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Securities

12 Months Ended

Dec. 31, 2021

Investments, Debt and Equity Securities [Abstract]

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

Note 2. Securities

A summary of amortized cost and cost and fair value of securities is presented below.

		December 31, 2021
(In thousands)		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Estimated Fair Value
Securities available for sale:
U.S. government agencies		$	15,847			$	4			$	449			$	15,402
Mortgage-backed securities			1,724				30				-				1,754
Total securities available for sale		$	17,571			$	34			$	449			$	17,156

Securities held to maturity:
Property assessed clean energy		$	2,731			$	-			$	-			$	2,731
Public Improvement District & TIRZ			16,942				-				-				16,942
Total securities held to maturity		$	19,673			$	-			$	-			$	19,673
Securities, restricted:
Other		$	2,432			$	-			$	-			$	2,432

Securities not readily marketable		$	100			$	-			$	-			$	100

		December 31, 2020
(In thousands)		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Estimated Fair Value
Securities available for sale:
U.S. government agencies		$	14,936			$	38			$	25			$	14,949
Mortgage-backed securities			2,373				74				-				2,447
Total securities available for sale		$	17,309			$	112			$	25			$	17,396

Securities held to maturity:
Property assessed clean energy		$	5,776			$	-			$	-			$	5,776
Securities, restricted:
Other		$	2,431			$	-			$	-			$	2,431

Securities not readily marketable		$	100			$	-			$	-			$	100

Securities available for sale consist of U.S. government agency securities and mortgage-backed securities guaranteed by U.S. government agencies. Securities held to maturity consist of Property Assessed Clean Energy (“PACE”) and Public Improvement District/Tax Increment Reinvestment Zone (“PID/TIRZ”) investments. These investment contracts or bonds located in Texas, California and Florida, originate under a contractual obligation between the property owners, the local county or city administration, and a third-party administrator and sponsor. PACE assessments are created to fund the purchase and installation of energy saving improvements to the property such as solar panels. PID/TIRZ assessments are used to pay for the development costs of a residential subdivision. Generally, as a property assessment, the total assessment is repaid in installments over a period of 5 to 32 years by the then current property owner(s). Each installment is collected by the County or City Tax Collector where the property is located. The assessments are an obligation of the property. Securities, restricted consist of Federal Reserve Bank of Dallas (“FRB”) and Federal Home Loan Bank of Dallas (“FHLB”) stock, which are carried at cost.

As of December 31, 2021 and December 31, 2020 securities available for sale with a fair value of $163,000 and $554,000, respectively, were pledged against trust deposit balances held at the Bank. As of December 31, 2021 and 2020, there were no securities pledged to secure borrowings at the FHLB.

As of December 31, 2021 and 2020, the Bank held FRB stock in the amount of $1.2 million and FHLB stock in the amount of $1.3 million, all of which were classified as restricted securities.

As of December 31, 2021 and 2020, the Company held an income interest in a private investment, which is not readily marketable, accounted for under the cost less impairment method in the amount of $100,000. No allowance for impairment was recorded as of December 31, 2021 or 2020.

The table below indicates the length of time individual investment securities have been in a continuous loss position as of December 31, 2021:

		Less than 12 months								12 months or longer								Total
(In thousands)		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
U.S. government agencies		$	9,438			$	256			$	5,803			$	193			$	15,241			$	449

The number of investment positions in this unrealized loss position totaled twelve as of December 31, 2021. The Company does not believe these unrealized losses are “other than temporary” as (i) it does not have the intent to sell the securities prior to recovery and/or maturity and, (ii) it is more likely than not that the Company will not have to sell the securities prior to recovery and/or maturity. Accordingly, as of December 31, 2021, no impairment loss has been realized in the Company’s consolidated statements of income.

In making this determination, the Company also considers the length of time and extent to which fair value has been less than cost and the financial condition of the issuer. Any unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The unrealized losses noted are primarily interest rate related due to the level of market interest rates as of December 31, 2021, compared to the time of purchase. The Company has reviewed the ratings of the issuers and has not identified any issues related to the ultimate repayment of principal as a result of credit concerns on these securities. The Company’s mortgage related securities are backed by the Government National Mortgage Association and the Federal National Mortgage Association, or are collateralized by securities backed by these agencies. Management believes the fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline.

The amortized cost and estimated fair value of securities at December 31, 2021 are presented below by contractual maturity. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Residential mortgage backed securities are shown separately since they are not due at a single maturity date.

		Available for Sale								Held to Maturity
(In thousands)		Amortized Cost				Estimated Fair Value				Amortized Cost				Estimated Fair Value
Due in one year or less		$	21			$	21			$	-			$	-
Due after one year through five years			1,995				1,927				2,707				2,707
Due after five years through ten years			10,157				9,916				-				-
Due after ten years			3,674				3,538				16,966				16,966
Mortgage-backed securities			1,724				1,754				-				-
Total		$	17,571			$	17,156			$	19,673			$	19,673