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Note 4 - Investment Securities
 12 Months Ended
Dec. 31, 2019
Notes to Financial Statements  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]
Note
4.
Investment Securities
 
Debt and equity securities have been classified in the consolidated balance sheets according to management’s intent. The amortized cost of securities and their approximate fair values at
December 31
follow:
 
(dollars in thousands)
  
Amortized
Cost
    
Unrealized
Gains
    
Unrealized
Losses
    
Fair
Value
  
201
9
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Available for sale:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
U.S. Government Agencies
   $
-
     $
-
     $
-
     $
-
  
Mortgage-backed securities
    
19,540
      
61
      
(97
 )    
19,504
  
Corporate securities
    
1,500
      
-
      
(67
 )    
1,433
  
State and municipal securities
    
11,777
      
168
      
(1
 )    
11,944
  
    $
32,817
     $
229
     $
(165
 )   $
32,881
  
2018
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Available for sale:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
U.S. Government Agencies
   $
244
     $
1
     $
-
     $
245
  
Mortgage-backed securities
    
25,627
      
1
      
(865
 )    
24,763
  
Corporate securities
    
2,970
      
-
      
(181
 )    
2,789
  
State and municipal securities
    
17,764
      
31
      
(164
 )    
17,631
  
    $
46,605
     $
33
     $
(1,210
 )   $
45,428
  
 
Restricted equity securities were
$2.4
million and
$2.1
million at
December 31, 2019
and
2018,
respectively. Restricted equity securities consist of investments in stock of the Federal Home Loan Bank of Atlanta (FHLB), CBB Financial Corp., Pacific Coast Bankers Bank, and the Federal Reserve Bank of Richmond, all of which are carried at cost. All of these entities are upstream correspondents of the Bank. The FHLB requires financial institutions to make equity investments in the FHLB in order to borrow money. The Bank is required to hold that stock so long as it borrows from the FHLB. The Federal Reserve requires Banks to purchase stock as a condition for membership in the Federal Reserve System. The Bank’s stock in CBB Financial Corp. and Pacific Coast Bankers Bank is restricted only in the fact that the stock
may
only be repurchased by the respective banks.
 
The following tables details unrealized losses and related fair values in the Company’s held to maturity and available for sale investment securities portfolios. This information is aggregated by the length of time that individual securities have been in a continuous unrealized loss position as of
December 31, 2019
and
2018.
 
   
Less Than 12 Months
    
12 Months or More
    
Total
  
(dollars in thousands)
  
Fair
Value
    
Unrealized
Losses
    
Fair
Value
    
Unrealized
Losses
    
Fair
Value
    
Unrealized
Losses
  
201
9
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Available for sale:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Mortgage-backed securities
   $
8,625
     $
(97
 )   $
-
     $
-
     $
8,625
     $
(97
 )
Corporate securities
    
-
      
-
      
1,433
      
(67
 )    
1,433
      
(67
 )
State and municipal securities
    
1,010
      
(1
 )    
-
      
-
      
1,010
      
(1
 )
Total securities available for sale
   $
9,635
     $
(98
 )   $
1,433
     $
(67
 )   $
11,068
     $
(165
 )
                                                 
2018
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Available for sale:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Mortgage-backed securities
   $
450
     $
(1
 )   $
24,227
     $
(864
 )   $
24,677
     $
(865
 )
Corporate securities
    
-
      
-
      
2,789
      
(181
 )    
2,789
      
(181
 )
State and municipal securities
    
5,518
      
(19
 )    
6,834
      
(145
 )    
12,352
      
(164
 )
Total securities available for sale
   $
5,968
     $
(20
 )   $
33,850
     $
(1,190
 )   $
39,818
     $
(1,210
 )
 
At
December 31, 2019,
7
debt securities with unrealized losses had depreciated
1.47
percent from their total amortized cost basis. Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to the length of time and the extent to which the fair value has been less than cost, and the financial condition and near-term prospects of the issuer. The relative significance of these and other factors will vary on a case by case basis. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, the results of reviews of the issuer’s financial condition and the issuer’s anticipated ability to pay the contractual cash flows of the investments. Since the Company intends to hold all of its investment securities until maturity, and it is more likely than
not
that the Company will
not
have to sell any of its investment securities before unrealized losses have been recovered, and the Company expects to recover the entire amount of the amortized cost basis of all its securities,
none
of the securities are deemed other than temporarily impaired at
December 31, 2019.
Management continues to monitor all of these securities with a high degree of scrutiny. There can be
no
assurance that the Company will
not
conclude in future periods that conditions existing at that time indicate some or all of these securities are other than temporarily impaired, which could require a charge to earnings in such periods.
 
Proceeds from the sales of investment securities available for sale were
$8.9
and
$18.4
million for the years ended
December 31, 2019
and
2018,
respectively. Proceeds from called securities totaled
$2.2
million and
$1.1
million for the years ended
December 31, 2019
and
2018,
respectively. Gross realized gains and losses for the years ended
December 31
are as follows:
 
(dollars in thousands)
  
201
9
    
201
8
  
                 
Realized gains
   $
92
     $
9
  
Realized losses
    
(43
 )    
(4
 )
    $
49
     $
5
  
 
There were
no
securities transferred between the available for sale and held to maturity portfolios or other sales of held to maturity securities during the periods presented. In the future management
may
elect to classify securities as held to maturity based upon such considerations as the nature of the security, the Bank’s ability to hold the security until maturity, and general economic conditions.
 
The scheduled maturities of securities available for sale at
December 31, 2019,
were as follows:
 
(dollars in thousands)
  
Amortized
Cost
    
Fair
Value
  
                 
Due in one year or less
   $
1,289
     $
1,290
  
Due after one year through five years
    
7,176
      
7,214
  
Due after five years through ten years
    
15,014
      
14,987
  
Due after ten years
    
9,338
      
9,390
  
    $
32,817
     $
32,881
  
 
Maturities of mortgage backed securities are based on contractual amounts. Actual maturity will vary as loans underlying the securities are prepaid.
 
Investment securities with amortized cost of approximately
$15.5
million and
$13.9
million at
December 31, 2019
and
2018
respectively, were pledged as collateral on public deposits and for other purposes as required or permitted by law.