Investment Securities

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

The following tables are a summary of the investment securities portfolios as of the dates shown:


	June 30, 2023
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-sale securities
U.S. Treasury	$	—	$	—	$	—	$	—
U.S. government agencies	80,000		—		(5,725)		74,275
Municipal	173,540		102		(6,231)		167,411
Corporate notes:
Financial issuers	83,995		—		(12,920)		71,075
Other	1,000		—		(15)		985
Mortgage-backed: (1)
Mortgage-backed securities	3,585,943		—		(483,659)		3,102,284
Collateralized mortgage obligations	94,373		—		(17,922)		76,451
Total available-for-sale securities	$	4,018,851	$	102	$	(526,472)	$	3,492,481
Held-to-maturity securities
U.S. government agencies	$	339,604	$	—	$	(71,022)	$	268,582
Municipal	176,128		362		(4,502)		171,988
Mortgage-backed: (1)
Mortgage-backed securities	2,832,138		—		(574,114)		2,258,024
Collateralized mortgage obligations	159,120		—		(23,014)		136,106
Corporate notes	57,889		35		(4,733)		53,191
Total held-to-maturity securities	$	3,564,879	$	397	$	(677,385)	$	2,887,891
Less: Allowance for credit losses	(406)
Held-to-maturity securities, net of allowance for credit losses	$	3,564,473
Equity securities with readily determinable fair value	$	120,629	$	3,711	$	(8,065)	$	116,275

(1)Consisting entirely of residential mortgage-backed securities, none of which are subprime.


	December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
Available-for-sale securities
U.S. Treasury	$	14,943	$	5	$	—	$	14,948
U.S. government agencies	80,000		36		(5,814)		74,222
Municipal	173,861		230		(5,436)		168,655
Corporate notes:
Financial issuers	93,994		—		(9,291)		84,703
Other	1,000		2		—		1,002
Mortgage-backed: (1)
Mortgage-backed securities	3,308,494		238		(488,795)		2,819,937
Collateralized mortgage obligations	97,342		—		(17,792)		79,550
Total available-for-sale securities	$	3,769,634	$	511	$	(527,128)	$	3,243,017
Held-to-maturity securities
U.S. government agencies	$	339,614	$	—	$	(75,293)	$	264,321
Municipal	179,027		477		(4,066)		175,438
Mortgage-backed: (1)
Mortgage-backed securities	2,900,031		—		(583,682)		2,316,349
Collateralized mortgage obligations	164,151		—		(23,322)		140,829
Corporate notes	58,232		—		(5,348)		52,884
Total held-to-maturity securities	$	3,641,055	$	477	$	(691,711)	$	2,949,821
Less: Allowance for credit losses	(488)
Held-to-maturity securities, net of allowance for credit losses	$	3,640,567
Equity securities with readily determinable fair value	$	115,552	$	2,935	$	(8,122)	$	110,365

(1)Consisting entirely of residential mortgage-backed securities, none of which are subprime.


	June 30, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
Available-for-sale securities
U.S. Treasury	$	—	$	—	$	—	$	—
U.S. government agencies	50,000		—		(1,913)		48,087
Municipal	170,268		570		(4,133)		166,705
Corporate notes:
Financial issuers	93,994		—		(5,177)		88,817
Other	1,000		—		(4)		996
Mortgage-backed: (1)
Mortgage-backed securities	2,915,107		28		(336,517)		2,578,618
Collateralized mortgage obligations	101,132		1		(14,235)		86,898
Total available-for-sale securities	$	3,331,501	$	599	$	(361,979)	$	2,970,121
Held-to-maturity securities
U.S. government agencies	$	294,631	$	—	$	(53,222)	$	241,409
Municipal	179,642		1,195		(2,796)		178,041
Mortgage-backed: (1)
Mortgage-backed securities	2,719,754		—		(438,050)		2,281,704
Collateralized mortgage obligations	170,951		—		(16,254)		154,697
Corporate notes	48,574		2		(4,158)		44,418
Total held-to-maturity securities	$	3,413,552	$	1,197	$	(514,480)	$	2,900,269
Less: Allowance for credit losses	(83)
Held-to-maturity securities, net of allowance for credit losses	$	3,413,469
Equity securities with readily determinable fair value	$	96,247	$	3,143	$	(6,095)	$	93,295

(1)Consisting entirely of residential mortgage-backed securities, none of which are subprime.

