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v3.22.2.2

Investment Securities | 9 Months Ended
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Sep. 30, 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: Schedule of Investment Available-For-Sale
|  |  |  |  | Gross |  |  | Gross |  |  |  |
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  |  |
(Dollars in thousands) |  | Cost |  |  | Gains |  |  | Losses |  |  | Fair Value |
September 30, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Treasury securities |  | $ | 60,502 |  |  | $ | — |  |  | $ | (4,779 | ) |  | $ | 55,723 |
Government Sponsored Enterprises |  |  | 2,500 |  |  |  | — |  |  |  | (404 | ) |  |  | 2,096 |
Mortgage-backed securities |  |  | 269,609 |  |  |  | 13 |  |  |  | (19,514 | ) |  |  | 250,109 |
Small Business Administration pools |  |  | 22,950 |  |  |  | 56 |  |  |  | (727 | ) |  |  | 22,279 |
State and local government |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |
Corporate and other securities |  |  | 8,773 |  |  |  | — |  |  |  | (632 | ) |  |  | 8,143 |
Total |  | $ | 364,334 |  |  | $ | 69 |  |  | $ | (26,056 | ) |  | $ | 338,350 |
|  |  |  |  | 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 |
HELD-TO-MATURITY: Schedule of Held to Maturity
|  |  |  |  | Gross |  |  | Gross |  |  |  |
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  |  |
(Dollars in thousands) |  | Cost |  |  | Gains |  |  | Losses |  |  | Fair Value |
September 30, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Treasury securities |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Government Sponsored Enterprises |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Mortgage-backed securities |  |  | 126,365 |  |  |  | — |  |  |  | (8,663 | ) |  |  | 117,702 |
Small Business Administration pools |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
State and local government |  |  | 106,936 |  |  |  | — |  |  |  | (7,691 | ) |  |  | 99,245 |
Corporate and other securities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 233,301 |  |  | $ | — |  |  | $ | (16,354 | ) |  | $ | 216,947 |
There were no investment securities listed as held-to-maturity as of December 31, 2021. On June 1, 2022, we reclassified $224.5 million in investments to held-to-maturity (HTM) from available-for-sale (AFS). These securities were transferred at fair value at the time of the transfer, which became the new cost basis for the securities held to maturity. The pretax unrealized net holding loss on the available for sale securities on the date of transfer totaled approximately $16.7 million, and continued to be reported as a component of accumulated other comprehensive loss. This net unrealized loss is being amortized to interest income over the remaining life of the securities as a yield adjustment. There were no gains or losses recognized as a result of this transfer. The remaining pretax unrealized net holding loss on these investments was $16.1 million ($12.7 million net of tax) at September 30, 2022. During the nine months ended September 30, 2022 and 2021, the Company did not receive any proceeds from the sale of investment securities available-for-sale. For the nine months ended September 30, 2022, and 2021, there were no gross realized gains from the sale of investment securities available-for-sale and no gross realized losses. At September 30, 2022, corporate and other securities available-for-sale included the following at fair value: corporate fixed-to-float bonds at $8.1 million, mutual funds at $11.6 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 nine months ended September 30, 2022 and 2021, a $0.9 thousand loss 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 funds 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 $136.7 thousand at September 30, 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 September 30, 2022 and December 31, 2021. Schedule of gross unrealized losses and fair values, aggregated by investment category and length of time that individual securities have been in a continuous loss position
(Dollars in thousands) |  | Less than 12 months |  |  | 12 months or more |  |  | Total |
September 30, 2022 |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |
Available-for-sale securities: |  | Value |  |  | Loss |  |  | Value |  |  | Loss |  |  | Value |  |  | Loss |
US Treasury Securities |  | $ | 42,805 |  |  | $ | 1,940 |  |  | $ | 12,919 |  |  | $ | 2,839 |  |  | $ | 55,724 |  |  | $ | 4,779 |
