Note 7 - Securities Available for Sale

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

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

(7) Securities Available For Sale

The following table shows the gross unrealized losses and fair value for the securities available for sale portfolio, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2021 and December 31, 2020.

	Less Than Twelve Months							Twelve Months or More							Total
(Dollars in thousands)	# of Investments		Fair Value		Unrealized Losses			# of Investments		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
September 30, 2021
Mortgage backed securities:
Federal National Mortgage  Association (FNMA)		16	$	72,635		(612	)		1	$	3,694		(51	)	$	76,329		(663	)
Federal Home Loan Mortgage Corporation (FHLMC)		16		73,242		(517	)		0		0		0			73,242		(517	)
Other marketable securities:
U.S. Government agency obligations		7		34,911		(85	)		0		0		0			34,911		(85	)
Corporate preferred stock		0		0		0			1		644		(56	)		644		(56	)
Total temporarily impaired securities		39	$	180,788		(1,214	)		2	$	4,338		(107	)	$	185,126		(1,321	)

	Less Than Twelve Months							Twelve Months or More							Total
(Dollars in thousands)	# of Investments		Fair Value		Unrealized Losses			# of Investments		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
December 31, 2020
Mortgage backed securities:
FNMA		1	$	4,956		(3	)		0	$	0		0		$	4,956		(3	)
Other marketable securities:
Corporate preferred stock		0		0		0			1		630		(70	)		630		(70	)
Total temporarily impaired securities		1	$	4,956		(3	)		1	$	630		(70	)	$	5,586		(73	)

The Company reviews its investment portfolio on a quarterly basis for indications of impairment. This review includes analyzing the length of time and the extent to which the fair value has been lower than the cost, the market liquidity for the investment, the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer and the Company’s intent and ability to hold the investment for a period of time sufficient to recover the temporary loss. The unrealized losses on impaired securities other than the corporate preferred stock are the result of changes in interest rates. The unrealized losses reported for the corporate preferred stock at September 30, 2021 relates to a single trust preferred security that was issued by the holding company of a small community bank. As of September 30, 2021 all payments were current on the trust preferred security and the issuer’s subsidiary bank was considered to be “well capitalized” based on its most recent regulatory filing. Based on a review of the issuer, it was determined that the trust preferred security was not other-than-temporarily impaired at September 30, 2021 as the Company does not intend to sell and has the intent and ability to hold it for a period of time sufficient to recover the temporary loss. Management believes that the Company will receive all principal and interest payments contractually due on the security and that the decrease in the market value is primarily due to a lack of liquidity in the market for trust preferred securities. Management will continue to monitor the credit risk of the issuer and may be required to recognize other-than-temporary impairment charges on this security in future periods.

A summary of securities available for sale at September 30, 2021 and December 31, 2020 is as follows:

(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
September 30, 2021:
Mortgage-backed securities:
FNMA	$	111,267		751		(663	)		111,355
FHLMC		83,244		172		(517	)		82,899
Collateralized mortgage obligations:
FNMA		51		2		0			53
		194,562		925		(1,180	)		194,307
Other marketable securities:
U.S. Government agency obligations		39,990		83		(85	)		39,988
Corporate preferred stock		700		0		(56	)		644
		40,690		83		(141	)		40,632
	$	235,252		1,008		(1,321	)		234,939

(Dollars in thousands)	Amortized cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2020
Mortgage-backed securities:
FNMA	$	68,699		1,313		(3	)		70,009
FHLMC		31,025		327		0			31,352
Collateralized mortgage obligations:
FNMA		97		6		0			103
		99,821		1,646		(3	)		101,464
Other marketable securities:
U.S. Government agency obligations		45,029		204		0			45,233
Municipal obligations		725		1		0			726
Corporate obligations		37		0		0			37
Corporate preferred stock		700		0		(70	)		630
		46,491		205		(70	)		46,626
	$	146,312		1,851		(73	)		148,090

The following table indicates amortized cost and estimated fair value of securities available for sale at September 30, 2021 based upon contractual maturity adjusted for scheduled repayments of principal and projected prepayments of principal based upon current economic conditions and interest rates.

(Dollars in thousands)	Amortized Cost		Fair Value
Due less than one year	$	85,676		85,595
Due after one year through five years		124,263		124,119
Due after five years through ten years		24,576		24,544
Due after ten years		737		681
Total	$	235,252		234,939

The allocation of mortgage-backed securities in the table above is based upon the anticipated future cash flow of the securities using estimated mortgage prepayment speeds. The allocation of other marketable securities that have call features is based on the anticipated cash flows to the call date if it is anticipated that the security will be called, or to the maturity date if it is not anticipated to be called.