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Note 4 - Securities | 9 Months Ended
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Sep. 30, 2019
Notes to Financial Statements |
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] | 4. Securities The Company did not hold any trading securities at September 30, 2019 and December 31, 2018. Securities available for sale are recorded at fair value. Securities held-to-maturity are recorded at amortized cost. The following table summarizes the Company’s portfolio of securities held-to-maturity at September 30, 2019:
|  |  |  |  |  |  |  |  |  | Gross |  |  | Gross |
|  | Amortized |  |  |  |  |  |  | Unrealized |  |  | Unrealized |
|  | Cost |  |  | Fair Value |  |  | Gains |  |  | Losses |
|  | (In thousands) |
Securities held-to-maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipals |  | $ | 52,101 |  |  | $ | 55,498 |  |  | $ | 3,397 |  |  | $ | - |
Total other securities |  |  | 52,101 |  |  |  | 55,498 |  |  |  | 3,397 |  |  |  | - |
FNMA |  |  | 7,939 |  |  |  | 8,372 |  |  |  | 433 |  |  |  | - |
Total mortgage-backed securities |  |  | 7,939 |  |  |  | 8,372 |  |  |  | 433 |  |  |  | - |
Total |  | $ | 60,040 |  |  | $ | 63,870 |  |  | $ | 3,830 |  |  | $ | - |
The following table summarizes the Company’s portfolio of securities held-to-maturity at December 31, 2018:
|  |  |  |  |  |  |  |  |  | Gross |  |  | Gross |
|  | Amortized |  |  |  |  |  |  | Unrealized |  |  | Unrealized |
|  | Cost |  |  | Fair Value |  |  | Gains |  |  | Losses |
|  | (In thousands) |
Securities held-to-maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipals |  | $ | 24,065 |  |  | $ | 22,508 |  |  | $ | - |  |  | $ | 1,557 |
Total other securities |  |  | 24,065 |  |  |  | 22,508 |  |  |  | - |  |  |  | 1,557 |
FNMA |  |  | 7,953 |  |  |  | 7,366 |  |  |  | - |  |  |  | 587 |
Total mortgage-backed securities |  |  | 7,953 |  |  |  | 7,366 |  |  |  | - |  |  |  | 587 |
Total |  | $ | 32,018 |  |  | $ | 29,874 |  |  | $ | - |  |  | $ | 2,144 |
The following table summarizes the Company’s portfolio of securities available for sale at September 30, 2019:
|  |  |  |  |  |  |  |  |  | Gross |  |  | Gross |
|  | Amortized |  |  |  |  |  |  | Unrealized |  |  | Unrealized |
|  | Cost |  |  | Fair Value |  |  | Gains |  |  | Losses |
|  | (In thousands) |
Corporate |  | $ | 130,000 |  |  | $ | 120,543 |  |  | $ | - |  |  | $ | 9,457 |
Municipals |  |  | 12,849 |  |  |  | 13,017 |  |  |  | 168 |  |  |  | - |
Mutual funds |  |  | 12,206 |  |  |  | 12,206 |  |  |  | - |  |  |  | - |
Collateralized loan obligations |  |  | 100,336 |  |  |  | 99,381 |  |  |  | 5 |  |  |  | 960 |
Other |  |  | 1,318 |  |  |  | 1,318 |  |  |  | - |  |  |  | - |
Total other securities |  |  | 256,709 |  |  |  | 246,465 |  |  |  | 173 |  |  |  | 10,417 |
REMIC and CMO |  |  | 390,044 |  |  |  | 392,525 |  |  |  | 3,604 |  |  |  | 1,123 |
GNMA |  |  | 706 |  |  |  | 764 |  |  |  | 58 |  |  |  | - |
FNMA |  |  | 106,773 |  |  |  | 107,383 |  |  |  | 998 |  |  |  | 388 |
FHLMC |  |  | 77,455 |  |  |  | 78,338 |  |  |  | 998 |  |  |  | 115 |
Total mortgage-backed securities |  |  | 574,978 |  |  |  | 579,010 |  |  |  | 5,658 |  |  |  | 1,626 |
Total securities available for sale |  | $ | 831,687 |  |  | $ | 825,475 |  |  | $ | 5,831 |  |  | $ | 12,043 |
The following table summarizes the Company’s portfolio of securities available for sale at December 31, 2018:
