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SECURITIES

3 Months Ended

Mar. 31, 2022

Investments, Debt and Equity Securities [Abstract]

SECURITIES

SECURITIES

Debt securities available-for-sale ("AFS") at March 31, 2022 and December 31, 2021 are as follows:

			March 31, 2022																								December 31, 2021
			Amortized						Unrealized												Fair						Amortized						Unrealized												Fair
			Cost						Gains						Losses						Value						Cost						Gains						Losses						Value
U.S. Government sponsored entities			$	1,831					$	0					$	(35)					$	1,796					$	110,788					$	2,728					$	(1,768)					$	111,748
State & political subdivisions			113,292						495						(7,923)						105,864						103,232						2,162						(1,682)						103,712
Residential & multi-family mortgage			406,532						494						(26,489)						380,537						437,021						4,127						(6,513)						434,635
Corporate notes & bonds			35,773						59						(1,678)						34,154						28,257						250						(443)						28,064
Pooled SBA			17,820						20						(629)						17,211						18,787						283						(38)						19,032
Total			$	575,248					$	1,068					$	(36,754)					$	539,562					$	698,085					$	9,550					$	(10,444)					$	697,191

Debt securities held-to-maturity ("HTM") at March 31, 2022 and December 31, 2021 are as follows:

			March 31, 2022																								December 31, 2021
			Amortized						Unrealized												Fair						Amortized						Unrealized												Fair
			Cost						Gains						Losses						Value						Cost						Gains						Losses						Value
U.S. Government sponsored entities			$	307,597					$	0					$	(11,909)					$	295,688					$	0					$	0					$	0					$	0
Total			$	307,597					$	0					$	(11,909)					$	295,688					$	0					$	0					$	0					$	0

The Corporation elected to transfer 23 AFS securities with an aggregate fair value of $101.1 million to a classification of HTM on January 1, 2022. In accordance with FASB ASC 320-10-55-24, the transfer from AFS to HTM must be recorded at the fair value of the AFS securities at the time of transfer. The net unrealized holding gain of $373 thousand, net of tax, at the date of transfer was retained in accumulated other comprehensive income (loss), with the associated pre-tax amount retained in the carrying value of the HTM securities. Such amounts will be amortized to comprehensive income over the remaining life of the securities.

Information pertaining to security sales on AFS securities is as follows:

			Proceeds						Gross Gains						Gross Losses
Three months ended March 31, 2022			$	22,164					$	651					$	0
Three months ended March 31, 2021			0						0						0

The tax provision related to these net realized gains was $137 thousand for the three months ended March 31, 2022 and zero during the three months ended March 31, 2021, respectively.

The table below illustrates the maturity distribution of debt securities at amortized cost and fair value as of March 31, 2022:

			Available-for-sale												Held-to-maturity
			Amortized Cost						Fair Value						Amortized Cost						Fair Value
1 year or less			$	7,343					$	7,377					$	503					$	477
1 year – 5 years			41,120						40,800						232,668						225,357
5 years – 10 years			94,461						86,401						68,939						64,722
After 10 years			7,972						7,236						5,487						5,132
			150,896						141,814						307,597						295,688
Residential & multi-family mortgage			406,532						380,537						0						0
Pooled SBA			17,820						17,211						0						0
Total debt securities			$	575,248					$	539,562					$	307,597					$	295,688

Mortgage securities and pooled SBA securities are not due at a single date; periodic payments are received based on the payment patterns of the underlying collateral.

On March 31, 2022 and December 31, 2021, securities carried at $601.5 million and $461.5 million, respectively, were pledged to secure public deposits and for other purposes as provided by law.

At March 31, 2022 and December 31, 2021, there were no holdings of securities of any one issuer, other than the U.S. Government sponsored entities, in an amount greater than 10% of shareholders’ equity. The Corporation’s residential and multi-family mortgage securities are issued by government sponsored entities.

