XML 22 R11.htm IDEA: XBRL DOCUMENT
v3.23.1

Note 2 - 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 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, gross unrealized gains and losses, allowance for credit losses, and fair values of debt securities at March 31, 2023 and December 31, 2022 were as follows (in thousands):
|  | March 31, 2023 |
|  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized (Losses) |  |  | Fair Value |  |  | Allowance for Credit Losses |
Securities available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 12,471 |  |  | $ | — |  |  | $ | (1,026 | ) |  | $ | 11,445 |  |  | $ | — |
U.S. agency and mortgage-backed securities |  |  | 106,764 |  |  |  | 86 |  |  |  | (11,944 | ) |  |  | 94,906 |  |  |  | — |
Obligations of states and political subdivisions |  |  | 64,301 |  |  |  | 16 |  |  |  | (8,313 | ) |  |  | 56,004 |  |  |  | — |
Total securities available for sale |  | $ | 183,536 |  |  | $ | 102 |  |  | $ | (21,283 | ) |  | $ | 162,355 |  |  | $ | — |
Securities held to maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 38,423 |  |  | $ | — |  |  | $ | (300 | ) |  | $ | 38,123 |  |  | $ | — |
U.S. agency and mortgage-backed securities |  |  | 98,048 |  |  |  | — |  |  |  | (7,866 | ) |  |  | 90,182 |  |  |  | — |
Obligations of states and political subdivisions |  |  | 11,962 |  |  |  | 37 |  |  |  | (1,045 | ) |  |  | 10,954 |  |  |  | — |
Corporate debt securities |  |  | 3,000 |  |  |  | — |  |  |  | (303 | ) |  |  | 2,697 |  |  |  | (132 | )
Total securities held to maturity |  | $ | 151,433 |  |  | $ | 37 |  |  | $ | (9,514 | ) |  | $ | 141,956 |  |  | $ | (132 | )
Total securities |  | $ | 334,969 |  |  | $ | 139 |  |  | $ | (30,797 | ) |  | $ | 304,311 |  |  | $ | (132 | )
|  | December 31, 2022 |
|  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized (Losses) |  |  | Fair Value |
Securities available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 12,468 |  |  | $ | — |  |  | $ | (1,239 | ) |  | $ | 11,229 |
U.S. agency and mortgage-backed securities |  |  | 109,972 |  |  |  | 95 |  |  |  | (13,149 | ) |  |  | 96,918 |
Obligations of states and political subdivisions |  |  | 64,386 |  |  |  | 4 |  |  |  | (9,630 | ) |  |  | 54,760 |
Total securities available for sale |  | $ | 186,826 |  |  | $ | 99 |  |  | $ | (24,018 | ) |  | $ | 162,907 |
Securities held to maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 38,211 |  |  | $ | — |  |  | $ | (568 | ) |  | $ | 37,643 |
U.S. agency and mortgage-backed securities |  |  | 99,374 |  |  |  | — |  |  |  | (9,189 | ) |  |  | 90,185 |
Obligations of states and political subdivisions |  |  | 12,573 |  |  |  | — |  |  |  | (1,252 | ) |  |  | 11,321 |
Corporate debt securities |  |  | 3,000 |  |  |  | — |  |  |  | (352 | ) |  |  | 2,648 |
Total securities held to maturity |  | $ | 153,158 |  |  | $ | — |  |  | $ | (11,361 | ) |  | $ | 141,797 |
Total securities |  | $ | 339,984 |  |  | $ | 99 |  |  | $ | (35,379 | ) |  | $ | 304,704 |
Information pertaining to securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position is as follows (in thousands):
|  | March 31, 2023 |
|  | 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 |  | $ | — |  |  | $ | — |  |  | $ | 11,445 |  |  | $ | (1,026 | ) |  | $ | 11,445 |  |  | $ | (1,026 | )
U.S. agency and mortgage-backed securities |  |  | 4,232 |  |  |  | (55 | ) |  |  | 84,936 |  |  |  | (11,889 | ) |  |  | 89,168 |  |  |  | (11,944 | )
Obligations of states and political subdivisions |  |  | 7,840 |  |  |  | (116 | ) |  |  | 41,831 |  |  |  | (8,197 | ) |  |  | 49,671 |  |  |  | (8,313 | )
Total securities available for sale |  | $ | 12,072 |  |  | $ | (171 | ) |  | $ | 138,212 |  |  | $ | (21,112 | ) |  | $ | 150,284 |  |  | $ | (21,283 | )
|  | December 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 |  | $ | 9,041 |  |  | $ | (932 | ) |  | $ | 2,188 |  |  | $ | (307 | ) |  | $ | 11,229 |  |  | $ | (1,239 | )
U.S. agency and mortgage-backed securities |  |  | 27,282 |  |  |  | (1,945 | ) |  |  | 62,342 |  |  |  | (11,204 | ) |  |  | 89,624 |  |  |  | (13,149 | )
