,729		(67	)		—		—		9,729		(67	)
Total temporarily impaired	$	109,154	$	(1,661	)	$	—	$	—	$	109,154	$	(1,661	)

	Less than 12 Months					12 Months or more					Total
Available-for-sale	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
June 30, 2021
Obligations of U.S. government-sponsored entities and agencies	$	2,003	$	(14	)	$	—	$	—		$	2,003	$	(14	)
Obligations of state and political subdivisions		7,398		(75	)		—		—			7,398		(75	)
Mortgage-backed securities – residential		42,378		(684	)		—		—			42,378		(684	)
Collateralized mortgage obligations - residential		7,707		(56	)		552		(1	)		8,259		(57	)
Other debt securities		492		(8	)		—		—			492		(8	)
Total temporarily impaired	$	59,978	$	(837	)	$	552	$	(1	)	$	60,530	$	(838	)

Management evaluates securities for other-than-temporary impairment (OTTI) on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. The securities portfolio is evaluated for OTTI by segregating the portfolio into two general segments and applying the appropriate OTTI model. Investment securities are generally evaluated for OTTI under FASB ASC Topic 320, Accounting for Certain Investments in Debt and Equity Securities.

In determining OTTI under the ASC Topic 320 model, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the entity has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

At September 30, 2021, there were a total of 87 available-for-sale securities in the portfolio with unrealized losses mainly due to an increase in market rates when compared to the time of purchase. The unrealized losses within the securities portfolio as of September 30, 2021 have not been recognized into income because the decline in fair value is not attributed to credit quality and management does not intend to sell, and it is not likely that management will be required to sell, the securities prior to their anticipated recovery. The mortgage-backed securities and collateralized mortgage obligations were primarily issued by Fannie Mae, Freddie Mac and Ginnie Mae, institutions which the government has affirmed its commitment to support. The Corporation does not own any private label mortgage-backed securities.

Equity Securities

As of September 30, 2021 and June 30, 2021, the Corporation owned equity securities with an amortized cost of $400 and fair value of $424. Changes in the fair value of these securities are included in noninterest income on the consolidated statements of income. There were no unrealized gains and losses on equity securities during the three-month periods ended September 30, 2021 and 2020. Also, there were no sales of equity securities during the three-month periods ended September 30, 2021 and 2020.