Securities

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Securities

6. Securities

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

					Gross		Gross
	Amortized				Unrecognized		Unrecognized
	Cost		Fair Value		Gains		Losses
	(In thousands)
Municipals	$	66,155	$	58,697	$	—	$	(7,458)
Total municipals		66,155		58,697		—		(7,458)
FNMA		7,855		7,058		—		(797)
Total mortgage-backed securities		7,855		7,058		—		(797)
Total before allowance for credit losses		74,010	$	65,755	$	—	$	(8,255)
Allowance for credit losses		(1,087)
Total	$	72,923

The following table summarizes the Company’s portfolio of securities held-to-maturity at 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)
Total before allowance for credit losses		74,811	$	62,550	$	—	$	(12,261)
Allowance for credit losses		(1,100)
Total	$	73,711

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

					Gross		Gross
	Amortized				Unrealized		Unrealized
	Cost		Fair Value		Gains		Losses
	(In thousands)
U.S. government agencies	$	82,548	$	81,734	$	123	$	(937)
Corporate		173,184		155,449		—		(17,735)
Mutual funds		11,660		11,660		—		—
Collateralized loan obligations		269,600		270,129		1,215		(686)
Other		1,437		1,437		—		—
Total other securities		538,429		520,409		1,338		(19,358)
REMIC and CMO		160,165		133,574		—		(26,591)
GNMA		12,402		10,665		3		(1,740)
FNMA		155,995		135,074		14		(20,935)
FHLMC		89,427		75,031		—		(14,396)
Total mortgage-backed securities		417,989		354,344		17		(63,662)
Total Securities excluding portfolio layer adjustments		956,418		874,753		1,355		(83,020)
Unallocated portfolio layer basis adjustments (1)		(2,254)		n/a		—		(2,254)
Total securities available for sale	$	954,164	$	874,753	$	1,355	$	(80,766)

⁽¹⁾ Represents the amount of portfolio layer method basis adjustments related to available for sale (“AFS”) securities hedged in a closed portfolio. Under GAAP portfolio layer method basis adjustments are not allocated to individual securities, however, the amounts impact the unrealized gains or losses for the individual securities being hedged. See Note 20 (“Derivative Financial Instruments”) of the Notes to the Consolidated Financial Statements.

The following table summarizes the Company’s portfolio of securities available for sale at 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 December 31, 2023 and 2022 are issued by U.S. banking institutions. The CMOs held by the Company at December 31, 2023 and 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 December 31, 2023, 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
Securities held-to-maturity:	Cost		Fair Value
	(In thousands)
Due after ten years	$	66,155	$	58,697
Total other securities		66,155		58,697
Mortgage-backed securities		7,855		7,058
		74,010		65,755
Allowance for credit losses		(1,087)		n/a
Total securities held-to-maturity	$	72,923	$	65,755

	Amortized
Securities available for sale:	Cost		Fair Value
	(In thousands)
Due in one year or less	$	59,979	$	59,485
Due after one year through five years		105,056		99,599
Due after five years through ten years		222,684		209,728
Due after ten years		139,050		139,937
Total other securities		526,769		508,749
Mutual funds		11,660		11,660
Mortgage-backed securities		417,989		354,344
Total securities available for sale (1)	$	956,418	$	874,753

(1) The table above excludes the unallocated portfolio layer basis adjustments totaling $2.3 million related to AFS securities hedged in a closed pool at December 31, 2023. See Note 20 (“Derivative Financial Instruments”) of the Notes to the Consolidated Financial Statements.

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 December 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	$	58,697	$	(7,458)	$	—	$	—	$	58,697	$	(7,458)
Total other securities	3		58,697		(7,458)		—		—		58,697		(7,458)
FNMA	1		7,058		(797)		—		—		7,058		(797)
Total mortgage-backed securities	1		7,058		(797)		—		—		7,058		(797)
Total	4	$	65,755	$	(8,255)	$	—	$	—	$	65,755	$	(8,255)
Available for sale securities (1)
U.S. government agencies	8	$	74,517	$	(937)	$	2,517	$	(7)	$	72,000	$	(930)
Corporate	26		155,449		(17,735)		25,428		(1,318)		130,021		(16,417)
CLO	17		120,609		(686)		—		—		120,609		(686)
Total other securities	51		350,575		(19,358)		27,945		(1,325)		322,630		(18,033)
REMIC and CMO	46		133,312		(26,591)		—		—		133,312		(26,591)
GNMA	7		10,466		(1,740)		3,867		(34)		6,599		(1,706)
FNMA	44		133,394		(20,935)		2,044		(1)		131,350		(20,934)
FHLMC	18		75,031		(14,396)		—		—		75,031		(14,396)
Total mortgage-backed securities	115		352,203		(63,662)		5,911		(35)		346,292		(63,627)
Total	166	$	702,778	$	(83,020)	$	33,856	$	(1,360)	$	668,922	$	(81,660)

(1) The table above excludes the unallocated portfolio layer basis adjustments totaling $2.3 million related to AFS securities hedged in a closed pool at December 31, 2023. See Note 20 (“Derivative Financial Instruments”) of the Notes to the Consolidated Financial Statements.

	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 debt security that had an unrealized loss at December 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. 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 tranche of the purchased 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 December 31, 2023 and 2022 as part of its quarterly ACL process, resulting in an allowance for credit losses of $1.1 million at both December 31, 2023 and 2022.

Accrued interest receivable on held-to-maturity debt securities totaled $0.1 million at both December 31, 2023 and 2022 and is excluded from the estimate of credit losses. Accrued interest receivable on available-for-sale debt securities totaled $7.1 million and $3.7 million at December 31, 2023 and 2022 respectively.  

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

	For the year ended December 31,
	2023		2022		2021
Beginning balance	$	1,100	$	862	$	907
Provision (benefit)		(13)		238		(45)
Allowance for credit losses	$	1,087	$	1,100	$	862

The Company did not have any allowance for credit losses for available for sale securities for the year ended December 31, 2023 and 2022.

The Company sold available for sale securities with carrying values at the time of sale totaling $84.2 million, and $45.0 million during the years ended December 31, 2022, and 2021, respectively. The Company did not sell any available for sale securities during the year ended December 31, 2023. The Company purchased mortgage-backed available for sale securities totaling $5.4 million, $56.6 million, and $340.8 million during the years ended December 31, 2023, 2022, and 2021, 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 year ended December 31,
	2023		2022		2021
	(In thousands)
Gross gains from the sale of securities	$	—	$	—	$	123
Gross losses from the sale of securities		—		(10,948)		(10)
Net gain (loss) from the sale of securities	$	—	$	(10,948)	$	113

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 $26.5 million and $24.3 million at December 31, 2023 and 2022, respectively.