XML 29 R9.htm IDEA: XBRL DOCUMENT v3.20.1
Note 2 - Investment Securities
 3 Months Ended
Mar. 31, 2020
Notes to Financial Statements  
Investments in Debt and Equity Instruments, Cash and Cash Equivalents, Unrealized and Realized Gains (Losses) [Text Block]
2.
Investment Securities
 
Investment securities have been classified in the consolidated balance sheets according to management’s intent. Investment securities at
March 31, 2020
and
December 31, 2019
are summarized as follows:
 
        Gross   Gross    
   
Amortized
  
Unrealized
  
Unrealized
  
Fair
(In thousands)  
Cost
  
Gains
  
Losses
  
Value
                 
March 31, 2020                                
Securities available for sale:                                
Agency mortgage-backed securities   $
68,746
 
   $
1,323
 
   $
-
 
   $
70,069
 
Agency CMO    
41,377
 
    
370
 
    
138
 
    
41,609
 
Other debt securities:                                
Agency notes and bonds    
59,139
 
    
1,430
 
    
-
 
    
60,569
 
Municipal obligations    
77,797
 
    
3,220
 
    
82
 
    
80,935
 
                                 
Total securities available for sale   $
247,059
 
   $
6,343
 
   $
220
 
   $
253,182
 
                                 
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
 
 
Agency notes and bonds, agency mortgage-backed securities and agency collateralized mortgage obligations (“CMO”) include securities issued by the Government National Mortgage Association (“GNMA”), a U.S. government agency, and the Federal National Mortgage Association (“FNMA”), the Federal Home Loan Mortgage Corporation (“FHLMC”) and the Federal Home Loan Bank (“FHLB”), which are government-sponsored enterprises.
 
The amortized cost and fair value of debt securities as of
March 31, 2020,
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   $
18,895
     $
18,949
  
Due after one year through five years    
48,810
      
50,327
  
Due after five years through ten years    
27,915
      
29,154
  
Due after ten years    
41,316
      
43,074
  
     
136,936
      
141,504
  
Mortgage-backed securities and CMO    
110,123
      
111,678
  
                 
    $
247,059
     $
253,182
  
 
Information pertaining to investment securities with gross unrealized losses at
March 31, 2020,
aggregated by investment category and the length of time that individual investment securities have been in a continuous position, follows.
 
    Number of       Gross
    Investment   Fair   Unrealized
    Positions   Value   Losses
(Dollars in thousands)                        
                         
Continuous loss position less than twelve months:                        
Agency CMO    
15
     $
16,012
     $
137
  
Muncipal obligations    
7
      
4,629
      
82
  
                         
Total less than twelve months    
22
      
20,641
      
219
  
                         
Continuous loss position more than twelve months:                        
Agency CMO    
2
      
322
      
1
  
                         
Total more than twelve months    
2
      
322
      
1
  
                         
Total securities available for sale    
24
     $
20,963
     $
220
  
 
Information pertaining to investment securities with gross unrealized losses at
December 31, 2019,
aggregated by investment category and the length of time that individual investment securities have been in a continuous position, follows.
 
    Number of       Gross
    Investment   Fair   Unrealized
    Positions   Value   Losses
(Dollars in thousands)                        
                         
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
  
Muncipal 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
  
 
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 recover in fair value.
 
At
March 31, 2020,
the U.S. government agency debt securities, including agency notes and bonds, mortgage-backed securities and CMO, and municipal obligations in a loss position had depreciated approximately
1.0%
from the amortized cost basis. All of the U.S. government agency securities and municipal obligations are issued by U.S. government agencies, government-sponsored enterprises and municipal governments, or are secured by
first
mortgage loans and 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 debt securities until maturity, or the foreseeable future if classified as available for sale,
no
declines are deemed to be other-than-temporary.
 
While management does
not
anticipate any credit-related impairment losses at
March 31, 2020,
additional deterioration in market and economic conditions
may
have an adverse impact on credit quality in the future.
 
During the
three
months ended
March 31, 2019,
the Company realized gross losses of
$86,000
on sales of available for sale securities and gross losses of
$11,000
on sales of time deposits. During the
three
months ended
March 31, 2020,
the Company sold
no
securities or time deposits.
 
Certain available for sale debt securities were pledged to secure public fund deposits at
March 31, 2020
and
December 31, 2019.
 
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
three
months ended
March 31, 2020,
the Company recognized an unrealized loss of
$394,000
on this equity investment. During the
three
months ended
March 31, 2019,
the Company recognized an unrealized gain of
$131,000
on this equity investment. At
March 31, 2020
and
December 31, 2019,
the equity investment had a fair value of
$1.4
million and
$1.7
million, respectively, and is included in other assets on the consolidated balance sheet.