Equity securities without readily determinable fair values totaled $53.4 million as of June 30, 2023. Equity securities without readily determinable fair values are included as part of accrued interest receivable and other assets in the Company’s Consolidated Statements of Condition. The Company monitors its equity investments without readily determinable fair values to identify potential transactions that may indicate an observable price change in orderly transactions for the identical or a similar investment of the same issuer, requiring adjustment to its carrying amount. The Company recorded no upward or downward adjustments related to such observable price changes for the three and six months ended June 30, 2023 or June 30, 2022. The Company conducts a quarterly assessment of its equity securities without readily determinable fair values to determine whether impairment exists in such securities, considering, among other factors, the nature of the securities, financial condition of the issuer and expected future cash flows. During the three months ended June 30, 2023, the Company recorded no impairment of equity securities without readily determinable fair values. During the three months ended June 30, 2022, the Company recorded $3.8 million of impairment of equity securities without readily determinable fair values. During the six months ended June 30, 2023, the Company recorded no of impairment of equity securities without readily determinable fair values. During the six months ended June 30, 2022, the Company recorded $4.4 million of impairment of equity securities without readily determinable fair values.

The following table presents the portion of the Company’s available-for-sale investment securities portfolios that have gross unrealized losses, reflecting the length of time that individual securities have been in a continuous unrealized loss position at June 30, 2023:


	Continuous unrealized losses existing for less than 12 months				Continuous unrealized losses existing for greater than 12 months				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available-for-sale securities

U.S. government agencies	$	29,909	$	(91)	$	44,366	$	(5,634)	$	74,275	$	(5,725)
Municipal	101,356		(1,988)		53,731		(4,243)		155,087		(6,231)
Corporate notes:
Financial issuers	—		—		71,075		(12,920)		71,075		(12,920)
Other	985		(15)		—		—		985		(15)
Mortgage-backed: (1)
Mortgage-backed securities	876,659		(18,454)		2,225,624		(465,205)		3,102,283		(483,659)
Collateralized mortgage obligations	37		(1)		76,414		(17,921)		76,451		(17,922)
Total available-for-sale securities	$	1,008,946	$	(20,549)	$	2,471,210	$	(505,923)	$	3,480,156	$	(526,472)

(1)Consisting entirely of residential mortgage-backed securities, none of which are subprime.

The Company conducts a regular assessment of its investment securities to determine whether securities are experiencing credit losses. Factors for consideration include the nature of the securities, credit ratings or financial condition of the issuer, the extent of the unrealized loss, expected cash flows, market conditions and the Company’s ability to hold the securities through the anticipated recovery period.

The Company does not consider available-for-sale securities with unrealized losses at June 30, 2023 to be experiencing credit losses and recognized no resulting allowance for credit losses for such individually assessed credit losses. The Company does not intend to sell these investments and it is more likely than not that the Company will not be required to sell these investments before recovery of the amortized cost bases, which may be the maturity dates of the securities. The unrealized losses within each category have occurred as a result of changes in interest rates, market spreads and market conditions subsequent to purchase. Available-for-sale securities with continuous unrealized losses existing for more than twelve months at June 30, 2023 were primarily mortgage-backed securities with unrealized losses due to increased market rates during such period.

See Note (7) “Allowance for Credit Losses” for further discussion regarding any credit losses associated with held-to-maturity securities at June 30, 2023.