AFS debt securities with unrealized 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, are as follows:

March 31, 2022

			Less than 12 Months												12 Months or More												Total
Description of Securities			Fair Value						Unrealized Loss						Fair Value						Unrealized Loss						Fair Value						Unrealized Loss
U.S. Government sponsored entities			$	1,796					$	(35)					$	0					$	0					$	1,796					$	(35)
State & political subdivisions			78,991						(6,275)						14,547						(1,648)						93,538						(7,923)
Residential & multi-family mortgage			293,601						(17,743)						100,040						(8,746)						393,641						(26,489)
Corporate notes & bonds			22,174						(1,401)						5,777						(277)						27,951						(1,678)
Pooled SBA			16,379						(629)						126						0						16,505						(629)
			$	412,941					$	(26,083)					$	120,490					$	(10,671)					$	533,431					$	(36,754)

December 31, 2021

			Less than 12 Months												12 Months or More												Total
			Fair Value						Unrealized Loss						Fair Value						Unrealized Loss						Fair Value						Unrealized Loss
U.S. Government sponsored entities			$	23,733					$	(553)					$	37,911					$	(1,215)					$	61,644					$	(1,768)
State & political subdivisions			55,636						(1,399)						5,026						(283)						60,662						(1,682)
Residential & multi-family mortgage			248,690						(4,837)						45,185						(1,676)						293,875						(6,513)
Corporate notes & bonds			6,466						(249)						3,806						(194)						10,272						(443)
Pooled SBA			4,394						(37)						127						(1)						4,521						(38)
			$	338,919					$	(7,075)					$	92,055					$	(3,369)					$	430,974					$	(10,444)

HTM debt securities with unrealized 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, are as follows:

March 31, 2022

			Less than 12 Months												12 Months or More												Total
Description of Securities			Fair Value						Unrealized Loss						Fair Value						Unrealized Loss						Fair Value						Unrealized Loss
U.S. Government sponsored entities			$	265,151					$	(9,108)					$	54,355					$	(2,801)					$	319,506					$	(11,909)
			$	265,151					$	(9,108)					$	54,355					$	(2,801)					$	319,506					$	(11,909)

December 31, 2021

			Less than 12 Months												12 Months or More												Total
			Fair Value						Unrealized Loss						Fair Value						Unrealized Loss						Fair Value						Unrealized Loss
U.S. Government sponsored entities			$	0					$	0					$	0					$	0					$	0					$	0
			$	0					$	0					$	0					$	0					$	0					$	0

At March 31, 2022 and December 31, 2021, management performed an assessment for possible impairment related to credit losses of the Corporation’s debt securities, relying on information obtained from various sources, including publicly available financial data, ratings by external agencies, brokers and other sources. Based on the results of the assessment, management believes impairment of these debt securities at March 31, 2022 and December 31, 2021 to be temporary.

For the securities that comprise corporate notes and bonds and the securities that are issued by state and political subdivisions, management monitors publicly available financial information, such as filings with the Securities and Exchange Commission, in order to evaluate the securities for other-than-temporary impairment. For financial institution issuers, management monitors information from quarterly “call” report filings that are used to generate Uniform Bank Performance Reports. All other securities that were in an unrealized loss position at the balance sheet date were reviewed by management, and issuer-specific documents were reviewed as appropriate given the following considerations; the financial condition and near-term prospects of the issuer and whether downgrades by bond rating agencies have occurred, the length of time and extent to which fair value has been less than cost, and whether management does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery.

As of March 31, 2022 and December 31, 2021, management concluded the debt securities described in the previous paragraphs were not impaired for reasons due to credit quality for the following reasons:

•There is no indication of any significant deterioration of the creditworthiness of the institutions that issued the securities.

•All contractual interest payments on the securities have been received as scheduled, and no information has come to management’s attention through the processes previously described which would lead to a conclusion that future contractual payments will not be timely received.

•The unrealized losses were deemed to be temporary changes in value related to market movements in interest yields.

The Corporation does not intend to sell and it is not more likely than not that it will be required to sell the securities in an unrealized loss position before recovery of its amortized cost basis.

Equity securities at March 31, 2022 and December 31, 2021 are as follows:

			March 31, 2022						December 31, 2021
Corporate equity securities			$	6,484					$	6,715
Mutual funds			2,383						2,566
Certificates of deposit			663						506
Corporate notes and bonds			562						579
Total			$	10,092					$	10,366

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- References

No definition available.

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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)

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