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Investment Securities
12 Months Ended
Dec. 31, 2022
Investments Securities [Abstract]  
Investment Securities
2.
 
INVESTMENT SECURITIES
 
The following
 
tables present
 
a summary
 
of the
 
amortized cost,
 
unrealized or
 
unrecognized gains
 
and losses,
 
and fair
value of investment securities at the dates indicated (in thousands):
For the year
 
ended December 31,
 
2022, there
 
were
26
 
investment securities
 
that were transferred
 
from available-for-
sale
 
(“AFS”)
 
to
 
held-to-maturity
 
(“HTM”)
 
with
 
an
 
amortized
 
cost
 
basis
 
and
 
fair
 
value
 
amount
 
of
 
$
74.4
 
million
 
and
$
63.8
 
million, respectively.
 
On the
 
date of
 
transfer,
 
these securities
 
had a
 
total net
 
unrealized loss
 
of $
10.6
 
million which
was included in accumulated other comprehensive income
 
(loss).
 
Transfers of debt securities into the HTM category from the AFS category are made at fair value at the date of transfer.
The unrealized gain or loss at the
 
date of transfer is retained in
 
accumulated other comprehensive income
 
(“AOCI”) and in
the carrying value of the held-to-maturity securities. Such amounts are
 
amortized over the remaining life of the security. For
the year
 
ended December 31,
 
2022, total
 
amortization out
 
of AOCI
 
for the
 
net unrealized
 
losses on
 
securities transferred
from AFS to HTM was $
120
 
thousand and $
108
 
thousand for year ended December 31, 2021.
 
The following
 
table presents
 
the proceeds,
 
realized gross
 
gains and
 
realized gross
 
losses on
 
sales and
 
calls of
 
AFS
debt securities for the years ended December 31, 2022 and
 
2021 (in thousands):
The
 
amortized
 
cost
 
and
 
fair
 
value
 
of
 
investment
 
securities,
 
by
 
contractual
 
maturity,
 
are
 
shown
 
below
 
for
 
the
 
date
indicated (in thousands).
 
Actual maturities may differ
 
from contractual maturities
 
because borrowers may 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.
At December 31,
 
2022 and
 
2021, there
 
were no
 
securities to
 
any one
 
issuer,
 
in an
 
amount greater
 
than 10%
 
of total
stockholders’
 
equity other
 
than the
 
United States
 
Government and
 
Government Agencies.
 
All the collateralized
 
mortgage
obligations
 
and
 
mortgage-backed
 
securities
 
are
 
issued
 
by
 
United
 
States
 
sponsored
 
entities
 
at
 
December 31,
 
2022
 
and
2021.
Information pertaining
 
to investment
 
securities with
 
gross unrealized
 
losses, aggregated
 
by investment
 
category and
length of
 
time that
 
those
 
individual securities
 
have been
 
in a
 
continuous
 
loss position,
 
are presented
 
as of
 
the following
dates (in thousands):
The unrealized losses
 
associated with $
134.7
 
million of investment
 
securities transferred from
 
the AFS portfolio to the
HTM portfolio represent unrealized
 
losses since the date of
 
purchase, independent of the
 
impact associated with changes
in the cost basis upon transfer between portfolios.
The Company performs a review
 
of the investments that have
 
an unrealized loss to determine whether
 
there have been
any changes in the
 
economic circumstance of the security
 
issuer to indicate that
 
the unrealized loss is
 
impaired on an other-
than-temporary (“OTTI”) basis. Management considers several factors in their analysis including (i) severity and duration of
the impairment, (ii) credit
 
rating of the security
 
including any downgrade,
 
(iii) intent to sell
 
the security,
 
or if it is more
 
likely
than not that it will be required to
 
sell the security before recovery
 
,
 
(iv) whether there have been any
 
payment defaults and
(v) underlying guarantor of the securities.
At
 
December
 
31,
 
2022,
 
the
 
Company
 
had
 
$
53.7
 
million
 
of
 
unrealized
 
losses
 
on
 
mortgage
 
backed
 
securities
 
and
collateralized
 
mortgage
 
obligations
 
of
 
government
 
sponsored
 
entities
 
having
 
a
 
fair
 
value
 
of
 
$
294.6
 
million
 
that
 
were
attributable
 
to
 
a
 
combination
 
of
 
factors,
 
including
 
relative
 
changes
 
in
 
interest
 
rates
 
since
 
the
 
time
 
of
 
purchase.
 
The
contractual cash flows
 
for these securities
 
are guaranteed by
 
U.S. government agencies
 
and U.S. government
 
sponsored
entities. The municipal bonds are of high credit
 
quality and the declines in fair value are not
 
due to credit quality.
 
Based on
the assessment of
 
these mitigating factors, management
 
believes that the
 
unrealized losses on these
 
debt security holdings
are a
 
function of
 
changes in
 
investment spreads
 
and interest
 
rate movements and
 
not changes
 
in credit
 
quality. Management
expects to recover the entire amortized cost basis of these securities.
At December 31, 2022, the
 
Company does not intend to
 
sell debt securities that are
 
in an unrealized loss position
 
and
it is not more than likely than not that the Company will be required to sell
 
these securities before recovery of the amortized
cost basis. Therefore,
 
management does
 
not consider any
 
investment to be
 
other than temporarily
 
impaired at December
31, 2022.
As of December 31, 2022, the Company maintains a master repurchase agreement with a public banking institution for
up
 
to
 
$
20.0
 
million
 
fully
 
guaranteed
 
with
 
investment
 
securities
 
upon
 
withdrawal.
 
Any
 
amounts
 
borrowed
 
would
 
be
 
at
 
a
variable interest rate
 
based on prevailing
 
rates at the
 
time funding is
 
requested. At
 
December 31, 2022, the
 
Company did
no
t have any securities pledged under this agreement.
In 2018, the Company became a Qualified Public Depositor (“QPD”) with the State of Florida. As a QPD, the Company
has the
 
authority to
 
legally maintain public
 
deposits from cities,
 
municipalities, and the
 
State of Florida.
 
