XML 20 R9.htm IDEA: XBRL DOCUMENT

Note 2 - Investment Securities

6 Months Ended

Jun. 30, 2021

Investments in Debt and Equity Instruments, Cash and Cash Equivalents, Unrealized and Realized Gains (Losses) [Text Block]

2. Investment Securities

Investment securities have been classified in the consolidated balance sheets according to management’s intent. Investment securities at June 30, 2021 and December 31, 2020 are summarized as follows:

			Gross		Gross
	*Amortized*		*Unrealized*		*Unrealized*		*Fair*
(In thousands)	*Cost*		*Gains*		*Losses*		*Value*

June 30, 2021
Securities available for sale:
Agency mortgage-backed securities	$	86,206	$	960	$	191	$	86,975
Agency CMO		11,407		218		11		11,614
Other debt securities:
Agency notes and bonds		109,489		798		736		109,551
Municipal obligations		140,636		5,063		357		145,342

Total securities available for sale	$	347,738	$	7,039	$	1,295	$	353,482

Securities held to maturity:
Other debt securities:
Corporate notes	$	2,000	$	25	$	-	$	2,025

Total securities held to maturity	$	2,000	$	25	$	-	$	2,025

December 31, 2020
Securities available for sale:
Agency mortgage-backed securities	$	59,997	$	1,362	$	-	$	61,359
Agency CMO		20,842		218		30		21,030
Other debt securities:
Agency notes and bonds		80,359		1,175		3		81,531
Municipal obligations		113,511		6,075		4		119,582

Total securities available for sale	$	274,709	$	8,830	$	37	$	283,502

Agency notes and bonds, agency mortgage-backed securities and agency collateralized mortgage obligations (“CMO”) include securities issued by the Government National Mortgage Association (“GNMA”), a U.S. government agency, and the Federal National Mortgage Association (“FNMA”), the Federal Home Loan Mortgage Corporation (“FHLMC”) and the Federal Home Loan Bank (“FHLB”), which are government-sponsored enterprises.

The amortized cost and fair value of debt securities as of June 30, 2021, by contractual maturity, are shown below. Expected maturities of mortgage-backed securities and CMO may differ from contractual maturities because the mortgages underlying the obligations may be prepaid without penalty.

	Securities Available for Sale				Securities Held to Maturity
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
(In thousands)

Due in one year or less	$	2,499	$	2,521	$	-	$	-
Due after one year through five years		100,545		101,059		-		-
Due after five years through ten years		62,222		63,681		-		-
Due after ten years		84,859		87,632		2,000		2,025
		250,125		254,893		2,000		2,025
Mortgage-backed securities and CMO		97,613		98,589		-		-

	$	347,738	$	353,482	$	2,000	$	2,025

Information pertaining to investment securities with gross unrealized losses at June 30, 2021, aggregated by investment category and the length of time that individual investment securities have been in a continuous position, follows.

	Number of				Gross
	Investment		Fair		Unrealized
	Positions		Value		Losses
(Dollars in thousands)

Continuous loss position less than twelve months:
Agency mortgage-backed securities		11	$	28,118	$	191
Agency CMO		4		1,112		11
Agency notes and bonds		28		85,013		736
Municipal obligations		41		28,535		357

Total less than twelve months		84		142,778		1,295

Total securities available for sale		84	$	142,778	$	1,295

Information pertaining to investment securities with gross unrealized losses at December 31, 2020, aggregated by investment category and the length of time that individual investment securities have been in a continuous position, follows.

	Number of				Gross
	Investment		Fair		Unrealized
	Positions		Value		Losses
(Dollars in thousands)

Continuous loss position less than twelve months:
Agency CMO		12	$	6,189	$	18
Agency notes and bonds		2		5,997		3
Municipal obligations		2		1,303		4

Total less than twelve months		16		13,489		25

Continuous loss position more than twelve months:
Agency CMO		4		1,589		12

Total more than twelve months		4		1,589		12

Total securities available for sale		20	$	15,078	$	37

Management evaluates securities for other-than-temporary impairment at least quarterly, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (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, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recover in fair value.

At June 30, 2021, the U.S. government agency debt securities, including agency notes and bonds, mortgage-backed securities and CMO, and municipal obligations in a loss position had depreciated approximately 0.9% from the amortized cost basis. All of the U.S. government agency securities and municipal obligations are issued by U.S. government agencies, government-sponsored enterprises and municipal governments, or are secured by first mortgage loans and municipal project revenues. These unrealized losses related principally to current interest rates for similar types of securities. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government, its agencies or other governments, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. As the Company has the ability to hold the debt securities until maturity, or the foreseeable future if classified as available for sale, no declines are deemed to be other-than-temporary.

While management does not anticipate any credit-related impairment losses at June 30, 2021, additional deterioration in market and economic conditions may have an adverse impact on credit quality in the future.

During the six months ended June 30, 2021, the Company realized gross gains of $12,000 and gross losses of $5,000 on sales of available for sale securities. There were no sales of investment securities or time deposits during the three months ended June 30, 2021 nor the three and six months ended June 30, 2020.

Certain available for sale debt securities were pledged to secure public fund deposits at June 30, 2021 and December 31, 2020.

Equity Securities

In September 2018, the Company acquired 90,000 shares of common stock in another bank holding company, representing approximately 5% of the outstanding common stock of the entity, for a total investment of $1.9 million. During the three and six months ended June 30, 2021, the Company recognized unrealized gains of $193,000 and $427,000, respectively, on this equity investment. During the three and six months ended June 30, 2020, the Company recognized an unrealized gain of $223,000 and an unrealized loss of $171,000, respectively, on this equity investment. At June 30, 2021 and December 31, 2020, the equity investment had a fair value of $2.0 million and $1.6 million, respectively, and is included in other assets on the consolidated balance sheets.