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Note 3 - Investment Securities | 12 Months Ended
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Dec. 31, 2022
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, 2022 and 2021 are summarized as follows:
|  |  |  |  |  | Gross |  |  | Gross |  |  |  |  |
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  | Fair |
(In thousands) |  | Cost |  |  | Gains |  |  | Losses |  |  | Value |
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency mortgage-backed securities |  | $ | 95,056 |  |  | $ | - |  |  | $ | 11,193 |  |  | $ | 83,863 |
Agency CMO |  |  | 9,682 |  |  |  | 20 |  |  |  | 349 |  |  |  | 9,353 |
Other debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency notes and bonds |  |  | 151,143 |  |  |  | - |  |  |  | 13,162 |  |  |  | 137,981 |
Treasury notes and bonds |  |  | 82,646 |  |  |  | - |  |  |  | 3,914 |  |  |  | 78,732 |
Municipal obligations |  |  | 168,939 |  |  |  | 177 |  |  |  | 18,226 |  |  |  | 150,890 |
Total securities available for sale |  | $ | 507,466 |  |  | $ | 197 |  |  | $ | 46,844 |  |  | $ | 460,819 |
Securities held to maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate notes |  | $ | 7,000 |  |  | $ | - |  |  | $ | 1,689 |  |  | $ | 5,311 |
Total securities held to maturity |  | $ | 7,000 |  |  | $ | - |  |  | $ | 1,689 |  |  | $ | 5,311 |
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency mortgage-backed securities |  | $ | 102,767 |  |  | $ | 604 |  |  | $ | 635 |  |  | $ | 102,736 |
Agency CMO |  |  | 7,863 |  |  |  | 98 |  |  |  | - |  |  |  | 7,961 |
Other debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency notes and bonds |  |  | 130,641 |  |  |  | 489 |  |  |  | 2,034 |  |  |  | 129,096 |
Treasury notes and bonds |  |  | 50,339 |  |  |  | - |  |  |  | 545 |  |  |  | 49,794 |
Municipal obligations |  |  | 153,610 |  |  |  | 4,721 |  |  |  | 583 |  |  |  | 157,748 |
Total securities available for sale |  | $ | 445,220 |  |  | $ | 5,912 |  |  | $ | 3,797 |  |  | $ | 447,335 |
Securities held to maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate notes |  | $ | 2,000 |  |  | $ | 4 |  |  | $ | - |  |  | $ | 2,004 |
Total securities held to maturity |  | $ | 2,000 |  |  | $ | 4 |  |  | $ | - |  |  | $ | 2,004 |
The amortized cost and fair value of debt securities as of December 31, 2022, 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 |  |  | Securities Held to Maturity |
|  | Amortized |  |  | Fair |  |  | Amortized |  |  | Fair |
|  | Cost |  |  | Value |  |  | Cost |  |  | Value |
(In thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Due in one year or less |  | $ | 36,739 |  |  | $ | 35,856 |  |  | $ | - |  |  | $ | - |
Due after one year through five years |  |  | 218,647 |  |  |  | 201,651 |  |  |  | - |  |  |  | - |
Due after five years through ten years |  |  | 42,163 |  |  |  | 39,334 |  |  |  | 2,000 |  |  |  | 1,507 |
Due after ten years |  |  | 105,179 |  |  |  | 90,762 |  |  |  | 5,000 |  |  |  | 3,804 |
|  |  | 402,728 |  |  |  | 367,603 |  |  |  | 7,000 |  |  |  | 5,311 |
Mortgage-backed securities and CMO |  |  | 104,738 |  |  |  | 93,216 |  |  |  | - |  |  |  | - |
|  | $ | 507,466 |  |  | $ | 460,819 |  |  | $ | 7,000 |  |  | $ | 5,311 |
At December 31, 2022, certain securities available for sale with an amortized cost of $112.1 million and fair value of $104.0 million were pledged to secure public fund deposits and a blanket collateral agreement with the FHLB. At December 31, 2022 and 2021, 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, 2022 and 2021, 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) |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2022: |  |  |  |  |  |  |  |  |  |  |  |
Securities available for sale: |  |  |  |  |  |  |  |  |  |  |  |
Continuous loss position less than twelve months: |  |  |  |  |  |  |  |  |  |  |  |
Agency mortgage-backed securities |  |  | 69 |  |  | $ | 27,561 |  |  | $ | 2,214 |
Agency CMO |  |  | 23 |  |  |  | 6,287 |  |  |  | 336 |
Agency notes and bonds |  |  | 15 |  |  |  | 35,079 |  |  |  | 1,314 |
Treasury notes and bonds |  |  | 17 |  |  |  | 31,615 |  |  |  | 997 |
Muncipal obligations |  |  | 154 |  |  |  | 81,218 |  |  |  | 5,960 |
Total less than twelve months |  |  | 278 |  |  |  | 181,760 |  |  |  | 10,821 |
Continuous loss position more than twelve months: |  |  |  |  |  |  |  |  |  |  |  |
Agency mortgage-backed securities |  |  | 28 |  |  |  | 56,303 |  |  |  | 8,979 |
Agency CMO |  |  | 3 |  |  |  | 257 |  |  |  | 13 |
Agency notes and bonds |  |  | 45 |  |  |  | 102,902 |  |  |  | 11,848 |
Treasury notes and bonds |  |  | 13 |  |  |  | 47,117 |  |  |  | 2,917 |
