Annual report pursuant to Section 13 and 15(d)

Note 2 - Debt Securities

v3.20.4
Note 2 - Debt Securities
12 Months Ended
Dec. 31, 2020
Notes to Financial Statements  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

NOTE 2.     DEBT SECURITIES

 

The amortized cost and fair values of available-for-sale and held-to-maturity debt securities at December 31, 2020 and 2019 are summarized as follows:

 

           

Gross

   

Gross

   

Allowance

         
   

Amortized

   

Unrealized

   

Unrealized

   

For Credit

   

Market

 
   

Cost

   

Gain

   

Loss

   

Losses

   

Value

 

December 31, 2020

 

(In Thousands)

 

Securities Available for Sale

                                       

U.S. Treasury Securities

  $ 13,993     $ 364     $ -     $ -     $ 14,357  

Government Agency Securities

    15,228       230       -       -       15,458  

Mortgage-backed securities

    477,407       17,720       (18 )     -       495,109  

State and municipal securities

    37,671       444       -       -       38,115  

Corporate debt

    316,857       7,296       (504 )     -       323,649  

Total

  $ 861,156     $ 26,054     $ (522 )   $ -     $ 886,688  

Debt Securities Held to Maturity

                                       

State and municipal securities

    250       -       -       -       250  

Total

  $ 250     $ -     $ -     $ -     $ 250  
                                         

December 31, 2019

                                       

Securities Available for Sale

                                       

U.S Treasury Securities

  $ 48,923     $ 291     $ (4 )   $ -     $ 49,210  

Government Agency Securities

    18,245       143       (2 )     -       18,386  

Mortgage-backed securities

    470,513       4,859       (1,318 )     -       474,054  

State and municipal securities

    56,951       335       (14 )     -       57,272  

Corporate debt

    157,549       3,098       (170 )     -       160,477  

Total

  $ 752,181     $ 8,726     $ (1,508 )   $ -     $ 759,399  

Debt Securities Held to Maturity

                                       

State and municipal securities

    250       -       -       -       250  

Total

  $ 250     $ -     $ -     $ -     $ 250  

 

All mortgage-backed debt securities are issued by government sponsored enterprises (GSEs) such as Federal National Mortgage Association, Government National Mortgage Association, Federal Home Loan Bank, and Federal Home Loan Mortgage Corporation.

 

At year-end 2020 and 2019, there were no holdings of debt securities of any issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders’ equity.

 

The amortized cost and fair value of debt securities as of December 31, 2020 and 2019 by contractual maturity are shown below. Actual maturities may differ from contractual maturities because the issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

 

   

December 31, 2020

   

December 31, 2019

 
   

Amortized Cost

   

Market Value

   

Amortized Cost

   

Market Value

 
   

(In Thousands)

 

Debt securities available for sale

                               

Due within one year

  $ 30,797     $ 31,060     $ 58,722     $ 58,975  

Due from one to five years

    59,828       61,481       90,034       91,005  

Due from five to ten years

    288,002       293,886       129,501       131,914  

Due after ten years

    5,122       5,152       3,411       3,451  

Mortgage-backed securities

    477,407       495,109       470,513       474,054  
    $ 861,156     $ 886,688     $ 752,181     $ 759,399  
                                 

Debt securities held to maturity

                               

Due from one to five years

  $ 250     $ 250     $ 250     $ 250  
    $ 250     $ 250     $ 250     $ 250  

 

The following table shows the gross unrealized losses and fair value of debt securities, aggregated by category and length of time that securities have been in a continuous unrealized loss position at December 31, 2020 and 2019.

 

   

Less Than Twelve Months

   

Twelve Months or More

   

Total

 
   

Gross

           

Gross

           

Gross

         
   

Unrealized

           

Unrealized

           

Unrealized

         
   

Losses

   

Fair Value

   

Losses

   

Fair Value

   

Losses

   

Fair Value

 
   

(In Thousands)

 

December 31, 2020

                                               

U.S. Treasury Securities

  $ -     $ -     $ -     $ -     $ -     $ -  

Government Agency Securities

    -       -       -       -       -       -  

Mortgage-backed securities

    (18 )     3,667       -       -       (18 )     3,667  

State and municipal securities

    -       -       -       -       -       -  

Corporate debt

    (504 )     59,576       -       -       (504 )     59,576  

Total

  $ (522 )   $ 63,243     $ -     $ -     $ (522 )   $ 63,243  
                                                 

December 31, 2019

                                               

U.S. Treasury Securities

  $ (4 )   $ 3,012     $ -     $ -     $ (4 )   $ 3,012  

Government Agency Securities

    (2 )     266       -       -       (2 )     266  

Mortgage-backed securities

    (1,206 )     153,330       (112 )     24,911       (1,318 )     178,241  

State and municipal securities

    (4 )     1,900       (10 )     2,647       (14 )     4,547  

Corporate debt

    (170 )     19,981       -       -       (170 )     19,981  

Total

  $ (1,386 )   $ 178,489     $ (122 )   $ 27,558     $ (1,508 )   $ 206,047  

 

At December 31, 2020, no allowance for credit losses has been recognized on available for sale debt securities in an unrealized loss position as the Company does not believe any of the debt securities are credit impaired. This is based on the Company’s analysis of the risk characteristics, including credit ratings, and other qualitative factors related to available for sale debt securities. The issuers of these debt securities continue to make timely principal and interest payments under the contractual terms of the securities. Furthermore, the Company does not intend to sell these debt securities and it is more likely than not that the Company will not be required to sell the debt securities before recovery of their amortized cost, which may be at maturity. The unrealized losses are due to increases in market interest rates over the yields available at the time the debt securities were purchased.

 

The following table summarizes information about sales of debt securities available for sale.

 

   

Years Ended December 31,

 
   

2020

   

2019

   

2018

 
   

(In Thousands)

 

Sale proceeds

  $ -     $ 18,920     $ 5,736  

Gross realized gains

  $ -     $ 27     $ 15  

Gross realized losses

    -       -       -  

Net realized gain (loss)

  $ -     $ 27     $ 15  

 

The carrying value of debt securities pledged to secure public funds on deposits and for other purposes as required by law as of December 31, 2020 and 2019 was $477.6 million and $389.9 million, respectively.