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Securities
 6 Months Ended
Jun. 30, 2020
Securities [Abstract]  
Securities
4.
Securities

The amortized cost, estimated fair value and unrealized gains (losses) of AFS securities are as follows:

(In thousands)
  
Amortized
Cost
    
Unrealized
Gains
    
Unrealized
Losses
    
Estimated
Fair Value
  
As of June 30, 2020
                        
Federal agency
  
$
45,588
    
$
39
    
$
23
    
$
45,604
  
State & municipal
    
2,529
      
160
      
-
      
2,689
  
Mortgage-backed:
                                
Government-sponsored enterprises
    
445,055
      
19,285
      
-
      
464,340
  
U.S. government agency securities
    
49,967
      
2,283
      
9
      
52,241
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
382,562
      
8,340
      
4
      
390,898
  
U.S. government agency securities
    
138,187
      
4,352
      
5
      
142,534
  
Corporate
    
10,000
      
137
      
-
      
10,137
  
Total AFS securities
  
$
1,073,888
    
$
34,596
    
$
41
    
$
1,108,443
  
As of December 31, 2019
                                
Federal agency
  
$
34,998
    
$
3
    
$
243
    
$
34,758
  
State & municipal
    
2,533
      
-
      
20
      
2,513
  
Mortgage-backed:
                                
Government-sponsored enterprises
    
453,614
      
4,982
      
239
      
458,357
  
U.S. government agency securities
    
44,758
      
667
      
156
      
45,269
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
328,499
      
1,949
      
467
      
329,981
  
U.S. government agency securities
    
104,152
      
718
      
408
      
104,462
  
Total AFS securities
  
$
968,554
    
$
8,319
    
$
1,533
    
$
975,340
  

There was no allowance for credit losses on AFS securities as of the quarter ending June 30, 2020.

The components of net realized gains (losses) on the sale of AFS securities are as follows. These amounts were reclassified out of accumulated other comprehensive income (loss) (“AOCI”) and into earnings. There were no sales of AFS securities during the three months ended June 30, 2020 and 2019.

  
Six Months Ended
June 30,
  
(In thousands)
  
2020
    
2019
  
Gross realized gains
  
$
3
    
$
53
  
Gross realized (losses)
    
-
      
(152
)
Net AFS realized gains (losses)
  
$
3
    
$
(99
)

Included in net gains (losses) on AFS securities, the Company recorded gains from calls of approximately $3 thousand and $4 thousand for the six months ended June 30, 2020 and 2019, respectively. There were no recorded gains from calls on AFS securities included in net gains (losses) from sales transactions for the three months ended June 30, 2020 and 2019.

The amortized cost, estimated fair value and unrealized gains (losses) of securities HTM are as follows:

(In thousands)
  
Amortized
Cost
    
Unrealized
Gains
    
Unrealized
Losses
    
Estimated
Fair Value
  
As of June 30, 2020
                        
Mortgage-backed:
                        
Government-sponsored enterprises
  
$
144,556
    
$
5,886
    
$
-
    
$
150,442
  
U.S. government agency securities
    
12,220
      
938
      
-
      
13,158
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
145,235
      
5,445
      
-
      
150,680
  
    U.S. government agency securities
    
105,862
      
5,447
      
-
      
111,309
  
State & municipal
    
191,291
      
6,152
      
10
      
197,433
  
Total HTM securities
  
$
599,164
    
$
23,868
    
$
10
    
$
623,022
  
As of December 31, 2019
                                
Mortgage-backed:
                                
Government-sponsored enterprises
  
$
149,448
    
$
3,184
    
$
155
    
$
152,477
  
U.S. government agency securities
    
13,667
      
584
      
-
      
14,251
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
189,402
      
2,165
      
368
      
191,199
  
   U.S. government agency securities
    
110,498
      
3,256
      
100
      
113,654
  
State & municipal
    
167,059
      
2,628
      
6
      
169,681
  
Total HTM securities
  
$
630,074
    
$
11,817
    
$
629
    
$
641,262
  

At June 30, 2020 and December 31, 2019, all of the mortgaged-backed HTM securities were comprised of U.S. government agency and Government-sponsored enterprises securities. There was no allowance for credit losses on HTM securities as of June 30, 2020.

