Available for Sale Debt Securities

12 Months Ended

Dec. 31, 2020

Investments, Debt and Equity Securities [Abstract]

On January 1, 2020, the Company adopted CECL which replaces the incurred loss methodology with an expected loss methodology. The Company did not record an allowance for credit losses on available for sale debt securities as this portfolio consisted primarily of debt securities explicitly or implicitly backed by the U.S. Government for which credit risk is deemed immaterial. The impact going forward will depend on the composition, characteristics, and credit quality of the securities portfolio as well as the economic conditions at future reporting periods.

The Company adopted CECL using the prospective transition approach for debt securities for which other-than-temporary impairment had been recognized prior to January 1, 2020. As a result, the amortized cost basis remains the same before and after the effective date of CECL.

Available for sale debt securities at December 31, 2020 and 2019 are summarized as follows (in thousands):


	2020
	Amortized cost		Gross unrealized gains	Gross unrealized losses	Fair value

Agency obligations	$	1,001	8	—	1,009
Mortgage-backed securities	910,393		28,872	(852)	938,413
Asset-backed securities	52,295		1,535		53,830
State and municipal obligations	69,687		1,666	(95)	71,258
Corporate obligations	40,194		809	(24)	40,979
	$	1,073,570	32,890	(971)	1,105,489


	2019
	Amortized cost		Gross unrealized gains	Gross unrealized losses	Fair value


Mortgage-backed securities	$	936,196	12,367	(1,133)	947,430
State and municipal obligations	3,907		172	—	4,079
Corporate obligations	25,032		393	(15)	25,410
	$	965,135	12,932	(1,148)	976,919

Available for sale debt securities having a carrying value of $618.0 million and $536.4 million at December 31, 2020 and 2019, respectively, are pledged to secure securities sold under repurchase agreements and municipal deposits.

The amortized cost and fair value of available for sale debt securities at December 31, 2020, by contractual maturity, are shown below (in thousands). Expected maturities may differ from contractual maturities due to prepayment or early call privileges of the issuer.


	2020
	Amortized cost		Fair value

Due after one year through five years	$	5,676	5,791
Due after five years through ten years	38,046		38,780
Due after ten years	66,159		67,666
	$	109,881	112,237

Investments which pay principal on a periodic basis totaling $963.7 million at amortized cost and $993.3 million at fair value are excluded from the table above as their expected lives are likely to be shorter than the contractual maturity date due to principal prepayments.

During 2020, proceeds from calls on securities in the available for sale debt securities portfolio totaled $13.9 million, with no gain or loss recognized. For 2019, there were no sales or calls of securities from the available for sale debt securities.

The following tables represent the Company's disclosure on available for sale debt securities in an unrealized loss position (in thousands):


	December 31, 2020 Unrealized Losses
	Less than 12 months			12 months or longer		Total
	Fair value		Gross unrealized losses	Fair value	Gross unrealized losses	Fair value	Gross unrealized losses


Mortgage-backed securities	$	127,600	(824)	8,007	(28)	135,607	(852)
State and municipal obligations	5,275		(95)	—	—	5,275	(95)
Corporate obligations	—		—	2,000	(24)	2,000	(24)
	$	132,875	(919)	10,007	(52)	142,882	(971)


	December 31, 2019 Unrealized Losses
	Less than 12 months			12 months or longer		Total
	Fair value		Gross unrealized losses	Fair value	Gross unrealized losses	Fair value	Gross unrealized losses


Mortgage-backed securities	$	136,270	(629)	46,819	(504)	183,089	(1,133)

Corporate obligations	2,013		(15)	—	—	2,013	(15)
	$	138,283	(644)	46,819	(504)	185,102	(1,148)

The number of securities in an unrealized loss position as of December 31, 2020 totaled 42, compared with 50 at December 31, 2019. The decrease in the number of securities in an unrealized loss position at December 31, 2020 was due to lower current market interest rates compared to rates at December 31, 2019. All securities in an unrealized loss position were investment grade at December 31, 2020. There was one private-label mortgage-backed security in an unrealized loss position at December 31, 2020, with an amortized cost of $17,445 and unrealized loss of $1,300. This private-label mortgage-backed security was investment grade at December 31, 2020.