Note 8 - Investment Securities

9 Months Ended

Sep. 30, 2023

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, 2023, and December 31, 2022

	September 30, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	392,956	$	41	$	155	$	392,842
U.S. government agency entities		51,018		144		161		51,001
U.S. government sponsored entities		33,709		—		89		33,620
Mortgage-backed securities		916,719		42		154,958		761,803
Collateralized mortgage obligations		32,015		—		4,317		27,698
Corporate debt securities		248,534		—		16,662		231,872
Foreign debt securities		10,000		—		38		9,962
Total	$	1,684,951	$	227	$	176,380	$	1,508,798

	December 31, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	241,611	$	—	$	1,111	$	240,500
U.S. government agency entities		63,347		384		121		63,610
U.S. government sponsored entities		30,000		—		—		30,000
Mortgage-backed securities		993,883		194		126,983		867,094
Collateralized mortgage obligations		34,552		—		3,491		31,061
Corporate debt securities		258,780		112		17,809		241,083
Total	$	1,622,173	$	690	$	149,515	$	1,473,348

As of September 30, 2023, the amortized cost of AFS debt securities excluded accrued interest receivables of $5.5 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 2022 Form 10-K.

The amortized cost and fair value of securities available-for-sale as of September 30, 2023, 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, 2023
	Securities Available-For-Sale
	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	442,957	$	442,208
Due after one year through five years		241,407		225,644
Due after five years through ten years		154,327		142,157
Due after ten years		846,260		698,789
Total	$	1,684,951	$	1,508,798

Equity Securities - The Company recognized an unrealized net loss of $6.2 million for the three months ended September 30, 2023, due to a decrease in fair value of equity investments with readily determinable fair values compared to a net loss of $3.7 million for the three months ended September 30, 2022. The Company recognized a net gain of $9.3 million for the nine months ended September 30, 2023 due to the increase in fair value of equity investments with readily determinable fair values compared to a net gain of $1.3 million for the nine months ended September 30, 2022. Equity securities were $31.5 million and $22.2 million as of September 30, 2023, and December 31, 2022, 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, 2023, and  December 31, 2022:

	September 30, 2023
	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	$	49,153	$	126	$	49,804	$	29	$	98,957	$	155
U.S. government agency entities		17,698		39		1,487		122		19,185		161
U.S. government sponsored entities		33,621		89		—		—		33,621		89
Mortgage-backed securities		17,695		642		743,568		154,316		761,263		154,958
Collateralized mortgage obligations		—		—		27,698		4,317		27,698		4,317
Corporate debt securities		68,285		1,715		163,586		14,947		231,871		16,662
Foreign debt securities		9,962		38		—		—		9,962		38
Total	$	196,414	$	2,649	$	986,143	$	173,731	$	1,182,557	$	176,380

	December 31, 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	$	240,500	$	1,111	$	—	$	—	$	240,500	$	1,111
U.S. government agency entities		—		—		1,806		121		1,806		121
Mortgage-backed securities		394,123		33,042		452,739		93,941		846,862		126,983
Collateralized mortgage obligations		24,427		1,614		6,634		1,877		31,061		3,491
Corporate debt securities		109,995		3,256		100,977		14,553		210,972		17,809
Total	$	769,045	$	39,023	$	562,156	$	110,492	$	1,331,201	$	149,515

As of September 30, 2023, the Company had a total of 202 AFS debt securities in a gross unrealized loss position with no credit impairment, consisting primarily of 161 mortgage-backed securities, and 24 Corporate debt securities. In comparison, as of December 31, 2022, the Company has a total of 195 AFS debt securities in a gross unrealized loss position with no credit impairment, consisting primarily of 159 mortgage-backed securities, 22 Corporate debt securities, six U.S. treasury securities, five collateralized mortgage obligations and three U.S. government agency securities.

In March 2023, the Company recorded a $3.0 million write-off of its holdings of debt securities from the failed Signature Bank.

Allowance for Credit Losses

The securities that were in an unrealized loss position at September 30, 2023, 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 2022 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, 2023, against these securities, and there was no provision for credit losses recognized for the three and nine months ended September 30, 2023.

Securities available-for-sale having a carrying value of $132.2 million and $145.7 million as of September 30, 2023, and December 31, 2022, respectively, were pledged to secure public deposits and other borrowings.