XML 26 R15.htm IDEA: XBRL DOCUMENT v3.19.2
Investment Securities
 6 Months Ended
Jun. 30, 2019
Investments Debt And Equity Securities [Abstract]  
Investment Securities

7.

Investment Securities

Investment securities have been classified in the unaudited consolidated balance sheets according to management’s intent. The carrying amounts of securities and their approximate fair values were as follows:

 

 

 

June 30, 2019

 

 

December 31, 2018

 

 

 

Amortized

Cost

 

 

Gross

Unrealized

Gains

 

 

Gross

Unrealized

Losses

 

 

Fair

Value

 

 

Amortized

Cost

 

 

Gross

Unrealized

Gains

 

 

Gross

Unrealized

Losses

 

 

Fair

Value

 

 

 

(dollars in thousands)

 

Available for sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. GSE obligations

 

$

50,000

 

 

$

1

 

 

$

(186

)

 

$

49,815

 

 

$

75,004

 

 

$

—

 

 

$

(965

)

 

$

74,039

 

Mortgage-backed securities

 

 

103,765

 

 

 

358

 

 

 

(885

)

 

 

103,238

 

 

 

92,271

 

 

 

118

 

 

 

(3,121

)

 

 

89,268

 

Corporate debt securities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

5,015

 

 

 

—

 

 

 

(159

)

 

 

4,856

 

Total available for sale securities

 

$

153,765

 

 

$

359

 

 

$

(1,071

)

 

$

153,053

 

 

$

172,290

 

 

$

118

 

 

$

(4,245

)

 

$

168,163

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to maturity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. GSE obligations

 

$

22,572

 

 

$

3

 

 

$

(17

)

 

$

22,558

 

 

$

32,571

 

 

$

—

 

 

$

(238

)

 

$

32,333

 

Mortgage-backed securities

 

 

181,776

 

 

 

2,790

 

 

 

(138

)

 

 

184,428

 

 

 

168,118

 

 

 

134

 

 

 

(2,290

)

 

 

165,962

 

Corporate debt securities

 

 

6,977

 

 

 

92

 

 

 

—

 

 

 

7,069

 

 

 

6,972

 

 

 

—

 

 

 

(107

)

 

 

6,865

 

Municipal securities

 

 

75,025

 

 

 

2,913

 

 

 

—

 

 

 

77,938

 

 

 

75,208

 

 

 

1,297

 

 

 

(355

)

 

 

76,150

 

Total held to maturity securities

 

$

286,350

 

 

$

5,798

 

 

$

(155

)

 

$

291,993

 

 

$

282,869

 

 

$

1,431

 

 

$

(2,990

)

 

$

281,310

 

Total

 

$

440,115

 

 

$

6,157

 

 

$

(1,226

)

 

$

445,046

 

 

$

455,159

 

 

$

1,549

 

 

$

(7,235

)

 

$

449,473

 

 

All of the Company’s mortgage-backed securities have been issued by, or are collateralized by securities issued by, either Government National Mortgage Association (Ginnie Mae), Federal National Mortgage Association (Fannie Mae), or Federal Home Loan Mortgage Corporation (Freddie Mac).

The following tables show the Company’s securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position:

 

 

 

June 30, 2019

 

 

 

Less than 12 months

 

 

12 months or longer

 

 

Total

 

 

 

Fair

Value

 

 

Unrealized

Losses

 

 

Fair

Value

 

 

Unrealized

Losses

 

 

Fair

Value

 

 

Unrealized

Losses

 

 

 

(dollars in thousands)

 

Temporarily Impaired Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. GSE obligations

 

$

—

 

 

$

—

 

 

$

44,814

 

 

$

(186

)

 

$

44,814

 

 

$

(186

)

Mortgage-backed securities

 

 

6,844

 

 

 

(41

)

 

 

71,244

 

 

 

(844

)

 

 

78,088

 

 

 

(885

)

Corporate debt securities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total available for sale securities

 

$

6,844

 

 

$

(41

)

 

$

116,058

 

 

$

(1,030

)

 

$

122,902

 

 

$

(1,071

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to maturity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. GSE obligations

 

$

—

 

 

$

—

 

 

$

14,980

 

 

$

(17

)

 

$

14,980

 

 

$

(17

)

Mortgage-backed securities

 

 

—

 

 

 

—

 

 

 

47,096

 

 

 

(138

)

 

 

47,096

 

 

 

(138

)

Corporate debt securities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Municipal securities

 

 

—

 

 

 

—

 

 

 

312

 

 

 

—

 

 

 

312

 

 

 

—

 

Total held to maturity securities

 

$

—

 

 

$

—

 

 

$

62,388

 

 

$

(155

)

 

$

62,388

 

 

$

(155

)

Total temporarily impaired securities

 

$

6,844

 

 

$

(41

)

 

$

178,446

 

 

$

(1,185

)

 

$

185,290

 

 

$

(1,226

)

 

 

 

December 31, 2018

 

 

 

Less than 12 months

 

 

12 months or longer

 

 

Total

 

 

 

Fair

Value

 

 

Unrealized

Losses

 

 

Fair

Value

 

 

Unrealized

Losses

 

 

Fair

Value

 

 

Unrealized

Losses

 

 

 

(dollars in thousands)

 

Temporarily Impaired Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. GSE obligations

 

$

—

 

 

$

—

 

 

$

74,039

 

 

$

(965

)

 

$

74,039

 

 

$

(965

)

Mortgage-backed securities

 

 

—

 

 

 

—

 

 

 

86,815

 

 

 

(3,121

)

 

 

86,815

 

 

 

(3,121

)

Corporate debt securities

 

 

902

 

 

 

(98

)

 

 

3,954

 

 

 

(61

)

 

 

4,856

 

 

 

(159

)

Total available for sale securities

 

$

902

 

 

$

(98

)

 

$

164,808

 

 

$

(4,147

)

 

$

165,710

 

 

$

(4,245

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to maturity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. GSE obligations

 

$

4,995

 

 

$

(5

)

 

$

27,338

 

 

$

(233

)

 

$

32,333

 

 

$

(238

)

Mortgage-backed securities

 

 

30,719

 

 

 

(216

)

 

 

93,225

 

 

 

(2,074

)

 

 

123,944

 

 

 

(2,290

)

Corporate debt securities

 

 

6,865

 

 

 

(107

)

 

 

—

 

 

 

—

 

 

 

6,865

 

 

 

(107

)

Municipal securities

 

 

8,484

 

 

 

(82

)

 

 

8,313

 

 

 

(273

)

 

 

16,797

 

 

 

(355

)

Total held to maturity securities

 

$

51,063

 

 

$

(410

)

 

$

128,876

 

 

$

(2,580

)

 

$

179,939

 

 

$

(2,990

)

Total temporarily impaired securities

 

$

51,965

 

 

$

(508

)

 

$

293,684

 

 

$

(6,727

)

 

$

345,649

 

 

$

(7,235

)

 

Management evaluates securities for other-than-temporary impairment on at least a quarterly basis, and more frequently, when economic or market conditions warrant such evaluation. Consideration is given to: (1) the length of time and the extent to which the fair value has been less than cost; (2) the financial condition and near-term prospects of the issuer; and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

As of June 30, 2019, 68 debt securities had gross unrealized losses, with an aggregate depreciation of 0.66% from the Company’s amortized cost basis. The largest unrealized loss percentage and largest unrealized loss dollar amount of any single security was 2.43%, or $79,000, of its amortized cost.

 

As of December 31, 2018, 142 debt securities had gross unrealized losses, with an aggregate depreciation of 2.05% from the Company’s amortized cost basis. The largest unrealized loss percentage of any single security was 9.79%, or $98,000, of its amortized cost. The largest unrealized dollar loss of any single security was $189,000, or 5.34%, of its amortized cost.

The Company believes that the nature and duration of impairment on its debt security positions are primarily a function of interest rate movements and changes in investment spreads and does not consider full repayment of principal on the reported debt obligations to be at risk. Since nearly all of these securities are rated “investment grade” and (a) the Company does not intend to sell these securities before recovery and (b) that it is more likely than not that the Company will not be required to sell these securities before recovery, the Company does not consider these securities to be other-than-temporarily impaired as of June 30, 2019 and December 31, 2018.

The amortized cost and fair value of debt securities, aggregated by the earlier of guaranteed call date or contractual maturity, are shown below. Maturities of mortgage-backed securities do not take into consideration scheduled amortization or prepayments. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

 

 

 

Within One Year

 

 

After One, But

Within Five Years

 

 

After Five, But

Within Ten Years

 

 

After Ten Years

 

 

Total

 

 

 

Amortized

Cost

 

 

Fair

Value

 

 

Amortized

Cost

 

 

Fair

Value

 

 

Amortized

Cost

 

 

Fair

Value

 

 

Amortized

Cost

 

 

Fair

Value

 

 

Amortized

Cost

 

 

Fair

Value

 

At June 30, 2019

 

(dollars in thousands)

 

Available for sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. GSE obligations

 

$

10,000

 

 

$

9,971

 

 

$

40,000

 

 

$

39,844

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

50,000

 

 

$

49,815

 

Mortgage-backed

   securities

 

 

—

 

 

 

—

 

 

 

58

 

 

 

59

 

 

 

29,462

 

 

 

29,176

 

 

 

74,245

 

 

 

74,003

 

 

 

103,765

 

 

 

103,238

 

Corporate debt securities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total available for

   sale securities

 

$

10,000

 

 

$

9,971

 

 

$

40,058

 

 

$

39,903

 

 

$

29,462

 

 

$

29,176

 

 

$

74,245

 

 

$

74,003

 

 

$

153,765

 

 

$

153,053

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to maturity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. GSE obligations

 

$

4,997

 

 

$

4,982

 

 

$

17,575

 

 

$

17,576

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

22,572

 

 

$

22,558

 

Mortgage-backed

   securities

 

 

8

 

 

 

8

 

 

 

—

 

 

 

—

 

 

 

52,063

 

 

 

53,202

 

 

 

129,705

 

 

 

131,218

 

 

 

181,776

 

 

 

184,428

 

Corporate debt securities

 

 

—

 

 

 

—

 

 

 

6,977

 

 

 

7,069

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

6,977

 

 

 

7,069

 

Municipal securities

 

 

2,424

 

 

 

2,445

 

 

 

12,746

 

 

 

12,970

 

 

 

43,956

 

 

 

46,051

 

 

 

15,899

 

 

 

16,472

 

 

 

75,025

 

 

 

77,938

 

Total held to maturity

   securities

 

$

7,429

 

 

$

7,435

 

 

$

37,298

 

 

$

37,615

 

 

$

96,019

 

 

$

99,253

 

 

$

145,604

 

 

$

147,690

 

 

$

286,350

 

 

$

291,993

 

Total

 

$

17,429

 

 

$

17,406

 

 

$

77,356

 

 

$

77,518

 

 

$

125,481

 

 

$

128,429

 

 

$

219,849

 

 

$

221,693

 

 

$

440,115

 

 

$

445,046

 

 

The following table sets forth information regarding sales of investment securities and the resulting gains (losses) from such sales:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

(dollars in thousands)

 

Amortized cost of securities sold

 

$

10,231

 

 

$

700

 

 

$

26,231

 

 

$

700

 

Gain/(loss) realized on securities sold

 

 

6

 

 

 

2

 

 

 

(81

)

 

 

2

 

Net proceeds from securities sold

 

$

10,237

 

 

$

702

 

 

$

26,150

 

 

$

702