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Note 2 - Securities | 9 Months Ended
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Sep. 30, 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 September 30, 2022 and December 31, 2021 were as follows (in thousands):
|  | September 30, 2022 |
|  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized (Losses) |  |  | Fair Value |
Securities available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 19,953 |  |  | $ | — |  |  | $ | (2,422 | ) |  | $ | 17,531 |
U.S. agency and mortgage-backed securities |  |  | 122,190 |  |  |  | 113 |  |  |  | (16,000 | ) |  |  | 106,303 |
Obligations of states and political subdivisions |  |  | 64,472 |  |  |  | 20 |  |  |  | (11,923 | ) |  |  | 52,569 |
Total securities available for sale |  | $ | 206,615 |  |  | $ | 133 |  |  | $ | (30,345 | ) |  | $ | 176,403 |
Securities held to maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 37,994 |  |  | $ | — |  |  | $ | (638 | ) |  | $ | 37,356 |
U.S. agency and mortgage-backed securities |  |  | 101,321 |  |  |  | — |  |  |  | (9,351 | ) |  |  | 91,970 |
Obligations of states and political subdivisions |  |  | 12,579 |  |  |  | — |  |  |  | (1,701 | ) |  |  | 10,878 |
Corporate debt securities |  |  | 3,000 |  |  |  | — |  |  |  | (284 | ) |  |  | 2,716 |
Total securities held to maturity |  | $ | 154,894 |  |  | $ | — |  |  | $ | (11,974 | ) |  | $ | 142,920 |
Total securities |  | $ | 361,509 |  |  | $ | 133 |  |  | $ | (42,319 | ) |  | $ | 319,323 |
|  | 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 September 30, 2022 and December 31, 2021, investments in an unrealized loss position that were temporarily impaired were as follows (in thousands):
|  | September 30, 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 |  | $ | 17,531 |  |  | $ | (2,422 | ) |  | $ | — |  |  | $ | — |  |  | $ | 17,531 |  |  | $ | (2,422 | )
U.S. agency and mortgage-backed securities |  |  | 33,107 |  |  |  | (2,596 | ) |  |  | 64,184 |  |  |  | (13,404 | ) |  |  | 97,291 |  |  |  | (16,000 | )
Obligations of states and political subdivisions |  |  | 33,128 |  |  |  | (6,055 | ) |  |  | 17,036 |  |  |  | (5,868 | ) |  |  | 50,164 |  |  |  | (11,923 | )
Total securities available for sale |  | $ | 83,766 |  |  | $ | (11,073 | ) |  | $ | 81,220 |  |  | $ | (19,272 | ) |  | $ | 164,986 |  |  | $ | (30,345 | )
Securities held to maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 28,517 |  |  | $ | (395 | ) |  | $ | 8,839 |  |  | $ | (243 | ) |  | $ | 37,356 |  |  | $ | (638 | )
U.S. agency and mortgage-backed securities |  |  | 68,723 |  |  |  | (6,595 | ) |  |  | 18,242 |  |  |  | (2,756 | ) |  |  | 86,965 |  |  |  | (9,351 | )
Obligations of states and political subdivisions |  |  | 9,104 |  |  |  | (1,576 | ) |  |  | 1,774 |  |  |  | (125 | ) |  |  | 10,878 |  |  |  | (1,701 | )
Corporate debt securities |  |  | 2,716 |  |  |  | (284 | ) |  |  | — |  |  |  | — |  |  |  | 2,716 |  |  |  | (284 | )
Total securities held to maturity |  | $ | 109,060 |  |  | $ | (8,850 | ) |  | $ | 28,855 |  |  | $ | (3,124 | ) |  | $ | 137,915 |  |  | $ | (11,974 | )
Total securities |  | $ | 192,826 |  |  | $ | (19,923 | ) |  | $ | 110,075 |  |  | $ | (22,396 | ) |  | $ | 302,901 |  |  | $ | (42,319 | )
|  | 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. On September 1, 2022, the Bank transferred 24 securities designated as available for sale with a combined book value of $82.2 million, market value of $74.4 million, and unrealized loss of $7.8 million, to securities designated held to maturity. The unrealized loss is being amortized monthly over the life of the securities with an increase to the carrying value of securities and a decrease to the related accumulated other comprehensive loss, which is included in the shareholders’ equity section of the Company’s balance sheet. The amortization of the unrealized loss on the transferred securities totaled $157 thousand, or $124 thousand net of tax, for the third quarter of 2022. The securities selected for transfer had larger potential decreases in their fair market values in higher interest rate environments than most of the other securities in the available for sale portfolio and included U.S. Treasury, agency, municipal and commercial mortgage-backed securities. The securities were transferred to mitigate the potential unfavorable impact that higher market interest rates may have on the carrying value of the securities and on the related accumulated other comprehensive loss. Securities designated as held to maturity are carried on the balance sheet at amortized cost, while securities designated as available for sale are carried at fair market value. At September 30, 2022, there were 12 out of 12 U.S. Treasury securities, 122 out of 145 U.S. agency and mortgage-backed securities, 111 out of 116 obligations of states and political subdivisions, and one out of one 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 6.1 years at September 30, 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 September 30, 2022 in the U.S. Treasury securities portfolio, U.S. agency and mortgage-backed securities portfolio, obligations of states and political subdivisions portfolio, and the corporate debt securities 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, 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 |  | $ | - |  |  | $ | - |  |  | $ | 907 |  |  | $ | 902 |
Due after one year through five years |  |  | 17,612 |  |  |  | 16,341 |  |  |  | 44,214 |  |  |  | 43,113 |
Due after five years through ten years |  |  | 53,590 |  |  |  | 48,051 |  |  |  | 27,267 |  |  |  | 24,698 |
Due after ten years |  |  | 135,413 |  |  |  | 112,011 |  |  |  | 82,506 |  |  |  | 74,207 |
|  | $ | 206,615 |  |  | $ | 176,403 |  |  | $ | 154,894 |  |  | $ | 142,920 |
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, 2022, and no impairment has been recognized. The composition of restricted securities at September 30, 2022 and December 31, 2021 was as follows (in thousands):
|  | September 30, 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 $566 thousand and $504 thousand at September 30, 2022 and December 31, 2021, respectively.

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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) + Details
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