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Securities
 3 Months Ended
Mar. 31, 2020
Investments, Debt and Equity Securities [Abstract]  
Securities
Securities
 
The following tables summarize securities available-for-sale and securities held-to-maturity as of March 31, 2020 and December 31, 2019.
 
 
March 31, 2020
 
 
Amortized
 
Gross Unrealized
 
Fair
(in thousands)
 
Cost
 
Gains
 
Losses
 
Value
Securities available-for-sale
 
 

 
 

 
 

 
 

U.S. Government-sponsored agencies
 
$
71,387

 
$
438

 
$
(1,821
)
 
$
70,004

Municipal securities
 
94,981

 
4,049

 
(4,211
)
 
94,819

Agency mortgage-backed securities
 
279,458

 
6,901

 
(3,727
)
 
282,632

Private label mortgage-backed securities
 
114,363

 
813

 
(152
)
 
115,024

Asset-backed securities
 
5,000

 
—

 
(287
)
 
4,713

Corporate securities
 
43,378

 
322

 
(2,210
)
 
41,490

Total available-for-sale
 
$
608,567

 
$
12,523

 
$
(12,408
)
 
$
608,682


 
 
March 31, 2020
 
 
Amortized
 
Gross Unrealized
 
Fair
(in thousands)
 
Cost
 
Gains
 
Losses
 
Value
Securities held-to-maturity
 
 

 
 

 
 

 
 

Municipal securities
 
$
14,617

 
$
1,061

 
$
—

 
$
15,678

Corporate securities
 
51,714

 
2,262

 
(186
)
 
53,790

Total held-to-maturity
 
$
66,331

 
$
3,323

 
$
(186
)
 
$
69,468

 
 
December 31, 2019
 
 
Amortized
 
Gross Unrealized
 
Fair
(in thousands)
 
Cost
 
Gains
 
Losses
 
Value
Securities available-for-sale
 
 

 
 

 
 

 
 

U.S. Government-sponsored agencies
 
$
77,715

 
$
99

 
$
(1,942
)
 
$
75,872

Municipal securities
 
97,447

 
1,706

 
(1,501
)
 
97,652

Agency mortgage-backed securities
 
264,142

 
1,304

 
(4,006
)
 
261,440

Private label mortgage-backed securities
 
63,704

 
97

 
(188
)
 
63,613

Asset-backed securities
 
5,000

 
—

 
(45
)
 
4,955

Corporate securities
 
38,632

 
220

 
(1,532
)
 
37,320

Total available-for-sale
 
$
546,640

 
$
3,426

 
$
(9,214
)
 
$
540,852


 
 
December 31, 2019
 
 
Amortized
 
Gross Unrealized
 
Fair
(in thousands)
 
Cost
 
Gains
 
Losses
 
Value
Securities held-to-maturity
 
 

 
 

 
 

 
 

Municipal securities
 
$
10,142

 
$
226

 
$
—

 
$
10,368

Corporate securities
 
51,736

 
588

 
(132
)
 
52,192

Total held-to-maturity
 
$
61,878

 
$
814

 
$
(132
)
 
$
62,560



The Company elected to transfer ten available-for-sale (“AFS”) securities with an aggregate fair value of $4.5 million to a classification of held-to-maturity (“HTM”) on March 1, 2020. The net unrealized holding gain of $0.1 million, net of tax, as the date of the transfer was retained in accumulated other comprehensive loss, with the associated pretax amount retained in the carrying value of the HTM securities. Such amounts will be amortized to interest income over the remaining life of the securities. The fair value of the transferred AFS securities became the book value of the HTM securities as of March 1, 2020, with no unrealized gain or loss at that date.

The carrying value of securities at March 31, 2020 is shown below by their contractual maturity date. Actual maturities will differ because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
 
Available-for-Sale
(in thousands)
 
Amortized
Cost
 
Fair
Value
Within one year
 
$
15

 
$
15

One to five years
 
19,032

 
15,068

Five to ten years
 
81,662

 
80,465

After ten years
 
109,037

 
110,765

 
 
209,746

 
206,313

Agency mortgage-backed securities
 
279,458

 
282,632

Private label mortgage-backed securities
 
114,363

 
115,024

Asset-backed securities
 
5,000

 
4,713

Total
 
$
608,567

 
$
608,682


 
 
Held-to-Maturity
(in thousands)
 
Amortized
Cost
 
Fair
Value
One to five years
 
$
1,505

 
$
1,584

Five to ten years
 
52,301

 
54,610

After ten years
 
12,525

 
13,274

Total
 
$
66,331

 
$
69,468



There were less than $0.1 million gross gains resulting from sales of available securities during the three months ended March 31, 2020 and no gross gains or losses resulting from sales of available-for-sale securities during the three months ended March 31, 2019.

