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Note 2 - Investment Securities

3 Months Ended

Mar. 31, 2021

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, 2021 and December 31, 2020 are summarized as follows:

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

March 31, 2021
Securities available for sale:
Agency mortgage-backed securities	$	68,008	$	1,108	$	96	$	69,020
Agency CMO		14,342		275		16		14,601
Other debt securities:
Agency notes and bonds		98,034		965		566		98,433
Municipal obligations		128,251		4,060		825		131,486

Total securities available for sale	$	308,635	$	6,408	$	1,503	$	313,540

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

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, 2021, 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	$	19,508	$	19,588
Due after one year through five years		87,758		88,430
Due after five years through
ten years		39,063		40,371
Due after ten years		79,956		81,530
		226,285		229,919
Mortgage-backed securities and
CMO		82,350		83,621

	$	308,635	$	313,540

Information pertaining to investment securities with gross unrealized losses at March 31, 2021, 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	$	8,721	$	96
Agency CMO		4		1,935		16
Agency notes and bonds		13		42,432		566
Municipal obligations		52		35,888		825

Total less than twelve months		74		88,976		1,503

Continuous loss position more than twelve months:		-		-		-

Total securities available for sale		74	$	88,976	$	1,503

Information pertaining to investment securities with gross unrealized losses at December 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		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

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, 2021, 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 1.7% 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, 2021, 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, 2021, the Company realized gross gains of $12,000 and gross losses of $5,000 on sales of available for sale securities. During the three months ended March 31, 2020, the Company sold no securities.

Certain available for sale debt securities were pledged to secure public fund deposits at March 31, 2021 and December 31, 2020.

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, 2021, the Company recognized an unrealized gain of $234,000 on this equity investment. During the three months ended March 31, 2020, the Company recognized an unrealized loss of $394,000 on this equity investment. At March 31, 2021 and December 31, 2020, the equity investment had a fair value of $1.8 million and $1.6 million, respectively, and is included in other assets on the consolidated balance sheets.