INVESTMENT SECURITIES

9 Months Ended

Sep. 30, 2020

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE 4 - INVESTMENT SECURITIES

The following tables summarize the amortized cost and fair value of securities available for sale and securities held to maturity at September 30, 2020 and December 31, 2019 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive loss and gross unrecognized gains and losses (in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized
At September 30, 2020	Cost		Gains		Losses		Fair Value
Debt securities available for sale:
Residential mortgage securities	$	124,411	$	2,709	$	—	$	127,120
Commercial mortgage securities		26,246		1,051		(42)		27,255
U.S. Government agency securities		27,997		—		(38)		27,959
Total securities available-for-sale	$	178,654	$	3,760	$	(80)	$	182,334
Held-to-maturity securities:
Residential mortgage securities	$	3,050	$	74	$	—	$	3,124
Total securities held-to-maturity	$	3,050	$	74	$	—	$	3,124
Equity investments:
CRA Mutual Fund	$	2,290	$	21	$	—	$	2,311
Total non-trading equity investment securities	$	2,290	$	21	$	—	$	2,311

			Gross		Gross
	Amortized		Unrealized		Unrealized
At December 31, 2019	Cost		Gains		Losses		Fair Value
Debt securities available for sale:
Residential mortgage securities	$	175,902	$	1,478	$	(117)	$	177,263
Commercial mortgage securities		32,284		206		(18)		32,472
U.S. Government agency securities		25,000		207		—		25,207
Total securities available for sale	$	233,186	$	1,891	$	(135)	$	234,942
Held-to-maturity securities:
Residential mortgage securities		3,722		9		(19)		3,712
Total securities held to maturity	$	3,722	$	9	$	(19)	$	3,712
Equity investments:
CRA Mutual Fund		2,258		—		(34)		2,224
Total non-trading equity investment securities	$	2,258	$	—	$	(34)	$	2,224

For the three months ended September 30, 2020, there were calls of $25.0 million, at amortized cost, of available-for-sale securities. There were sales and calls of $108.1 million and $30.0 million, at amortized cost, respectively, for the nine months ended September 30, 2020 and calls of $1.1 million for the nine months ended September 30, 2019. The proceeds from sales and calls of securities and associated gains for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Proceeds	$	25,000	$	—	$	141,422	$	1,065
Gross gains	$	—	$	—	$	3,286	$	—
Tax impact	$	—	$	—	$	(1,036)	$	—

Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately. The following tables summarize, by contractual maturity, the amortized cost and fair value of debt securities at September 30, 2020 and December 31, 2019 (in thousands):

	Held-to-Maturity				Available-for-Sale
At September 30, 2020	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within one year	$	—	$	—	$	—	$	—
One to five years		—		—		27,997		27,959
Five to ten years		—		—		—		—
After ten years		—		—		—		—
Total	$	—	$	—	$	27,997	$	27,959
Residential mortgage securities	$	3,050	$	3,124		124,411		127,120
Commercial mortgage securities		—		—		26,246		27,255
Total Securities	$	3,050	$	3,124	$	178,654	$	182,334

	Held-to-Maturity				Available-for-Sale
At December 31, 2019	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within one year	$	—	$	—	$	—	$	—
One to five years		—		—		—		—
Five to ten years		—		—		25,000		25,207
Due after ten years		—		—		—		—
Total	$	—	$	—	$	25,000	$	25,207
Residential mortgage securities	$	3,722	$	3,712	$	175,902	$	177,263
Commercial mortgage securities		—		—		32,284		32,472
Total Securities	$	3,722	$	3,712	$	233,186	$	234,942

There were no securities pledged as collateral at September 30, 2020. At December 31, 2019, there were $126.2 million of securities available for sale pledged as collateral for certain deposits.

At September 30, 2020 and December 31, 2019, all of the residential mortgage securities and commercial mortgage securities held by the Bank were issued by U.S. Government-sponsored entities and agencies.

Securities with unrealized/unrecognized losses at September 30, 2020 and December 31, 2019, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows (in thousands):

	Less than 12 Months				12 months or more				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
At September 30, 2020	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Debt securities available for sale:
Commercial mortgage securities	$	5,477	$	(41)	$	387	$	(1)	$	5,864	$	(42)
U.S. Government agency securities		27,959		(38)		—		—		27,959		(38)
Total securities available for sale	$	33,436	$	(79)	$	387	$	(1)	$	33,823	$	(80)

	Less than 12 Months				12 months or more				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
At December 31, 2019	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Debt securities available for sale:
Residential mortgage securities	$	22,850	$	(52)	$	6,728	$	(65)	$	29,578	$	(117)
Commercial mortgage securities		9,911		(18)		—		—		9,911		(18)
Total securities available-for-sale	$	32,761	$	(70)	$	6,728	$	(65)	$	39,489	$	(135)
Held-to-Maturity Securities:
Residential mortgage securities	$	—	$	—	$	1,470	$	(19)	$	1,470	$	(19)
Total securities held to maturity	$	—	$	—	$	1,470	$	(19)	$	1,470	$	(19)
Equity investments:
CRA Mutual Fund	$	—	$	—	$	2,224	$	(34)	$	2,224	$	(34)
Total equity investment securities	$	—	$	—	$	2,224	$	(34)	$	2,224	$	(34)

The unrealized losses on securities are primarily due to the changes in market interest rates subsequent to purchase. The Bank did not consider these securities to be other-than-temporarily impaired at September 30, 2020 or December 31, 2019 since the decline in market value was attributable to changes in interest rates and not credit quality. In addition, the Bank does not intend to sell and does not believe that it is more likely than not that it will be required to sell these investments until there is a full recovery of the unrealized loss, which may be at maturity. As a result, no impairment loss was recognized during the nine months ended September 30, 2020 or for the year ended December 31, 2019.

At September 30, 2020 and December 31, 2019, 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 stockholders’ equity.