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Securities

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Securities

4. Securities

The Company did not hold any trading securities at March 31, 2022 and December 31, 2021. Securities available for sale are recorded at fair value. Securities held-to-maturity (“HTM”) are recorded at amortized cost.

The following table summarizes the Company’s portfolio of securities held-to-maturity at March 31, 2022:


								Gross			Gross
		Amortized						Unrecognized			Unrecognized
		Cost			Fair Value			Gains			Losses

		(In thousands)
Securities held-to-maturity:
Municipals		$	67,313		$	61,839		$	—		$	5,474
Total municipals			67,313			61,839			—			5,474

FNMA			7,890			7,880			—			10
Total mortgage-backed securities			7,890			7,880			—			10

Allowance for Credit Losses			(986)			—			—			—
Total		$	74,217		$	69,719		$	—		$	5,484

The following table summarizes the Company’s portfolio of securities held-to-maturity at December 31, 2021:


								Gross			Gross
		Amortized						Unrecognized			Unrecognized
		Cost			Fair Value			Gains			Losses

		(In thousands)
Securities held-to-maturity:
Municipals		$	50,836		$	53,362		$	2,526		$	—
Total municipals			50,836			53,362			2,526			—

FNMA			7,894			8,667			773			—
Total mortgage-backed securities			7,894			8,667			773			—

Allowance for Credit Losses			(862)			—			—			—
Total		$	57,868		$	62,029		$	3,299		$	—

The following table summarizes the Company’s portfolio of securities available for sale at March 31, 2022:


								Gross			Gross
		Amortized						Unrealized			Unrealized
		Cost			Fair Value			Gains			Losses

		(In thousands)
U.S. government agencies		$	74,543		$	73,870		$	—		$	673
Corporate			109,924			104,176			86			5,834
Mutual funds			11,937			11,937			—			—
Collateralized loan obligations			95,014			94,318			—			696
Other			1,740			1,740			—			—
Total other securities			293,158			286,041			86			7,203
REMIC and CMO			197,494			185,390			19			12,123
GNMA			10,039			9,116			18			941
FNMA			226,185			213,798			67			12,454
FHLMC			156,501			145,524			107			11,084
Total mortgage-backed securities			590,219			553,828			211			36,602
Total securities available for sale		$	883,377		$	839,869		$	297		$	43,805

The following table summarizes the Company’s portfolio of securities available for sale at December 31, 2021:


								Gross			Gross
		Amortized						Unrealized			Unrealized
		Cost			Fair Value			Gains			Losses

		(In thousands)
U.S. government agencies		$	5,599		$	5,590		$	—		$	9
Corporate			107,423			104,370			136			3,189
Mutual funds			12,485			12,485			—			—
Collateralized loan obligations			81,166			80,912			1			255
Other			1,695			1,695			—			—
Total other securities			208,368			205,052			137			3,453
REMIC and CMO			210,948			208,509			1,217			3,656
GNMA			10,572			10,286			30			316
FNMA			203,777			202,938			1,321			2,160
FHLMC			152,760			150,451			326			2,635
Total mortgage-backed securities			578,057			572,184			2,894			8,767
Total securities available for sale		$	786,425		$	777,236		$	3,031		$	12,220

The corporate securities held by the Company at March 31, 2022 and December 31, 2021 are issued by U.S. banking institutions. The CMOs held by the Company at March 31, 2022 and December 31, 2021 are either fully guaranteed or issued by a government sponsored enterprise.