Obligations of states and political subdivisions |  |  | 24,689 |  |  |  | (2,581 | ) |  |  | 26,362 |  |  |  | (7,049 | ) |  |  | 51,051 |  |  |  | (9,630 | )
Total securities available for sale |  | $ | 61,012 |  |  | $ | (5,458 | ) |  | $ | 90,892 |  |  | $ | (18,560 | ) |  | $ | 151,904 |  |  | $ | (24,018 | )
Securities held to maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 19,302 |  |  | $ | (258 | ) |  | $ | 18,342 |  |  | $ | (310 | ) |  | $ | 37,644 |  |  | $ | (568 | )
U.S. agency and mortgage-backed securities |  |  | 58,019 |  |  |  | (6,848 | ) |  |  | 32,167 |  |  |  | (2,341 | ) |  |  | 90,186 |  |  |  | (9,189 | )
Obligations of states and political subdivisions |  |  | 8,648 |  |  |  | (1,008 | ) |  |  | 2,672 |  |  |  | (244 | ) |  |  | 11,320 |  |  |  | (1,252 | )
Corporate debt securities |  |  | 2,648 |  |  |  | (352 | ) |  |  | — |  |  |  | — |  |  |  | 2,648 |  |  |  | (352 | )
Total securities held to maturity |  | $ | 88,617 |  |  | $ | (8,466 | ) |  | $ | 53,181 |  |  | $ | (2,895 | ) |  | $ | 141,798 |  |  | $ | (11,361 | )
Total securities |  | $ | 149,629 |  |  | $ | (13,924 | ) |  | $ | 144,073 |  |  | $ | (21,455 | ) |  | $ | 293,702 |  |  | $ | (35,379 | )
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 to determine whether the impairment is due to credit-related factors or noncredit-related factors at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to the extent to which fair the fair value is less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to retains its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value. 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. Accrued interest receivable on securities available for sale and securities held to maturity totaled $803 thousand and $600 thousand, respectively at March 31, 2023. Accrued interest on debt securities is included in accrued interest receivable on the Company's consolidated balance sheets. At March 31, 2023, there were 3 out of 3 U.S. Treasury securities, 94 out of 109 U.S. agency and mortgage-backed securities, and 80 out of 98 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 6.5 years at March 31, 2023. One hundred percent of the Company’s investment portfolio was considered investment grade at December 31, 2022. The weighted-average re-pricing term of the portfolio was 6.5 years at December 31, 2022. The unrealized losses at March 31, 2023 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. 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 $316 thousand for the first quarter of 2023. 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. The amortized cost and fair value of securities at March 31, 2023 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 |  | $ | 500 |  |  | $ | 500 |  |  | $ | 19,949 |  |  | $ | 19,779 |
Due after one year through five years |  |  | 20,323 |  |  |  | 19,219 |  |  |  | 27,721 |  |  |  | 27,181 |
Due after five years through ten years |  |  | 40,251 |  |  |  | 37,157 |  |  |  | 24,100 |  |  |  | 21,910 |
Due after ten years |  |  | 122,462 |  |  |  | 105,479 |  |  |  | 79,663 |  |  |  | 73,086 |
|  | $ | 183,536 |  |  | $ | 162,355 |  |  | $ | 151,433 |  |  | $ | 141,956 |
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 composition of restricted securities at March 31, 2023 and December 31, 2022 was as follows (in thousands):
|  | March 31, 2023 |  |  | December 31, 2022 |
Federal Home Loan Bank stock |  | $ | 691 |  |  | $ | 796 |
Federal Reserve Bank stock |  |  | 980 |  |  |  | 980 |
Community Bankers’ Bank stock |  |  | 132 |  |  |  | 132 |
|  | $ | 1,803 |  |  | $ | 1,908 |
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 $636 thousand and $599 thousand at March 31, 2023 and December 31, 2022, respectively. Credit Quality Indicators & Allowance for Credit Losses - HTM The Company monitors the credit quality of the debt securities held to maturity through the use of credit ratings from Moody's, S&P, and Egan-Jones. The Company monitors the credit ratings on a quarterly basis. The following table summarizes the amortized cost of debt securities held to maturity at March 31, 2023, aggregated by credit quality indicators.
