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Securities (Tables)
 6 Months Ended
Jun. 30, 2019
Investments, Debt and Equity Securities [Abstract]  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]
The fair value of securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income are shown below.
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair Value
Available-for-Sale Securities
 
 
 
 
 
 
 
June 30, 2019
 
 
 
 
 
 
 
Certificates of deposit
$
73,523

 
$
—

 
$
—

 
$
73,523

Municipal securities
507

 
7

 
—

 
514

Mortgage-backed securities - residential
9,312

 
404

 
(10
)
 
9,706

Collateralized mortgage obligations - residential
3,342

 
5

 
(10
)
 
3,337

 
$
86,684

 
$
416

 
$
(20
)
 
$
87,080

December 31, 2018
 
 
 
 
 
 
 
Certificates of deposit
$
73,507

 
$
—

 
$
—

 
$
73,507

Municipal securities
509

 
—

 
—

 
509

Mortgage-backed securities - residential
10,116

 
400

 
(38
)
 
10,478

Collateralized mortgage obligations - residential
3,676

 
11

 
(2
)
 
3,685

 
$
87,808

 
$
411

 
$
(40
)
 
$
88,179


The mortgage-backed securities and collateralized mortgage obligations reflected in the preceding table were issued by U.S. government-sponsored entities or agencies, Freddie Mac, Fannie Mae and Ginnie Mae, and are obligations which the government has affirmed its commitment to support.
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair Value
Equity Investments (1)
 
 
 
 
 
 
 
December 31, 2018
 
 
 
 
 
 
 
Visa Class B shares
$
—

 
$
3,427

 
$
—

 
$
3,427

(1) Equity investments are included in Other assets in the Consolidated Statements of Financial Condition.
The amortized cost and fair values of securities by contractual maturity are shown below. Securities not due at a single maturity date are shown separately. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
June 30, 2019
 
Amortized
Cost
 
Fair
Value
Due in one year or less
$
73,027

 
$
73,027

Due after one year through five years
1,003

 
1,010

 
74,030

 
74,037

Mortgage-backed securities - residential
9,312

 
9,706

Collateralized mortgage obligations - residential
3,342

 
3,337

 
$
86,684

 
$
87,080


Investment securities available-for-sale with carrying values of $2.4 million and $2.7 million at June 30, 2019 and December 31, 2018, respectively, were pledged as collateral on customer repurchase agreements and for other purposes as required or permitted by law.
Sales of equity securities were as follows:
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Proceeds
$
—

 
$
487

 
$
3,722

 
$
487

Gross gains
—

 
—

 
295

 
—

Gross losses
—

 
(14
)
 
—

 
(14
)

Securities with unrealized losses not recognized in income are as follows:
 
Less than 12 Months
 
12 Months or More
 
Total
 
Fair
Value
 
Unrealized
Loss
 
Fair
Value
 
Unrealized
Loss
 
Fair
Value
 
Unrealized
Loss
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities - residential
$
—

 
$
—

 
$
914

 
$
(10
)
 
$
914

 
$
(10
)
Collateralized mortgage obligations - residential
1,225

 
(6
)
 
1,566

 
(4
)
 
2,791

 
(10
)
 
$
1,225

 
$
(6
)
 
$
2,480

 
$
(14
)
 
$
3,705

 
$
(20
)
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities - residential
$
—

 
$
—

 
$
904

 
$
(38
)
 
$
904

 
$
(38
)
Collateralized mortgage obligations - residential
—

 
—

 
1,729

 
(2
)
 
1,729

 
(2
)
 
$
—

 
$
—

 
$
2,633

 
$
(40
)
 
$
2,633

 
$
(40
)

