Note 3 - Securities

9 Months Ended

Mar. 31, 2022

Notes to Financial Statements

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

Note 3 – Securities

Debt securities

The following tables summarize the Corporation’s debt securities as of March 31, 2022 and June 30, 2021:

Available –for-Sale	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
March 31, 2022
Obligations of U.S. Treasury	$	8,901	$	—	$	(376	)	$	8,525
Obligations of U.S. government-sponsored entities and agencies		27,883		11		(1,348	)		26,546
Obligations of state and political subdivisions		97,144		783		(3,644	)		94,283
U.S. Government-sponsored mortgage-backed securities–residential		113,267		51		(7,291	)		106,027
U.S. Government-sponsored mortgage-backed securities– commercial		8,627		—		(840	)		7,787
U.S. Government-sponsored collateralized mortgage obligations– residential		30,025		8		(1,645	)		28,388
Other debt securities		17,414		6		(601	)		16,819
Total securities available-for-sale	$	303,261	$	859	$	(15,745	)	$	288,375

Held-to-Maturity	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Fair Value
March 31, 2022
Obligations of state and political subdivisions	$	7,020	$	20	$	(163	)	$	6,877

Available–for-Sale	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2021
Obligations of U.S. government-sponsored entities and agencies	$	14,746	$	301	$	(14	)	$	15,033
Obligations of state and political subdivisions		73,013		3,561		(75	)		76,499
U.S. Government-sponsored mortgage-backed securities – residential		90,065		1,136		(684	)		90,517
U.S. Government-sponsored mortgage-backed securities – commercial		8,641		204		—			8,845
U.S. Government-sponsored collateralized mortgage obligations – residential		16,302		129		(57	)		16,374
Other debt securities		500		—		(8	)		492
Total securities available-for-sale	$	203,267	$	5,331	$	(838	)	$	207,760

Held-to-Maturity	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
June 30, 2021
Obligations of state and political subdivisions	$	7,996	$	356	$	—	$	8,352

Proceeds from the sale and call of available-for-sale securities were as follows:

	Three Months Ended March 31,					Nine Months Ended March 31,
	2022		2021		2022		2021
Proceeds from sales and calls	$	—	$	2,812		1,000		5,545
Gross realized gains		—		13		2		44
Gross realized losses		—		7		—		30

The income tax provision related to the net realized gain amounted to less than $1 for the nine-month period ended March 31, 2022. The income tax provision related to the net realized gains amounted to $1 and $3 for the three- and nine-month periods ended March 31, 2021.

The amortized cost and fair values of debt securities at March 31, 2022, by expected maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately. 

Available-for-Sale	Amortized Cost		Estimated Fair Value
Due in one year or less	$	2,953	$	2,959
Due after one year through five years		36,065		35,272
Due after five years through ten years		40,580		39,053
Due after ten years		71,744		68,889
Total		151,342		146,173
U.S. Government-sponsored mortgage-backed and related securities		151,919		142,202
Total securities available-for-sale	$	303,261	$	288,375
Held-to-Maturity
Due after one year through five years	$	253	$	254
Due after five years through ten years		4,532		3,869
Due after ten years		2,235		2,754
Total securities held-to-maturity	$	7,020	$	6,877

Securities with a carrying value of approximately $122,812 and $96,970 were pledged at March 31, 2022, and June 30, 2021, respectively, to secure public deposits and commitments as required or permitted by law.

The following table summarizes the securities with unrealized losses at March 31, 2022 and June 30, 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

	Less than 12 Months					12 Months or more					Total
Available-for-sale	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
March 31, 2022
Obligation of U.S. Treasury	$	8,525	$	(376	)	$	—	$	—		$	8,525	$	(376	)
Obligations of U.S. government-sponsored entities and agencies		22,152		(1,348	)		—		—			22,152		(1,348	)
Obligations of state and political subdivisions		49,905		(3,368	)		2,194		(276	)		52,099		(3,644	)
U.S. Government-sponsored mortgage-backed securities – residential		74,063		(4,813	)		23,592		(2,478	)		97,655		(7,291	)
U.S. Government-sponsored mortgage-backed securities – commercial		7,787		(840	)		—		—			7,787		(840	)
Collateralized mortgage obligations - residential		20,906		(1,590	)		643		(55	)		21,549		(1,645	)
Other debt securities		15,334		(581	)		479		(20	)		15,813		(601	)
Total temporarily impaired	$	198,672	$	(12,916	)	$	26,908	$	(2,829	)	$	225,580	$	(15,745	)

	Less than 12 Months					12 Months or more				Total
Held to Maturity	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
March 31, 2022
Obligations of state and political subdivisions		6,004		(163	)		—		—		6,004		(163	)
Total temporarily impaired	$	6,004	$	(163	)	$	—	$	—	$	6,004	$	(163	)

	Less than 12 Months					12 Months or more					Total
Available-for-sale	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
June 30, 2021
Obligations of U.S. government-sponsored entities and agencies	$	2,003	$	(14	)	$	—	$	—		$	2,003	$	(14	)
Obligations of state and political subdivisions		7,398		(75	)		—		—			7,398		(75	)
Mortgage-backed securities – residential		42,378		(684	)		—		—			42,378		(684	)
Collateralized mortgage obligations - residential		7,707		(56	)		552		(1	)		8,259		(57	)
Other debt securities		492		(8	)		—		—			492		(8	)
Total temporarily impaired	$	59,978	$	(837	)	$	552	$	(1	)	$	60,530	$	(838	)

Management evaluates securities for other-than-temporary impairment (OTTI) on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. The securities portfolio is evaluated for OTTI by segregating the portfolio into two general segments and applying the appropriate OTTI model. Investment securities are generally evaluated for OTTI under FASB ASC Topic 320, Accounting for Certain Investments in Debt and Equity Securities.

In determining OTTI under the ASC Topic 320 model, management considers many factors, including: (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, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the entity has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

At March 31, 2022, there were a total of 281 available-for-sale and two held-to-maturity securities in the portfolio with unrealized losses mainly due to an increase in market rates when compared to the time of purchase. The unrealized losses within the securities portfolio as of March 31, 2022 have not been recognized into income because the decline in fair value is not attributed to credit quality and management does not intend to sell, and it is not likely that management will be required to sell, the securities prior to their anticipated recovery. The mortgage-backed securities and collateralized mortgage obligations were primarily issued by Fannie Mae, Freddie Mac and Ginnie Mae, institutions which the government has affirmed its commitment to support. The Corporation does not own any private label mortgage-backed securities.

Equity Securities

The Corporation owned equity securities with an amortized cost of $400 and a fair value of $428 and $424 as of March 31, 2022 and June 30, 2021, respectively. Changes in the fair value of these securities are included in noninterest income on the consolidated statements of income. There were no unrealized gains and losses on equity securities during the three- and nine-month periods ended March 31, 2022 and 2021. Also, there were no sales of equity securities during the three- and nine-month periods ended March 31, 2022 and 2021.