INVESTMENT SECURITIES

9 Months Ended

Sep. 30, 2022

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE 4 — INVESTMENT SECURITIES

The following tables summarize 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 September 30, 2022	Cost		Gains		Losses		Fair Value
Available-for-Sale Securities:
U.S. Government agency securities	$	67,995	$	—	$	(9,163)	$	58,832
U.S. State and Municipal securities		11,687		—		(2,696)		8,991
Residential MBS		412,754		—		(75,513)		337,241
Commercial MBS		16,310		—		(2,101)		14,209
Asset-backed securities		4,171		—		(179)		3,992
Total securities available-for-sale	$	512,917	$	—	$	(89,652)	$	423,265
Held-to-Maturity Securities:
U.S. Treasury securities	$	29,842	$	—	$	(2,419)	$	27,423
U.S. State and Municipal securities		15,875		—		(3,308)		12,567
Residential MBS		467,543		—		(65,465)		402,078
Commercial MBS		8,116		—		(1,316)		6,800
Total securities held-to-maturity	$	521,376	$	—	$	(72,508)	$	448,868
Equity Investments:
CRA Mutual Fund	$	2,348	$	—	$	(321)	$	2,027
Total equity investment securities	$	2,348	$	—	$	(321)	$	2,027

			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

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

	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Proceeds	$	—	$	—	$	—	$	43,241
Gross gains	$	—	$	—	$	—	$	(609)
Tax impact	$	—	$	—	$	—	$	195

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 investments 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 September 30, 2022	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within 1 year	$	—	$	—	$	—	$	—
After 1 year through 5 years		29,842		27,423		54,915		48,694
After 5 years through 10 years		9,586		8,151		26,690		23,223
After 10 years		481,948		413,294		431,312		351,348
Total Securities	$	521,376	$	448,868	$	512,917	$	423,265

	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 through 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

There were no securities pledged as collateral at September 30, 2022 or December 31, 2021.

At September 30, 2022 and December 31, 2021, all of the residential MBS and commercial MBS held by the Company were issued by U.S. Government-sponsored entities and agencies.

Debt securities with unrealized 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 September 30, 2022	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Available-for-Sale Securities:
U.S. Government agency securities	$	—	$	—	$	58,832	$	(9,163)	$	58,832	$	(9,163)
U.S. State and Municipal securities		2,421		(665)		6,570		(2,031)		8,991		(2,696)
Residential MBS		128,285		(26,149)		208,956		(49,364)		337,241		(75,513)
Commercial MBS		2,497		(154)		11,712		(1,947)		14,209		(2,101)
Asset-backed securities		—		—		3,992		(179)		3,992		(179)
Total securities available-for-sale	$	133,203	$	(26,968)	$	290,062	$	(62,684)	$	423,265	$	(89,652)
Held-to-Maturity Securities:
U.S. Treasury securities	$	27,423	$	(2,419)	$	—	$	—	$	27,423	$	(2,419)
U.S. State and Municipal securities		12,567		(3,308)		—		—		12,567		(3,308)
Residential MBS		402,078		(65,465)		—		—		402,078		(65,465)
Commercial MBS		6,800		(1,316)		—		—		6,800		(1,316)
Asset-backed securities		—		—		—		—		—		—
Total securities held-to-maturity	$	448,868	$	(72,508)	$	—	$	—	$	448,868	$	(72,508)

	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)

The unrealized losses on securities are primarily due to the changes in market interest rates subsequent to purchase. The Company did not consider these securities to have OTTI at September 30, 2022 or December 31, 2021 since the decline in market value was attributable to changes in interest rates and not to changes in 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 nine months ended September 30, 2022 or for the year ended December 31, 2021.

At September 30, 2022 and December 31, 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 stockholders’ equity.