Securities

6 Months Ended

Jun. 30, 2022

Securities

Securities

4) Securities

The amortized cost and estimated fair value of securities were as follows for the periods indicated:

			Gross		Gross		Allowance		Estimated
	Amortized		Unrealized		Unrealized		for Credit		Fair
June 30, 2022	Cost		Gains		(Losses)		Losses		Value
	(Dollars in thousands)
Securities available-for-sale:
U.S. Treasury	$	251,365	$	224	$	(1,463)	$	—	$	250,126
Agency mortgage-backed securities		84,952		2		(2,951)		—		82,003
Total	$	336,317	$	226	$	(4,414)	$	—	$	332,129
			Gross		Gross		Estimated		Allowance
	Amortized		Unrecognized		Unrecognized		Fair		for Credit
June 30, 2022	Cost		Gains		(Losses)		Value		Losses
	(Dollars in thousands)
Securities held-to-maturity:
Agency mortgage-backed securities	$	683,779	$	1	$	(72,491)	$	611,289	$	—
Municipals - exempt from Federal tax		39,976		86		(522)		39,540		(39)
Total	$	723,755	$	87	$	(73,013)	$	650,829	$	(39)

			Gross		Gross		Allowance		Estimated
	Amortized		Unrealized		Unrealized		for Credit		Fair
December 31, 2021	Cost		Gains		(Losses)		Losses		Value
	(Dollars in thousands)
Securities available-for-sale:
Agency mortgage-backed securities	$	99,359	$	2,893	$	—	$	—	$	102,252
Total	$	99,359	$	2,893	$	—	$	—	$	102,252
			Gross		Gross		Estimated		Allowance
	Amortized		Unrecognized		Unrecognized		Fair		for Credit
December 31, 2021	Cost		Gains		(Losses)		Value		Losses
	(Dollars in thousands)
Securities held-to-maturity:
Agency mortgage-backed securities	$	607,377	$	3,157	$	(4,752)	$	605,782	$	—
Municipals - exempt from Federal tax		51,063		804		—		51,867		(43)
Total	$	658,440	$	3,961	$	(4,752)	$	657,649	$	(43)

Securities with unrealized losses at June 30, 2022 and December 31, 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows:

	Less Than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
June 30, 2022	Value		(Losses)		Value		(Losses)		Value		(Losses)
	(Dollars in thousands)
Securities available-for-sale:
U.S. Treasury	$	218,960	$	(1,463)	$	—	$	—	$	218,960	$	(1,463)
Agency mortgage-backed securities		81,550		(2,951)		—		—		81,550		(2,951)
Total	$	300,510	$	(4,414)	$	—	$	—	$	300,510	$	(4,414)
Securities held-to-maturity:
Agency mortgage-backed securities	$	580,869	$	(66,582)	$	29,473	$	(5,909)	$	610,342	$	(72,491)
Municipals — exempt from Federal tax		23,120		(522)		—		—		23,120		(522)
Total	$	603,989	$	(67,104)	$	29,473	$	(5,909)	$	633,462	$	(73,013)

	Less Than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2021	Value		(Losses)		Value		(Losses)		Value		(Losses)
	(Dollars in thousands)
Securities held-to-maturity:
Agency mortgage-backed securities	$	408,856	$	(3,319)	$	27,997	$	(1,433)	$	436,853	$	(4,752)
Total	$	408,856	$	(3,319)	$	27,997	$	(1,433)	$	436,853	$	(4,752)

There were no holdings of securities of any one issuer, other than the U.S. Government and its sponsored entities, in an amount greater than 10% of shareholders’ equity. At June 30, 2022, the Company held 430 securities (144 available-for-sale and 286 held-to-maturity), of which 366 had fair value below amortized cost. At June 30, 2022, there were $218,960,000 of U.S. Treasury securities available-for-sale, and $81,550,000 of agency mortgage-backed securities available-for-sale, carried with an unrealized loss for less than 12 months. At June 30, 2022, there were $580,869,000 of agency mortgage-backed securities held-to-maturity, and $23,120,000 of municipal securities, carried with an unrealized loss for less than 12 months, and $29,473,000 of agency mortgage-backed securities held-to-maturity, carried with an unrealized loss for 12 months or more. The total unrealized loss for securities carried less than 12 months was ($71,518,000), and the total unrealized loss for securities carried for 12 months or more was ($5,909,000) at June 30, 2022. The unrealized loss was due to higher interest rates in comparison to when the security was purchased. The issuers are of high credit quality and all principal amounts are expected to be paid when securities mature. The fair value is expected to recover as the securities approach their maturity date and/or market rates decline. The Company does not believe that it is more likely than not that the Company will be required to sell a security in an unrealized loss position prior to recovery in value. Therefore, the Company does not consider the agency mortgage-backed securities and U.S. Treasury securities to have credit-related losses as of June 30, 2022.

The amortized cost and estimated fair values of securities as of June 30, 2022 are shown by contractual maturity below. The expected maturities will differ from contractual maturities if borrowers have the right to call or pre-pay obligations with or without call or pre-payment penalties. Securities not due at a single maturity date are shown separately.

	Available-for-sale
	Amortized		Estimated
	Cost		Fair Value
	(Dollars in thousands)
Due after one through five years	$	251,365	$	250,126
Agency mortgage-backed securities		84,952		82,003
Total	$	336,317	$	332,129

	Held-to-maturity
	Amortized		Estimated
	Cost		Fair Value
	(Dollars in thousands)
Due after three months through one year	$	549	$	550
Due after one through five years		7,496		7,523
Due after five through ten years		26,335		25,970
Due after ten years		5,596		5,497
Agency mortgage-backed securities		683,779		611,289
Total	$	723,755	$	650,829

Securities with amortized cost of $63,885,000 and $42,473,000 as of June 30, 2022 and December 31, 2021 were pledged to secure public deposits and for other purposes as required or permitted by law or contract.

The table below presents a roll-forward by major security type for the six months ended June 30, 2022 of the allowance for credit losses on debt securities held-to-maturity held at period end:

		Municipals
		(Dollars in thousands)
Beginning balance January 1, 2022	$	43
Provision for (recapture of) credit losses		(4)
Ending balance June 30, 2022	$	39

For the six months ended June 30, 2022, there was a reduction of $4,000 to the allowance for credit losses on the Company’s held-to-maturity municipal investment securities portfolio. This reduction was the result of a reduction in municipal securities amortized balances resulting from regular payments. The bond ratings for the Company’s municipal investment securities at June 30, 2022 were consistent with the ratings at December 31, 2021.