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Note 6 - Debt 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] | 6. Debt Securities The amortized cost of securities available-for-sale and their approximate fair values as of September 30, 2022 and December 31, 2021 are summarized below (in thousands):
2022: |  |  |  |  |  | Gross |  |  | Gross |  |  |  |  |
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  | Estimated |
|  | Cost |  |  | Gains |  |  | Losses |  |  | Fair Value |
U.S. government treasuries |  | $ | 230,063 |  |  | $ | - |  |  | $ | (21,977 | ) |  | $ | 208,086 |
U.S. government agencies |  |  | 114,018 |  |  |  | 5 |  |  |  | (10,380 | ) |  |  | 103,643 |
U.S. government mortgage-backed securities |  |  | 138,117 |  |  |  | 6 |  |  |  | (19,766 | ) |  |  | 118,357 |
State and political subdivisions |  |  | 316,532 |  |  |  | 5 |  |  |  | (36,048 | ) |  |  | 280,489 |
Corporate bonds |  |  | 81,713 |  |  |  | - |  |  |  | (8,321 | ) |  |  | 73,392 |
|  | $ | 880,443 |  |  | $ | 16 |  |  | $ | (96,492 | ) |  | $ | 783,967 |
2021: |  |  |  |  |  | Gross |  |  | Gross |  |  |  |  |
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  | Estimated |
|  | Cost |  |  | Gains |  |  | Losses |  |  | Fair Value |
U.S. government treasuries |  | $ | 192,323 |  |  | $ | 239 |  |  | $ | (2,083 | ) |  | $ | 190,479 |
U.S. government agencies |  |  | 114,531 |  |  |  | 2,235 |  |  |  | (752 | ) |  |  | 116,014 |
U.S. government mortgage-backed securities |  |  | 149,896 |  |  |  | 1,375 |  |  |  | (1,670 | ) |  |  | 149,601 |
State and political subdivisions |  |  | 290,548 |  |  |  | 4,035 |  |  |  | (1,724 | ) |  |  | 292,859 |
Corporate bonds |  |  | 79,887 |  |  |  | 2,437 |  |  |  | (274 | ) |  |  | 82,050 |
|  | $ | 827,185 |  |  | $ | 10,321 |  |  | $ | (6,503 | ) |  | $ | 831,003 |
The amortized cost and fair value of debt securities available-for-sale as of September 30, 2022, are shown below by expected maturity. Expected maturity will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties (in thousands).
|  | Amortized |  |  | Estimated |
|  | Cost |  |  | Fair Value |
Due in one year or less |  | $ | 32,318 |  |  | $ | 32,029 |
Due after one year through five years |  |  | 452,629 |  |  |  | 414,093 |
Due after five years through ten years |  |  | 382,700 |  |  |  | 326,965 |
Due after ten years |  |  | 12,796 |  |  |  | 10,880 |
Total |  | $ | 880,443 |  |  | $ | 783,967 |
Securities with a carrying value of $207.4 million and $219.7 million at September 30, 2022 and December 31, 2021, respectively, were pledged on public deposits, securities sold under agreements to repurchase and for other purposes as required or permitted by law. The proceeds and gains on securities available-for-sale for the three and nine months ended September 30, 2022 and 2021 are summarized below (in thousands):
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Proceeds from sales of securities available-for-sale |  | $ | 10,013 |  |  | $ | 622 |  |  | $ | 10,548 |  |  | $ | 622 |
Gross realized gains on securities available-for-sale |  |  | 25 |  |  |  | 24 |  |  |  | 60 |  |  |  | 24 |
Gross realized losses on securities available-for-sale |  |  | (23 | ) |  |  | - |  |  |  | (23 | ) |  |  | - |
Gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2022 and December 31, 2021 are summarized as follows (in thousands):
|  | Less than 12 Months |  |  | 12 Months or More |  |  | Total |
2022: |  | Estimated Fair Value |  |  | Unrealized Losses |  |  | Estimated Fair Value |  |  | Unrealized Losses |  |  | Estimated Fair Value |  |  | Unrealized Losses |
Securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government treasuries |  | $ | 119,179 |  |  | $ | (10,309 | ) |  | $ | 88,907 |  |  | $ | (11,668 | ) |  | $ | 208,086 |  |  | $ | (21,977 | )
U.S. government agencies |  |  | 76,888 |  |  |  | (6,433 | ) |  |  | 26,095 |  |  |  | (3,947 | ) |  |  | 102,983 |  |  |  | (10,380 | )
U.S. government mortgage-backed securities |  |  | 47,837 |  |  |  | (5,541 | ) |  |  | 69,785 |  |  |  | (14,225 | ) |  |  | 117,622 |  |  |  | (19,766 | )
State and political subdivisions |  |  | 218,288 |  |  |  | (23,921 | ) |  |  | 59,639 |  |  |  | (12,127 | ) |  |  | 277,927 |  |  |  | (36,048 | )
Corporate bonds |  |  | 63,812 |  |  |  | (6,032 | ) |  |  | 9,580 |  |  |  | (2,289 | ) |  |  | 73,392 |  |  |  | (8,321 | )
|  | $ | 526,004 |  |  | $ | (52,236 | ) |  | $ | 254,006 |  |  | $ | (44,256 | ) |  | $ | 780,010 |  |  | $ | (96,492 | )
|  | Less than 12 Months |  |  | 12 Months or More |  |  | Total |
2021: |  | Estimated Fair Value |  |  | Unrealized Losses |  |  | Estimated Fair Value |  |  | Unrealized Losses |  |  | Estimated Fair Value |  |  | Unrealized Losses |
Securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government treasuries |  | $ | 163,206 |  |  | $ | (2,083 | ) |  | $ | - |  |  | $ | - |  |  | $ | 163,206 |  |  | $ | (2,083 | )
U.S. government agencies |  |  | 30,647 |  |  |  | (570 | ) |  |  | 5,836 |  |  |  | (182 | ) |  |  | 36,483 |  |  |  | (752 | )
U.S. government mortgage-backed securities |  |  | 92,192 |  |  |  | (1,580 | ) |  |  | 2,524 |  |  |  | (90 | ) |  |  | 94,716 |  |  |  | (1,670 | )
State and political subdivisions |  |  | 115,204 |  |  |  | (1,667 | ) |  |  | 1,725 |  |  |  | (57 | ) |  |  | 116,929 |  |  |  | (1,724 | )
Corporate bonds |  |  | 16,484 |  |  |  | (274 | ) |  |  | - |  |  |  | - |  |  |  | 16,484 |  |  |  | (274 | )
|  | $ | 417,733 |  |  | $ | (6,174 | ) |  | $ | 10,085 |  |  | $ | (329 | ) |  | $ | 427,818 |  |  | $ | (6,503 | )
Gross unrealized losses on debt securities totaled $96.5 million as of September 30, 2022. These unrealized losses are generally due to changes in interest rates or general market conditions. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, state or political subdivision, or corporations. Management then determines whether downgrades by bond rating agencies have occurred, and reviews industry analysts’ reports. The Company’s procedures for evaluating investments in states, municipalities and political subdivisions include but are not limited to reviewing the offering statement and the most current available financial information, comparing yields to yields of bonds of similar credit quality, confirming capacity to repay, assessing operating and financial performance, evaluating the stability of tax revenues, considering debt profiles and local demographics, and for revenue bonds, assessing the source and strength of revenue structures for municipal authorities. These procedures, as applicable, are utilized for all municipal purchases and are utilized in whole or in part for monitoring the portfolio of municipal holdings. The Company does not utilize third party credit rating agencies as a primary component of determining if the municipal issuer has an adequate capacity to meet the financial commitments under the security for the projected life of the investment, and, therefore, does not compare internal assessments to those of the credit rating agencies. Credit rating downgrades are utilized as an additional indicator of credit weakness and as a reference point for historical default rates. Management concluded that the gross unrealized losses on debt securities were temporary. Due to potential changes in conditions, it is at least reasonably possible that changes in fair values and management’s assessments will occur in the near term and that such changes could materially affect the amounts reported in the Company’s financial statements.

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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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