Note 6 - Securities -

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

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

Note 6 – Securities –

The amortized cost and fair values of securities available for sale as of December 31, 2023 and 2022 are summarized as follows:

	December 31, 2023
	(Dollars in thousands)
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
U.S. Treasury Securities	$	17,690	$	-	$	1,451	$	16,239
U.S. Government Agencies		10,258		-		848		9,410
Corporate Securities		49,609		-		5,770		43,839
Mortgage-Backed Securities		555,148		976		49,814		506,310
Municipal Securities		331,273		298		27,798		303,773
Total Securities Available for Sale	$	963,978	$	1,274	$	85,681	$	879,571

	December 31, 2022
	(Dollars in thousands)
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
U.S. Treasury Securities	$	32,783	$	-	$	2,668	$	30,115
U.S. Government Agencies		50,288		-		2,916		47,372
Corporate Securities		48,475		25		2,496		46,004
Mortgage-Backed Securities		506,671		267		55,213		451,725
Municipal Securities		347,382		11		31,858		315,535
Total Securities Available for Sale	$	985,599	$	303	$	95,151	$	890,751

The following tables present a summary of securities with gross unrealized losses and fair values at December 31, 2023 and 2022, aggregated by investment category and length of time in a continued unrealized loss position. Due to the nature of these investments and current prevailing market prices, these unrealized losses are considered non-credit related.

	December 31, 2023
	Less Than 12 Months				12 Months or Greater				Total
	(Dollars in thousands)
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury Securities	$	-	$	-	$	16,239	$	1,451	$	16,239	$	1,451
U.S. Government Agencies		-		-		9,410		848		9,410		848
Corporate Securities		7,529		362		36,106		5,408		43,635		5,770
Mortgage-Backed Securities		21,436		895		375,891		48,919		397,327		49,814
Municipal Securities		8,013		63		270,467		27,735		278,480		27,798
Total Securities Available for Sale	$	36,978	$	1,320	$	708,113	$	84,361	$	745,091	$	85,681

	December 31, 2022
	Less Than 12 Months				12 Months or Greater				Total
	(Dollars in thousands)
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury Securities	$	9,702	$	374	$	20,413	$	2,294	$	30,115	$	2,668
U.S. Government Agencies		24,405		595		22,967		2,321		47,372		2,916
Corporate Securities		19,564		1,359		6,385		1,137		25,949		2,496
Mortgage-Backed Securities		115,692		7,473		324,043		47,740		439,735		55,213
Municipal Securities		143,035		10,206		131,944		21,652		274,979		31,858
Total Securities Available for Sale	$	312,398	$	20,007	$	505,752	$	75,144	$	818,150	$	95,151

As of December 31, 2023, no allowance for credit losses was recognized on available for sale securities in an unrealized loss position as management does not believe any of the securities are impaired due to credit quality. This determination is based on the Company’s analysis of the underlying risk characteristics including credit ratings, historical loss experience, and other qualitative factors.  Further, the securities continue to make principal and interest payments under their contractual terms and management does not have the intent to sell any of the securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of amortized cost basis.  Therefore, the Company has determined the unrealized losses are due to changes in market interest rates compared to rates when the securities were acquired.

For the period ended December 31, 2022, management evaluated securities for other than temporary impairment. Consideration was given to the extent and length of time the fair value had been below cost, the reasons for the decline in value, and the Company’s intent to sell a security or whether it was more likely than not that the Company would be required to sell the security before the recovery of its amortized cost. The Company utilized a process to identify securities that could potentially have a credit impairment that was other than temporary. The process involved evaluating each security for impairment by monitoring credit performance, collateral type, collateral geography, loan-to-value ratios, credit scores, loss severity levels, pricing levels, downgrades by rating agencies, cash flow projections and other factors as indicators of potential credit issues. The Company determined no other than temporary impairment existed at December 31, 2022.

The amortized cost and fair values of securities available for sale as of December 31, 2023 by contractual maturity are shown below. Actual maturities may differ from contractual maturities in mortgage-backed securities because the mortgages underlying the securities may be called or repaid without any penalties.

	Amortized		Fair
	Cost		Value
	(Dollars in thousands)
Less Than One Year	$	17,287	$	17,126
One to Five Years		181,791		171,117
Over Five to Ten Years		384,160		349,660
Over Ten Years		380,740		341,668
Total Securities Available for Sale	$	963,978	$	879,571

Securities available for sale with a fair value of $629.7 million and $482.7 million, respectively, were pledged as collateral on public deposits and for other purposes as required or permitted by law as of December 31, 2023 and 2022.

At December 31, 2023 and 2022, accrued interest receivable on securities was $4.7 million and $4.4 million, respectively, and is included within accrued interest receivable on the consolidated balance sheets.

There were $9,000 and $593,000 realized gross gains from sales or redemptions of securities for the years ended December 31, 2022 and 2021, respectively, and none for the year ended December 31, 2023. There were $2.6 million, $57,000 and $215,000 realized gross losses from sales or redemptions of securities for the years ended December 31, 2023, 2022 and 2021, respectively.

Other Equity Securities and VIEs

The Company has invested in the Federal Home Loan Bank of Dallas which is included in other equity securities and reflected at cost in these financial statements. The cost of these securities was $14.8 million and $19.7 million, respectively, at December 31, 2023 and 2022. The Federal Home Loan Bank stock is pledged to secure advances from the Federal Home Loan Bank of Dallas at both December 31, 2023 and 2022. The Company also has investments of $302,000 in TIB National Association, $562,000 in Bankers Insurance, LLC, and $2.2 million in First National Banker’s Bank at both December 31, 2023 and 2022. The Company also had an investment in Senior Housing Crime Prevention Foundation stock of $501,000 at December 31, 2022. These investments are carried at cost, less any impairment, due to the lack of a quoted market price and a ready market for these types of investments.

VIEs are legal entities that either do not have sufficient equity to finance their activities without the support from other parties or whose equity investors lack a controlling financial interest. The Company has investments in certain partnerships and limited liability entities that have been evaluated and determined to be VIEs. Consolidation of a VIE is appropriate if a reporting entity holds a controlling financial interest in the VIE and is the primary beneficiary. The Company is not the primary beneficiary and does not hold a controlling interest in the VIEs as it does not have the power to direct the activities that most significantly impact the VIEs’ economic performance.

Small Business Investment Companies (“SBIC”) and financial technology (“Fintech”) funds at December 31, 2023 and 2022 are summarized below.

	December 31,
	2023		2022
	(Dollars in thousands)
McLarty Capital Partners SBIC, L.P.	$	457	$	878
McLarty Capital Partners SBIC II, L.P.		2,520		2,437
Firmament Capital Partners SBIC III, L.P.		1,870		1,787
Firmament Capital Partners SBIC IV, L.P.		493		-
Bluehenge Capital Secured Debt SBIC, L.P.		3,220		3,934
Bluehenge Capital Secured Debt SBIC II, L.P.		1,146		296
New Louisiana Agnel Fund 2, LLC		49		49
Pharos Capital Partners IV-A, L.P.		457		356
Valesco Fund II, LP		1,227		1,147
Valesco Fund III, LP		37		-
GP Capital Partners, LP		624		277
BankTech Ventures, LP		284		77
Jam Fintop BankTech, LP		531		340
Ledyard Capital Managers, LLC		769		928
Mendon Ventures Banktech Fund I, LP		1,308		896
Castle Creek Launchpad Fund I, LP		607		211
Work America Capital Fund I, LP		425		629
	$	16,024	$	14,242