|  | U.S. Treasury securities |  |  | U.S. agency and mortgage-backed securities |  |  | Obligations of states and political subdivisions |  |  | Corporate debt securities |  |  | Total Held to Maturity Securities |
March 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Aaa |  | $ | 38,423 |  |  | $ | 22,763 |  |  | $ | 2,911 |  |  | $ | — |  |  | $ | 64,097 |
Aa1 / Aa2 / Aa3 |  |  | — |  |  |  | — |  |  |  | 9,051 |  |  |  | — |  |  |  | 9,051 |
Baa1 / Baa2 / Baa3 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,000 |  |  |  | 3,000 |
Not rated - Agency (1) |  |  | — |  |  |  | 75,285 |  |  |  | — |  |  |  | — |  |  |  | 75,285 |
Total |  | $ | 38,423 |  |  | $ | 98,048 |  |  | $ | 11,962 |  |  | $ | 3,000 |  |  | $ | 151,433 |
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Aaa |  | $ | 38,211 |  |  | $ | 22,706 |  |  | $ | 3,126 |  |  | $ | — |  |  | $ | 64,043 |
Aa1 / Aa2 / Aa3 |  |  | — |  |  |  | — |  |  |  | 9,447 |  |  |  | — |  |  |  | 9,447 |
Baa1 / Baa2 / Baa3 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,000 |  |  |  | 3,000 |
Not rated - Agency (1) |  |  | — |  |  |  | 76,668 |  |  |  | — |  |  |  | — |  |  |  | 76,668 |
Total |  | $ | 38,211 |  |  | $ | 99,374 |  |  | $ | 12,573 |  |  | $ | 3,000 |  |  | $ | 153,158 |
________________________________________ (1) Generally considered not to have credit risk given the implied governmental guarantees associated with these agencies The following table summarizes the change in the allowance for credit losses on held to maturity securities for the three months ended March 31, 2023.
|  | U.S. Treasury securities |  |  | U.S. agency and mortgage-backed securities |  |  | Obligations of states and political subdivisions |  |  | Corporate debt securities |  |  | Total Held to Maturity Securities |
Balance, December 31, 2022 |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Adjustment for adoption of ASU 2016-13 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 132 |  |  |  | 132 |
Provision for credit losses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Charge-offs of securities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Recoveries |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Balance, March 31, 2023 |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 132 |  |  | $ | 132 |
At March 31, 2023, the Company had no securities held-to-maturity that were past due 30 days or more as to principal and interest payments. The Company had no securities held-to-maturity classified as nonaccrual for the three months ended March 31, 2023.

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://www.xbrl.org/2003/role/disclosureRef -Topic 320 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//320/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 320 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481800/320-10-50-10 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6B -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-6B Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6B -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-6B Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Name Regulation S-K (SK) -Number 229 -Section 1403 -Paragraph (b) -Publisher SEC Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 946 -SubTopic 320 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//946-320/tableOfContent Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 940 -SubTopic 320 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//940-320/tableOfContent Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 942 -SubTopic 320 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//942-320/tableOfContent + Details
Name: | us-gaap_InvestmentsInDebtAndMarketableEquitySecuritiesAndCertainTradingAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration