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Investment Securities | 9 Months Ended
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Sep. 30, 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 September 30, 2020 and December 31, 2019, money market instruments included as part of cash and cash equivalents amounted to $14.6 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 September 30, 2020 and December 31, 2019 were as follows:
| September 30, 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 | $ | 135,067 |  | $ | 4,897 |  | $ | - |  | $ | 139,964 |  | 1.96%
GNMA certificates |  | 141,412 |  |  | 4,480 |  |  | - |  |  | 145,892 |  | 2.29%
CMOs issued by US government-sponsored agencies |  | 42,816 |  |  | 1,048 |  |  | - |  |  | 43,864 |  | 1.97%
Total mortgage-backed securities |  | 319,295 |  |  | 10,425 |  |  | - |  |  | 329,720 |  | 2.11%
Investment securities |  |  |  |  |  |  |  |  |  |  |  |  |
US Treasury securities |  | 91,109 |  |  | 422 |  |  | - |  |  | 91,531 |  | 1.61%
Obligations of US government-sponsored agencies |  | 1,688 |  |  | 26 |  |  | - |  |  | 1,714 |  | 1.39%
Other debt securities |  | 808 |  |  | 42 |  |  | - |  |  | 850 |  | 2.99%
Total investment securities |  | 93,605 |  |  | 490 |  |  | - |  |  | 94,095 |  | 1.62%
Total securities available for sale | $ | 412,900 |  | $ | 10,915 |  | $ | - |  | $ | 423,815 |  | 2.00%
| 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 September 30, 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.
| September 30, 2020
| Available-for-sale
| Amortized Cost |  | Fair Value
| (In thousands)
Mortgage-backed securities |  |  |  |  |
Due less than one year |  |  |  |  |
FNMA and FHLMC certificates | $ | 597 |  | $ | 624
Total due in less than one year |  | 597 |  |  | 624
Due from 1 to 5 years |  |  |  |  |
GNMA certificates |  | 546 |  |  | 550
Total due from 1 to 5 years |  | 546 |  |  | 550
Due after 5 to 10 years |  |  |  |  |
CMOs issued by US government-sponsored agencies | $ | 35,553 |  | $ | 36,442
FNMA and FHLMC certificates |  | 103,975 |  | $ | 107,933
GNMA certificates |  | 64,979 |  | $ | 66,388
Total due after 5 to 10 years |  | 204,507 |  |  | 210,763
Due after 10 years |  |  |  |  |
FNMA and FHLMC certificates | $ | 30,495 |  | $ | 31,407
GNMA certificates |  | 75,888 |  | $ | 78,954
CMOs issued by US government-sponsored agencies |  | 7,262 |  | $ | 7,422
Total due after 10 years |  | 113,645 |  |  | 117,783
Total mortgage-backed securities |  | 319,295 |  |  | 329,720
Investment securities |  |  |  |  |
Due less than one year |  |  |  |  |
US Treasury securities | $ | 81,103 |  | $ | 81,245
Other debt securities |  | 100 |  | $ | 100
Total due in less than one year |  | 81,203 |  |  | 81,345
Due from 1 to 5 years |  |  |  |  |
Obligations of US government-sponsored agencies | $ | 1,688 |  | $ | 1,714
US Treasury securities |  | 10,006 |  | $ | 10,286
Total due from 1 to 5 years |  | 11,694 |  |  | 12,000
Due from 5 to 10 years |  |  |  |  |
Other debt securities |  | 708 |  |  | 750
Total due after 5 to 10 years |  | 708 |  |  | 750
Total investment securities |  | 93,605 |  |  | 94,095
Total | $ | 412,900 |  | $ | 423,815
During the nine-month period ended September 30, 2020, Oriental retained securitized GNMA pools totaling $46.2 million amortized cost, at a yield of 2.69% from its own originations, while during the nine-month period ended on September 30, 2019 that amount totaled $45.7 million amortized cost, at a yield of 3.42%. During the nine-month period ended September 30, 2020, Oriental sold $316.3 million available-for-sale-mortgage-backed securities and recorded a net gain on sale of securities of $4.7 million. During the nine-month period ended September 30, 2019 Oriental sold $680.5 million available-for-sale mortgage-backed securities and recognized a gain in the sale of $8.3 million.
| Nine-Month Period Ended September 30, 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 |  | $ | -
| Nine-Month Period Ended September 30, 2019
|  |  | 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 | $ | 451,081 |  | $ | 447,305 |  | $ | 3,776 |  | $ | -
GNMA certificates |  | 229,385 |  |  | 224,887 |  |  | 4,498 |  |  | -
Total | $ | 680,466 |  | $ | 672,192 |  | $ | 8,274 |  | $ | -
At September 30, 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 September 30, 2020, all securities held by Oriental are issued by U.S. government entities and agencies that have a zero-credit loss assumption. The following table show Oriental’s gross unrealized losses and fair value of investment securities available-for-sale at December 31, 2019, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position:
| 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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