Annual report pursuant to Section 13 and 15(d)

Note 2 - Securities

v3.23.1
Note 2 - Securities
12 Months Ended
Dec. 31, 2022
Notes to Financial Statements  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 2: Securities

 

The amortized cost and estimated fair value of debt securities at December 31, 2022 and 2021, by contractual maturity, are shown below. Maturities may differ from contractual maturities in mortgage-backed securities because the mortgages underlying the securities may be called or repaid without any penalties, therefore, these securities have been included in 1 to 5 years based on average remaining life.

 

December 31, 2022

 

U.S. Treasuries

   

U.S. government agency obligations

   

Municipal obligations

   

Mortgage-backed residential obligations

   

Collateralized mortgage obligations

   

Total available-for-sale

 
           

(Dollars in thousands)

 

1 year or less

  $ 2,433     $ 1,007     $ 528     $     $     $ 3,968  

1 to 5 years

    4,855       11,511       5,394       20,033       22,809       64,602  

5 to 10 years

          8,872       2,655       15,046       11,848       38,421  

After 10 years

                11,060       659       2,495       14,214  

Fair value

  $ 7,288     $ 21,390     $ 19,637     $ 35,738     $ 37,152     $ 121,205  

Gross unrealized gains

                6                   6  

Gross unrealized losses

    (155 )     (1,870 )     (2,972 )     (5,464 )     (5,105 )     (15,566 )

Amortized cost

  $ 7,443     $ 23,260     $ 22,603     $ 41,202     $ 42,257     $ 136,765  

 

 

December 31, 2021

  U.S. government agency obligations    

Municipal obligations

   

Mortgage-backed residential obligations

   

Collateralized mortgage obligations

    Total available-for-sale  
      (Dollars in thousands)

1 year or less

  $     $ 1,631     $ 356     $ 1,064     $ 3,051  

1 to 5 years

    5,587       3,941       29,375       16,097       55,000  

5 to 10 years

    4,466       2,244       12,417       11,976       31,103  

After 10 years

          10,184             1,612       11,796  

Fair value

  $ 10,053     $ 18,000     $ 42,148     $ 30,749     $ 100,950  

Gross unrealized gains

    73       423       259       279       1,034  

Gross unrealized losses

    (78 )     (14 )     (612 )     (443 )     (1,147 )

Amortized cost

  $ 10,058     $ 17,591     $ 42,501     $ 30,913     $ 101,063  

 

As of December 31, 2022 and 2021, no securities were pledged to secure public deposits or for other purposes as required or permitted by law. At December 31, 2022 and 2021, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of equity. 

 

Information pertaining to securities with gross unrealized losses at December 31, 2022 and 2021, aggregated by investment category and length of time that individual securities have been in a continuous loss position, is as follows:

 

   

Less than 12 Months

   

12 Months or Longer

   

Total

 
   

Fair

   

Unrealized

   

Fair

   

Unrealized

   

Fair

   

Unrealized

 

December 31, 2022

 

Value

   

Losses

   

Value

   

Losses

   

Value

   

Losses

 
      (Dollars in thousands)

U.S. Treasuries

  $ 7,288     $ 155     $     $     $ 7,288     $ 155  

U.S. government agency obligations

    17,274       1,296       4,116       574       21,390       1,870  

Municipal obligations

    16,823       2,349       2,037       623       18,860       2,972  

Mortgage-backed residential obligations

    14,365       1,618       21,373       3,846       35,738       5,464  

Collateralized mortgage obligations

    21,449       2,014       15,703       3,091       37,152       5,105  

Total

  $ 77,199     $ 7,432     $ 43,229     $ 8,134     $ 120,428     $ 15,566  

December 31, 2021

                                               

U.S. government agency obligations

  $ 4,020     $ 62     $ 1,105     $ 16     $ 5,125     $ 78  

Municipal obligations

    2,399       8       247       6       2,646       14  

Mortgage-backed residential obligations

    26,540       535       2,781       77       29,321       612  

Collateralized mortgage obligations

    16,715       338       4,386       105       21,101       443  

Total

  $ 49,674     $ 943     $ 8,519     $ 204     $ 58,193     $ 1,147  

 

There were no securities with other than temporary impairment losses at December 31, 2022 or 2021 respectively.  

 

Unrealized losses have not been recognized into income because, based on management’s evaluation, the decline in fair value is largely due to increased market rates, temporary market conditions and trading spreads, and, as such, are considered to be temporary by the Bank. In addition, management has the intent and ability to hold these securities until they mature or they recover their carrying values.

 

All U.S. Treasuries, U.S. government agency obligations, mortgage-backed residential obligations and collateralized mortgage obligations are agency-issued or government-sponsored enterprise issued. Agency-issued securities are generally guaranteed by a U.S. government agency, such as the Government National Mortgage Association. Government-sponsored enterprises, such as the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, or the Small Business Administration, have either a direct or implied guarantee by the U.S. government.  

 

The Bank holds two classifications of municipal bonds, general obligation bonds and revenue bonds. General obligation bonds are backed by the general revenue of the issuing municipality, while revenue bonds are supported by a specific revenue source. All general obligation and revenue bonds have a bond rating of investment grade by Standard and Poor’s or Moody’s Investor Services or are not rated. The bonds that are not rated have been in a loss position less than 12 months. As of December 31, 2022, all municipal bond securities are paying as agreed. 

 

The following table represents the proceeds from the sale of securities available-for-sale and the related gross gains and losses during the periods presented. 

 

   

At December 31,

 
   

2022

   

2021

 
   

(Dollars in thousands)

 

Sales of securities available for sale

  $     $ 6,769  

Gross gain realized on the sale of securities available for sale

          131  

Gross loss realized on the sale of securities available for sale