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Note 4 - Securities

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

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

Note 4: Securities

The amortized costs, gross unrealized gains, gross unrealized losses and fair values for securities available for sale by major security type are as follows.

June 30, 2020

Amortized

Costs

Gross

Unrealized

Gains

Gross

Unrealized

Losses

Fair

Values

Available for Sale:

U.S. Government agencies and corporations

$

68,909

$

4,617

$

---

$

73,526

States and political subdivisions

146,928

4,535

583

150,880

Mortgage-backed securities

259,040

3,461

269

262,232

Corporate debt securities

3,001

287

---

3,288

Total securities available for sale

$

477,878

$

12,900

$

852

$

489,926

		December 31, 2019
		Amortized Costs				Gross Unrealized Gains				Gross Unrealized Losses				Fair Values
Available for Sale:
U.S. Government agencies and corporations		$	119,903			$	1,995			$	775			$	121,123
States and political subdivisions			88,092				791				644				88,239
Mortgage-backed securities			223,173				45				1,435				221,783
Corporate debt securities			3,998				120				---				4,118
Total securities available for sale		$	435,166			$	2,951			$	2,854			$	435,263

The amortized cost and fair value of single maturity securities available for sale at June 30, 2020, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities included in these totals are categorized by final maturity.

		June 30, 2020
		Amortized Cost				Fair Value
Available for Sale:
Due in one year or less		$	9,684			$	9,766
Due after one year through five years			4,479				4,635
Due after five years through ten years			135,247				139,803
Due after ten years			328,468				335,722
Total securities available for sale		$	477,878			$	489,926

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, follows.

June 30, 2020

Less Than 12 Months

12 Months or More

Fair
Value

Unrealized
Loss

Fair
Value

Unrealized
Loss

Temporarily Impaired Securities:

States and political subdivisions

$

20,438

$

566

$

622

$

17

Mortgage-backed securities

85,915

269

---

---

Total

$

106,353

$

835

$

622

$

17

		December 31, 2019
		Less Than 12 Months								12 Months or More
		Fair Value				Unrealized Loss				Fair Value				Unrealized Loss
Temporarily Impaired Securities:
U.S. Government agencies and corporations		$	53,244			$	738			$	38,962			$	37
States and political subdivisions			35,934				596				591				48
Mortgage-backed securities			181,279				1,435				---				---
Total		$	270,457			$	2,769			$	39,553			$	85

The Company had 49 securities with a fair value of $106,975 that were temporarily impaired at June 30, 2020. The total unrealized loss on these securities was $852. Of the temporarily impaired total, 1 security with a fair value of $622 and an unrealized loss of $17 has been in a continuous loss position for twelve months or more. The Company has determined that this security is temporarily impaired at June 30, 2020 for the reasons set out below.

States and political subdivisions. The unrealized loss of $17 on state and political subdivision securities stemmed from 1 security with a fair value of $622. The unrealized loss was caused by interest rate and market fluctuations. The Company is monitoring bond market trends to develop strategies to address unrealized losses. Because the Company does not intend to sell the investment and it is not likely that the Company will be required to sell the investment before recovery of the amortized cost basis, which may be at maturity, the Company does not consider the investment to be other-than-temporarily impaired.

Restricted Stock.

The Company held restricted stock of $1,279 as of June 30, 2020 and $1,220 at December 31, 2019. Restricted stock is reported separately from available for sale securities. As a member bank of the Federal Reserve system and the Federal Home Loan Bank of Atlanta (“FHLB”), NBB is required to maintain certain minimum investments in the common stock of those entities. Required levels of investment are based upon NBB’s capital, current borrowings, and a percentage of qualifying assets. The Company purchases stock from or sells stock back to the correspondents based on their calculations. The stock is held by member institutions only and is not actively traded.

Redemption of FHLB stock is subject to certain limitations and conditions. At its discretion, the FHLB may declare dividends on the stock. In addition to dividends, NBB also benefits from its membership with FHLB through eligibility to borrow from the FHLB, using as collateral NBB’s capital stock investment in the FHLB and qualifying NBB real estate mortgage loans totaling $547,272 at June 30, 2020. Management reviews for impairment based upon the ultimate recoverability of the cost basis of the FHLB stock, and at June 30, 2020, management did not determine any impairment.

Management regularly monitors the credit quality of the investment portfolio. Changes in ratings are noted and follow-up research on the issuer is undertaken when warranted. Management intends to carefully monitor any changes in bond quality.