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Securities | 3 Months Ended
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Mar. 31, 2022
Securities |
Securities | ​ Note 3 – Securities ​ Investment Portfolio Management ​ Our investment portfolio serves the liquidity needs and income objectives of the Company. While the portfolio serves as an important component of the overall liquidity management at the Bank, portions of the portfolio also serve as income producing assets. The size and composition of the portfolio reflects liquidity needs, loan demand and interest income objectives. Portfolio size and composition will be adjusted from time to time. While a significant portion of the portfolio consists of readily marketable securities to address liquidity, other parts of the portfolio may reflect funds invested pending future loan demand or to maximize interest income without undue interest rate risk. ​ Investments are comprised of debt securities and non-marketable equity investments. Securities available-for-sale are carried at fair value. Unrealized gains and losses, net of tax, on securities available-for-sale are reported as a separate component of equity. This balance sheet component changes as interest rates and market conditions change. Unrealized gains and losses are not included in the calculation of regulatory capital. ​ Federal Home Loan Bank of Chicago (“FHLBC”) and Federal Reserve Bank of Chicago (“FRBC”) stock are considered nonmarketable equity investments. FHLBC stock was recorded at $7.1 million at March 31, 2022, and December 31, 2021. FRBC stock was recorded at $14.9 million at March 31, 2022, and $6.2 million at December 31, 2021. ​ The following tables summarize the amortized cost and fair value of the securities portfolio at March 31, 2022, and December 31, 2021, and the corresponding amounts of gross unrealized gains and losses: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Gross | ​ | Gross | ​ | ​ | ​
​ | ​ | Amortized | ​ | Unrealized | ​ | Unrealized | ​ | Fair
March 31, 2022 |  | Cost1 |  | Gains |  | Losses | ​ | Value
Securities available-for-sale | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. Treasury | ​ | $ | 227,646 | ​ | $ | 13 | ​ | $ | (7,096) | ​ | $ | 220,563
U.S. government agencies | ​ | ​ | 62,029 | ​ | ​ | - | ​ | ​ | (2,993) | ​ | ​ | 59,036
U.S. government agencies mortgage-backed | ​ | ​ | 161,119 | ​ | ​ | 117 | ​ | ​ | (8,088) | ​ | ​ | 153,148
States and political subdivisions | ​ | ​ | 237,988 | ​ | ​ | 4,358 | ​ | ​ | (5,938) | ​ | ​ | 236,408
Corporate bonds | ​ | ​ | 10,000 | ​ | ​ | - | ​ | ​ | (317) | ​ | ​ | 9,683
Collateralized mortgage obligations | ​ | ​ | 720,960 | ​ | ​ | 298 | ​ | ​ | (24,745) | ​ | ​ | 696,513
Asset-backed securities | ​ | ​ | 278,941 | ​ | ​ | 240 | ​ | ​ | (4,240) | ​ | ​ | 274,941
Collateralized loan obligations | ​ | ​ | 167,124 | ​ | ​ | 3 | ​ | ​ | (969) | ​ | ​ | 166,158
Total securities available-for-sale | ​ | $ | 1,865,807 | ​ | $ | 5,029 | ​ | $ | (54,386) | ​ | $ | 1,816,450
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ ​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Gross | ​ | Gross | ​ | ​ | ​
​ | ​ | Amortized | ​ | Unrealized | ​ | Unrealized | ​ | Fair
December 31, 2021 |  | Cost1 |  | Gains |  | Losses | ​ | Value
Securities available-for-sale | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. Treasury | ​ | $ | 202,251 | ​ | $ | 125 | ​ | $ | (37) | ​ | $ | 202,339
U.S. government agencies | ​ | ​ | 62,587 | ​ | ​ | - | ​ | ​ | (699) | ​ | ​ | 61,888
U.S. government agencies mortgage-backed | ​ | ​ | 172,016 | ​ | ​ | 856 | ​ | ​ | (570) | ​ | ​ | 172,302
States and political subdivisions | ​ | ​ | 240,793 | ​ | ​ | 16,344 | ​ | ​ | (672) | ​ | ​ | 256,465
Corporate bonds | ​ | ​ | 10,000 | ​ | ​ | - | ​ | ​ | (113) | ​ | ​ | 9,887
Collateralized mortgage obligations | ​ | ​ | 673,238 | ​ | ​ | 2,014 | ​ | ​ | (2,285) | ​ | ​ | 672,967
Asset-backed securities | ​ | ​ | 236,293 | ​ | ​ | 1,245 | ​ | ​ | (661) | ​ | ​ | 236,877
Collateralized loan obligations | ​ | ​ | 79,838 | ​ | ​ | 3 | ​ | ​ | (78) | ​ | ​ | 79,763
