XML 127 R10.htm IDEA: XBRL DOCUMENT v3.20.1
Investment and Mortgage-Backed Securities, Available for Sale
12 Months Ended
Dec. 31, 2019
Investments, Debt and Equity Securities [Abstract]  
Investment and Mortgage-Backed Securities, Available for Sale
At December 31, 2019, the Bank held an amortized cost and fair value of $63.2 million and $63.9 million, respectively, in GNMA mortgage-backed securities compared to an amortized cost and fair value of $80.4 million and $80.2 million, respectively, at December 31, 2018. Also included in mortgage-backed securities in the tables above and below are private label collateralized mortgage obligation ("CMO") securities, which are issued by non-governmental real estate mortgage investment conduits and are not backed by the full faith and credit of the United States government.  At December 31, 2019 the Bank held an amortized cost and fair value of $15.8 million and $16.1 million, respectively, in private label CMO mortgage-backed securities, compared to an amortized cost and fair value of $29.7 million and $29.5 million, respectively, at December 31, 2018.
Investment and Mortgage-Backed Securities, Available For Sale

The amortized cost, gross unrealized gains, gross unrealized losses, and fair values of investment and mortgage-backed securities available for sale at the dates indicated are as follows:
 
December 31, 2019
 
Amortized Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair value
Student Loan Pools
$
41,088,231

 
$

 
$
856,401

 
$
40,231,830

Small Business Administration (“SBA”) Bonds
111,927,938


622,105


656,944


111,893,099

Tax Exempt Municipal Bonds
43,153,086


4,088,408




47,241,494

Taxable Municipal Bonds
15,169,737

 
35,359

 
364,686

 
14,840,410

Mortgage-Backed Securities
197,356,288


3,664,621


582,902


200,438,007

 
$
408,695,280

 
$
8,410,493

 
$
2,460,933

 
$
414,644,840

 
December 31, 2018
 
Amortized Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair value
Student Loan Pools
$
12,934,037

 
$
20,713

 
$
69,249

 
$
12,885,501

SBA Bonds
125,777,016

 
560,352

 
890,837

 
125,446,531

Tax Exempt Municipal Bonds
60,141,164

 
1,518,974

 
329,769

 
61,330,369

Taxable Municipal Bonds
1,998,258

 
3,546

 
23,919

 
1,977,885

Mortgage-Backed Securities
185,291,038

 
1,073,432

 
1,903,919

 
184,460,551

 
$
386,141,513

 
$
3,177,017

 
$
3,217,693

 
$
386,100,837


Student Loan Pools are typically 97% guaranteed by the United States government while SBA bonds are 100% backed by the full faith and credit of the United States government. Included in the tables above and below in mortgage-backed securities are Government National Mortgage Association ("GNMA") mortgage-backed securities, which are also backed by the full faith and credit of the United States government.  At December 31, 2019, the Bank held an amortized cost and fair value of $63.2 million and $63.9 million, respectively, in GNMA mortgage-backed securities compared to an amortized cost and fair value of $80.4 million and $80.2 million, respectively, at December 31, 2018. Also included in mortgage-backed securities in the tables above and below are private label collateralized mortgage obligation ("CMO") securities, which are issued by non-governmental real estate mortgage investment conduits and are not backed by the full faith and credit of the United States government.  At December 31, 2019 the Bank held an amortized cost and fair value of $15.8 million and $16.1 million, respectively, in private label CMO mortgage-backed securities, compared to an amortized cost and fair value of $29.7 million and $29.5 million, respectively, at December 31, 2018.
The amortized cost and fair value of investment and mortgage-backed securities available for sale at December 31, 2019 are shown below by contractual maturity.  Expected maturities will differ from contractual maturities because borrowers have the right to prepay obligations with or without call or prepayment penalties. Since mortgage-backed securities are not due at a single maturity date, they are disclosed separately, rather than allocated over the maturity groupings below.
 