Included in net realized gains (losses), the Company recorded gains from calls on HTM securities of approximately $4 thousand for the three and six months ended June 30, 2020. There were no recorded gains from calls on HTM securities included in net realized gains (losses) for the three and six months ended June 30, 2019.

During the three and six months ended June 30, 2020, the Company sold HTM securities with an amortized cost of $1.0 million and resulted in a realized loss of $1 thousand. Due to significant deterioration in the creditworthiness of the issuer of the HTM securities, the circumstances caused the Company to change its intent to hold the HTM securities sold to maturity, which did not affect the Company’s intent to hold the remainder of the HTM portfolio to maturity. There were no sales of HTM securities in the three and six month periods ended June 30, 2019

AFS and HTM securities with amortized costs totaling $1.3 billion at June 30, 2020 and December 31, 2019 were pledged to secure public deposits and for other purposes required or permitted by law. Additionally, at June 30, 2020 and December 31, 2019, AFS and HTM securities with an amortized cost of $249.8 million and $189.8 million, respectively, were pledged as collateral for securities sold under repurchase agreements.

The following tables set forth information with regard to gains and losses on equity securities:

  
Three Months Ended June 30,
  
(In thousands)
  
2020
    
2019
  
Net gains and (losses) recognized on equity securities
  
$
177
    
$
(69
)
Less: Net gains and (losses) recognized during the period on equity securities sold during the period
    
-
      
-
  
Unrealized gains and (losses) recognized on equity securities still held
  
$
177
    
$
(69
)

 
Six Months Ended June 30,
  
(In thousands)
  
2020
    
2019
  
Net gains and (losses) recognized on equity securities
  
$
(638
)
  
$
87
  
Less: Net gains and (losses) recognized during the period on equity securities sold during the period
    
-
      
-
  
Unrealized gains and (losses) recognized on equity securities still held
  
$
(638
)
  
$
87
  

As of June 30, 2020 and December 31, 2019, the carrying value of equity securities without readily determinable fair values was $4.0 million. The Company performed a qualitative assessment to determine whether the investments were impaired and identified no areas of concern as of June 30, 2020 and 2019. There were no impairments, downward or upward adjustments recognized for equity securities without readily determinable fair values during the three and six months ended June 30, 2020 and 2019.

The following tables set forth information with regard to contractual maturities of debt securities at June 30, 2020:

(In thousands)
  
Amortized
Cost
    
Estimated
Fair Value
  
AFS debt securities:
            
Within one year
  
$
1,137
    
$
1,179
  
From one to five years
    
19,997
      
20,682
  
From five to ten years
    
201,736
      
208,054
  
After ten years
    
851,018
      
878,528
  
Total AFS debt securities
  
$
1,073,888
    
$
1,108,443
  
HTM debt securities:
                
Within one year
  
$
19,161
    
$
19,190
  
From one to five years
    
59,201
      
60,404
  
From five to ten years
    
147,566
      
154,845
  
After ten years
    
373,236
      
388,583
  
Total HTM debt securities
  
$
599,164
    
$
623,022
  

Maturities of mortgage-backed, collateralized mortgage obligations and asset-backed securities are stated based on their estimated average lives. Actual maturities may differ from estimated average lives or contractual maturities because, in certain cases, borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Except for U.S. Government securities and Government-sponsored enterprises securities, there were no holdings, when taken in the aggregate, of any single issuer that exceeded 10% of consolidated stockholders’ equity at June 30, 2020 and December 31, 2019.

The following table sets forth information with regard to investment securities with unrealized losses, for which an allowance for credit losses has not been recorded at June 30, 2020, segregated according to the length of time the securities had been in a continuous unrealized loss position:

  
Less Than 12 Months
    
12 Months or Longer
    
Total
  
(In thousands)
  
Fair
Value
    
Unrealized
Losses
    
Number
of Positions
    
Fair
Value
    
Unrealized
Losses
    
Number
of Positions
    
Fair
Value
    
Unrealized
Losses
    
Number
of Positions
  
As of June 30, 2020
                                                      
AFS securities:
                                                      
Federal agency
  
$
19,965
    
$
(23
)
    
2
    
$
-
    
$
-
      
-
    
$
19,965
    
$
(23
)
    
