SECURITIES

3 Months Ended

Mar. 31, 2022

SECURITIES

SECURITIES

7.SECURITIES

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

	March 31, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(In thousands)	Cost		Gains		Losses		Value
Securities available-for-sale:
Treasury securities	$	247,665	$	—	$	(13,134)	$	234,531
Corporate securities		151,382		980		(4,937)		147,425
Pass-through mortgage-backed securities ("MBS") issued by government sponsored entities ("GSEs")		443,266		905		(26,055)		418,116
Agency collateralized mortgage obligations ("CMOs")		469,808		7		(29,632)		440,183
State and municipal obligations		38,619		2		(1,840)		36,781
Total securities available-for-sale	$	1,350,740	$	1,894	$	(75,598)	$	1,277,036
	March 31, 2022
			Gross		Gross
	Amortized		Unrecognized		Unrecognized		Fair
(In thousands)	Cost		Gains		Losses		Value
Securities held-to-maturity:
Agency notes	$	88,858	$	—	$	(5,025)	$	83,833
Pass-through MBS issued by GSEs		180,379		—		(13,503)		166,876
Agency CMOs		114,685		—		(6,705)		107,980
Total securities held-to-maturity	$	383,922	$	—	$	(25,233)	$	358,689

	December 31, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(In thousands)	Cost		Gains		Losses		Value
Securities available-for-sale:
Agency notes	$	82,476	$	—	$	(2,222)	$	80,254
Treasury securities		247,916		—		(3,147)		244,769
Corporate securities		148,430		4,354		(754)		152,030
Pass-through mortgage-backed securities ("MBS") issued by government sponsored entities ("GSEs")		528,749		4,271		(6,566)		526,454
Agency collateralized mortgage obligations ("CMOs")		527,348		2,705		(8,795)		521,258
State and municipal obligations		39,175		73		(302)		38,946
Total securities available-for-sale	$	1,574,094	$	11,403	$	(21,786)	$	1,563,711
	December 31, 2021
			Gross		Gross
	Amortized		Unrecognized		Unrecognized		Fair
(In thousands)	Cost		Gains		Losses		Value
Securities held-to-maturity:
Pass-through MBS issued by GSEs	$	118,382	$	59	$	(1,141)	$	117,300
Agency CMOs		60,927		—		(873)		60,054
Total securities held-to-maturity	$	179,309	$	59	$	(2,014)	$	177,354

The Company reassessed classification of certain investments during the three months ended March 31, 2022 and transferred securities with a book value of $182.1 million from available-for-sale to held-to-maturity. The transfer occurred at fair value totaling $175.3 million. The related unrealized losses of $6.8 million were converted to a discount that is being accreted through interest income on a level-yield method over the term of the securities, while the unrealized losses

recorded in other comprehensive income are amortized out of other comprehensive income through interest income on a level-yield method over the remaining term of securities, with no net change to interest income. No gain or loss was recorded at the time of transfer.  There were no transfers of securities held-to-maturity to securities available-for-sale during the three months ended March 31, 2022. There were no transfers to or from securities held-to-maturity during the three months ended March 31, 2021.

The carrying amount of securities available-for-sale pledged at March 31, 2022 and December 31, 2021 was $451.4 million and $595.8 million, respectively. The carrying amount of securities held-to-maturity pledged at March 31, 2022 and December 31, 2021 was $352.4 million and $132.0 million, respectively.

