XML 26 R12.htm IDEA: XBRL DOCUMENT v3.20.4
Investment Securities
 12 Months Ended
Dec. 31, 2020
Investments [Abstract]  
Investment Securities

(4.)

INVESTMENT SECURITIES

The amortized cost and fair value of investment securities are summarized below (in thousands).

 

 

 

Amortized

Cost

 

 

Unrealized

Gains

 

 

Unrealized

Losses

 

 

Fair

Value

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government agencies and government sponsored enterprises

 

$

6,239

 

 

$

396

 

 

$

-

 

 

$

6,635

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal National Mortgage Association

 

 

350,627

 

 

 

15,549

 

 

 

44

 

 

 

366,132

 

Federal Home Loan Mortgage Corporation

 

 

225,645

 

 

 

3,155

 

 

 

24

 

 

 

228,776

 

Government National Mortgage Association

 

 

22,107

 

 

 

830

 

 

 

-

 

 

 

22,937

 

Collateralized mortgage obligations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal National Mortgage Association

 

 

3,047

 

 

 

97

 

 

 

-

 

 

 

3,144

 

Federal Home Loan Mortgage Corporation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Privately issued

 

 

-

 

 

 

435

 

 

 

-

 

 

 

435

 

Total mortgage-backed securities

 

 

601,426

 

 

 

20,066

 

 

 

68

 

 

 

621,424

 

Total available for sale securities

 

$

607,665

 

 

$

20,462

 

 

$

68

 

 

$

628,059

 

Securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State and political subdivisions

 

$

144,506

 

 

$

4,478

 

 

$

-

 

 

$

148,984

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal National Mortgage Association

 

 

10,776

 

 

 

703

 

 

 

-

 

 

 

11,479

 

Federal Home Loan Mortgage Corporation

 

 

5,858

 

 

 

382

 

 

 

-

 

 

 

6,240

 

Government National Mortgage Association

 

 

37,084

 

 

 

1,578

 

 

 

-

 

 

 

38,662

 

Collateralized mortgage obligations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal National Mortgage Association

 

 

29,988

 

 

 

1,075

 

 

 

-

 

 

 

31,063

 

Federal Home Loan Mortgage Corporation

 

 

35,897

 

 

 

1,581

 

 

 

-

 

 

 

37,478

 

Government National Mortgage Association

 

 

7,864

 

 

 

265

 

 

 

-

 

 

 

8,129

 

Total mortgage-backed securities

 

 

127,467

 

 

 

5,584

 

 

 

-

 

 

 

133,051

 

Total held to maturity securities

 

 

271,973

 

 

$

10,062

 

 

$

-

 

 

$

282,035

 

Allowance for credit losses - securities

 

 

(7

)

 

 

 

 

 

 

 

 

 

 

 

 

Total held to maturity securities, net

 

$

271,966

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government agencies and government sponsored enterprises

 

$

26,440

 

 

$

437

 

 

$

-

 

 

$

26,877

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal National Mortgage Association

 

 

293,873

 

 

 

2,263

 

 

 

1,380

 

 

 

294,756

 

Federal Home Loan Mortgage Corporation

 

 

52,733

 

 

 

318

 

 

 

172

 

 

 

52,879

 

Government National Mortgage Association

 

 

14,065

 

 

 

60

 

 

 

4

 

 

 

14,121

 

Collateralized mortgage obligations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal National Mortgage Association

 

 

23,834

 

 

 

-

 

 

 

57

 

 

 

23,777

 

Federal Home Loan Mortgage Corporation

 

 

4,907

 

 

 

-

 

 

 

18

 

 

 

4,889

 

Privately issued

 

 

-

 

 

 

618

 

 

 

-

 

 

 

618

 

Total mortgage-backed securities

 

 

389,412

 

 

 

3,259

 

 

 

1,631

 

 

 

391,040

 

Total available for sale securities

 

$

415,852

 

 

$

3,696

 

 

$

1,631

 

 

$

417,917

 

 

 

(4.)

