XML 175 R15.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Note 7 - Securities | 12 Months Ended
--- | ---
Dec. 31, 2019
Notes to Financial Statements |
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] | 7. SECURITIES Amortized cost and fair value of available-for-sale debt securities at December 31, 2019 and 2018 are summarized as follows:
|  |  |  |  |  | December 31, 201 9 |  |  |  |  |
|  |  |  |  |  | Gross |  |  | Gross |  |  |  |  |
|  |  |  |  |  | Unrealized |  |  | Unrealized |  |  |  |  |
|  | Amortized |  |  | Holding |  |  | Holding |  |  | Fair |
(In Thousands) |  | Cost |  |  | Gains |  |  | Losses |  |  | Value |
Obligations of U.S. Government agencies |  | $ | 16,380 |  |  | $ | 620 |  |  | $ | 0 |  |  | $ | 17,000 |
Obligations of states and political subdivisions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Tax-exempt |  |  | 68,787 |  |  |  | 2,011 |  |  |  | (38 | ) |  |  | 70,760 |
Taxable |  |  | 35,446 |  |  |  | 927 |  |  |  | (70 | ) |  |  | 36,303 |
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential pass-through securities |  |  | 58,875 |  |  |  | 472 |  |  |  | (137 | ) |  |  | 59,210 |
Residential collateralized mortgage obligations |  |  | 115,025 |  |  |  | 308 |  |  |  | (610 | ) |  |  | 114,723 |
Commercial mortgage-backed securities |  |  | 47,765 |  |  |  | 1,069 |  |  |  | (107 | ) |  |  | 48,727 |
Total |  | $ | 342,278 |  |  | $ | 5,407 |  |  | $ | (962 | ) |  | $ | 346,723 |
|  |  |  |  |  | December 31, 201 8 |  |  |  |  |
|  |  |  |  |  | Gross |  |  | Gross |  |  |  |  |
|  |  |  |  |  | Unrealized |  |  | Unrealized |  |  |  |  |
|  | Amortized |  |  | Holding |  |  | Holding |  |  | Fair |
(In Thousands) |  | Cost |  |  | Gains |  |  | Losses |  |  | Value |
Obligations of U.S. Government agencies |  | $ | 12,331 |  |  | $ | 169 |  |  | $ | 0 |  |  | $ | 12,500 |
Obligations of states and political subdivisions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Tax-exempt |  |  | 84,204 |  |  |  | 949 |  |  |  | (1,201 | ) |  |  | 83,952 |
Taxable |  |  | 27,618 |  |  |  | 208 |  |  |  | (127 | ) |  |  | 27,699 |
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential pass-through securities |  |  | 54,827 |  |  |  | 48 |  |  |  | (1,430 | ) |  |  | 53,445 |
Residential collateralized mortgage obligations |  |  | 148,964 |  |  |  | 238 |  |  |  | (3,290 | ) |  |  | 145,912 |
Commercial mortgage-backed securities |  |  | 40,781 |  |  |  | 166 |  |  |  | (1,182 | ) |  |  | 39,765 |
Total |  | $ | 368,725 |  |  | $ | 1,778 |  |  | $ | (7,230 | ) |  | $ | 363,273 |
The following table presents gross unrealized losses and fair value of available-for-sale debt securities with unrealized loss positions that are not deemed to be other-than-temporarily impaired, aggregated by length of time that individual securities have been in a continuous unrealized loss position at December 31, 2019 and 2018:
December 31, 201 9 |  | Less Than 12 Months |  |  | 12 Months or More |  |  | Total |
