Note 3 - Securities

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

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

NOTE 3. SECURITIES

The following tables present the amortized costs, unrealized gains, unrealized losses and estimated fair values of our investment securities as of March 31, 2021, and December 31, 2020.

	As of March 31, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
(Amounts in thousands)	Costs		Gains		Losses			Fair Values
Available-for-sale securities:
U.S. government & agencies	$	30,460	$	696	$	(96	)	$	31,060
Obligations of state and political subdivisions		127,136		3,361		(1,657	)		128,840
Residential mortgage-backed securities and collateralized mortgage obligations		276,782		3,127		(2,362	)		277,547
Commercial mortgage-backed securities		38,538		481		(436	)		38,583
Other asset-backed securities		40,508		837		—			41,345
Total	$	513,424	$	8,502	$	(4,551	)	$	517,375

	As of December 31, 2020
			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
(Amounts in thousands)	Costs		Gains		Losses			Fair Values
Available-for-sale securities:
U.S. government & agencies	$	32,164	$	838	$	(8	)	$	32,994
Obligations of state and political subdivisions		103,424		4,971		(29	)		108,366
Residential mortgage-backed securities and collateralized mortgage obligations		236,829		3,895		(246	)		240,478
Commercial mortgage-backed securities		27,455		637		(18	)		28,074
Other asset-backed securities		36,377		592		(1	)		36,968
Total	$	436,249	$	10,933	$	(302	)	$	446,880

The following table presents the contractual maturities of investment securities at March 31, 2021. Actual maturities may differ from contractual maturities if the issuers of the securities have the right to call or prepay obligations with or without call or prepayment penalties.

	Available-For-Sale
(Amounts in thousands)	Amortized Costs		Fair Values
Amounts maturing in:
One year or less	$	11,616	$	11,787
After one year through five years		119,976		122,928
After five years through ten years		186,265		185,830
After ten years		195,567		196,830
Total	$	513,424	$	517,375

The amortized costs and fair values of residential mortgage-backed securities, collateralized mortgage obligations and commercial mortgage securities are presented by their expected average life, rather than contractual maturity, because the underlying loans may be repaid without prepayment penalties.

The following table presents the cash proceeds from sales of investment securities and the associated gross realized gains and gross realized losses that have been included in earnings for the three months ended March 31, 2021 and 2020.

	Three Months Ended March 31,
(Amounts in thousands)	2021			2020
Investment Securities:
Proceeds from sales of investment securities	$	11,890		$	29,339
Gross realized gains on sales of investment securities:
Obligations of state and political subdivisions	$	—		$	48
Residential mortgage-backed securities and collateralized mortgage obligations		53			84
Commercial mortgage-backed securities		—			36
Total gross realized gains on sales of investment securities		53			168
Gross realized losses on sales of investment securities:
Obligations of state and political subdivisions		—			(4	)
Residential mortgage-backed securities and collateralized mortgage obligations		(46	)		(80	)
Total gross realized losses on sales of investment securities		(46	)		(84	)
Gain on sale of investment securities, net	$	7		$	84

Investment securities that were in an unrealized loss position as of March 31, 2021 and December 31, 2020 are presented in the following tables, based on the length of time individual securities have been in an unrealized loss position.

	As of March 31, 2021
	Less Than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Amounts in thousands)	Values		Losses			Values		Losses			Values		Losses
Available-for-sale securities:
U.S. government & agencies	$	2,934	$	(89	)	$	677	$	(7	)	$	3,611	$	(96	)
Obligations of state and political subdivisions		47,968		(1,655	)		438		(2	)		48,406		(1,657	)
Residential mortgage-backed securities and collateralized mortgage obligations		157,530		(2,355	)		459		(7	)		157,989		(2,362	)
Commercial mortgage-backed securities		22,150		(436	)		—		—			22,150		(436	)
Total temporarily impaired securities	$	230,582	$	(4,535	)	$	1,574	$	(16	)	$	232,156	$	(4,551	)

	As of December 31, 2020
	Less Than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Amounts in thousands)	Values		Losses			Values		Losses			Values		Losses
Available-for-sale securities:
U.S. government & agencies	$	—	$	—		$	1,615	$	(8	)	$	1,615	$	(8	)
Obligations of state and political subdivisions		7,291		(29	)		—		—			7,291		(29	)
Residential mortgage-backed securities and collateralized mortgage obligations		68,512		(241	)		249		(5	)		68,761		(246	)
Commercial mortgage-backed securities		5,400		(18	)		—		—			5,400		(18	)
Other asset-backed securities		2,106		—			930		(1	)		3,036		(1	)
Total temporarily impaired securities	$	83,309	$	(288	)	$	2,794	$	(14	)	$	86,103	$	(302	)

At March 31, 2021 and December 31, 2020, the number of securities in an unrealized loss position was 115 and 47, respectively. In the opinion of management, these securities are considered only temporarily impaired due to changes in market interest rates or widening of market spreads subsequent to the initial purchase of the securities, and not due to concerns regarding the underlying credit of the issuers or the underlying collateral. Our investment policy requires securities at the time of purchase to be rated A3/A- or higher by Moody’s, S&P and Fitch rating agencies. Management monitors the published credit ratings of our investment portfolio for material rating or outlook changes. For all private-label securities collateralized by mortgages, management also monitors the credit characteristics of the underlying mortgages to identify potential credit losses, if any, in the portfolio. Because the decline in fair value is not due to credit quality concerns, and because we have no plans to sell the securities before the recovery of their amortized cost, and because the Bank has the ability to hold the securities to maturity these investments are not considered other-than-temporarily impaired.

The following table presents the characteristics of our securities that were in unrealized loss positions at March 31, 2021 and December 31, 2020.

	Characteristics of securities in unrealized loss positions at
Available-for-sale securities:	March 31, 2021 and December 31, 2020
U.S. government & agencies	Direct obligations of the U.S. government or obligations guaranteed by U.S. government agencies such as the SBA.
Obligations of state and political subdivisions	General obligation issuances or revenue securities issued by municipalities and political subdivisions located within the U.S. secured by revenues from specific sources.
Residential mortgage-backed securities and collateralized mortgage obligations	Obligations issued by U.S. government sponsored entities or non-governmental entities collateralized by high quality mortgages on residential properties. Issuances by non-governmental entities usually include good credit enhancements. Of the residential mortgage-backed securities and collateralized mortgage obligations that we owned at March 31, 2021 and December 31, 2020, 87% and 86%, respectively, were issued or guaranteed by U.S. government sponsored entities.
Corporate securities	Debt obligations generally issued or guaranteed by large U.S. corporate institutions.
Commercial mortgage-backed securities	Obligations issued by U.S. government sponsored entities or non-governmental entities collateralized by high quality mortgages on commercial properties. Issuances by non-governmental entities usually include good credit enhancements. Of the commercial mortgage-backed securities that we owned at March 31, 2021 and December 31, 2020, 100% were issued or guaranteed by U.S. government sponsored entities.
Other asset-backed securities	Obligations issued by non-governmental issuers secured by high quality loans with good credit enhancements.

Pledged Securities

At March 31, 2021 and December 31, 2020, securities with a fair value of $89.6 million and $67.8 million, respectively, were pledged as collateral to secure public fund deposits, FHLB borrowings and for other purposes as required by law.