Quarterly report pursuant to Section 13 or 15(d)

INVESTMENT SECURITIES

v3.22.1
INVESTMENT SECURITIES
3 Months Ended
Mar. 31, 2022
Investments Securities [Abstract]  
Investment securities
NOTE 2 –
INVESTMENT SECURITIES
Investment Portfolio Composition
. The following table summarizes the amortized cost and related fair value
securities available-for-sale and securities held-to-maturity and the corresponding
 
amounts of gross
Available for
 
Sale
Amortized
Unrealized
Unrealized
Allowance for
Fair
(Dollars in Thousands)
Cost
Gains
Losses
Credit Losses
Value
March 31, 2022
U.S. Government Treasury
$
190,049
$
15
$
10,051
$
-
$
180,013
U.S. Government Agency
232,067
547
8,179
-
224,435
States and Political Subdivisions
47,107
11
3,753
(15)
43,350
Mortgage-Backed Securities
(1)
91,169
15
5,121
-
86,063
Corporate Debt Securities
88,208
4
5,018
(21)
83,173
Other Securities
(2)
7,327
-
-
-
7,327
Total
 
$
655,927
$
592
$
32,122
$
(36)
$
624,361
December 31, 2021
U.S. Government Treasury
$
190,409
$
65
$
2,606
$
-
$
187,868
U.S. Government Agency
238,490
1,229
2,141
-
237,578
States and Political Subdivisions
47,762
44
811
(15)
46,980
Mortgage-Backed Securities
(1)
89,440
27
598
-
88,869
Corporate Debt Securities
87,537
10
1,304
(21)
86,222
Other Securities
(2)
7,094
-
-
-
7,094
Total
 
$
660,732
$
1,375
$
7,460
$
(36)
$
654,611
Held to Maturity
Amortized
Unrealized
Unrealized
Fair
(Dollars in Thousands)
Cost
Gains
Losses
Value
March 31, 2022
U.S. Government Treasury
$
289,237
$
10
$
9,355
$
279,892
Mortgage-Backed Securities
(1)
229,441
414
8,470
221,385
Total
 
$
518,678
$
424
$
17,825
$
501,277
December 31, 2021
U.S. Government Treasury
$
115,499
$
-
$
1,622
$
113,877
Mortgage-Backed Securities
(1)
224,102
2,819
1,099
225,822
Total
 
$
339,601
$
2,819
$
2,721
$
339,699
(1)
 
Comprised of residential mortgage-backed
 
securities
(2)
 
Includes Federal Home Loan Bank and Federal Reserve Bank stock, recorded
 
at cost of $
2.3
 
million and $
5.1
 
million,
respectively,
 
at March 31, 2022 and $
2.0
 
million and $
5.1
 
million, respectively,
 
at December 31, 2021.
At March 31, 2022, the investment portfolio had $
0.9
 
million in equity securities. These securities do not have a readily determinable
fair value and were not credit impaired.
 
Securities with an amortized cost of $
453.3
 
million and $
463.8
 
million at March 31, 2022 and December 31, 2021, respectively,
 
were
pledged to secure public deposits and for other purposes.
The Bank, as a member of the Federal Home Loan Bank of Atlanta (“FHLB”), is required
 
to own capital stock in the FHLB based
generally upon the balances of residential and commercial real estate loans and FHLB
 
advances.
 
FHLB stock, which is included in
other securities,
 
is pledged to secure FHLB advances.
 
No ready market exists for this stock, and it has no quoted fair value; however,
redemption of this stock has historically been at par value.
As a member of the Federal Reserve Bank of Atlanta, the Bank is required to maintain
 
stock in the Federal Reserve Bank of Atlanta
based on a specified ratio relative to the Bank’s
 
capital.
 
Federal Reserve Bank stock is carried at cost.
 
Investment Sales.
There were sales of investment securities totaling $
3.4
 
million for the three months ended March 31, 2022. There
were no significant sales of investment securities for the three months ended
 
December 31, 2021 and March 31, 2021.
Maturity Distribution
.
 
At March 31, 2022, the Company's investment securities had the following
 
maturity distribution based on
contractual maturity.
 
Expected maturities may differ from contractual maturities because borrowers
 
may have the right to call or
prepay obligations.
 
Mortgage-backed securities and certain amortizing U.S. government
 
agency securities are shown separately
because they are not due at a certain maturity date.
Available for
 
Sale
Held to Maturity
(Dollars in Thousands)
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Due in one year or less
$
36,321
 
$
34,519
 
$
-
 
$
-
Due after one year through five years
 
306,432
 
 
290,613
 
 
289,237
 
 
279,892
Due after five year through ten years
 
62,103
 
 
56,445
 
 
-
 
 
-
Mortgage-Backed Securities
91,169
86,063
229,441
221,385
U.S. Government Agency
 
152,575
 
 
149,394
 
 
-
 
 
-
Equity Securities
 
7,327
 
 
7,327
 
 
-
 
 
-
Total
 
$
655,927
 
$
624,361
 
$
518,678
 
$
501,277
Unrealized Losses on Investment Securities.
 
The following table summarizes the available for sale investment securities with
unrealized losses aggregated by major security type and length of time in a continuous
 
unrealized loss position:
Less Than
Greater Than
12 Months
12 Months
Total
Fair
Unrealized
Fair
Unrealized
Fair
Unrealized
(Dollars in Thousands)
Value
Losses
Value
Losses
Value
Losses
March 31, 2022
Available for
 
Sale
U.S. Government Treasury
$
117,369
 
$
6,723
 
$
57,638
 
$
3,328
 
$
175,007
 
$
10,051
U.S. Government Agency
122,572
5,952
43,637
2,227
166,209
8,179
States and Political Subdivisions
42,181
 
3,719
 
444
 
34
 
42,625
 
3,753
Mortgage-Backed Securities
85,848
 
5,121
 
-
 
-
 
85,848
 
5,121
Corporate Debt Securities
79,718
 
5,018
 
-
 
-
 
79,718
 
5,018
Total
 
447,688
 
26,533
 
101,719
 
5,589
 
549,407
 
32,122
 
Held to Maturity
U.S. Government Treasury
 
261,362
 
9,355
 
 
-
 
-
 
 
261,362
 
 
9,355
Mortgage-Backed Securities
166,472
 
7,633
 
10,496
 
837
 
176,968
 
8,470
Total
 
$
427,834
 
$
16,988
 
$
10,496
 
$
837
 
$
438,330
 
$
17,825
December 31, 2021
Available for
 
Sale
 
U.S. Government Treasury
$
172,206
 
$
2,606
 
$
-
 
$
-
 
$
172,206
 
$
2,606
U.S. Government Agency
127,484
1,786
17,986
355
145,470
2,141
States and Political Subdivisions
 
42,122
 
 
811
 
 
-
 
 
-
 
 
42,122
 
 
811
Mortgage-Backed Securities
81,832
598
-
-
81,832
598
Corporate Debt Securities
69,354
1,304
-
-
69,354
1,304
Total
 
$
492,998
 
$
7,105
 
$
17,986
 
$
355
 
$
510,984
 
$
7,460
 
Held to Maturity
U.S. Government Treasury
 
113,877
 
 
1,622
 
 
-
 
 
-
 
 
113,877
 
 
1,622
Mortgage-Backed Securities
115,015
1,099
-
-
115,015
1,099
Total
 
$
228,892
 
$
2,721
 
$
-
 
$
-
 
$
228,892
 
$
2,721
At March 31, 2022, there were
673
 
positions (combined Available-for-Sale
 
and Held-to-Maturity) with unrealized losses totaling
$
49.9
 
million.
553
 
of these positions were U.S. government agency securities issued by U.S. government
 
sponsored entities.
 
Municipal securities totaled
48
 
positions.
 
The remaining
72
 
positions were corporate debt and asset backed securities.
 
These
investment securities had allowance for credit losses totaling less than $
0.1
 
million at March 31, 2022.
 
The declines in the fair values
of these securities were attributable to changes in interest rates and not credit quality.
Credit Quality Indicators
The Company monitors the credit quality of its investment securities through
 
various risk management procedures, including the
monitoring of credit ratings.
 
A majority of the debt securities in the Company’s
 
investment portfolio were issued by a U.S.
government entity or agency and are either explicitly or implicitly guaranteed
 
by the U.S. government.
 
The Company believes the
long history of no credit losses on these securities indicates that the expectation
 
of nonpayment of the amortized cost basis is zero,
even if the U.S. government were to technically default.
 
Further, certain municipal securities held by the Company
 
have been pre-
refunded and secured by government guaranteed treasuries.
 
Therefore, for the aforementioned securities, the Company does not
assess or record expected credit losses due to the zero loss assumption.
 
The Company monitors the credit quality of its municipal and
corporate securities portfolio via credit ratings
 
which are updated on a quarterly basis.
 
On a quarterly basis, municipal and corporate
securities in an unrealized loss position are evaluated to determine if the
 
loss is attributable to credit
 
related factors and if an allowance
for credit loss is needed.