Note 8 - Investment Securities

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

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

8. 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 June 30, 2022, and December 31, 2021:

	June 30, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	119,823	$	—	$	825	$	118,998
U.S. government agency entities		75,781		1,285		125		76,941
Mortgage-backed securities		932,753		108		88,398		844,463
Collateralized mortgage obligations		23,949		—		1,369		22,580
Corporate debt securities		183,987		—		12,398		171,589
Total	$	1,336,293	$	1,393	$	103,115	$	1,234,571

	December 31, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
Securities Available-for-Sale
U.S. government agency entities		86,475		1,169		135		87,509
Mortgage-backed securities		886,614		9,465		7,414		888,665
Collateralized mortgage obligations		9,547		—		430		9,117
Corporate debt securities		144,231		441		2,654		142,018
Total	$	1,126,867	$	11,075	$	10,633	$	1,127,309

As of June 30, 2022, the amortized cost of AFS debt securities excluded accrued interest receivables of $3.1 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 1 - Summary of Significant Accounting Policies – Securities Available for Sale – Allowance for Credit Losses on Available for Sale Securities to the Consolidated Financial Statements in the Company’s 2021 Form 10-K.

The amortized cost and fair value of securities available-for-sale as of June 30, 2022, 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.  

	June 30, 2022
	Securities Available-For-Sale
	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	139,838	$	138,315
Due after one year through five years		146,693		135,240
Due after five years through ten years		147,294		144,903
Due after ten years		902,468		816,113
Total	$	1,336,293	$	1,234,571

Equity Securities - The Company recognized a net loss of $1.0 million for the three months ended June 30, 2022, due to the decrease in fair value during the quarter of equity investments with readily determinable fair values compared to a net loss of $0.9 million for the three months ended June 30, 2021. The Company recognized a net gain of $4.9 million for the six months ended June 30, 2022 due to the increase in fair value of equity investment with readily determinable fair value compared to a net loss of $3.6 million for the six months ended June 30, 2021. Equity securities were $26.8 million and $22.3 million as of June 30, 2022, and December 31, 2021, 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  June 30, 2022, and  December 31, 2021:

	June 30, 2022
	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	$	118,998	$	825	$	—	$	—	$	118,998	$	825
U.S. government agency entities		—		—		2,184		125		2,184		125
Mortgage-backed securities		705,908		65,450		132,913		22,948		838,821		88,398
Collateralized mortgage obligations		14,793		163		7,787		1,206		22,580		1,369
Corporate debt securities		134,070		9,243		37,520		3,155		171,590		12,398
Total	$	973,769	$	75,681	$	180,404	$	27,434	$	1,154,173	$	103,115

	December 31, 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		—		—		2,337		135		2,337		135
Mortgage-backed securities		527,276		6,659		6,496		755		533,772		7,414
Collateralized mortgage obligations		8,989		417		128		13		9,117		430
Corporate debt securities		103,720		2,122		19,468		532		123,188		2,654
Total	$	639,985	$	9,198	$	28,429	$	1,435	$	668,414	$	10,633

As of June 30, 2022, the Company had a total of 175 AFS debt securities in a gross unrealized loss position with no credit impairment, consisting primarily of 149 U.S. government-sponsored mortgage-backed securities, and 16 Corporate debt securities. In comparison, as of December 31, 2021, the Company has a total of 88 AFS debt securities in a gross unrealized loss position with no impairment, consisting primarily of 70 U.S. government-sponsored mortgage-backed securities, and 12 Corporate debt securities.

Allowance for Credit Losses

The securities that were in an unrealized loss position at June 30, 2022, 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 1 - Summary of Significant Accounting Policies - Allowance for Credit Losses on Available for Sale Securities to the Consolidated Financial Statements in the Company’s 2021 Form 10-K.

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 June 30, 2022, against these securities, and there was no provision for credit losses recognized for the three months ended June 30, 2022. For the three months ended June 30, 2021, there was no credit loss recognized.

Securities available-for-sale having a carrying value of $102.9 million and $30.5 million as of June 30, 2022, and December 31, 2021, respectively, were pledged to secure public deposits, other borrowings, treasury tax and loan.