Note 2 - Securities

6 Months Ended

Dec. 31, 2023

Notes to Financial Statements

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

Note 2 – Securities

Debt securities

The following tables summarize the amortized cost, fair value, and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive loss on the Company’s debt securities available-for-sale and gross unrecognized losses on the Company’s debt securities held-to-maturity as of December 31, 2023 and June 30, 2023:

Available –for-Sale	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2023
Obligations of U.S. Treasury	$	8,957	$	—	$	(321	)	$	8,636
Obligations of U.S. government-sponsored entities and agencies		28,686		45		(3,273	)		25,458
Obligations of state and political subdivisions		87,136		150		(6,821	)		80,465
U.S. Government-sponsored mortgage-backed securities–residential		100,308		57		(13,452	)		86,913
U.S. Government-sponsored mortgage-backed securities– commercial		8,594		—		(1,678	)		6,916
U.S. Government-sponsored collateralized mortgage obligations– residential		57,406		162		(5,338	)		52,230
Other debt securities		17,088		—		(1,573	)		15,515
Total securities available-for-sale	$	308,175	$	414	$	(32,456	)	$	276,133

Held-to-Maturity	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Fair Value
December 31, 2023
Obligations of state and political subdivisions	$	6,428	$	—	$	(528	)	$	5,900

Available-for-sale	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2023
Obligation of U.S Treasury	$	8,941	$	—	$	(533	)	$	8,408
Obligations of U.S. government-sponsored entities and agencies		29,430		7		(3,745	)		25,692
Obligations of state and political subdivisions		92,891		63		(8,982	)		83,972
U.S. Government-sponsored mortgage-backed securities - residential		104,689		12		(15,066	)		89,635
U.S. Government-sponsored mortgage-backed securities - commercial		8,604		—		(1,809	)		6,795
U.S. Government-sponsored collateralized mortgage obligations – residential		55,800		8		(5,738	)		50,070
Other debt securities		17,175		—		(2,142	)		15,033
Total available-for-sale securities	$	317,530	$	90	$	(38,015	)	$	279,605

Held-to-maturity	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Fair Value
June 30, 2023
Obligations of state and political subdivisions	$	6,970	$	—	$	(676	)	$	6,294

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

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
Proceeds from sales	$	—	$	1,639	$	4,002	$	3,708
Gross realized gains		—		1		—		8
Gross realized losses		—		5		79		23

The income tax benefit related to the net realized losses amounted to $16 for the six month period ended December 31, 2023 and $1 for the three-month and $3 for the six-month periods ended December 31, 2022.

The amortized cost and fair values of debt securities as of December 31, 2023, 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	$	11,378	$	11,143
Due after one year through five years		25,096		24,096
Due after five years through ten years		51,843		46,760
Due after ten years		53,550		48,075
Total		141,867		130,074
U.S. Government-sponsored mortgage-backed and related securities		166,308		146,059
Total securities available-for-sale	$	308,175	$	276,133
Held-to-Maturity
Due in one year or less	$	2,720	$	2,658
Due after one year through five years		467		457
Due after five years through ten years		3,241		2,785
Total securities held-to-maturity	$	6,428	$	5,900

Securities with a carrying value of approximately $140,998 and $137,896 were pledged at December 31, 2023 and June 30, 2023, respectively, to secure public deposits and commitments as required or permitted by law.

The following table summarizes the debt securities with unrealized and unrecognized losses as of December 31, 2023 and June 30, 2023, 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
December 31, 2023
Obligation of U.S. Treasury	$	—	$	—		$	8,636	$	(321	)	$	8,636	$	(321	)
Obligations of U.S. government-sponsored entities and agencies		1,091		(31	)		22,629		(3,242	)		23,720		(3,273	)
Obligations of state and political subdivisions		4,916		(74	)		61,833		(6,747	)		66,749		(6,821	)
U.S. Government-sponsored mortgage-backed securities – residential		2,494		(24	)		82,234		(13,428	)		84,728		(13,452	)
U.S. Government-sponsored mortgage-backed securities – commercial		—		—			6,916		(1,678	)		6,916		(1,678	)
Collateralized mortgage obligations - residential		11,934		(180	)		31,532		(5,158	)		43,466		(5,338	)
Other debt securities		—		—			15,515		(1,573	)		15,515		(1,573	)
Total temporarily impaired	$	20,435	$	(309	)	$	229,295	$	(32,147	)	$	249,730	$	(32,456	)

