Quarterly report pursuant to Section 13 or 15(d)

Securities

v3.20.2
Securities
6 Months Ended
Jun. 30, 2020
Investments Debt And Equity Securities [Abstract]  
Securities

Note 2 — Securities

The following is a summary of securities available for sale as of the dates indicated:

 

 

 

 

 

 

 

Gross

 

 

Gross

 

 

Estimated

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

Fair

 

 

 

Cost

 

 

Gain

 

 

Loss

 

 

Value

 

 

 

(in thousands)

 

June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

44,982

 

 

$

280

 

 

$

 

 

$

45,262

 

U.S. government agency and sponsored agency obligations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities

 

 

413,278

 

 

 

422

 

 

 

(437

)

 

 

413,263

 

Collateralized mortgage obligations

 

 

120,080

 

 

 

390

 

 

 

(176

)

 

 

120,294

 

Debt securities

 

 

77,160

 

 

 

9

 

 

 

(17

)

 

 

77,152

 

Total U.S. government agency and sponsored agency obligations

 

 

610,518

 

 

 

821

 

 

 

(630

)

 

 

610,709

 

Total securities available for sale

 

$

655,500

 

 

$

1,101

 

 

$

(630

)

 

$

655,971

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

34,947

 

 

$

259

 

 

$

 

 

 

35,206

 

U.S. government agency and sponsored agency obligations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities

 

 

406,813

 

 

 

4,334

 

 

 

(347

)

 

$

410,800

 

Collateralized mortgage obligations

 

 

164,232

 

 

 

792

 

 

 

(432

)

 

 

164,592

 

Debt securities

 

 

23,733

 

 

 

168

 

 

 

(22

)

 

 

23,879

 

Total U.S. government agency and sponsored agency obligations

 

 

594,778

 

 

 

5,294

 

 

 

(801

)

 

 

599,271

 

Total securities available for sale

 

$

629,725

 

 

$

5,553

 

 

$

(801

)

 

$

634,477

 

 

The amortized cost and estimated fair value of securities as of June 30, 2020, by contractual or expected maturity, are shown below. Collateralized mortgage obligations are included in the table shown below based on their expected maturities. All other securities are included based on their contractual maturities.

 

 

 

Available for Sale

 

 

 

Amortized

 

 

Estimated

 

 

 

Cost

 

 

Fair Value

 

 

 

(in thousands)

 

Within one year

 

$

45,358

 

 

$

45,379

 

Over one year through five years

 

 

121,596

 

 

 

122,202

 

Over five years through ten years

 

 

48,702

 

 

 

48,812

 

Over ten years

 

 

439,844

 

 

 

439,578

 

Total

 

$

655,500

 

 

$

655,971

 

CECL (ASU 2016-13) requires the Company to assess its available-for-sales securities portfolio for impairment on an at least quarterly basis.  The Company performed an impairment assessment of the Bank’s investment in debt securities in accordance with this standard.  This assessment took into account the credit quality of these debt securities and determined that since all were U.S. Treasury obligations, U.S. government agency securities, and U.S. government sponsored agency securities, they all have the backing of the U.S. government, and thus no credit impairment is expected.

 

Gross unrealized losses on securities available for sale, the estimated fair value of the related securities and the number of securities aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows as of June 30, 2020 and December 31, 2019:

 

 

 

Holding Period

 

 

 

Less than 12 Months

 

 

12 Months or More

 

 

Total

 

 

 

Gross

 

 

Estimated

 

 

Number

 

 

Gross

 

 

Estimated

 

 

Number

 

 

Gross

 

 

Estimated

 

 

Number

 

 

 

Unrealized

 

 

Fair

 

 

of

 

 

Unrealized

 

 

Fair

 

 

of

 

 

Unrealized

 

 

Fair

 

 

of

 

 

 

Loss

 

 

Value

 

 

Securities

 

 

Loss

 

 

Value

 

 

Securities

 

 

Loss

 

 

Value

 

 

Securities

 

 

 

(in thousands, except number of securities)

 

June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

 

 

$

29,988

 

 

 

4

 

 

$

 

 

$

 

 

 

 

 

$

 

 

$

29,988

 

 

 

4

 

U.S. government agency and sponsored agency obligations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities

 

 

(437

)

 

 

192,403

 

 

 

23

 

 

 

 

 

 

 

 

 

 

 

 

(437

)

 

 

192,403

 

 

 

23

 

Collateralized mortgage obligations

 

 

(176

)

 

 

46,693

 

 

 

12

 

 

 

 

 

 

 

 

 

 

 

 

(176

)

 

 

46,693

 

 

 

12

 

Debt securities

 

 

(17

)

 

 

32,483

 

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

(17

)

 

 

32,483

 

 

 

5

 

Total U.S. government agency and sponsored agency obligations

 

 

(630

)

 

 

271,579

 

 

 

40

 

 

 

 

 

 

 

 

 

 

 

 

(630

)

 

 

271,579

 

 

 

40

 

Total

 

$

(630

)

 

$

301,567

 

 

 

44

 

 

$

 

 

$

 

 

 

 

 

$

(630

)

 

$

301,567

 

 

 

44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agency and sponsored agency obligations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities

 

$

(186

)

 

$

51,261

 

 

 

17

 

 

$

(161

)

 

$

18,757

 

 

 

14

 

 

$

(347

)

 

$

70,018

 

 

 

31

 

Collateralized mortgage obligations

 

 

(112

)

 

 

41,419

 

 

 

14

 

 

 

(320

)

 

 

39,936

 

 

 

36

 

 

 

(432

)

 

 

81,355

 

 

 

50

 

Debt securities

 

 

(20

)

 

 

8,235

 

 

 

2

 

 

 

(3

)

 

 

2,997

 

 

 

1

 

 

 

(22

)

 

 

11,233

 

 

 

3

 

Total U.S. government agency and sponsored agency obligations

 

 

(318

)

 

 

100,916

 

 

 

33

 

 

 

(483

)

 

 

61,690

 

 

 

51

 

 

 

(801

)

 

 

162,606

 

 

 

84

 

Total

 

$

(318

)

 

$

100,916

 

 

 

33

 

 

$

(483

)

 

$

61,690

 

 

 

51

 

 

$

(801

)

 

$

162,606

 

 

 

84

 

 

The unrealized losses in the U.S. government agency and sponsored agency obligations, were caused by fluctuations in interest rates. These securities are not deemed to have credit risk due to their long history with no credit losses, and the explicit guarantee of the U.S. government of timely payment of principal and interest to investors. The Company does not intend to sell the securities and it is not more likely than not that it will be required to sell them before recovery of their amortized cost.

Realized gains and losses on sales of securities and proceeds from sales of securities were as follows for the periods indicated:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(in thousands)

 

Gross realized gains on sales of securities

 

$

15,712

 

 

$

634

 

 

$

15,712

 

 

$

1,359

 

Gross realized losses on sales of securities

 

 

 

 

 

(64

)

 

 

 

 

 

(64

)

Net realized gains on sales of securities

 

$

15,712

 

 

$

570

 

 

$

15,712

 

 

$

1,295

 

Proceeds from sales of securities

 

$

495,566

 

 

 

44,119

 

 

$

495,566

 

 

 

113,306

 

 

 

During the three months ended June 30, 2020 and 2019, there was a $15.7 million and $570,000 net gain in earnings resulting from the sale of securities, respectively. A net unrealized gain of $15.3 million and $792,000 related to these securities had previously been recorded in accumulated other comprehensive income as of the beginning of the period in 2020 and 2019, respectively.

 

During the six months ended June 30, 2020, there were $15.7 million securities sales transactions in net gains in earnings resulting from $15.3 million previously recorded for unrealized gains in accumulated other comprehensive income.  During the six months ended June 30, 2019, there were $1.3 million in net gains in earnings resulting from the sale of securities which had $586,000 in previously recorded unrealized gains in accumulated other comprehensive income. 

Securities available for sale with market values of $50.0 million and $30.2 million as of June 30, 2020 and 2019, respectively, were pledged to secure public deposits and for other purposes as required or permitted by law.