Note 8 - Investment Securities

9 Months Ended

Sep. 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 September 30, 2022, and December 31, 2021:

	September 30, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	242,510	$	—	$	1,110	$	241,400
U.S. government agency entities		68,712		526		126		69,112
Mortgage-backed securities		1,001,832		58		140,402		861,488
Collateralized mortgage obligations		35,378		—		3,669		31,709
Corporate debt securities		228,879		—		18,177		210,702
Total	$	1,577,311	$	584	$	163,484	$	1,414,411

	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 September 30, 2022, the amortized cost of AFS debt securities excluded accrued interest receivables of $4.5 million, which are included in “accrued interest receivable” 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 September 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.  

	September 30, 2022
	Securities Available-For-Sale
	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	282,514	$	280,897
Due after one year through five years		176,541		159,389
Due after five years through ten years		147,198		138,428
Due after ten years		971,058		835,697
Total	$	1,577,311	$	1,414,411

Equity Securities - The Company recognized a net loss of $3.7 million for the three months ended September 30, 2022, due to the decrease in fair value during the quarter of equity investments with readily determinable fair values compared to a net gain of $3 thousand for the three months ended September 30, 2021. The Company recognized a net gain of $1.3 million for the nine months ended September 30, 2022 due to the increase in fair value of equity investments with readily determinable fair values compared to a net loss of $3.6 million for the nine months ended September 30, 2021. Equity securities were $23.1 million and $22.3 million as of September 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  September 30, 2022, and  December 31, 2021:

	September 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	$	241,400	$	1,110	$	—	$	—	$	241,400	$	1,110
U.S. government agency entities		—		—		2,155		126		2,155		126
Mortgage-backed securities		551,053		69,037		309,737		71,365		860,790		140,402
Collateralized mortgage obligations		24,901		1,794		6,809		1,875		31,710		3,669
Corporate debt securities		118,913		4,364		91,790		13,813		210,703		18,177
Total	$	936,267	$	76,305	$	410,491	$	87,179	$	1,346,758	$	163,484

	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 September 30, 2022, the Company had a total of 195 AFS debt securities in a gross unrealized loss position with no credit impairment, consisting primarily of 160 U.S. government-sponsored mortgage-backed securities, and 21 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 September 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 September 30, 2022, against these securities, and there was no provision for credit losses recognized for the three months and nine months ended September 30, 2022. For the three months and nine months ended September 30, 2021, there were no credit losses recognized.

Securities available-for-sale having a carrying value of $144.3 million and $30.5 million as of September 30, 2022, and December 31, 2021, respectively, were pledged to secure public deposits and other borrowings.