Note 3 - Securities

6 Months Ended

Dec. 31, 2022

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 December 31, 2022 and June 30, 2022:

Available –for-Sale	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2022
Obligations of U.S. Treasury	$	8,925	$	—	$	(604	)	$	8,321
Obligations of U.S. government-sponsored entities and agencies		27,783		—		(3,751	)		24,032
Obligations of state and political subdivisions		106,075		119		(10,259	)		95,935
U.S. Government-sponsored mortgage-backed securities–residential		108,903		5		(15,670	)		93,238
U.S. Government-sponsored mortgage-backed securities– commercial		8,613		—		(1,860	)		6,753
U.S. Government-sponsored collateralized mortgage obligations– residential		48,249		22		(5,187	)		43,084
Other debt securities		17,272		—		(1,493	)		15,779
Total securities available-for-sale	$	325,820	$	146	$	(38,824	)	$	287,142

Held-to-Maturity	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Fair Value
December 31, 2022
Obligations of state and political subdivisions	$	7,338	$	—	$	(427	)	$	6,911

Available-for-sale	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2022
Obligation of U.S Treasury	$	8,909	$	—	$	(462	)	$	8,447
Obligations of U.S. government-sponsored entities and agencies		28,689		—		(2,424	)		26,265
Obligations of state and political subdivisions		105,977		129		(8,749	)		97,357
U.S. Government-sponsored mortgage-backed securities – residential		113,812		13		(11,642	)		102,183
U.S. Government-sponsored mortgage-backed securities – commercial		8,623		—		(1,322	)		7,301
U.S. Government-sponsored collateralized mortgage obligations – residential		40,952		1		(2,774	)		38,179
Other debt securities		17,367		—		(752	)		16,615
Total available-for-sale securities	$	324,329	$	143	$	(28,125	)	$	296,347

Held-to-maturity	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Fair Value
June 30, 2022
Obligations of state and political subdivisions	$	7,874	$	47	$	(90	)	$	7,831

Proceeds from the sale of available-for-sale securities were as follows:

	Three Months Ended December 31,				Six Months Ended December 31,
	2022		2021		2022		2021
Proceeds from sales	$	1,639	$	1,000	$	3,708	$	1,000
Gross realized gains		1		2		8		2
Gross realized losses		5		—		23		—

The income tax benefit related to the net realized loss amounted to $1 for the three-month and $3 for the six-month periods ended December 31, 2022. The income tax provision related to the net realized gain amounted to less than $1 for the three- and six-month periods ended December 31, 2021.

The amortized cost and fair values of debt securities as of December 31, 2022, 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	$	2,747	$	2,705
Due after one year through five years		31,708		30,013
Due after five years through ten years		52,323		46,902
Due after ten years		73,277		64,447
Total		160,055		144,067
U.S. Government-sponsored mortgage-backed and related securities		165,765		143,075
Total securities available-for-sale	$	325,820	$	287,142
Held-to-Maturity
Due after one year through five years	$	171	$	169
Due after five years through ten years		3,289		3,182
Due after ten years		3,878		3,560
Total securities held-to-maturity	$	7,338	$	6,911

Securities with a carrying value of approximately $131,731 and $126,679 were pledged at December 31, 2022 and June 30, 2022, respectively, to secure public deposits and commitments as required or permitted by law.

The following table summarizes the securities with unrealized losses as of December 31, 2022 and June 30, 2022, 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
December 31, 2022
Obligation of U.S. Treasury	$	—	$	—		$	8,321	$	(604	)	$	8,321	$	(604	)
Obligations of U.S. government-sponsored entities and agencies		11,941		(1,392	)		12,091		(2,359	)		24,032		(3,751	)
Obligations of state and political subdivisions		73,469		(7,882	)		11,583		(2,377	)		85,052		(10,259	)
U.S. Government-sponsored mortgage-backed securities – residential		32,106		(2,959	)		59,845		(12,711	)		91,951		(15,670	)
U.S. Government-sponsored mortgage-backed securities – commercial		2,279		(610	)		4,474		(1,250	)		6,753		(1,860	)
Collateralized mortgage obligations - residential		27,929		(1,662	)		14,147		(3,525	)		42,076		(5,187	)
Other debt securities		6,569		(554	)		9,210		(939	)		15,779		(1,493	)
Total temporarily impaired	$	154,293	$	(15,059	)	$	119,671	$	(23,765	)	$	273,964	$	(38,824	)

	Less than 12 Months					12 Months or more					Total
Held to Maturity	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
December 31, 2022
Obligations of state and political subdivisions	$	3,729	$	(320	)	$	3,182	$	(107	)	$	6,911	$	(427	)
Total temporarily impaired	$	3,729	$	(320	)	$	3,182	$	(107	)	$	6,911	$	(427	)

	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, 2022
Obligations of U.S. Treasury	$	8,447	$	(462	)	$	—	$	—		$	8,447	$	(462	)
Obligations of U.S. government-sponsored entities and agencies		26,265		(2,424	)		—		—			26,265		(2,424	)
Obligations of state and political subdivisions		80,445		(8,331	)		2,047		(418	)		82,492		(8,749	)
Mortgage-backed securities – residential		76,526		(7,586	)		24,569		(4,056	)		101,095		(11,642	)
Mortgage-backed securities – commercial		7,301		(1,322	)		—		—			7,301		(1,322	)
Collateralized mortgage obligations - residential		30,729		(2,308	)		2,713		(466	)		33,442		(2,774	)
Other debt securities		16,156		(711	)		459		(41	)		16,615		(752	)
Total temporarily impaired	$	245,869	$	(23,144	)	$	29,788	$	(4,981	)	$	275,657	$	(28,125	)

	Less than 12 Months					12 Months or more				Total
Held to Maturity	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
June 30, 2022
Obligations of state and political subdivisions	$	3,522	$	(90	)		—	$	—	$	3,522	$	(90	)
Total temporarily impaired	$	3,522	$	(90	)	$	—	$	—	$	3,522	$	(90	)

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 December 31 2022, there were a total of 399 available-for-sale and four held-to-maturity securities in the portfolio with unrealized losses due to an increase in market interest rates when compared to the time of purchase. The unrealized losses within the securities portfolio as of December 31, 2022 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

The Corporation owned equity securities with an amortized cost of $400 as of December 31, 2022, and June 30, 2022. Changes in the fair value of these securities are included in noninterest income on the consolidated statements of income. The following table presents the net unrealized losses on equity securities recognized in earnings for the three and six-month periods ended December 31, 2022 and 2021. There were no sales of equity securities during the three and six-month periods ended December 31, 2022 and 2021.

	Three Months Ended December 31,					Six Months Ended December 31,
	2022			2021		2022			2021
Unrealized loss recognized on equity securities held at the end of the period	$	(9	)	$	—	$	(33	)	$	—