SECURITIES

9 Months Ended

Sep. 30, 2022

SECURITIES [Abstract]

SECURITIES

7.SECURITIES

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

	September 30, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(In thousands)	Cost		Gains		Losses		Value
Securities available-for-sale:
Treasury securities	$	247,157	$	—	$	(21,232)	$	225,925
Corporate securities		174,344		—		(17,312)		157,032
Pass-through mortgage-backed securities ("MBS") issued by government sponsored entities ("GSEs")		287,157		—		(34,502)		252,655
Agency collateralized mortgage obligations ("CMOs")		342,734		2		(49,019)		293,717
State and municipal obligations		37,157		—		(3,559)		33,598
Total securities available-for-sale	$	1,088,549	$	2	$	(125,624)	$	962,927
	September 30, 2022
			Gross		Gross
	Amortized		Unrecognized		Unrecognized		Fair
(In thousands)	Cost		Gains		Losses		Value
Securities held-to-maturity:
Agency notes	$	89,057	$	—	$	(14,168)	$	74,889
Corporate securities		9,000		—		(287)		8,713
Pass-through MBS issued by GSEs		281,739		—		(43,405)		238,334
Agency CMOs		211,607		—		(22,489)		189,118
Total securities held-to-maturity	$	591,403	$	—	$	(80,349)	$	511,054

	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 MBS issued by GSEs		528,749		4,271		(6,566)		526,454
Agency 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 nine months ended September 30, 2022 and transferred securities with a book value of $400.0 million from available-for-sale to held-to-maturity. The transfers occurred at fair value totaling $372.2 million. The related unrealized losses of $27.8 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 nine months ended September 30, 2022. There were no transfers to or from securities held-to-maturity during the nine months ended September 30, 2021.

The carrying amount of securities pledged at September 30, 2022 and December 31, 2021 was $651.1 million and $727.8 million, respectively.

At September 30, 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.  

	September 30, 2022
	Amortized		Fair
(In thousands)	Cost		Value
Available-for-sale
Within one year	$	4,328	$	4,260
One to five years		279,979		256,086
Five to ten years		169,206		151,713
Beyond ten years		5,145		4,496
Pass-through MBS issued by GSEs and agency CMO		629,891		546,372
Total	$	1,088,549	$	962,927
Held-to-maturity
Within one year	$	—	$	—
One to five years		10,000		9,301
Five to ten years		88,057		74,301
Beyond ten years		—		—
Pass-through MBS issued by GSEs and agency CMO		493,346		427,452
Total	$	591,403	$	511,054

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands)	2022		2021		2022		2021
Securities available-for-sale
Proceeds	$	—	$	—	$	—	$	138,077
Gross gains		—		—		—		1,327
Tax expense on gains		—		—		—		421
Gross losses		—		—		—		120
Tax benefit on losses		—		—		—		38

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands)	2022		2021		2022		2021
Proceeds:
Marketable equity securities	$	—	$	—	$	—	$	6,101

There were no gains on marketable equity securities for the three and nine months ended September 30, 2022, and the three months ended September 30, 2021. Net gain of $131 thousand was recognized on marketable equity securities for the nine months ended September 30, 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 and nine months ended September 30, 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:

	September 30, 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	$	—	$	—	$	225,925	$	21,232	$	225,925	$	21,232
Corporate securities		135,613		13,125		21,419		4,187		157,032		17,312
Pass-through MBS issued by GSEs		69,094		4,440		183,561		30,062		252,655		34,502
Agency CMOs		80,929		5,456		207,788		43,563		288,717		49,019
State and municipal obligations		18,428		1,498		15,170		2,061		33,598		3,559

	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 September 30, 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 $4.6 million and $4.4 million at September 30, 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 September 30, 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.