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Investment Securities | 3 Months Ended
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Mar. 31, 2020
Investment Securities [Abstract] |
Investments Securities | NOTE 4 – INVESTMENT SECURITIES Money Market Investments Oriental considers as cash equivalents all money market instruments that are not pledged and that have maturities of three months or less at the date of acquisition. At March 31, 2020 and 2019, money market instruments included as part of cash and cash equivalents amounted to $10.2 million and $6.8 million, respectively. Investment Securities The amortized cost, gross unrealized gains and losses, fair value, and weighted average yield of the securities owned by Oriental at March 31, 2020 and December 31, 2019 were as follows:
| March 31, 2020
|  |  | Gross |  | Gross |  |  |  | Weighted
| Amortized |  | Unrealized |  | Unrealized |  | Fair |  | Average
| Cost |  | Gains |  | Losses |  | Value |  | Yield
| (In thousands)
Available-for-sale |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 155,303 |  | $ | 2,916 |  | $ | - |  | $ | 158,219 |  | 1.98%
GNMA certificates |  | 142,294 |  |  | 2,994 |  |  | - |  |  | 145,288 |  | 2.29%
CMOs issued by US government-sponsored agencies |  | 51,214 |  |  | 917 |  |  | - |  |  | 52,131 |  | 1.97%
Total mortgage-backed securities |  | 348,811 |  |  | 6,827 |  |  | - |  |  | 355,638 |  | 2.10%
Investment securities |  |  |  |  |  |  |  |  |  |  |  |  |
US Treasury securities |  | 296,992 |  |  | 1,995 |  |  | - |  |  | 298,987 |  | 1.63%
Obligations of US government-sponsored agencies |  | 1,884 |  |  | 33 |  |  | - |  |  | 1,917 |  | 1.39%
Other debt securities |  | 878 |  |  | 40 |  |  | - |  |  | 918 |  | 2.98%
Total investment securities |  | 299,754 |  |  | 2,068 |  |  | - |  |  | 301,822 |  | 1.64%
Total securities available for sale | $ | 648,565 |  | $ | 8,895 |  | $ | - |  | $ | 657,460 |  | 1.89%
| December 31, 2019
|  |  | Gross |  | Gross |  |  |  | Weighted
| Amortized |  | Unrealized |  | Unrealized |  | Fair |  | Average
| Cost |  | Gains |  | Losses |  | Value |  | Yield
| (In thousands)
Available-for-sale |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 403,227 |  | $ | 846 |  | $ | 1,417 |  | $ | 402,656 |  | 2.00%
GNMA certificates |  | 215,755 |  |  | 718 |  |  | 4 |  |  | 216,469 |  | 2.33%
CMOs issued by US government-sponsored agencies |  | 55,235 |  |  | 16 |  |  | 490 |  |  | 54,761 |  | 1.97%
Total mortgage-backed securities |  | 674,217 |  |  | 1,580 |  |  | 1,911 |  |  | 673,886 |  | 2.11%
Investment securities |  |  |  |  |  |  |  |  |  |  |  |  |
US Treasury securities |  | 397,183 |  |  | - |  |  | - |  |  | 397,183 |  | 1.60%
Obligations of US government-sponsored agencies |  | 1,967 |  |  | - |  |  | 6 |  |  | 1,961 |  | 1.38%
Other debt securities |  | 1,108 |  |  | 31 |  |  | - |  |  | 1,139 |  | 3.00%
Total investment securities |  | 400,258 |  |  | 31 |  |  | 6 |  |  | 400,283 |  | 1.60%
Total securities available-for-sale | $ | 1,074,475 |  | $ | 1,611 |  | $ | 1,917 |  | $ | 1,074,169 |  | 1.92%
The amortized cost and fair value of Oriental’s investment securities at March 31, 2020, by contractual maturity, are shown in the next table. Securities not due on a single contractual maturity date, such as collateralized mortgage obligations, are classified in the period of final contractual maturity. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
| March 31, 2020
| Available-for-sale
| Amortized Cost |  | Fair Value
| (In thousands)
Mortgage-backed securities |  |  |  |  |
Due from 1 to 5 years |  |  |  |  |
FNMA and FHLMC certificates | $ | 1,242 |  | $ | 1,292
GNMA certificates |  | 694 |  |  | 704
Total due from 1 to 5 years |  | 1,936 |  |  | 1,996
Due after 5 to 10 years |  |  |  |  |
CMOs issued by US government-sponsored agencies | $ | 42,053 |  | $ | 42,718
FNMA and FHLMC certificates |  | 104,324 |  |  | 106,488
GNMA certificates |  | 61,219 |  |  | 62,188
Total due after 5 to 10 years |  | 207,596 |  |  | 211,394