	Less than 12 Months				12 Months or more					Total
Held to Maturity	Fair Value		Unrecognized Loss		Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss
December 31, 2023
Obligations of state and political subdivisions	$	—	$	—	$	5,900	$	(528	)	$	5,900	$	(528	)
Total temporarily impaired	$	—	$	—	$	5,900	$	(528	)	$	5,900	$	(528	)

	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, 2023
Obligations of U.S. Treasury	$	—	$	—		$	8,408	$	(533	)	$	8,408	$	(533	)
Obligations of U.S. government-sponsored entities and agencies		1,008		(10	)		23,551		(3,735	)		24,559		(3,745	)
Obligations of state and political subdivisions		16,009		(344	)		62,492		(8,638	)		78,501		(8,982	)
Mortgage-backed securities – residential		3,334		(84	)		85,096		(14,982	)		88,430		(15,066	)
Mortgage-backed securities – commercial		—		—			6,795		(1,809	)		6,795		(1,809	)
Collateralized mortgage obligations - residential		22,039		(638	)		27,023		(5,100	)		49,062		(5,738	)
Other debt securities		—		—			15,033		(2,142	)		15,033		(2,142	)
Total temporarily impaired	$	42,390	$	(1,076	)	$	228,398	$	(36,939	)	$	270,788	$	(38,015	)

	Less than 12 Months				12 Months or more					Total
Held to Maturity	Fair Value		Unrecognized Loss		Fair Value		Unrecognized Loss			Fair Value		Unrecognized Loss
June 30, 2023
Obligations of state and political subdivisions	$	—	$	—	$	6,294	$	(676	)	$	6,294	$	(676	)
Total temporarily impaired	$	—	$	—	$	6,294	$	(676	)	$	6,294	$	(676	)

At December 31, 2023, the Company’s portfolio consisted of 413 securities, 365 of which were available-for-sale and 4 of which were held-to-maturity securities in unrealized or unrecognized loss positions. As of December 31, 2023, no allowance for credit losses has been recognized on securities in an unrealized loss position as management does not believe any of the securities are impaired due to reasons of credit quality. This is based upon our analysis of the underlying risk characteristics, including credit ratings, and other qualitative factors related to our available-for-sale securities.

The Company’s mortgage-backed securities and collateralized mortgage obligations were issued by U.S. government-sponsored entities and agencies. The Company does not own any private label mortgage-backed securities. The Company’s municipal bond portfolio consists of tax-exempt and taxable general obligation and revenue bonds to a broad range of counties, towns, school districts, and other essential service providers. As of December 31, 2023, 98.5% of the municipal bonds held in the available-for-sale portfolio had a S&P or Moody’s investment grade rating, and 1.5% were non-rated issues. The municipal bonds in the held-to-maturity portfolio are all non-rated issues to local entities that are also deposit customers. The other debt securities consist of subordinated notes issued by other bank holding companies. Within the other debt securities portfolio, the Company owns $2 million for one issuer who’s rating was downgraded by Moody’s to Ba2 in February 2024. The issuers of all securities owned by the Company continue to make timely principal and interest payments under the securities’ contractual terms. The unrealized losses related to these securities have not been recognized into income because the decline in fair value is not attributed to credit quality, management does not intend to sell the securities, and it is not likely that management will be required to sell the securities prior to their anticipated recovery. The unrealized losses on these securities are primarily due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The securities’ fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline.

Equity Securities

The Company owned equity securities with an amortized cost of $400 as of December 31, 2023, and June 30, 2023. Changes in the fair value of these securities are included in noninterest income on the consolidated statements of income. The following table presents the net unrealized losses on equity securities recognized in earnings for the three month and six month periods ended December 31, 2023 and 2022. There were no sales of equity securities during the three- and six-month periods ended December 31, 2023 and 2022.

	Three Months Ended December 31,					Six Months Ended December 31,
	2023		2022			2023		2022
Unrealized loss recognized on equity securities held at the end of the period	$	—	$	(33	)	$	—	$	(9	)