XML 20 R10.htm IDEA: XBRL DOCUMENT
v3.22.2

INVESTMENT SECURITIES | 6 Months Ended
--- | ---
Jun. 30, 2022
Investments, Debt and Equity Securities [Abstract] |
INVESTMENT SECURITIES | INVESTMENT SECURITIES: The following table sets forth certain information regarding the amortized cost basis and fair values of our investment securities AFS and held-to-maturity ("HTM"):
| At June 30, 2022
(in thousands) | Amortized cost |  | Gross unrealized gains |  | Gross unrealized losses |  | Fair value
AFS |  |  |  |  |  |  |
Mortgage backed securities ("MBS"): |  |  |  |  |  |  |
Residential | $ | 131,458 |  |  | $ | 137 |  |  | $ | (2,664) |  |  | $ | 128,931 |
Commercial | 70,076 |  |  | — |  |  | (6,503) |  |  | 63,573 |
Collateralized mortgage obligations ("CMOs"): |  |  |  |  |  |  |
Residential | 314,451 |  |  | 175 |  |  | (18,577) |  |  | 296,049 |
Commercial | 131,781 |  |  | 75 |  |  | (5,265) |  |  | 126,591 |
Municipal bonds | 582,262 |  |  | 826 |  |  | (47,735) |  |  | 535,353 |
Corporate debt securities | 31,792 |  |  | — |  |  | (1,462) |  |  | 30,330 |
U.S. Treasury securities | 23,178 |  |  | — |  |  | (2,248) |  |  | 20,930 |
Total | $ | 1,284,998 |  |  | $ | 1,213 |  |  | $ | (84,454) |  |  | $ | 1,201,757 |
HTM |  |  |  |  |  |  |
Municipal bonds | $ | 3,118 |  |  | $ | 3 |  |  | $ | (32) |  |  | $ | 3,089 |
| At December 31, 2021
(in thousands) | