Securities

12 Months Ended

Dec. 31, 2020

Summary of Significant Accounting Policies.

Securities

7. Securities

The Company did not hold any trading securities at December 31, 2020 and 2019. Securities available for sale are recorded at fair value. Securities held-to-maturity are recorded at amortized cost.

Allowance for credit losses

The Company’s estimate of expected credit losses for held-to-maturity debt securities is based on historical information, current conditions and a reasonable and supportable forecast. The Company’s portfolio is made up of three securities, one which is structured similar to a commercial owner occupied loan, which is modeled for credit losses similar to commercial business loans secured by real estate, one that currently has an active forbearance with a specific reserve of $0.6 million and one security is issued and guaranteed by Fannie Mae, which is a government sponsored enterprise that has a credit rating and perceived credit risk comparable to the U.S. government and therefore the Company assumes a zero loss expectation. As of December 31, 2020, the active forbearance has an outstanding balance of $21.0 million. During the time this security is in forbearance, it is considered current and as such, continues to accrue interest at its original contractual terms. Accrued interest receivable on held-to-maturity securities totaled $0.1 million at December 31, 2020 and is excluded from estimates of credit losses.

The following table summarizes the Company’s portfolio of securities held-to-maturity at December 31, 2020:

					Gross		Gross		Allowance
	Amortized				Unrecognized		Unrecognized		for Credit
	Cost		Fair Value		Gains		Losses		Losses
	(In thousands)
Securities held-to-maturity:
Municipals	$	50,825	$	54,538	$	3,713	$	—	$	(907)
Total municipals		50,825		54,538		3,713		—		(907)
FNMA		7,914		8,991		1,077		—		—
Total mortgage-backed securities		7,914		8,991		1,077		—		—
Total	$	58,739	$	63,529	$	4,790	$	—	$	(907)

The following table summarizes the Company’s portfolio of securities held-to-maturity at December 31, 2019:

					Gross		Gross		Allowance
	Amortized				Unrecognized		Unrecognized		for Credit
	Cost		Fair Value		Gains		Losses		Losses
	(In thousands)
Securities held-to-maturity:
Municipals	$	50,954	$	53,998	$	3,044	$	—	$	—
Total municipals		50,954		53,998		3,044		—		—
FNMA		7,934		8,114		180		—		—
Total mortgage-backed securities		7,934		8,114		180		—		—
Total	$	58,888	$	62,112	$	3,224	$	—	$	—

The following table summarizes the Company’s portfolio of securities available for sale at December 31, 2020:

					Gross		Gross
	Amortized				Unrealized		Unrealized
	Cost		Fair Value		Gains		Losses
	(In thousands)
U.S. government agencies	$	6,452	$	6,453	$	2	$	1
Corporate		130,000		123,865		131		6,266
Mutual funds		12,703		12,703		—		—
Collateralized loan obligations		100,561		99,198		—		1,363
Other		1,295		1,295		—		—
Total other securities		251,011		243,514		133		7,630
REMIC and CMO		175,142		180,877		5,735		—
GNMA		13,009		13,053		66		22
FNMA		143,154		146,169		3,046		31
FHLMC		63,796		64,361		648		83
Total mortgage-backed securities		395,101		404,460		9,495		136
Total securities available for sale	$	646,112	$	647,974	$	9,628	$	7,766

The following table summarizes the Company’s portfolio of securities available for sale at December 31, 2019:

					Gross		Gross
	Amortized				Unrealized		Unrealized
	Cost		Fair Value		Gains		Losses
	(In thousands)
Corporate	$	130,000	$	123,050	$	—	$	6,950
Municipals		12,797		12,916		119		—
Mutual funds		12,216		12,216		—		—
Collateralized loan obligations		100,349		99,137		—		1,212
Other		1,332		1,332		—		—
Total other securities		256,694		248,651		119		8,162
REMIC and CMO		348,236		348,989		2,193		1,440
GNMA		653		704		51		—
FNMA		104,235		104,882		1,073		426
FHLMC		68,476		69,274		871		73
Total mortgage-backed securities		521,600		523,849		4,188		1,939
Total securities available for sale	$	778,294	$	772,500	$	4,307	$	10,101

We did not hold any private issue CMO’s that are collateralized by commercial real estate mortgages at December 31, 2020 and 2019. The corporate securities held by the Company at December 31, 2020 and 2019 are issued by U.S. banking institutions.

The following table details the amortized cost and fair value of the Company’s securities classified as held-to-maturity at December 31, 2020, by contractual maturity. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized
	Cost		Fair Value
	(In thousands)
Due after ten years	$	50,825	$	54,538
Total other securities		50,825		54,538
Mortgage-backed securities		7,914		8,991
Total securities held-to-maturity	$	58,739	$	63,529

The amortized cost and fair value of the Company’s securities, classified as available for sale at December 31, 2020, by contractual maturity, are shown below.