Government Sponsored Enterprise |  |  | 2,096 |  |  |  | 404 |  |  |  | — |  |  |  | — |  |  |  | 2,096 |  |  |  | 404 |
Mortgage-backed securities |  |  | 104,236 |  |  |  | 6,523 |  |  |  | 144,072 |  |  |  | 12,992 |  |  |  | 248,308 |  |  |  | 19,515 |
Small Business Administration pools |  |  | 16,139 |  |  |  | 649 |  |  |  | 3,053 |  |  |  | 77 |  |  |  | 19,192 |  |  |  | 726 |
State and local government |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Corporate and other securities |  |  | 2,189 |  |  |  | 93 |  |  |  | 3,211 |  |  |  | 539 |  |  |  | 5,400 |  |  |  | 632 |
Total |  | $ | 167,465 |  |  | $ | 9,609 |  |  | $ | 163,255 |  |  | $ | 16,447 |  |  | $ | 330,720 |  |  | $ | 26,056 |
(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 |
Schedule of gross unrealized losses and fair values, aggregated by investment category and length of time that individual held to maturity have been in a continuous loss position
(Dollars in thousands) |  | Less than 12 months |  |  | 12 months or more |  |  | Total |
September 30, 2022 |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |
Held-to-maturity securities: |  | Value |  |  | Loss |  |  | Value |  |  | Loss |  |  | Value |  |  | Loss |
US Treasury Securities |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Government Sponsored Enterprise |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Mortgage-backed securities |  |  | 107,682 |  |  |  | 7,719 |  |  |  | 10,019 |  |  |  | 944 |  |  |  | 117,701 |  |  |  | 8,663 |
Small Business Administration pools |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
State and local government |  |  | 95,701 |  |  |  | 7,200 |  |  |  | 3,544 |  |  |  | 491 |  |  |  | 99,245 |  |  |  | 7,691 |
Corporate and other securities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 203,383 |  |  | $ | 14,919 |  |  | $ | 13,563 |  |  | $ | 1,435 |  |  | $ | 216,946 |  |  | $ | 16,354 |
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 $418.9 million and $429.0 million and approximate fair value of $390.0 million and $429.0 million at September 30, 2022 and December 31, 2021, respectively. The total amortized cost of $418.9 million and approximate fair value of $390.0 million includes $292.6 million amortized cost and $272.3 million fair value in available-for-sale and $126.3 million amortized cost and $117.7 million fair value in held-to-maturity at September 30, 2022. 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 September 30, 2022. Non-agency Mortgage Backed Securities: The Company held private label mortgage-backed securities (“PLMBSs”), including CMOs, at September 30, 2022 with an amortized cost of $39.8 thousand and approximate fair value of $40.2 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 September 30, 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 September 30, 2022. The following sets forth the amortized cost and fair value of investment securities at September 30, 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. Schedule of Amortized Cost and Fair Value of Investment Securities
|  | Available-for-sale |
September 30, 2022 |  | Amortized |  |  | Fair |
(Dollars in thousands) |  | Cost |  |  | Value |
Due in one year or less |  | $ | 3,846 |  |  | $ | 3,838 |
Due after one year through five years |  |  | 165,838 |  |  |  | 157,528 |
Due after five years through ten years |  |  | 170,365 |  |  |  | 155,694 |
Due after ten years |  |  | 24,285 |  |  |  | 21,290 |
Total |  | $ | 364,334 |  |  | $ | 338,350 |
|  | Held-to-maturity |
September 30, 2022 |  | Amortized |  |  | Fair |
(Dollars in thousands) |  | Cost |  |  | Value |
Due in one year or less |  | $ | 8,683 |  |  | $ | 8,617 |
Due after one year through five years |  |  | 48,765 |  |  |  | 46,457 |
Due after five years through ten years |  |  | 137,408 |  |  |  | 127,399 |
Due after ten years |  |  | 38,445 |  |  |  | 34,474 |
Total |  | $ | 233,301 |  |  | $ | 216,947 |

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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 https://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 https://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 https://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 https://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) + Details
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