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Note 6 - Securities

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 6 - Securities

The estimated fair value of available-for-sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income were as follows:

		(Dollars in thousands)
						Gross				Gross				Estimated
		Cost				Unrealized				Unrealized				Fair
		Basis				Gains				Losses				Value
September 30, 2023
U.S. government sponsored entities		$	8,883			$	-			$	(1,333	)			7,550
U.S. treasury securities			-				-				-				-
Collateralized mortgage obligations and residential mortgage-backed securities			152,118				-				(33,022	)			119,096
Municipal securities			279,837				-				(68,358	)			211,479
Collateralized debt obligations			2,173				-				(1,018	)			1,155
Total securities available-for-sale		$	443,011			$	-			$	(103,731	)		$	339,280

		(Dollars in thousands)
						Gross				Gross				Estimated
		Cost				Unrealized				Unrealized				Fair
		Basis				Gains				Losses				Value
December 31, 2022
U.S. government sponsored entities		$	8,883			$	-			$	(1,258	)		$	7,625
U.S. treasury securities			389				-				-				389
Collateralized mortgage obligations and residential mortgage-backed securities			163,000				-				(28,884	)			134,116
Municipal securities			281,032				7				(53,321	)			227,718
Collateralized debt obligations			2,173				-				(1,125	)			1,048
Total securities available-for-sale		$	455,477			$	7			$	(84,588	)		$	370,896

The cost basis and estimated fair value of available-for-sale debt securities at September 30, 2023, by contractual maturity, were as follows. Securities not due at a single maturity date, primarily collateralized mortgage obligations and residential mortgage-backed securities, are shown separately.

		(Dollars in thousands)
		Available-for-sale
						Estimated
		Cost				Fair
September 30, 2023		Basis				Value
Due in one year or less		$	690			$	688
Due from one to five years			10,293				8,853
Due from five to ten years			21,761				19,048
Due over ten years			258,149				191,595
Collateralized mortgage obligations and residential mortgage-backed securities			152,118				119,096
Total		$	443,011			$	339,280

Sales of available-for-sale securities were as follows for the three months ended:

		September 30,				September 30,
		2023				2022
Proceeds		$	124			$	10,178
Gross gains			-				41
Gross losses			-				(18	)

Sales of available-for-sale securities were as follows for the nine months ended:

		(Dollars in thousands)
		September 30,				September 30,
		2023				2022
Proceeds		$	476			$	53,953
Gross gains			-				733
Gross losses			(48	)			(71	)

Accumulated other comprehensive income/(loss) balances, net of tax, related to available-for-sale securities, were as follows:

		(Dollars in thousands)
		Unrealized gain/(loss)
Ending balance, June 30, 2022		$	(57,781	)
Current period change			(22,058	)
Ending balance, September 30, 2022		$	(79,839	)

		(Dollars in thousands)
		Unrealized gain/(loss)
Ending balance, June 30, 2023		$	(60,185	)
Current period change			(18,663	)
Ending balance, September 30, 2023		$	(78,848	)

		(Dollars in thousands)
		Unrealized gain/(loss)
Ending balance, December 31, 2021		$	4,276
Current period change			(84,115	)
Ending balance, September 30, 2022		$	(79,839	)

		(Dollars in thousands)
		Unrealized gain/(loss)
Ending balance, December 31, 2022		$	(64,300	)
Current period change			(14,548	)
Ending balance, September 30, 2023		$	(78,848	)

Securities with market values of approximately $294.4 million and $223.7 million were pledged as of September 30, 2023 and December 31, 2022, respectively, as collateral for repurchase agreements, public funds, and for other purposes as permitted or required by law.

Securities with gross unrealized losses at September 30, 2023, and December 31, 2022 not recognized in income are as follows:

		(Dollars in thousands)
		Less than 12 months								12 months or longer								Total
		Estimated								Estimated								Estimated								Percentage of
		Fair				Unrealized				Fair				Unrealized				Fair				Unrealized				Total Portfolio
		Value				Losses				Value				Losses				Value				Losses				in Loss Position
September 30, 2023
U.S. government sponsored entities		$	-			$	-			$	7,550			$	(1,333	)		$	7,550			$	(1,333	)			100.0	%
Collateralized mortgage obligations and residential mortgage-backed securities			-				-				119,096				(33,022	)			119,096				(33,022	)			100.0	%
Municipal securities			12,529				(1,185	)			198,950				(67,173	)			211,479				(68,358	)			100.0	%
Collateralized debt obligations			-				-				1,155				(1,018	)			1,155				(1,018	)			100.0	%
Total temporarily impaired		$	12,529			$	(1,185	)		$	326,751			$	(102,546	)		$	339,280			$	(103,731	)			100.0	%
Number of securities							20								425								445

		(Dollars in thousands)
		Less than 12 months								12 months or longer								Total
		Estimated								Estimated								Estimated								Percentage of
		Fair				Unrealized				Fair				Unrealized				Fair				Unrealized				Total Portfolio
		Value				Losses				Value				Losses				Value				Losses				in Loss Position
December 31, 2022
U.S. government sponsored entities		$	-			$	-			$	7,625			$	(1,258	)		$	7,625			$	(1,258	)			100.0	%
Collateralized mortgage obligations and residential mortgage-backed securities			32,700				(4,955	)			101,416				(23,929	)			134,116				(28,884	)			100.0	%
Municipal securities			171,581				(35,935	)			52,961				(17,386	)			224,542				(53,321	)			98.6	%
Collateralized debt obligations			-				-				1,048				(1,125	)			1,048				(1,125	)			100.0	%
Total temporarily impaired		$	204,281			$	(40,890	)		$	163,050			$	(43,698	)		$	367,331			$	(84,588	)			99.0	%
Number of securities							311								135								446

Unrealized losses on securities have not been recognized into income because the securities are of high credit quality or have undisrupted cash flows. Management has the intent and ability to hold those securities for the foreseeable future, and the decline in fair value is largely due to changes in interest rates and volatility in securities markets. The fair values are expected to recover as the securities approach maturity.

At September 30, 2023, collateralized debt obligations with a cost basis of $2.2 million and fair value of $1.2 million had previously recorded impairment of $173 thousand, which will not be recoverable until maturity of the security.

Accrued interest receivable on AFS debt securities totaled $2.4 million at September 30, 2023, and is excluded from the estimate of credit losses. The Bancorp made the policy election to exclude accrued interest from the amortized cost basis of AFS debt securities and report accrued interest separately on the condensed consolidated balance sheet.

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The entire disclosure for investments in certain debt and equity securities.

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