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Note 3 - Investment Securities

12 Months Ended

Dec. 31, 2020

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, 2020 and 2019 are summarized as follows:

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

December 31, 2020
Securities available for sale:
Agency mortgage-backed securities	$	59,997	$	1,362	$	-	$	61,359
Agency CMO		20,842		218		30		21,030
Other debt securities:
Agency notes and bonds		80,359		1,175		3		81,531
Municipal obligations		113,511		6,075		4		119,582

Total securities available for sale	$	274,709	$	8,830	$	37	$	283,502

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

The amortized cost and fair value of debt securities as of December 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	$	20,593	$	20,703
Due after one year through five years		68,776		70,110
Due after five years through ten years		37,626		39,864
Due after ten years		66,875		70,436
		193,870		201,113
Mortgage-backed securities and
CMO		80,839		82,389

	$	274,709	$	283,502

At December 31, 2020, certain securities available for sale with an amortized cost of $54.0 million and fair value of $55.1 million were pledged to secure public fund deposits.

At December 31, 2020 and 2019, 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, 2020 and 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
(Dollars in thousands)	*Positions*		*Value*		*Losses*

December 31, 2020:
Continuous loss position less than twelve months:
Agency CMO		12	$	6,189	$	18
Agency notes and bonds		2		5,997		3
Municipal obligations		2		1,303		4

Total less than twelve months		16		13,489		25

Continuous loss position more than twelve months:
Agency CMO		4		1,589		12

Total more than twelve months		4		1,589		12

Total securities available for sale		20	$	15,078	$	37

	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

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, 2020, 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 0.2% 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, 2020, 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, 2020, the Company sold no available for sale securities or interest-bearing time deposits. 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. During the year ended December 31, 2018, the Company realized gross gains of $218,000 and gross losses of $313,000 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, 2020, 2019 and 2018, the Company recognized an unrealized loss of $194,000, an unrealized gain of $32,000 and an unrealized loss of $207,000, respectively, on this equity investment. At December 31, 2020 and 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 sheets.