XML 24 R13.htm IDEA: XBRL DOCUMENT v3.21.1
Securities Available for Sale
 3 Months Ended
Mar. 31, 2021
Debt Securities, Available-for-sale [Abstract]  
Securities Available for Sale Securities Available for Sale
The following is a summary of securities available for sale as of the dates indicated:
 At March 31, 2021
 Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Allowance For
Investment
Credit Losses
Fair
Value
 (Dollars in thousands)
Debt securities:
U.S. Government agency and U.S. Government sponsored enterprises:
Collateralized mortgage obligations$901,735 $9,424 $(6,500)$— $904,659 
Mortgage-backed securities:
Residential646,409 3,190 (11,771)— 637,828 
Commercial527,528 13,378 (3,118)— 537,788 
Asset-backed securities34,781 104 (36)— 34,849 
Corporate securities14,435 — (1,230)— 13,205 
Municipal securities103,481 2,272 (338)— 105,415 
Total investment securities available for sale$2,228,369 $28,368 $(22,993)$— $2,233,744 
At December 31, 2020
 Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Allowance For
Investment
Credit Losses
Fair
Value
 (Dollars in thousands)
Debt securities:
U.S. Government agency and U.S. Government sponsored enterprises:
Collateralized mortgage obligations$990,679 $11,482 $(844)$— $1,001,317 
Mortgage-backed securities:
Residential
672,667 8,460 (114)— 681,013 
Commercial
482,874 25,026 (21)— 507,879 
Corporate securities
7,000 15 (881)— 6,134 
Municipal securities86,213 3,058 (3)— 89,268 
Total investment securities available for sale$2,239,433 $48,041 $(1,863)$— $2,285,611 
 
As of March 31, 2021 and December 31, 2020, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.
During the three months ended March 31, 2021 and 2020, the Company recognized zero net gains on sales and calls of securities available for sale. For the three months ended March 31, 2021 and 2020, the Company had no sales of securities available for sale.
At March 31, 2021 and December 31, 2020, $4.4 million and $33.2 million in unrealized gains on securities available for sale net of taxes, respectively, were included in accumulated other comprehensive income. For the three months ended March 31, 2021 and 2020, there were no reclassifications out of accumulated other comprehensive income into earnings as gain on sales of investments securities available for sale.
The amortized cost and estimated fair value of investment securities at March 31, 2021, by contractual maturity, is presented in the table below. 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. Collateralized mortgage obligations, mortgage-backed securities, and asset-backed securities are not due at a single maturity date and their total balances are shown separately.
Amortized
Cost		Estimated
Fair Value
 (Dollars in thousands)
Available for sale:
Due within one year$350 $351 
Due after one year through five years— — 
Due after five years through ten years19,616 19,478 
Due after ten years97,950 98,791 
U.S. Government agency and U.S. Government sponsored enterprises:
Collateralized mortgage obligations901,735 904,659 
Mortgage-backed securities:
Residential646,409 637,828 
Commercial527,528 537,788 
Asset-backed securities34,781 34,849 
Total$2,228,369 $2,233,744 

Securities with carrying values of approximately $325.0 million and $376.1 million at March 31, 2021 and December 31, 2020, respectively, were pledged to secure public deposits, for various borrowings, and for other purposes as required or permitted by law.
The following tables show the Company’s investments’ gross unrealized losses and estimated fair values, aggregated by investment category and the length of time that the individual securities have been in a continuous unrealized loss position as of the dates indicated.    
