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Note 7 - Investment and Equity Securities

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

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

NOTE 7 – INVESTMENT AND EQUITY SECURITIES

The amortized cost and fair values of investment securities available for sale are as follows:

		March 31, 2023
						Gross				Gross
		Amortized				Unrealized				Unrealized				Fair
(Dollar amounts in thousands)		Cost				Gains				Losses				Value

Subordinated debt		$	34,300			$	8			$	(1,795	)		$	32,513
Obligations of states and political subdivisions:
Taxable			500				-				-				500
Tax-exempt			151,204				82				(22,027	)			129,259
Mortgage-backed securities in government-sponsored entities			7,973				1				(641	)			7,333
Total		$	193,977			$	91			$	(24,463	)		$	169,605

		December 31, 2022
						Gross				Gross
		Amortized				Unrealized				Unrealized				Fair
(Dollar amounts in thousands)		Cost				Gains				Losses				Value

Subordinated debt		$	32,300			$	3			$	(2,139	)		$	30,164
Obligations of states and political subdivisions:
Taxable			500				-				-				500
Tax-exempt			151,896				49				(25,111	)			126,834
Mortgage-backed securities in government-sponsored entities			8,302				-				(833	)			7,469
Total		$	192,998			$	52			$	(28,083	)		$	164,967

Equity securities totaled $777,000 and $915,000 at March 31, 2023 and December 31, 2022, respectively.

The Company recognized a net (loss) gain on equity investments of ($138,000) and $33,000 for the three months ended March 31, 2023 and 2022, respectively. No net gains on sold equity securities were realized from sales during these periods.

The amortized cost and fair value of debt securities at March 31, 2023, 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.

		Amortized				Fair
(Dollar amounts in thousands)		Cost				Value

Due in one year or less		$	570			$	570
Due after one year through five years			2,935				2,870
Due after five years through ten years			47,291				45,336
Due after ten years			143,181				120,829
Total		$	193,977			$	169,605

There were no securities sold during the three months ended March 31, 2023, and 2022, respectively.

Investment securities with an approximate carrying value of $91.2 million and $89.9 million on March 31, 2023, and December 31, 2022, respectively, were pledged to secure deposits and for other purposes as required by law.

The following table shows the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position.

		March 31, 2023
		Less than Twelve Months								Twelve Months or Greater								Total
						Gross								Gross								Gross
		Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
(Dollar amounts in thousands)		Value				Losses				Value				Losses				Value				Losses

Subordinated debt		$	13,082			$	(418	)		$	17,923			$	(1,377	)		$	31,005			$	(1,795	)
Obligations of states and political subdivisions:
Tax-exempt			22,396				(962	)			89,741				(21,065	)			112,137				(22,027	)
Mortgage-backed securities in government-sponsored entities			609				(13	)			6,463				(628	)			7,072				(641	)
Total		$	36,087			$	(1,393	)		$	114,127			$	(23,070	)		$	150,214			$	(24,463	)

		December 31, 2022
		Less than Twelve Months								Twelve Months or Greater								Total
						Gross								Gross								Gross
		Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
(Dollar amounts in thousands)		Value				Losses				Value				Losses				Value				Losses

Subordinated debt		$	12,638			$	(1,129	)		$	8,790			$	(1,010	)		$	21,428			$	(2,139	)
Obligations of states and political subdivisions:
Tax-exempt			75,343				(10,488	)			41,138				(14,623	)			116,481				(25,111	)
Mortgage-backed securities in government-sponsored entities			6,153				(480	)			1,316				(353	)			7,469				(833	)
Total		$	94,134			$	(12,097	)		$	51,244			$	(15,986	)		$	145,378			$	(28,083	)

Every quarter, the Company evaluate securities with unrealized losses to determine if the decline in fair value has resulted from credit losses or other factors. There were 44 securities in an unrealized loss position for less than twelve months and 137 securities in an unrealized loss position for twelve months or greater on March 31, 2023. Unrealized losses on available-for-sale securities have not been recognized into income because we do not intend to sell and it is more likely than not that we will not be required to sell any of the securities in an unrealized loss position before recovery of their amortized cost. The unrealized losses on debt securities were attributable to changes in interest rates and not related to the credit quality of these issuers. As of March 31, 2023, no ACL was required on available-for-sale securities. Prior to the adoption of ASU 2016-13 there was no available for sale debt securities with an unrealized loss that suffered other than temporary impairment (OTTI) during the year ended December 31, 2022.