Note 3 - Securities

9 Months Ended

Sep. 30, 2025

Notes to Financial Statements

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

3.         Securities

The amortized cost and fair value of debt securities available-for-sale along with gross unrealized gains and losses as of the dates indicated are summarized as follows (in thousands):

	September 30, 2025									December 31, 2024
			Gross		Gross							Gross		Gross
	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value		Cost		Gains		Losses			Value
U.S. Treasury	$	2,956	$	32	$	-		$	2,988	$	2,194	$	9	$	(1	)	$	2,202
U.S. government agencies		49,596		104		(143	)		49,557		25,865		11		(427	)		25,449
Taxable state and municipal		34,124		371		(330	)		34,165		6,142		-		(511	)		5,631
Tax exempt state and municipal		88,881		870		(2,316	)		87,435		55,696		3		(3,903	)		51,796
U.S. government sponsored enterprise mortgage-backed		45,491		292		(315	)		45,468		27,723		31		(656	)		27,098
Corporate		4,086		16		(82	)		4,020		4,034		-		(157	)		3,877
Total debt securities available-for-sale	$	225,134	$	1,685	$	(3,186	)	$	223,633	$	121,654	$	54	$	(5,655	)	$	116,053

Accrued interest receivable on available-for-sale securities totaled $1,478,000 and $620,000 at  September 30, 2025 and December 31, 2024, respectively and is included in Accrued Interest Receivable on the Consolidated Balance Sheets. These amounts were excluded from the estimate of credit losses.

The deferred tax asset for the net unrealized loss on securities available for sale was $1,909,000 as of   September 30, 2025 and $1,176,000 as of December 31, 2024.  The deferred tax asset is included in net deferred tax asset on the Consolidated Balance Sheets.  

The amortized cost and estimated fair value of debt securities available-for-sale at September 30, 2025, by expected maturity for mortgage-backed securities and debt securities with call features and by contractual maturity for all other securities, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties (in thousands).

	Amortized		Fair
	Cost		Value
Due in one year or less	$	34,914	$	34,768
Due after one year through five years		128,998		129,028
Due after five years through ten years		56,269		55,306
Due after ten years		4,953		4,531
Total	$	225,134	$	223,633

The following tables show the Company's debt securities available-for-sale gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of  September 30, 2025 and  December 31, 2024 (in thousands):

September 30, 2025	Less than 12 Months				12 Months or Longer				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
U.S. Treasury	$	-	$	-	$	-	$	-	$	-	$	-
U.S. government agencies		25,559		59		7,597		84		33,156		143
Taxable state and municipal		2,848		12		4,675		318		7,523		330
Tax-exempt state and municipal		499		1		42,301		2,315		42,800		2,316
U.S. government sponsored enterprise mortgage-backed		5,039		26		11,697		289		16,736		315
Corporate		-		-		2,947		82		2,947		82
Total debt securities available-for-sale	$	33,945	$	98	$	69,217	$	3,088	$	103,162	$	3,186

December 31, 2024	Less than 12 Months				12 Months or Longer				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
U.S. Treasury	$	-	$	-	$	248	$	1	$	248	$	1
U.S. government agencies		11,650		235		10,169		192		21,819		427
Taxable state and municipal		-		-		5,631		511		5,631		511
Tax-exempt state and municipal		6,646		96		43,673		3,807		50,319		3,903
U.S. government sponsored enterprise mortgage-backed		11,450		140		9,492		516		20,942		656
Corporate		498		-		3,379		157		3,877		157
Total debt securities available-for-sale	$	30,244	$	471	$	72,592	$	5,184	$	102,836	$	5,655

At September 30, 2025, the $98,000 unrealized loss (less than 12 months) was attributed to 94 different securities. The $3,088,000 unrealized loss (12 months or more) was attributed to 166 securities. At December 31, 2024, the $471,000 unrealized loss (less than 12 months) was attributed to 42 different securities. The $5,184,000 unrealized loss (12 months or more) was attributed to 192 securities. None of the unrealized losses are individually significant. Management believes, based upon an evaluation of the issuers of the debt securities, that the unrealized losses on debt securities were the result of fluctuations in market interest rates subsequent to purchase and not a result of credit risk. Management has the intent and ability to hold investments and does not believe it will have to sell the securities until the earlier of maturity or market price recovery.

The Company considers payment history, risk ratings from external parties, financial statements for municipal and corporate securities, public statements from issuers and other available credible published sources in evaluating credit risk. No credit risk was found and no Allowance for Credit Loss on securities available for sale was recorded as of  September 30, 2025 and December 31, 2024. The unrealized losses are attributed to noncredit-related factors, including changes in interest rates and other market conditions.

During the three and nine months ended September 30, 2025, the Company sold available-for-sale securities with a total par value of $52.8 million resulting in a gross pre-tax loss of $8,000.

The Company did not sell or recognize any gain or loss for any securities for the three and nine months ended September 30, 2024.  

Securities with a carrying value of $136,551,000 and $73,585,000 at  September 30, 2025 and December 31, 2024, respectively, were pledged to secure public deposits and for other purposes as required by law.

As of  September 30, 2025 and December 31, 2024, the Company had $518,000 and $268,000, respectively, in marketable equity securities recorded at fair value. The following is a summary of unrealized and realized gains and losses recognized in net income on marketable equity securities during the three and nine months ended September 30, 2025 and 2024 (in thousands):

	Three Months Ended September 30, 2025		Three Months Ended September 30, 2024			Nine Months Ended September 30, 2025		Nine Months Ended September 30, 2024
Net change in the unrealized gain (loss) recognized during the period on marketable equity securities	$	60	$	(80	)	$	57	$	(112	)
Add: Net realized gain (loss) recognized on marketable equity securities sold during the period		-		-			-		-
Net gain (loss) recognized in net income during the period on marketable equity securities still held at the reporting date	$	60	$	(80	)	$	57	$	(112	)

Restricted Investments in Bank and Other Stock

Restricted investments in bank stock represent required investments in the common stock of correspondent banks and consist of common stock of the Federal Home Loan Bank of Pittsburgh (FHLB) of $2,508,000 and $2,255,000 at  September 30, 2025 and December 31, 2024, respectively, and other correspondent banks of $45,000 at  September 30, 2025 and December 31, 2024. Also included as of September 30, 2025 is other restricted stock of $227,000.  As a member of the FHLB, the Bank is required to maintain an investment in FHLB stock based on mortgage loans, advances and other criteria. As no active market exists for this stock, it is carried at cost. All FHLB stock is pledged as collateral for FHLB advances. The Company evaluated its holding of FHLB stock for impairment and deemed the stock to not be impaired at  September 30, 2025 and  December 31, 2024. In making this determination, management concluded that recovery of total outstanding par value, which equals the carrying value, is expected. The decision was based upon review of financial information the FHLB has made publicly available.