2
  
Mortgage-backed
    
46
      
-
      
2
      
779
      
(9
)
    
2
      
825
      
(9
)
    
4
  
Collateralized mortgage
obligations
    
583
      
(5
)
    
1
      
3,043
      
(4
)
    
1
      
3,626
      
(9
)
    
2
  
Total securities with unrealized losses
  
$
20,594
    
$
(28
)
    
5
    
$
3,822
    
$
(13
)
    
3
    
$
24,416
    
$
(41
)
    
8
  
                                                                         
HTM securities:
                                                                        
State & municipal
  
$
990
    
$
(10
)
    
1
    
$
-
    
$
-
      
-
    
$
990
    
$
(10
)
    
1
  
Total securities with unrealized losses
  
$
990
    
$
(10
)
    
1
    
$
-
    
$
-
      
-
    
$
990
    
$
(10
)
    
1
  
                                                                         
As of December 31, 2019
                                                                        
AFS securities:
                                                                        
Federal agency
  
$
14,891
    
$
(109
)
    
2
    
$
9,866
    
$
(134
)
    
1
    
$
24,757
    
$
(243
)
    
3
  
State & municipal
    
2,503
      
(20
)
    
1
      
-
      
-
      
-
      
2,503
      
(20
)
    
1
  
Mortgage-backed
    
67,986
      
(273
)
    
21
      
37,745
      
(122
)
    
16
      
105,731
      
(395
)
    
37
  
Collateralized mortgage obligations
    
113,121
      
(316
)
    
24
      
49,632
      
(559
)
    
17
      
162,753
      
(875
)
    
41
  
Total securities with unrealized losses
  
$
198,501
    
$
(718
)
    
48
    
$
97,243
    
$
(815
)
    
34
    
$
295,744
    
$
(1,533
)
    
82
  
                                                                         
HTM securities:
                                                                        
Mortgage-backed
  
$
-
    
$
-
      
-
    
$
25,370
    
$
(155
)
    
2
    
$
25,370
    
$
(155
)
    
2
  
Collateralized mortgage obligations
    
18,040
      
(181
)
    
3
      
22,389
      
(287
)
    
5
      
40,429
      
(468
)
    
8
  
State & municipal
    
2,257
      
(6
)
    
4
      
-
      
-
      
-
      
2,257
      
(6
)
    
4
  
Total securities with unrealized losses
  
$
20,297
    
$
(187
)
    
7
    
$
47,759
    
$
(442
)
    
7
    
$
68,056
    
$
(629
)
    
14
  

The Company does not believe the AFS securities that were in an unrealized loss position as of June 30, 2020, which consisted of 8 individual securities, represented a credit loss impairment. AFS debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. As of June 30, 2020, all of the AFS securities in an unrealized loss position consisted of debt securities issued by U.S. government agencies or U.S. government-sponsored enterprises that carry the explicit and/or implicit guarantee of the U.S. government, which are widely recognized as “risk-free” and have a long history of zero credit losses. Total gross unrealized losses were primarily attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. The Company does not intend to sell, nor is it more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, which may be at maturity. The Company elected to exclude accrued interest receivable (“AIR”) from the amortized cost basis of debt securities disclosed throughout this footnote. AIR on AFS debt securities totaled $2.6 million at June 30, 2020 and is excluded from the estimate of credit losses and reported in the financial statement line for other assets.

None of the bank’s HTM debt securities were past due or on non-accrual status as of the quarter ending June 30, 2020. There was no accrued interest reversed against interest income for the quarter ended June 30, 2020 as all securities remained on accrual status. In addition, there were no collateral dependent HTM debt securities as of June 30, 2020. 68% of the Company’s HTM debt securities are issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government, are widely recognized as “risk free,” and have a long history of zero credit loss. Therefore, the Company did not record an allowance for credit losses for these securities as of June 30, 2020. The remaining HTM debt securities at June 30, 2020 were comprised of state and municipal obligations with bond ratings of A to AAA. Utilizing the CECL approach, the Company determined that the expected credit loss on its HTM municipal bond portfolio was immaterial and therefore no allowance for credit loss was recorded as of June 30, 2020. AIR on HTM debt securities totaled $2.3 million at June 30, 2020 and is excluded from the estimate of credit losses and reported in the financial statement line for other assets.