INVESTMENT AND MORTGAGE-BACKED SECURITIES

3 Months Ended

Mar. 31, 2021

INVESTMENT AND MORTGAGE-BACKED SECURITIES

INVESTMENT AND MORTGAGE-BACKED SECURITIES

7.INVESTMENT AND MORTGAGE-BACKED SECURITIES

The following tables summarize the major categories of securities owned by the Company as of the dates indicated:

	March 31, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(In thousands)	Cost		Gains		Losses		Value
Securities available-for-sale:
Agency notes	$	72,500	$	—	$	(2,930)	$	69,570
Treasury securities		92,547		—		(275)		92,272
Corporate securities		95,786		3,367		(420)		98,733
Pass-through MBS issued by GSEs		321,442		7,053		(4,788)		323,707
Agency Collateralized Mortgage Obligations ("CMOs")		522,841		6,305		(6,324)		522,822
State and municipal obligations		45,498		179		(288)		45,389
Total securities available-for-sale	$	1,150,614	$	16,904	$	(15,025)	$	1,152,493

	December 31, 2020
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(In thousands)	Cost		Gains		Losses		Value
Securities available-for-sale:
Agency notes	$	47,500	$	12	$	(91)	$	47,421
Corporate securities		62,021		2,440		—		64,461
Pass-through MBS issued by GSEs		135,842		7,672		(31)		143,483
Agency CMOs		274,898		8,674		(76)		283,496
Total securities available-for-sale	$	520,261	$	18,798	$	(198)	$	538,861

As a result of the Merger, the Company acquired $652.0 million of securities available-for-sale on the Merger Date.

The carrying amount of securities pledged as collateral was $637.1 million and $99.4 million at March 31, 2021 and December 31, 2020, respectively.

At March 31, 2021 and December 31, 2020, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders' equity.

The amortized cost and fair value of debt securities are shown by contractual maturity.  Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.  Securities not due at a single maturity date are shown separately.  

	March 31, 2021
	Amortized		Fair
(In thousands)	Cost		Value
Available-for-sale
Within one year	$	2,123	$	2,130
One to five years		116,049		115,878
Five to ten years		183,014		182,961
Beyond ten years		5,145		4,995
Pass-through MBS issued by GSEs and agency CMO		844,283		846,529
Total	$	1,150,614	$	1,152,493

The following table presents the information related to sales of securities available-for-sale as of the periods indicated:

	Three Months Ended
	March 31,
(In thousands)	2021		2020
Corporate Securities:
Proceeds	$	46,754	$	—
Gross gains		709		—
Tax expense on gain		225		—
Gross losses		41		—
Tax benefit on loss		13		—
Pass through MBS issued by GSEs:
Proceeds		26,823		—
Gross gains		187		—
Tax expense on gain		59		—
Gross losses		35		—
Tax benefit on loss		11		—
Agency CMOs:
Proceeds		41,324		4,199
Gross gains		268		8
Tax expense on gain		85		3
Gross losses		44		—
Tax benefit on loss		14		—
State and municipal obligations:
Proceeds		19,657		—
Gross gains		143		—
Tax expense on gain		45		—

	Three Months Ended
	March 31,
(In thousands)	2021		2020
Proceeds:
Marketable equity securities	$	6,101	$	137

Net gain of $131 thousand was recognized on marketable equity securities for the three-month period ended March 31, 2021. Net loss of $472 thousand was recognized on marketable equity securities for the three-month period ended March 31, 2020. Marketable equity securities were fully liquidated in connection with the termination of the BMP.

The following table summarizes the gross unrealized losses and fair value of investment securities aggregated by investment category and the length of time the securities were in a continuous unrealized loss position as of the dates indicated:

	March 31, 2021
	Less than 12				12 Consecutive
	Consecutive Months				Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(In thousands)	Value		Losses		Value		Losses		Value		Losses
Securities available-for-sale:
Agency notes	$	69,570	$	2,930	$	—	$	—	$	69,570	$	2,930
Treasury securities		92,272		275		—		—		92,272		275
Corporate securities		18,278		420		—		—		18,278		420
Pass-through MBS issued by GSEs		181,917		4,788		—		—		181,917		4,788
Agency CMOs		239,145		6,324		—		—		239,145		6,324
State and municipal obligations		19,004		288		—		—		19,004		288

	December 31, 2020
	Less than 12				12 Consecutive
	Consecutive Months				Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(In thousands)	Value		Losses		Value		Losses		Value		Losses
Securities available-for-sale:
Agency notes	$	22,409	$	91	$	—	$	—	$	22,409	$	91
Corporate securities		—		—		—		—		—		—
Pass-through MBS issued by GSEs		5,007		31		—		—		5,007		31
Agency CMOs		6,563		30		4,954		46		11,517		76

The issuers of securities available-for-sale are primarily U.S. government-sponsored entities or agencies. The decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality. In accordance with the Company’s investment policy, corporate notes are rated "investment grade" at the time of purchase and the financials of the issuers are reviewed quarterly. It is likely that the Company will not be required to sell the securities before their anticipated recovery, and as such, the Company does not consider these securities to be other-than-temporarily-impaired at March 31, 2021.

On January 1, 2021, the Company adopted the CECL Standard, which requires that debt securities held to maturity be accounted for under the current expected credit losses model, including historical loss experience and impact of current conditions and reasonable and supportable forecasts, with an associated allowance for credit losses. In addition, while credit losses on debt securities available for sale should be measured in accordance with the other-than-temporary impairment (“OTTI”) framework under current GAAP, the amendments in the CECL Standard require that these credit losses be presented as an allowance for credit losses.  For AFS debt securities, a decline in fair value due to credit loss results in recording an allowance for credit losses to the extent the fair value is less than the amortized cost basis. There are no held maturity securities as of March 31, 2021.