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 March 31, 2022, 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		$	67,313		$	61,839
Total other securities			67,313			61,839
Mortgage-backed securities			7,890			7,880
			75,203			69,719

Allowance for credit losses			(986)			-
Total securities held-to-maturity		$	74,217		$	69,719


		Amortized
Securities available for sale:		Cost			Fair Value

		(In thousands)
Due in one year or less		$	10,036		$	9,989
Due after one year through five years			79,395			78,619
Due after five years through ten years			168,590			162,353
Due after ten years			23,200			23,143
Total other securities			281,221			274,104
Mutual funds			11,937			11,937
Mortgage-backed securities			590,219			553,828
Total securities available for sale		$	883,377		$	839,869

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 March 31, 2022
				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		3		$	61,839		$	5,474		$	61,839		$	5,474		$	—		$	—
Total other securities		3			61,839			5,474			61,839			5,474			—			—

FNMA		1			7,880			10			7,880			10			—			—
Total mortgage-backed securities		1			7,880			10			7,880			10			—			—

Total		4		$	69,719		$	5,484		$	69,719		$	5,484		$	—		$	—

Available for sale securities
U.S. government agencies		7		$	73,870		$	673		$	69,749		$	667		$	4,121		$	6
Corporate		13			91,591			5,834			63,000			4,425			28,591			1,409
CLO		12			94,319			696			73,408			341			20,911			355
Total other securities		32			259,780			7,203			206,157			5,433			53,623			1,770

REMIC and CMO		45			174,122			12,123			120,470			6,670			53,652			5,453
GNMA		4			8,793			941			307			9			8,486			932
FNMA		43			197,920			12,454			151,792			8,184			46,128			4,270
FHLMC		23			132,744			11,084			64,038			3,734			68,706			7,350
Total mortgage-backed securities		115			513,579			36,602			336,607			18,597			176,972			18,005
Total		147		$	773,359		$	43,805		$	542,764		$	24,030		$	230,595		$	19,775


		At December 31, 2021
				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
U.S. government agencies		2		$	5,577		$	9		$	1,130		$	5		$	4,447		$	4
Corporate		13			94,234			3,189			65,453			1,970			28,781			1,219
CLO		4			31,012			255			10,000			1			21,012			254
Total other securities		19			130,823			3,453			76,583			1,976			54,240			1,477

REMIC and CMO		15			124,131			3,656			105,959			2,800			18,172			856
GNMA		4			9,924			316			1,138			16			8,786			300
FNMA		25			171,109			2,160			153,657			1,587			17,452			573
FHLMC		18			129,115			2,635			98,297			1,448			30,818			1,187
Total mortgage-backed securities		62			434,279			8,767			359,051			5,851			75,228			2,916
Total		81		$	565,102		$	12,220		$	435,634		$	7,827		$	129,468		$	4,393

The Company reviewed each available for sale security that had an unrealized loss at March 31, 2022 and December 31, 2021. 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. If the Company evaluates any decline in the fair value is due to credit loss factors and this valuation indicates that a credit loss exists, then the present value of cash flows is expected to be collected from the security is compared to the amortized cost basis of security. If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. 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 tranche of the purchased collateralized loan obligations (“CLO”) and the issuer of Corporate securities are global systematically important banks. 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.

The Company reviewed each held-to-maturity security that had an unrealized loss at March 31, 2022 as part of its quarterly Current Expected Credit Loss (“CECL”) process, with an allowance for credit losses of $1.0 million and $0.9 million at March 31, 2022 and December 31, 2021, respectively.

Accrued interest receivable on held-to-maturity securities totaled $0.2 million and $0.1 million at March 31, 2022 and December 31, 2021, respectively, and is excluded from estimates of credit losses. Accrued interest receivable on available-for-sale debt securities totaled $1.7 million and $1.5 million at March 31, 2022 and December 31, 2021, respectively, and is excluded from the estimate of credit losses.

The following table presents the activity in the allowance for credit losses for debt securities held-to-maturity.


		Other Securities
		For the three months ended
		March 31,
		2022			2021

		(In thousands)
Beginning balance		$	862		$	907
Provision			124			8
Allowance for credit losses		$	986		$	915

Realized gains and losses on the sales of securities are determined using the specific identification method. The Company did not sell any securities during the three months ended March 31, 2022 and 2021.