Note 3 - Investment Securities Available for Sale

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

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

3.   INVESTMENT SECURITIES AVAILABLE FOR SALE

The amortized cost and estimated fair value of investment securities at March 31, 2024 and December 31, 2023 consisted of the following, in thousands:

Available-for-Sale	March 31, 2024
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Debt securities:
U.S. Treasury securities	$	6,988	$	-	$	(69	)	$	6,919
U.S. Government-sponsored agencies collateralized by mortgage obligations - residential		244,574		292		(15,233	)		229,633
U.S. Government-agencies collateralized by mortgage obligations - commercial		133,806		188		(10,916	)		123,078
Obligations of states and political subdivisions		95,318		693		(8,196	)		87,815
	$	480,686	$	1,173	$	(34,414	)	$	447,445

Unrealized losses on available-for-sale investment securities totaling $33,240,000 were recorded, net of $9,825,000 in tax benefit, as accumulated other comprehensive loss within shareholders' equity at March 31, 2024.  During the three months ended March 31, 2024, the Company sold 155 available-for-sale investment securities for proceeds of $114,838,000 recording a $19,826,000 loss on sale. The Company realized a gain on sale from 9 of these securities totaling $86,000 and a loss on sale of 146 securities totaling $19,912,000. 

Available-for-Sale	December 31, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Debt securities:
U.S. Treasury securities	$	6,978	$	-	$	(98	)	$	6,880
U.S. Government-sponsored agencies collateralized by mortgage obligations - residential		256,694		351		(21,114	)		235,931
U.S. Government-agencies collateralized by mortgage obligations - commercial		129,321		465		(13,834	)		115,952
Obligations of states and political subdivisions		142,276		1,067		(12,925	)		130,418
	$	535,269	$	1,883	$	(47,971	)	$	489,181

Unrealized losses on available-for-sale investment securities totaling $46,088,000 were recorded, net of $13,624,000 in tax benefit, as accumulated other comprehensive income within shareholders' equity at December 31, 2023. No securities were sold during the three months ended March 31, 2023.

There were no transfers of available-for-sale investment securities during the three months ended March 31, 2024 and twelve months ended December 31, 2023. There were no securities classified as held-to-maturity at March 31, 2024 or December 31, 2023.

Investment securities with unrealized losses at March 31, 2024 and December 31, 2023 are summarized and classified according to the duration of the loss period as follows, in thousands:

March 31, 2024	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Debt securities:
U.S. Treasury securities	$	-	$	-	$	6,918	$	69	$	6,918	$	69
U.S. Government-sponsored agencies collateralized by mortgage obligations - residential		68,116		694		117,201		14,539		185,317		15,233
U.S. Government-agencies collateralized by mortgage obligations - commercial		33,867		457		62,382		10,459		96,249		10,916
Obligations of states and political subdivisions		7,875		71		48,873		8,125		56,748		8,196
	$	109,858	$	1,222	$	235,374	$	33,192	$	345,232	$	34,414

December 31, 2023	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Debt securities:
U.S. Treasury securities	$	-	$	-	$	6,880	$	98	$	6,880	$	98
U.S. Government-sponsored agencies collateralized by mortgage obligations - residential		43,924		279		160,383		20,835		204,307		21,114
U.S. Government-agencies collateralized by mortgage obligations - commercial		16,533		295		71,782		13,539		88,315		13,834
Obligations of states and political subdivisions		9,306		151		82,764		12,774		92,070		12,925
	$	69,763	$	725	$	321,809	$	47,246	$	391,572	$	47,971

At March 31, 2024, the Company held 309 securities of which 43 were in a loss position for less than twelve months and 186 were in a loss position for twelve months or more. Of the 309 securities 2 are U.S. Treasury securities, 90 are U.S. Government-sponsored agencies collateralized by residential mortgage obligations, 46 were U.S. Government agencies collateralized by commercial mortgage obligations and 171were obligations of states and political subdivisions. The unrealized losses relate principally to market rate conditions. All of the securities continue to pay as scheduled. For available-for sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized costs basis.  If either of the criteria regarding intent or requirement to sell is met, the security's amortized cost basis is written down to fair value through income.  At March 31, 2024, neither of the criteria regarding intent or requirement to sell was met for any of the securities in an unrealized loss position.

Unrealized losses on investments in obligations of U.S. government agencies and U.S. government sponsored agencies are caused by interest rate increases. Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, there is no allowance for credit losses recorded.

Obligations of states and political subdivisions: The unrealized losses on investments in obligations of states and political subdivisions were caused by increases in required yields by investors in these types of securities. Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, there is no allowance for credit losses recorded.

The amortized cost and estimated fair value of investment in debt securities at March 31, 2024 by contractual maturity are shown below, in thousands.

	Amortized Cost		Estimated Fair Value
Within one year	$	7,943	$	7,866
After one year through five years		5,493		5,399
After five years through ten years		14,418		14,299
After ten years		74,452		67,170
Investment securities not due at a single maturity date:
Government- agencies commercial mortgage-backed securities		133,806		123,078
Government-sponsored agencies residential mortgage-backed securities		244,574		229,633
	$	480,686	$	447,445

Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to call or prepay obligations with or without call or prepayment penalties.

Investment securities with amortized costs totaling $288,168,000 and $316,733,000 and estimated fair values totaling $268,944,000 and $285,534,000 at March 31, 2024 and December 31, 2023, respectively, were pledged to secure deposits, repurchase agreements and Federal Reserve Bank borrowings.