Note 3 - Securities

12 Months Ended

Jun. 30, 2022

Notes to Financial Statements

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

NOTE 3—SECURITIES

The following table summarizes the amortized cost and fair value of securities available-for-sale and held-to-maturity at June 30, 2022 and 2021 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses:

Available-for-sale	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2022
Obligation of U.S Treasury	$	8,909	$	—	$	(462	)	$	8,447
Obligations of U.S. government-sponsored entities and agencies		28,689		—		(2,424	)		26,265
Obligations of state and political subdivisions		105,977		129		(8,749	)		97,357
U.S. Government-sponsored mortgage-backed securities - residential		113,812		13		(11,642	)		102,183
U.S. Government-sponsored mortgage-backed securities - commercial		8,623		—		(1,322	)		7,301
U.S. Government-sponsored collateralized mortgage obligations – residential		40,952		1		(2,774	)		38,179
Other debt securities		17,367		—		(752	)		16,615
Total available-for-sale securities	$	324,329	$	143	$	(28,125	)	$	296,347

Held-to-maturity	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Fair Value
June 30, 2022
Obligations of state and political subdivisions	$	7,874	$	47	$	(90	)	$	7,831

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 available-for-sale securities	$	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 sales of available-for-sale securities during fiscal year 2022 and fiscal year 2021 were as follows:

	2022			2021
Proceeds from sales	$	2,722		$	5,545
Gross realized gains		8			44
Gross realized losses		(2	)		(30	)

The income tax provision related to these net realized gains amounted to $1 in fiscal year 2022 and $3 in fiscal year 2021.

The amortized cost and fair values of debt securities at June 30, 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 and collateralized mortgage obligations are shown separately. 

Available-for-sale	Amortized Cost		Fair Value
Due in one year or less	$	850	$	851
Due after one year through five years		37,415		36,266
Due after five years through ten years		47,877		44,894
Due after ten years		74,800		66,673
Total		160,942		148,684
U.S. Government-sponsored mortgage-backed and related securities		163,387		147,663
Total	$	324,329	$	296,347

Held-to-maturity	Amortized Cost		Fair Value
Due after one year through five years	$	212	$	212
Due after five years through ten years		4,212		3,522
Due after ten years		3,450		4,097
Total	$	7,874	$	7,831

Securities with a carrying value of approximately $126,679 and $96,970 were pledged at June 30, 2022 and 2021, respectively, to secure public deposits and commitments as required or permitted by law. At June 30, 2022 and 2021, there were no holdings of securities of any one issuer, other than obligations of U.S. government-sponsored entities and agencies, with an aggregate book value greater than 10% of shareholders’ equity.

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

	Less than 12 Months					12 Months or more					Total
June 30, 2022	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Available-for-sale
Obligations of U.S Treasury	$	8,447	$	(462	)	$	—	$	—		$	8,447	$	(462	)
Obligations of U.S. government-sponsored entities and agencies		26,265		(2,424	)		—		—			26,265		(2,424	)
Obligations of state and political subdivisions		80,445		(8,331	)		2,047		(418	)		82,492		(8,749	)
Mortgage-backed securities – residential		76,526		(7,586	)		24,569		(4,056	)		101,095		(11,642	)
Mortgage-backed securities – commercial		7,301		(1,322	)		—		—			7,301		(1,322	)
Collateralized mortgage obligations - residential		30,729		(2,308	)		2,713		(466	)		33,442		(2,774	)
Other debt securities		16,156		(711	)		459		(41	)		16,615		(752	)
Total temporarily impaired	$	245,869	$	(23,144	)	$	29,788	$	(4,981	)	$	275,657	$	(28,125	)

	Less than 12 Months					12 Months or more				Total
June 30, 2022	Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss		Fair Value		Unrecognized Loss
Held-to-maturity
Obligations of state and political subdivisions	$	3,522	$	(90	)	$	—	$	—	$	3,522	$	(90	)

	Less than 12 Months					12 Months or more					Total
June 30, 2021	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Available-for-sale
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	)
Mortgage-backed securities – commercial		7,707		(56	)		552		(1	)		8,259		(57	)
Collateralized mortgage obligations – residential		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.

As of June 30, 2022, the Corporation’s securities portfolio consisted of 436 available-for-sale and four held-to-maturity securities. There were 387 available-for-sale securities in an unrealized loss position at June 30, 2022, 29 of which were in a continuous loss position for twelve or more months. There was one held-to-maturity security in an unrealized loss position at June 30, 2022. The unrealized losses within the available-for-sale and held-to-maturity security portfolios in fiscal year 2022 was primarily attributed to a change in rates. 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. Also, management monitors the financial condition of the individual municipal securities to ensure they meet minimum credit standards. Since the Corporation does not intend to sell these securities and it is not likely the Corporation will be required to sell these securities at an unrealized loss position prior to any anticipated recovery in fair value, which may be maturity, management does not believe there is any OTTI related to these securities at June 30, 2022. Also, there was no OTTI recognized at June 30, 2021.

As of June 30, 2022, the Corporation owned equity securities with an amortized cost of $400. The following table presents the net unrealized gains and losses on equity securities recognized in earnings for the twelve months ended June 30, 2022 and 2021. There were no realized gains or losses on the sale of equity securities during the periods presented.

	2022			2021
Unrealized gain/(loss) recognized on equity securities held at the end of the period	$	(24	)	$	24