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Note 2 - Securities

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

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

Note 2. Securities

The Company invests in U.S. agency and mortgage-backed securities, obligations of state and political subdivisions, and corporate debt securities. Amortized costs and fair values of securities at September 30, 2021 and December 31, 2020 were as follows (in thousands):

		September 30, 2021
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized (Losses)				Fair Value
Securities available for sale:
U.S. Treasury securities		$	19,951			$	63			$	(38	)		$	19,976
U.S. agency and mortgage-backed securities			172,782				1,713				(1,234	)			173,261
Obligations of states and political subdivisions			70,703				1,002				(378	)			71,327
Corporate debt securities			2,027				9				—				2,036
Total securities available for sale		$	265,463			$	2,787			$	(1,650	)		$	266,600
Securities held to maturity:
U.S. agency and mortgage-backed securities		$	7,301			$	117			$	(2	)		$	7,416
Obligations of states and political subdivisions			2,745				101				—				2,846
Total securities held to maturity		$	10,046			$	218			$	(2	)		$	10,262
Total securities		$	275,509			$	3,005			$	(1,652	)		$	276,862

		December 31, 2020
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized (Losses)				Fair Value
Securities available for sale:
U.S. agency and mortgage-backed securities		$	98,848			$	2,830			$	(80	)		$	101,598
Obligations of states and political subdivisions			37,507				1,122				(2	)			38,627
Total securities available for sale		$	136,355			$	3,952			$	(82	)		$	140,225
Securities held to maturity:
U.S. agency and mortgage-backed securities		$	9,588			$	264			$	—			$	9,852
Obligations of states and political subdivisions			3,146				140				—				3,286
Corporate debt securities			1,500				105				—				1,605
Total securities held to maturity		$	14,234			$	509			$	—			$	14,743
Total securities		$	150,589			$	4,461			$	(82	)		$	154,968

At September 30, 2021 and December 31, 2020, investments in an unrealized loss position that were temporarily impaired were as follows (in thousands):

		September 30, 2021
		Less than 12 months								12 months or more								Total
		Fair Value				Unrealized (Loss)				Fair Value				Unrealized (Loss)				Fair Value				Unrealized (Loss)
Securities available for sale:
U.S. Treasury securities		$	9,934			$	(38	)		$	—			$	—			$	9,934			$	(38	)
U.S. agency and mortgage-backed securities			110,631				(1,234	)			—				—				110,631				(1,234	)
Obligations of states and political subdivisions			25,202				(378	)			—				—				25,202				(378	)
Total securities available for sale		$	145,767			$	(1,650	)		$	—			$	—			$	145,767			$	(1,650	)
Securities held to maturity:
U.S. agency and mortgage-backed securities		$	—			$	—			$	—			$	—			$	—			$	—
Obligations of states and political subdivisions			—				—				—				—				—				—
Total securities held to maturity		$	—			$	—			$	—			$	—			$	—			$	—
Total securities		$	145,767			$	(1,650	)		$	—			$	—			$	145,767			$	(1,650	)

		December 31, 2020
		Less than 12 months								12 months or more								Total
		Fair Value				Unrealized (Loss)				Fair Value				Unrealized (Loss)				Fair Value				Unrealized (Loss)
Securities available for sale:
U.S. agency and mortgage-backed securities		$	17,367			$	(80	)		$	—			$	—			$	17,367			$	(80	)
Obligations of states and political subdivisions			1,020				(2	)			—				—				1,020				(2	)
Total securities available for sale		$	18,387			$	(82	)		$	—			$	—			$	18,387			$	(82	)
Securities held to maturity:
U.S. agency and mortgage-backed securities		$	—			$	—			$	—			$	—			$	—			$	—
Obligations of states and political subdivisions			—				—				—				—				—				—
Total securities held to maturity		$	—			$	—			$	—			$	—			$	—			$	—
Total securities		$	18,387			$	(82	)		$	—			$	—			$	18,387			$	(82	)

The tables above provide information about securities that have been in an unrealized loss position for less than twelve consecutive months and securities that have been in an unrealized loss position for twelve consecutive months or more. Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Impairment is considered to be other-than-temporary if the Company (1) intends to sell the security, (2) more likely than not will be required to sell the security before recovering its cost, or (3) does not expect to recover the security’s entire amortized cost basis. Presently, the Company does not intend to sell any of these securities, does not expect to be required to sell these securities, and expects to recover the entire amortized cost of all the securities.

At September 30, 2021, there were forty-two out of one hundred twenty-three U.S. agency and mortgage-backed securities, two out of four U.S. Treasury securities, and twenty-five out of one hundred and ten obligations of states and political subdivisions in an unrealized loss position. One hundred percent of the Company’s investment portfolio is considered investment grade. The weighted-average re-pricing term of the portfolio was 5.3 years at September 30, 2021. At December 31, 2020, there were seven out of one hundred and one U.S. agency and mortgage-backed securities and one out of eighty-four obligations of states and political subdivisions in an unrealized loss position. One hundred percent of the Company’s investment portfolio was considered investment grade at December 31, 2020. The weighted-average re-pricing term of the portfolio was 3.5 years at December 31, 2020. The unrealized losses at September 30, 2021 in the U.S. agency and mortgage-backed securities portfolio and the obligations of states and political subdivisions portfolio were related to changes in market interest rates and not credit concerns of the issuers.

The amortized cost and fair value of securities at September 30, 2021 by contractual maturity are shown below (in thousands). Expected maturities of mortgage-backed securities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without call or prepayment penalties.

		Available for Sale								Held to Maturity
		Amortized Cost				Fair Value				Amortized Cost				Fair Value
Due within one year		$	2,765			$	2,781			$	2,410			$	2,418
Due after one year through five years			15,905				16,002				2,335				2,432
Due after five years through ten years			62,654				63,525				1,552				1,599
Due after ten years			184,139				184,292				3,749				3,813
		$	265,463			$	266,600			$	10,046			$	10,262

Federal Home Loan Bank, Federal Reserve Bank, and Community Bankers’ Bank stock are generally viewed as long-term investments and as restricted securities, which are carried at cost, because there is a minimal market for the stock. Therefore, when evaluating restricted securities for impairment, their value is based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. The Company does not consider these investments to be other-than-temporarily impaired at September 30, 2021, and no impairment has been recognized.

The composition of restricted securities at September 30, 2021 and December 31, 2020 was as follows (in thousands):

		September 30, 2021				December 31, 2020
Federal Home Loan Bank stock		$	701			$	818
Federal Reserve Bank stock			980				980
Community Bankers’ Bank stock			132				77
		$	1,813			$	1,875

The Company also holds limited partnership investments in Small Business Investment Companies (SBICs), which are included in other assets in the Consolidated Balance Sheets. The limited partnership investments are measured as equity investments without readily determinable fair values at their cost, less any impairment. The amounts included in other assets for the limited partnership investments were $454 thousand and $529 thousand at September 30, 2021 and December 31, 2020, respectively.