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Investment Securities
 3 Months Ended
Mar. 31, 2022
Investments, Debt and Equity Securities [Abstract]  
Investment Securities

Note 3—Investment Securities

 

The amortized cost and estimated fair values of investment securities are summarized below:

 

AVAILABLE-FOR-SALE:

 

       Gross   Gross     
   Amortized   Unrealized   Unrealized     
(Dollars in thousands)  Cost   Gains   Losses   Fair Value 
March 31, 2022                    
US Treasury securities  $60,406   $—   $1,811   $58,595 
Government Sponsored Enterprises   2,499    —    182    2,317 
Mortgage-backed securities   391,271    217    13,140    378,348 
Small Business Administration pools   28,112    209    337    27,984 
State and local government   105,757    1,182    4,968    101,971 
Corporate and other securities   8,774    81    250    8,605 
Total  $596,819   $1,689   $20,688   $577,820 
                     
       Gross   Gross     
   Amortized   Unrealized   Unrealized     
(Dollars in thousands)  Cost   Gains   Losses   Fair Value 
December 31, 2021                    
US Treasury securities  $15,736   $—   $300   $15,436 
Government Sponsored Enterprises   2,499    2    —    2,501 
Mortgage-backed securities   398,125    3,596    3,992    397,729 
Small Business Administration pools   30,835    505    67    31,273 
State and local government   105,469    4,918    539    109,848 
Corporate and other securities   8,024    157    129    8,052 
Total  $560,688   $9,178   $5,027   $564,839 

 

There were no investment securities listed as held-to-maturity as of March 31, 2022 or December 31, 2021.

 

During the three months ended March 31, 2022 and 2021, the Company did not receive any proceeds from the sale of investment securities available-for-sale. For the three months ended March 31, 2022, and 2021 there were no gross realized gains from the sale of investment securities available-for-sale and no gross realized losses.

 

At March 31, 2022, corporate and other securities available-for-sale included the following at fair value: corporate fixed-to-float bonds at $8.6 million, mutual funds at $12.0 thousand, and foreign debt of $10.0 thousand. As required by Accounting Standards Update (“ASU”) 2016-01-Financial Instruments-Overall (Subtopic 825-10), the Company measured its equity investments at fair value with changes in the fair value recognized through net income. For the three months ended March 31, 2022 and 2021, a $0.4 thousand gain and a $1.7 thousand gain were recognized on a mutual fund, respectively. At December 31, 2021, corporate and other securities available-for-sale included the following at fair value: corporate fixed-to-float bonds at $8.0 million, mutual fund at $11.6 thousand and foreign debt of $10.0 thousand. Other investments, at cost, include Federal Home Loan Bank (“FHLB”) stock in the amount of $792.1 thousand and corporate stock in the amount of $1.0 million, and a venture capital fund in the amount of $86.7 thousand at March 31, 2022. The Company held $698.4 thousand of FHLB stock and $1.0 million in corporate stock, and a venture capital fund in the amount of $86.7 thousand at December 31, 2021.

The following tables show gross unrealized losses and fair values, aggregated by investment category and length of time that individual securities have been in a continuous loss position, at March 31, 2022 and December 31, 2021.

 

                         
(Dollars in thousands)  Less than 12 months   12 months or more   Total 
March 31, 2022  Fair   Unrealized   Fair   Unrealized   Fair   Unrealized 
Available-for-sale securities:  Value   Loss   Value   Loss   Value   Loss 
                         
US Treasury Securities  $53,261   $1,271   $5,334   $540   $58,595   $1,811 
Government Sponsored Enterprise   2,317    182    —    —    2,317    182 
Mortgage-backed securities   261,976    8,929    86,207    4,211    348,183    13,140 
Small Business Administration pools   12,529    295    2,642    42    15,171    337 
State and local government   59,077    4,392    2,961    576    62,038    4,968 
Corporate and other securities   4,507    250    —    —    4,507    250 
Total  $393,667   $15,319   $97,144   $5,369   $490,811   $20,688 
             
(Dollars in thousands)  Less than 12 months   12 months or more   Total 
December 31, 2021  Fair   Unrealized   Fair   Unrealized   Fair   Unrealized 
Available-for-sale securities:  Value   Loss   Value   Loss   Value   Loss 
                         
US Treasury Securities  $ 14,479   $ 264   $ 958   $36   $15,437   $300 
Mortgage-backed securities   200,238    3,156    48,570    836    248,808    3,992 
Small Business Administration pools   7,232    67    —    —    7,232    67 
State and local government   21,261    539    —    —    21,261    539 
Corporate and other securities   3,621    129    —    —    3,621    129 
Total  $246,831   $4,155   $49,528   $872   $296,359   $5,027 

 

Government Sponsored Enterprise, Mortgage-Backed Securities: The Company owned mortgage-backed securities (“MBSs”), including collateralized mortgage obligations (“CMOs”), issued by government sponsored enterprises (“GSEs”) with an amortized cost of $419.4 million and $429.0 million and approximate fair value of $406.3 million and $429.0 million at March 31, 2022 and December 31, 2021, respectively. Unrealized losses on certain of these investments are not considered to be “other than temporary,” and the Company has the intent and ability to hold these until they mature or recover the current book value. The contractual cash flows of the investments are guaranteed by the GSEs. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost of the Company’s investment. Because the Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell these securities before a recovery of its amortized cost, which may be maturity, the Company does not consider the investments to be other-than-temporarily impaired at March 31, 2022.

 

Non-agency Mortgage Backed Securities: The Company held private label mortgage-backed securities (“PLMBSs”), including CMOs, at March 31, 2022 with an amortized cost of $45.6 thousand and approximate fair value of $45.3 thousand. The Company held PLMBSs, including CMOs, at December 31, 2021 with an amortized cost of $48.2 thousand and approximate fair value of $46.4 thousand. Management monitors each of these securities on a quarterly basis to identify any deterioration in the credit quality, collateral values and credit support underlying the investments. The Company does not consider these securities to be other-than-temporarily impaired at March 31, 2022.

 

State and Local Governments and Other: Management monitors these securities on a quarterly basis to identify any deterioration in the credit quality. Included in the monitoring is a review of the credit rating, a financial analysis and certain demographic data on the underlying issuer. The Company does not consider these securities to be other-than-temporarily impaired at March 31, 2022.

The following sets forth the amortized cost and fair value of investment securities at March 31, 2022 by contractual maturity. Expected maturities differ from contractual maturities because borrowers may have the right to call or prepay the obligations with or without prepayment penalties. MBSs are based on average life at estimated prepayment speeds.

 

   Available-for-sale 
March 31, 2022  Amortized   Fair 
(Dollars in thousands)  Cost   Value 
Due in one year or less  $20,273   $20,132 
Due after one year through five years   211,536    207,996 
Due after five years through ten years   285,494    272,064 
Due after ten years   79,516    77,658 
Total  $596,819   $577,820