Note 3 - Investment Securities - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Assets [Abstract]

Interest Receivable

$ 4,442

$ 4,788

Notes to Financial Statements

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 March 31, 2024 and December 31, 2023 are summarized as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(In thousands)	Cost		Gains		Losses		Value
March 31, 2024
Securities available for sale:
Agency mortgage-backed securities	$	77,981	$	-	$	9,511	$	68,470
Agency CMO		48,276		54		613		47,717
Other debt securities:
Agency notes and bonds		135,931		7		8,671		127,267
Treasury notes and bonds		59,756		-		1,394		58,362
Municipal obligations		139,551		208		13,431		126,328
Total securities available for sale	$	461,495	$	269	$	33,620	$	428,144
Securities held to maturity:
Other debt securities:
Corporate notes	$	7,000	$	-	$	2,595	$	4,405
Total securities held to maturity	$	7,000	$	-	$	2,595	$	4,405
December 31, 2023
Securities available for sale:
Agency mortgage-backed securities	$	81,166	$	-	$	9,122	$	72,044
Agency CMO		25,402		94		323		25,173
Other debt securities:
Agency notes and bonds		138,174		38		8,707		129,505
Treasury notes and bonds		64,758		-		1,674		63,084
Municipal obligations		159,049		655		12,239		147,465
Total securities available for sale	$	468,549	$	787	$	32,065	$	437,271
Securities held to maturity:
Other debt securities:
Corporate notes	$	7,000	$	-	$	2,554	$	4,446
Total securities held to maturity	$	7,000	$	-	$	2,554	$	4,446

Agency notes and bonds, agency mortgage-backed securities and agency collateralized mortgage obligations (“CMO”) include securities issued by the Government National Mortgage Association (“GNMA”), a U.S. government agency, and the Federal National Mortgage Association (“FNMA”), the Federal Home Loan Mortgage Corporation (“FHLMC”), the Federal Farm Credit Bank (“FFCB”) and the Federal Home Loan Bank (“FHLB”), which are government-sponsored enterprises.  Corporate notes classified as held to maturity include subordinated debt obligations issued by other bank holding companies.

The amortized cost and fair value of debt securities as of March 31, 2024, 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	$	67,535	$	65,951	$	-	$	-
Due after one year through five
years		149,731		140,052		-		-
Due after five years through
ten years		41,277		38,658		2,000		1,270
Due after ten years		76,695		67,296		5,000		3,135
		335,238		311,957		7,000		4,405
Mortgage-backed securities and
CMO		126,257		116,187		-		-
	$	461,495	$	428,144	$	7,000	$	4,405

Information pertaining to investment securities with gross unrealized losses at March 31, 2024, 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)
March 31, 2024:
Securities available for sale:
Continuous loss position less than twelve months:
Agency CMO		12	$	29,646	$	256
Agency notes and bonds		6		4,586		47
Muncipal obligations		80		33,199		2,603
Total less than twelve months		98		67,431		2,906
Continuous loss position more than twelve months:
Agency mortgage-backed securities		95		68,470		9,511
Agency CMO		22		4,675		357
Agency notes and bonds		52		121,127		8,624
Treasury notes and bonds		20		58,362		1,394
Muncipal obligations		129		77,625		10,828
Total more than twelve months		318		330,259		30,714
Total securities available for sale		416	$	397,690	$	33,620
Securities held to maturity:
Continuous loss position more than twelve months:
Corporate notes		4	$	4,405	$	2,595
Total more than twelve months		4		4,405		2,595
Total securities held to maturity		4	$	4,405	$	2,595

Information pertaining to investment securities with gross unrealized losses at December 31, 2023, aggregated by investment category and the length of time that individual investment securities have been in a continuous position, follows.

