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Note 7 - Investment Securities
9 Months Ended
Sep. 30, 2024
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 ("AFS") as of September 30, 2024, and December 31, 2023

 

  

September 30, 2024

 
      

Gross

  

Gross

     
  

Amortized

  

Unrealized

  

Unrealized

     
  

Cost

  

Gains

  

Losses

  

Fair Value

 
  

(In thousands)

 

Securities AFS

                

U.S. treasury securities

 $494,517  $494  $  $495,011 

U.S. government agency entities

  10,180   61   116   10,125 

Mortgage-backed securities

  821,023   395   86,882   734,536 

Collateralized mortgage obligations

  28,663      2,229   26,434 

Corporate debt securities

  248,313   299   6,362   242,250 

Total

 $1,602,696  $1,249  $95,589  $1,508,356 

 

  

December 31, 2023

 
      

Gross

  

Gross

     
  

Amortized

  

Unrealized

  

Unrealized

     
  

Cost

  

Gains

  

Losses

  

Fair Value

 
  

(In thousands)

 

Securities AFS

                

U.S. treasury securities

 $495,167  $153  $20  $495,300 

U.S. government agency entities

  48,282   117   230   48,169 

Mortgage-backed securities

  892,942   223   106,442   786,723 

Collateralized mortgage obligations

  31,238      3,194   28,044 

Corporate debt securities

  258,451   22   12,139   246,334 

Total

 $1,726,080  $515  $122,025  $1,604,570 

 

As of September 30, 2024, and December 31, 2023, the amortized cost of AFS securities excluded accrued interest receivables of $4.5 million and $5.5 million, respectively, which are included in accrued interest receivable on the Consolidated Balance Sheets. For the Company’s accounting policy related to AFS 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 2023 Form 10-K.

 

The amortized cost and fair value of securities AFS as of September 30, 2024, 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, 2024

 
  

Securities AFS

 
  

Amortized Cost

  

Fair Value

 
  

(In thousands)

 
         

Due in one year or less

 $564,646  $564,312 

Due after one year through five years

  182,986   177,692 

Due after five years through ten years

  119,016   113,945 

Due after ten years

  736,048   652,407 

Total

 $1,602,696  $1,508,356 

 

Equity Securities - The Company recognized an unrealized net gain of $4.3 million for the three months ended September 30, 2024, due to an increase in fair value of equity investments with readily determinable fair values compared to a net loss of $6.2 million for the three months ended September 30, 2023. The Company recognized a net loss of $6.2 million for the nine months ended September 30, 2024, due to a decrease in fair value of equity investments with readily determinable fair values compared to a net gain of $9.3 million for the nine months ended September 30, 2023. Equity securities were $35.7 million and $40.4 million as of September 30, 2024, and December 31, 2023, 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, 2024, and  December 31, 2023:

 

  

September 30, 2024

 
  

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 AFS

                        

U.S. government agency entities

 $1,182  $1  $2,223  $115  $3,405  $116 

Mortgage-backed securities

  8      701,624   86,882   701,632   86,882 

Collateralized mortgage obligations

        26,434   2,229   26,434   2,229 

Corporate debt securities

  19,974   26   146,866   6,336   166,840   6,362 

Total

 $21,164  $27  $877,147  $95,562  $898,311  $95,589 

 

  

December 31, 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 AFS

                        

U.S. treasury securities

 $49,831  $20  $  $  $49,831  $20 

U.S. government agency entities

  18,301   108   1,313   122   19,614   230 

Mortgage-backed securities

        768,274   106,442   768,274   106,442 

Collateralized mortgage obligations

        28,044   3,194   28,044   3,194 

Corporate debt securities

  64,448   552   166,864   11,587   231,312   12,139 

Total

 $132,580  $680  $964,495  $121,345  $1,097,075  $122,025 

 

As of September 30, 2024, the Company had a total of 177 AFS securities in a gross unrealized loss position with no credit impairment, consisting primarily of 149 mortgage-backed securities, and 18 Corporate debt securities, five collateralized mortgage obligations and five U.S. government agency securities. In comparison, as of December 31, 2023, the Company has a total of 192 AFS securities in a gross unrealized loss position with no credit impairment, consisting primarily of 154 mortgage-backed securities, 24 Corporate debt securities, one U.S. treasury security, five collateralized mortgage obligations and eight U.S. government agency securities.

 

In March 2023, the Company recorded a $3.0 million write-off of its holdings of securities AFS from the failed Signature Bank. During the nine months ended September 30, 2024, the Company sold that security for $1.4 million.

 

Allowance for Credit Losses

 

The AFS securities that were in an unrealized loss position at September 30, 2024, 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 2023 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 securities AFS that have declined below their cost before their anticipated recovery. Accordingly, no allowance for credit losses was recorded as of September 30, 2024, against these securities, and there was no provision for credit losses recognized for the three and nine months ended September 30, 2024.

 

AFS securities having a carrying value of $18.4 million and $134.2 million as of September 30, 2024, and December 31, 2023, respectively, were pledged to secure public deposits and other borrowings.