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Securities | 9 Months Ended
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Sep. 30, 2020
Notes to Financial Statements |
Securities | 4. Securities The Company did not hold any trading securities at September 30, 2020 and December 31, 2019. Securities available for sale are recorded at fair value. Securities held-to-maturity (“HTM”) are recorded at amortized cost. Allowance for credit losses The Company’s estimate of expected credit losses for held-to-maturity debt securities is based on historical information, current conditions and a reasonable and supportable forecast. The Company’s portfolio is made up of three securities, two of which are structured similar to a commercial owner occupied loan, which is modeled for credit losses similar to commercial business loans secured by real estate. The other security is issued and guaranteed by Fannie Mae, which is a government sponsored enterprise that has a credit rating and perceived credit risk comparable to the U.S. government and therefore the Company assumes a zero loss expectation. As of September 30, 2020, we have one active forbearance for held-to-maturity securities with an outstanding balance of $20.9 million. During the time this security is in forbearance, it is considered current and as such, continues to accrue interest at its original contractual terms. Accrued interest receivable on held-to-maturity securities totaled $0.1 million at September 30, 2020 and is excluded from estimates of credit losses. The following table summarizes the Company’s portfolio of securities held-to-maturity at September 30, 2020: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Gross | ​ | Gross | ​ | Allowance
​ | ​ | Amortized | ​ | ​ | ​ | ​ | Unrealized | ​ | Unrealized | ​ | for Credit
​ |  | Cost |  | Fair Value |  | Gains |  | Losses |  | Losses
​ | ​ | (In thousands)
Securities held-to-maturity: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Municipals | ​ | $ | 50,654 | ​ | $ | 53,268 | ​ | $ | 2,614 | ​ | $ | — | ​ | $ | (402)
Total other securities | ​ |  | 50,654 | ​ |  | 53,268 | ​ |  | 2,614 | ​ |  | — | ​ |  | (402)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
FNMA | ​ |  | 7,919 | ​ |  | 9,198 | ​ |  | 1,279 | ​ |  | — | ​ |  | —
Total mortgage-backed securities | ​ |  | 7,919 | ​ |  | 9,198 | ​ |  | 1,279 | ​ |  | — | ​ |  | —
Total | ​ | $ | 58,573 | ​ | $ | 62,466 | ​ | $ | 3,893 | ​ | $ | — | ​ | $ | (402)
​ The following table summarizes the Company’s portfolio of securities held-to-maturity at December 31, 2019: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Gross | ​ | Gross
​ | ​ | Amortized | ​ | ​ | ​ | ​ | Unrealized | ​ | Unrealized
​ |  | Cost |  | Fair Value |  | Gains |  | Losses
​ | ​ | (In thousands)
Securities held-to-maturity: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Municipals | ​ | $ | 50,954 | ​ | $ | 53,998 | ​ | $ | 3,044 | ​ | $ | —
Total other securities | ​ |  | 50,954 | ​ |  | 53,998 | ​ |  | 3,044 | ​ |  | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
FNMA | ​ |  | 7,934 | ​ |  | 8,114 | ​ |  | 180 | ​ |  | —
Total mortgage-backed securities | ​ |  | 7,934 | ​ |  | 8,114 | ​ |  | 180 | ​ |  | —
Total | ​ | $ | 58,888 | ​ | $ | 62,112 | ​ | $ | 3,224 | ​ | $ | —
​ The following table summarizes the Company’s portfolio of securities available for sale at September 30, 2020: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Gross | ​ | Gross
​ | ​ | Amortized | ​ | ​ | ​ | ​ | Unrealized | ​ | Unrealized
​ |  | Cost |  | Fair Value |  | Gains |  | Losses
​ | ​ | (In thousands)
Securities available for sale: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Corporate | ​ | $ | 130,000 | ​ | $ | 123,516 | ​ | $ | 192 | ​ | $ | 6,676
Municipals | ​ |  | 65 | ​ |  | 65 | ​ |  | — | ​ |  | —
Mutual funds | ​ |  | 12,691 | ​ |  | 12,691 | ​ |  | — | ​ |  | —
Collateralized loan obligations | ​ |  | 100,473 | ​ |  | 97,300 | ​ |  | — | ​ |  | 3,173
Other | ​ |  | 1,149 | ​ |  | 1,149 | ​ |  | — | ​ |  | —
Total other securities | ​ |  | 244,378 | ​ |  | 234,721 | ​ |  | 192 | ​ |  | 9,849
REMIC and CMO | ​ |  | 206,973 | ​ |  | 213,941 | ​ |  | 7,007 | ​ |  | 39
GNMA | ​ |  | 505 | ​ |  | 554 | ​ |  | 49 | ​ |  | —
FNMA | ​ |  | 129,140 | ​ |  | 132,001 | ​ |  | 2,883 | ​ |  | 22
FHLMC | ​ |  | 39,266 | ​ |  | 39,739 | ​ |  | 504 | ​ |  | 31
Total mortgage-backed securities | ​ |  | 375,884 | ​ |  | 386,235 | ​ |  | 10,443 | ​ |  | 92
Total securities available for sale | ​ | $ | 620,262 | ​ | $ | 620,956 | ​ | $ | 10,635 | ​ | $ | 9,941
​ The following table summarizes the Company’s portfolio of securities available for sale at December 31, 2019: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Gross | ​ | Gross
​ | ​ | Amortized | ​ | ​ | ​ | ​ | Unrealized | ​ | Unrealized
​ |  | Cost |  | Fair Value |  | Gains |  | Losses
​ | ​ | (In thousands)
Securities available for sale: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Corporate | ​ | $ | 130,000 | ​ | $ | 123,050 | ​ | $ | — | ​ | $ | 6,950
Municipals | ​ |  | 12,797 | ​ |  | 12,916 | ​ |  | 119 | ​ |  | —
Mutual funds | ​ |  | 12,216 | ​ |  | 12,216 | ​ |  | — | ​ |  | —
Collateralized loan obligations | ​ |  | 100,349 | ​ |  | 99,137 | ​ |  | — | ​ |  | 1,212
Other | ​ |  | 1,332 | ​ |  | 1,332 | ​ |  | — | ​ |  | —
Total other securities | ​ |  | 256,694 | ​ |  | 248,651 | ​ |  | 119 | ​ |  | 8,162
REMIC and CMO | ​ |  | 348,236 | ​ |  | 348,989 | ​ |  | 2,193 | ​ |  | 1,440
GNMA | ​ |  | 653 | ​ |  | 704 | ​ |  | 51 | ​ |  | —
FNMA | ​ |  | 104,235 | ​ |  | 104,882 | ​ |  | 1,073 | ​ |  | 426
FHLMC | ​ |  | 68,476 | ​ |  | 69,274 | ​ |  | 871 | ​ |  | 73
Total mortgage-backed securities | ​ |  | 521,600 | ​ |  | 523,849 | ​ |  | 4,188 | ​ |  | 1,939
Total securities available for sale | ​ | $ | 778,294 | ​ | $ | 772,500 | ​ | $ | 4,307 | ​ | $ | 10,101
​ We did not hold any private issue CMO’s that are collateralized by commercial real estate mortgages at September 30, 2020 and December 31, 2019. The corporate securities held by the Company at September 30, 2020 and December 31, 2019 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, 2020, 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 after ten years | ​ | $ | 50,654 | ​ | $ | 53,268
Total other securities | ​ | ​ | 50,654 | ​ | ​ | 53,268
Mortgage-backed securities | ​ | ​ | 7,919 | ​ | ​ | 9,198
Total | ​ | $ | 58,573 |  | $ | 62,466
​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Amortized | ​ | ​ | ​
Securities available for sale: |  | Cost |  | Fair Value
​ | ​ | (In thousands)
Due after one year through five years | ​ | $ | 45,000 | ​ | $ | 43,654
Due after five years through ten years | ​ |  | 110,431 | ​ |  | 104,599
Due after ten years | ​ | ​ | 76,256 | ​ | ​ | 73,777
Total other securities | ​ |  | 231,687 | ​ |  | 222,030
Mutual funds | ​ |  | 12,691 | ​ |  | 12,691
Mortgage-backed securities | ​ |  | 375,884 | ​ |  | 386,235
Total | ​ | $ | 620,262 | ​ | $ | 620,956
​ 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, 2020
​ | ​ | 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 |  | 14 | ​ | $ | 113,324 | ​ | $ | 6,676 | ​ | $ | — | ​ | $ | — | ​ | $ | 113,324 | ​ | $ | 6,676
Collateralized loan obligations |  | 13 | ​ |  | 97,299 | ​ |  | 3,173 | ​ |  | 7,293 | ​ |  | 183 | ​ |  | 90,006 | ​ |  | 2,990
Total other securities |  | 27 | ​ |  | 210,623 | ​ |  | 9,849 | ​ |  | 7,293 | ​ |  | 183 | ​ |  | 203,330 | ​ |  | 9,666
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
REMIC and CMO |  | 2 | ​ |  | 5,663 | ​ |  | 39 | ​ |  | 5,663 | ​ |  | 39 | ​ |  | — | ​ |  | —
GNMA (1) |  | 1 | ​ |  | 48 | ​ |  | — | ​ |  | 48 | ​ |  | — | ​ |  | — | ​ |  | —
FNMA |  | 1 | ​ |  | 8,652 | ​ |  | 22 | ​ |  | — | ​ |  | — | ​ |  | 8,652 | ​ |  | 22
FHLMC |  | 1 | ​ |  | 13,449 | ​ |  | 31 | ​ |  | 13,449 | ​ |  | 31 | ​ |  | — | ​ |  | —
Total mortgage-backed securities |  | 5 | ​ |  | 27,812 | ​ |  | 92 | ​ |  | 19,160 | ​ |  | 70 | ​ |  | 8,652 | ​ |  | 22
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total securities available for sale |  | 32 | ​ | $ | 238,435 | ​ | $ | 9,941 | ​ | $ | 26,453 | ​ | $ | 253 | ​ | $ | 211,982 | ​ | $ | 9,688
(1) | At September 30, 2020, the unrealized loss was less than $1,000 and in a continuous loss position for less than 12 months.
