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Note 2 - Securities

6 Months Ended

Jun. 30, 2025

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 June 30, 2025 and December 31, 2024 were as follows (in thousands):

	June 30, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value		Allowance for Credit Losses
Securities available for sale:
U.S. Treasury securities	$	39,319	$	33	$	(545	)	$	38,807	$	—
U.S. agency and mortgage-backed securities		104,600		122		(10,062	)		94,660		—
Obligations of states and political subdivisions		62,591		8		(8,487	)		54,112		—
Total securities available for sale	$	206,510	$	163	$	(19,094	)	$	187,579	$	—
Securities held to maturity:
U.S. Treasury securities	$	9,759	$	—	$	(64	)	$	9,695	$	—
U.S. agency and mortgage-backed securities		83,126		—		(7,116	)		76,010		—
Obligations of states and political subdivisions		10,642		2		(1,202	)		9,442		—
Corporate debt securities		3,000		—		(419	)		2,581		(97	)
Total securities held to maturity	$	106,527	$	2	$	(8,801	)	$	97,728	$	(97	)
Total securities	$	313,037	$	165	$	(27,895	)	$	285,307	$	(97	)

	December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value		Allowance for Credit Losses
Securities available for sale:
U.S. Treasury securities	$	12,483	$	—	$	(795	)	$	11,688	$	—
U.S. agency and mortgage-backed securities		110,480		57		(12,498	)		98,039		—
Obligations of states and political subdivisions		62,954		5		(8,839	)		54,120		—
Total securities available for sale	$	185,917	$	62	$	(22,132	)	$	163,847	$	—
Securities held to maturity:
U.S. Treasury securities	$	9,632	$	—	$	(125	)	$	9,507	$	—
U.S. agency and mortgage-backed securities		86,554		—		(9,282	)		77,272		—
Obligations of states and political subdivisions		10,649		8		(1,112	)		9,545		—
Corporate debt securities		3,000		—		(450	)		2,550		(94	)
Total securities held to maturity	$	109,835	$	8	$	(10,969	)	$	98,874	$	(94	)
Total securities	$	295,752	$	70	$	(33,101	)	$	262,721	$	(94	)

Information pertaining to available for sale 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):

	June 30, 2025
	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	$	13,823	$	(10	)	$	11,953	$	(535	)	$	25,776	$	(545	)
U.S. agency and mortgage-backed securities		2,302		(34	)		65,191		(10,028	)		67,493		(10,062	)
Obligations of states and political subdivisions		2,371		(27	)		48,635		(8,460	)		51,006		(8,487	)
Total securities available for sale	$	18,496	$	(71	)	$	125,779	$	(19,023	)	$	144,275	$	(19,094	)

	December 31, 2024
	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	$	—	$	—		$	11,688	$	(795	)	$	11,688	$	(795	)
U.S. agency and mortgage-backed securities		23,445		(237	)		67,800		(12,261	)		91,245		(12,498	)
Obligations of states and political subdivisions		4,839		(135	)		47,776		(8,704	)		52,615		(8,839	)
Total securities available for sale	$	28,284	$	(372	)	$	127,264	$	(21,760	)	$	155,548	$	(22,132	)

The tables above provide information about available for sale 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 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 retain 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 $952 thousand and $411 thousand, respectively, at June 30, 2025. Accrued interest on debt securities is included in accrued interest receivable on the Company's consolidated balance sheets.

At June 30, 2025, there were 7 out of 7 available for sale U.S. Treasury securities, 92 out of 112 U.S. agency and mortgage-backed available for sale securities, and 91 out of 101 obligations of states and political subdivisions available for sale in an unrealized loss position. One hundred percent of the Company’s investment portfolio was considered investment grade at June 30, 2025. The weighted-average re-pricing term of the portfolio was 4.9 years at June 30, 2025. One hundred percent of the Company’s investment portfolio was considered investment grade at December 31, 2024. The weighted-average re-pricing term of the portfolio was 5.7 years at December 31, 2024. The unrealized losses at June 30, 2025 in the U.S. Treasury securities portfolio, U.S. agency and mortgage-backed securities portfolio, and obligations of states and political subdivisions portfolio were related to current interest rates above those that existed when these securities were purchased. Additionally, spreads on securities change from period to period, also impacting pricing. At June 30, 2025 the Company did not have credit concerns on any of the securities represented by these issuers.

The amortized cost and fair value of securities at June 30, 2025 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	$	15,316	$	15,300	$	9,964	$	9,900
Due after one year through five years		50,304		48,783		18,653		17,745
Due after five years through ten years		42,126		38,978		15,447		14,401
Due after ten years		98,764		84,518		62,463		55,682
	$	206,510	$	187,579	$	106,527	$	97,728

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 June 30, 2025 and December 31, 2024 was as follows (in thousands):

	June 30, 2025		December 31, 2024
Federal Home Loan Bank stock	$	2,609	$	1,467
Federal Reserve Bank stock		2,752		2,010
Community Bankers’ Bank stock		263		264
	$	5,624	$	3,741

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 or other observable transaction prices. The amounts included in other assets for the limited partnership investments were $2.4 million at June 30, 2025 and December 31, 2024.

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 June 30, 2025 and December 31, 2024, 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
June 30, 2025
Aaa	$	9,759	$	23,294	$	2,477	$	—	$	35,530
Aa1 / Aa2 / Aa3		—		—		8,165		—		8,165
Baa1 / Baa2 / Baa3		—		—		—		3,000		3,000
Not rated - Agency ⁽¹⁾		—		59,832		—		—		59,832
Total	$	9,759	$	83,126	$	10,642	$	3,000	$	106,527
December 31, 2024
Aaa	$	9,632	$	23,173	$	2,487	$	—	$	35,292
Aa1 / Aa2 / Aa3		—		—		8,162		—		8,162
Baa1 / Baa2 / Baa3		—		—		—		3,000		3,000
Not rated - Agency ⁽¹⁾		—		63,381		—		—		63,381
Total	$	9,632	$	86,554	$	10,649	$	3,000	$	109,835

⁽¹⁾Generally considered not to have credit risk given the implied governmental guarantees associated with these agencies.

The following tables summarize the change in the allowance for credit losses on held to maturity securities for the six months ended June 30, 2025 and 2024 and for the year ended December 31, 2024.

	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, 2024	$	—	$	—	$	—	$	94	$	94
Provision for credit losses		—		—		—		3		3
Charge-offs of securities		—		—		—		—		—
Recoveries		—		—		—		—		—
Balance, June 30, 2025	$	—	$	—	$	—	$	97	$	97

	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, 2023	$	—	$	—	$	—	$	106	$	106
Provision for credit losses		—		—		1		2		3
Charge-offs of securities		—		—		—		—		—
Recoveries		—		—		—		—		—
Balance, June 30, 2024	$	—	$	—	$	1	$	108	$	109

	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, 2023	$	—	$	—	$	—	$	106		$	106
Provision for credit losses		—		—		—		(12	)		(12	)
Charge-offs of securities		—		—		—		—			—
Recoveries		—		—		—		—			—
Balance, December 31, 2024	$	—	$	—	$	—	$	94		$	94

At June 30, 2025 and December 31, 2024, 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 as of June 30, 2025 and December 31, 2024.