As of March 31, 2021
Less than 12 months12 months or longerTotal
Description of
Securities		Number 
of
Securities		Fair 
Value		Gross
Unrealized
Losses		Number 
of
Securities		Fair 
Value		Gross
Unrealized
Losses		Number 
of
Securities		Fair 
Value		Gross
Unrealized
Losses
  (Dollars in thousands)
Collateralized mortgage obligations*
24 $453,139 $(6,475)2 $2,347 $(25)26 $455,486 $(6,500)
Mortgage-backed securities:
Residential*44 507,249 (11,771)— — — 44 507,249 (11,771)
Commercial*13 136,164 (3,118)— — — 13 136,164 (3,118)
Asset-backed securities1 4,515 (36)— — — 1 4,515 (36)
Corporate securities3 9,011 (423)1 4,194 (807)4 13,205 (1,230)
Municipal securities10 31,371 (338)— — — 10 31,371 (338)
Total95 $1,141,449 $(22,161)3 $6,541 $(832)98 $1,147,990 $(22,993)
__________________________________    
* Investments in U.S. Government agency and U.S. Government sponsored enterprises
As of December 31, 2020
Less than 12 months12 months or longerTotal
Description of
Securities		Number 
of
Securities		Fair 
Value		Gross
Unrealized
Losses		Number 
of
Securities		Fair 
Value		Gross
Unrealized
Losses		Number 
of
Securities		Fair 
Value		Gross
Unrealized
Losses
  (Dollars in thousands)
Collateralized mortgage obligations*
22 $312,757 $(844)— $— $— 22 $312,757 $(844)
Mortgage-backed securities:
Residential*8 46,094 (114)— — — 8 46,094 (114)
Commercial*1 10,275 (21)— — — 1 10,275 (21)
Corporate securities— — — 1 4,119 (881)1 4,119 (881)
Municipal securities1 997 (3)— — — 1 997 (3)
Total32 $370,123 $(982)1 $4,119 $(881)33 $374,242 $(1,863)
__________________________________
* Investments in U.S. Government agency and U.S. Government sponsored enterprises
The Company had two CMOs and one corporate security that were in a continuous unrealized loss position for twelve months or longer with fair values of $2.3 million and $4.2 million, respectively as of March 31, 2021. With the adoption of CECL, the length of time that the fair value of investment securities have been less than amortized cost is not considered when assessing for credit impairment.
With the adoption of ASU 2016-13 on January 1, 2020, the CECL methodology replaced the other-than-temporary impairment model that previously existed. The Company did not have a day 1 allowance impact attributable to its investment securities portfolio and did not have an allowance for credit losses as of March 31, 2021 and December 31, 2020. The Company has elected to exclude accrued interest from the amortized cost of its investment securities available for sale. Accrued interest receivable for investment securities available for sale at March 31, 2021 and December 31, 2020, totaled $4.5 million and $4.7 million, respectively.
The Company evaluates securities in unrealized loss position for impairment related to credit losses on at least a quarterly basis. Securities in unrealized loss positions are first assessed as to whether we intend to sell, or if it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If one of the criteria is met, the security’s amortized cost basis is written down to fair value through current earnings. For securities that do not meet these criteria, the Company evaluates whether the decline in fair value resulted from credit losses or other factors. In evaluating whether a credit loss exists, the Company has set up an initial filter for impairment triggers. Once the quantitative filters have been triggered, the securities are placed on a watch list and an additional assessment is performed to identify whether a credit impairment exists. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security and the issuer, among other factors. If this assessment indicates that a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Unrealized losses that have not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of applicable taxes. No allowance for credit losses for available for sale securities was recorded at March 31, 2021.
Approximately 93% of the Company’s investment portfolio at March 31, 2021 consisted of securities that were issued by U.S. Government agency and U.S. Government sponsored enterprises. Although a government guarantee exists on these investments, these entities are not legally backed by the full faith and credit of the federal government, and the current support they receive is subject to a cap as part of the agreement entered into in 2008. Nonetheless, at this time we do not foresee any set of circumstances in which the government would not fund its commitments on these investments as the issuers are an integral part of the U.S. housing market in providing liquidity and stability. Therefore, we concluded that a zero allowance approach for these investment securities is appropriate. The Company had also had one asset-backed security, four corporate securities, and 10 municipal bonds in unrealized loss positions at March 31, 2021. The Company performed an assessment of investment securities in unrealized loss positions for credit impairment and concluded that no allowance for credit losses was required at March 31, 2021.