XML 43 R16.htm IDEA: XBRL DOCUMENT
v3.19.3

Investment Securities | 9 Months Ended
--- | ---
Sep. 30, 2019
Investment Securities |
Investment Securities | 8. Investment Securities The cost basis and fair values of investment securities are summarized as follows (in thousands): Investment securities available for sale (AFS):
|  | September 30, 2019
|  |  |  |  | Gross |  | Gross |  |  |
|  | Cost |  | Unrealized |  | Unrealized |  | Fair
|  | Basis |  | Gains |  | Losses |  | Value
US Agency |  | $ | 6,209 |  | $ | 71 |  | $ | — |  | $ | 6,280
US Agency mortgage- backed securities |  |  | 83,830 |  |  | 1,760 |  |  | (100) |  |  | 85,490
Municipal |  |  | 13,781 |  |  | 642 |  |  | (8) |  |  | 14,415
Corporate bonds |  |  | 37,290 |  |  | 317 |  |  | (392) |  |  | 37,215
Total |  | $ | 141,110 |  | $ | 2,790 |  | $ | (500) |  | $ | 143,400
Investment securities held to maturity (HTM):
|  | September 30, 2019
|  |  |  |  | Gross |  | Gross |  |  |
|  | Cost |  | Unrealized |  | Unrealized |  | Fair
|  | Basis |  | Gains |  | Losses |  | Value
US Agency mortgage- backed securities |  | $ | 9,061 |  | $ | 277 |  | $ | (6) |  | $ | 9,332
Municipal |  |  | 24,205 |  |  | 1,259 |  |  | (42) |  |  | 25,422
Corporate bonds and other securities |  |  | 6,033 |  |  | 62 |  |  | (36) |  |  | 6,059
Total |  | $ | 39,299 |  | $ | 1,598 |  | $ | (84) |  | $ | 40,813
Investment securities available for sale (AFS):
|  | December 31, 2018
|  |  |  |  | Gross |  | Gross |  |  |
|  | Cost |  | Unrealized |  | Unrealized |  | Fair
|  | Basis |  | Gains |  | Losses |  | Value
US Agency |  | $ | 7,685 |  | $ | 4 |  | $ | (160) |  | $ | 7,529
US Agency mortgage- backed securities |  |  | 90,169 |  |  | 516 |  |  | (1,158) |  |  | 89,527
Municipal |  |  | 13,301 |  |  | 114 |  |  | (234) |  |  | 13,181
Corporate bonds |  |  | 37,359 |  |  | 131 |  |  | (996) |  |  | 36,494
Total |  | $ | 148,514 |  | $ | 765 |  | $ | (2,548) |  | $ | 146,731
Investment securities held to maturity (HTM):
|  | December 31, 2018
|  |  |  |  | Gross |  | Gross |  |  |
|  | Cost |  | Unrealized |  | Unrealized |  | Fair
|  | Basis |  | Gains |  | Losses |  | Value
US Agency mortgage- backed securities |  | $ | 9,983 |  | $ | 78 |  | $ | (132) |  | $ | 9,929
Municipal |  |  | 24,740 |  |  | 131 |  |  | (404) |  |  | 24,467
Corporate bonds and other securities |  |  | 6,037 |  |  | 13 |  |  | (122) |  |  | 5,928
Total |  | $ | 40,760 |  | $ | 222 |  | $ | (658) |  | $ | 40,324
Maintaining investment quality is a primary objective of the Company’s investment policy which, subject to certain limited exceptions, prohibits the purchase of any investment security below a Moody’s Investor’s Service or Standard & Poor’s rating of “A.” At September 30, 2019, 55.6% of the portfolio was rated “AAA” as compared to 57.5% at December 31, 2018. Approximately 9.1% of the portfolio was either rated below “A” or unrated at September 30, 2019 as compared to 10.0% at December 31, 2018. The Company sold $2.8 million AFS securities in the third quarter of 2019 resulting in $88,000 of gross investment security gains and sold $3.4 million AFS securities in the first nine months of 2019 resulting in $118,000 of gross investment security gains. The Company sold no AFS securities during the third quarter of 2018. Total proceeds from the sale of AFS securities for the first nine months of 2018 were $4.5 million resulting in $15,000 of gross investment security gains and $163,000 of gross investment security losses. The carrying value of securities, both available for sale and held to maturity, pledged to secure public and trust deposits was $126,815,000 at September 30, 2019 and $115,536,000 at December 31, 2018. The following tables present information concerning investments with unrealized losses as of September 30, 2019 and December 31, 2018 (in thousands): Total investment securities:
|  | September 30, 2019
|  | Less than 12 months |  | 12 months or longer |  | Total
|  | Fair |  | Unrealized |  | Fair |  | Unrealized |  | Fair |  | Unrealized
|  | Value |  | Losses |  | Value |  | Losses |  | Value |  | Losses
US Agency |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | —
US Agency mortgage-backed securities |  |  | 4,602 |  |  | (20) |  |  | 10,804 |  |  | (86) |  |  | 15,406 |  |  | (106)
Municipal |  |  | 943 |  |  | (3) |  |  | 1,130 |  |  | (47) |  |  | 2,073 |  |  | (50)
