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Securities | 6 Months Ended
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Jun. 30, 2020
Investments, Debt and Equity Securities [Abstract] |
Securities | Securities The following tables summarize securities available-for-sale and securities held-to-maturity as of June 30, 2020 and December 31, 2019.
|  | June 30, 2020 |  |  |  |  |  |
|  | Amortized |  | Gross Unrealized |  |  |  | Fair
(in thousands) |  | Cost |  | Gains |  | Losses |  | Value
Securities available-for-sale |  |  |  |  |  |  |  |
U.S. Government-sponsored agencies |  | $ | 68,203 |  |  | $ | 384 |  |  | $ | (2,043) |  |  | $ | 66,544 |
Municipal securities |  | 91,906 |  |  | 3,140 |  |  | (4,484) |  |  | 90,562 |
Agency mortgage-backed securities |  | 275,433 |  |  | 6,632 |  |  | (3,535) |  |  | 278,530 |
Private label mortgage-backed securities |  | 101,110 |  |  | 1,044 |  |  | (229) |  |  | 101,925 |
Asset-backed securities |  | 5,000 |  |  | — |  |  | (163) |  |  | 4,837 |
Corporate securities |  | 48,394 |  |  | 309 |  |  | (2,084) |  |  | 46,619 |
Total available-for-sale |  | $ | 590,046 |  |  | $ | 11,509 |  |  | $ | (12,538) |  |  | $ | 589,017 |
|  | June 30, 2020 |  |  |  |  |  |
|  | Amortized |  | Gross Unrealized |  |  |  | Fair
(in thousands) |  | Cost |  | Gains |  | Losses |  | Value
Securities held-to-maturity |  |  |  |  |  |  |  |
Municipal securities |  | $ | 14,603 |  |  | $ | 671 |  |  | $ | — |  |  | $ | 15,274 |
Corporate securities |  | 53,692 |  |  | 768 |  |  | (582) |  |  | 53,878 |
Total held-to-maturity |  | $ | 68,295 |  |  | $ | 1,439 |  |  | $ | (582) |  |  | $ | 69,152 |
|  | December 31, 2019 |  |  |  |  |  |
|  | Amortized |  | Gross Unrealized |  |  |  | Fair
(in thousands) |  | Cost |  | Gains |  | Losses |  | Value
Securities available-for-sale |  |  |  |  |  |  |  |
U.S. Government-sponsored agencies |  | $ | 77,715 |  |  | $ | 99 |  |  | $ | (1,942) |  |  | $ | 75,872 |
Municipal securities |  | 97,447 |  |  | 1,706 |  |  | (1,501) |  |  | 97,652 |
Agency mortgage-backed securities |  | 264,142 |  |  | 1,304 |  |  | (4,006) |  |  | 261,440 |
Private label mortgage-backed securities |  | 63,704 |  |  | 97 |  |  | (188) |  |  | 63,613 |
Asset-backed securities |  | 5,000 |  |  | — |  |  | (45) |  |  | 4,955 |
Corporate securities |  | 38,632 |  |  | 220 |  |  | (1,532) |  |  | 37,320 |
Total available-for-sale |  | $ | 546,640 |  |  | $ | 3,426 |  |  | $ | (9,214) |  |  | $ | 540,852 |
|  | December 31, 2019 |  |  |  |  |  |
|  | Amortized |  | Gross Unrealized |  |  |  | Fair
(in thousands) |  | Cost |  | Gains |  | Losses |  | Value
Securities held-to-maturity |  |  |  |  |  |  |  |
Municipal securities |  | $ | 10,142 |  |  | $ | 226 |  |  | $ | — |  |  | $ | 10,368 |
Corporate securities |  | 51,736 |  |  | 588 |  |  | (132) |  |  | 52,192 |
Total held-to-maturity |  | $ | 61,878 |  |  | $ | 814 |  |  | $ | (132) |  |  | $ | 62,560 |
The Company elected to transfer ten available-for-sale (“AFS”) securities with an aggregate fair value of $4.5 million to a classification of held-to-maturity (“HTM”) on March 1, 2020. The net unrealized holding gain of $0.1 million, net of tax, as the date of the transfer was retained in accumulated other comprehensive loss, with the associated pretax amount retained in the carrying value of the HTM securities. Such amounts will be amortized to interest income over the remaining life of the securities. The fair value of the transferred AFS securities became the book value of the HTM securities as of March 1, 2020, with no unrealized gain or loss at that date. The carrying value of securities at June 30, 2020 is shown below by their contractual maturity date. Actual maturities will differ because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
|  | Available-for-Sale |  |
(in thousands) |  | Amortized Cost |  | Fair Value
Within one year |  | $ | 15 |  |  | $ | 15 |
One to five years |  | 30,141 |  |  | 25,364 |
Five to ten years |  | 82,174 |  |  | 79,991 |
After ten years |  | 96,173 |  |  | 98,355 |
|  | 208,503 |  |  | 203,725 |
Agency mortgage-backed securities |  | 275,433 |  |  | 278,530 |
Private label mortgage-backed securities |  | 101,110 |  |  | 101,925 |
Asset-backed securities |  | 5,000 |  |  | 4,837 |
Total |  | $ | 590,046 |  |  | $ | 589,017 |
|  | Held-to-Maturity |  |
(in thousands) |  | Amortized Cost |  | Fair Value
One to five years |  | $ | 1,505 |  |  | $ | 1,557 |
Five to ten years |  | 54,272 |  |  | 54,642 |
After ten years |  | 12,518 |  |  | 12,953 |
Total |  | $ | 68,295 |  |  | $ | 69,152 |
There were no gross gains or losses resulting from sales of available-for-sale securities during the three months ended June 30, 2020 and gross gains of less than $0.1 million resulting from the sales of available-for-sale securities during the six months ended June 30, 2020. There were $0.5 million of gross losses resulting from sales of available-for-sale securities during the three and six months ended June 30, 2019. Certain investments in debt securities are reported in the condensed consolidated financial statements at an amount less than their historical cost. The total fair value of these investments at June 30, 2020 and December 31, 2019 was $237.5 million and $317.5 million, which was approximately 36% and 53%, respectively, of the Company’s available-for-sale and held-to-maturity securities portfolios. These declines resulted primarily from fluctuations in market interest rates after purchase. Management believes the declines in fair value for these securities are temporary. Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced, with the resulting loss recognized in net income in the period the other-than-temporary impairment (“OTTI”) is identified. U. S. Government-Sponsored Agencies, Municipal Securities and Corporate Securities The unrealized losses on the Company’s investments in securities issued by U.S. Government-sponsored agencies, municipal organizations and corporate entities were caused primarily by interest rate changes. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be upon maturity, the Company does not consider those investments to be other-than-temporarily impaired at June 30, 2020. Agency Mortgage-Backed, Private Label Mortgage-Backed and Asset-Backed Securities The unrealized losses on the Company’s investments in agency mortgage-backed, private label mortgage-backed and asset-backed securities were caused primarily by interest rate changes. The Company expects to recover the amortized cost bases over the term of the securities. Because the Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be upon maturity, the Company does not consider those investments to be other-than-temporarily impaired at June 30, 2020. The following tables show the securities portfolio’s gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2020 and December 31, 2019.
|  | June 30, 2020 |  |  |  |  |  |  |  |  |  |
|  | Less Than 12 Months |  |  |  | 12 Months or Longer |  |  |  | Total |  |
(in thousands) |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Securities available-for-sale |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government-sponsored agencies |  | $ | 1,195 |  |  | $ | (15) |  |  | $ | 56,494 |  |  | $ | (2,028) |  |  | $ | 57,689 |  |  | $ | (2,043) |
Municipal securities |  | 61,167 |  |  | (4,484) |  |  | — |  |  | — |  |  | 61,167 |  |  | (4,484) |
Agency mortgage-backed securities |  | 22,419 |  |  | (391) |  |  | 10,727 |  |  | (3,144) |  |  | 33,146 |  |  | (3,535) |
Private label mortgage-backed securities |  | 21,781 |  |  | (160) |  |  | 2,777 |  |  | (69) |  |  | 24,558 |  |  | (229) |
Asset-backed securities |  | — |  |  | — |  |  | 4,837 |  |  | (163) |  |  | 4,837 |  |  | (163) |
Corporate securities |  | 12,512 |  |  | (122) |  |  | 20,038 |  |  | (1,962) |  |  | 32,550 |  |  | (2,084) |
Total |  | $ | 119,074 |  |  | $ | (5,172) |  |  | $ | 94,873 |  |  | $ | (7,366) |  |  | $ | 213,947 |  |  | $ | (12,538) |
|  | June 30, 2020 |  |  |  |  |  |  |  |  |  |
|  | Less Than 12 Months |  |  |  | 12 Months or Longer |  |  |  | Total |  |
(in thousands) |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Securities held-to-maturity |  |  |  |  |  |  |  |  |  |  |  |
Corporate securities |  | $ | 23,527 |  |  | $ | (582) |  |  | $ | — |  |  | $ | — |  |  | $ | 23,527 |  |  | $ | (582) |
Total |  | $ | 23,527 |  |  | $ | (582) |  |  | $ | — |  |  | $ | — |  |  | $ | 23,527 |  |  | $ | (582) |
|  | December 31, 2019 |  |  |  |  |  |  |  |  |  |
|  | Less Than 12 Months |  |  |  | 12 Months or Longer |  |  |  | Total |  |
(in thousands) |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Securities available-for-sale |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government-sponsored agencies |  | $ | 4,820 |  |  | $ | (61) |  |  | $ | 62,182 |  |  | $ | (1,881) |  |  | $ | 67,002 |  |  | $ | (1,942) |
Municipal securities |  | 1,279 |  |  | (1,501) |  |  | — |  |  | — |  |  | 1,279 |  |  | (1,501) |
Agency mortgage-backed securities |  | 91,159 |  |  | (829) |  |  | 83,212 |  |  | (3,177) |  |  | 174,371 |  |  | (4,006) |
Private label mortgage-backed securities |  | 30,077 |  |  | (180) |  |  | 2,884 |  |  | (8) |  |  | 32,961 |  |  | (188) |
Asset-backed securities |  | — |  |  | — |  |  | 4,955 |  |  | (45) |  |  | 4,955 |  |  | (45) |
Corporate securities |  | — |  |  | — |  |  | 22,985 |  |  | (1,532) |  |  | 22,985 |  |  | (1,532) |
Total |  | $ | 127,335 |  |  | $ | (2,571) |  |  | $ | 176,218 |  |  | $ | (6,643) |  |  | $ | 303,553 |  |  | $ | (9,214) |
|  | December 31, 2019 |  |  |  |  |  |  |  |  |  |
|  | Less Than 12 Months |  |  |  | 12 Months or Longer |  |  |  | Total |  |
(in thousands) |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Securities held-to-maturity |  |  |  |  |  |  |  |  |  |  |  |
Corporate securities |  | 13,977 |  |  | (132) |  |  | — |  |  | — |  |  | 13,977 |  |  | (132) |
Total |  | $ | 13,977 |  |  | $ | (132) |  |  | $ | — |  |  | $ | — |  |  | $ | 13,977 |  |  | $ | (132) |
Amounts reclassified from accumulated other comprehensive loss and the affected line items in the condensed consolidated statements of income during the three and six months ended June 30, 2020 and June 30, 2019 were as follows:
(in thousands) Details About Accumulated Other Comprehensive Loss Components |  |  |  |  |  |  |  |  |  |  | Affected Line Item in the Statements of Income
|  | Three Months Ended June 30, 2020 |  | Six Months Ended June 30, 2020 |  | Three Months Ended June 30, 2019 |  | Six Months Ended June 30, 2019 |  |  |
Realized gains (losses) on securities available-for-sale |  |  |  |  |  |  |  |  |  |  |
Gain (loss) realized in earnings |  | $ | — |  |  | $ | 41 |  |  | $ | (458) |  |  | $ | (458) |  |  |  | Gain (loss) on sale of securities
Total reclassified amount before tax |  | — |  |  | 41 |  |  | (458) |  |  | (458) |  |  |  | Income Before Income Taxes
Tax expense (benefit) |  | — |  |  | 11 |  |  | (124) |  |  | (124) |  |  |  | Income Tax Provision (Benefit)
Total reclassifications out of accumulated other comprehensive loss |  | $ | — |  |  | $ | 30 |  |  | $ | (334) |  |  | $ | (334) |  |  |  | Net Income

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