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Securities

9 Months Ended

Sep. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Securities

Securities

The amortized cost and fair value of securities available-for-sale and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income were as follows:

						As of September 30, 2020
						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
						(In Thousands)
Available-for-sale:
U.S. government agency securities - government-sponsored enterprises						$	21,601					$	10					$	(74)					$	21,537
Municipal securities						13,520						462						(19)						13,963
Residential mortgage-backed securities - government issued						11,018						527						—						11,545
Residential mortgage-backed securities - government-sponsored enterprises						107,765						2,691						(9)						110,447
Commercial mortgage-backed securities - government issued						5,848						194						—						6,042
Commercial mortgage-backed securities - government-sponsored enterprises						12,639						811						—						13,450
Other securities						2,205						85						—						2,290
						$	174,596					$	4,780					$	(102)					$	179,274

						As of December 31, 2019
						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
						(In Thousands)
Available-for-sale:
U.S. government agency securities - government-sponsored enterprises						$	23,616					$	152					$	(10)					$	23,758
Municipal securities						160						—						—						160
Residential mortgage-backed securities - government issued						16,119						234						(5)						16,348
Residential mortgage-backed securities - government-sponsored enterprises						111,561						847						(406)						112,002
Commercial mortgage-backed securities - government issued						6,705						45						(87)						6,663
Commercial mortgage-backed securities - government-sponsored enterprises						11,953						23						(9)						11,967
Other securities						2,205						30						—						2,235
						$	172,319					$	1,331					$	(517)					$	173,133

The amortized cost and fair value of securities held-to-maturity and the corresponding amounts of gross unrealized gains and losses were as follows:

						As of September 30, 2020
						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
						(In Thousands)
Held-to-maturity:
Municipal securities						$	18,591					$	470					$	(21)					$	19,040
Residential mortgage-backed securities - government issued						4,121						131						—						4,252
Residential mortgage-backed securities - government-sponsored enterprises						4,173						180						—						4,353
Commercial mortgage-backed securities - government-sponsored enterprises						2,012						307						—						2,319
						$	28,897					$	1,088					$	(21)					$	29,964

						As of December 31, 2019
						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
						(In Thousands)
Held-to-maturity:
Municipal securities						$	19,727					$	335					$	(8)					$	20,054
Residential mortgage-backed securities - government issued						5,776						19						(9)						5,786
Residential mortgage-backed securities - government-sponsored enterprises						5,183						51						(23)						5,211
Commercial mortgage-backed securities - government-sponsored enterprises						2,014						123						—						2,137
						$	32,700					$	528					$	(40)					$	33,188

U.S. government agency securities - government-sponsored enterprises represent securities issued by the Federal National Mortgage Association (“FNMA”) and the SBA. Municipal securities include securities issued by various municipalities located primarily within Wisconsin and are primarily general obligation bonds that are tax-exempt in nature. Residential and commercial mortgage-backed securities - government issued represent securities guaranteed by the Government National Mortgage Association. Residential and commercial mortgage-backed securities - government-sponsored enterprises include securities guaranteed by the Federal Home Loan Mortgage Corporation, FNMA, and the FHLB. Other securities represent certificates of deposit of insured banks and savings institutions with an original maturity greater than three months. There were no sales of available-for-sale securities that occurred during the three months ended September 30, 2020 and one sale that occurred during the nine months ended September 30, 2020. There were 37 and 46 sales of available-for-sale securities that occurred during the three and nine months ended September 30, 2019, respectively.

At September 30, 2020 and December 31, 2019, securities with a fair value of $79.8 million and $30.3 million, respectively, were pledged to secure various obligations, including interest rate swap contracts, outstanding FHLB advances, additional FHLB availability, the Federal Reserve Discount Window, and municipal deposits. At September 30, 2020, pledged securities with a fair value of $129.3 million were available to secure various obligations. No pledged securities were available to secure various obligations as of December 31, 2019.

The amortized cost and fair value of securities by contractual maturity at September 30, 2020 are shown below. Actual maturities may differ from contractual maturities because issuers have the right to call or prepay certain obligations with or without call or prepayment penalties.

