Investment Securities

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Investment Securities

INVESTMENT SECURITIES     

Transfer of Securities Available-for-Sale to Held-to Maturity

Effective June 1, 2022, the Company transferred $2.3 billion in fair value of municipal securities, agency commercial MBS, private label commercial MBS, U.S. Treasury securities, and corporate debt securities from available-for-sale to held-to-maturity. At the time of transfer, $218.3 million of unrealized losses, net of tax, was retained in "Accumulated other comprehensive income (loss)" on the condensed consolidated balance sheets.

Securities Available-for-Sale

The following table presents amortized cost, gross unrealized gains and losses, and fair values of securities available-for-sale as of the dates indicated:

	March 31, 2023								December 31, 2022
			Gross		Gross						Gross		Gross
	Amortized		Unrealized		Unrealized		Fair		Amortized		Unrealized		Unrealized		Fair
Security Type	Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
	(In thousands)
Agency residential MBS	$	2,645,975	$	—	$	(396,895)	$	2,249,080	$	2,685,038	$	—	$	(442,996)	$	2,242,042
U.S. Treasury securities	771,208		—		(85,772)		685,436		771,145		—		(101,075)		670,070
Agency commercial MBS	545,480		—		(53,799)		491,681		549,492		—		(61,886)		487,606
Agency residential CMOs	509,303		—		(53,621)		455,682		517,174		—		(60,111)		457,063
Municipal securities	395,709		—		(50,070)		345,639		399,724		—		(60,398)		339,326
Corporate debt securities	344,747		—		(54,953)		289,794		344,767		6		(32,868)		311,905
Private label residential CMOs	203,088		—		(38,685)		164,403		207,123		—		(40,399)		166,724
Collateralized loan obligations	109,166		—		(6,172)		102,994		109,159		—		(6,898)		102,261
Private label commercial MBS	27,331		—		(1,796)		25,535		28,903		—		(2,076)		26,827
Asset-backed securities	22,864		—		(407)		22,457		23,568		—		(1,155)		22,413
SBA securities	16,895		—		(989)		15,906		18,524		—		(1,274)		17,250
Total	$	5,591,766	$	—	$	(743,159)	$	4,848,607	$	5,654,617	$	6	$	(811,136)	$	4,843,487

As of March 31, 2023, the Company had not recorded an allowance for credit losses on securities available-for-sale. The Company does not consider unrealized losses on such securities to be attributable to credit-related factors, as the unrealized losses have occurred as a result of changes in non-credit related factors such as interest rates, market spreads, and market conditions subsequent to purchase.

As of March 31, 2023, securities available-for-sale with a fair value of $4.6 billion were pledged as collateral primarily for the Bank Term Funding Program borrowings, FRB secured line of credit, and FHLB secured line of credit borrowings.

Realized Gains and Losses on Securities Available-for-Sale

The following table presents the amortized cost of securities sold with related gross realized gains, gross realized losses, and net realized (losses) gains for the years indicated:

	Three Months Ended
	March 31,
Sales of Securities Available-for-Sale	2023		2022
	(In thousands)
Amortized cost of securities sold	$	—	$	206,088
Gross realized gains	$	—	$	1,190
Gross realized losses	—		(1,086)
Net realized gains (losses)	$	—	$	104

Unrealized Losses on Securities Available-for-Sale

The following tables present the gross unrealized losses and fair values of securities available-for-sale that were in unrealized loss positions as of the dates indicated:

	March 31, 2023
	Less Than 12 Months				12 Months or More				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Security Type	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
Agency residential MBS	$	6,665	$	(306)	$	2,242,415	$	(396,589)	$	2,249,080	$	(396,895)
U.S. Treasury securities	4,993		(7)		680,443		(85,765)		685,436		(85,772)
Agency commercial MBS	20,806		(977)		470,875		(52,822)		491,681		(53,799)
Agency residential CMOs	35,116		(2,707)		420,566		(50,914)		455,682		(53,621)
Municipal securities	836		(44)		344,803		(50,026)		345,639		(50,070)
Corporate debt securities	119,754		(18,667)		170,040		(36,286)		289,794		(54,953)
Private label residential CMOs	1,226		(6)		163,177		(38,679)		164,403		(38,685)
Collateralized loan obligations	18,690		(838)		84,304		(5,334)		102,994		(6,172)
Private label commercial MBS	—		—		25,534		(1,796)		25,534		(1,796)
Asset-backed securities	—		—		22,457		(407)		22,457		(407)
SBA securities	—		—		15,906		(989)		15,906		(989)
Total	$	208,086	$	(23,552)	$	4,640,520	$	(719,607)	$	4,848,606	$	(743,159)

	December 31, 2022
	Less Than 12 Months				12 Months or More				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Security Type	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
Agency residential MBS	$	52,556	$	(6,193)	$	2,189,485	$	(436,803)	$	2,242,041	$	(442,996)
U.S. Treasury securities	4,972		(26)		665,098		(101,049)		670,070		(101,075)
Agency commercial MBS	316,892		(31,139)		170,714		(30,747)		487,606		(61,886)
Agency residential CMOs	245,755		(22,748)		211,309		(37,363)		457,064		(60,111)
Municipal securities	37,380		(3,129)		298,266		(57,269)		335,646		(60,398)
Corporate debt securities	302,643		(32,124)		4,256		(744)		306,899		(32,868)
Private label residential CMOs	19,261		(1,294)		147,464		(39,105)		166,725		(40,399)
Collateralized loan obligations	27,704		(1,818)		74,558		(5,080)		102,262		(6,898)
Private label commercial MBS	10,204		(508)		16,623		(1,568)		26,827		(2,076)
Asset-backed securities	22,413		(1,155)		—		—		22,413		(1,155)
SBA securities	17,250		(1,274)		—		—		17,250		(1,274)
Total	$	1,057,030	$	(101,408)	$	3,777,773	$	(709,728)	$	4,834,803	$	(811,136)

The securities that were in an unrealized loss position at March 31, 2023, were considered impaired and required further review to determine if the unrealized losses were credit-related. We concluded the unrealized losses were a result of the level of market interest rates relative to the types of securities and pricing changes caused by shifting supply and demand dynamics and not a result of downgraded credit ratings or other indicators of deterioration of the underlying issuers' ability to repay. We also considered the seniority of the tranches and U.S. government agency guarantees, if any, to assess whether an unrealized loss was credit-related. Accordingly, we determined the unrealized losses were not credit-related and recognized the unrealized losses in "Accumulated other comprehensive (loss) income" of "Stockholders' equity" on the condensed consolidated balance sheets. Although we periodically sell securities for portfolio management purposes, we do not foresee having to sell any impaired securities and believe that it is more likely than not we would not be required to sell any impaired securities before recovery of their amortized cost.

Contractual Maturities of Securities Available-for-Sale

The following table presents the contractual maturities of our securities available-for-sale portfolio based on amortized cost and carrying value as of the date indicated:

	March 31, 2023
			Due After		Due After
	Due		One Year		Five Years		Due
	Within		Through		Through		After
Security Type	One Year		Five Years		Ten Years		Ten Years		Total
	(In thousands)
Amortized Cost:
Agency residential MBS	$	—	$	—	$	—	$	2,645,975	$	2,645,975
U.S. Treasury securities	4,999		503,869		262,340		—		771,208
Agency commercial MBS	—		205,442		321,502		18,536		545,480
Agency residential CMOs	—		—		175,473		333,830		509,303
Municipal securities	—		53,855		319,463		22,391		395,709
Corporate debt securities	—		5,000		339,747		—		344,747
Private label residential CMOs	—		—		—		203,088		203,088
Collateralized loan obligations	—		—		70,329		38,837		109,166
Private label commercial MBS	—		—		—		27,331		27,331
Asset-backed securities	—		—		—		22,864		22,864
SBA securities	—		3,409		—		13,486		16,895
Total	$	4,999	$	771,575	$	1,488,854	$	3,326,338	$	5,591,766
Fair Value:
Agency residential MBS	$	—	$	—	$	—	$	2,249,080	$	2,249,080
U.S. Treasury securities	4,993		448,478		231,965		—		685,436
Agency commercial MBS	—		191,319		282,520		17,842		491,681
Agency residential CMOs	—		—		154,603		301,079		455,682
Municipal securities	—		48,293		276,487		20,859		345,639
Corporate debt securities	—		4,957		284,837		—		289,794
Private label residential CMOs	—		—		—		164,403		164,403
Collateralized loan obligations	—		—		67,321		35,673		102,994
Private label commercial MBS	—		—		—		25,535		25,535
Asset-backed securities	—		—		—		22,457		22,457
SBA securities	—		3,279		—		12,627		15,906
Total	$	4,993	$	696,326	$	1,297,733	$	2,849,555	$	4,848,607

CMBS, CMOs, and MBS have contractual maturity dates, but require periodic payments based upon scheduled amortization terms. Actual principal collections on these securities usually occur more rapidly than the scheduled amortization terms because of prepayments made by obligors of the underlying loan collateral.

Securities Held-to-Maturity

The following table presents amortized cost, allowance for credit losses, gross unrealized gains and losses, and fair values of securities held-to-maturity as of the date indicated:

	March 31, 2023
			Allowance
			for		Net		Gross		Gross
	Amortized		Credit		Carrying		Unrealized		Unrealized		Fair
Security Type	Cost		Losses		Amount		Gains		Losses		Value
	(In thousands)
Municipal securities	$	1,244,441	$	(140)	$	1,244,301	$	814	$	(41,203)	$	1,203,912
Agency commercial MBS	428,995		—		428,995		—		(26,135)		402,860
Private label commercial MBS	346,976		—		346,976		—		(28,371)		318,605
U.S. Treasury securities	184,862		—		184,862		—		(8,233)		176,629
Corporate debt securities	69,876		(1,360)		68,516		—		(13,466)		55,050
Total (1)	$	2,275,150	$	(1,500)	$	2,273,650	$	814	$	(117,408)	$	2,157,056

__________________________

(1)    Excludes accrued interest receivable of $11.3 million at March 31, 2023 which is recorded in "Other assets" on the condensed consolidated balance sheets.

	December 31, 2022
			Allowance
			for		Net		Gross		Gross
	Amortized		Credit		Carrying		Unrealized		Unrealized		Fair
Security Type	Cost		Losses		Amount		Gains		Losses		Value
	(In thousands)
Municipal securities	$	1,243,443	$	(140)	$	1,243,303	$	8	$	(77,526)	$	1,165,785
Agency commercial MBS	427,411		—		427,411		—		(34,287)		393,124
Private label commercial MBS	345,825		—		345,825		—		(26,027)		319,798
U.S. Treasury securities	184,162		—		184,162		—		(12,462)		171,700
Corporate debt securities	69,794		(1,360)		68,434		—		(8,369)		60,065
Total (1)	$	2,270,635	$	(1,500)	$	2,269,135	$	8	$	(158,671)	$	2,110,472

__________________________

(1)    Excludes accrued interest receivable of $13.5 million at December 31, 2022 which is recorded in "Other assets" on the condensed consolidated balance sheets.

As of March 31, 2023, securities held-to-maturity with a fair value of $2.1 billion were pledged as collateral primarily for public deposits, the FRB secured line of credit, Bank Term Funding Program borrowings, and letters of credit.

Allowance for Credit Losses on Securities Held-to-Maturity

The following table presents the changes by major security type in our allowance for credit losses on securities held-to-maturity for the periods indicated:

	Allowance for		Provision						Allowance for
	Credit Losses,		for						Credit Losses,
	Beginning		Credit						End of
Security Type	of Period		Losses		Charge-offs		Recoveries		Period
	(In thousands)
Three Months Ended March 31, 2023
Municipal securities	$	140	$	—	$	—	$	—	$	140
Corporate debt securities	1,360		—		—		—		1,360
Total	$	1,500	$	—	$	—	$	—	$	1,500

Credit losses on HTM securities are recorded at the time of purchase, acquisition, or when the Company designates securities as held-to-maturity. Credit losses on HTM securities are representative of current expected credit losses that may be incurred over the life of the investment. Accrued interest receivable on HTM securities, which is included in other assets on the condensed consolidated balance sheets, is excluded from the estimate of expected credit losses. HTM U.S. treasury securities and agency-backed MBS securities are considered to have no risk of loss as they are either explicitly or implicitly guaranteed by the U.S. government. The change in fair value in the HTM private label CMBS portfolio is solely driven by changes in interest rates. The Company has no knowledge of any underlying credit issues and the cash flows underlying the debt securities have not changed and are not expected to be impacted by changes in interest rates and, thus, there is no related ACL for this portfolio. The underlying bonds in the Company’s HTM municipal securities and HTM corporate debt securities portfolios are evaluated for credit losses in conjunction with management’s estimate of the allowance for credit losses based primarily on credit ratings.

Securities Held-to-Maturity by Credit Quality Indicator

The Company uses S&P, Moody's, Fitch, Kroll, and Egan Jones ratings as the credit quality indicators for its held-to-maturity securities. The following table presents our securities held-to-maturity portfolio at amortized cost by the lowest available credit rating as of the dates indicated:

	March 31, 2023
Security Type	AAA		AA+		AA		AA-		A		A-		BBB		NR		Total
	(In thousands)
Amortized Cost:
Municipal securities	$	551,978	$	397,018	$	174,273	$	95,566	$	1,898	$	—	$	—	$	23,708	$	1,244,441
Agency commercial MBS	—		428,995		—		—		—		—		—		—		428,995
Private label commercial
MBS	346,976		—		—		—		—		—		—		—		346,976
U.S. Treasury securities	—		184,862		—		—		—		—		—		—		184,862
Corporate debt securities	—		—		—		—		—		23,268		21,007		25,601		69,876
Total	$	898,954	$	1,010,875	$	174,273	$	95,566	$	1,898	$	23,268	$	21,007	$	49,309	$	2,275,150

	December 31, 2022
Security Type	AAA		AA+		AA		AA-		A		A-		BBB		NR		Total
	(In thousands)
Amortized Cost:
Municipal securities	$	568,674	$	385,990	$	173,751	$	95,471	$	1,901	$	—	$	—	$	17,656	$	1,243,443
Agency commercial MBS	—		427,411		—		—		—		—		—		—		427,411
Private label commercial
MBS	345,825		—		—		—		—		—		—		—		345,825
U.S. Treasury securities	—		184,162		—		—		—		—		—		—		184,162
Corporate debt securities	—		—		—		—		—		23,244		20,999		25,551		69,794
Total	$	914,499	$	997,563	$	173,751	$	95,471	$	1,901	$	23,244	$	20,999	$	43,207	$	2,270,635

Contractual Maturities of Securities Held-to-Maturity

The following table presents the contractual maturities of our securities held-to-maturity portfolio based on amortized cost and fair value as of the date indicated:

	March 31, 2023
			Due After		Due After
	Due		One Year		Five Years		Due
	Within		Through		Through		After
Security Type	One Year		Five Years		Ten Years		Ten Years		Total
	(In thousands)
Amortized Cost:
Municipal securities	$	—	$	—	$	350,751	$	893,690	$	1,244,441
Agency commercial MBS	—		—		407,855		21,140		428,995
Private label commercial MBS	—		—		36,089		310,887		346,976
U.S. Treasury securities	—		—		184,862		—		184,862
Corporate debt securities	—		—		—		69,876		69,876
Total	$	—	$	—	$	979,557	$	1,295,593	$	2,275,150
Fair Value:
Municipal securities	$	—	$	—	$	335,601	$	868,311	$	1,203,912
Agency commercial MBS	—		—		382,601		20,259		402,860
Private label commercial MBS	—		—		33,282		285,323		318,605
U.S. Treasury securities	—		—		176,629		—		176,629
Corporate debt securities	—		—		—		55,050		55,050
Total	$	—	$	—	$	928,113	$	1,228,943	$	2,157,056

CMBS have contractual maturity dates, but require periodic payments based upon scheduled amortization terms. Actual principal collections on these securities usually occur more rapidly than the scheduled amortization terms because of prepayments made by obligors of the underlying loan collateral.

Interest Income on Investment Securities

The following table presents the composition of our interest income on investment securities, including available-for-sale and held-to-maturity, for the periods indicated:

	Three Months Ended
	March 31,
	2023		2022
	(In thousands)
Taxable interest	$	38,692	$	44,642
Non-taxable interest	4,903		8,519
Dividend income	642		261
Total interest income on investment securities	$	44,237	$	53,422