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INVESTMENT SECURITIES

9 Months Ended

Sep. 30, 2025

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE D: INVESTMENT SECURITIES

The amortized cost and estimated fair value of investment securities as of September 30, 2025 and December 31, 2024 are as follows:


		September 30, 2025												December 31, 2024
					Gross			Gross									Gross			Gross
		Amortized			Unrealized			Unrealized			Fair			Amortized			Unrealized			Unrealized			Fair
(000’s omitted)		Cost			Gains			Losses			Value			Cost			Gains			Losses			Value
Available-for-Sale Portfolio:
U.S. Treasury and agency securities		$	2,396,816		$	0		$	218,906		$	2,177,910		$	2,389,208		$	0		$	305,422		$	2,083,786
Obligations of state and political subdivisions			418,563			298			33,420			385,441			428,204			288			41,997			386,495
Government agency mortgage-backed securities			332,181			85			46,017			286,249			360,102			37			58,915			301,224
Corporate debt securities			5,000			0			125			4,875			8,000			0			303			7,697
Government agency collateralized mortgage obligations			5,050			0			213			4,837			6,878			0			366			6,512
Total available-for-sale portfolio		$	3,157,610		$	383		$	298,681		$	2,859,312		$	3,192,392		$	325		$	407,003		$	2,785,714

Held-to-Maturity Portfolio:
U.S. Treasury and agency securities		$	1,160,978		$	0		$	83,632		$	1,077,346		$	1,138,743		$	0		$	123,194		$	1,015,549
Government agency mortgage-backed securities			281,330			2,502			289			283,543			206,412			448			2,241			204,619
Total held-to-maturity portfolio		$	1,442,308		$	2,502		$	83,921		$	1,360,889		$	1,345,155		$	448		$	125,435		$	1,220,168

As of September 30, 2025, equity and other securities on the consolidated statements of condition consists of equity securities with readily determinable fair values carried at $2.9 million and equity securities without readily determinable fair values carried at $76.0 million, including Federal Home Loan Bank of New York (“FHLB”) common stock of $36.9 million, Federal Reserve Bank (“FRB”) common stock of $33.3 million and other equity securities of $5.8 million.

As of December 31, 2024, equity and other securities on the consolidated statements of condition consists of equity securities with readily determinable fair values carried at $2.4 million and equity securities without readily determinable fair values carried at $85.1 million; including FHLB common stock of $45.4 million, FRB common stock of $33.4 million and other equity securities of $6.3 million.

The investment in FRB stock represents approximately half of the total required subscription, and the remaining half is unpaid and remains subject to call by the FRB.

The amount of upward and downward adjustments to equity securities without readily determinable fair values was not material for the three and nine months ended September 30, 2025 and 2024.

The gains and losses on equity and other securities for the three and nine months ended September 30, 2025 and 2024 are as follows:


		Three Months Ended						Nine Months Ended
		September 30,						September 30,
(000's omitted)		2025			2024			2025			2024
Net gain recognized on equity securities		$	236		$	101		$	480		$	984
Less: Net gain (loss) recognized on equity securities sold during the period			0			0			0			0
Unrealized gain recognized on equity securities still held		$	236		$	101		$	480		$	984

A summary of investment securities that have been in a continuous unrealized loss position is as follows:

As of September 30, 2025


	Less than 12 Months							12 Months or Longer						Total
					Gross						Gross						Gross
					Unrealized						Unrealized						Unrealized
(000’s omitted)		Fair Value			Losses			Fair Value			Losses			Fair Value			Losses
Available-for-Sale Portfolio:
U.S. Treasury and agency securities		$	0		$	0		$	2,177,910		$	218,906		$	2,177,910		$	218,906
Obligations of state and political subdivisions			41,792			1,040			281,692			32,380			323,484			33,420
Government agency mortgage-backed securities			106			1			280,461			46,016			280,567			46,017
Corporate debt securities			0			0			4,875			125			4,875			125
Government agency collateralized mortgage obligations			0			0			4,831			213			4,831			213
Total available-for-sale investment portfolio		$	41,898		$	1,041		$	2,749,769		$	297,640		$	2,791,667		$	298,681

Held-to-Maturity Portfolio:
U.S. Treasury and agency securities		$	0		$	0		$	1,077,346		$	83,632		$	1,077,346		$	83,632
Government agency mortgage-backed securities			20,696			112			28,270			177			48,966			289
Total held-to-maturity portfolio		$	20,696		$	112		$	1,105,616		$	83,809		$	1,126,312		$	83,921

As of December 31, 2024


		Less than 12 Months						12 Months or Longer						Total
					Gross						Gross						Gross
					Unrealized						Unrealized						Unrealized
(000’s omitted)		Fair Value			Losses			Fair Value			Losses			Fair Value			Losses
Available-for-Sale Portfolio:
U.S. Treasury and agency securities		$	0		$	0		$	2,083,786		$	305,422		$	2,083,786		$	305,422
Obligations of state and political subdivisions			47,144			847			301,202			41,150			348,346			41,997
Government agency mortgage-backed securities			7,943			221			290,786			58,694			298,729			58,915
Corporate debt securities			0			0			7,697			303			7,697			303
Government agency collateralized mortgage obligations			0			0			6,501			366			6,501			366
Total available-for-sale investment portfolio		$	55,087		$	1,068		$	2,689,972		$	405,935		$	2,745,059		$	407,003

Held-to-Maturity Portfolio:
U.S. Treasury and agency securities		$	0		$	0		$	1,015,549		$	123,194		$	1,015,549		$	123,194
Government agency mortgage-backed securities			149,742			2,027			15,281			214			165,023			2,241
Total held-to-maturity portfolio		$	149,742		$	2,027		$	1,030,830		$	123,408		$	1,180,572		$	125,435

The unrealized losses reported pertaining to available-for-sale securities issued by the U.S. government and its sponsored entities include treasuries, agencies, and mortgage-backed securities issued by Ginnie Mae, Fannie Mae, and Freddie Mac, which are currently rated Aa1 by Moody’s Investor Services, AA+ by Standard & Poor’s, AA+ by Fitch and are guaranteed by the U.S. government. The majority of the obligations of state and political subdivisions carry a credit rating of A or better. Additionally, a portion of the obligations of state and political subdivisions carry a secondary level of credit enhancement. The Company holds one corporate debt security in an unrealized loss position and, based on an analysis of the financial position of the issuer including financial performance, liquidity and regulatory capital ratios, the issuer of the security shows a remote risk of default. Timely interest payments continue to be made on the security. The unrealized losses in the portfolios are primarily attributable to changes in interest rates. As such, management does not believe any individual unrealized loss as of September 30, 2025 represents credit losses and no unrealized losses have been recognized in the provision for credit losses. Accordingly, there is no allowance for credit losses on the Company’s available-for-sale portfolio as of September 30, 2025. Accrued interest receivable on available-for-sale debt securities, included in accrued interest and fees receivable on the consolidated statements of condition, totaled $8.5 million at September 30, 2025 and is excluded from the estimate of credit losses.

Securities classified as held-to-maturity are included under the Current Expected Credit Loss (“CECL”) methodology. Calculation of expected credit loss under CECL is done on a collective (“pooled”) basis, with assets grouped when similar risk characteristics exist. The Company notes that at September 30, 2025, all securities in the held-to-maturity classification are U.S. Treasury securities and government agency mortgage-backed securities; therefore, they share the same risk characteristics and can be evaluated on a collective basis. The expected credit loss on these securities is evaluated based on historical credit losses of this security type and the expected possibility of default in the future as these securities are guaranteed by the U.S. government. U.S. Treasury securities and government agency mortgage-backed securities often receive the highest credit rating by rating agencies and the Company has concluded that the possibility of default is considered remote. The U.S. Treasury securities and government agency mortgage-backed securities held by the Company in the held-to-maturity category carry an Aa1 rating from Moody’s Investor Services, AA+ rating from Standard & Poor’s, and AA+ from Fitch. The Company concludes that the long history with no credit losses for these securities (adjusted for current conditions and reasonable and supportable forecasts) indicates an expectation that nonpayment of the amortized cost basis is zero. Management has concluded that the prepayment risk associated with these securities is insignificant and it is expected to recover the recorded investment. Accordingly, there is no allowance for credit losses on the Company’s held-to-maturity debt portfolio as of September 30, 2025. Accrued interest receivable on held-to-maturity debt securities, included in accrued interest and fees receivable on the consolidated statements of condition, totaled $4.1 million at September 30, 2025 and is excluded from the estimate of credit losses. The Company has the intent and ability to hold the securities to maturity.

The amortized cost and estimated fair value of debt securities at September 30, 2025, by contractual maturity, are shown below. 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. Securities not due at a single maturity date, including government agency mortgage-backed securities and government agency collateralized mortgage obligations, are shown separately.


		Held-to-Maturity						Available-for-Sale
		Amortized			Fair			Amortized			Fair
(000’s omitted)		Cost			Value			Cost			Value
Due in one year or less		$	0		$	0		$	18,051		$	17,938
Due after one through five years			0			0			1,950,886			1,852,880
Due after five years through ten years			575,740			562,180			438,342			381,405
Due after ten years			585,238			515,166			413,100			316,003
Subtotal			1,160,978			1,077,346			2,820,379			2,568,226
Government agency mortgage-backed securities			281,330			283,543			332,181			286,249
Government agency collateralized mortgage obligations			0			0			5,050			4,837
Total		$	1,442,308		$	1,360,889		$	3,157,610		$	2,859,312

Investment securities with a carrying value of $2.45 billion and $2.27 billion at September 30, 2025 and December 31, 2024, respectively, were pledged to collateralize certain deposits and borrowings. Securities pledged to collateralize certain deposits and borrowings included $319.2 million and $362.1 million of U.S. Treasury securities that were pledged as collateral for securities sold under agreement to repurchase at September 30, 2025 and December 31, 2024, respectively.