Quarterly report pursuant to Section 13 or 15(d)

INVESTMENT SECURITIES

v3.22.2
INVESTMENT SECURITIES
6 Months Ended
Jun. 30, 2022
Investments Securities [Abstract]  
Investment securities
NOTE 2 –
INVESTMENT SECURITIES
Investment Portfolio Composition
. The following table summarizes the amortized cost and related fair value of investment
securities available-for-sale and securities held-to-maturity and the corresponding
 
amounts of gross unrealized gains and losses.
Available for
 
Sale
Amortized
Unrealized
Unrealized
Allowance for
Fair
(Dollars in Thousands)
Cost
Gains
Losses
Credit Losses
Value
June 30, 2022
U.S. Government Treasury
$
189,686
$
-
$
11,791
$
-
$
177,895
U.S. Government Agency
219,936
336
9,588
-
210,684
States and Political Subdivisions
47,626
9
5,269
(9)
42,357
Mortgage-Backed Securities
(1)
86,168
8
8,355
-
77,821
Corporate Debt Securities
92,936
-
7,593
(22)
85,321
Other Securities
(2)
7,327
-
-
-
7,327
Total
 
$
643,679
$
353
$
42,596
$
(31)
$
601,405
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
June 30, 2022
U.S. Government Treasury
$
303,379
$
-
$
13,671
$
289,708
Mortgage-Backed Securities
(1)
224,879
66
15,690
209,255
Total
 
$
528,258
$
66
$
29,361
$
498,963
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 June 30, 2022 and $
2.0
 
million and $
5.1
 
million, respectively,
 
at December 31, 2021.
At June 30, 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 $
375.2
 
million and $
463.8
 
million at June 30, 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 no significant sales of investment securities for the three or six months
 
ended June 30, 2022 or June 30,
2021.
Maturity Distribution
.
 
At June 30, 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
$
34,031
 
$
31,933
 
$
-
 
$
-
Due after one year through five years
 
316,240
 
 
296,327
 
 
303,379
 
 
289,708
Due after five year through ten years
 
59,474
 
 
51,323
 
 
-
 
 
-
Mortgage-Backed Securities
86,168
77,821
224,879
209,255
U.S. Government Agency
 
140,439
 
 
136,674
 
 
-
 
 
-
Equity Securities
 
7,327
 
 
7,327
 
 
-
 
 
-
Total
 
$
643,679
 
$
601,405
 
$
528,258
 
$
498,963
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
June 30, 2022
Available for
 
Sale
U.S. Government Treasury
$
115,930
 
$
7,757
 
$
61,965
 
$
4,034
 
$
177,895
 
$
11,791
U.S. Government Agency
129,675
7,137
43,349
2,451
173,024
9,588
States and Political Subdivisions
40,323
 
5,229
 
437
 
40
 
40,760
 
5,269
Mortgage-Backed Securities
73,829
 
7,909
 
3,801
 
446
 
77,630
 
8,355
Corporate Debt Securities
82,151
 
7,285
 
3,192
 
308
 
85,343
 
7,593
Total
 
441,908
 
35,317
 
112,744
 
7,279
 
554,652
 
42,596
 
Held to Maturity
U.S. Government Treasury
 
284,789
 
13,375
 
 
4,919
 
296
 
 
289,708
 
 
13,671
Mortgage-Backed Securities
195,328
 
14,395
 
9,659
 
1,295
 
204,987
 
15,690
Total
 
$
480,117
 
$
27,770
 
$
14,578
 
$
1,591
 
$
494,695
 
$
29,361
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
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.