XML 23 R11.htm IDEA: XBRL DOCUMENT v3.20.2
INVESTMENT SECURITIES
 9 Months Ended
Sep. 30, 2020
Investments, Debt and Equity Securities [Abstract]  
INVESTMENT SECURITIES
NOTE 3 – INVESTMENT SECURITIES
 
The amortized cost and estimated fair value of securities available for sale along with allowance for credit losses, gross unrealized gains and losses are summarized as follows:
(dollars in thousands)Amortized
Cost		Allowance for Credit LossesGross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Fair
Value
September 30, 2020
U.S. government sponsored agencies$17,184 $— $420 $— $17,604 
State, county and municipal securities84,219 — 3,429 — 87,648 
Corporate debt securities51,659 (68)826 (276)52,141 
SBA pool securities62,204 — 3,019 (107)65,116 
Mortgage-backed securities855,083 — 39,942 (98)894,927 
Total debt securities$1,070,349 $(68)$47,636 $(481)$1,117,436 
December 31, 2019
U.S. government sponsored agencies$22,246 $— $116 $— $22,362 
State, county and municipal securities102,952 — 2,310 (2)105,260 
Corporate debt securities51,720 — 1,281 (2)52,999 
SBA pool securities73,704 — 617 (409)73,912 
Mortgage-backed securities1,129,816 — 19,937 (883)1,148,870 
Total debt securities$1,380,438 $— $24,261 $(1,296)$1,403,403 

The amortized cost and estimated fair value of debt securities available for sale securities as of September 30, 2020, by contractual maturity are shown below. Maturities may differ from contractual maturities in mortgage-backed securities because the mortgages underlying these securities may be called or repaid without penalty. Therefore, these securities are not included in the maturity categories in the following maturity summary:
(dollars in thousands)
Amortized
Cost		Estimated
Fair
Value
Due in one year or less$35,577 $35,851 
Due from one year to five years56,870 58,892 
Due from five to ten years68,527 71,211 
Due after ten years54,292 56,555 
Mortgage-backed securities855,083 894,927 
 $1,070,349 $1,117,436 
 
Securities with a carrying value of approximately $595.7 million serve as collateral to secure public deposits, securities sold under agreements to repurchase and for other purposes required or permitted by law at September 30, 2020, compared with $679.6 million at December 31, 2019.
The following table shows the gross unrealized losses and estimated fair value of securities aggregated by category and length of time that securities have been in a continuous unrealized loss position at September 30, 2020 and December 31, 2019.
 Less Than 12 Months12 Months or MoreTotal
(dollars in thousands)Estimated
Fair
Value		Unrealized
Losses		Estimated
Fair
Value		Unrealized
Losses		Estimated
Fair
Value		Unrealized
Losses
September 30, 2020      
Corporate debt securities$9,906 $(276)$— $— $9,906 $(276)
SBA pool securities— — 4,276 (107)4,276 (107)
Mortgage-backed securities24,687 (98)2 — 24,689 (98)
Total debt securities$34,593 $(374)$4,278 $(107)$38,871 $(481)
December 31, 2019      
State, county and municipal securities$803 $(2)$— $— $803 $(2)
Corporate debt securities2,573 (2)— — 2,573 (2)
SBA pool securities28,521 (285)4,825 (124)33,346 (409)
Mortgage-backed securities99,279 (416)52,326 (467)151,605 (883)
Total debt securities$131,176 $(705)$57,151 $(591)$188,327 $(1,296)
 
As of September 30, 2020, the Company’s security portfolio consisted of 524 securities, 30 of which were in an unrealized loss position. At September 30, 2020, the Company held 17 mortgage-backed securities that were in an unrealized loss position, all of which were issued by U.S. government-sponsored entities and agencies. At September 30, 2020, the Company held seven SBA pool securities and six corporate securities that were in an unrealized loss position.

During 2020 and 2019, the Company received timely and current interest and principal payments on all of the securities classified as corporate debt securities. The Company’s investments in subordinated debt include investments in regional and super-regional banks on which the Company prepares regular analysis through review of financial information and credit ratings. Investments in preferred securities are also concentrated in the preferred obligations of regional and super-regional banks through non-pooled investment structures. The Company did not have investments in “pooled” trust preferred securities at September 30, 2020 or December 31, 2019.
 
Management and the Company’s Asset and Liability Committee (the “ALCO Committee”) evaluate securities in an unrealized loss position on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation, to determine if credit-related impairment exists. Management first evaluates whether they intend to sell or more likely than not will be required to sell an impaired security before recovering its amortized cost basis. If either criteria is met, the entire amount of unrealized loss is recognized in earnings with a corresponding adjustment to the security's amortized cost basis. If either of the above criteria is not met, management evaluates whether the decline in fair value is attributable to credit or resulted from other factors. The Company does not intend to sell these investment securities at an unrealized loss position at September 30, 2020, and it is more likely than not that the Company will not be required to sell these securities prior to recovery or maturity. Based on the results of management's review, at September 30, 2020, management determined $68,000 was attributable to credit impairment and increased the allowance for credit losses accordingly. The remaining $481,000 in unrealized loss was determined to be from factors other than credit.
(dollars in thousands)Nine Months Ended
September 30, 2020
Allowance for credit losses
Beginning balance$— 
Current-period provision for expected credit losses68 
Ending balance$68 
 
At September 30, 2020 and December 31, 2019, all of the Company’s mortgage-backed securities were obligations of government-sponsored agencies.
 
The following table is a summary of sales activities in the Company’s investment securities available for sale for the nine months ended September 30, 2020 and 2019:
(dollars in thousands)September 30, 2020September 30, 2019
Gross gains on sales of securities$— $522 
Gross losses on sales of securities— (464)
Net realized gains on sales of securities available for sale$— $58 
Sales proceeds$— $64,995 

Total gain on securities reported on the consolidated statements of income and comprehensive income is comprised of the following for the nine months ended September 30, 2020 and 2019:
(dollars in thousands)September 30, 2020September 30, 2019
Net realized gains on sales of securities available for sale$— $58 
Unrealized holding gains on equity securities5 19 
Net realized gains on sales of other investments— 62 
Total gain on securities$5 $139