Investment Securities Held-to-Maturity |
Note 3. Investment Securities
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December 31, 2019 |
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Amortized Cost |
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Gross Unrealized Gains |
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Gross Unrealized Losses |
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Estimated Fair Value |
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(in thousands) |
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U.S. Government Sponsored Enterprises |
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$ |
98,867 |
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$ |
527 |
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$ |
96 |
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$ |
99,298 |
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44,379 |
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182 |
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303 |
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44,258 |
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U.S. Government Sponsored Enterprises Mortgage- Backed Securities |
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2,207,874 |
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20,720 |
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10,846 |
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2,217,748 |
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$ |
2,351,120 |
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$ |
21,429 |
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$ |
11,245 |
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$ |
2,361,304 |
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| Included in total investment securities are securities pledged to secure public deposits and repurchase agreements at fair value amounting to $1,722,363,000 and $1,776,399,000 at September 30, 2020 and December 31, 2019, respectively. Also included are securities pledged for borrowing at the Federal Home Loan Bank of Boston at fair value amounting to $597,810,000 and $399,646,000 at September 30, 2020 and December 31, 2019, respectively. Also included in investment securities are securities at fair value pledged for borrowing at the Federal Reserve Bank discount window of $156,360,000 and $0 at September 30, 2020 and December 31, 2019, respectively. There were no sales of securities for the nine months ended September 30, 2020. The Company realized gross gains of $48,000 from the proceeds of $1,194,000 from the sales of securities for the nine months ended September 30, 2019. The sales of securities relate to certain mortgage backed securities for which the company has previously collected a substantial portion of its principal investment. At September 30, 2020 and December 31, 2019, all mortgage-backed securities are obligations of U.S. Government Sponsored Enterprises. Debt securities of U.S. Government Sponsored Enterprises and U.S. Government Sponsored Enterprises Mortgage-Backed Securities primarily refer to debt securities of Fannie Mae and Freddie Mac. The following table shows the maturity distribution of the Company’s securities at September 30, 2020.
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After one but within five years |
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After five but within ten years |
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| The weighted average remaining life of investment securities at September 30, 2020 was 3.6 years. Included in the weighted average remaining life calculation at September 30, 2020 were $207,730,000 of U.S. Government Sponsored Enterprises obligations that are callable at the discretion of the issuer. The contractual maturities, which were used in the table above, of mortgage-backed securities, will differ from the actual maturities, due to the ability of the issuers to prepay underlying obligations. Also $89,000 of the securities are floating rate or adjustable rate and reprice prior to maturity. As of September 30, 2020 and December 31, 2019, management concluded that the unrealized losses of its investment securities are temporary in nature since they are not related to the underlying credit quality of the issuers, and the Company does not intend to sell these debt securities and it is not more likely than not that it will be required to sell these debt securities before the anticipated recovery of their remaining amortized costs. In making its other-than-temporary impairment evaluation, the Company considered the fact that the principal and interest on these securities are from issuers that are investment grade. The unrealized loss on U.S. Government Sponsored Enterprises, SBA Backed Securities, and U.S. Government Sponsored Enterprises Mortgage-Backed Securities related primarily to interest rates and not credit quality, and because the Company does not intend to sell any of these securities and it is not more likely than not that it will be required to sell these securities before the anticipated recovery of the remaining amortized cost, the Company does not consider these investments to be other-than-temporarily impaired at September 30, 2020 or December 31, 2019. In evaluating the underlying credit quality of a security, management considers several factors such as the credit rating of the obligor and the issuer, if applicable. Internal reviews of issuer financial statements are performed as deemed necessary. The following table shows the temporarily impaired securities of the Company’s portfolio September 30, 2020. This table shows the unrealized market loss of securities that have been in a continuous unrealized loss position for 12 months or less and a continuous loss position for 12 months or longer. There are 30 and 3 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 576 holdings at September 30, 2020.
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Temporarily Impaired Investments |
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US Government Sponsored Enterprises Mortgage-Backed Securities |
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U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities |
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Total temporarily impaired securities |
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| The following table shows the temporarily impaired securities of the Company’s portfolio at December 31, 2019. This table shows the unrealized market loss of securities that have been in a continuous unrealized loss position for less than 12 months and a continuous loss position for 12 months or longer. There are 114 and 103 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 531 holdings at December 31, 2019.
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December 31, 2019 |
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Less Than 12 Months |
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12 Months or Longer |
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Total |
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Temporarily Impaired Investments |
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Fair Value |
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Unrealized Losses |
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Fair Value |
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Unrealized Losses |
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Fair Value |
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Unrealized Losses |
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(in thousands) |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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U.S. Government Sponsored Enterprises |
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24,420 |
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72 |
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9,976 |
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24 |
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34,396 |
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96 |
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25,251 |
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303 |
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— |
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— |
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25,251 |
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303 |
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U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities |
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613,905 |
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3,949 |
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389,919 |
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6,897 |
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1,003,824 |
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10,846 |
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Total temporarily impaired securities |
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$ |
663,576 |
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$ |
4,324 |
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$ |
399,895 |
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$ |
6,921 |
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$ |
1,063,471 |
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$ |
11,245 |
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