Securities

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Securities

4.     Securities

The following table summarizes the Company’s portfolio of securities held-to-maturity on March 31, 2023:

					Gross		Gross
	Amortized				Unrecognized		Unrecognized
	Cost		Fair Value		Gains		Losses
	(In thousands)
Municipals	$	66,740	$	60,732	$	—	$	6,008
Total municipals		66,740		60,732		—		6,008
FNMA		7,870		7,137		—		733
Total mortgage-backed securities		7,870		7,137		—		733
Allowance for credit losses		(1,087)		—		—		—
Total	$	73,523	$	67,869	$	—	$	6,741

The following table summarizes the Company’s portfolio of securities held-to-maturity on December 31, 2022:

					Gross		Gross
	Amortized				Unrecognized		Unrecognized
	Cost		Fair Value		Gains		Losses
	(In thousands)
Municipals	$	66,936	$	55,561	$	—	$	11,375
Total municipals		66,936		55,561		—		11,375
FNMA		7,875		6,989		—		886
Total mortgage-backed securities		7,875		6,989		—		886
Allowance for credit losses		(1,100)		—		—		—
Total	$	73,711	$	62,550	$	—	$	12,261

The following table summarizes the Company’s portfolio of securities available for sale on March 31, 2023:

					Gross		Gross
	Amortized				Unrealized		Unrealized
	Cost		Fair Value		Gains		Losses
	(In thousands)
U.S. government agencies	$	83,691	$	81,802	$	171	$	2,060
Corporate		173,052		156,581		—		16,471
Mutual funds		11,460		11,460		—		—
Collateralized loan obligations		184,773		180,530		—		4,243
Other		1,445		1,445		—		—
Total other securities		454,421		431,818		171		22,774
REMIC and CMO		172,001		146,318		—		25,683
GNMA		9,067		7,304		3		1,766
FNMA		168,689		146,633		1		22,057
FHLMC		94,641		79,855		—		14,786
Total mortgage-backed securities		444,398		380,110		4		64,292
Total securities available for sale	$	898,819	$	811,928	$	175	$	87,066

The following table summarizes the Company’s portfolio of securities available for sale on December 31, 2022:

					Gross		Gross
	Amortized				Unrealized		Unrealized
	Cost		Fair Value		Gains		Losses
	(In thousands)
U.S. government agencies	$	83,720	$	81,103	$	2	$	2,619
Corporate		146,430		131,766		—		14,664
Mutual funds		11,211		11,211		—		—
Collateralized loan obligations		129,684		125,478		—		4,206
Other		1,516		1,516		—		—
Total other securities		372,561		351,074		2		21,489
REMIC and CMO		175,712		148,414		—		27,298
GNMA		9,193		7,317		3		1,879
FNMA		172,690		148,265		—		24,425
FHLMC		96,725		80,287		—		16,438
Total mortgage-backed securities		454,320		384,283		3		70,040
Total securities available for sale	$	826,881	$	735,357	$	5	$	91,529

The corporate securities held by the Company at March 31, 2023 and December 31, 2022, are issued by U.S. banking institutions. The CMOs held by the Company at March 31, 2023 and December 31, 2022, are either fully guaranteed or issued by a government sponsored enterprise.

The following tables detail the amortized cost and fair value of the Company’s securities classified as held-to-maturity and available for sale at March 31, 2023, by contractual maturity. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized
Securities held-to-maturity:	Cost		Fair Value
	(In thousands)
Due after ten years	$	66,740	$	60,732
Total other securities		66,740		60,732
Mortgage-backed securities		7,870		7,137
		74,610		67,869
Allowance for credit losses		(1,087)		-
Total securities held-to-maturity	$	73,523	$	67,869

	Amortized
Securities available for sale:	Cost		Fair Value
	(In thousands)
Due in one year or less	$	59,843	$	58,258
Due after one year through five years		74,798		69,629
Due after five years through ten years		236,428		221,597
Due after ten years		71,892		70,874
Total other securities		442,961		420,358
Mutual funds		11,460		11,460
Mortgage-backed securities		444,398		380,110
Total securities available for sale	$	898,819	$	811,928

The following tables show 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 the dates indicated:

