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Securities

9 Months Ended

Sep. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Securities

Securities

The following tables summarize securities available-for-sale and securities held-to-maturity as of September 30, 2021 and December 31, 2020.

						September 30, 2021
						Amortized						Gross Unrealized												Fair
(in thousands)						Cost						Gains						Losses						Value
Securities available-for-sale
U.S. Government-sponsored agencies						$	53,380					$	234					$	(1,159)					$	52,455
Municipal securities						76,528						1,086						(164)						77,450
Agency mortgage-backed securities						432,613						2,364						(5,092)						429,885
Private label mortgage-backed securities						19,997						238						—						20,235
Asset-backed securities						5,000						5						—						5,005
Corporate securities						48,460						965						(448)						48,977
Total available-for-sale						$	635,978					$	4,892					$	(6,863)					$	634,007

						September 30, 2021
						Amortized						Gross Unrealized												Fair
(in thousands)						Cost						Gains						Losses						Value
Securities held-to-maturity
Municipal securities						$	14,538					$	781					$	—					$	15,319
Corporate securities						47,591						1,427						—						49,018
Total held-to-maturity						$	62,129					$	2,208					$	—					$	64,337

						December 31, 2020
						Amortized						Gross Unrealized												Fair
(in thousands)						Cost						Gains						Losses						Value
Securities available-for-sale
U.S. Government-sponsored agencies						$	61,765					$	432					$	(1,652)					$	60,545
Municipal securities						82,757						463						(731)						82,489
Agency mortgage-backed securities						241,795						4,591						(2,465)						243,921
Private label mortgage-backed securities						57,268						850						(2)						58,116
Asset-backed securities						5,000						—						(39)						4,961
Corporate securities						48,419						771						(1,594)						47,596
Total available-for-sale						$	497,004					$	7,107					$	(6,483)					$	497,628

						December 31, 2020
						Amortized						Gross Unrealized												Fair
(in thousands)						Cost						Gains						Losses						Value
Securities held-to-maturity
Municipal securities						$	14,571					$	746					$	—					$	15,317
Corporate securities						53,652						610						(127)						54,135
Total held-to-maturity						$	68,223					$	1,356					$	(127)					$	69,452

The carrying value of securities at September 30, 2021 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						$	—					$	—
One to five years						34,855						32,935
Five to ten years						64,591						64,429
After ten years						78,922						81,518
						178,368						178,882
Agency mortgage-backed securities						432,613						429,885
Private label mortgage-backed securities						19,997						20,235
Asset-backed securities						5,000						5,005
Total						$	635,978					$	634,007

						Held-to-Maturity
(in thousands)						Amortized Cost						Fair Value
One to five years						$	5,793					$	5,976
Five to ten years						44,655						46,320
After ten years						11,681						12,041
Total						$	62,129					$	64,337

There were no gross gains or losses resulting from the sale of available-for-sale securities during the three and nine months ended September 30, 2021. There were $0.1 million of gross gains resulting from the sale of available-for-sale securities during the three and nine months ended September 30, 2020.

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 September 30, 2021 and December 31, 2020 was $462.4 million and $226.5 million, which was approximately 66% and 40%, respectively, of the Company’s AFS and HTM securities portfolios. As of September 30, 2021, the Company’s security portfolio consisted of 441 securities, of which 167 were in an unrealized loss position. The unrealized losses are related to the categories noted below. 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 September 30, 2021.

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 terms 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 September 30, 2021.

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 September 30, 2021 and December 31, 2020.

						September 30, 2021
						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						$	2,931					$	(69)					$	44,034					$	(1,090)					$	46,965					$	(1,159)
Municipal securities						61,658						(164)						—						—						61,658						(164)
Agency mortgage-backed securities						320,805						(4,085)						18,818						(1,007)						339,623						(5,092)
Corporate securities						4,998						(2)						9,552						(446)						14,550						(448)
Total						$	390,392					$	(4,320)					$	72,404					$	(2,543)					$	462,796					$	(6,863)

There were no securities held-to-maturity with gross unrealized losses at September 30, 2021.

						December 31, 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						$	—					$	—					$	52,351					$	(1,652)					$	52,351					$	(1,652)
Municipal securities						18,731						(114)						23,519						(617)						42,250						(731)
Agency mortgage-backed securities						38,987						(276)						45,297						(2,189)						84,284						(2,465)
Private label mortgage-backed securities						1,277						(1)						558						(1)						1,835						(2)
Asset-backed securities						—						—						4,961						(39)						4,961						(39)
Corporate securities						—						—						20,406						(1,594)						20,406						(1,594)
Total						$	58,995					$	(391)					$	147,092					$	(6,092)					$	206,087					$	(6,483)

						December 31, 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						17,456						(126)						2,999						(1)						20,455						(127)
Total						$	17,456					$	(126)					$	2,999					$	(1)					$	20,455					$	(127)

There were no amounts reclassified from accumulated other comprehensive loss to the condensed consolidated statements of income during the three and nine months ended September 30, 2021. Amounts reclassified from accumulated other comprehensive loss and the affected line items in the condensed consolidated statements of income during the three and nine months ended September 30, 2020 were as follows:

(in thousands) Details About Accumulated Other Comprehensive Loss Components																																	Affected Line Item in the Statements of Income
						Three Months Ended September 30, 2021						Nine Months Ended September 30, 2021						Three Months Ended September 30, 2020						Nine Months Ended September 30, 2020
Realized gains on securities available-for-sale
Gain realized in earnings						$	—					$	—					$	98					$	139								Gain on sale of securities
Total reclassified amount before tax						—						—						98						139									Income Before Income Taxes
Tax expense						—						—						26						38									Income Tax Provision
Total reclassifications out of accumulated other comprehensive loss						$	—					$	—					$	72					$	101								Net Income

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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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