XML 28 R15.htm IDEA: XBRL DOCUMENT
v3.21.1

Investment Securities | 3 Months Ended
--- | ---
Mar. 31, 2021
Investment Securities |
Investment Securities | 7. Investment Securities The cost basis and fair values of investment securities are summarized as follows: Investment securities available for sale (AFS):
|  | March 31, 2021
|  |  |  |  | GROSS |  | GROSS |  |  |
|  |  |  |  | UNREALIZED |  | UNREALIZED |  | FAIR
|  | COST BASIS |  | GAINS |  | LOSSES |  | VALUE
|  | (IN THOUSANDS)
U.S. Agency |  | $ | 6,786 |  | $ | 135 |  | $ | (33) |  | $ | 6,888
U.S. Agency mortgage-backed securities |  |  | 75,758 |  |  | 2,016 |  |  | (899) |  |  | 76,875
Municipal |  |  | 19,859 |  |  | 1,001 |  |  | (83) |  |  | 20,777
Corporate bonds |  |  | 51,040 |  |  | 1,002 |  |  | (166) |  |  | 51,876
Total |  | $ | 153,443 |  | $ | 4,154 |  | $ | (1,181) |  | $ | 156,416
Investment securities held to maturity (HTM):
|  | March 31, 2021
|  |  |  |  | GROSS |  | GROSS |  |  |
|  |  |  |  | UNREALIZED |  | UNREALIZED |  | FAIR
|  | COST BASIS |  | GAINS |  | LOSSES |  | VALUE
|  | (IN THOUSANDS)
U.S. Agency |  | $ | 1,500 |  | $ | — |  | $ | — |  | $ | 1,500
U.S. Agency mortgage-backed securities |  |  | 9,317 |  |  | 311 |  |  | (91) |  |  | 9,537
Municipal |  |  | 30,935 |  |  | 1,797 |  |  | (261) |  |  | 32,471
Corporate bonds and other securities |  |  | 6,025 |  |  | 79 |  |  | (29) |  |  | 6,075
Total |  | $ | 47,777 |  | $ | 2,187 |  | $ | (381) |  | $ | 49,583
Investment securities available for sale (AFS):
|  | December 31, 2020
|  |  |  |  | GROSS |  | GROSS |  |  |
|  |  |  |  | UNREALIZED |  | UNREALIZED |  | FAIR
|  | COST BASIS |  | GAINS |  | LOSSES |  | VALUE
|  | (IN THOUSANDS)
U.S. Agency |  | $ | 2,971 |  | $ | 181 |  | $ | — |  | $ | 3,152
U.S. Agency mortgage-backed securities |  |  | 65,398 |  |  | 2,533 |  |  | (18) |  |  | 67,913
Municipal |  |  | 19,000 |  |  | 1,348 |  |  | — |  |  | 20,348
Corporate bonds |  |  | 52,315 |  |  | 666 |  |  | (229) |  |  | 52,752
Total |  | $ | 139,684 |  | $ | 4,728 |  | $ | (247) |  | $ | 144,165
Investment securities held to maturity (HTM):
|  | December 31, 2020
|  |  |  |  | GROSS |  | GROSS |  |  |
|  |  |  |  | UNREALIZED |  | UNREALIZED |  | FAIR
|  | COST BASIS |  | GAINS |  | LOSSES |  | VALUE
|  | (IN THOUSANDS)
U.S. Agency mortgage-backed securities |  | $ | 8,119 |  | $ | 369 |  | $ | — |  | $ | 8,488
Municipal |  |  | 30,076 |  |  | 2,455 |  |  | (49) |  |  | 32,482
Corporate bonds and other securities |  |  | 6,027 |  |  | 113 |  |  | (4) |  |  | 6,136
Total |  | $ | 44,222 |  | $ | 2,937 |  | $ | (53) |  | $ | 47,106
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 March 31, 2021, 47.1% of the portfolio was rated “AAA” as compared to 42.2% at December 31, 2020. Approximately 13.8% of the portfolio was either rated below “A” or unrated at March 31, 2021 as compared to 15.2% at December 31, 2020. The Company sold no AFS securities during the first quarter of 2021 and 2020. The carrying value of securities, both available for sale and held to maturity, pledged to secure public and trust deposits was $123,462,000 at March 31, 2021 and $111,694,000 at December 31, 2020. The following tables present information concerning investments with unrealized losses as of March 31, 2021 and December 31, 2020 (in thousands): Total investment securities:
|  | March 31, 2021
|  | LESS THAN 12 MONTHS |  | 12 MONTHS OR LONGER |  | TOTAL
|  | FAIR |  | UNREALIZED |  | FAIR |  | UNREALIZED |  | FAIR |  | UNREALIZED
|  | VALUE |  | LOSSES |  | VALUE |  | LOSSES |  | VALUE |  | LOSSES
