Note 4 - Securities Available for Sale

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

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

NOTE 4 Securities Available for Sale

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

(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2021
Mortgage-backed securities:
Federal National Mortgage Association (FNMA)	$	138,628		550		(1,367	)		137,811
Federal Home Loan Mortgage Corporation (FHLMC)		108,599		126		(1,189	)		107,536
Collateralized mortgage obligations:
FNMA		48		2		0			50
		247,275		678		(2,556	)		245,397
Other marketable securities:
U.S. Government agency obligations		39,991		56		(337	)		39,710
Corporate preferred stock		700		0		(42	)		658
		40,691		56		(379	)		40,368
	$	287,966		734		(2,935	)		285,765
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 Company did not sell any available for sale securities and did not recognize any gains or losses on securities available for sale in 2021 or 2020.

The following table presents the amortized cost and estimated fair value of securities available for sale at December 31, 2021, based upon contractual maturity adjusted for scheduled repayments of principal and projected prepayments of principal based upon current economic conditions and interest rates. Actual maturities may differ from the maturities in the following table because obligors may have the right to call or prepay obligations with or without call or prepayment penalties:

(Dollars in thousands)	Amortized Cost		Fair Value
Due one year or less	$	71,861		71,318
Due after one year through five years		170,404		169,129
Due after five years through fifteen years		45,700		45,317
Due after fifteen years		1		1
Total	$	287,966		285,765

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 following table shows the gross unrealized losses and fair values 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 December 31, 2021 and 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
December 31, 2021
Mortgage backed securities:
FNMA		19	$	98,423		(1,234	)		2	$	6,810		(133	)	$	105,233		(1,367	)
FHLMC		17		85,624		(1,038	)		2		7,664		(151	)		93,288		(1,189	)
Other marketable securities:
U.S. government  agency obligations		7		34,659		(337	)		0		0		0			34,659		(337	)
Corporate preferred stock		0		0		0			1		658		(42	)		658		(42	)
Total temporarily impaired securities		43	$	218,706		(2,609	)		5	$	15,132		(326	)	$	233,838		(2,935	)
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	)

We review our 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 our 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 December 31, 2021 relates to a single trust preferred security that was issued by the holding company of a small community bank. As of December 31, 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 December 31, 2021. The Company does not intend to sell the preferred stock 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.