(In Thousands) |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |
|  | Value |  |  | Losses |  |  | Value |  |  | Losses |  |  | Value |  |  | Losses |
Obligations of states and political subdivisions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Tax-exempt |  | $ | 6,429 |  |  | $ | (38 | ) |  | $ | 0 |  |  | $ | 0 |  |  | $ | 6,429 |  |  | $ | (38 | )
Taxable |  |  | 5,624 |  |  |  | (68 | ) |  |  | 161 |  |  |  | (2 | ) |  |  | 5,785 |  |  |  | (70 | )
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential pass-through securities |  |  | 9,771 |  |  |  | (35 | ) |  |  | 14,787 |  |  |  | (102 | ) |  |  | 24,558 |  |  |  | (137 | )
Residential collateralized mortgage obligations |  |  | 31,409 |  |  |  | (195 | ) |  |  | 30,535 |  |  |  | (415 | ) |  |  | 61,944 |  |  |  | (610 | )
Commercial mortgage-backed securities |  |  | 0 |  |  |  | 0 |  |  |  | 8,507 |  |  |  | (107 | ) |  |  | 8,507 |  |  |  | (107 | )
Total |  | $ | 53,233 |  |  | $ | (336 | ) |  | $ | 53,990 |  |  | $ | (626 | ) |  | $ | 107,223 |  |  | $ | (962 | )
December 31, 201 8 |  | Less Than 12 Months |  |  | 12 Months or More |  |  | Total |
(In Thousands) |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |
|  | Value |  |  | Losses |  |  | Value |  |  | Losses |  |  | Value |  |  | Losses |
Obligations of states and political subdivisions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Tax-exempt |  | $ | 5,084 |  |  | $ | (11 | ) |  | $ | 32,684 |  |  | $ | (1,190 | ) |  | $ | 37,768 |  |  | $ | (1,201 | )
Taxable |  |  | 980 |  |  |  | (2 | ) |  |  | 11,418 |  |  |  | (125 | ) |  |  | 12,398 |  |  |  | (127 | )
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential pass-through securities |  |  | 5,592 |  |  |  | (4 | ) |  |  | 42,309 |  |  |  | (1,426 | ) |  |  | 47,901 |  |  |  | (1,430 | )
Residential collateralized mortgage obligations |  |  | 1,892 |  |  |  | (8 | ) |  |  | 101,662 |  |  |  | (3,282 | ) |  |  | 103,554 |  |  |  | (3,290 | )
Commercial mortgage-backed securities |  |  | 0 |  |  |  | 0 |  |  |  | 32,552 |  |  |  | (1,182 | ) |  |  | 32,552 |  |  |  | (1,182 | )
Total |  | $ | 13,548 |  |  | $ | (25 | ) |  | $ | 220,625 |  |  | $ | (7,205 | ) |  | $ | 234,173 |  |  | $ | (7,230 | )
Gross realized gains and losses from available-for-sale securities and the related income tax provision were as follows:
(In Thousands) |  |  |  |  |  |  |  |
|  | 201 9 |  |  | 2018 |
Gross realized gains from sales |  | $ | 24 |  |  | $ | 259 |
Gross realized losses from sales |  |  | (1 | ) |  |  | (547 | )
Net realized gains (losses) |  | $ | 23 |  |  | $ | (288 | )
Income tax (credit) provision related to net realized gains (losses) |  | $ | 5 |  |  | $ | (60 | )
The amortized cost and fair value of available-for-sale debt securities by contractual maturity are shown in the following table as of December 31, 2019. Actual maturities may differ from contractual maturities because counterparties may have the right to call or prepay obligations with or without call or prepayment penalties.