U.S. Agency |  | $ | 1,967 |  | $ | (33) |  | $ | — |  | $ | — |  | $ | 1,967 |  | $ | (33)
U.S. Agency mortgage-backed securities |  |  | 28,534 |  |  | (989) |  |  | 101 |  |  | (1) |  |  | 28,635 |  |  | (990)
Municipal |  |  | 8,958 |  |  | (297) |  |  | 751 |  |  | (47) |  |  | 9,709 |  |  | (344)
Corporate bonds and other securities |  |  | 9,466 |  |  | (130) |  |  | 7,435 |  |  | (65) |  |  | 16,901 |  |  | (195)
Total |  | $ | 48,925 |  | $ | (1,449) |  | $ | 8,287 |  | $ | (113) |  | $ | 57,212 |  | $ | (1,562)
Total investment securities:
|  | December 31, 2020
|  | LESS THAN 12 MONTHS |  | 12 MONTHS OR LONGER |  | TOTAL
|  | FAIR |  | UNREALIZED |  | FAIR |  | UNREALIZED |  | FAIR |  | UNREALIZED
|  | VALUE |  | LOSSES |  | VALUE |  | LOSSES |  | VALUE |  | LOSSES
U.S. Agency mortgage-backed securities |  | $ | 6,394 |  | $ | (17) |  | $ | 123 |  | $ | (1) |  | $ | 6,517 |  | $ | (18)
Municipal |  |  | — |  |  | — |  |  | 751 |  |  | (49) |  |  | 751 |  |  | (49)
Corporate bonds and other securities |  |  | 13,083 |  |  | (162) |  |  | 7,929 |  |  | (71) |  |  | 21,012 |  |  | (233)
Total |  | $ | 19,477 |  | $ | (179) |  | $ | 8,803 |  | $ | (121) |  | $ | 28,280 |  | $ | (300)
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 76 positions that are considered temporarily impaired at March 31, 2021. 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. The interest rate environment and market yields can also have a significant impact on the yield earned on mortgage-backed securities (MBS). Prepayment speed assumptions are an important factor to consider when evaluating the returns on an MBS. Generally, as interest rates decline, borrowers have more incentive to refinance into a lower rate, so prepayments will rise. Conversely, as interest rates increase, prepayments will decline. When an MBS is purchased at a premium, the yield will decrease as prepayments increase and the yield will increase as prepayments decrease. As of March 31, 2021, the Company had low premium risk as the book value of our mortgage-backed securities purchased at a premium was only 101.1% of the par value. Contractual maturities of securities at March 31, 2021 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 March 31, 2021 is 39.4 months and is higher than the duration at December 31, 2020 which was 25.4 months. The duration remains within our internally established guideline to not exceed 60 months which we believe is appropriate to maintain proper levels of liquidity, interest rate risk, market valuation sensitivity and profitability. Total investment securities:
|  | March 31, 2021
|  | Available for sale |  | Held to maturity
|  | Cost Basis |  | Fair Value |  | Cost Basis |  | Fair Value
Within 1 year |  | $ | 4,587 |  | $ | 4,634 |  | $ | 3,400 |  | $ | 3,398
After 1 year but within 5 years |  |  | 26,757 |  |  | 27,575 |  |  | 8,164 |  |  | 8,552
After 5 years but within 10 years |  |  | 50,613 |  |  | 51,944 |  |  | 19,061 |  |  | 20,270
After 10 years but within15 years |  |  | 14,788 |  |  | 15,380 |  |  | 10,162 |  |  | 10,326
Over 15 years |  |  | 56,698 |  |  | 56,883 |  |  | 6,990 |  |  | 7,037
Total |  | $ | 153,443 |  | $ | 156,416 |  | $ | 47,777 |  | $ | 49,583
As of March 31, 2021 and December 31, 2020, the Company reported $474,000 and $443,000, respectively, 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. During the periods presented, the Company recorded both realized and unrealized gains/losses related to the equity securities. The amounts of such gains/losses were immaterial to the Consolidated Financial Statements. 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