The following table provides information as to the amount of gross gains and losses, adjustments and impairment on investment securities recognized in earnings and proceeds received through the sale or call of investment securities:


	Three months ended June 30,				Six months ended June 30,
(In thousands)	2023		2022		2023		2022
Realized gains on investment securities	$	6	$	7	$	611	$	265
Realized losses on investment securities	(6)		(7)		(51)		(14)
Net realized gains on investment securities	—		—		560		251
Unrealized gains on equity securities with readily determinable fair value	684		2		2,974		182
Unrealized losses on equity securities with readily determinable fair value	(684)		(4,013)		(2,136)		(6,655)
Net unrealized gains (losses) on equity securities with readily determinable fair value	—		(4,011)		838		(6,473)
Upward adjustments of equity securities without readily determinable fair values	—		—		—		—
Downward adjustments of equity securities without readily determinable fair values	—		—		—		—
Impairment of equity securities without readily determinable fair values	—		(3,786)		—		(4,357)
Adjustment and impairment, net, of equity securities without readily determinable fair values	—		(3,786)		—		(4,357)
Gains (losses) on investment securities, net	$	—	$	(7,797)	$	1,398	$	(10,579)





Proceeds from sales of available-for-sale securities(1)	$	—	$	—	$	—	$	—

Proceeds from sales of equity securities with readily determinable fair value	—		—		23,592		18,753
Proceeds from sales and capital distributions of equity securities without readily determinable fair value	—		279		67		529

(1)Includes proceeds from available-for-sale securities sold in accordance with written covered call options sold to a third party.

The amortized cost and fair value of available-for-sale and held-to-maturity investment securities as of June 30, 2023, December 31, 2022 and June 30, 2022, by contractual maturity, are shown in the following table. Contractual maturities may differ from actual maturities as borrowers may have the right to call or repay obligations with or without call or prepayment penalties. Mortgage-backed securities are not included in the maturity categories in the following maturity summary as actual maturities may differ from contractual maturities because the underlying mortgages may be called or prepaid without penalties:


	June 30, 2023				December 31, 2022				June 30, 2022
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available-for-sale securities
Due in one year or less	$	93,724	$	93,137	$	119,830	$	119,275	$	55,058	$	54,824
Due in one to five years	138,704		126,776		63,644		61,701		75,941		74,559
Due in five to ten years	41,655		36,315		115,734		105,076		115,378		109,492
Due after ten years	64,452		57,518		64,590		57,478		68,885		65,730
Mortgage-backed	3,680,316		3,178,735		3,405,836		2,899,487		3,016,239		2,665,516
Total available-for-sale securities	$	4,018,851	$	3,492,481	$	3,769,634	$	3,243,017	$	3,331,501	$	2,970,121
Held-to-maturity securities
Due in one year or less	$	2,479	$	2,475	$	1,340	$	1,332	$	1,457	$	1,458
Due in one to five years	102,182		96,806		94,705		89,093		84,906		80,705
Due in five to ten years	106,708		105,054		115,318		113,758		105,450		105,491
Due after ten years	362,252		289,426		365,510		288,460		331,034		276,214
Mortgage-backed	2,991,258		2,394,130		3,064,182		2,457,178		2,890,705		2,436,401
Total held-to-maturity securities	$	3,564,879	$	2,887,891	$	3,641,055	$	2,949,821	$	3,413,552	$	2,900,269
Less: Allowance for credit losses	(406)				(488)				(83)
Held-to-maturity securities, net of allowance for credit losses	$	3,564,473			$	3,640,567			$	3,413,469

Securities having a carrying value of $6.4 billion at June 30, 2023 as well as securities having a carrying value of $2.8 billion at both December 31, 2022 and June 30, 2022, respectively, were pledged as collateral for public deposits, trust deposits, Federal Home Loan Bank (“FHLB”) advances and available lines of credit, securities sold under repurchase agreements and derivatives. At June 30, 2023, there were no securities of a single issuer, other than U.S. government-sponsored agency securities, which exceeded 10% of shareholders’ equity.