December 31, 2023:
Securities available for sale:
Continuous loss position less than twelve months:
Agency CMO	3	$	8,019	$	30
Agency notes and bonds	3		2,754		12
Muncipal obligations	74		32,124		2,405
Total less than twelve months	80		42,897		2,447
Continuous loss position more than twelve months:
Agency mortgage-backed securities	96		72,044		9,122
Agency CMO	22		4,998		293
Agency notes and bonds	52		123,416		8,695
Treasury notes and bonds	21		63,084		1,674
Muncipal obligations	130		79,643		9,834
Total more than twelve months	321		343,185		29,618
Total securities available for sale	401	$	386,082	$	32,065
Securities held to maturity:
Continuous loss position more than twelve months:
Corporate notes	4	$	4,446	$	2,554
Total more than twelve months	4		4,446		2,554
Total securities held to maturity	4	$	4,446	$	2,554

The Company has not identified any specific available for sale securities in a loss position that it intends to sell in the near term and does not believe that it will be required to sell any such securities. The Company reviews its securities on a quarterly basis to assess declines in fair value for credit losses. Consideration is given to such factors as the credit rating of the borrower, market conditions such as current interest rates, any adverse conditions specific to the security, and delinquency status on contractual payments. At March 31, 2024, management concluded that in all instances, securities with fair values less than carrying value were due to fluctuations in interest rates and other factors; thus, no credit loss provision was required.

In addition, management assesses held to maturity securities for credit losses on a quarterly basis. The assessment includes review of performance metrics, identification of delinquency and evaluation of market factors. Based on this analysis, management concludes the decline in fair value is due to changes in interest rates and other market factors. Accordingly, no credit loss provision was recorded in earnings for the three months ended March 31, 2024. 

At March 31, 2024, the municipal obligations and U.S. government agency debt securities, including Treasury notes and bonds, agency notes and bonds, mortgage-backed securities and CMOs classified as available for sale and in a loss position had depreciated approximately 7.8% from the amortized cost basis.  All of the U.S. government agency securities and municipal obligations are issued by U.S. government agencies, government-sponsored enterprises and municipal governments, or are secured by first mortgage loans and municipal project revenues.  At March 31, 2024, the corporate notes classified as held to maturity in a loss position had depreciated approximately 37.1% from the amortized cost basis.  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 debt securities until maturity, or the foreseeable future if classified as available for sale, no credit loss is deemed to exist.

As of March 31, 2024 and December 31, 2023, the Company estimated expected credit losses to be immaterial based on the composition of the held to maturity securities portfolio.

While management does not anticipate any credit losses at March 31, 2024, additional deterioration in market and economic conditions may have an adverse impact on credit quality in the future.

During the three months ended March 31, 2024, the Company recognized gross gains of $133,000 and gross losses of $101,000 on sales of available for sale securities.  There were no sales of available for sale securities during the three months ended March 31, 2023.

At March 31, 2024 and December 31, 2023, 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.

Accrued interest receivable on available for sale debt securities totaled $2.0 million and $2.4 million at March 31, 2024 and December 31, 2023, respectively, and was reported in accrued interest receivable on the consolidated balance sheets and is excluded from the estimate of credit losses.

Accrued interest receivable on held to maturity debt securities totaled $18,000 at both March 31, 2024 and December 31, 2023, and was reported in accrued interest receivable on the consolidated balance sheets and is excluded from the estimate of credit losses.

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 three months ended March 31, 2024, the Company recognized an unrealized loss of $68,000 on this equity investment.  During the three months ended March 31, 2023, the Company recognized an unrealized gain of $137,000 on this equity investment. At March 31, 2024 and December 31, 2023, the equity investment had a fair value of $1.2 million and $1.3 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 March 31, 2024 and December 31, 2023, the Company’s investment in the limited partnership was $1.0 million and is reflected in other assets on the consolidated balance sheets.  The unfunded commitment related to the limited partnership investment at both March 31, 2024 and December 31, 2023 was $530,000, and is reflected in other liabilities on the consolidated balance sheets.  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 three months ended March 31, 2024 or 2023.