INVESTMENT SECURITIES (Continued)

 

 

 

Amortized

Cost

 

 

Unrealized

Gains

 

 

Unrealized

Losses

 

 

Fair

Value

 

December 31, 2019 (continued)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State and political subdivisions

 

$

192,215

 

 

$

3,803

 

 

$

-

 

 

$

196,018

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal National Mortgage Association

 

 

12,049

 

 

 

227

 

 

 

6

 

 

 

12,270

 

Federal Home Loan Mortgage Corporation

 

 

6,995

 

 

 

77

 

 

 

47

 

 

 

7,025

 

Government National Mortgage Association

 

 

45,758

 

 

 

306

 

 

 

128

 

 

 

45,936

 

Collateralized mortgage obligations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal National Mortgage Association

 

 

41,561

 

 

 

150

 

 

 

256

 

 

 

41,455

 

Federal Home Loan Mortgage Corporation

 

 

49,389

 

 

 

307

 

 

 

103

 

 

 

49,593

 

Government National Mortgage Association

 

 

11,033

 

 

 

12

 

 

 

83

 

 

 

10,962

 

Total mortgage-backed securities

 

 

166,785

 

 

 

1,079

 

 

 

623

 

 

 

167,241

 

Total held to maturity securities

 

$

359,000

 

 

$

4,882

 

 

$

623

 

 

$

363,259

 

 

The Company elected to exclude accrued interest receivable (“AIR”) from the amortized cost basis of debt securities disclosed throughout this footnote. For AFS debt securities, AIR totaled $1.2 million and $1.0 million as of December 31, 2020 and December 31, 2019, respectively. For HTM debt securities, AIR totaled $905 thousand and $1.2 million as of December 31, 2020 and December 31, 2019, respectively. AIR is included in other assets on the Company’s consolidated statements of financial condition.

For the years ended December 31, 2020 and 2019, credit loss (credit) expense for HTM investment securities was $(7) thousand and $0, respectively.

Investment securities with a total fair value of $567.4 million and $676.9 million at December 31, 2020 and 2019, respectively, were pledged as collateral to secure public deposits and for other purposes required or permitted by law.

Interest and dividends on securities for the years ended December 31 are summarized as follows (in thousands):

 

 

 

2020

 

 

2019

 

 

2018

 

Taxable interest and dividends

 

$

14,186

 

 

$

14,382

 

 

$

16,510

 

Tax-exempt interest and dividends

 

 

3,278

 

 

 

4,150

 

 

 

5,091

 

Total interest and dividends on securities

 

$

17,464

 

 

$

18,532

 

 

$

21,601

 

 

Sales of securities available for sale for the years ended December 31 were as follows (in thousands):

 

 

 

2020

 

 

2019

 

 

2018

 

Proceeds from sales

 

$

107,098

 

 

$

178,059

 

 

$

29,851

 

Gross realized gains

 

 

1,642

 

 

 

2,391

 

 

 

73

 

Gross realized losses

 

 

43

 

 

 

714

 

 

 

200

 

 

 

(4.)

INVESTMENT SECURITIES (Continued)

The scheduled maturities of securities available for sale and securities held to maturity at December 31, 2020 are shown below (in thousands). Actual expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations.

 

 

 

Amortized

Cost

 

 

Fair

Value

 

Debt securities available for sale:

 

 

 

 

 

 

 

 

Due in one year or less

 

$

1,907

 

 

$

1,920

 

Due from one to five years

 

 

39,712

 

 

 

41,903

 

Due after five years through ten years

 

 

159,570

 

 

 

171,036

 

Due after ten years

 

 

406,476

 

 

 

413,200

 

Total available for sale securities

 

$

607,665

 

 

$

628,059

 

Debt securities held to maturity:

 

 

 

 

 

 

 

 

Due in one year or less

 

$

47,086

 

 

$

47,505

 

Due from one to five years

 

 

97,363

 

 

 

101,311

 

Due after five years through ten years

 

 

17,371

 

 

 

18,194

 

Due after ten years

 

 

110,153

 

 

 

115,025

 

Total held to maturity securities

 

$

271,973

 

 

$

282,035

 

 

 

(4.)