The Company evaluates marketable investment securities with significant declines in fair value on a quarterly basis to determine whether they should be considered other-than-temporarily impaired under current accounting guidance, which generally provides that if a marketable security is in an unrealized loss position, whether due to general market conditions or industry or issuer-specific factors, the holder of the securities must assess whether the impairment is other-than-temporary.
Certain mortgage-backed securities and collateralized mortgage obligations that the Company holds in its investment portfolio were in an unrealized loss position at June 30, 2019, but the unrealized losses were not considered significant under the Company’s impairment testing methodology. In addition, the Company does not intend to sell these securities, and it is likely that the Company will not be required to sell these securities before their anticipated recovery occurs.
The Bank, as a member of Visa USA, received 51,404 unrestricted shares of Visa, Inc. Class B common stock in connection with Visa, Inc.’s initial public offering in 2007. The retroactive responsibility plan obligates all former Visa USA members to indemnify Visa USA, in proportion to their equity interests in Visa USA, for certain litigation losses and expenses, including settlement expenses, for the lawsuits covered by the retrospective responsibility plan. Due to the restrictions that the retrospective responsibility plan imposes on the Company’s Visa, Inc. Class B shares, the Company had not recorded the Class B shares as an asset.
The Bank sold 25,702 shares of Visa Class B common stock in the fourth quarter of 2018 and recorded a gain of $3.6 million. For equity investments without readily determinable fair values, when an orderly transaction for the identical or similar investment of the same issuer is identified, we use the valuation techniques permitted under ASC 820 Fair Value to evaluate the observed transaction(s) and adjust the fair value of the equity investment. Based on the existing transfer restriction and the uncertainty of the outcome of the Visa litigation mentioned above, the 25,702 Visa Class B shares that the Company owned as of December 31, 2018 were recorded at $3.4 million in other assets with a corresponding gain.
The Bank sold the remaining 25,702 shares of Visa Class B common stock in the first quarter of 2019 and recorded a gain of $295,000.
Unrealized gains and losses recognized in accumulated other comprehensive income (loss)
The fair value of securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income are shown below.
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair Value
Available-for-Sale Securities
 
 
 
 
 
 
 
June 30, 2019
 
 
 
 
 
 
 
Certificates of deposit
$
73,523

 
$
—

 
$
—

 
$
73,523

Municipal securities
507

 
7

 
—

 
514

Mortgage-backed securities - residential
9,312

 
404

 
(10
)
 
9,706

Collateralized mortgage obligations - residential
3,342

 
5

 
(10
)
 
3,337

 
$
86,684

 
$
416

 
$
(20
)
 
$
87,080

December 31, 2018
 
 
 
 
 
 
 
Certificates of deposit
$
73,507

 
$
—

 
$
—

 
$
73,507

Municipal securities
509

 
—

 
—

 
509

Mortgage-backed securities - residential
10,116

 
400

 
(38
)
 
10,478

Collateralized mortgage obligations - residential
3,676

 
11

 
(2
)
 
3,685

 
$
87,808

 
$
411

 
$
(40
)
 
$
88,179


The mortgage-backed securities and collateralized mortgage obligations reflected in the preceding table were issued by U.S. government-sponsored entities or agencies, Freddie Mac, Fannie Mae and Ginnie Mae, and are obligations which the government has affirmed its commitment to support.
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair Value
Equity Investments (1)
 
 
 
 
 
 
 
December 31, 2018
 
 
 
 
 
 
 
Visa Class B shares
$
—

 
$
3,427

 
$
—

 
$
3,427

(1) Equity investments are included in Other assets in the Consolidated Statements of Financial Condition.
Amortized cost and fair values of securities
The amortized cost and fair values of securities by contractual maturity are shown below. Securities not due at a single maturity date are shown separately. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
June 30, 2019
 
Amortized
Cost
 
Fair
Value
Due in one year or less
$
73,027

 
$
73,027

Due after one year through five years
1,003

 
1,010

 
74,030

 
74,037

Mortgage-backed securities - residential
9,312

 
9,706

Collateralized mortgage obligations - residential
3,342

 
3,337

 
$
86,684

 
$
87,080
Securities with unrealized losses
Securities with unrealized losses not recognized in income are as follows:
 
Less than 12 Months
 
12 Months or More
 
Total
 
Fair
Value
 
Unrealized
Loss
 
Fair
Value
 
Unrealized
Loss
 
Fair
Value
 
Unrealized
Loss
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities - residential
$
—

 
$
—

 
$
914

 
$
(10
)
 
$
914

 
$
(10
)
Collateralized mortgage obligations - residential
1,225

 
(6
)
 
1,566

 
(4
)
 
2,791

 
(10
)
 
$
1,225

 
$
(6
)
 
$
2,480

 
$
(14
)
 
$
3,705

 
$
(20
)
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities - residential
$
—

 
$
—

 
$
904

 
$
(38
)
 
$
904

 
$
(38
)
Collateralized mortgage obligations - residential
—

 
—

 
1,729

 
(2
)
 
1,729

 
(2
)
 
$
—

 
$
—

 
$
2,633

 
$
(40
)
 
$
2,633

 
$
(40
)