XML 67 R11.htm IDEA: XBRL DOCUMENT v3.20.1
Note 3 - Investment Securities
 12 Months Ended
Dec. 31, 2019
Notes to Financial Statements  
Investments in Debt and Equity Instruments, Cash and Cash Equivalents, Unrealized and Realized Gains (Losses) [Text Block]
(
3
)
INVESTMENT SECURITIES
 
Investment securities have been classified in the consolidated balance sheets according to management’s intent. Investment securities at
December 31, 2019
and
2018
are summarized as follows:
 
 
 
(In thousands)
 

 

 
Gross

Amortized

Cost
 

 

 
Gross

Unrealized

Gains
 

 

 
 
Unrealized
Losses
 

 

 
 
Fair
Value
 
 
 
 
 
 
 
 
 
December 31, 2019:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Securities available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency mortgage-backed securities
 
$
69,984
 
 
$
90
 
 
$
576
 
 
$
69,498
 
Agency CMO
 
 
43,067
 
 
 
238
 
 
 
221
 
 
 
43,084
 
Other debt securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency notes and bonds
 
 
64,162
 
 
 
473
 
 
 
79
 
 
 
64,556
 
Municipal obligations
 
 
74,606
 
 
 
2,843
 
 
 
25
 
 
 
77,424
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total securities available for sale
 
$
251,819
 
 
$
3,644
 
 
$
901
 
 
$
254,562
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Securities available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency mortgage-backed securities
 
$
94,746
 
 
$
-
 
 
$
3,489
 
 
$
91,257
 
Agency CMO
 
 
33,222
 
 
 
152
 
 
 
382
 
 
 
32,992
 
Other debt securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency notes and bonds
 
 
75,461
 
 
 
59
 
 
 
1,016
 
 
 
74,504
 
Municipal obligations
 
 
63,008
 
 
 
651
 
 
 
571
 
 
 
63,088
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total securities available for sale
 
$
266,437
 
 
$
862
 
 
$
5,458
 
 
$
261,841
 
 
 
The amortized cost and fair value of debt securities as of
December 31, 2019,
by contractual maturity, are shown below. Expected maturities of mortgage-backed securities and CMO
may
differ from contractual maturities because the mortgages underlying the obligations
may
be prepaid without penalty.
 
    Securities Available for Sale
    Amortized   Fair
    Cost   Value
(In thousands)        
         
Due in one year or less   $
21,972
     $
21,953
  
Due after one year through five years    
50,908
      
51,476
  
Due after five years through ten years    
29,551
      
30,750
  
Due after ten years    
36,337
      
37,801
  
     
138,768
      
141,980
  
Mortgage-backed securities and                
CMO    
113,051
      
112,582
  
                 
    $
251,819
     $
254,562
  
 
At
December 31, 2019,
certain securities available for sale with an amortized cost of
$53.4
million and fair value of
$53.3
million were pledged to secure public fund deposits.
 
At
December 31, 2019
and
2018,
there were
no
holdings of securities of any
one
issuer, other than the U.S. Government and its agencies, with an aggregate book value greater that
10%
of stockholders’ equity.
 
Information pertaining to investment securities with gross unrealized losses at
December 31, 2019
and
2018,
aggregated by investment category and the length of time that individual investment securities have been in a continuous loss position, follows.
 
    Number of   Gross    
    Investment   Fair   Unrealized
(Dollars in thousands)  
Positions
  
Value
  
Losses
             
December 31, 2019:                        
Continuous loss position less than twelve months:                        
Agency mortgage-backed securities    
5
 
   $
723
 
   $
2
 
Agency CMO    
13
 
    
14,749
 
    
157
 
Agency notes and bonds    
2
 
    
5,551
 
    
17
 
Municipal obligations    
4
 
    
3,241
 
    
25
 
                         
Total less than twelve months    
24
 
    
24,264
 
    
201
 
                         
Continuous loss position more than twelve months:                        
Agency mortgage-backed securities    
50
 
    
49,033
 
    
574
 
Agency CMO    
15
 
    
7,113
 
    
64
 
Agency notes and bonds    
10
 
    
37,706
 
    
62
 
                         
Total more than twelve months    
75
 
    
93,852
 
    
700
 
                         
Total securities available for sale    
99
 
   $
118,116
 
   $
901
 
 
 
    Number of   Gross    
    Investment   Fair   Unrealized
(Dollars in thousands)  
Positions
  
Value
  
Losses
             
December 31, 2018:                        
Continuous loss position less than twelve months:                        
Agency mortgage-backed securities    
1
 
   $
1,563
 
   $
13
 
Agency CMO    
4
 
    
2,870
 
    
1
 
Agency notes and bonds    
1
 
    
499
 
    
1
 
Municipal obligations    
11
 
    
3,552
 
    
12
 
                         
Total less than twelve months    
17
 
    
8,484
 
    
27
 
                         
Continuous loss position more than twelve months:                        
Agency mortgage-backed securities    
97
 
    
89,680
 
    
3,476
 
Agency CMO    
24
 
    
12,168
 
    
381
 
Agency notes and bonds    
22
 
    
67,927
 
    
1,015
 
Municipal obligations    
49
 
    
25,316
 
    
559
 
                         
Total more than twelve months    
192
 
    
195,091
 
    
5,431
 
                         
Total securities available for sale    
209
 
   $
203,575
 
   $
5,458
 
 
Management evaluates securities for other-than-temporary impairment at least quarterly, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (
1
) the length of time and the extent to which the fair value has been less than cost, (
2
) the financial condition and near-term prospects of the issuer, and (
3
) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.
 
At
December 31, 2019,
the municipal obligations and U.S. government agency debt securities, including agency mortgage-backed securities, agency CMOs, and agency notes and bonds, in a loss position had depreciated approximately
0.8%
from the amortized cost basis. All of the U.S. government agency securities and municipal securities are issued by U.S. government agencies, government-sponsored enterprises, or municipal governments, and are secured by
first
mortgage loans or municipal project revenues. These unrealized losses related principally to current interest rates for similar types of securities. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government, its agencies or other governments, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. As the Company has the ability to hold the U.S. government agency debt securities and municipal securities in an unrealized loss position until maturity,
no
declines are deemed to be other-than-temporary.
 
While management does
not
anticipate any credit-related impairment losses at
December 31, 2019,
additional deterioration in market and economic conditions
may
have an adverse impact on the credit quality in the future.
 
During the year ended
December 31, 2019,
the Company realized gross gains of
$22,000
and gross losses of
$156,000
on sales of available for sale securities, and gross losses of
$13,000
on sales of interest-bearing time deposits. During the year ended
December 31, 2018,
the Company realized gross gains of
$218,000
and gross losses of
$313,000
on sales of available for sale securities. During the year ended
December 31, 2017,
the Company realized gross gains of
$61,000
and gross losses of
$7,000
on the sale of available for sale securities.
 
Equity Securities
 
In
September 2018,
the Company acquired
90,000
shares of common stock in another bank holding company, representing approximately
5%
of the outstanding common stock of the entity, for a total investment of
$1.9
million. During the years ended
December 31, 2019
and
2018,
the Company recognized an unrealized gain of
$32,000
and an unrealized loss of
$207,000,
respectively, on this equity investment. At
December 31, 2019
and
2018,
the equity investment had a fair value of
$1.7
million and is included in other assets on the consolidated balance sheets.