INVESTMENT SECURITIES

12 Months Ended

Dec. 31, 2021

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE 4 — INVESTMENT SECURITIES

The following tables summarizes the amortized cost and fair value of debt securities AFS and HTM and equity investments and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses (in thousands):

			Gross		Gross
			Unrealized/		Unrealized/
	Amortized		Unrecognized		Unrecognized
At December 31, 2021	Cost		Gains		Losses		Fair Value
Available-for-Sale Securities:
U.S. Government agency securities	$	67,994	$	—	$	(1,660)	$	66,334
U.S. State and Municipal securities		11,799		—		(300)		11,499
Residential MBS		476,393		623		(10,465)		466,551
Commercial MBS		17,787		219		(379)		17,627
Asset-backed securities		4,635		—		(22)		4,613
Total securities available-for-sale	$	578,608	$	842	$	(12,826)	$	566,624
Held-to-Maturity Securities:
U.S. Treasury securities	$	29,811	$	6	$	(43)	$	29,774
U.S. State and Municipal securities		16,055		299		—		16,354
Residential MBS		328,095		105		(2,259)		325,941
Commercial MBS		8,138		—		(99)		8,039
Total securities held-to-maturity	$	382,099	$	410	$	(2,401)	$	380,108
Equity Investments:
CRA Mutual Fund	$	2,326	$	—	$	(53)	$	2,273
Total equity investment securities	$	2,326	$	—	$	(53)	$	2,273

			Gross		Gross
			Unrealized/		Unrealized/
	Amortized		Unrecognized		Unrecognized
At December 31, 2020	Cost		Gains		Losses		Fair Value
Available-for-Sale:
U.S. Government agency securities	$	37,997	$	—	$	(81)	$	37,916
Residential MBS		192,163		2,599		(74)		194,688
Commercial MBS		32,589		997		(94)		33,492
Total securities available-for-sale	$	262,749	$	3,596	$	(249)	$	266,096
Held-to-Maturity Securities:
Residential MBS	$	2,760	$	67	$	—	$	2,827
Total securities held-to-maturity	$	2,760	$	67	$	—	$	2,827
Equity Investments:
CRA Mutual Fund	$	2,299	$	14	$	—	$	2,313
Total equity investment securities	$	2,299	$	14	$	—	$	2,313

The following table summarizes the proceeds from sales and calls of securities and associated gains (in thousands):  

	Year Ended December 31,
	2021		2020
Proceeds	$	43,241	$	141,422
Gross gains	$	609	$	3,286
Tax impact	$	(197)	$	(1,036)

For the year ended December 31, 2021, there were sales of $42.6 million, at amortized cost, of AFS securities. For the year ended December 31, 2020, there were sales and calls of AFS securities, at amortized cost, of $138.1 million.

The tables below summarize, by contractual maturity, the amortized cost and fair value of debt securities. The tables do not include the effect of principal repayments or scheduled principal amortization. Equity securities, primarily investment in mutual funds, have been excluded from the table. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties (in thousands):

	Held-to-Maturity				Available-for-Sale
At December 31, 2021	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within 1 year	$	—	$	—	$	—	$	—
After 1 year through 5 years		29,811		29,774		48,515		47,370
After 5 years though 10 years		9,973		9,912		36,242		36,024
After 10 years		342,315		340,422		493,851		483,230
Total Securities	$	382,099	$	380,108	$	578,608	$	566,624

	Held-to-Maturity				Available-for-Sale
At December 31, 2020	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within 1 year	$	—	$	—	$	—	$	—
After 1 year through 5 years		—		—		38,911		38,851
After 5 years though 10 years		1,656		1,701		29,391		30,106
After 10 years		1,104		1,126		194,447		197,139
Total Securities	$	2,760	$	2,827	$	262,749	$	266,096

There were no securities pledged as collateral at December 31, 2021 or 2020.

At December 31, 2021 and 2020, all Residential and Commercial MBS held by the Company were issued by U.S. government-sponsored entities and agencies.

Debt securities with unrealized/unrecognized losses, 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
			Unrealized/				Unrealized/				Unrealized/
	Estimated		Unrecognized		Estimated		Unrecognized		Estimated		Unrecognized
At December 31, 2021	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Available-for-Sale Securities:
U.S. Government agency securities	$	29,267	$	(730)	$	37,067	$	(930)	$	66,334	$	(1,660)
U.S. State and Municipal securities		8,372		(300)		—		—		8,372		(300)
Residential MBS		423,686		(9,727)		12,931		(738)		436,617		(10,465)
Commercial MBS		11,202		(296)		3,511		(83)		14,713		(379)
Asset-backed securities		4,613		(22)		—		—		4,613		(22)
Total securities available-for-sale	$	477,140	$	(11,075)	$	53,509	$	(1,751)	$	530,649	$	(12,826)
Held-to-Maturity Securities:
U.S. Treasury Securities	$	9,697	$	(43)	$	—	$	—	$	9,697	$	(43)
Residential MBS		301,896		(2,259)		—		—		301,896		(2,259)
Commercial MBS		8,039		(99)		—		—		8,039		(99)
Total securities held-to-maturity	$	319,632	$	(2,401)	$	—	$	—	$	319,632	$	(2,401)

	Less than 12 Months				12 Months or More				Total
			Unrealized/				Unrealized/				Unrealized/
	Estimated		Unrecognized		Estimated		Unrecognized		Estimated		Unrecognized
At December 31, 2020	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Available-for-Sale Securities:
U.S. Government agency securities	$	37,916	$	(81)	$	—	$	—	$	37,916	$	(81)
Residential MBS		33,734		(74)		—		—		33,734		(74)
Commercial MBS		12,314		(93)		385		(1)		12,699		(94)
Total securities available-for-sale	$	83,964	$	(248)	$	385	$	(1)	$	84,349	$	(249)

The unrealized losses of securities are primarily due to the changes in market interest rates subsequent to purchase. The Company did not consider these securities to be OTTI at December 31, 2021 or 2020 since the decline in market value was attributable to changes in interest rates and not credit quality. In addition, the Company 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 years ended December 31, 2021 or 2020.

As of December 31, 2021 and 2020, 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.