XML 21 R10.htm IDEA: XBRL DOCUMENT

Note 2 - Investment Securities

6 Months Ended

Jun. 30, 2020

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 June 30, 2020 and December 31, 2019 are summarized as follows:

			*Gross*		*Gross*
	*Amortized*		*Unrealized*		*Unrealized*		*Fair*
(In thousands)	*Cost*		*Gains*		*Losses*		*Value*

June 30, 2020
Securities available for sale:
Agency mortgage-backed securities	$	68,289	$	1,587	$	-	$	69,876
Agency CMO		34,903		368		80		35,191
Other debt securities:
Agency notes and bonds		56,833		1,414		-		58,247
Municipal obligations		89,206		4,581		2		93,785

Total securities available for sale	$	249,231	$	7,950	$	82	$	257,099

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 June 30, 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
$ 25,243 $ 25,486

Due after one year through five years
41,043 42,517

Due after five years through ten years
28,058 29,785

Due after ten years
51,695 54,244

146,039 152,032

Mortgage-backed securities and

CMO
103,192 105,067

$ 249,231 $ 257,099

Information pertaining to investment securities with gross unrealized losses at June 30, 2020, aggregated by investment category and the length of time that individual investment securities have been in a continuous loss position, follows. The Company did not have any investment securities in a continuous loss position of more than 12 months at June 30, 2020.

Number of

Gross

Investment

Fair

Unrealized

Positions

Value

Losses

(Dollars in thousands)

Continuous loss position less than twelve months:

Agency CMO
10 $ 7,967 $ 80

Municipal obligations
1 493 2

Total less than twelve months
11 $ 8,460 $ 82

Total securities available for sale
11 $ 8,460 $ 82

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 loss 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 June 30, 2020, the agency 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 June 30, 2020, additional deterioration in market and economic conditions may have an adverse impact on credit quality in the future.

During the six months ended June 30, 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. There were no sales of investment securities or time deposits during the three months ended June 30, 2019 nor the three and six months ended June 30, 2020.

Certain available for sale debt securities were pledged to secure public fund deposits at June 30, 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 and six months ended June 30, 2020, the Company recognized an unrealized gain of $223,000 and an unrealized loss of $171,000, respectively, on this equity investment. During the three and six months ended June 30, 2019, the Company recognized an unrealized loss of $14,000 and an unrealized gain of $117,000, respectively, on this equity investment. At June 30, 2020 and December 31, 2019, the equity investment had a fair value of $1.6 million and $1.7 million, respectively, and is included in other assets on the consolidated balance sheet.