|  | December 31, 201 9 |
|  | Amortized |  |  | Fair |
(In Thousands) |  | Cost |  |  | Value |
Due in one year or less |  | $ | 7,216 |  |  | $ | 7,247 |
Due from one year through five years |  |  | 31,627 |  |  |  | 32,408 |
Due from five years through ten years |  |  | 42,709 |  |  |  | 43,845 |
Due after ten years |  |  | 39,061 |  |  |  | 40,563 |
Sub-total |  |  | 120,613 |  |  |  | 124,063 |
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: |  |  |  |  |  |  |  |
Residential pass-through securities |  |  | 58,875 |  |  |  | 59,210 |
Residential collateralized mortgage obligations |  |  | 115,025 |  |  |  | 114,723 |
Commercial mortgage-backed securities |  |  | 47,765 |  |  |  | 48,727 |
Total |  | $ | 342,278 |  |  | $ | 346,723 |
The Corporation’s mortgage-backed securities and collateralized mortgage obligations have stated maturities that may differ from actual maturities due to borrowers’ ability to prepay obligations. Cash flows from such investments are dependent upon the performance of the underlying mortgage loans and are generally influenced by the level of interest rates. In the table above, mortgage-backed securities and collateralized mortgage obligations are shown in one period. Investment securities carried at $215,270,000 at December 31, 2019 and $229,418,000 at December 31, 2018 were pledged as collateral for public deposits, trusts and certain other deposits as provided by law. See Note 12 for information concerning securities pledged to secure borrowing arrangements. Management evaluates securities for OTTI at least on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. Consideration is given to ( 1 ) the length of time and the extent to which the fair value has been less than cost, ( 2 ) the financial condition and near-term prospects of the issuer, and ( 3 ) whether the Corporation intends to sell the security or more likely than not will be required to sell the security before its anticipated recovery. A summary of information management considered in evaluating debt and equity securities for OTTI at December 31, 2019 and 2018 is provided below. Debt Securities At December 31, 2019 and 2018, management performed an assessment for possible OTTI of the Corporation’s debt securities on an issue-by-issue basis, relying on information obtained from various sources, including publicly available financial data, ratings by external agencies, brokers and other sources. The extent of individual analysis applied to each security depended on the size of the Corporation’s investment, as well as management’s perception of the credit risk associated with each security. Based on the results of the assessment, management believes impairment of these debt securities at December 31, 2019 and 2018 to be temporary. Equity Securities C&N Bank is a member of the Federal Home Loan Bank of Pittsburgh (FHLB-Pittsburgh), which is one of 11 regional Federal Home Loan Banks. As a member, C&N Bank is required to purchase and maintain stock in FHLB-Pittsburgh. There is no active market for FHLB-Pittsburgh stock, and it must ordinarily be redeemed by FHLB-Pittsburgh in order to be liquidated. C&N Bank’s investment in FHLB-Pittsburgh stock, included in Other Assets in the consolidated balance sheets, was $10,131,000 at December 31, 2019 and $5,582,000 at December 31, 2018. The Corporation evaluated its holding of FHLB-Pittsburgh stock for impairment and deemed the stock to not be impaired at December 31, 2019 and December 31, 2018. In making this determination, management concluded that recovery of total outstanding par value, which equals the carrying value, is expected. The decision was based on review of financial information that FHLB-Pittsburgh has made publicly available. The Corporation’s marketable equity security, with carrying values of $979,000 at December 31, 2019 and $950,000 at December 31, 2018, consisted exclusively of one mutual fund. There was an unrealized loss on the mutual fund of $21,000 at December 31, 2019 and $50,000 at December 31, 2018. The decrease in the unrealized loss of $29,000 in 2019 and the increase in the unrealized loss of $21,000 in 2018 are included in other noninterest income in the consolidated statements of income. In the year ended December 31, 2018, the Corporation recorded pre-tax gains from sales of a restricted equity security (Visa Class B stock) totaling $2,321,000. The Corporation had received 19,789 shares of Visa Class B stock pursuant to Visa’s 2007 initial public offering. Until the second quarter 2018, the carrying value of the shares was $0, which represented the Corporation’s cost basis. Class B shares are subject to restrictions on transfer, essentially limiting their transferability to other owners of Class B shares. In the second and third quarters of 2018, the Corporation sold all of its Visa Class B stock. A summary of realized and unrealized gains and losses recognized on equity securities is as follows:
(In Thousands) |  |  |  |  |  |
|  | 201 9 |  |  | 201 8 |
Net gains recognized during the period on equity securities |  | $ | 29 |  |  | $ | 2,300 |
Less: net gains recognized during the period on equity securities sold during the period |  |  | 0 |  |  |  | (2,321 | )
Unrealized gains (losses) recognized during the period on equity securities still held at the reporting date |  | $ | 29 |  |  | $ | (21 | )

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 http://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 http://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 http://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 http://asc.fasb.org/subtopic&trid=2176304 + Details
Name: | us-gaap_InvestmentsInDebtAndMarketableEquitySecuritiesAndCertainTradingAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration