Investments

6 Months Ended

Jun. 30, 2020

Securities Available For Sale, at Fair Value

The following table sets forth the major components of securities available for sale and compares the amortized costs and estimated fair market values of, and the gross unrealized gains and losses on, these securities at June 30, 2020 and December 31, 2019:


(Dollars in thousands)	June 30, 2020																					December 31, 2019
			Amortized Cost			Gross Unrealized									Estimated Fair Value			Amortized Cost			Gross Unrealized				Estimated Fair Value
									Gain			Loss												Gain		Loss
Securities Available for Sale

Commercial mortgage backed securities issued by U.S. Agencies⁽¹⁾	$	8,537		$	416		$	—		$	8,953		$	9,147		$	128		$	(46)		$	9,229
Residential mortgage backed securities issued by U.S. Agencies⁽²⁾	16,883			380			(3)			17,260			19,380			12			(277)			19,115




Total	$	25,420		$	796		$	(3)		$	26,213		$	28,527		$	140		$	(323)		$	28,344

(1)Secured by first liens on commercial apartment building mortgages.

(2)Secured by closed-end first liens on 1-4 family residential mortgages.

At June 30, 2020 and December 31, 2019, U.S. agency residential mortgage backed securities with an aggregate fair market value of $8.3 million and $9.2 million, respectively, were pledged to secure repurchase agreements, local agency deposits and treasury, tax and loan accounts.

The amortized cost and estimated fair values of securities available for sale at June 30, 2020 and December 31, 2019 are shown in the tables below by contractual maturities taking into consideration historical prepayments based on the prior twelve months of principal payments. Expected maturities will differ from contractual maturities and historical prepayments, particularly with respect to collateralized mortgage obligations, primarily because prepayment rates are affected by changes in conditions in the interest rate market and, therefore, future prepayment rates may differ from historical prepayment rates.


	At June 30, 2020 Maturing in
(Dollars in thousands)	One year or less			Over one year through five years			Over five years through ten years			Over ten Years			Total
Securities available for sale, amortized cost	$	5,379		$	12,570		$	7,471		$	—		$	25,420
Securities available for sale, estimated fair value	5,465			12,880			7,868			—			26,213
Weighted average yield	1.42		%	1.51		%	1.92		%	—		%	1.61		%


	At December 31, 2019 Maturing in
(Dollars in thousands)	One year or less			Over one year through five years			Over five years through ten years			Over ten Years			Total
Securities available for sale, amortized cost	$	5,286		$	13,032		$	6,842		$	3,367		$	28,527
Securities available for sale, estimated fair value	5,230			12,887			6,849			3,378			28,344
Weighted average yield	1.58		%	1.66		%	2.22		%	2.53		%	1.88		%

We purchased no securities available for sale during the three and six months ended June 30, 2020 or during the three and six months ended June 30, 2019. We had no sales of securities available for sale during the three and six months ended June 30, 2019 or the three and six months ended June 30, 2020.

The tables below indicate, as of June 30, 2020 and December 31, 2019, the gross unrealized losses and fair values of our investments, aggregated by investment category, and length of time that the individual securities have been in a continuous unrealized loss position.


	Securities with Unrealized Loss at June 30, 2020
	Less than 12 months						12 months or more						Total
(Dollars in thousands)	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss

Commercial mortgage backed securities issued by U.S. Agencies	$	43	$	—	$	164	$	(3)	$	207	$	(3)




Total	$	43	$	—	$	164	$	(3)	$	207	$	(3)


	Securities with Unrealized Loss at December 31, 2019
	Less than 12 months						12 months or more						Total
(Dollars in thousands)	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss

Commercial mortgage backed securities issued by U.S. Agencies	4,472		(46)		—		—		4,472		(46)
Residential mortgage backed securities issued by U.S. Agencies	76		(1)		15,965		(276)		16,041		(277)



Total	$	4,548	$	(47)	$	15,965	$	(276)	$	20,513	$	(323)

We regularly monitor investments for significant declines in fair value. We have determined that declines in the fair values of these investments below their respective amortized costs, as set forth in the tables above, are temporary because (i) those declines were due to interest rate changes and not to a deterioration in the creditworthiness of the issuers of those investment securities, and (ii) we have the ability to hold those securities until there is a recovery in their values or until their maturity.

We recognize other-than-temporary impairments (“OTTI”) to our available-for-sale debt securities in accordance with FASB ASC 320-10. When there are credit losses associated with, but we have no intention to sell, an impaired debt security, and it is more likely than not that we will not have to sell the security before recovery of its cost basis, we will separate the amount of impairment, or OTTI, between the amount that is credit-related and the amount that is related to non-credit factors. Credit-related impairments are recognized in our consolidated statements of operations. Any non-credit-related impairments are recognized and reflected in other comprehensive income in our consolidated statements of financial condition.

Through the impairment assessment process, we determined that there were no available-for-sale debt securities that were other-than-temporarily impaired at June 30, 2020. We recorded no impairment credit losses on available-for-sale debt securities in our consolidated statements of operations for the three and six months ended June 30, 2020 and 2019.

We have made a determination that the remainder of our securities with respect to which there were unrealized losses as of June 30, 2020 are not other-than-temporarily impaired, because we have concluded that we have the ability to continue to hold those securities until their respective fair market values increase above their respective amortized costs or, if necessary, until their respective maturities. In reaching that conclusion we considered a number of factors and other information, which included: (i) the significance of each such security, (ii) the amount of the unrealized losses attributable to each such security, (iii) our liquidity position, (iv) the impact that retention of those securities could have on our capital position and (v) our evaluation of the expected future performance of these securities (based on the criteria discussed above).

Equity Investments Without Readily Determinable Fair Value

As of June 30, 2020, we had three investments in private companies and limited partnerships without a readily determinable fair value. As of June 30, 2020, we owned less than 3% of the total investment in each such company or partnership. Under ASU 2016-01, we elected to measure these equity investments using the measurement alternative, which requires that these investments are measured at cost, less any impairment, plus or minus any changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. During the three and six months ended June 30, 2020, these investments were not impaired and there were no observable price changes. As a result, the balance shown below as of June 30, 2020 represents the cost of the investments and is included within other assets on the consolidated statements of financial condition. During the three and six months ended June 30, 2020, we had $199 thousand of capital contributions to these investments. We had $283 thousand and $877 thousand, respectively, of capital contributions to these investments during the three and six months ended June 30, 2019. As of June 30, 2020 and December 31, 2019, our equity investments without readily determinable fair value were as follows:


	June 30, 2020		December 31, 2019
	(Dollars in thousands)
Equity investments without readily determinable fair value	$	2,316	$	2,117