						Available-for-Sale																		Held-to-Maturity
						Amortized Cost						Fair Value						Amortized Cost						Fair Value
						(In Thousands)
Due in one year or less						$	—					$	—					$	2,804					$	2,823
Due in one year through five years						8,148						8,439						12,085						12,344
Due in five through ten years						33,651						35,229						10,872						11,513
Due in over ten years						132,797						135,606						3,136						3,284
						$	174,596					$	179,274					$	28,897					$	29,964

The tables below show the Corporation’s gross unrealized losses and fair value of available-for-sale investments aggregated by investment category and length of time that individual investments were in a continuous loss position at September 30, 2020 and December 31, 2019. At September 30, 2020, the Corporation held 12 available-for-sale securities that were in an unrealized loss position. Such securities have not experienced credit rating downgrades; however, they have generally declined in value due to the current interest rate environment. At September 30, 2020, the Corporation held one available-for-sale security that had been in a continuous unrealized loss position for twelve months or greater.

The Corporation also has not specifically identified available-for-sale securities in a loss position that it intends to sell in the near term and does not believe that it will be required to sell any such securities. The Corporation reviews its securities on a quarterly basis to monitor its exposure to other-than-temporary impairment. Consideration is given to such factors as the length of time and extent to which the security has been in an unrealized loss position, changes in security ratings, and an evaluation of the present value of expected future cash flows, if necessary. Based on the Corporation’s evaluation, it is expected that the Corporation will recover the entire amortized cost basis of each security. Accordingly, no other-than-temporary impairment was recorded in the unaudited Consolidated Statements of Income for the three and nine months ended September 30, 2020 and 2019.

A summary of unrealized loss information for securities available-for-sale, categorized by security type and length of time for which the security has been in a continuous unrealized loss position, follows:

						As of September 30, 2020
						Less than 12 Months																		12 Months or Longer																		Total
						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses
						(In Thousands)
Available-for-sale:
U.S. government agency securities - government-sponsored enterprises						$	12,933					$	41					$	4,086					$	33					$	17,019					$	74
Municipal securities						$	2,460					$	19					$	—					$	—					$	2,460					$	19
Residential mortgage-backed securities - government-sponsored enterprises						15,115						9						—						—						15,115						9
						$	30,508					$	69					$	4,086					$	33					$	34,594					$	102

						As of December 31, 2019
						Less than 12 Months																		12 Months or Longer																		Total
						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses
						(In Thousands)
Available-for-sale:
U.S. government agency securities - government-sponsored enterprises						$	4,363					$	10					$	—					$	—					$	4,363					$	10
Residential mortgage-backed securities - government issued						4,619						5						—						—						4,619						5
Residential mortgage-backed securities - government-sponsored enterprises						36,972						253						11,304						153						48,276						406
Commercial mortgage-backed securities - government issued						—						—						4,727						87						4,727						87
Commercial mortgage-backed securities - government-sponsored enterprises						2,245						4						1,047						5						3,292						9
						$	48,199					$	272					$	17,078					$	245					$	65,277					$	517

The tables below show the Corporation’s gross unrealized losses and fair value of held-to-maturity investments, aggregated by investment category and length of time that individual investments were in a continuous loss position at September 30, 2020 and December 31, 2019. At September 30, 2020, the Corporation held two held-to-maturity securities that were in an unrealized loss position. Such securities have not experienced credit rating downgrades; however, they have generally declined in value due to the current interest rate environment. There was one held-to-maturity security that had been in a continuous loss position for twelve months or greater as of September 30, 2020. It is expected that the Corporation will recover the entire amortized cost basis of each held-to-maturity security based upon an evaluation of aforementioned factors. Accordingly, no other-than-temporary impairment was recorded in the unaudited Consolidated Statements of Income for the three and nine months ended September 30, 2020 and 2019.

A summary of unrealized loss information for securities held-to-maturity, categorized by security type and length of time for which the security has been in a continuous unrealized loss position, follows:

						As of September 30, 2020
						Less than 12 Months																		12 Months or Longer																		Total
						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses
						(In Thousands)
Held-to-maturity:
Municipal securities						$	271					$	18					$	213					$	3					$	484					$	21

						As of December 31, 2019
						Less than 12 Months																		12 Months or Longer																		Total
						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses
						(In Thousands)
Held-to-maturity:
Municipal securities						$	499					$	8					$	—					$	—					$	499					$	8
Residential mortgage-backed securities - government issued						—						—						1,887						9						1,887						9
Residential mortgage-backed securities - government-sponsored enterprises						1,364						5						2,144						18						3,508						23
						$	1,863					$	13					$	4,031					$	27					$	5,894					$	40

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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

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