|  |  |  |  |  |  |  |  |  | Gross |  |  | Gross |
|  | Amortized |  |  |  |  |  |  | Unrealized |  |  | Unrealized |
|  | Cost |  |  | Fair Value |  |  | Gains |  |  | Losses |
|  | (In thousands) |
Corporate |  | $ | 130,000 |  |  | $ | 118,535 |  |  | $ | - |  |  | $ | 11,465 |
Municipals |  |  | 46,231 |  |  |  | 46,574 |  |  |  | 343 |  |  |  | - |
Mutual funds |  |  | 11,586 |  |  |  | 11,586 |  |  |  | - |  |  |  | - |
Collateralized loan obligations |  |  | 88,396 |  |  |  | 86,751 |  |  |  | - |  |  |  | 1,645 |
Other |  |  | 1,256 |  |  |  | 1,256 |  |  |  | - |  |  |  | - |
Total other securities |  |  | 277,469 |  |  |  | 264,702 |  |  |  | 343 |  |  |  | 13,110 |
REMIC and CMO |  |  | 382,632 |  |  |  | 376,340 |  |  |  | 885 |  |  |  | 7,177 |
GNMA |  |  | 785 |  |  |  | 826 |  |  |  | 41 |  |  |  | - |
FNMA |  |  | 94,069 |  |  |  | 91,693 |  |  |  | 72 |  |  |  | 2,448 |
FHLMC |  |  | 90,377 |  |  |  | 89,094 |  |  |  | 113 |  |  |  | 1,396 |
Total mortgage-backed securities |  |  | 567,863 |  |  |  | 557,953 |  |  |  | 1,111 |  |  |  | 11,021 |
Total securities available for sale |  | $ | 845,332 |  |  | $ | 822,655 |  |  | $ | 1,454 |  |  | $ | 24,131 |
We did not hold any private issue CMO’s that are collateralized by commercial real estate mortgages at September 30, 2019 and December 31, 2018. The corporate securities held by the Company at September 30, 2019 and December 31, 2018 are issued by U.S. banking institutions. The following tables detail the amortized cost and fair value of the Company’s securities classified as held-to-maturity and available for sale at September 30, 2019, by contractual maturity. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
|  | Amortized |  |  |  |  |
Securities held-to-maturity: |  | Cost |  |  | Fair Value |
|  | (In thousands) |
Due in one year or less |  | $ | 1,180 |  |  | $ | 1,180 |
Due after ten years |  |  | 50,921 |  |  |  | 54,318 |
Total other securities |  |  | 52,101 |  |  |  | 55,498 |
Mortgage-backed securities |  |  | 7,939 |  |  |  | 8,372 |
Total |  | $ | 60,040 |  |  | $ | 63,870 |
|  | Amortized |  |  |  |  |
Securities available for sale: |  | Cost |  |  | Fair Value |
|  | (In thousands) |
Due after one year through five years |  | $ | 10,000 |  |  | $ | 9,762 |
Due after five years through ten years |  |  | 137,913 |  |  |  | 128,645 |
Due after ten years |  |  | 96,590 |  |  |  | 95,852 |
Total other securities |  |  | 244,503 |  |  |  | 234,259 |
Mutual funds |  |  | 12,206 |  |  |  | 12,206 |
Mortgage-backed securities |  |  | 574,978 |  |  |  | 579,010 |
Total |  | $ | 831,687 |  |  | $ | 825,475 |
The following tables show the Company’s securities with gross unrealized losses and their fair value, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position, at the dates indicated:
|  | At September 30, 2019 |
|  | Total |  |  | Less than 12 months |  |  | 12 months or more |
|  |  |  |  |  |  |  |  |  | Unrealized |  |  |  |  |  |  | Unrealized |  |  |  |  |  |  | Unrealized |
|  | Count |  |  | Fair Value |  |  | Losses |  |  | Fair Value |  |  | Losses |  |  | Fair Value |  |  | Losses |
|  |  |  |  |  | (Dollars in thousands) |
Available for sale securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate |  |  | 16 |  |  | $ | 120,543 |  |  | $ | 9,457 |  |  | $ | 9,663 |  |  | $ | 338 |  |  | $ | 110,880 |  |  | $ | 9,119 |