	Amortized
	Cost		Fair Value
	(In thousands)
Due after one year through five years	$	45,000	$	43,738
Due after five years through ten years		138,730		133,201
Due after ten years		54,578		53,872
Total other securities		238,308		230,811
Mutual funds		12,703		12,703
Mortgage-backed securities		395,101		404,460
Total securities available for sale	$	646,112	$	647,974

The following table shows the Company’s securities with gross unrealized losses and their fair value, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2020.

		Total				Less than 12 months				12 months or more
				Unrealized				Unrealized				Unrealized
	Count	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
	(Dollars in thousands)
Available for sale securities
U.S. government agencies	1	$	4,988	$	1	$	4,988	$	1	$	—	$	—
Corporate	14		113,734		6,266		—		—		113,734		6,266
CLO	13		99,199		1,363		7,441		52		91,758		1,311
Total other securities	28		217,921		7,630		12,429		53		205,492		7,577
GNMA	1		10,341		22		10,341		22		—		—
FNMA	5		32,463		31		23,864		28		8,599		3
FHLMC	3		30,095		83		30,095		83		—		—
Total mortgage-backed securities	9		72,899		136		64,300		133		8,599		3
Total securities available for sale	37	$	290,820	$	7,766	$	76,729	$	186	$	214,091	$	7,580

The following table shows the Company’s available for sale securities with gross unrealized losses and their fair value, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2019.

		Total				Less than 12 months				12 months or more
				Unrealized				Unrealized				Unrealized
	Count	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
	(Dollars in thousands)
Available for sale securities
Corporate	16	$	123,050	$	6,950	$	—	$	—	$	123,050	$	6,950
CLO	13		99,137		1,212		25,451		108		73,686		1,104
Total other securities	29		222,187		8,162		25,451		108		196,736		8,054
REMIC and CMO	23		120,989		1,440		102,384		1,117		18,605		323
GNMA	1		49		—		49		—		—		—
FNMA	8		67,618		426		19,073		138		48,545		288
FHLMC	1		30,200		73		—		—		30,200		73
Total mortgage-backed securities	33		218,856		1,939		121,506		1,255		97,350		684
Total securities available for sale	62	$	441,043	$	10,101	$	146,957	$	1,363	$	294,086	$	8,738

The Company reviewed each available for sale debt security that had an unrealized loss at December 31, 2020 and December 31, 2019. At December 31, 2020, the Company evaluated whether the decline in fair value of a debt security resulted from credit losses or other factors under ASC 326. The Company does not have the intent to sell these securities and it is more likely than not the Company will not be required to sell the securities before recovery of the securities’ amortized cost basis. This conclusion is based upon considering the Company’s cash and working capital requirements and contractual and regulatory obligations, none of which the Company believes would cause the sale of the securities. All of these securities are rated investment grade or above and have a long history of no credit losses. It is not anticipated that these securities would be settled at a price that is less than the amortized cost of the Company’s investment.

In determining the risk of loss for available for sale securities, the Company considered that mortgage-backed securities are either fully guaranteed or issued by a government sponsored enterprise, which has a credit rating and perceived credit risk comparable to U.S. government, the issuer of Corporate securities are global systematically important banks, and the tranche of the purchased CLO’s. Each of these securities is performing according to its terms and, in the opinion of management, will continue to perform according to its terms. Based on this review, management believes that the unrealized losses have resulted from other factors not deemed credit-related and no allowance for credit loss was recorded.

Accrued interest receivable on available-for-sale debt securities totaled $1.3 million at December 31, 2020 and is excluded from the estimate of credit losses.

Upon adoption of ASC Topic 326, “Credit Losses” on January 1, 2020, see Note 22 related to the adoption of Topic 326, we recorded a transition adjustment of $0.3 million in the allowance for credit losses for held-to-maturity debt securities.

The following table presents the activity in the allowance for credit losses for debt securities held-to-maturity for the year ended December 31, 2020:

	Mortgage-backed securities		Other securities
	(In thousands)
Beginning balance	$	—	$	—
CECL adoption		—		340
Provision		—		567
Allowance for credit losses - securities	$	—	$	907

The Company sold available for sale securities with carrying values at the time of sale totaling $221.0 million, $26.4 million and $67.0 million during the years ended December 31, 2020, 2019 and 2018, respectively. The Company purchased mortgage-backed available for sale securities totaling $308.1 million, $128.0 million and $196.4 million during the years ended December 31, 2020, 2019 and 2018, respectively.  

The following table represents the gross gains and gross losses realized from the sale of securities available for sale for the periods indicated:

	For the years ended
	December 31,
	2020		2019		2018
	(In thousands)
Gross gains from the sale of securities	$	1,499	$	423	$	105
Gross losses from the sale of securities		(2,200)		(438)		(2,025)
Net losses from the sale of securities	$	(701)	$	(15)	$	(1,920)

Included in “Other assets” within our Consolidated Statements of Financial Condition are amounts held in a rabbi trust for certain non-qualified deferred compensation plans totaling $22.6 million and $20.0 million at December 31, 2020 and 2019, respectively.