These public deposits
are secured by securities
 
pledged to the
 
State of Florida
 
at a ratio of
25
% of the
 
average outstanding uninsured
 
deposits.
The Company must also maintain a minimum
 
amount of pledged securities to be in the program.
At December 31, 2022,
 
the Company had
eighteen
 
securities with a
 
fair value of
 
$
49.0
 
million pledged to
 
the State of
Florida under the public funds program. The Company
 
held a total of $
204.2
 
million in public funds at December 31, 2022.
At December
 
31, 2021,
 
the Company
 
had
eleven
 
securities
 
with a
 
fair value
 
of $
20.4
 
million pledged
 
to the
 
State of
Florida under the public funds program. The Company
 
held a total of $
37.3
 
million in public funds at December 31, 2021.
December 31, 2022
Available-for-sale:
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
U.S. Government Agency
$
10,177
$
-
$
(1,522)
$
8,655
Collateralized mortgage obligations
118,951
-
(23,410)
95,541
Mortgage-backed securities - Residential
73,838
-
(12,959)
60,879
Mortgage-backed securities - Commercial
32,244
15
(4,305)
27,954
Municipal securities
25,084
-
(6,601)
18,483
Bank subordinated debt securities
15,964
5
(1,050)
14,919
Corporate bonds
4,037
-
(328)
3,709
$
280,295
$
20
$
(50,175)
$
230,140
Held-to-maturity:
U.S. Government Agency
$
44,914
$
25
$
(5,877)
$
39,062
U.S. Treasury
9,841
-
(13)
9,828
Collateralized mortgage obligations
68,727
28
(7,830)
60,925
Mortgage-backed securities - Residential
42,685
372
(4,574)
38,483
Mortgage-backed securities - Commercial
11,442
-
(665)
10,777
Corporate bonds
11,090
-
(1,077)
10,013
$
188,699
$
425
$
(20,036)
$
169,088
December 31, 2021
Available-for-sale:
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
U.S. Government Agency
$
10,564
$
6
$
(50)
$
10,520
Collateralized mortgage obligations
160,506
22
(3,699)
156,829
Mortgage-backed securities - Residential
120,643
228
(2,029)
118,842
Mortgage-backed securities - Commercial
49,905
820
(608)
50,117
Municipal securities
25,164
6
(894)
24,276
Bank subordinated debt securities
27,003
1,418
(13)
28,408
Corporate bonds
12,068
482
-
12,550
$
405,853
$
2,982
$
(7,293)
$
401,542
Held-to-maturity:
U.S. Government Agency
$
34,505
$
14
$
(615)
$
33,904
Collateralized mortgage obligations
44,820
-
(1,021)
43,799
Mortgage-backed securities - Residential
26,920
-
(568)
26,352
Mortgage-backed securities - Commercial
3,103
-
(90)
3,013
Corporate bonds
13,310
-
(221)
13,089
$
122,658
$
14
$
(2,515)
$
120,157
Available-for-sale:
2022
2021
Proceeds from sales and call of securities
$
60,649
$
51,974
Gross Gains
$
217
$
545
Gross Losses
(2,746)
(331)
Net realized gains (losses)
$
(2,529)
$
214
Available-for-sale
Held-to-maturity
December 31, 2022:
Amortized
Cost
Fair Value
Amortized
Cost
Fair Value
Due within one year
$
-
$
-
$
1,515
$
1,475
Due after one year through five years
4,037
3,709
9,575
8,539
Due after five years through ten years
16,964
15,722
-
-
Due after ten years
24,084
17,680
-
-
U.S. Government Agency
10,177
8,655
44,914
39,061
U.S. Treasury
-
-
9,841
9,828
Collateralized mortgage obligations
118,951
95,541
68,727
60,925
Mortgage-backed securities - Residential
 
73,838
60,879
42,685
38,483
Mortgage-backed securities - Commercial
 
32,244
27,954
11,442
10,777
$
280,295
$
230,140
$
188,699
$
169,088
December 31, 2022
Less than 12 months
12 months or more
Total
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
U.S. Government Agency
$
11,407
(1,093)
36,310
(7,616)
$
47,717
$
(8,709)
U.S. Treasury
9,828
(13)
-
-
9,828
$
(13)
Collateralized mortgage obligations
16,500
(963)
139,965
(34,962)
156,465
$
(35,925)
Mortgage-backed securities -
Residential
5,059
(564)
91,742
(19,348)
96,801
$
(19,912)
Mortgage-backed securities -
Commercial
10,052
(1,173)
26,823
(5,300)
36,875
$
(6,473)
Municipal securities
 
-
-
18,483
(6,601)
18,483
$
(6,601)
Bank subordinated debt securities
11,295
(670)
2,619
(381)
13,914
$
(1,051)
Corporate bonds
13,723
(926)
-
-
13,723
$
(926)
$
77,864
$
(5,402)
$
315,942
$
(74,208)
$
393,806
$
(79,610)
December 31, 2021
Less than 12 months
12 months or more
Total
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
U.S. Government Agency
$
25,951
$
(254)
$
15,477
$
(516)
$
41,428
$
(770)
Collateralized mortgage obligations
155,668
(3,223)
38,459
(1,497)
194,127
$
(4,720)
Mortgage-backed securities -
Residential
88,772
(1,178)
37,373
(1,274)
126,145
$
(2,452)
Mortgage-backed securities -
Commercial
25,289
(318)
7,507
(309)
32,796
$
(627)
Municipal securities
 
11,292
(395)
11,978
(499)
23,270
$
(894)
Bank subordinated debt securities
4,487
(13)
-
-
4,487
$
(13)
$
311,459
$
(5,381)
$
110,794
$
(4,095)
$
422,253
$
(9,476)