CLO |  |  | 12 |  |  |  | 91,916 |  |  |  | 960 |  |  |  | 63,821 |  |  |  | 485 |  |  |  | 28,095 |  |  |  | 475 |
Total other securities |  |  | 28 |  |  |  | 212,459 |  |  |  | 10,417 |  |  |  | 73,484 |  |  |  | 823 |  |  |  | 138,975 |  |  |  | 9,594 |
REMIC and CMO |  |  | 25 |  |  |  | 157,584 |  |  |  | 1,123 |  |  |  | 138,250 |  |  |  | 887 |  |  |  | 19,334 |  |  |  | 236 |
FNMA |  |  | 7 |  |  |  | 69,075 |  |  |  | 388 |  |  |  | 14,888 |  |  |  | 30 |  |  |  | 54,187 |  |  |  | 358 |
FHLMC |  |  | 1 |  |  |  | 34,816 |  |  |  | 115 |  |  |  | - |  |  |  | - |  |  |  | 34,816 |  |  |  | 115 |
Total mortgage-backed securities |  |  | 33 |  |  |  | 261,475 |  |  |  | 1,626 |  |  |  | 153,138 |  |  |  | 917 |  |  |  | 108,337 |  |  |  | 709 |
Total |  |  | 61 |  |  | $ | 473,934 |  |  | $ | 12,043 |  |  | $ | 226,622 |  |  | $ | 1,740 |  |  | $ | 247,312 |  |  | $ | 10,303 |
There were no unrealized losses on held-to maturity securities at September 30, 2019.
|  | At December 31, 2018 |
|  | Total |  |  | Less than 12 months |  |  | 12 months or more |
|  |  |  |  |  |  |  |  |  | Unrealized |  |  |  |  |  |  | Unrealized |  |  |  |  |  |  | Unrealized |
|  | Count |  |  | Fair Value |  |  | Losses |  |  | Fair Value |  |  | Losses |  |  | Fair Value |  |  | Losses |
|  | (Dollars in thousands) |
Held-to-maturity securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipals |  |  | 1 |  |  | $ | 19,940 |  |  | $ | 1,557 |  |  | $ | - |  |  | $ | - |  |  | $ | 19,940 |  |  | $ | 1,557 |
Total other securities |  |  | 1 |  |  |  | 19,940 |  |  |  | 1,557 |  |  |  | - |  |  |  | - |  |  |  | 19,940 |  |  |  | 1,557 |
FNMA |  |  | 1 |  |  |  | 7,366 |  |  |  | 587 |  |  |  | - |  |  |  | - |  |  |  | 7,366 |  |  |  | 587 |
Total mortgage-backed securities |  |  | 1 |  |  |  | 7,366 |  |  |  | 587 |  |  |  | - |  |  |  | - |  |  |  | 7,366 |  |  |  | 587 |
Total securities held-to-maturity |  |  | 2 |  |  | $ | 27,306 |  |  | $ | 2,144 |  |  | $ | - |  |  | $ | - |  |  | $ | 27,306 |  |  | $ | 2,144 |
Available for sale securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate |  |  | 16 |  |  | $ | 118,535 |  |  | $ | 11,465 |  |  | $ | 19,113 |  |  | $ | 888 |  |  | $ | 99,422 |  |  | $ | 10,577 |
Municipals |  |  | 3 |  |  |  | 4,220 |  |  |  | - |  |  |  | 4,220 |  |  |  | - |  |  |  | - |  |  |  | - |
CLO |  |  | 11 |  |  |  | 86,752 |  |  |  | 1,645 |  |  |  | 86,752 |  |  |  | 1,645 |  |  |  | - |  |  |  | - |
Total other securities |  |  | 30 |  |  |  | 209,507 |  |  |  | 13,110 |  |  |  | 110,085 |  |  |  | 2,533 |  |  |  | 99,422 |  |  |  | 10,577 |
REMIC and CMO |  |  | 39 |  |  |  | 243,756 |  |  |  | 7,177 |  |  |  | 17,308 |  |  |  | 200 |  |  |  | 226,448 |  |  |  | 6,977 |
GNMA |  |  | 1 |  |  |  | 51 |  |  |  | - |  |  |  | 51 |  |  |  | - |  |  |  | - |  |  |  | - |
FNMA |  |  | 14 |  |  |  | 85,046 |  |  |  | 2,448 |  |  |  | 6,372 |  |  |  | 17 |  |  |  | 78,674 |  |  |  | 2,431 |
FHLMC |  |  | 3 |  |  |  | 51,288 |  |  |  | 1,396 |  |  |  | 10,116 |  |  |  | 95 |  |  |  | 41,172 |  |  |  | 1,301 |
Total mortgage-backed securities |  |  | 57 |  |  |  | 380,141 |  |  |  | 11,021 |  |  |  | 33,847 |  |  |  | 312 |  |  |  | 346,294 |  |  |  | 10,709 |
Total securities available for sale |  |  | 87 |  |  | $ | 589,648 |  |  | $ | 24,131 |  |  | $ | 143,932 |  |  | $ | 2,845 |  |  | $ | 445,716 |  |  | $ | 21,286 |