INVESTMENT SECURITIES (Continued)

 

Unrealized losses on investment securities for which an allowance for credit losses has not been recorded and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31 are summarized as follows (in thousands):

 

 

 

Less than 12 months

 

 

12 months or longer

 

 

Total

 

 

 

Fair

Value

 

 

Unrealized

Losses

 

 

Fair

Value

 

 

Unrealized

Losses

 

 

Fair

Value

 

 

Unrealized

Losses

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government agencies and government sponsored enterprises

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal National Mortgage Association

 

 

18,155

 

 

 

44

 

 

 

-

 

 

 

-

 

 

 

18,155

 

 

 

44

 

Federal Home Loan Mortgage Corporation

 

 

10,932

 

 

 

24

 

 

 

-

 

 

 

-

 

 

 

10,932

 

 

 

24

 

Government National Mortgage Association

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Collateralized mortgage obligations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal National Mortgage Association

 

 

-

 

 

 

-

 

 

 

8

 

 

 

-

 

 

 

8

 

 

 

-

 

Federal Home Loan Mortgage Corporation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total mortgage-backed securities

 

 

29,087

 

 

 

68

 

 

 

8

 

 

 

-

 

 

 

29,095

 

 

 

68

 

Total available for sale securities

 

 

29,087

 

 

 

68

 

 

 

8

 

 

 

-

 

 

 

29,095

 

 

 

68

 

Total temporarily impaired securities

 

$

29,087

 

 

$

68

 

 

$

8

 

 

$

-

 

 

$

29,095

 

 

$

68

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government agencies and government sponsored enterprises

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal National Mortgage Association

 

 

104,634

 

 

 

1,277

 

 

 

7,196

 

 

 

103

 

 

 

111,830

 

 

 

1,380

 

Federal Home Loan Mortgage Corporation

 

 

10,347

 

 

 

11

 

 

 

9,409

 

 

 

161

 

 

 

19,756

 

 

 

172

 

Government National Mortgage Association

 

 

533

 

 

 

4

 

 

 

-

 

 

 

-

 

 

 

533

 

 

 

4

 

Collateralized mortgage obligations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal National Mortgage Association

 

 

8,803

 

 

 

57

 

 

 

8

 

 

 

-

 

 

 

8,811

 

 

 

57

 

Federal Home Loan Mortgage Corporation

 

 

4,889

 

 

 

18

 

 

 

-

 

 

 

-

 

 

 

4,889

 

 

 

18

 

Total mortgage-backed securities

 

 

129,206

 

 

 

1,367

 

 

 

16,613

 

 

 

264

 

 

 

145,819

 

 

 

1,631

 

Total available for sale securities

 

 

129,206

 

 

 

1,367

 

 

 

16,613

 

 

 

264

 

 

 

145,819

 

 

 

1,631

 

Securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State and political subdivisions

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal National Mortgage Association

 

 

2,388

 

 

 

6

 

 

 

-

 

 

 

-

 

 

 

2,388

 

 

 

6

 

Federal Home Loan Mortgage Corporation

 

 

2,967

 

 

 

19

 

 

 

2,598

 

 

 

28

 

 

 

5,565

 

 

 

47

 

Government National Mortgage Association

 

 

11,155

 

 

 

61

 

 

 

5,625

 

 

 

67

 

 

 

16,780

 

 

 

128

 

Collateralized mortgage obligations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal National Mortgage Association

 

 

9,120

 

 

 

40

 

 

 

13,486

 

 

 

216

 

 

 

22,606

 

 

 

256

 