	At March 31, 2023
		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)
Held-to-maturity securities
Municipals	3	$	60,732	$	6,008	$	—	$	—	$	60,732	$	6,008
Total other securities	3		60,732		6,008		—		—		60,732		6,008
FNMA	1		7,137	$	733		—		—		7,137		733
Total mortgage-backed securities	1		7,137		733		—		—		7,137		733
Total	4	$	67,869	$	6,741	$	—	$	—	$	67,869	$	6,741
Available for sale securities
U.S. Government Agencies & Treasury	8	$	73,930	$	2,060	$	5,506	$	20	$	68,424	$	2,040
Corporate	26		156,581		16,471		58,591		4,529		97,990		11,942
CLO	25		180,531		4,243		64,192		893		116,339		3,350
Total other securities	59		411,042		22,774		128,289		5,442		282,753		17,332
REMIC and CMO	47		146,030		25,683		3,315		101		142,715		25,582
GNMA	7		7,106		1,766		41		—		7,065		1,766
FNMA	45		146,490		22,057		7,598		312		138,892		21,745
FHLMC	18		79,855		14,786		10,875		621		68,980		14,165
Total mortgage-backed securities	117		379,481		64,292		21,829		1,034		357,652		63,258
Total	176	$	790,523	$	87,066	$	150,118	$	6,476	$	640,405	$	80,590

	At December 31, 2022
		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)
Held-to-maturity securities
Municipals	3	$	55,561	$	11,375	$	55,561	$	11,375	$	—	$	—
Total other securities	3		55,561		11,375		55,561		11,375		—		—
FNMA	1		6,989		886		6,989		886		—		—
Total mortgage-backed securities	1		6,989		886		6,989		886		—		—
Total	4	$	62,550	$	12,261	$	62,550	$	12,261	$	—	$	—
Available for sale securities
U.S. government agencies	7	$	77,856	$	2,619	$	77,059	$	2,517	$	797	$	102
Corporate	20		131,766		14,664		45,447		3,553		86,319		11,111
CLO	19		125,478		4,206		95,518		2,916		29,960		1,290
Total other securities	46		335,100		21,489		218,024		8,986		117,076		12,503
REMIC and CMO	47		148,120		27,298		40,911		3,457		107,209		23,841
GNMA	8		7,133		1,879		64		—		7,069		1,879
FNMA	47		148,229		24,425		38,296		3,871		109,933		20,554
FHLMC	18		80,287		16,438		24,838		2,397		55,449		14,041
Total mortgage-backed securities	120		383,769		70,040		104,109		9,725		279,660		60,315
Total	166	$	718,869	$	91,529	$	322,133	$	18,711	$	396,736	$	72,818

The Company reviewed each available for sale security that had an unrealized loss at March 31, 2023, and December 31, 2022. 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. If the Company identifies any decline in the fair value due to credit loss factors and evaluation indicates that a credit loss exists, then the present value of cash flows that is expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. 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 the U.S. government, and that issuers of the collateralized loan obligations (“CLO”) and the issuer of Corporate securities are global systematically important banks. 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.

The Company reviewed each held-to-maturity security at March 31, 2023, and December 31, 2022 as part of its quarterly Current Expected Credit Loss (“CECL”) process, resulting in an allowance for credit losses of $1.1 million at each of March 31, 2023 and December 31, 2022.

It is the Company’s policy to exclude accrued interest receivable from the calculation of the allowance for credit losses on held-to-maturity and the valuation of available for sale securities. Accrued interest receivable on held-to-maturity securities totaled $0.1 million each at March 31, 2023 and December 31, 2022 and accrued interest receivable on available for sale debt securities totaled $4.6 million and $3.7 million at March 31, 2023 and December 31, 2022, respectively.

The following table presents the activity in the allowance for credit losses for debt securities held-to-maturity.

	For the three months ended March 31,
	2023		2022
		(In thousands)
Beginning balance	$	1,100	$	862
(Benefit) provision		(13)		124
Allowance for credit losses	$	1,087	$	986

Realized gains and losses on the sales of securities are determined using the specific identification method. The Company did not sell any securities during the three months ended March 31, 2023 and 2022.