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At December 31, 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 | ​ | $ | 123,050 | ​ | $ | 6,950 | ​ | $ | — | ​ | $ | — | ​ | $ | 123,050 | ​ | $ | 6,950
Collateralized loan obligations |  | 13 | ​ |  | 99,137 | ​ |  | 1,212 | ​ |  | 25,451 | ​ |  | 108 | ​ |  | 73,686 | ​ |  | 1,104
Total other securities |  | 29 | ​ |  | 222,187 | ​ |  | 8,162 | ​ |  | 25,451 | ​ |  | 108 | ​ |  | 196,736 | ​ |  | 8,054
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
REMIC and CMO |  | 23 | ​ |  | 120,989 | ​ |  | 1,440 | ​ |  | 102,384 | ​ |  | 1,117 | ​ |  | 18,605 | ​ |  | 323
GNMA |  | 1 | ​ |  | 49 | ​ |  | — | ​ |  | 49 | ​ |  | — | ​ |  | — | ​ |  | —
FNMA |  | 8 | ​ |  | 67,618 | ​ |  | 426 | ​ |  | 19,073 | ​ |  | 138 | ​ |  | 48,545 | ​ |  | 288
FHLMC |  | 1 | ​ |  | 30,200 | ​ |  | 73 | ​ |  | — | ​ |  | — | ​ |  | 30,200 | ​ |  | 73
Total mortgage-backed securities |  | 33 | ​ |  | 218,856 | ​ |  | 1,939 | ​ |  | 121,506 | ​ |  | 1,255 | ​ |  | 97,350 | ​ |  | 684
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total securities available for sale |  | 62 | ​ | $ | 441,043 | ​ | $ | 10,101 | ​ | $ | 146,957 | ​ | $ | 1,363 | ​ | $ | 294,086 | ​ | $ | 8,738
​ The Company reviewed each available for sale debt security that had an unrealized loss at September 30, 2020 and December 31, 2019. At September 30, 2020, the Company evaluated whether the decline in fair value of a debt security resulted from credit losses or other factors under ASC 326. 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. All of these securities are rated investment grade or above and have a long history of no credit losses. 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. In determining the risk of loss for available for sale securities, the Company considered that mortgage-backed securities are either fully guaranteed or issued by a government sponsored enterprise, which has a credit rating and perceived credit risk comparable to U.S. government, the issuer of Corporate securities are global systematically important banks, and the tranche of the purchased CLO’s. Each of these securities is performing according to its terms and, in the opinion of management, will continue to perform according to its terms. Based on this review, management believes that the unrealized losses have resulted from other factors not deemed credit-related and no allowance for credit loss was recorded. Accrued interest receivable on available-for-sale debt securities totaled $1.4 million at September 30, 2020 and is excluded from the estimate of credit losses. Upon adoption of ASC Topic 326, “Credit Losses” on January 1, 2020, see Note 17 related to the adoption of Topic 326, we recorded a transition adjustment of $0.3 million in the allowance for credit losses for held-to-maturity debt securities. The following table presents the activity in the allowance for credit losses for debt securities held-to-maturity for the three months ended September 30, 2020:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Mortgage-backed securities | ​ | Other securities | ​
​ | ​ | (In thousands) | ​
Beginning balance | ​ | $ | — | ​ | $ | 402 | ​
Provision | ​ | ​ | — | ​ | ​ | — | ​
Allowance for credit losses - securities | ​ | $ | — | ​ | $ | 402 | ​
​ The following table presents the activity in the allowance for credit losses for debt securities held-to-maturity for the nine months ended September 30, 2020:
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Mortgage-backed securities | ​ | Other securities
​ | ​ | (In thousands)
Beginning balance | ​ | $ | — | ​ | $ | —
CECL adoption | ​ | ​ | — | ​ | ​ | 340
Provision | ​ | ​ | — | ​ | ​ | 62
Allowance for credit losses - securities | ​ | $ | — | ​ | $ | 402
​ Realized gains and losses on the sales of securities are determined using the specific identification method. The Company did not sell any securities during three months ended September 30, 2020 and 2019. The Company sold $130.8 million and $26.4 million in mortgage-backed securities during the nine months ended September 30, 2020 and 2019, respectively. 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,
​ |  | 2020 |  | 2019 |  | 2020 |  | 2019
​ | ​ | (In thousands)
Gross gains from the sale of securities | ​ | $ | — | ​ | $ | — | ​ | $ | 1,476 | ​ | $ | 423
Gross losses from the sale of securities | ​ |  | — | ​ |  | — | ​ |  | (1,567) | ​ |  | (438)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net losses from the sale of securities | ​ | $ | — | ​ | $ | — | ​ | $ | (91) | ​ | $ | (15)
​

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2176304 + Details
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