XML 25 R11.htm IDEA: XBRL DOCUMENT

Note 3 - Investment Securities

12 Months Ended

Dec. 31, 2021

Investments in Debt and Equity Instruments, Cash and Cash Equivalents, Unrealized and Realized Gains (Losses) [Text Block]

(3) INVESTMENT SECURITIES

Investment securities have been classified in the consolidated balance sheets according to management’s intent. Investment securities at December 31, 2021 and 2020 are summarized as follows:

			Gross		Gross
	*Amortized*		*Unrealized*		*Unrealized*		*Fair*
(In thousands)	*Cost*		*Gains*		*Losses*		*Value*

December 31, 2021
Securities available for sale:
Agency mortgage-backed securities	$	102,767	$	604	$	635	$	102,736
Agency CMO		7,863		98		-		7,961
Other debt securities:
Agency notes and bonds		130,641		489		2,034		129,096
Treasury notes and bonds		50,339		-		545		49,794
Municipal obligations		153,610		4,721		583		157,748

Total securities available for sale	$	445,220	$	5,912	$	3,797	$	447,335

Securities held to maturity:
Other debt securities:
Corporate notes	$	2,000	$	4	$	-	$	2,004

Total securities available for sale	$	2,000	$	4	$	-	$	2,004

December 31, 2020
Securities available for sale:
Agency mortgage-backed securities	$	59,997	$	1,362	$	-	$	61,359
Agency CMO		20,842		218		30		21,030
Other debt securities:
Agency notes and bonds		80,359		1,175		3		81,531
Municipal obligations		113,511		6,075		4		119,582

Total securities available for sale	$	274,709	$	8,830	$	37	$	283,502

The amortized cost and fair value of debt securities as of December 31, 2021, by contractual maturity, are shown below. Expected maturities of mortgage-backed securities and CMO may differ from contractual maturities because the mortgages underlying the obligations may be prepaid without penalty.

	Securities Available for Sale				Securities Held to Maturity
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
(In thousands)

Due in one year or less	$	2,043	$	2,049	$	-	$	-
Due after one year through five years		182,653		181,145		-		-
Due after five years through ten years		56,104		57,063		-		-
Due after ten years		93,790		96,381		2,000		2,004
		334,590		336,638		2,000		2,004
Mortgage-backed securities and
CMO		110,630		110,697		-		-

	$	445,220	$	447,335	$	2,000	$	2,004

At December 31, 2021, certain securities available for sale with an amortized cost of $101.7 million and fair value of $100.9 million were pledged to secure public fund deposits and a blanket collateral agreement with the FHLB.

At December 31, 2021 and 2020, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, with an aggregate book value greater that 10% of stockholders’ equity.

Information pertaining to investment securities with gross unrealized losses at December 31, 2021 and 2020, aggregated by investment category and the length of time that individual investment securities have been in a continuous loss position, follows.

	Number of				Gross
	Investment		Fair		Unrealized
	Positions		Value		Losses
(Dollars in thousands)

December 31, 2021:
Continuous loss position less than twelve months:
Agency mortgage-backed securities		23	$	67,512	$	607
Agency notes and bonds		39		98,042		1,710
Treasury notes and bonds		11		49,190		545
Muncipal obligations		49		32,642		479

Total less than twelve months		122		247,386		3,341

Continuous loss position more than twelve months:
Agency mortgage-backed securities		1		1,357		28
Agency notes and bonds		4		13,676		324
Muncipal obligations		4		2,957		104

Total more than twelve months		9		17,990		456

Total securities available for sale		131	$	265,376	$	3,797

Number of

Gross

Investment

Fair

Unrealized

Positions

Value

Losses

(Dollars in thousands)

December 31, 2020:

Continuous loss position less than twelve months:

Agency CMO
12 $ 6,189 $ 18

Agency notes and bonds
2 5,997 3

Municipal obligations
2 1,303 4

Total less than twelve months
16 13,489 25

Continuous loss position more than twelve months:

Agency CMO
4 1,589 12

Total more than twelve months
4 1,589 12

Total securities available for sale
20 $ 15,078 $ 37

Management evaluates securities for other-than-temporary impairment at least quarterly, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (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, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

At December 31, 2021, the municipal obligations and U.S. government agency debt securities, including agency mortgage-backed securities, Treasury notes and bonds, and agency notes and bonds, in a loss position had depreciated approximately 1.4% from the amortized cost basis. All of the U.S. government agency securities and municipal securities are issued by U.S. government agencies, government-sponsored enterprises, or municipal governments, and are secured by first mortgage loans or municipal project revenues. These unrealized losses related principally to current interest rates for similar types of securities. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government, its agencies or other governments, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. As the Company has the ability to hold the U.S. government agency debt securities and municipal securities in an unrealized loss position until maturity, no declines are deemed to be other-than-temporary.

While management does not anticipate any credit-related impairment losses at December 31, 2021, additional deterioration in market and economic conditions may have an adverse impact on the credit quality in the future.

During the year ended December 31, 2021, the Company realized gross gains of $12,000 and gross losses of $5,000 on the sale of available for sale securities. During the year ended December 31, 2020, the Company sold no available for sale securities. During the year ended December 31, 2019, the Company realized gross gains of $22,000 and gross losses of $156,000 on sales of available for sale securities.

Equity Securities

In September 2018, the Company acquired 90,000 shares of common stock in another bank holding company, representing approximately 5% of the outstanding common stock of the entity, for a total investment of $1.9 million. During the years ended December 31, 2021, 2020 and 2019, the Company recognized an unrealized gain of $328,000, an unrealized loss of $194,000 and an unrealized gain of $32,000, respectively, on this equity investment. At December 31, 2021 and 2020, the equity investment had a fair value of $1.9 million and $1.6 million, respectively, and is included in other assets on the consolidated balance sheets.

In October 2021 the Company entered into an agreement to invest in a bank technology fund through a limited partnership. At December 31, 2021, the Company’s investment in the limited partnership was $1.0 million and is reflected in other assets on the consolidated balance sheet. The unfunded commitment related to the limited partnership investment at December 31, 2021 was $880,000 and is reflected in other liabilities on the consolidated balance sheet. The Company expects to fulfill the commitment as capital calls are made through 2026. The investment is accounted for as an equity security without a readily determinable fair value, and has been recorded at cost, less any impairment, and adjustments resulting from observable price changes. There were no impairments or adjustments on equity securities without readily determinable fair values during the year ended December 31, 2021.