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v3.22.2.2

SECURITIES AVAILABLE FOR SALE | 9 Months Ended
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Sep. 30, 2022
SECURITIES AVAILABLE FOR SALE |
SECURITIES AVAILABLE FOR SALE | ​ NOTE 2. SECURITIES AVAILABLE FOR SALE ​ The following is a summary of securities available for sale (“AFS”): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Gross | ​ | Gross | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Unrealized | ​ | Unrealized | ​ | ​ | ​
(in thousands) |  | Amortized Cost |  | Gains |  | Losses |  | Fair Value
September 30, 2022 |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Mortgage-backed securities: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
US Government-sponsored enterprises | ​ | $ | 252,369 | ​ | $ | 4 | ​ | $ | (36,349) | ​ | $ | 216,024
US Government agency | ​ |  | 93,643 | ​ |  | 11 | ​ |  | (10,128) | ​ |  | 83,526
Private label | ​ |  | 72,484 | ​ |  | 34 | ​ |  | (5,749) | ​ |  | 66,769
Obligations of states and political subdivisions thereof | ​ |  | 123,350 | ​ |  | 9,205 | ​ |  | (27,903) | ​ |  | 104,652
Corporate bonds | ​ |  | 91,512 | ​ |  | 26 | ​ |  | (5,757) | ​ |  | 85,781
Total securities available for sale | ​ | $ | 633,358 | ​ | $ | 9,280 | ​ | $ | (85,886) | ​ | $ | 556,752
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Gross | ​ | Gross | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Unrealized | ​ | Unrealized | ​ | ​ | ​
(in thousands) |  | Amortized Cost |  | Gains |  | Losses |  | Fair Value
December 31, 2021 | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Mortgage-backed securities: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
US Government-sponsored enterprises | ​ | $ | 237,283 | ​ | $ | 2,289 | ​ | $ | (3,455) | ​ | $ | 236,117
US Government agency | ​ |  | 79,143 | ​ |  | 1,016 | ​ |  | (522) | ​ |  | 79,637
Private label | ​ |  | 68,691 | ​ |  | 142 | ​ |  | (138) | ​ |  | 68,695
Obligations of states and political subdivisions thereof | ​ |  | 140,585 | ​ |  | 1,489 | ​ |  | (298) | ​ |  | 141,776
Corporate bonds | ​ |  | 89,994 | ​ |  | 2,479 | ​ |  | (422) | ​ |  | 92,051
Total securities available for sale | ​ | $ | 615,696 | ​ | $ | 7,415 | ​ | $ | (4,835) | ​ | $ | 618,276
​ Credit Quality Information We monitor the credit quality of available for sale debt securities through credit ratings from various rating agencies and substantial price changes. Credit ratings express opinions about the credit quality of a security and are utilized us to make informed decisions. Securities are triggered for further review in the quarter if the security has significant fluctuations in ratings, drops below investment grade, or significant pricing changes. For securities without credit ratings, we utilize other financial information indicating the financial health of the underlying municipality, agency, or organization associated with the underlying security. ​ As of September 30, 2022 and December 31, 2021, we carried no allowance on available for sale debt securities in accordance with ASU 2016-13, Measurement of Credit Losses on Financial Instruments. ​ The amortized cost and estimated fair value of available for sale securities segregated by contractual maturity at September 30, 2022 are presented below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities are shown in total, as their maturities are highly variable. ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Available for sale
(in thousands) |  | Amortized Cost |  | Fair Value
Within 1 year |  | $ | 195 | ​ | $ | 196
Over 1 year to 5 years | ​ |  | 30,292 | ​ |  | 28,426
Over 5 years to 10 years | ​ |  | 49,666 | ​ |  | 55,025
Over 10 years | ​ |  | 134,709 | ​ |  | 106,786
Total bonds and obligations | ​ |  | 214,862 | ​ |  | 190,433
Mortgage-backed securities | ​ |  | 418,496 | ​ |  | 366,319
Total securities available for sale | ​ | $ | 633,358 | ​ | $ | 556,752
​ ​ ​ ​ The following table presents the gains and losses from the sale of AFS securities for the periods presented: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | Nine Months Ended
​ | ​ | September 30, | ​ | September 30,
(in thousands) |  | 2022 |  | 2021 |  | 2022 |  | 2021
Gross gains on sales of available for sale securities | ​ | $ | 142 | ​ | $ | 1,980 | ​ | $ | 151 | ​ | $ | 2,030
Gross losses on sales of available for sale securities | ​ |  | (98) | ​ |  | (50) | ​ |  | (98) | ​ |  | (50)
Net gains on sale of available for sale securities | ​ | $ | 44 | ​ | $ | 1,930 | ​ | $ | 53 | ​ | $ | 1,980
​ Securities with unrealized losses, segregated by the duration of their continuous unrealized loss positions, are summarized as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Less Than Twelve Months | ​ | Over Twelve Months | ​ | Total
​ | ​ | Gross |  | ​ | ​ |  | Gross |  | ​ | ​ |  | Gross |  | ​ | ​
​ | ​ | Unrealized | ​ | Fair | ​ | Unrealized | ​ | Fair | ​ | Unrealized | ​ | Fair
(in thousands) |  | Losses |  | Value |  | Losses |  | Value |  | Losses |  | Value
September 30, 2022 |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Mortgage-backed securities: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
US Government-sponsored enterprises | ​ | $ | 18,262 | ​ | $ | 139,219 | ​ | $ | 18,087 | ​ | $ | 76,291 | ​ | $ | 36,349 | ​ | $ | 215,510
US Government agency | ​ |  | 6,591 | ​ |  | 64,575 | ​ |  | 3,537 | ​ |  | 17,021 | ​ |  | 10,128 | ​ |  | 81,596
Private label | ​ |  | 3,466 | ​ |  | 35,740 | ​ |  | 2,283 | ​ |  | 30,994 | ​ |  | 5,749 | ​ |  | 66,734
Obligations of states and political subdivisions thereof | ​ |  | 20,425 | ​ |  | 78,085 | ​ |  | 7,478 | ​ |  | 21,373 | ​ |  | 27,903 | ​ |  | 99,458
Corporate bonds | ​ |  | 3,770 | ​ |  | 65,251 | ​ |  | 1,987 | ​ |  | 16,763 | ​ |  | 5,757 | ​ |  | 82,014
Total securities available for sale | ​ | $ | 52,514 | ​ | $ | 382,870 | ​ | $ | 33,372 | ​ | $ | 162,442 | ​ | $ | 85,886 | ​ | $ | 545,312
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Less Than Twelve Months | ​ | Over Twelve Months | ​ | Total
​ |  | Gross |  | ​ | ​ |  | Gross |  | ​ | ​ |  | Gross |  | ​ | ​
​ | ​ | Unrealized | ​ | Fair | ​ | Unrealized | ​ | Fair | ​ | Unrealized | ​ | Fair
(in thousands) | ​ | Losses | ​ | Value | ​ | Losses | ​ | Value | ​ | Losses | ​ | Value
December 31, 2021 |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Mortgage-backed securities: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
US Government-sponsored enterprises | ​ | $ | 1,589 | ​ | $ | 127,780 | ​ | $ | 1,866 | ​ | $ | 39,717 | ​ | $ | 3,455 | ​ | $ | 167,497
US Government agency | ​ |  | 381 | ​ |  | 32,628 | ​ |  | 141 | ​ |  | 4,548 | ​ |  | 522 | ​ |  | 37,176
Private label | ​ |  | 133 | ​ |  | 44,372 | ​ |  | 5 | ​ |  | 16 | ​ |  | 138 | ​ |  | 44,388
Obligations of states and political subdivisions thereof | ​ |  | 187 | ​ |  | 36,878 | ​ |  | 111 | ​ |  | 6,129 | ​ |  | 298 | ​ |  | 43,007
Corporate bonds | ​ |  | 94 | ​ |  | 21,358 | ​ |  | 328 | ​ |  | 11,922 | ​ |  | 422 | ​ |  | 33,280
Total securities available for sale | ​ | $ | 2,384 | ​ | $ | 263,016 | ​ | $ | 2,451 | ​ | $ | 62,332 | ​ | $ | 4,835 | ​ | $ | 325,348
​ We expect to recover the amortized cost basis on all securities in our AFS portfolio. Furthermore, we do not intend to sell nor do we anticipate that we will be required to sell any securities in an unrealized loss position as of September 30, 2022, prior to this recovery. Our ability and intent to hold these securities until recovery is supported by our capital and liquidity positions as well as historically low portfolio turnover. ​ The following summarizes, by investment security type, the impact of securities in an unrealized loss position for greater than 12 months at September 30, 2022: ​ US Government-sponsored enterprises ​ 489 out of the total 521 securities in our portfolios of AFS US Government-sponsored enterprises were in unrealized loss positions. Aggregate unrealized losses represented 14.55% of the amortized cost of securities in unrealized loss positions. The Federal National Mortgage Association and Federal Home Loan Mortgage Corporation guarantee the contractual cash flows of all of our US Government-sponsored enterprises. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. ​ US Government agency ​ 139 out of the total 161 securities in our portfolios of AFS US Government agency securities were in unrealized loss positions. Aggregate unrealized losses represented 11.04% of the amortized cost of securities in unrealized loss positions. The Government National Mortgage Association guarantees the contractual cash flows of all of our US Government agency securities. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. ​ Private label ​ 33 of the total 35 securities in our portfolio of AFS private label mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 7.93% of the amortized cost of securities in unrealized loss positions. We expect to receive all of the future contractual cash flows related to the amortized cost on these securities. ​ Obligations of states and political subdivisions thereof ​ 68 of the total 83 securities in our portfolio of AFS municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 22.06% of the amortized cost of securities in unrealized loss positions. We continually monitor the municipal bond sector of the market carefully and periodically evaluate the appropriate level of exposure to the market. At this time, we feel the bonds in this portfolio carry minimal risk of default, and we are appropriately compensated for the risk. There were no material underlying credit downgrades during the quarter. ​ Corporate bonds ​ 26 out of the total 31 securities in our portfolio of AFS corporate bonds were in an unrealized loss position. The aggregate unrealized loss represents 7.07% of the amortized cost of bonds in unrealized loss positions. We review the financial strength of all of these bonds, and we have concluded that the amortized cost remains supported by the expected future cash flows of these securities. The most recent review includes all bond issuers and their current credit ratings, financial performance and capitalization.

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