Muncipal obligations |  |  | 98 |  |  |  | 52,279 |  |  |  | 12,266 |
Total more than twelve months |  |  | 187 |  |  |  | 258,858 |  |  |  | 36,023 |
Total securities available for sale |  |  | 465 |  |  | $ | 440,618 |  |  | $ | 46,844 |
Securities held to maturity: |  |  |  |  |  |  |  |  |  |  |  |
Continuous loss position less than twelve months: |  |  |  |  |  |  |  |  |  |  |  |
Corporate notes |  |  | 3 |  |  | $ | 3,779 |  |  | $ | 1,221 |
Total less than twelve months |  |  | 3 |  |  |  | 3,779 |  |  |  | 1,221 |
Continuous loss position more than twelve months: |  |  |  |  |  |  |  |  |  |  |  |
Corporate notes |  |  | 1 |  |  |  | 1,532 |  |  |  | 468 |
Total more than twelve months |  |  | 1 |  |  |  | 1,532 |  |  |  | 468 |
Total securities held to maturity |  |  | 4 |  |  | $ | 5,311 |  |  | $ | 1,689 |
|  | Number of |  |  |  |  |  |  | Gross |
|  | Investment |  |  | Fair |  |  | Unrealized |
|  | Positions |  |  | Value |  |  | Losses |
(Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2021: |  |  |  |  |  |  |  |  |  |  |  |
Continuous loss position less than twelve months: |  |  |  |  |  |  |  |  |  |  |  |
Agency mortgage-backed securities |  |  | 23 |  |  | $ | 67,512 |  |  | $ | 607 |
Agency notes and bonds |  |  | 39 |  |  |  | 98,042 |  |  |  | 1,710 |
Treasury notes and bonds |  |  | 11 |  |  |  | 49,190 |  |  |  | 545 |
Muncipal obligations |  |  | 49 |  |  |  | 32,642 |  |  |  | 479 |
Total less than twelve months |  |  | 122 |  |  |  | 247,386 |  |  |  | 3,341 |
Continuous loss position more than twelve months: |  |  |  |  |  |  |  |  |  |  |  |
Agency mortgage-backed securities |  |  | 1 |  |  |  | 1,357 |  |  |  | 28 |
Agency notes and bonds |  |  | 4 |  |  |  | 13,676 |  |  |  | 324 |
Muncipal obligations |  |  | 4 |  |  |  | 2,957 |  |  |  | 104 |
Total more than twelve months |  |  | 9 |  |  |  | 17,990 |  |  |  | 456 |
Total securities available for sale |  |  | 131 |  |  | $ | 265,376 |  |  | $ | 3,797 |
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, 2022, the municipal obligations and U.S. government agency debt securities, including agency mortgage-backed securities, Treasury notes and bonds, and agency notes and bonds, in a loss position had depreciated approximately 9.6% 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. At December 31, 2022, the corporate notes classified as held to maturity in a loss position had depreciated approximately 24.1% from the amortized cost basis. 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 all debt securities in an unrealized loss position 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 December 31, 2022, 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, 2021, the Company realized gross gains of $12,000 and gross losses of $5,000 on the sale of available for sale securities. During the years ended December 31, 2022 and 2020, the Company sold no 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, 2022, 2021 and 2020, the Company recognized an unrealized loss of $414,000, an unrealized gain of $328,000 and an unrealized loss of $194,000, respectively, on this equity investment. At December 31, 2022 and 2021, the equity investment had a fair value of $1.5 million and $1.9 million, respectively, and is included in other assets on the consolidated balance sheets. In October 2021 the Company entered into an agreement to invest in a bank technology fund through a limited partnership. At December 31, 2022 and 2021, the Company’s investment in the limited partnership was $1.0 million and is reflected in other assets on the consolidated balance sheets. The unfunded commitment related to the limited partnership investment at December 31, 2022 and 2021 was $780,000 and $880,000, respectively, and is reflected in other liabilities on the consolidated balance sheets. The Company expects to fulfill the commitment as capital calls are made through 2026. The investment is accounted for as an equity security without a readily determinable fair value, and has been recorded at cost, less any impairment, and adjustments resulting from observable price changes. There were no impairments or adjustments on equity securities without readily determinable fair values during the years ended December 31, 2022 or 2021.

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- Definition The entire disclosure for cash, cash equivalents, investments in debt and equity instruments (including cost and equity investees and related income statement amounts), equity and cost method investments, investments in joint ventures and any other investment. + References No definition available. + Details
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