ALERUS FINANCIAL CORP [ALRS] Filings

10-Q 1 alrs-20220331x10q.htm 10-Q

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-39036

ALERUS FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	45-0375407
(State or other jurisdiction of incorporation or	(I.R.S. Employer Identification No.)
organization)

401 Demers Avenue
Grand Forks, ND	58201
(Address of principal executive offices)	(Zip Code)

(701) 795-3200

(Registrant’s telephone number, including area code)

Securities registered pursuant to section 12(b) of the Act:


Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, par value $1.00 per share	ALRS	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ◻

Accelerated filer ⌧

Non-accelerated filer ◻

Smaller reporting company ☐

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ⌧

The number of shares of the registrant’s common stock outstanding at April 30, 2022 was 17,288,575.

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Alerus Financial Corporation and Subsidiaries

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		Page
Part 1:	FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements	1
	Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021	1
	Consolidated Statements of Income for the three months ended March 31, 2022 and 2021	2
	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2022 and 2021	3
	Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2022 and 2021	4
	Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021	5
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	54
Item 4.	Controls and Procedures	56

Part 2:	OTHER INFORMATION
Item 1.	Legal Proceedings	56
Item 1A.	Risk Factors	56
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	56
Item 3.	Defaults Upon Senior Securities	57
Item 4.	Mine Safety Disclosures	57
Item 5.	Other Information	57
Item 6.	Exhibits	58

Signatures		59

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PART 1. FINANCIAL INFORMATION

Item 1 - Consolidated Financial Statements

Alerus Financial Corporation and Subsidiaries

Consolidated Balance Sheets


	March 31,		December 31,
(dollars in thousands, except share and per share data)	2022		2021
Assets	(Unaudited)		(Audited)
Cash and cash equivalents	$	132,832	$	242,311
Investment securities
Available-for-sale, at fair value		866,333		853,649
Held-to-maturity, at carrying value		340,150		352,061
Loans held for sale		21,864		46,490
Loans		1,818,042		1,758,020
Allowance for loan losses		(31,713)		(31,572)
Net loans		1,786,329		1,726,448
Land, premises and equipment, net		17,619		18,370
Operating lease right-of-use assets		3,360		3,727
Accrued interest receivable		8,516		8,537
Bank-owned life insurance		33,358		33,156
Goodwill		31,490		31,490
Other intangible assets		19,197		20,250
Servicing rights		1,771		1,880
Deferred income taxes, net		23,517		11,614
Other assets		49,863		42,708
Total assets	$	3,336,199	$	3,392,691
Liabilities and Stockholders’ Equity
Deposits
Noninterest-bearing	$	831,558	$	938,840
Interest-bearing		2,060,709		1,981,711
Total deposits		2,892,267		2,920,551
Long-term debt		58,902		58,933
Operating lease liabilities		3,850		4,275
Accrued expenses and other liabilities		52,675		49,529
Total liabilities		3,007,694		3,033,288
Stockholders’ equity
Preferred stock, $1 par value, 2,000,000 shares authorized: 0 issued and outstanding		—		—
Common stock, $1 par value, 30,000,000 shares authorized: 17,288,575 and 17,212,588 issued and outstanding		17,289		17,213
Additional paid-in capital		92,573		92,878
Retained earnings		260,967		253,567
Accumulated other comprehensive income (loss)		(42,324)		(4,255)
Total stockholders’ equity		328,505		359,403
Total liabilities and stockholders’ equity	$	3,336,199	$	3,392,691

See accompanying notes to consolidated financial statements (unaudited)

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Alerus Financial Corporation and Subsidiaries

Consolidated Statements of Income (Unaudited)


	Three months ended
	March 31,
(dollars and shares in thousands, except per share data)	2022		2021
Interest Income
Loans, including fees	$	17,292	$	20,567
Investment securities
Taxable		5,440		2,401
Exempt from federal income taxes		216		236
Other		116		117
Total interest income		23,064		23,321
Interest Expense
Deposits		829		995
Long-term debt		562		288
Total interest expense		1,391		1,283
Net interest income		21,673		22,038
Provision for loan losses		—		—
Net interest income after provision for loan losses		21,673		22,038
Noninterest Income
Retirement and benefit services		17,646		17,255
Wealth management		5,326		4,986
Mortgage banking		4,931		17,132
Service charges on deposit accounts		363		338
Net gains (losses) on investment securities		—		114
Other		1,204		1,056
Total noninterest income		29,470		40,881
Noninterest Expense
Compensation		19,051		23,698
Employee taxes and benefits		6,162		5,813
Occupancy and equipment expense		2,051		2,231
Business services, software and technology expense		4,924		4,976
Intangible amortization expense		1,053		1,151
Professional fees and assessments		1,541		1,472
Marketing and business development		600		676
Supplies and postage		646		531
Travel		179		26
Mortgage and lending expenses		686		1,332
Other		1,178		1,136
Total noninterest expense		38,071		43,042
Income before income taxes		13,072		19,877
Income tax expense		2,888		4,662
Net income	$	10,184	$	15,215
Per Common Share Data
Basic earnings per common share	$	0.58	$	0.87
Diluted earnings per common share	$	0.57	$	0.86
Dividends declared per common share	$	0.16	$	0.15
Average common shares outstanding		17,244		17,145
Diluted average common shares outstanding		17,500		17,465

See accompanying notes to consolidated financial statements (unaudited)

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Alerus Financial Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income (Unaudited)


	Three months ended
	March 31,
(dollars in thousands)	2022		2021
Net Income	$	10,184	$	15,215
Other Comprehensive Income (Loss), Net of Tax
Unrealized gains (losses) on available-for-sale securities		(46,708)		(18,036)
Accretion of (gains) losses on debt securities reclassified to held-to-maturity		(4,118)		—
Reclassification adjustment for losses (gains) realized in income		—		(114)
Total other comprehensive income (loss), before tax		(50,826)		(18,150)
Income tax expense (benefit) related to items of other comprehensive income		(12,757)		(4,556)
Other comprehensive income (loss), net of tax		(38,069)		(13,594)
Total comprehensive income (loss)	$	(27,885)	$	1,621

See accompanying notes to consolidated financial statements (unaudited)

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Alerus Financial Corporation and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)


	Three months ended March 31, 2022
							Accumulated
			Additional				Other
	Common		Paid-in		Retained		Comprehensive
(dollars in thousands)	Stock		Capital		Earnings		Income (Loss)		Total
Balance as of December 31, 2021	$	17,213	$	92,878	$	253,567	$	(4,255)	$	359,403
Net income		—		—		10,184		—		10,184
Other comprehensive income (loss)		—		—		—		(38,069)		(38,069)
Common stock repurchased		(20)		(587)		—		—		(607)
Common stock dividends		—		—		(2,784)		—		(2,784)
Share‑based compensation expense		—		378		—		—		378
Vesting of restricted stock		96		(96)		—		—		—
Balance as of March 31, 2022	$	17,289	$	92,573	$	260,967	$	(42,324)	$	328,505


	Three months ended March 31, 2021
							Accumulated
			Additional				Other
	Common		Paid-in		Retained		Comprehensive
(dollars in thousands)	Stock		Capital		Earnings		Income (Loss)		Total
Balance as of December 31, 2020	$	17,125	$	90,237	$	212,163	$	10,638	$	330,163
Net income		—		—		15,215		—		15,215
Other comprehensive income (loss)		—		—		—		(13,594)		(13,594)
Common stock repurchased		(16)		(134)		(296)		—		(446)
Common stock dividends		—		—		(2,602)		—		(2,602)
Share‑based compensation expense		—		498		—		—		498
Vesting of restricted stock		81		(81)		—		—		—
Balance as of March 31, 2021	$	17,190	$	90,520	$	224,480	$	(2,956)	$	329,234

See accompanying notes to consolidated financial statements (unaudited)

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Alerus Financial Corporation and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)


	Three months ended
	March 31,
(dollars in thousands)	2022		2021
Operating Activities
Net income	$	10,184	$	15,215
Adjustments to reconcile net income to net cash provided (used) by operating activities
Deferred income taxes		854		264
Depreciation and amortization		2,083		2,345
Amortization and accretion of premiums/discounts on investment securities		1,010		794
Amortization of operating lease right-of-use assets		(19)		(8)
Stock-based compensation		378		498
Increase in value of bank-owned life insurance		(202)		(193)
Realized loss (gain) on sale of fixed assets		—		(27)
Realized loss (gain) on derivative instruments		2		(713)
Realized loss (gain) on loans sold		(3,097)		(14,201)
Realized loss (gain) on sale of foreclosed assets		(8)		(23)
Realized loss (gain) on sale of investment securities		—		(114)
Realized loss (gain) on servicing rights		(51)		(165)
Net change in:
Loans held for sale		27,638		57,823
Accrued interest receivable		21		391
Other assets		(4,818)		(2,050)
Accrued expenses and other liabilities		872		(4,995)
Net cash provided (used) by operating activities		34,847		54,841
Investing Activities
Proceeds from sales or calls of investment securities available-for-sale		—		13,189
Proceeds from maturities of investment securities available-for-sale		31,665		27,307
Purchases of investment securities available-for-sale		(95,640)		(262,081)
Proceeds from sales or calls of investment securities held-to-maturity		515		—
Proceeds from maturities of investment securities held-to-maturity		10,851		—
Net (increase) decrease in loans		(59,910)		41,391
Purchases of premises and equipment		(130)		(277)
Proceeds from sales of foreclosed assets		57		101
Net cash provided (used) by investing activities		(112,592)		(180,370)
Financing Activities
Net increase (decrease) in deposits		(28,284)		145,580
Repayments of long-term debt		(59)		(49,748)
Proceeds from the issuance of subordinated debt		—		50,000
Cash dividends paid on common stock		(2,784)		(2,602)
Repurchase of common stock		(607)		(446)
Net cash provided (used) by financing activities		(31,734)		142,784
Net change in cash and cash equivalents		(109,479)		17,255
Cash and cash equivalents at beginning of period		242,311		172,962
Cash and cash equivalents at end of period	$	132,832	$	190,217

See accompanying notes to consolidated financial statements (unaudited)

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	Three months ended
	March 31,
Supplemental Cash Flow Disclosures	2022		2021
Cash paid for:
Interest	$	926	$	1,405
Income taxes		12		736
Non-cash information
Loan collateral transferred to foreclosed assets		29		154
Unrealized gain (loss) on investment securities available-for-sale		(33,951)		(13,594)
Accretion of unrealized (gain) loss on investment securities held-to-maturity		(4,118)		—

See accompanying notes to consolidated financial statements (unaudited)

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Alerus Financial Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

NOTE 1 Significant Accounting Policies

Organization

Alerus Financial Corporation, or the Company, is a financial holding company organized under the laws of the state of Delaware. The Company and its subsidiaries operate as a diversified financial services company headquartered in Grand Forks, North Dakota. Through its subsidiary, Alerus Financial, National Association, or the Bank, the Company provides financial solutions to businesses and consumers through four distinct business lines—banking, retirement and benefit services, wealth management, and mortgage.

Basis of Presentation

The accompanying unaudited consolidated financial statements and notes thereto of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC, and conform to practices within the banking industry and include all of the information and disclosures required by generally accepted accounting principles in the United States of America, or GAAP, for interim financial reporting. The accompanying unaudited consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of financial results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results for the full year or any other period. The Company has also evaluated all subsequent events for potential recognition and disclosure through the date of the filing of this Quarterly Report on Form 10-Q. These interim unaudited financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 11, 2022.

Principles of Consolidation

The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. The Company’s principal operating subsidiary is the Bank.

In the normal course of business, the Company may enter into a transaction with a variable interest entity, or VIE. VIE’s are legal entities whose investors lack the ability to make decisions about the entity’s activities, or whose equity investors do not have the right to receive the residual returns of the entity. The applicable accounting guidance requires the Company to perform ongoing quantitative and qualitative analysis to determine whether it must consolidate any VIE. The Company does not have any ownership interest in, or exert any control, over any VIE, and thus no VIE’s are included in the consolidated financial statements.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change in the near term include the valuation of investment securities, determination of the allowance for loan losses, valuation of reporting units for the purpose of testing goodwill and other intangible assets for impairment, valuation of deferred tax assets, and fair values of financial instruments.

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Reclassifications

Certain items previously reported have been reclassified to conform to the current period’s reporting format. Such reclassifications did not affect net income or stockholders’ equity.

Other Information

As of March 31, 2022, the Coronavirus Disease, or COVID-19, pandemic was ongoing. During 2020, the COVID-19 pandemic created disruption in global supply chains, increased rates of unemployment and adversely impacted many industries, including industries related to the collateral underlying certain of our loans, and many of these effects are continuing. Beginning in 2021 and continuing into 2022, the U.S. economy, with certain setbacks, started reopening and wider distribution of vaccines encouraged greater economic activity. Nonetheless, the economic recovery could remain uneven, particularly given uncertainty with respect to the continued distribution and acceptance of the vaccines and their effectiveness with respect to new variants of the virus. Management believes the Company is taking appropriate actions to mitigate, to the extent possible, the negative impact. However, the full impact of COVID-19 is currently unknown and cannot be reasonably estimated as the events are continuing to unfold.

Emerging Growth Company

The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and may take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In addition, even if the Company complies with the greater obligations of public companies that are not emerging growth companies, the Company may avail itself of the reduced requirements applicable to emerging growth companies from time to time in the future, so long as the Company is an emerging growth company. The Company will continue to be an emerging growth company until the earliest to occur of: (1) the end of the fiscal year following the fifth anniversary of the date of the first sale of common equity securities under the Company’s Registration Statement on Form S-1, which was declared effective by the SEC on September 12, 2019; (2) the last day of the fiscal year in which the Company has $1.07 billion or more in annual revenues; (3) the date on which the Company is deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, or the “Exchange Act”; or (4) the date on which the Company has, during the previous three-year period, issued publicly or privately, more than $1.0 billion in non-convertible debt securities.

Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 for complying with new or revised accounting standards. As an emerging growth company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company elected to take advantage of the benefits of this extended transition period.

NOTE 2 Recent Accounting Pronouncements

The following FASB Accounting Standards Updates, or ASUs, are divided into pronouncements which have been adopted by the Company since January 1, 2022, and those which are not yet effective and have been evaluated or are currently being evaluated by management as of March 31, 2022.

Adopted Pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), which simplifies accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for the areas of Topic 740 by clarifying and amending existing guidance. This guidance is effective for fiscal years, and interim periods within those fiscal years beginning after December 15,

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2020, for public business entities. For private companies and smaller reporting companies, this guidance is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2021. The Company adopted ASU 2019-12, as of January 2022. The new guidance did not have an impact on the Company’s consolidated financial statements.

Pronouncements Not Yet Effective

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU requires a new impairment model known as the current expected credit loss, or CECL, which significantly changes the way impairment of financial instruments is recognized by requiring immediate recognition of estimated credit losses expected to occur over the remaining life of financial instruments. The main provisions of ASU 2016-13 include (1) replacing the “incurred cost” approach under GAAP with an “expected loss” model for instruments measured at amortized cost, (2) requiring entities to record an allowance for credit losses related to available-for-sale debt securities rather than a direct write-down of the carrying amount of the investments, as is required by the other-than-temporary impairment model under current GAAP, and (3) a simplified accounting model for purchase credit-impaired debt securities and loans. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments – Credit Losses (Topic 326). This update amends the effective date of ASU No. 2016-13 for certain entities, including private companies and smaller reporting companies, until fiscal years beginning after December 15, 2022, including interim periods within those fiscal periods. Early adoption is permitted. As an emerging growth company, the Company can take advantage of this delay and plans to adopt the standard with the amended effective date. The Company does not plan to early adopt this standard but continues to work on its implementation. The Company continues collecting and retaining loan and credit data and evaluating various loss estimation models. While we currently cannot reasonably estimate the impact of adopting this standard, we expect the impact will be influenced by the composition, characteristics, and quality of our loan portfolio, as well as the general economic conditions and forecasts as of the adoption date.

In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which affects a variety of topics in the Codification and applies to all reporting entities within the scope of the affected accounting guidance. The Company will consider these clarifications and improvements in determining the appropriate adoption of ASU 2019-04.

In May 2019, the FASB issued ASU 2019-05, Targeted Transition Relief, to provide entities with an option to irrevocably elect the fair value option applied on an instrument-by-instrument basis for eligible instruments. In November 2019, the FASB Issued ASU 2019-10, which amends the effective date of this ASU for certain entities, including private companies and smaller reporting companies, until after December 15, 2022, including interim periods within those fiscal years. As an emerging growth company, the Company can take advantage of this delay and plans to adopt the standard with the amended effective date. This update is not expected to have a significant impact on the Company’s consolidated financial statements

In March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments. This ASU represents changes to clarify or improve the Accounting Standards Codification, or ASC, related to seven topics. The amendments make the ASC easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. Issues 1, 2, 3, 4, and 5 are conforming amendments and for public business entities effective upon the issuance of the standard. Issues 6 and 7 are amendments that affect the guidance in ASU 2016-13. The Company will consider these clarifications and improvements in determining the appropriate adoption of ASU 2016-13.

NOTE 3 Investment Securities

The following tables present amortized cost, gross unrealized gain and losses, and fair value of the available-for-sale investment securities and the amortized cost, net unrealized gains, carrying value, gross unrealized gains and losses and fair value of for held-to-maturity as of March 31, 2022 and December 31, 2021:

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	March 31, 2022
	Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value
Available-for-sale
U.S. Treasury and agencies	$	4,107	$	60	$	—	$	4,167
Mortgage backed securities
Residential agency		765,363		229		(54,471)		711,121
Commercial		85,123		185		(2,576)		82,732
Asset backed securities		41		1		—		42
Corporate bonds		69,033		531		(1,293)		68,271
Total available-for-sale investment securities		923,667		1,006		(58,340)		866,333
Held-to-maturity
Obligations of state and political agencies		141,373		1		(7,594)		133,780
Mortgage backed securities
Residential agency		198,777		—		(14,731)		184,046
Total held-to-maturity investment securities		340,150		1		(22,325)		317,826
Total investment securities	$	1,263,817	$	1,007	$	(80,665)	$	1,184,159


	December 31, 2021
	Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value
Available-for-sale
U.S. Treasury and agencies	$	5,028	$	75	$	—	$	5,103
Mortgage backed securities
Residential agency		717,781		1,213		(11,837)		707,157
Commercial		88,362		2,674		(123)		90,913
Asset backed securities		52		2		—		54
Corporate bonds		49,035		1,398		(11)		50,422
Total available-for-sale investment securities		860,258		5,362		(11,971)		853,649
Held-to-maturity
Obligations of state and political agencies		144,543		1,110		(349)		145,304
Mortgage backed securities
Residential agency		207,518		—		(3,145)		204,373
Total held-to-maturity investment securities		352,061		1,110		(3,494)		349,677
Total investment securities	$	1,212,319	$	6,472	$	(15,465)	$	1,203,326

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Gross unrealized losses on investment securities and the fair value of the related securities aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2022 and December 31, 2021, were as follows:


	March 31, 2022
	Less than 12 Months				Over 12 Months				Total
	Unrealized		Fair		Unrealized		Fair		Unrealized		Fair
(dollars in thousands)	Losses		Value		Losses		Value		Losses		Value
Available-for-sale
U.S. Treasury and agencies	$	—	$	—	$	—	$	—	$	—	$	—
Mortgage backed securities
Residential agency		(30,707)		462,087		(23,764)		219,167		(54,471)		681,254
Commercial		(2,576)		70,176		—		—		(2,576)		70,176
Asset backed securities		—		—		—		2		—		2
Corporate bonds		(1,293)		38,240		—		—		(1,293)		38,240
Total available-for-sale investment securities		(34,576)		570,503		(23,764)		219,169		(58,340)		789,672
Held-to-maturity
Obligations of state and political agencies		(7,594)		131,278		—		—		(7,594)		131,278
Mortgage backed securities
Residential agency		(14,731)		184,046		—		—		(14,731)		184,046
Total held-to-maturity investment securities		(22,325)		315,324		—		—		(22,325)		315,324
Total investment securities	$	(56,901)	$	885,827	$	(23,764)	$	219,169	$	(80,665)	$	1,104,996

December 31, 2021

Less than 12 Months

Over 12 Months

Total

Unrealized

Fair

Unrealized

Fair

Unrealized

Fair

(dollars in thousands)

Losses

Value

Losses

Value

Losses

Value

Available-for-sale