Federal Home Loan Mortgage Corporation

 

 

15,127

 

 

 

30

 

 

 

7,988

 

 

 

73

 

 

 

23,115

 

 

 

103

 

Government National Mortgage Association

 

 

8,760

 

 

 

72

 

 

 

892

 

 

 

11

 

 

 

9,652

 

 

 

83

 

Total mortgage-backed securities

 

 

49,517

 

 

 

228

 

 

 

30,589

 

 

 

395

 

 

 

80,106

 

 

 

623

 

Total held to maturity securities

 

 

49,517

 

 

 

228

 

 

 

30,589

 

 

 

395

 

 

 

80,106

 

 

 

623

 

Total temporarily impaired securities

 

$

178,723

 

 

$

1,595

 

 

$

47,202

 

 

$

659

 

 

$

225,925

 

 

$

2,254

 

 

 

(4.)

INVESTMENT SECURITIES (Continued)

 

 

The total number of security positions in the investment portfolio in an unrealized loss position at December 31, 2020 was eight compared to 91 at December 31, 2019. At December 31, 2020, the Company had a position in one investment security with a fair value of eight thousand dollars and a total unrealized loss of less than one thousand dollars that has been in a continuous unrealized loss position for more than 12 months. At December 31, 2020, there were a total of seven securities positions in the Company’s investment portfolio with a fair value of $29.1 million and a total unrealized loss of $68 thousand that had been in a continuous unrealized loss position for less than 12 months. At December 31, 2019, the Company had positions in 34 investment securities with a fair value of $47.2 million and a total unrealized loss of $659 thousand that have been in a continuous unrealized loss position for more than 12 months. At December 31, 2019, there were a total of 57 securities positions in the Company’s investment portfolio with a fair value of $178.7 million and a total unrealized loss of $1.6 million that had been in a continuous unrealized loss position for less than 12 months. The unrealized loss on investment securities was predominantly caused by changes in market interest rates subsequent to purchase. The fair value of most of the investment securities in the Company’s portfolio fluctuates as market interest rates change.

Securities Available for Sale

As of December 31, 2020, no allowance for credit losses has been recognized on available for sale securities in an unrealized loss position as management does not believe any of the securities are impaired due to reasons of credit quality. This is based upon our analysis of the underlying risk characteristics, including credit ratings, and other qualitative factors related to our available for sale securities and in consideration of our historical credit loss experience and internal forecasts. The issuers of these securities continue to make timely principal and interest payments under the contractual terms of the securities. Furthermore, management does not have the intent to sell any of the securities classified as available for sale in the table above and believes that it is more likely than not that we will not have to sell any such securities before a recovery of cost. The unrealized losses are due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline.

Securities Held to Maturity

The Company’s HTM investment securities include debt securities that 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. In addition, the Company’s HTM investment securities include debt securities that are issued by state and local government agencies, or municipal bonds.

The Company monitors the credit quality of our municipal bonds through the use of a credit rating agency or by ratings that are derived by an internal scoring model. The scoring methodology for the internally derived ratings is based on a series of financial ratios for the municipality being reviewed as compared to typical industry figures. This information is used to determine the financial strengths and weaknesses of the municipality, which is indicated with a numeric rating. This number is then converted into a letter rating to better match the system used by the credit rating agencies. As of December 31, 2020, $135.7 million of our municipal bonds were rated as an equivalent to Standard & Poor’s A/AA/AAA, with $8.5 million internally rated to be the equivalent of Standard & Poor’s A/AA/AAA rating. Additionally, one municipal bond is rated below investment grade, with a BB+ Standard & Poor’s equivalent rating. The below investment grade bond was recently upgraded from a Standard & Poor’s equivalent rating of BB-, represents exposure of $279 thousand, or 0.19% of the municipal bond portfolio and is closely monitored for repayment.

As of December 31, 2020, the Company had no past due or nonaccrual held to maturity investment securities.