Note 5 - Securities -

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

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

Note 5 – Securities –

The amortized cost and fair values of securities available for sale as of June 30, 2023, and December 31, 2022 are summarized as follows:

	June 30, 2023
	(Dollars in thousands)
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
U.S. Treasury Securities	$	32,731	$	-	$	2,508	$	30,223
U.S. Government Agencies		50,253		-		2,821		47,432
Corporate Securities		49,383		-		6,559		42,824
Mortgage-Backed Securities		501,470		38		57,472		444,036
Municipal Securities		346,333		37		33,111		313,259
Total Securities Available for Sale	$	980,170	$	75	$	102,471	$	877,774

	December 31, 2022
	(Dollars in thousands)
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
U.S. Treasury Securities	$	32,783	$	-	$	2,668	$	30,115
U.S. Government Agencies		50,288		-		2,916		47,372
Corporate Securities		48,475		25		2,496		46,004
Mortgage-Backed Securities		506,671		267		55,213		451,725
Municipal Securities		347,382		11		31,858		315,535
Total Securities Available for Sale	$	985,599	$	303	$	95,151	$	890,751

The following tables present a summary of securities with gross unrealized losses and fair values at June 30, 2023 and December 31, 2022, aggregated by investment category and length of time in a continued unrealized loss position. 

	June 30, 2023
	Less Than 12 Months				12 Months or Greater				Total
	(Dollars in thousands)
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury Securities	$	-	$	-	$	30,223	$	2,508	$	30,223	$	2,508
U.S. Government Agencies		-		-		47,432		2,821		47,432		2,821
Corporate Securities		26,587		3,791		16,237		2,768		42,824		6,559
Mortgage-Backed Securities		41,314		1,597		391,178		55,875		432,492		57,472
Municipal Securities		49,608		3,201		251,202		29,910		300,810		33,111
Total Securities Available for Sale	$	117,509	$	8,589	$	736,272	$	93,882	$	853,781	$	102,471

	December 31, 2022
	Less Than 12 Months				12 Months or Greater				Total
	(Dollars in thousands)
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury Securities	$	9,702	$	374	$	20,413	$	2,294	$	30,115	$	2,668
U.S. Government Agencies		24,405		595		22,967		2,321		47,372		2,916
Corporate Securities		19,564		1,359		6,385		1,137		25,949		2,496
Mortgage-Backed Securities		115,692		7,473		324,043		47,740		439,735		55,213
Municipal Securities		143,035		10,206		131,944		21,652		274,979		31,858
Total Securities Available for Sale	$	312,398	$	20,007	$	505,752	$	75,144	$	818,150	$	95,151

As of June 30, 2023, no allowance for credit losses was recognized on available for sale securities in an unrealized loss position as management does not believe any of the securities are impaired due to credit quality.  This determination is based on the Company’s analysis of the underlying risk characteristics including credit ratings, historical loss experience, and other qualitative factors. Further, the securities continue to make principal and interest payments under their contractual terms and management does not have the intent to sell any of the securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of amortized cost basis.  Therefore, the Company has determined the unrealized losses are due to changes in market interest rates compared to rates when the securities were acquired.

For the period ended December 31, 2022, management evaluated securities for other than temporary impairment.  Consideration was given to the extent and length of time the fair value had been below cost, the reasons for the decline in value, and the Company’s intent to sell a security or whether it was more likely than not that the Company would be required to sell the security before the recovery of its amortized cost.  The Company utilized a process to identify securities that could potentially have a credit impairment that was other than temporary.  The process involved evaluating each security for impairment by monitoring credit performance, collateral type, collateral geography, loan-to-value ratios, credit scores, loss severity levels, pricing levels, downgrades by rating agencies, cash flow projections and other factors as indicators of potential credit issues.  The Company determined no other than temporary impairment existed at December 31, 2022.

The amortized cost and fair values of securities available for sale as of June 30, 2023, by contractual maturity are shown below.  Actual maturities may differ from contractual maturities in mortgage-backed securities because the mortgages underlying the securities may be called or repaid without any penalties. 

	Amortized		Fair
	Cost		Value
	(Dollars in thousands)
Less Than One Year	$	28,306	$	27,764
One to Five Years		235,160		217,886
Over Five to Ten Years		363,195		323,256
Over Ten Years		353,509		308,868
Total Securities Available for Sale	$	980,170	$	877,774

At June 30, 2023, the Company had pledged securities with a fair value of $386.3 million against our public deposit and repurchase agreements, and $394.6 million against our Bank Term Funding Program facility.

At June 30, 2023 and December 31, 2022, accrued interest receivable on securities was $4.6 million and $4.4 million, respectively, and included within accrued interest receivable on the consolidated balance sheets.