Total securities available-for-sale | ​ | $ | 1,677,016 | ​ | $ | 20,587 | ​ | $ | (5,115) | ​ | $ | 1,692,488
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ 1 Excludes accrued interest receivable of $5.2 million and $4.3 million at March 31, 2022 and December 31, 2021, respectively, that is recorded in other assets on the consolidated balance sheet. ​ The fair value, amortized cost and weighted average yield of debt securities at March 31, 2022, by contractual maturity, are listed in the table below. Securities not due at a single maturity date are shown separately. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Weighted | ​ | ​ | ​ | ​ | ​
​ | ​ | Amortized | ​ | Average | ​ | ​ | Fair | ​
Securities available-for-sale |  | Cost |  | Yield | ​ |  | Value |
Due in one year or less | ​ | $ | 7,451 | ​ | 1.47 | % | ​ | $ | 7,458 | ​
Due after one year through five years | ​ | ​ | 300,065 | ​ | 0.95 | ​ | ​ | ​ | 289,731 | ​
Due after five years through ten years | ​ | ​ | 46,076 | ​ | 2.50 | ​ | ​ | ​ | 44,739 | ​
Due after ten years | ​ | ​ | 184,071 | ​ | 2.98 | ​ | ​ | ​ | 183,762 | ​
​ | ​ | ​ | 537,663 | ​ | 1.78 | ​ | ​ | ​ | 525,690 | ​
Mortgage-backed and collateralized mortgage obligations | ​ | ​ | 882,079 | ​ | 1.50 | ​ | ​ | ​ | 849,661 | ​
Asset-backed securities | ​ | ​ | 278,941 | ​ | 1.33 | ​ | ​ | ​ | 274,941 | ​
Collateralized loan obligations | ​ | ​ | 167,124 | ​ | 2.06 | ​ | ​ | ​ | 166,158 | ​
Total securities available-for-sale | ​ | $ | 1,865,807 | ​ | 1.61 | % | ​ | $ | 1,816,450 | ​
​ At March 31, 2022, the Company’s investments included $218.1 million of asset-backed securities that are backed by student loans originated under the Federal Family Education Loan program (“FFEL”). Under the FFEL, private lenders made federally guaranteed student loans to parents and students. While the program was modified several times before elimination in 2010, FFEL securities are generally guaranteed by the U.S Department of Education (“DOE”) at not less than 97% of the outstanding principal amount of the loans. The guarantee will reduce to 85% if the DOE receives reimbursement requests in excess of 5% of insured loans; reimbursement will drop to 75% if reimbursement requests exceed 9% of insured loans. In addition to the DOE guarantee, total added credit enhancement in the form of overcollateralization and/or subordination amounted to $20.3 million, or 9.29%, of outstanding principal. ​ At March 31, 2022, the Company had no securities issued from any one originator, other than the U.S. Government and its agencies, which individually amounted to over 10% of the Company’s stockholders’ equity. ​ Securities with unrealized losses with no corresponding allowance for credit losses at March 31, 2022 and December 31, 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows (in thousands except for number of securities): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Less than 12 months | ​ | 12 months or more | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
March 31, 2022 | ​ | in an unrealized loss position | ​ | in an unrealized loss position | ​ | Total
​ | ​ | Number of | ​ | Unrealized | ​ | Fair | ​ | Number of | ​ | Unrealized | ​ | Fair | ​ | Number of | ​ | Unrealized | ​ | Fair
Securities available-for-sale |  | Securities |  | Losses |  | Value |  | Securities |  | Losses |  | Value |  | Securities |  | Losses |  | Value
U.S. Treasuries | ​ | 5 | ​ | $ | 7,096 | ​ | $ | 216,531 | ​ | - | ​ | $ | - | ​ | $ | - | ​ | 5 | ​ | $ | 7,096 | ​ | $ | 216,531
U.S. government agencies | ​ | 5 | ​ | ​ | 2,884 | ​ | ​ | 54,588 | ​ | 4 | ​ | ​ | 109 | ​ | ​ | 4,448 | ​ | 9 | ​ | ​ | 2,993 | ​ | ​ | 59,036
U.S. government agencies mortgage-backed | ​ | 124 | ​ | ​ | 7,322 | ​ | ​ | 142,866 | ​ | 5 | ​ | ​ | 766 | ​ | ​ | 5,341 | ​ | 129 | ​ | ​ | 8,088 | ​ | ​ | 148,207
States and political subdivisions | ​ | 27 | ​ | ​ | 4,535 | ​ | ​ | 90,991 | ​ | 1 | ​ | ​ | 1,403 | ​ | ​ | 3,232 | ​ | 28 | ​ | ​ | 5,938 | ​ | ​ | 94,223
