SECURITIES

3 Months Ended

Mar. 31, 2023

SECURITIES

SECURITIES

6.SECURITIES

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

	March 31, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(In thousands)	Cost		Gains		Losses		Value
Securities available-for-sale:
Agency notes	$	10,000	$	—	$	(709)	$	9,291
Treasury securities		246,646		—		(16,215)		230,431
Corporate securities		172,626		—		(28,744)		143,882
Pass-through mortgage-backed securities ("MBS") issued by government sponsored entities ("GSEs")		263,194		—		(28,120)		235,074
Agency collateralized mortgage obligations ("CMOs")		324,394		2		(46,002)		278,394
State and municipal obligations		32,078		—		(2,338)		29,740
Total securities available-for-sale	$	1,048,938	$	2	$	(122,128)	$	926,812
	March 31, 2023
			Gross		Gross
	Amortized		Unrecognized		Unrecognized		Fair
(In thousands)	Cost		Gains		Losses		Value
Securities held-to-maturity:
Agency notes	$	89,258	$	—	$	(11,619)	$	77,639
Corporate securities		9,000		—		(2,063)		6,937
Pass-through MBS issued by GSEs		290,698		123		(37,137)		253,684
Agency CMOs		216,686		16		(22,390)		194,312
Total securities held-to-maturity	$	605,642	$	139	$	(73,209)	$	532,572

	December 31, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(In thousands)	Cost		Gains		Losses		Value
Securities available-for-sale:
Treasury securities	$	246,899	$	—	$	(19,643)	$	227,256
Corporate securities		183,791		57		(17,075)		166,773
Pass-through mortgage-backed securities ("MBS") issued by government sponsored entities ("GSEs")		272,774		—		(31,534)		241,240
Agency collateralized mortgage obligations ("CMOs")		331,394		2		(50,057)		281,339
State and municipal obligations		37,000		—		(3,021)		33,979
Total securities available-for-sale	$	1,071,858	$	59	$	(121,330)	$	950,587
	December 31, 2022
			Gross		Gross
	Amortized		Unrecognized		Unrecognized		Fair
(In thousands)	Cost		Gains		Losses		Value
Securities held-to-maturity:
Agency notes	$	89,157	$	—	$	(14,095)	$	75,062
Corporate securities		9,000		—		(553)		8,447
Pass-through MBS issued by GSEs		278,281		—		(40,960)		237,321
Agency CMOs		209,360		—		(24,431)		184,929
Total securities held-to-maturity	$	585,798	$	—	$	(80,039)	$	505,759

There were no transfers to or from securities held-to-maturity during the three months ended March 31, 2023. The Company transfeed securities with a book value of $182.1 million from available-for-sale to held-to-maturity during the three months ended March 31, 2022.

The carrying amount of securities pledged at March 31, 2023 and December 31, 2022 was $667.9 million and $631.4 million, respectively.

At March 31, 2023 and December 31, 2022, 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, 2023
	Amortized		Fair
(In thousands)	Cost		Value
Available-for-sale
Within one year	$	11,050	$	10,679
One to five years		269,229		251,440
Five to ten years		175,926		146,950
Beyond ten years		5,145		4,275
Pass-through MBS issued by GSEs and agency CMO		587,588		513,468
Total	$	1,048,938	$	926,812
Held-to-maturity
Within one year	$	—	$	—
One to five years		10,000		9,407
Five to ten years		88,258		75,169
Beyond ten years		—		—
Pass-through MBS issued by GSEs and agency CMO		507,384		447,996
Total	$	605,642	$	532,572

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)	2023		2022
Securities available-for-sale
Proceeds	$	77,804	$	—
Gross gains		130		—
Tax expense on gains		39		—
Gross losses		1,577		—
Tax benefit on losses		467		—

There were no sales of securities held-to-maturity during the three months ended March 31, 2023 and 2022.  

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, 2023
	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	$	—	$	—	$	9,291	$	709	$	9,291	$	709
Treasury securities		—		—		230,431		16,215		230,431		16,215
Corporate securities		81,866		13,507		62,016		15,237		143,882		28,744
Pass-through MBS issued by GSEs		27,912		867		207,162		27,253		235,074		28,120
Agency CMOs		3,778		32		269,614		45,970		273,392		46,002
State and municipal obligations		2,021		29		27,719		2,309		29,740		2,338

	December 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	$	—	$	—	$	227,256	$	19,643	$	227,256	$	19,643
Corporate securities		110,707		8,494		50,116		8,581		160,823		17,075
Pass-through MBS issued by GSEs		50,813		2,010		190,427		29,524		241,240		31,534
Agency CMOs		55,924		3,454		220,413		46,603		276,337		50,057
State and municipal obligations		10,848		174		22,681		2,847		33,529		3,021

As of March 31, 2023, 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 $4.7 million and $5.4 million at March 31, 2023 and December 31, 2022, 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, 2023, 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.