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INVESTMENT SECURITIES

12 Months Ended

Dec. 31, 2020

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE 4 — INVESTMENT SECURITIES

The following table summarizes the amortized cost and fair value of securities available for sale and securities held to maturity at December 31, 2020 and 2019 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses (in thousands):


					Gross			Gross
					Unrealized/			Unrealized/
		Amortized			Unrecognized			Unrecognized
At December 31, 2020		Cost			Gains			Losses			Fair Value
Debt securities available for sale
Residential mortgage securities		$	192,163		$	2,599		$	(74)		$	194,688
Commercial mortgage securities			32,589			997			(94)			33,492
U.S. Government agency securities			37,997			—			(81)			37,916
Total securities available for sale		$	262,749		$	3,596		$	(249)		$	266,096

Held-to-Maturity Securities:
Residential mortgage securities			2,760			67			—			2,827
Total securities held to maturity		$	2,760		$	67		$	—		$	2,827

Equity investments:
CRA Mutual Fund			2,299			14			—			2,313
Total equity investment securities		$	2,299		$	14		$	—		$	2,313


					Gross			Gross
					Unrealized/			Unrealized/
		Amortized			Unrecognized			Unrecognized
At December 31, 2019		Cost			Gains			Losses			Fair Value
Debt securities available for sale
Residential mortgage securities		$	175,902		$	1,478		$	(117)		$	177,263
Commercial mortgage securities			32,284			206			(18)			32,472
U.S. Government agency securities			25,000			207			—			25,207
Total securities available for sale		$	233,186		$	1,891		$	(135)		$	234,942

Held-to-Maturity Securities:
Residential mortgage securities			3,722			9			(19)			3,712
Total securities held to maturity		$	3,722		$	9		$	(19)		$	3,712

Equity investments:
CRA Mutual Fund			2,258			—			(34)			2,224
Total equity investment securities		$	2,258		$	—		$	(34)		$	2,224

The proceeds from sales and calls of securities during the years ended December 31, 2020 and 2019 were $141.4 million and $1.1 million, respectively. The following table summarizes the proceeds from sales and calls of securities and associated gains for the years ended December 31, 2020 and 2019 (in thousands):


		Year Ended December 31,
		2020			2019
Proceeds			141,422		$	1,065
Gross gains			3,286		$	—
Tax impact			(1,036)		$	—

The gains of $3.3 million in the table above resulted from sales of $108.1 million (amortized cost) of AFS securities in 2020. Proceeds from the sale were $111.4 million.

The following table summarizes, by contractual maturity, the amortized cost and fair value of debt securities at December 31, 2020 and 2019. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. The table does not include the effect of principal repayments. Equity securities, primarily investment in mutual funds, have been excluded from the table. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately (in thousands):


		Held-to-Maturity						Available-for-Sale
At December 31, 2020		Amortized Cost			Fair Value			Amortized Cost			Fair Value
Within one year		$	—		$	—		$	—		$	—
One to five years			—			—			37,997			37,916
Five to ten years			—			—			—			—
Due after ten years			—			—			—			—
Total		$	—		$	—		$	37,997		$	37,916

Residential mortgage securities		$	2,760			2,827			192,163			194,688
Commercial mortgage securities			—			—			32,589			33,492
Total Securities		$	2,760		$	2,827		$	262,749		$	266,096


		Held-to-Maturity						Available-for-Sale
At December 31, 2019		Amortized Cost			Fair Value			Amortized Cost			Fair Value
Within one year		$	—		$	—		$	—		$	—
One to five years			—			—			—			—
Five to ten years			—			—			25,000			25,207
Due after ten years			—			—			—			—
Total		$	—		$	—		$	25,000		$	25,207

Residential mortgage securities		$	3,722		$	3,712		$	175,902		$	177,263
Commercial mortgage securities			—			—			32,284		$	32,472

Total Securities		$	3,722		$	3,712		$	233,186		$	234,942

There were no securities pledged as collateral at December 31, 2020. At December 31, 2019, there were $126.2 million of securities available for sale pledged as collateral for certain deposits.

At December 31, 2020 and 2019, all of the mortgage-backed securities and collateralized mortgage obligations held by the Bank were issued by U.S. government-sponsored entities and agencies.

Securities with unrealized losses for the years ended December 31, 2020 and 2019, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows (in thousands):


		Less than 12 Months						12 months or more						Total
					Unrealized/						Unrealized/						Unrealized/
		Estimated			Unrecognized			Estimated			Unrecognized			Estimated			Unrecognized
At December 31, 2020		Fair Value			Losses			Fair Value			Losses			Fair Value			Losses
Debt securities available for sale
Residential mortgage securities		$	33,734		$	(74)		$	—		$	—		$	33,734		$	(74)
Commercial mortgage securities			12,314			(93)			385			(1)			12,699			(94)
U.S. Government agency securities			37,916			(81)			—			—			37,916			(81)
Total securities available for sale		$	83,964		$	(248)		$	385		$	(1)		$	84,349		$	(249)

Held-to-Maturity Securities:
Residential mortgage securities		$	—		$	—		$	—		$	—		$	—		$	—
Total securities held to maturity		$	—		$	—		$	—		$	—		$	—		$	—

Equity investments:
CRA Mutual Fund		$	—		$	—		$	—		$	—		$	—		$	—
Total equity investment securities		$	—		$	—		$	—		$	—		$	—		$	—


		Less than 12 Months						12 months or more						Total
					Unrealized/						Unrealized/						Unrealized/
		Estimated			Unrecognized			Estimated			Unrecognized			Estimated			Unrecognized
At December 31, 2019		Fair Value			Losses			Fair Value			Losses			Fair Value			Losses
Debt securities available for sale
Residential mortgage securities		$	22,850		$	(52)		$	6,728		$	(65)		$	29,578		$	(117)
Commercial mortgage securities			9,911			(18)			—			—			9,911			(18)
Total securities available for sale		$	32,761		$	(70)		$	6,728		$	(65)		$	39,489		$	(135)

Held-to-Maturity Securities:
Residential mortgage securities		$	—		$	—		$	1,470		$	(19)		$	1,470		$	(19)
Total securities held to maturity		$	—		$	—		$	1,470		$	(19)		$	1,470		$	(19)

Equity investments:
CRA Mutual Fund		$	—		$	—		$	2,224		$	(34)		$	2,224		$	(34)
Total equity investment securities		$	—		$	—		$	2,224		$	(34)		$	2,224		$	(34)

The unrealized losses of securities are primarily due to the changes in market interest rates subsequent to purchase. The Bank does not consider these securities to be other-than-temporarily impaired at December 31, 2020 or 2019 since the decline in market value was attributable to changes in interest rates and not credit quality. In addition, the Bank does not intend to sell and does not believe that it is more likely than not that it will be required to sell these investments until

there is a full recovery of the unrealized loss, which may be at maturity. As a result, no impairment loss was recognized during the years ended December 31, 2020 or 2019.

As of December 31, 2020 and 2019, 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.