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Note 2 - Securities

3 Months Ended

Mar. 31, 2022

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. Treasury securities, 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 March 31, 2022 and December 31, 2021 were as follows (in thousands):

		March 31, 2022
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized (Losses)				Fair Value
Securities available for sale:
U.S. Treasury securities		$	59,797			$	—			$	(2,276	)		$	57,521
U.S. agency and mortgage-backed securities			171,513				140				(10,392	)			161,261
Obligations of states and political subdivisions			70,165				148				(6,211	)			64,102
Corporate debt securities			2,011				—				(2	)			2,009
Total securities available for sale		$	303,486			$	288			$	(18,881	)		$	284,893
Securities held to maturity:
U.S. agency and mortgage-backed securities		$	69,367			$	—			$	(2,812	)		$	66,555
Obligations of states and political subdivisions			9,273				12				(543	)			8,742
Corporate debt securities			3,000				—				—				3,000
Total securities held to maturity		$	81,640			$	12			$	(3,355	)		$	78,297
Total securities		$	385,126			$	300			$	(22,236	)		$	363,190

		December 31, 2021
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized (Losses)				Fair Value
Securities available for sale:
U.S. Treasury securities		$	39,871			$	37			$	(250	)		$	39,658
U.S. agency and mortgage-backed securities			177,131				1,085				(1,837	)			176,379
Obligations of states and political subdivisions			71,037				910				(509	)			71,438
Corporate debt securities			2,019				1				—				2,020
Total securities available for sale		$	290,058			$	2,033			$	(2,596	)		$	289,495
Securities held to maturity:
U.S. agency and mortgage-backed securities		$	26,392			$	124			$	(53	)		$	26,463
Obligations of states and political subdivisions			7,049				118				(13	)			7,154
Total securities held to maturity		$	33,441			$	242			$	(66	)		$	33,617
Total securities		$	323,499			$	2,275			$	(2,662	)		$	323,112

At March 31, 2022 and December 31, 2021, investments in an unrealized loss position that were temporarily impaired were as follows (in thousands):

		March 31, 2022
		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		$	57,521			$	(2,276	)		$	—			$	—			$	57,521			$	(2,276	)
U.S. agency and mortgage-backed securities			126,499				(7,605	)			26,536				(2,787	)			153,035				(10,392	)
Obligations of states and political subdivisions			43,821				(5,529	)			5,003				(682	)			48,824				(6,211	)
Corporate debt securities			2,009				(2	)			—				—				2,009				(2	)
Total securities available for sale		$	229,850			$	(15,412	)		$	31,539			$	(3,469	)		$	261,389			$	(18,881	)
Securities held to maturity:
U.S. agency and mortgage-backed securities		$	66,555			$	(2,812	)		$	—			$	—			$	66,555			$	(2,812	)
Obligations of states and political subdivisions			5,991				(543	)			—				—				5,991				(543	)
Total securities held to maturity		$	72,546			$	(3,355	)		$	—			$	—			$	72,546			$	(3,355	)
Total securities		$	302,396			$	(18,767	)		$	31,539			$	(3,469	)		$	333,935			$	(22,236	)

		December 31, 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		$	29,656			$	(250	)		$	—			$	—			$	29,656			$	(250	)
U.S. agency and mortgage-backed securities			109,950				(1,335	)			14,749				(502	)			124,699				(1,837	)
Obligations of states and political subdivisions			34,611				(500	)			1,009				(9	)			35,620				(509	)
Total securities available for sale		$	174,217			$	(2,085	)		$	15,758			$	(511	)		$	189,975			$	(2,596	)
Securities held to maturity:
U.S. agency and mortgage-backed securities		$	5,411			$	(53	)		$	—			$	—			$	5,411			$	(53	)
Obligations of states and political subdivisions			999				(13	)			—				—				999				(13	)
Total securities held to maturity		$	6,410			$	(66	)		$	—			$	—			$	6,410			$	(66	)
Total securities		$	180,627			$	(2,151	)		$	15,758			$	(511	)		$	196,385			$	(2,662	)

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 March 31, 2022, there were 125 out of 146 U.S. agency and mortgage-backed securities, 12 out of 12 U.S. Treasury securities, 70 out of 119 obligations of states and political subdivisions, and zero out of 2 corporate debt securities 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 5.7 years at March 31, 2022. At December 31, 2021, there were six out of eight U.S. Treasury securities, 58 out of 135 U.S. agency and mortgage-backed securities and 37 out of 118 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, 2021. The weighted-average re-pricing term of the portfolio was 5.2 years at December 31, 2021. The unrealized losses at March 31, 2022 in the U.S. Treasury securities portfolio, 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 March 31, 2022 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		$	810			$	811			$	3,019			$	3,022
Due after one year through five years			56,795				55,128				6,501				6,449
Due after five years through ten years			66,160				63,379				11,373				10,892
Due after ten years			179,721				165,575				60,747				57,934
		$	303,486			$	284,893			$	81,640			$	78,297

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 March 31, 2022, and no impairment has been recognized.

The composition of restricted securities at March 31, 2022 and December 31, 2021 was as follows (in thousands):

		March 31, 2022				December 31, 2021
Federal Home Loan Bank stock		$	796			$	701
Federal Reserve Bank stock			980				980
Community Bankers’ Bank stock			132				132
		$	1,908			$	1,813

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 $529 thousand and $504 thousand at March 31, 2022 and December 31, 2021, respectively.