OTTI losses on impaired securities must be fully recognized in earnings if an investor has the intent to sell the debt security or if it is more likely than not that the investor will be required to sell the debt security before recovery of its amortized cost. However, even if an investor does not expect to sell a debt security in an unrealized loss position, the investor must evaluate the expected cash flows to be received and determine if a credit loss has occurred. In the event that a credit loss has occurred, only the amount of impairment associated with the credit loss is recognized in earnings in the Consolidated Statements of Income. Amounts relating to factors other than credit losses are recorded in accumulated other comprehensive loss (“AOCL”) within Stockholders’ Equity. Unrealized losses on available for sale securities, that are deemed to be temporary, are recorded in AOCL, net of tax. The Company reviewed each investment that had an unrealized loss at September 30, 2019 and December 31, 2018. The unrealized losses in held-to-maturity municipal securities at December 31, 2018 were caused by illiquidity in the market and movements in interest rates. The unrealized losses in held-to-maturity FNMA securities at December 31, 2018 were caused by movements in interest rates. The unrealized losses in securities available for sale at September 30, 2019 and December 31, 2018 were caused by movements in interest rates. It is not anticipated that these securities would be settled at a price that is less than the amortized cost of the Company’s investment. Each of these securities is performing according to its terms and, in the opinion of management, will continue to perform according to its terms. The Company does not have the intent to sell these securities and it is more likely than not the Company will not be required to sell the securities before recovery of the securities’ amortized cost basis. This conclusion is based upon considering the Company’s cash and working capital requirements and contractual and regulatory obligations, none of which the Company believes would cause the sale of the securities. Therefore, the Company did not consider these investments to be other-than-temporarily impaired at September 30, 2019 and December 31, 2018. Realized gains and losses on the sales of securities are determined using the specific identification method. The Company sold $26.4 million in mortgage-backed securities during the nine months ended September 30, 2019. The Company did not sell any securities during the three months ended September 30, 2019 and the three and nine months ended September 30, 2018. The following table represents the gross gains and gross losses realized from the sale of securities available for sale for the periods indicated:
|  | For the three months ended |  |  | For the nine months ended |
|  | September 30, |  |  | September 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
|  | (In thousands) |
Gross gains from the sale of securities |  | $ | - |  |  | $ | - |  |  | $ | 423 |  |  | $ | - |
Gross losses from the sale of securities |  |  | - |  |  |  | - |  |  |  | (438 | ) |  |  | - |
Net losses from the sale of securities |  | $ | - |  |  | $ | - |  |  | $ | (15 | ) |  | $ | - |

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