Quarterly report pursuant to Section 13 or 15(d)

Note 4 - Securities

v3.19.3
Note 4 - Securities
 9 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]
Note
4
- Securities
The estimated fair value of available-for-sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income were as follows:
 
   
(Dollars in thousands)
  
           
Gross
    
Gross
    
Estimated
  
   
Cost
    
Unrealized
    
Unrealized
    
Fair
  
   
Basis
    
Gains
    
Losses
    
Value
  
September 30, 2019
                                
Money market fund
   $
5,771
     $
-
     $
-
     $
5,771
  
U.S. government sponsored entities
    
14,420
      
96
      
(3
 )    
14,513
  
Collateralized mortgage obligations and residential mortgage-backed securities
    
138,832
      
1,894
      
(105
 )    
140,621
  
Municipal securities
    
92,999
      
5,119
      
(39
 )    
98,079
  
Collateralized debt obligations
    
3,448
      
-
      
(1,378
 )    
2,070
  
Total securities available-for-sale
   $
255,470
     $
7,109
     $
(1,525
 )   $
261,054
  
 
   
(Dollars in thousands)
  
           
Gross
    
Gross
    
Estimated
  
   
Cost
    
Unrealized
    
Unrealized
    
Fair
  
   
Basis
    
Gains
    
Losses
    
Value
  
December 31, 2018
                                
Money market fund
   $
2,480
     $
-
     $
-
     $
2,480
  
U.S. government sponsored entities
    
7,997
      
28
      
(131
 )    
7,894
  
Collateralized mortgage obligations and residential mortgage-backed securities
    
137,834
      
135
      
(2,688
 )    
135,281
  
Municipal securities
    
93,516
      
1,072
      
(524
 )    
94,064
  
Collateralized debt obligations
    
3,481
      
-
      
(1,432
 )    
2,049
  
Total securities available-for-sale
   $
245,308
     $
1,235
     $
(4,775
 )   $
241,768
  
 
The estimated fair value of available-for-sale debt securities at
September 30, 2019,
by contractual maturity, were as follows. Securities
not
due at a single maturity date, primarily collateralized mortgage obligations and residential mortgage-backed securities, are shown separately.
 
   
(Dollars in thousands)
  
   
Available-for-sale
  
   
Estimated
          
   
Fair
    
Tax-Equivalent
  
September 30, 2019
  
Value
    
Yield (%)
  
Due in one year or less
   $
8,840
      
2.71
  
Due from one to five years
    
3,397
      
4.95
  
Due from five to ten years
    
20,270
      
3.71
  
Due over ten years
    
87,926
      
4.02
  
Collateralized mortgage obligations and residential mortgage-backed securities
    
140,621
      
2.70
  
Total
   $
261,054
      
3.25
  
 
 
Sales of available-for-sale securities were as follows for the
nine
months ended:
 
   
(Dollars in thousands)
  
   
September 30,
    
September 30,
  
   
2019
    
2018
  
                 
Proceeds
   $
35,859
     $
29,049
  
Gross gains
    
838
      
1,159
  
Gross losses
    
(84
 )    
(4
 )
 
Accumulated other comprehensive income/(loss) balances, net of tax, related to available-for-sale securities, were as follows:
 
   
(Dollars in thousands)
  
   
Unrealized
gain/(loss)
  
Ending balance, December 31, 2018
   $
(2,796
 )
Current period change
    
7,214
  
Ending balance, September 30, 2019
   $
4,418
  
 
Securities with carrying values of approximately
$69.2
million and
$16.3
million were pledged as of
September 30, 2019
and
December 31, 2018,
respectively, as collateral for repurchase agreements, public funds, and for other purposes as permitted or required by law. The increase in pledged securities for
September 30, 2019,
was the result of new pledging requirements for Indiana public funds deposits.
 
Securities with gross unrealized losses at
September 30, 2019
and
December 31, 2018
not
recognized in income are as follows:
 
   
(Dollars in thousands)
  
   
Less than 12 months
    
12 months or longer
    
Total
  
   
Estimated
            
Estimated
            
Estimated
          
   
Fair
    
Unrealized
    
Fair
    
Unrealized
    
Fair
    
Unrealized
  
   
Value
    
Losses
    
Value
    
Losses
    
Value
    
Losses
  
September 30, 2019
                                                
U.S. government sponsored entities
   $
1,427
     $
(3
 )   $
-
     $
-
     $
1,427
     $
(3
 )
Collateralized mortgage obligations and residential mortgage-backed securities
    
5,727
      
(34
 )    
17,351
      
(71
 )    
23,078
      
(105
 )
Municipal securities
    
2,579
      
(39
 )    
-
      
-
      
2,579
      
(39
 )
Collateralized debt obligations
    
-
      
-
      
2,070
      
(1,378
 )    
2,070
      
(1,378
 )
Total temporarily impaired
   $
9,733
     $
(76
 )   $
19,421
     $
(1,449
 )   $
29,154
     $
(1,525
 )
Number of securities
    
 
      
8
      
 
      
19
      
 
      
27
  
 
   
(Dollars in thousands)
  
   
Less than 12 months
    
12 months or longer
    
Total
  
   
Estimated
            
Estimated
            
Estimated
          
   
Fair
    
Unrealized
    
Fair
    
Unrealized
    
Fair
    
Unrealized
  
   
Value
    
Losses
    
Value
    
Losses
    
Value
    
Losses
  
December 31, 2018
                                                
U.S. government sponsored entities
   $
-
     $
-
     $
3,866
     $
(131
 )   $
3,866
     $
(131
 )
Collateralized mortgage obligations and residential mortgage-backed securities
    
28,388
      
(304
 )    
89,234
      
(2,384
 )    
117,622
      
(2,688
 )
Municipal securities
    
22,678
      
(367
 )    
3,495
      
(157
 )    
26,173
      
(524
 )
Collateralized debt obligations
    
-
      
-
      
2,049
      
(1,432
 )    
2,049
      
(1,432
 )
Total temporarily impaired
   $
51,066
     $
(671
 )   $
98,644
     $
(4,104
 )   $
149,710
     $
(4,775
 )
Number of securities
    
 
      
52
      
 
      
75
      
 
      
127
  
 
Unrealized losses on securities have
not
been recognized into income because the securities are of high credit quality or have undisrupted cash flows. Management has the intent and ability to hold those securities for the foreseeable future, and the decline in fair value is largely due to changes in interest rates and volatility in securities markets. The fair values are expected to recover as the securities approach maturity.