Amortized Cost
 
Fair Value
Due in less than one year
$
18,237

 
$
18,134

Due in one year to five years
6,314,205

 
6,342,172

Due in five to ten years
57,236,558

 
57,209,659

Due in ten years or more
147,769,992

 
150,636,868

Mortgage-Backed Securities
197,356,288

 
200,438,007

 
$
408,695,280

 
$
414,644,840


(2)         Investment and Mortgage-Backed Securities, Available For Sale, Continued

The amortized cost and fair value of investment and mortgage-backed securities available for sale pledged as collateral for certain deposit accounts, FHLB advances and other borrowings were $171.4 million and $173.1 million, respectively, at December 31, 2019 and $111.8 million and $111.7 million, respectively, at December 31, 2018.

The Bank received $96.5 million, $33.3 million and $72.3 million in gross proceeds from sales of available for sale securities during the years ended December 31, 2019, 2018 and 2017, respectively. As a result, the Bank recognized gross gains of $1.5 million, $732,000 and $1.0 million, respectively, and gross losses of $636,000, $159,000 and $510,000, respectively, during the years ended December 31, 2019, 2018 and 2017.

The tables below summarize gross unrealized losses and the related fair value, aggregated by investment category and length of time that individual available for sale securities have been in a continuous unrealized loss position for the periods indicated.
 
December 31, 2019
 
Less than 12 Months
 
12 Months or More
 
Total
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Student Loan Pools
$
30,079,497

 
$
534,048

 
$
10,152,333

 
$
322,353

 
$
40,231,830

 
$
856,401

SBA Bonds
13,844,666

 
106,110

 
47,395,036

 
550,834

 
61,239,702

 
656,944

Taxable Municipal Bonds
13,810,279

 
364,686

 

 

 
13,810,279

 
364,686

Mortgage-Backed Securities
55,326,064

 
480,958

 
7,975,863

 
101,944

 
63,301,927

 
582,902

 
$
113,060,506

 
$
1,485,802

 
$
65,523,232

 
$
975,131

 
$
178,583,738

 
$
2,460,933

 
December 31, 2018
 
Less than 12 Months
 
12 Months or More
 
Total
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Student Loan Pools
$
8,384,145

 
$
69,249

 
$

 
$

 
$
8,384,145

 
$
69,249

SBA Bonds
59,496,936

 
479,955

 
25,054,861

 
410,882

 
84,551,797

 
890,837

Tax Exempt Municipal Bonds
4,585,849

 
91,281

 
9,626,613

 
238,488

 
14,212,462

 
329,769

Taxable Municipal Bonds

 

 
980,520

 
23,919

 
980,520

 
23,919

Mortgage-Backed Securities
38,168,598

 
249,050

 
81,947,249

 
1,654,869

 
120,115,847

 
1,903,919

 
$
110,635,528

 
$
889,535

 
$
117,609,243

 
$
2,328,158

 
$
228,244,771

 
$
3,217,693



Securities classified as available-for-sale are recorded at fair market value.  At December 31, 2019 and 2018, 39.6% and 72.4% of the unrealized losses, representing 69 and 92 individual securities, respectively, consisted of securities in a continuous loss position for 12 months or more. The Company has the ability and intent to hold these securities until such time as the value recovers or the securities mature.  The Company believes, based on industry analyst reports and credit ratings, that the deterioration in value is attributable to changes in market interest rates and is not in the credit quality of the issuer and therefore, these losses are not considered other-than-temporary. The Company reviews its investment securities portfolio at least quarterly and more frequently when economic conditions warrant, assessing whether there is any indication of other-than-temporary impairment (“OTTI”).

Factors considered in the Company's review of its investment securities portfolio include estimated future cash flows, length of time and extent to which market value has been less than cost, the financial condition and near term prospects of the issuer, and our intent and ability to retain the security to allow for an anticipated recovery in market value. If the review determines that there is OTTI, then an impairment loss is recognized in earnings equal to the entire difference between the investment’s cost and its fair value at the balance sheet date of the reporting period for which the assessment is made, or the Company may recognize a portion of the impairment in other comprehensive income. The fair value of investments on which OTTI is recognized then becomes the new cost basis of the investment. There was no OTTI recognized during the years ended December 31, 2019, 2018 and 2017.