Note 4 - Securities

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

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

Note 4: Securities

The amortized costs, gross unrealized gains, gross unrealized losses and fair values for debt securities available for sale by major security type are as follows.

	March 31, 2022
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Values
Available for Sale:
U.S. Treasuries	$	989	$	-	$	25	$	964
U.S. Government agencies and corporations		344,348		904		22,864		322,388
States and political subdivisions		193,185		416		14,801		178,800
Mortgage-backed securities		193,538		70		2,722		190,886
Corporate debt securities		6,499		-		183		6,316
Total securities available for sale	$	738,559	$	1,390	$	40,595	$	699,354

	December 31, 2021
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Values
Available for Sale:
U.S. Government agencies and corporations	$	279,934	$	2,795	$	4,710	$	278,019
States and political subdivisions		195,365		5,314		2,007		198,672
Mortgage-backed securities		204,164		2,323		313		206,174
Corporate debt securities		3,004		248		37		3,215
Total securities available for sale	$	682,467	$	10,680	$	7,067	$	686,080

The amortized cost and fair value of single maturity securities available for sale at March 31, 2022, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities included in these totals are categorized by final maturity.

	March 31, 2022
	Amortized Cost		Fair Value
Available for Sale:
Due in one year or less	$	1,317	$	1,325
Due after one year through five years		79,070		77,180
Due after five years through ten years		329,371		310,296
Due after ten years		328,801		310,553
Total securities available for sale	$	738,559	$	699,354

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

	March 31, 2022
	Less Than 12 Months				12 Months or More
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Treasuries	$	964	$	25	$	-	$	-
U.S. Government agencies and corporations		238,220		14,294		68,352		8,570
States and political subdivisions		120,206		8,951		36,298		5,850
Mortgage-backed securities		160,387		2,262		9,623		460
Corporate debt securities		5,317		183		-		-
Total temporarily impaired securities	$	525,094	$	25,715	$	114,273	$	14,880

	December 31, 2021
	Less Than 12 Months
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Government agencies and corporations	$	201,650	$	3,530	$	26,792	$	1,180
States and political subdivisions		50,659		1,214		20,542		793
Mortgage-backed securities		13,139		141		4,665		172
Corporate debt securities		966		37		-		-
Total temporarily impaired securities	$	266,414	$	4,922	$	51,999	$	2,145

The Company had 529 securities with a fair value of $639,367 that were temporarily impaired at March 31, 2022.  The total unrealized loss on these securities was $40,595. Of the temporarily impaired total, 116 securities with a fair value of $114,273 and an unrealized loss of $14,880 have been in a continuous loss position for 12 months or more. The Company has determined that these securities are temporarily impaired at March 31, 2022 for the reasons set out below.

U.S. Government agencies. Unrealized losses of $8,570 on 77 securities with a fair value of $68,352 were caused by interest rate and market fluctuations. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of the investments. Because the Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be at maturity, the Company does not consider the securities to be other-than-temporarily impaired.

States and political subdivisions. The Company reviewed financial statements and cash flow information for the 35 securities with a fair value of $36,298 and unrealized losses of $5,850 and determined that the unrealized loss is the result of interest rate and market fluctuations and not associated with impaired financial status. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of the investments. Because the Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of amortized cost basis, which may be at maturity, the Company does not consider the investments to be other-than-temporarily impaired.

Mortgage-backed securities. Unrealized losses of $460 on 4 securities with a fair value of $9,623 were caused by interest rate and market fluctuations. Because the Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of amortized costs basis, which may be at maturity, the Company does not consider the investments to be other-than-temporarily impaired.

Restricted Stock

The Company held restricted stock of $941 as of March 31, 2022 and $845 at December 31, 2021. Restricted stock is reported separately from available for sale securities. As a member bank of the Federal Reserve system and the Federal Home Loan Bank of Atlanta (“FHLB”), NBB is required to maintain certain minimum investments in the common stock of those entities. Required levels of investment are based upon NBB’s capital, current borrowings, and a percentage of qualifying assets. The correspondents provide calculations that require the Company purchase or sell stock back to the correspondents. The stock is held by member institutions only and is not actively traded.

Redemption of FHLB stock is subject to certain limitations and conditions. At its discretion, the FHLB may declare dividends on the stock. In addition to dividends, NBB also benefits from its membership with FHLB through eligibility to borrow from the FHLB, using as collateral NBB’s capital stock investment in the FHLB and qualifying NBB real estate mortgage loans totaling $614,894 at March 31, 2022. Management reviews for impairment based upon the ultimate recoverability of the cost basis of the FHLB stock, and at March 31, 2022, management did not determine any impairment.

Management regularly monitors the credit quality of the investment portfolio. Changes in ratings are noted and follow-up research on the issuer is undertaken when warranted. Management intends to carefully monitor any changes in bond quality.