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INVESTMENT SECURITIES

9 Months Ended

Sep. 30, 2021

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE 4 - INVESTMENT SECURITIES

The following tables summarize the amortized cost and fair value of debt securities available for sale (“AFS”), debt securities held to maturity (“HTM”) and equity investments at September 30, 2021 and December 31, 2020 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 September 30, 2021		Cost			Gains			Losses			Fair Value
Debt securities available for sale:
Residential mortgage securities		$	504,167		$	1,123		$	(3,859)		$	501,431
Commercial mortgage securities			18,270			249			(263)			18,256
Asset-backed securities			4,750			—			(17)			4,733
U.S. Government agency			67,994			—			(763)			67,231
Securities issued by states and political subdivisions in the U.S			11,836			—			(319)			11,517
Total securities available-for-sale		$	607,017		$	1,372		$	(5,221)		$	603,168

Held-to-maturity securities:
Residential mortgage securities		$	2,017			57			—			2,074
Total securities held-to-maturity		$	2,017		$	57		$	—		$	2,074

Equity investments:
CRA Mutual Fund		$	2,320			—			(31)			2,289
Total non-trading equity investment securities		$	2,320		$	—		$	(31)		$	2,289


					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			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 non-trading equity investment securities		$	2,299		$	14		$	—		$	2,313

For the three months ended September 30, 2021, there were no sales of AFS securities. For the nine months ended September 30, 2021, there were sales of $42.6 million, at amortized cost, of AFS securities. For the three months ended September 30, 2020, there were calls of $25.0 million, at amortized cost of AFS securities. There were sales and calls of $108.1 million and $30.0 million, at amortized cost, respectively, for the nine months ended September 30, 2020. The

proceeds from sales and calls of AFS securities and associated gains for the three and nine months ended September 30, 2021 and 2020 (in thousands):


		Three months ended September 30,						Nine months ended September 30,
		2021			2020			2021			2020
Proceeds		$	—		$	25,000		$	43,241		$	141,422
Gross gains		$	—		$	—		$	609		$	3,286
Tax impact		$	—		$	—		$	(195)		$	(1,036)

The tables below summarize, by contractual maturity, the amortized cost and fair value of debt securities at September 30, 2021 and December 31, 2020. The table does not include the effect of principal repayments. Equity securities, primarily investment in mutual funds, have been excluded from the table. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately (in thousands):


		Held-to-Maturity						Available-for-Sale
At September 30, 2021		Amortized Cost			Fair Value			Amortized Cost			Fair Value
Within one year		$	—		$	—		$	—		$	—
One to five years			—			—			47,994			47,475
Five to ten years			—			—			15,000			14,832
After ten years			—			—			16,836			16,441
Total		$	—		$	—		$	79,830		$	78,748

Residential mortgage securities		$	2,017		$	2,074			504,167			501,431
Commercial mortgage securities			—			—			18,270			18,256
Asset-backed securities			—			—			4,750			4,733
Total Securities		$	2,017		$	2,074		$	607,017		$	603,168


		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

There were no securities pledged as collateral at September 30, 2021 or December 31, 2020.

At September 30, 2021 and December 31, 2020, all of the residential mortgage securities and commercial mortgage securities held by the Company were issued by U.S. Government-sponsored entities and agencies.

Debt securities with unrealized/unrecognized losses at September 30, 2021 and December 31, 2020, 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
		Estimated			Unrealized			Estimated			Unrealized			Estimated			Unrealized
At September 30, 2021		Fair Value			Losses			Fair Value			Losses			Fair Value			Losses
Debt securities available for sale:
Residential mortgage securities		$	315,184		$	(3,859)		$	—		$	—		$	315,184		$	(3,859)
Commercial mortgage securities			14,919			(263)			379			—			15,298			(263)
Asset-backed securities			4,733			(17)			—			—			4,733			(17)
U.S. Government agency securities			39,546			(451)			27,685			(312)			67,231			(763)
Securities issued by states and political subdivisions in the U.S			11,517			(319)			—			—			11,517			(319)
Total securities available for sale		$	385,899		$	(4,909)		$	28,064		$	(312)		$	413,963		$	(5,221)


		Less than 12 Months						12 months or more						Total
		Estimated			Unrealized			Estimated			Unrealized			Estimated			Unrealized
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)

The unrealized losses on securities are primarily due to the changes in market interest rates subsequent to purchase. The Company did not consider these securities to be other-than-temporarily impaired at September 30, 2021 or December 31, 2020 since the decline in market value was attributable to changes in interest rates and not credit quality. In addition, the Company 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 nine months ended September 30, 2021 or for the year ended December 31, 2020.

At September 30, 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.