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Note 3 - 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 3: Securities

The amortized cost and estimated fair value of securities available for sale along with gross unrealized gains and losses are summarized as follows:

		March 31, 2023
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Allowance for Credit Losses				Fair Value
Available for Sale:
U.S. Treasuries		$	993			$	-			$	46			$	-			$	947
U.S. Government agencies and corporations			382,592				-				48,648				-				333,944
States and political subdivisions			181,214				3				31,255				-				149,962
Mortgage-backed securities			167,964				-				7,511				-				160,453
Corporate debt securities			6,502				-				761				-				5,741
Total securities available for sale		$	739,265			$	3			$	88,221			$	-			$	651,047

		December 31, 2022
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
Available for Sale:
U.S. Treasuries		$	992			$	-			$	56			$	936
U.S. Government agencies and corporations			391,538				39				55,002				336,575
States and political subdivisions			190,192				26				38,018				152,200
Mortgage-backed securities			170,694				22				9,239				161,477
Corporate debt securities			6,501				-				837				5,664
Total securities available for sale		$	759,917			$	87			$	103,152			$	656,852

No allowance for credit loss on securities available for sale was recorded as of March 31, 2023.

The deferred tax asset for the net unrealized loss on securities available for sale was $18,526 as of March 31, 2023 and $21,644 as of December 31, 2022. The deferred tax asset is included in other assets on the Consolidated Balance Sheets.

The amortized cost and fair value of single maturity securities available for sale at March 31, 2023, 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.

		March 31, 2023
		Amortized Cost				Fair Value
Available for Sale:
Due in one year or less		$	3,229			$	3,172
Due after one year through five years			148,141				138,200
Due after five years through ten years			316,859				273,664
Due after ten years			271,036				236,011
Total securities available for sale		$	739,265			$	651,047

Information pertaining to securities with gross unrealized losses aggregated by investment category and length of time that the individual securities have been in a continuous loss position, follows.

March 31, 2023

Less Than 12 Months

12 Months or More

Fair
Value

Unrealized
Loss

Fair
Value

Unrealized
Loss

U.S. Treasuries

$

-

$

-

$

947

$

46

U.S. Government agencies and corporations

50,869

2,032

283,074

46,616

States and political subdivisions

9,432

1,214

139,371

30,041

Mortgage-backed securities

18,576

242

141,868

7,269

Corporate debt securities

873

127

4,868

634

Total available for sale securities

$

79,750

$

3,615

$

570,128

$

84,606

		December 31, 2022
		Less Than 12 Months								12 Months or More
		Fair Value				Unrealized Loss				Fair Value				Unrealized Loss
U.S. Treasuries		$	936			$	56			$	-			$	-
U.S. Government agencies and corporations			144,574				12,699				190,950				42,303
States and political subdivisions			94,657				18,373				52,134				19,645
Mortgage-backed securities			144,198				7,326				15,165				1,913
Corporate debt securities			4,843				655				821				182
Total temporarily impaired securities		$	389,208			$	39,109			$	259,070			$	64,043

The Company evaluates securities available for sale that are in unrealized loss positions to determine whether the impairment is due to credit-related factors or noncredit-related factors. 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.

At March 31, 2023, the Company had 602 securities with a fair value of $649,878 in an unrealized loss position. The Company does not have the intent to sell any of these securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. The contractual terms of the investments do not permit the issuers to settle the securities at a price less than the cost basis of the investments. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline. Accordingly, the unrealized losses are attributed to noncredit-related factors, including changes in interest rates and other market conditions. No allowance for credit losses on securities available for sale was recorded as of March 31, 2023.

Restricted Stock.

The Company held restricted stock of $929 as of March 31, 2023 and $941 at December 31, 2022. Restricted stock is reported separately from available for sale securities. As a member of the Federal Reserve 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 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 $646,100 at March 31, 2023. Management reviews for impairment based upon the ultimate recoverability of the cost basis of the FHLB stock, and at March 31, 2023, did not determine any impairment.

Realized Securities Gains and Losses

During the first three months of 2023, the Company realized net securities gains of $12 on the sale of securities with an amortized cost basis of $17,987. The sales were part of the Company’s interest rate risk management strategy. There were no sales of securities during 2022.