Corporate bonds | ​ | 2 | ​ | ​ | 317 | ​ | ​ | 9,683 | ​ | - | ​ | ​ | - | ​ | ​ | - | ​ | 2 | ​ | ​ | 317 | ​ | ​ | 9,683
Collateralized mortgage obligations | ​ | 208 | ​ | ​ | 24,649 | ​ | ​ | 647,144 | ​ | 1 | ​ | ​ | 96 | ​ | ​ | 7,366 | ​ | 209 | ​ | ​ | 24,745 | ​ | ​ | 654,510
Asset-backed securities | ​ | 41 | ​ | ​ | 4,109 | ​ | ​ | 230 | ​ | 4 | ​ | ​ | 131 | ​ | ​ | 4,534 | ​ | 45 | ​ | ​ | 4,240 | ​ | ​ | 4,764
Collateralized loan obligations | ​ | 22 | ​ | ​ | 885 | ​ | ​ | 128,303 | ​ | 2 | ​ | ​ | 84 | ​ | ​ | 10,587 | ​ | 24 | ​ | ​ | 969 | ​ | ​ | 138,890
Total securities available-for-sale | ​ | 434 | ​ | $ | 51,797 | ​ | $ | 1,290,336 | ​ | 17 | ​ | $ | 2,589 | ​ | $ | 35,508 | ​ | 451 | ​ | $ | 54,386 | ​ | $ | 1,325,844
​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Less than 12 months | ​ | 12 months or more | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
December 31, 2021 | ​ | in an unrealized loss position | ​ | in an unrealized loss position | ​ | Total
​ | ​ | Number of | ​ | Unrealized | ​ | ​ | Fair | ​ | Number of | ​ | Unrealized | ​ | ​ | Fair | ​ | Number of | ​ | Unrealized | ​ | ​ | Fair
Securities available-for-sale |  | Securities |  | Losses |  | ​ | Value |  | Securities |  | Losses |  | ​ | Value |  | Securities |  | Losses |  | ​ | Value
U.S. Treasuries | ​ | 1 | ​ | $ | 37 | ​ | $ | 49,719 | ​ | - | ​ | $ | - | ​ | $ | - | ​ | 1 | ​ | $ | 37 | ​ | $ | 49,719
U.S. government agencies | ​ | 5 | ​ | ​ | 592 | ​ | ​ | 56,879 | ​ | 4 | ​ | ​ | 107 | ​ | ​ | 5,008 | ​ | 9 | ​ | ​ | 699 | ​ | ​ | 61,887
U.S. government agencies mortgage-backed | ​ | 63 | ​ | ​ | 505 | ​ | ​ | 78,711 | ​ | 1 | ​ | ​ | 65 | ​ | ​ | 1,663 | ​ | 64 | ​ | ​ | 570 | ​ | ​ | 80,374
States and political subdivisions | ​ | 7 | ​ | ​ | 55 | ​ | ​ | 8,430 | ​ | 1 | ​ | ​ | 617 | ​ | ​ | 4,051 | ​ | 8 | ​ | ​ | 672 | ​ | ​ | 12,481
Corporate bonds | ​ | 2 | ​ | ​ | 113 | ​ | ​ | 9,887 | ​ | - | ​ | ​ | - | ​ | ​ | - | ​ | 2 | ​ | ​ | 113 | ​ | ​ | 9,887
Collateralized mortgage obligations | ​ | 133 | ​ | ​ | 2,285 | ​ | ​ | 381,658 | ​ | - | ​ | ​ | - | ​ | ​ | - | ​ | 133 | ​ | ​ | 2,285 | ​ | ​ | 381,658
Asset-backed securities | ​ | 20 | ​ | ​ | 608 | ​ | ​ | 103,819 | ​ | 3 | ​ | ​ | 53 | ​ | ​ | 3,276 | ​ | 23 | ​ | ​ | 661 | ​ | ​ | 107,095
Collateralized loan obligations | ​ | 10 | ​ | ​ | 35 | ​ | ​ | 45,132 | ​ | 2 | ​ | ​ | 43 | ​ | ​ | 10,628 | ​ | 12 | ​ | ​ | 78 | ​ | ​ | 55,760
Total securities available-for-sale | ​ | 241 | ​ | $ | 4,230 | ​ | $ | 734,235 | ​ | 11 | ​ | $ | 885 | ​ | $ | 24,626 | ​ | 252 | ​ | $ | 5,115 | ​ | $ | 758,861
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ Each quarter we perform an analysis to determine if any of the unrealized losses on securities available-for-sale are comprised of credit losses as compared to unrealized losses due to market interest rate adjustments. Our assessment includes a review of the unrealized loss for each security issuance held; the financial condition and near-term prospects of the issuer, including external credit ratings and recent downgrades; and our ability and intent to hold the security for a period of time sufficient for a recovery in value. We also consider the extent to which the securities are issued by the federal government or its agencies, and any guarantee of issued amounts by those agencies. No credit losses were determined to be present as of March 31, 2022, as there was no credit quality deterioration noted. Therefore, no provision for credit losses on securities was recognized for the first quarter of 2022. ​ There were no securities sold for the three months ended March 31, 2022 or March 31, 2021. ​ As of March 31, 2022, securities valued at $478.2 million were pledged to secure deposits and borrowings, and for other purposes, a decrease from $501.3 million of securities pledged at year-end 2021.

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2176304 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher SEC -Name Regulation S-K (SK) -Number 229 -Section 1403 -Paragraph (b) + Details
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