Due after 10 years |  |  |  |  |
FNMA and FHLMC certificates | $ | 49,737 |  | $ | 50,439
GNMA certificates |  | 80,381 |  |  | 82,396
CMOs issued by US government-sponsored agencies |  | 9,161 |  |  | 9,413
Total due after 10 years |  | 139,279 |  |  | 142,248
Total mortgage-backed securities |  | 348,811 |  |  | 355,638
Investment securities |  |  |  |  |
Due less than one year |  |  |  |  |
US Treasury securities | $ | 286,985 |  | $ | 288,658
Other debt securities |  | 100 |  |  | 100
Total due in less than one year |  | 287,085 |  |  | 288,758
Due from 1 to 5 years |  |  |  |  |
Obligations of US government-sponsored agencies | $ | 1,884 |  | $ | 1,917
US Treasury securities |  | 10,007 |  |  | 10,329
Total due from 1 to 5 years |  | 11,891 |  |  | 12,246
Due from 5 to 10 years |  |  |  |  |
Other debt securities |  | 778 |  |  | 818
Total due after 5 to 10 years |  | 778 |  |  | 818
Total investment securities |  | 299,754 |  |  | 301,822
Total | $ | 648,565 |  | $ | 657,460
During the quarter ended March 31, 2020, Oriental retained securitized GNMA pools totaling $26.8 million amortized cost, at a yield of 2.82% from its own originations, while during the quarter ended 2019 that amount totaled $15.1 million amortized cost, at a yield of 3.84%. During the quarter ended March 31, 2020, Oriental recorded a net gain on sale of securities of $4.7 million. During the quarter ended March 31, 2019 Oriental did not sell mortgage-backed securities or investment securities.
| Quarter Ended March 31, 2020
|  |  | Book Value |  |  |  |
Description | Sale Price |  | at Sale |  | Gross Gains |  | Gross Losses
| (In thousands)
Sale of securities available-for-sale |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 229,571 |  | $ | 227,213 |  | $ | 2,358 |  | $ | -
GNMA certificates |  | 91,413 |  |  | 89,043 |  |  | 2,370 |  |  | -
Total | $ | 320,984 |  | $ | 316,256 |  | $ | 4,728 |  | $ | -
At March 31, 2020, Oriental did not have investment securities in unrealized loss position. Effective January 1, 2020, Oriental adopted the new accounting standard for credit losses that requires evaluation of available-for-sale debt securities for any expected losses with recognition of an allowance for credit losses, when applicable. For more information, see Note 1 – Significant Accounting Policies. At March 31, 2020, all securities held by Oriental are issued by U.S. government entities and agencies that have a zero credit loss assumption.
| December 31, 2019
| 12 months or more
| Amortized |  | Unrealized |  | Fair
| Cost |  | Loss |  | Value
| (In thousands)
Securities available-for-sale |  |  |  |  |  |  |  |
CMOs issued by US Government-sponsored agencies | $ | 35,417 |  | $ | 387 |  | $ | 35,030
FNMA and FHLMC certificates |  | 259,099 |  |  | 1,415 |  |  | 257,684
Obligations of US Government and sponsored agencies |  | 1,967 |  |  | 6 |  |  | 1,961
GNMA certificates |  | 19 |  |  | - |  |  | 19
| $ | 296,502 |  | $ | 1,808 |  | $ | 294,694
| Less than 12 months
| Amortized |  | Unrealized |  | Fair
| Cost |  | Loss |  | Value
| (In thousands)
Securities available-for-sale |  |  |  |  |  |  |  |
CMOs issued by US Government-sponsored agencies |  | 11,503 |  |  | 103 |  |  | 11,400
FNMA and FHLMC certificates |  | 4,919 |  |  | 2 |  |  | 4,917
GNMA certificates |  | 3,549 |  |  | 4 |  |  | 3,545
US Treasury Securities |  | 627 |  |  | - |  |  | 627
| $ | 20,598 |  | $ | 109 |  | $ | 20,489
| Total
| Amortized |  | Unrealized |  | Fair
| Cost |  | Loss |  | Value
| (In thousands)
Securities available-for-sale |  |  |  |  |  |  |  |
CMOs issued by US Government-sponsored agencies |  | 46,920 |  |  | 490 |  |  | 46,430
FNMA and FHLMC certificates |  | 264,018 |  |  | 1,417 |  |  | 262,601
Obligations of US government and sponsored agencies |  | 1,967 |  |  | 6 |  |  | 1,961
GNMA certificates |  | 3,568 |  |  | 4 |  |  | 3,564
US Treasury Securities |  | 627 |  |  | - |  |  | 627
| $ | 317,100 |  | $ | 1,917 |  | $ | 315,183

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