Corporate bonds and other securities |  |  | 3,051 |  |  | (31) |  |  | 16,145 |  |  | (397) |  |  | 19,196 |  |  | (428)
Total |  | $ | 8,596 |  | $ | (54) |  | $ | 28,079 |  | $ | (530) |  | $ | 36,675 |  | $ | (584)
Total investment securities:
|  | December 31, 2018
|  | Less than 12 months |  | 12 months or longer |  | Total
|  | Fair |  | Unrealized |  | Fair |  | Unrealized |  | Fair |  | Unrealized
|  | Value |  | Losses |  | Value |  | Losses |  | Value |  | Losses
US Agency |  | $ | 244 |  | $ | (6) |  | $ | 5,631 |  | $ | (154) |  | $ | 5,875 |  | $ | (160)
US Agency mortgage-backed securities |  |  | 17,718 |  |  | (177) |  |  | 39,983 |  |  | (1,113) |  |  | 57,701 |  |  | (1,290)
Municipal |  |  | 6,601 |  |  | (71) |  |  | 15,880 |  |  | (567) |  |  | 22,481 |  |  | (638)
Corporate bonds and other securities |  |  | 15,221 |  |  | (440) |  |  | 17,038 |  |  | (678) |  |  | 32,259 |  |  | (1,118)
Total |  | $ | 39,784 |  | $ | (694) |  | $ | 78,532 |  | $ | (2,512) |  | $ | 118,316 |  | $ | (3,206)
The unrealized losses are primarily a result of increases in market yields from the time of purchase. In general, as market yields rise, the value of securities will decrease; as market yields fall, the fair value of securities will increase. There are 51 positions that are considered temporarily impaired at September 30, 2019. Management generally views changes in fair value caused by changes in interest rates as temporary; therefore, these securities have not been classified as other-than-temporarily impaired. Management has also concluded that based on current information we expect to continue to receive scheduled interest payments as well as the entire principal balance. Furthermore, management does not intend to sell these securities and does not believe it will be required to sell these securities before they recover in value or mature. Contractual maturities of securities at September 30, 2019 are shown below (in thousands). Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without prepayment penalties. The weighted average duration of the total investment securities portfolio at September 30, 2019 is 35.1 months and is lower than the duration at December 31, 2018 which was 44.1 months. The duration remains within our internal established guideline range of 24 to 60 months which we believe is appropriate to maintain proper levels of liquidity, interest rate risk, market valuation sensitivity and profitability. Total investment securities:
|  | September 30, 2019
|  | Available for sale |  | Held to maturity
|  | Cost |  | Fair |  | Cost |  | Fair
|  | Basis |  | Value |  | Basis |  | Value
Within 1 year |  | $ | 2,500 |  | $ | 2,506 |  | $ | — |  | $ | —
After 1 year but within 5 years |  |  | 21,374 |  |  | 21,485 |  |  | 6,516 |  |  | 6,565
After 5 years but within 10 years |  |  | 40,360 |  |  | 41,005 |  |  | 19,662 |  |  | 20,618
After 10 years but within15 years |  |  | 24,722 |  |  | 25,248 |  |  | 8,085 |  |  | 8,481
Over 15 years |  |  | 52,154 |  |  | 53,156 |  |  | 5,036 |  |  | 5,149
Total |  | $ | 141,110 |  | $ | 143,400 |  | $ | 39,299 |  | $ | 40,813
As of September 30, 2019, the Company reported $354,000 of equity securities within Other assets on the Consolidated Balance Sheets. These equity securities are held within a nonqualified deferred compensation plan in which a select group of executives of the Company can participate. An eligible executive can defer a certain percentage of their current salary to be placed into the plan and held within a rabbi trust. The assets of the rabbi trust are invested in various publicly listed mutual funds. The gain or loss on the equity securities (both realized and unrealized) is reported within Other income on the Consolidated Statements of Operations. For the third quarter and first nine months of 2019, the Company recorded a realized gain of $9,000 and an unrealized gain of $3,000 on these equity securities. Additionally, the Company has recognized a deferred compensation liability, which is equal to the balance of the equity securities and is reported within Other liabilities on the Consolidated Balance Sheets.

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 + Details
Name: | us-gaap_InvestmentsInDebtAndMarketableEquitySecuritiesAndCertainTradingAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration