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Note 3 - Debt Securities

12 Months Ended

Dec. 31, 2022

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:

		December 31, 2022
		Amortized				Unrealized				Unrealized				Fair
		Cost				Gains				Losses				Value
(Amounts in thousands)
U.S. Agency securities		$	1,500			$	—			$	(15	)		$	1,485
U.S. Treasury securities			161,617				—				(4,353	)			157,264
Municipal securities			23,480				21				(192	)			23,309
Corporate Notes			37,046				—				(2,189	)			34,857
Mortgage-backed Agency securities			96,480				3				(13,049	)			83,434
Total		$	320,123			$	24			$	(19,798	)		$	300,349

		December 31, 2021
		Amortized				Unrealized				Unrealized				Fair
		Cost				Gains				Losses				Value
(Amounts in thousands)
U.S. Agency securities		$	469			$	—			$	(3	)		$	466
Municipal securities			28,596				198				—				28,794
Mortgage-backed Agency securities			9,935				—				(16	)			9,919
Total			37,273				513				(673	)			37,113
		$	76,273			$	711			$	(692	)		$	76,292

The following table presents the amortized cost and fair value of available-for-sale debt securities, by contractual maturity, as of December 31, 2022. Actual maturities could differ from contractual maturities because issuers may have the right to call or prepay obligations with or without penalties.

(Amounts in thousands)		U.S. Agency Securities				U.S. Treasury Securities				Municipal Securities				Corporate Notes				Total
Amortized cost maturity:
One year or less		$	1,500			$	32,013			$	3,070			$	8,510			$	45,093
After one year through five years			—				129,604				17,626				28,536				175,766
After five years through ten years			—				—				2,784				—				2,784
After ten years			—				—				—				—				—
Amortized cost		$	1,500			$	161,617			$	23,480			$	37,046				223,643
Mortgage-backed securities																			96,480
Total amortized cost																		$	320,123
Fair value maturity:
One year or less		$	1,485			$	31,786			$	3,068			$	8,448			$	44,787
After one year through five years			—				125,478				17,467				26,409				169,354
After five years through ten years			—				—				2,774				—				2,774
After ten years			—				—				—				—				—
Fair value		$	1,485			$	157,264			$	23,309			$	34,857				216,915
Mortgage-backed securities																			83,434
Total fair value																		$	300,349

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:

		December 31, 2022
		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		$	1,485			$	(15	)		$	—			$	—			$	1,485			$	(15	)
U.S. Treasury securities			157,264				(4,353	)			—				—				157,264				(4,353	)
Municipal securities			12,347				(192	)			—				—				12,347				(192	)
Corporate Notes			32,368				(2,172	)			2,489				(17	)			34,857				(2,189	)
Mortgage-backed Agency securities			64,993				(8,824	)			18,305				(4,225	)			83,298				(13,049	)
Total		$	268,457			$	(15,556	)		$	20,794			$	(4,242	)		$	289,251			$	(19,798	)

		December 31, 2021
		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		$	—			$	—			$	459			$	(3	)		$	459			$	(3	)
Municipal securities			—				—				—				—				—				—
Corporate Notes			9,919				(16	)			—				—				9,919				(16	)
Mortgage-backed Agency securities			14,092				(253	)			8,384				(420	)			22,476				(673	)
Total		$	24,011			$	(269	)		$	8,843			$	(423	)		$	32,854			$	(692	)

There were 113 individual debt securities in an unrealized loss position as of December 31, 2022, and their combined depreciation in value represented 6.59% of the debt securities portfolio. There were 23 individual debt securities in an unrealized loss position as of December 31, 2021, and their combined depreciation in value represented  0.91 % of the debt securities portfolio.

There were no sales of available for sale debt securities in 2022 or in 2021.  In 2020, gross realized gains and losses from the sale of available for sale debt securities were $419 thousand and $34 thousand, respectively.  The carrying amount of securities pledged for various purposes totaled $22.43 million as of December 31, 2022, and $22.15 million as of December 31, 2021.

In determining whether or not a security is impaired, we consider the severity of the loss as well as our intent to hold the securities to maturity or the recovery of the cost basis.

U. S. Agency securities

The Company has one U.S. Agency security as of   December 31, 2022, with an amortized cost of $1.5 million.  The security is issued by the Federal Home Loan Bank.  The security is guaranteed of full and timely payments by the issuing agency.  Based on management's analysis and judgement, there was no credit loss attributable to the U.S. Agency security at December 31, 2022.

U.S. Treasury securities

U.S. Treasury securities are backed by the full faith and credit of the United States government.  At  December 31, 2022, the total amortized cost of available for sale U. S. Treasury securities was $161.62 million.  Based on management's analysis and judgement, there were no credit losses attributable to U.S. Treasury securities at December 31, 2022.

Municipal securities

Municipal securities are securities issued by various municipalities in the United States.  At  December 31, 2022, the total amortized cost of available for sale Municipal securities was $23.48 million.  The majority of the portfolio was rated AA or higher, with no securities rated below investment grade at year-end.  Based on management's analysis and judgement, there were no credit losses attributable to Municipal securities at December 31, 2022.

Corporate Notes

Corporate notes are debt obligations issued by public or private corporations.  As of   December 31, 2022, the total amortized cost of available for sale Corporate notes was $37.05 million.  The majority of the portfolio was rated AA or higher, with no securities rated below investment grade at year-end.  Based on management's analysis and judgement, there were no credit losses attributable to Corporate note securities at December 31, 2022.

Mortgage-backed Agency securities

Mortgage-backed Agency securities within the Company's portfolio are issued by Ginnie Mae, Fannie Mae, and Freddie Mac.  As of   December 31, 2022, the total amortized cost of available for sale Mortgage-backed Agency securities was $96.48 million.  Each agency provides a guarantee of full and timely payments of principal and interest by the issuing agency.  Based on management's analysis and judgement, there were no credit losses attributable to Mortgage-backed Agency securities at December 31, 2022.

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- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 320
-URI https://asc.fasb.org/subtopic&trid=2209399

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 946
-SubTopic 320
-URI https://asc.fasb.org/subtopic&trid=2324412

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-URI https://asc.fasb.org/topic&trid=2196928

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 940
-SubTopic 320
-URI https://asc.fasb.org/subtopic&trid=2176304

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1403
-Paragraph (b)

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