Note 7 - Investment Securities

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

7. Investment Securities

The following tables set forth the amortized cost, gross unrealized gains, gross unrealized losses, and fair value of securities available-for-sale as of September 30, 2021, and December 31, 2020:

	September 30, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	40,206	$	5	$	—	$	40,211
U.S. government agency entities		89,823		1,255		135		90,943
Mortgage-backed securities		798,905		12,490		6,328		805,067
Collateralized mortgage obligations		9,792		—		231		9,561
Corporate debt securities		134,348		514		1,428		133,434
Total	$	1,073,074	$	14,264	$	8,122	$	1,079,216

	December 31, 2020
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	80,948	$	6	$	6	$	80,948
U.S. government agency entities		99,944		441		546		99,839
Mortgage-backed securities		709,709		17,965		606		727,068
Collateralized mortgage obligations		10,358		—		34		10,324
Corporate debt securities		118,271		367		267		118,371
Total	$	1,019,230	$	18,779	$	1,459	$	1,036,550

As of September 30, 2021, the amortized cost of AFS debt securities excluded accrued interest receivables of $2.6 million, which are included in “accrued interest receivables” on the Consolidated Balance Sheets. For the Company’s accounting policy related to AFS debt securities’ accrued interest receivable, see Note 2. Basis of Presentation and Summary of Significant Accounting Policies to the Consolidated Financial Statements in this Form 10Q.

The amortized cost and fair value of securities available-for-sale as of September 30, 2021, by contractual maturities, are set forth in the tables below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or repay obligations with or without call or repayment penalties.  

	September 30, 2021
	Securities Available-For-Sale
	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	45,215	$	45,234
Due after one year through five years		117,088		115,615
Due after five years through ten years		149,474		153,657
Due after ten years		761,297		764,710
Total	$	1,073,074	$	1,079,216

Equity Securities - The Company recognized a net gain of $3 thousand for the three months ended September 30, 2021, due to the increase in fair value during the quarter of equity investments with readily determinable fair values compared to a net gain of $1.6 million for the three months ended September 30, 2020. The Company recognized a net loss of $3.6 million for the nine months ended September 30, 2021, due to the decrease in fair value, year to date, of equity investments with readily determinable fair values compared to a net loss of $1.9 million for the nine months ended September 30, 2020. Equity securities were $20.1 million and $23.7 million as of September 30, 2021, and December 31, 2020, respectively.

The following tables set forth the gross unrealized losses and related fair value of the Company’s investment portfolio, aggregated by investment category and the length of time that individual security has been in a continuous unrealized loss position, as of  September 30, 2021, and  December 31, 2020:

	September 30, 2021
	Less than 12 Months				12 Months or Longer				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
Securities Available-for-Sale
U.S. government agency entities	$	—	$	—	$	2,403	$	135	$	2,403	$	135
Mortgage-backed securities		399,470		5,632		7,038		696		406,508		6,328
Collateralized mortgage obligations		9,418		219		144		12		9,562		231
Corporate debt securities		91,870		1,144		19,716		284		111,586		1,428
Total	$	500,758	$	6,995	$	29,301	$	1,127	$	530,059	$	8,122

	December 31, 2020
	Less than 12 Months				12 Months or Longer				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	40,952	$	6	$	—	$	—	$	40,952	$	6
U.S. government agency entities		26,390		102		40,009		444		66,399		546
Mortgage-backed securities		1,694		23		8,093		583		9,787		606
Collateralized mortgage obligations		10,131		25		193		9		10,324		34
Corporate debt securities		58,405		267		—		—		58,405		267
Total	$	137,572	$	423	$	48,295	$	1,036	$	185,867	$	1,459

Allowance for Credit Losses

The securities that were in an unrealized loss position at September 30, 2021, were evaluated to determine whether the decline in fair value below the amortized cost basis resulted from a credit loss or other factors. For a discussion of the factors and criteria the Company uses in analyzing securities for impairment related to credit losses, see Note 2 Basis of Presentation and Summary of Significant Accounting Policies - Allowance for Credit Losses on Available for Sale Securities to the Consolidated Financial Statements in this Form 10Q.

The Company concluded the unrealized losses were primarily attributed to yield curve movement, together with widened liquidity spreads and credit spreads. The issuers have not, to the Company’s knowledge, established any cause for default on these securities. The Company expects to recover the amortized cost basis of its securities and has no present intent to sell and will not be required to sell available-for-sale securities that have declined below their cost before their anticipated recovery. Accordingly, no allowance for credit losses was recorded as of September 30, 2021, against these securities, and there was no provision for credit losses recognized for the nine months ended September 30, 2021. For the nine months ended September 30, 2020, there was no credit loss recognized.

Securities available-for-sale having a carrying value of $30.9 million and $22.7 million as of September 30, 2021, and December 31, 2020, respectively, were pledged to secure public deposits, other borrowings, treasury tax and loan.