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Note 3 - Debt Securities

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

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

Note 3. Debt Securities

The following tables present the amortized cost and fair value of available-for-sale debt securities, including gross unrealized gains and losses, as of the dates indicated:

		*September 30, 2020*
		*Amortized*				*Unrealized*				*Unrealized*				*Fair*
		*Cost*				*Gains*				*Losses*				*Value*
(Amounts in thousands)
U.S. Agency securities		$	576			$	-			$	(4	)		$	572
Municipal securities			55,036				631				-				55,667
Mortgage-backed Agency securities			33,776				999				(42	)			34,733
Total		$	89,388			$	1,630			$	(46	)		$	90,972

		December 31, 2019
		Amortized				Unrealized				Unrealized				Fair
		Cost				Gains				Losses				Value
(Amounts in thousands)
U.S. Agency securities		$	5,038			$	-			$	(4	)		$	5,034
Municipal securities			85,992				886				-				86,878
Mortgage-backed Agency securities			77,448				380				(166	)			77,662
Total		$	168,478			$	1,266			$	(170	)		$	169,574

The following table presents the amortized cost and aggregate fair value of available-for-sale debt securities by contractual maturity, as of the date indicated. Actual maturities could differ from contractual maturities because issuers may have the right to call or prepay obligations with or without penalties.

		*September 30, 2020*
		*Amortized*
(Amounts in thousands)		*Cost*				*Fair Value*
Available-for-sale debt securities
Due within one year		$	-			$	-
Due after one year but within five years			28,495				28,749
Due after five years but within ten years			27,117				27,490
Due after ten years			-				-
			55,612				56,239
Mortgage-backed securities			33,776				34,733
Total debt securities available for sale		$	89,388			$	90,972

The following tables present the fair values and unrealized losses for available-for-sale debt securities in a continuous unrealized loss position for less than 12 months and for 12 months or longer as of the dates indicated:

		*September 30, 2020*
		*Less than 12 Months*								*12 Months or Longer*								*Total*
		*Fair*				*Unrealized*				*Fair*				*Unrealized*				*Fair*				*Unrealized*
		*Value*				*Losses*				*Value*				*Losses*				*Value*				*Losses*
(Amounts in thousands)
U.S. Agency securities		$	-			$	-			$	565			$	(4	)		$	565			$	(4	)
Mortgage-backed Agency securities			3,405				(42	)			-				-				3,405				(42	)
Total		$	3,405			$	(42	)		$	565			$	(4	)		$	3,970			$	(46	)

		December 31, 2019
		Less than 12 Months								12 Months or Longer								Total
		Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
		Value				Losses				Value				Losses				Value				Losses
(Amounts in thousands)
U.S. Agency securities		$	975			$	(4	)		$	-			$	-			$	975			$	(4	)
Mortgage-backed Agency securities			8,020				(48	)			8,319				(118	)			16,339				(166	)
Total		$	8,995			$	(52	)		$	8,319			$	(118	)		$	17,314			$	(170	)

There were 3 individual debt securities in an unrealized loss position as of September 30, 2020, and the combined depreciation in value represented 0.05% of the debt securities portfolio. There were 17 individual debt securities in an unrealized loss position as of December 31, 2019, and their combined depreciation in value represented 0.10% of the debt securities portfolio.

The Company reviews its investment portfolio quarterly for indications of other-than-temporary impairment (“OTTI”). The initial indicator of OTTI for debt securities is a decline in fair value below book value and the severity and duration of the decline. The credit-related OTTI is recognized as a charge to noninterest income and the noncredit-related OTTI is recognized in other comprehensive income (“OCI”). During the nine months ended September 30, 2020 and 2019, the Company incurred no OTTI charges on debt securities. Temporary impairment on debt securities is primarily related to changes in benchmark interest rates, changes in pricing in the credit markets, and other current economic factors.

The following table presents gross realized gains and losses from the sale of available-for-sale debt securities for the periods indicated:

		*Three Months Ended*								*Nine Months Ended*
		*September 30,*								*September 30,*
		*2020*				*2019*				*2020*				*2019*
(Amounts in thousands)
Gross realized gains		$	-				-			$	419			$	67
Gross realized losses			-				-				(34	)			(110	)
Net Gain (Loss) on sale of securities		$	-			$	-			$	385			$	(43	)

The carrying amount of securities pledged for various purposes totaled $36.17 million as of September 30, 2020, and $27.87 million as of December 31, 2019.