Note 3 - Debt and Equity Securities

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

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

Note 3. Debt and Equity Securities

Debt and equity securities have been classified in the consolidated balance sheet according to management’s intent. Debt and equity securities at March 31, 2020 and December 31, 2019 are summarized as follows:

	March 31, 2020
	Securities Available-For-Sale
	In Thousands
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Market Value
U.S. Government-sponsored enterprises (GSEs)	$	52,754	$	305	$	121	$	52,938
Mortgage-backed securities		248,255		6,219		258		254,216
Asset-backed securities		26,358		375		403		26,330
Obligations of states and political subdivisions		73,364		1,291		915		73,740
	$	400,731	$	8,190	$	1,697	$	407,224

	December 31, 2019
	Securities Available-For-Sale
	In Thousands
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Market Value
U.S. Government-sponsored enterprises (GSEs)	$	59,735	$	48	$	204	$	59,579
Mortgage-backed securities		265,648		2,300		635		267,313
Asset-backed securities		27,531		1		303		27,229
Obligations of states and political subdivisions		67,293		559		828		67,024
	$	420,207	$	2,908	$	1,970	$	421,145

There were no debt and equity securities classified as held-to-maturity at March 31, 2020 or December 31, 2019.

Included in mortgage-backed securities are collateralized mortgage obligations totaling $44,027,000 (fair value of $45,045,000) and $46,994,000 (fair value of $47,442,000) at March 31, 2020 and December 31, 2019, respectively.

The amortized cost and estimated market value of debt securities at March 31, 2020, by contractual 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.

	Available-For-Sale
	In Thousands
	Amortized Cost		Estimated Market Value
Due in one year or less	$	470	$	469
Due after one year through five years		12,372		12,486
Due after five years through ten years		70,268		71,430
Due after ten years		317,621		322,839
	$	400,731	$	407,224

The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2020 and December 31, 2019.

	In Thousands, Except Number of Securities
	Less than 12 Months						12 Months or More						Total
March 31, 2020	Fair Value		Unrealized Losses		Number of Securities Included		Fair Value		Unrealized Losses		Number of Securities Included		Fair Value		Unrealized Losses
Available-for-Sale Securities:
GSEs	$	7,093	$	121		3	$	—	$	—		—	$	7,093	$	121
Mortgage-backed securities		17,935		206		9		5,163		52		14		23,098		258
Asset-backed securities		9,664		403		2		—		—		—		9,664		403
Obligations of states and political subdivisions		30,592		873		38		1,173		42		3		31,765		915
	$	65,284	$	1,603		52	$	6,336	$	94		17	$	71,620	$	1,697

	In Thousands, Except Number of Securities
	Less than 12 Months						12 Months or More						Total
December 31, 2019	Fair Value		Unrealized Losses		Number of Securities Included		Fair Value		Unrealized Losses		Number of Securities Included		Fair Value		Unrealized Losses
Available-for-Sale Securities:
GSEs	$	16,507	$	114		5	$	24,658	$	90		9	$	41,165	$	204
Mortgage-backed securities		45,862		182		21		56,917		453		52		102,779		635
Asset-backed securities		17,807		161		10		7,317		142		4		25,124		303
Obligations of states and political subdivisions		30,423		783		26		3,858		45		10		34,281		828
	$	110,599	$	1,240		62	$	92,750	$	730		75	$	203,349	$	1,970

Unrealized losses on securities have not been recognized into income because the Company does not consider these securities to be other-than-temporarily impaired at March 31, 2020, as the issuers’ securities are of high credit quality, management does not intend to sell the securities and it is not more likely than not that management will be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. The issuers continue to make timely principal and interest payment on the securities. The fair value is expected to recover as the securities approach maturity.

The carrying values of the Company’s investment securities could decline in the future if the financial condition of issuers deteriorates and management determines it is probable that the Company will not recover the entire amortized cost bases of the securities. As a result, there is a risk that other-than-temporary impairment charges may occur in the future given the current economic environment.