At March 31, 2022 and December 31, 2021, 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 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, 2022
	Amortized		Fair
(In thousands)	Cost		Value
Available-for-sale
Within one year	$	4,226	$	4,196
One to five years		277,389		262,734
Five to ten years		150,906		146,993
Beyond ten years		5,145		4,814
Pass-through MBS issued by GSEs and agency CMO		913,074		858,299
Total	$	1,350,740	$	1,277,036
Held-to-maturity
Within one year	$	—	$	—
One to five years		10,000		9,827
Five to ten years		78,858		74,006
Beyond ten years		—		—
Pass-through MBS issued by GSEs and agency CMO		295,064		274,856
Total	$	383,922	$	358,689

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)	2022		2021
Securities available-for-sale
Proceeds	$	—	$	134,558
Gross gains		—		1,307
Tax expense on gains		—		414
Gross losses		—		120
Tax benefit on losses		—		38

	Three Months Ended
	March 31,
(In thousands)	2022		2021
Proceeds:
Marketable equity securities	$	—	$	6,101

There were no gains on marketable equity securities for the three months ended March 31, 2022. Net gain of $131 thousand was recognized on marketable equity securities for the three months ended March 31, 2021. Marketable equity securities were fully liquidated in connection with the termination of the BMP during the three months ended March 31, 2021.

There were no sales of securities held-to-maturity during the three months ended March 31, 2022 and 2021.  

The following table summarizes the gross unrealized losses and fair value of securities available-for-sale 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, 2022
	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:
Treasury securities	$	234,530	$	13,134	$	—	$	—	$	234,530	$	13,134
Corporate securities		95,535		4,847		2,910		90		98,445		4,937
Pass-through MBS issued by GSEs		290,385		18,572		70,248		7,483		360,633		26,055
Agency CMOs		320,114		16,773		116,425		12,859		436,539		29,632
State and municipal obligations		31,150		1,308		4,190		532		35,340		1,840

	December 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	$	58,607	$	1,369	$	21,647	$	853	$	80,254	$	2,222
Treasury securities		244,769		3,147		—		—		244,769		3,147
Corporate securities		37,620		754		—		—		37,620		754
Pass-through MBS issued by GSEs		422,634		6,333		4,748		233		427,382		6,566
Agency CMOs		349,879		8,672		3,182		123		353,061		8,795
State and municipal obligations		18,887		302		—		—		18,887		302

As of March 31, 2022, none of the Company’s available-for-sale debt securities were in an unrealized loss position due to credit and therefore no allowance for credit losses on available-for-sale debt securities was required. Additionally, given the high-quality composition of the Company’s held-to-maturity portfolio, the Company did not record an allowance for credit losses on the held-to-maturity portfolio. With respect to certain classes of debt securities, primarily U.S. Treasuries and securities issued by Government Sponsored Entities, the Company considers the history of credit losses, current conditions and reasonable and supportable forecasts, which may indicate that the expectation that nonpayment of the amortized cost basis is or continues to be zero, even if the U.S. government were to technically default.  Accrued interest receivable on securities totaling $4.5 million and $4.4 million at March 31, 2022 and December 31, 2021, respectively, was included in other assets in the consolidated balance sheet and excluded from the amortized cost and estimated fair value totals in the table above.

Management evaluates available-for-sale debt securities in unrealized loss positions to determine whether the impairment is due to credit-related factors or noncredit-related factors. Consideration is given to (1) the extent to which the fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value.

At March 31, 2022, substantially all of the securities in an unrealized loss position had a fixed interest rate and the cause of the temporary impairment was directly related to changes in interest rates. The Company generally views changes in fair value caused by changes in interest rates as temporary, which is consistent with its experience. The following major security types held by the Company are all issued by U.S. government entities and agencies and therefore either explicitly or implicitly guaranteed by the U.S. government; Agency Notes, Treasury Securities, Pass-through MBS issued by GSEs, Agency Collateralized Mortgage Obligations. Substantially all of the corporate bonds within the portfolio have maintained an investment grade rating by either Kroll, Egan-Jones, Fitch, Moody’s or Standard and Poor’s. None of the unrealized losses are related to credit losses. Substantially all of the state and municipal obligations within the portfolio have all

maintained an investment grade rating by either Moody’s or Standard and Poor’s.  The Company does not have the intent to sell these securities and it is more likely than not that it will not be required to sell the securities before their anticipated recovery. The issuers continue to make timely principal and interest payments on the debt. The fair value is expected to recover as the securities approach maturity.