Certain investments in debt securities are reported in the condensed consolidated financial statements at an amount less than their historical cost. The total fair value of these investments at March 31, 2020 and December 31, 2019 was $205.1 million and $317.5 million, which was approximately 30% and 53%, respectively, of the Company’s available-for-sale and held-to-maturity securities portfolios. These declines resulted primarily from fluctuations in market interest rates after purchase. Management believes the declines in fair value for these securities are temporary. Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced, with the resulting loss recognized in net income in the period the other-than-temporary impairment (“OTTI”) is identified.

U. S. Government-Sponsored Agencies, Municipal Securities and Corporate Securities

The unrealized losses on the Company’s investments in securities issued by U.S. Government-sponsored agencies, municipal organizations and corporate entities were caused primarily by interest rate changes. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be upon maturity, the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2020.
 
Agency Mortgage-Backed, Private Label Mortgage-Backed and Asset-Backed Securities
 
The unrealized losses on the Company’s investments in agency mortgage-backed, private label mortgage-backed and asset-backed securities were caused primarily by interest rate changes. The Company expects to recover the amortized cost bases over the term of the securities. Because the Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be upon maturity, the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2020.

The following tables show the securities portfolio’s gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2020 and December 31, 2019.
 
 
March 31, 2020
 
 
Less Than 12 Months
 
12 Months or Longer
 
Total
(in thousands)
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Securities available-for-sale
 
 

 
 

 
 

 
 

 
 

 
 

U.S. Government-sponsored agencies
 
$
3,274

 
$
(96
)
 
$
57,775

 
$
(1,725
)
 
$
61,049

 
$
(1,821
)
Municipal securities
 
61,974

 
(4,211
)
 
—

 
—

 
61,974

 
(4,211
)
Agency mortgage-backed securities
 
18,798

 
(317
)
 
13,516

 
(3,410
)
 
32,314

 
(3,727
)
Private label mortgage-backed securities
 
10,201

 
(122
)
 
2,639

 
(30
)
 
12,840

 
(152
)
Asset-backed securities
 
—

 
—

 
4,713

 
(287
)
 
4,713

 
(287
)
Corporate securities
 
9,274

 
(286
)
 
20,076

 
(1,924
)
 
29,350

 
(2,210
)
Total
 
$
103,521

 
$
(5,032
)
 
$
98,719

 
$
(7,376
)
 
$
202,240

 
$
(12,408
)
 
 
March 31, 2020
 
 
Less Than 12 Months
 
12 Months or Longer
 
Total
(in thousands)
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Securities held-to-maturity
 
 

 
 

 
 

 
 

 
 

 
 

Corporate securities
 
$
2,814

 
$
(186
)
 
$
—

 
$
—

 
$
2,814

 
$
(186
)
Total
 
$
2,814

 
$
(186
)
 
$
—

 
$
—

 
$
2,814

 
$
(186
)

 
 
 
December 31, 2019
 
 
Less Than 12 Months
 
12 Months or Longer
 
Total
(in thousands)
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Securities available-for-sale
 
 

 
 

 
 

 
 

 
 

 
 

U.S. Government-sponsored agencies
 
$
4,820

 
$
(61
)
 
$
62,182

 
$
(1,881
)
 
$
67,002

 
$
(1,942
)
Municipal securities
 
1,279

 
(1,501
)
 
—

 
—

 
1,279

 
(1,501
)
Agency mortgage-backed securities
 
91,159

 
(829
)
 
83,212

 
(3,177
)
 
174,371

 
(4,006
)
Private label mortgage-backed securities
 
30,077

 
(180
)
 
2,884

 
(8
)
 
32,961

 
(188
)
Asset-backed securities
 
—

 
—

 
4,955

 
(45
)
 
4,955

 
(45
)
Corporate securities
 
—

 
—

 
22,985

 
(1,532
)
 
22,985

 
(1,532
)
Total
 
$
127,335

 
$
(2,571
)
 
$
176,218

 
$
(6,643
)
 
$
303,553

 
$
(9,214
)

 
 
December 31, 2019
 
 
Less Than 12 Months
 
12 Months or Longer
 
Total
(in thousands)
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Securities held-to-maturity
 
 

 
 

 
 

 
 

 
 

 
 

Corporate securities
 
13,977

 
(132
)
 
—

 
—

 
13,977

 
(132
)
Total
 
$
13,977

 
$
(132
)
 
$
—

 
$
—

 
$
13,977

 
$
(132
)


There were no amounts reclassified from accumulated other comprehensive loss to the condensed consolidated statements of income during the three months ended March 31, 2019. Amounts reclassified from accumulated other comprehensive loss and the affected line items in the condensed consolidated statements of income during the three months ended March 31, 2020 were as follows:

(in thousands)



Details About Accumulated Other Comprehensive Loss Components
 
 
 
Affected Line Item in the
Statements of Income
 
Three Months Ended March 31, 2020
 
Realized gains on securities available-for-sale
 
 

 
 
Gain realized in earnings
 
$
41

 
Gain on sale of securities
Total reclassified amount before tax
 
41

 
Income Before Income Taxes
Tax expense
 
11

 
Income Tax Provision
Total reclassifications out of accumulated other comprehensive loss
 
$
30

 
Net Income