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Securities
 3 Months Ended
Mar. 31, 2023
Investments Debt And Equity Securities [Abstract]  
Securities

Note 3. Securities

Adoption of Topic 326

Effective January 1, 2023, the Company adopted the provisions of Topic 326 using the modified retrospective method. Therefore, prior period comparative information has not been adjusted and continues to be reported under GAAP in effect prior to the adoption of Topic 326. There was no ACL on available-for-sale securities recognized upon the adoption of Topic 326.

The amortized cost, gross unrealized gains and losses, and fair value of securities at March 31, 2023 and December 31, 2022 are summarized as follows:

 

 

 

March 31, 2023

 

 

 

 

 

 

Gross

 

 

Gross

 

 

 

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

 

 

 

 

Cost

 

 

Gains

 

 

Losses

 

 

Fair Value

 

 

 

(in thousands)

 

Available-for-Sale Securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government Bonds

 

$

2,987

 

 

$

—

 

 

$

(241

)

 

$

2,746

 

Corporate Bonds

 

 

25,816

 

 

 

—

 

 

 

(2,639

)

 

 

23,177

 

Mortgage-Backed Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Collateralized Mortgage Obligations (1)

 

 

43,421

 

 

 

—

 

 

 

(6,030

)

 

 

37,391

 

FHLMC Certificates

 

 

11,036

 

 

 

—

 

 

 

(1,490

)

 

 

9,546

 

FNMA Certificates

 

 

65,819

 

 

 

—

 

 

 

(10,474

)

 

 

55,345

 

GNMA Certificates

 

 

117

 

 

 

—

 

 

 

(2

)

 

 

115

 

Total available-for-sale securities

 

$

149,196

 

 

$

—

 

 

$

(20,876

)

 

$

128,320

 

 

 

 

 

 

 

 

 

 

 

 

 

Held-to-Maturity Securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Agency Bonds

 

$

25,000

 

 

$

—

 

 

$

(206

)

 

$

24,794

 

Corporate Bonds

 

 

82,500

 

 

 

—

 

 

 

(4,158

)

 

 

78,342

 

Mortgage-Backed Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Collateralized Mortgage Obligations (1)

 

 

230,531

 

 

 

853

 

 

 

(2,457

)

 

 

228,927

 

FHLMC Certificates

 

 

4,008

 

 

 

—

 

 

 

(245

)

 

 

3,763

 

FNMA Certificates

 

 

128,968

 

 

 

—

 

 

 

(3,695

)

 

 

125,273

 

SBA Certificates

 

 

21,451

 

 

 

71

 

 

 

—

 

 

 

21,522

 

Allowance for Credit Losses

 

 

(809

)

 

 

—

 

 

 

—

 

 

 

—

 

Total held-to-maturity securities

 

$

491,649

 

 

$

924

 

 

$

(10,761

)

 

$

482,621

 

 

(1)
Comprised of Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“FNMA”) and Ginnie Mae (“GNMA”) issued securities.

 

 

 

December 31, 2022

 

 

 

 

 

 

Gross

 

 

Gross

 

 

 

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

 

 

 

 

Cost

 

 

Gains

 

 

Losses

 

 

Fair Value

 

 

(in thousands)

 

Available-for-Sale Securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government Bonds

 

$

2,985

 

 

$

—

 

 

$

(296

)

 

$

2,689

 

Corporate Bonds

 

 

25,824

 

 

 

—

 

 

 

(2,465

)

 

 

23,359

 

Mortgage-Backed Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Collateralized Mortgage Obligations (1)

 

 

44,503

 

 

 

—

 

 

 

(6,726

)

 

 

37,777

 

FHLMC Certificates

 

 

11,310

 

 

 

—

 

 

 

(1,676

)

 

 

9,634

 

FNMA Certificates

 

 

67,199

 

 

 

—

 

 

 

(11,271

)

 

 

55,928

 

GNMA Certificates

 

 

122

 

 

 

—

 

 

 

(4

)

 

 

118

 

Total available-for-sale securities

 

$

151,943

 

 

$

—

 

 

$

(22,438

)

 

$

129,505

 

 

 

 

 

 

 

 

 

 

 

 

 

Held-to-Maturity Securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Agency Bonds

 

$

35,000

 

 

$

—

 

 

$

(380

)

 

$

34,620

 

Corporate Bonds

 

 

82,500

 

 

 

57

 

 

 

(3,819

)

 

 

78,738

 

Mortgage-Backed Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Collateralized Mortgage Obligations (1)

 

 

235,479

 

 

 

192

 

 

 

(5,558

)

 

 

230,113

 

FHLMC Certificates

 

 

4,120

 

 

 

—

 

 

 

(268

)

 

 

3,852

 

FNMA Certificates

 

 

131,918

 

 

 

—

 

 

 

(5,227

)

 

 

126,691

 

SBA Certificates

 

 

21,803

 

 

 

34

 

 

 

—

 

 

 

21,837

 

Total held-to-maturity securities

 

$

510,820

 

 

$

283

 

 

$

(15,252

)

 

$

495,851

 

 

(1)
Comprised of FHLMC, FNMA and GNMA issued securities.

The Company’s securities portfolio had 42 and 42 available-for-sale securities and 33 and 34 held-to-maturity securities at March 31, 2023 and December 31, 2022, respectively. There were no available-for-sale and held-to-maturity securities sold during the three months ended March 31, 2023. There were no available-for-sale securities and held-to-maturity securities sold during the year ended December 31, 2022. One available-for-sale security in the amount of $10.0 million matured and/or was called during the three months ended March 31, 2023 and two available-for-sale securities in the amount of $5.4 million matured and/or were called during the year ended December 31, 2022. The Company did not purchased any available-for-sale securities and held-to-maturity securities during the three months ended March 31, 2023 and purchased $58.4 million in available-for-sale securities and $528.9 million in held-to-maturity securities during the year ended December 31, 2022.

The following table presents the Company's gross unrealized losses and fair values of its securities, aggregated by the length of time the individual securities have been in a continuous unrealized loss position, at March 31, 2023 and December 31, 2022:

 

 

 

March 31, 2023

 

 

 

Securities With Gross Unrealized Losses

 

 

 

Less Than 12 Months

 

 

12 Months or More

 

 

Total

 

 

Total

 

 

 

Fair

 

 

Unrealized

 

 

Fair

 

 

Unrealized

 

 

Fair

 

 

Unrealized

 

 

 

Value

 

 

Losses

 

 

Value

 

 

Losses

 

 

Value

 

 

Losses

 

 

 

(in thousands)

 

Available-for-Sale Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government Bonds

 

$

—

 

 

$

—

 

 

$

2,746

 

 

$

(241

)

 

$

2,746

 

 

$

(241

)

Corporate Bonds

 

 

5,586

 

 

 

(446

)

 

 

17,591

 

 

 

(2,193

)

 

 

23,177

 

 

 

(2,639

)

Mortgage-Backed Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Collateralized Mortgage Obligations

 

 

—

 

 

 

—

 

 

 

37,391

 

 

 

(6,030

)

 

 

37,391

 

 

 

(6,030

)

FHLMC Certificates

 

 

—

 

 

 

—

 

 

 

9,546

 

 

 

(1,490

)

 

 

9,546

 

 

 

(1,490

)

FNMA Certificates

 

 

—

 

 

 

—

 

 

 

55,345

 

 

 

(10,474

)

 

 

55,345

 

 

 

(10,474

)

GNMA Certificates

 

 

115

 

 

 

(2

)

 

 

—

 

 

 

—

 

 

 

115

 

 

 

(2

)

Total available-for-sale securities

 

$

5,701

 

 

$

(448

)

 

$

122,619

 

 

$

(20,428

)

 

$

128,320

 

 

$

(20,876

)

Held-to-Maturity Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Agency Bonds

 

$

24,794

 

 

$

(206

)

 

$

—

 

 

$

—

 

 

$

24,794

 

 

$

(206

)

Corporate Bonds

 

 

78,342

 

 

 

(4,158

)

 

 

—

 

 

 

—

 

 

 

78,342

 

 

 

(4,158

)

Collateralized Mortgage Obligations

 

 

124,242

 

 

 

(2,457

)

 

 

—

 

 

 

—

 

 

 

124,242

 

 

 

(2,457

)

FHLMC Certificates

 

 

3,080

 

 

 

(106

)

 

 

683

 

 

 

(139

)

 

 

3,763

 

 

 

(245

)

FNMA Certificates

 

 

125,273

 

 

 

(3,695

)

 

 

—

 

 

 

—

 

 

 

125,273

 

 

 

(3,695

)

Total held-to-maturity securities

 

$

355,731

 

 

$

(10,622

)

 

$

683

 

 

$

(139

)

 

$

356,414

 

 

$

(10,761

)

 

 

 

 

 

December 31, 2022

 

 

 

Securities With Gross Unrealized Losses

 

 

 

Less Than 12 Months

 

 

12 Months or More

 

 

Total

 

 

Total

 

 

 

Fair

 

 

Unrealized

 

 

Fair

 

 

Unrealized

 

 

Fair

 

 

Unrealized

 

 

 

Value

 

 

Losses

 

 

Value

 

 

Losses

 

 

Value

 

 

Losses

 

 

 

(in thousands)

 

Available-for-Sale Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government Bonds

 

$

—

 

 

$

—

 

 

$

2,689

 

 

$

(296

)

 

$

2,689

 

 

$

(296

)

Corporate Bonds

 

 

13,138

 

 

 

(1,186

)

 

 

10,221

 

 

 

(1,279

)

 

 

23,359

 

 

 

(2,465

)

Mortgage-Backed Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Collateralized Mortgage Obligations

 

 

4,537

 

 

 

(300

)

 

 

33,240

 

 

 

(6,426

)

 

 

37,777

 

 

 

(6,726

)

FHLMC Certificates

 

 

—

 

 

 

—

 

 

 

9,634

 

 

 

(1,676

)

 

 

9,634

 

 

 

(1,676

)

FNMA Certificates

 

 

12,111

 

 

 

(1,230

)

 

 

43,817

 

 

 

(10,041

)

 

 

55,928

 

 

 

(11,271

)

GNMA Certificates

 

 

118

 

 

 

(4

)

 

 

—

 

 

 

—

 

 

 

118

 

 

 

(4

)

Total available-for-sale securities

 

$

29,904

 

 

$

(2,720

)

 

$

99,601

 

 

$

(19,718

)

 

$

129,505

 

 

$

(22,438

)

Held-to-Maturity Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Agency Bonds

 

$

24,620

 

 

$

(380

)

 

$

—

 

 

$

—

 

 

$

24,620

 

 

$

(380

)

Corporate Bonds

 

 

75,181

 

 

 

(3,819

)

 

 

—

 

 

 

—

 

 

 

75,181

 

 

 

(3,819

)

Collateralized Mortgage Obligations

 

 

215,300

 

 

 

(5,558

)

 

 

—

 

 

 

—

 

 

 

215,300

 

 

 

(5,558

)

FHLMC Certificates

 

 

3,177

 

 

 

(115

)

 

 

675

 

 

 

(153

)

 

 

3,852

 

 

 

(268

)

FNMA Certificates

 

 

126,691

 

 

 

(5,227

)

 

 

—

 

 

 

—

 

 

 

126,691

 

 

 

(5,227

)

Total held-to-maturity securities

 

$

444,969

 

 

$

(15,099

)

 

$

675

 

 

$

(153

)

 

$

445,644

 

 

$

(15,252

)

 

 

At March 31, 2023 and December 31, 2022, the Company had 42 and 42 available-for-sale securities, respectively, and 26 and 27 held-to-maturity securities at March 31, 2023 and December 31, 2022 with gross unrealized loss positions. Management reviewed the financial condition of the entities underlying the securities at both March 31, 2023 and December 31, 2022. The unrealized losses related to the Company debt securities were issued by U.S. government-sponsored entities and agencies. The Company does not believe that the debt securities that were in an unrealized loss position as of March 31, 2023 represents a credit loss impairment. The gross unrealized loss positions related to mortgage-backed securities and other obligations issued by the U.S government agencies or U.S.

government-sponsored enterprises carry the explicit and/or implicit guarantee of the U.S. government and have a long history of zero credit loss. Total gross unrealized losses were primarily attributable to changes in interest rates relative to when the investment securities were purchased and not due to the credit quality of the investment securities.

Management reviewed the collectability of the corporate bonds taking into consideration of such factors as the financial condition of the issuers, reported regulatory capital ratios of the issuers, credit ratings, including ratings in effect as of the reporting date. Management believes the unrealized losses on the corporate bonds are primarily attributable to changes in the interest rates and not changes in the credit quality of the issuers of the corporate bonds.

The following is a summary of maturities of securities at March 31, 2023 and December 31, 2022. Amounts are shown by contractual maturity. Because borrowers for mortgage-backed securities have the right to prepay obligations with or without prepayment penalties, at any time, these securities are included as a total within the table.

 

 

 

March 31, 2023

 

 

 

Amortized

 

 

Fair

 

 

 

Cost

 

 

Value

 

 

 

(in thousands)

 

Available-for-Sale Securities:

 

 

 

 

 

 

U.S. Government Bonds:

 

 

 

 

 

 

Amounts maturing:

 

 

 

 

 

 

Three months or less

 

$

—

 

 

$

—

 

More than three months through one year

 

 

—

 

 

 

—

 

More than one year through five years

 

 

2,987

 

 

 

2,746

 

More than five years through ten years

 

 

—

 

 

 

—

 

 

 

2,987

 

 

 

2,746

 

Corporate Bonds:

 

 

 

 

 

 

Amounts maturing:

 

 

 

 

 

 

Three months or less

 

$

—

 

 

$

—

 

More than three months through one year

 

 

—

 

 

 

—

 

More than one year through five years

 

 

4,000

 

 

 

3,709

 

More than five years through ten years

 

 

21,816

 

 

 

19,468

 

 

 

25,816

 

 

 

23,177

 

Mortgage-Backed Securities

 

 

120,393

 

 

 

102,397

 

Total available-for-sale securities

 

$

149,196

 

 

$

128,320

 

Held-to-Maturity Securities:

 

 

 

 

 

 

U.S. Agency Bonds:

 

 

 

 

 

 

Amounts maturing:

 

 

 

 

 

 

Three months or less

 

$

—

 

 

$

—

 

More than three months through one year

 

 

—

 

 

 

—

 

More than one year through five years

 

 

25,000

 

 

 

24,794

 

More than five years through ten years

 

 

—

 

 

 

—

 

 

 

25,000

 

 

 

24,794

 

Corporate Bonds:

 

 

 

 

 

 

Amounts maturing:

 

 

 

 

 

 

Three months or less

 

$

—

 

 

$

—

 

More than three months through one year

 

 

—

 

 

 

—

 

More than one year through five years

 

 

75,000

 

 

 

71,101

 

More than five years through ten years

 

 

7,500

 

 

 

7,241

 

 

 

82,500

 

 

 

78,342

 

Mortgage-Backed Securities

 

 

384,958

 

 

 

379,485

 

Allowance for Credit Losses

 

 

(809

)

 

 

—

 

Total held-to-maturity securities

 

$

491,649

 

 

$

482,621

 

 

 

 

 

 

December 31, 2022

 

 

 

Amortized

 

 

Fair

 

 

 

Cost

 

 

Value

 

 

 

(in thousands)

 

Available-for-Sale Securities:

 

 

 

 

 

 

U.S. Government Bonds:

 

 

 

 

 

 

Amounts maturing:

 

 

 

 

 

 

Three months or less

 

$

—

 

 

$

—

 

More than three months through one year

 

 

—

 

 

 

—

 

More than one year through five years

 

 

2,985

 

 

 

2,689

 

More than five years through ten years

 

 

—

 

 

 

—

 

 

 

2,985

 

 

 

2,689

 

Corporate Bonds:

 

 

 

 

 

 

Amounts maturing:

 

 

 

 

 

 

Three months or less

 

$

—

 

 

$

—

 

More than three months through one year

 

 

—

 

 

 

—

 

More than one year through five years

 

 

4,000

 

 

 

3,710

 

More than five years through ten years

 

 

21,824

 

 

 

19,649

 

 

 

25,824

 

 

 

23,359

 

Mortgage-Backed Securities

 

 

123,134

 

 

 

103,457

 

Total available-for-sale securities

 

$

151,943

 

 

$

129,505

 

Held-to-Maturity Securities:

 

 

 

 

 

 

U.S. Agency Bonds:

 

 

 

 

 

 

Amounts maturing:

 

 

 

 

 

 

Three months or less

 

$

—

 

 

$

—

 

More than three months through one year

 

 

—

 

 

 

—

 

More than one year through five years

 

 

35,000

 

 

 

34,620

 

More than five years through ten years

 

 

—

 

 

 

—

 

 

 

35,000

 

 

 

34,620

 

Corporate Bonds:

 

 

 

 

 

 

Amounts maturing:

 

 

 

 

 

 

Three months or less

 

$

—

 

 

$

—

 

More than three months through one year

 

 

—

 

 

 

—

 

More than one year through five years

 

 

75,000

 

 

 

71,328

 

More than five years through ten years

 

 

7,500

 

 

 

7,410

 

 

 

82,500

 

 

 

78,738

 

Mortgage-Backed Securities

 

 

393,320

 

 

 

382,493

 

Total held-to-maturity securities

 

$

510,820

 

 

$

495,851

 

 

The following table presents the activity in the allowance for credit losses for held-to-maturity securities:

 

 

 

For the Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Beginning balance

 

$

—

 

 

$

—

 

Impact on CECL adoption

 

 

662

 

 

 

—

 

Provision for credit losses

 

 

147

 

 

 

—

 

Allowance for credit losses

 

$

809

 

 

$

—

 

 

At March 31, 2023, 26 available-for-sale securities with a fair value totaling $102.3 million and 10 held-to-maturity securities with an amortized cost totaling $130.0 million were pledged at the FHLBNY as collateral for borrowing activities. At December 31, 2022 six held-to-maturity securities with an amortized costs totaling $194.9 million were pledged at the FHLBNY as collateral for borrowing activities. No available-for-sale securities were pledged at December 31, 2022.