XML 22 R12.htm IDEA: XBRL DOCUMENT v3.23.1
Securities
 3 Months Ended
Mar. 31, 2023
Securities [Abstract]  
Securities
4.
Securities

The amortized cost, estimated fair value and unrealized gains (losses) of available for sale (“AFS”) securities are as follows:

(In thousands)
  
Amortized
Cost
    
Unrealized
Gains
    
Unrealized
Losses
    
Estimated
Fair Value
  
As of March 31, 2023
                        
U.S. treasury
   $ 132,878     $ -     $ (9,299 )   $ 123,579  
Federal agency
    
248,410
      
-
      
(38,190
)
    
210,220
  
State & municipal
    
96,841
      
17
      
(11,825
)
    
85,033
  
Mortgage-backed:
                                
Government-sponsored enterprises
    
440,537
      
12
      
(48,986
)
    
391,563
  
U.S. government agency securities
    
78,234
      
16
      
(6,235
)
    
72,015
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
486,538
      
14
      
(51,869
)
    
434,683
  
U.S. government agency securities
    
169,088
      
-
      
(21,410
)
    
147,678
  
Corporate
    
55,414
      
-
      
(8,177
)
    
47,237
  
Total AFS securities
  
$
1,707,940
    
$
59
    
$
(195,991
)
  
$
1,512,008
  
As of December 31, 2022
                                
U.S. treasury
   $ 132,891     $ -     $ (11,233 )   $ 121,658  
Federal agency
    
248,419
      
-
      
(42,000
)
    
206,419
  
State & municipal
    
97,036
      
5
      
(14,190
)
    
82,851
  
Mortgage-backed:
                                
Government-sponsored enterprises
    
454,177
      
9
      
(54,675
)
    
399,511
  
U.S. government agency securities
    
81,844
      
15
      
(7,676
)
    
74,183
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
498,021
      
9
      
(59,473
)
    
438,557
  
U.S. government agency securities
    
171,090
      
-
      
(21,284
)
    
149,806
  
Corporate
    
60,404
      
-
      
(6,164
)
    
54,240
  
Total AFS securities
  
$
1,743,882
    
$
38
    
$
(216,695
)
  
$
1,527,225
  

There was no allowance for credit losses on AFS securities as of March 31, 2023 and December 31, 2022.

During the three months ended March 31, 2023, the Company incurred a $5.0 million loss on the write-off of an AFS corporate debt security from a subordinated debt investment of a bank that failed. The $5.0 million loss was reclassified out of accumulated other comprehensive income (loss) (“AOCI”) and into earnings in net securities losses in the consolidated statement of income. During the three months ended March 31, 2022 there were no gains or losses reclassified out of AOCI and into earnings.

The amortized cost, estimated fair value and unrealized gains (losses) of held to maturity (“HTM”) securities are as follows:

(In thousands)
  
Amortized
Cost
    
Unrealized
Gains
    
Unrealized
Losses
    
Estimated
Fair Value
  
As of March 31, 2023
                        
Federal agency
  
$
100,000
    
$
-
    
$
(19,055
)
  
$
80,945
  
Mortgage-backed:
                                
Government-sponsored enterprises
    
244,670
      
-
      
(33,729
)
    
210,941
  
U.S. government agency securities
    
17,399
      
3
      
(464
)
    
16,938
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
202,831
      
274
      
(12,236
)
    
190,869
  
U.S. government agency securities
    
65,989
      
-
      
(9,651
)
    
56,338
  
State & municipal
    
275,935
      
147
      
(19,449
)
    
256,633
  
Total HTM securities
  
$
906,824
    
$
424
    
$
(94,584
)
  
$
812,664
  
As of December 31, 2022
                                
Federal agency
  
$
100,000
    
$
-
    
$
(20,678
)
  
$
79,322
  
Mortgage-backed:
                                
Government-sponsored enterprises
    
249,511
      
-
      
(36,819
)
    
212,692
  
U.S. government agency securities
    
18,396
      
4
      
(619
)
    
17,781
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
207,738
      
200
      
(14,876
)
    
193,062
  
U.S. government agency securities
    
66,628
      
-
      
(9,842
)
    
56,786
  
State & municipal
    
277,244
      
5
      
(24,245
)
    
253,004
  
Total HTM securities
  
$
919,517
    
$
209
    
$
(107,079
)
  
$
812,647
  

At March 31, 2023 and December 31, 2022, all of the mortgaged-backed HTM securities were comprised of U.S. government agency and government-sponsored enterprises securities. There was no allowance for credit losses on HTM securities as of March 31, 2023 and December 31, 2022 because the expectation of nonrepayment of the amortized cost is zero, except for state & municipal securities, which such expected losses from nonrepayment are immaterial.

The Company recorded no gains from calls on HTM securities for the three months ended March 31, 2023. Included in net realized gains (losses), the Company recorded gains from calls on HTM securities of approximately $4 thousand for the three months ended March 31, 2022.

AFS and HTM securities with amortized costs totaling $1.76 billion at March 31, 2023 and $1.73 billion at December 31, 2022 were pledged to secure public deposits and for other purposes required or permitted by law. Additionally, at March 31, 2023 and December 31, 2022, AFS and HTM securities with an amortized cost of $142.2 million and $149.5 million, respectively, were pledged as collateral for securities sold under repurchase agreements.

The following table sets forth information with regard to gains and (losses) on equity securities:

 
Three Months Ended March 31,
  
(In thousands)
  
2023
    
2022
  
Net gains and (losses) recognized on equity securities
  
$
2
    
$
(183
)
Less: Net gains and (losses) recognized on equity securities sold during the period
    
-
      
-
  
Unrealized gains and (losses) recognized on equity securities still held
  
$
2
    
$
(183
)

As of March 31, 2023 and December 31, 2022, the carrying value of equity securities without readily determinable fair values was $1.0 million. The Company performed a qualitative assessment to determine whether the investments were impaired and identified no areas of concern as of March 31, 2023 and 2022. There were no impairments, downward or upward adjustments recognized for equity securities without readily determinable fair values during the three months ended March 31, 2023 and 2022.

The following table sets forth information with regard to contractual maturities of debt securities at March 31, 2023:

(In thousands)
  
Amortized
Cost
    
Estimated
Fair Value
  
AFS debt securities:
            
Within one year
  
$
360
    
$
357
  
From one to five years
    
406,527
      
370,571
  
From five to ten years
    
566,555
      
495,942
  
After ten years
    
734,498
      
645,138
  
Total AFS debt securities
  
$
1,707,940
    
$
1,512,008
  
HTM debt securities:
                
Within one year
  
$
51,124
    
$
51,112
  
From one to five years
    
100,684
      
98,539
  
From five to ten years
    
270,074
      
237,794
  
After ten years
    
484,942
      
425,219
  
Total HTM debt securities
  
$
906,824
    
$
812,664
  

Maturities of mortgage-backed, collateralized mortgage obligations and asset-backed securities are stated based on their estimated average lives. Actual maturities may differ from estimated average lives or contractual maturities because, in certain cases, borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Except for U.S. government securities and government-sponsored enterprises securities, there were no holdings, when taken in the aggregate, of any single issuer that exceeded 10% of consolidated stockholders’ equity at March 31, 2023 and December 31, 2022.

The following table sets forth information with regard to investment securities with unrealized losses, for which an allowance for credit losses has not been recorded, segregated according to the length of time the securities had been in a continuous unrealized loss position:

 
Less Than 12 Months
    
12 Months or Longer
    
Total
  
(In thousands)
  
Fair
Value
    
Unrealized
Losses
    
Number
of Positions
    
Fair
Value
    
Unrealized
Losses
    
Number
of Positions
    
Fair
Value
    
Unrealized
Losses
    
Number
of Positions
  
As of March 31, 2023
                                                      
AFS securities:
                                                      
U.S. treasury
   $ 9,818     $ (114 )     1     $ 113,761     $ (9,185 )     7     $ 123,579     $ (9,299 )     8  
Federal agency
    
-
      
-
      
-
      
210,220
      
(38,190
)
    
16
      
210,220
      
(38,190
)
    
16
  
State & municipal
    
1,454
      
(51
)
    
1
      
82,792
      
(11,774
)
    
65
      
84,246
      
(11,825
)
    
66
  
Mortgage-backed
    
22,278
      
(736
)
    
33
      
440,057
      
(54,485
)
    
134
      
462,335
      
(55,221
)
    
167
  
Collateralized mortgage obligations
    
74,631
      
(2,080
)
    
23
      
504,718
      
(71,199
)
    
97
      
579,349
      
(73,279
)
    
120
  
Corporate
    
13,677
      
(737
)
    
4
      
33,560
      
(7,440
)
    
13
      
47,237
      
(8,177
)
    
17
  
Total securities with unrealized losses
  
$
121,858
    
$
(3,718
)
    
62
    
$
1,385,108
    
$
(192,273
)
    
332
    
$
1,506,966
    
$
(195,991
)
    
394
  
                                                                         
HTM securities:
                                                                        
Federal agency
  
$
-
    
$
-
      
-
    
$
80,945
    
$
(19,055
)
    
4
    
$
80,945
    
$
(19,055
)
    
4
  
Mortgage-backed
    
28,642
      
(1,033
)
    
7
      
199,125
      
(33,160
)
    
27
      
227,767
      
(34,193
)
    
34
  
Collateralized mortgage obligation
     87,826       (3,168 )     17       149,636       (18,719 )     37       237,462       (21,887 )     54  
State & municipal
    
52,808
      
(561
)
    
75
      
131,416
      
(18,888
)
    
134
      
184,224
      
(19,449
)
    
209
  
Total securities with unrealized losses
  
$
169,276
    
$
(4,762
)
    
99
    
$
561,122
    
$
(89,822
)
    
202
    
$
730,398
    
$
(94,584
)
    
301
  
                                                                         
As of December 31, 2022
                                                                        
AFS securities:
                                                                        
U.S. treasury
   $ 55,616     $ (3,864 )     5     $ 66,042     $ (7,369 )     3     $ 121,658     $ (11,233 )     8  
Federal agency
    
-
      
-
      
-
      
206,419
      
(42,000
)
    
16
      
206,419
      
(42,000
)
    
16
  
State & municipal
     3,679       (341 )     2       78,395       (13,849 )     64       82,074       (14,190 )     66  
Mortgage-backed
    
204,447
      
(15,048
)
    
149
      
267,926
      
(47,303
)
    
32
      
472,373
      
(62,351
)
    
181
  
Collateralized mortgage obligations
    
211,612
      
(14,458
)
    
77
      
374,376
      
(66,299
)
    
49
      
585,988
      
(80,757
)
    
126
  
Corporate
     34,434       (2,970 )     12       19,806       (3,194 )     6       54,240       (6,164 )     18  
Total securities with unrealized losses
  
$
509,788
    
$
(36,681
)
    
245
    
$
1,012,964
    
$
(180,014
)
    
170
    
$
1,522,752
    
$
(216,695
)
    
415
  
                                                                         
HTM securities:
                                                                        
Federal agency
  
$
-
    
$
-
      
-
    
$
79,322
    
$
(20,678
)
    
4
    
$
79,322
    
$
(20,678
)
    
4
  
Mortgage-backed
     91,417       (9,096 )     21       138,936       (28,342 )     13       230,353       (37,438 )     34  
Collateralized mortgage obligations
     191,644       (13,863 )     47       48,289       (10,855 )     8       239,933       (24,718 )     55  
State & municipal
    
110,727
      
(4,930
)
    
149
      
82,949
      
(19,315
)
    
76
      
193,676
      
(24,245
)
    
225
  
Total securities with unrealized losses
  
$
393,788
    
$
(27,889
)
    
217
    
$
349,496
    
$
(79,190
)
    
101
    
$
743,284
    
$
(107,079
)
    
318
  

The Company does not believe the AFS securities that were in an unrealized loss position as of March 31, 2023 and December 31, 2022, which consisted of 394 and 415 individual securities, respectively, represented a credit loss impairment. AFS debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. As of March 31, 2023 and December 31, 2022, the majority of the AFS securities in an unrealized loss position consisted of debt securities issued by U.S. government agencies or U.S. government-sponsored enterprises that carry the explicit and/or implicit guarantee of the U.S. government, which are widely recognized as “risk-free” and have a long history of zero credit losses. 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. The Company does not intend to sell, nor is it more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, which may be at maturity. The Company elected to exclude accrued interest receivable (“AIR”) from the amortized cost basis of debt securities. AIR on AFS debt securities totaled $4.1 million at March 31, 2023 and $4.2 million at December 31, 2022 and is excluded from the estimate of credit losses and reported in the other assets financial statement line.

None of the Bank’s HTM debt securities were past due or on nonaccrual status as of March 31, 2023 and December 31, 2022. There was no accrued interest reversed against interest income for the three months ended March 31, 2023 or the year ended December 31, 2022 as all securities remained on accrual status. In addition, there were no collateral-dependent HTM debt securities as of March 31, 2023 and December 31, 2022. As of March 31, 2023 and December 31, 2022, 70% of the Company’s HTM debt securities were issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government, which are widely recognized as “risk-free” and have a long history of zero credit loss. Therefore, the Company did not record an allowance for credit losses for these securities as of March 31, 2023 and December 31, 2022. The remaining HTM debt securities at March 31, 2023 and December 31, 2022 were comprised of state and municipal obligations generally with bond ratings of A to AAA. Utilizing the Current Expected Credit Losses (“CECL”) approach, the Company determined that the expected credit loss on its HTM municipal bond portfolio was immaterial and therefore no allowance for credit loss was recorded as of March 31, 2023 and December 31, 2022. AIR on HTM debt securities totaled $3.8 million at March 31, 2023 and December 31, 2022 and is excluded from the estimate of credit losses and reported in the other assets financial statement line.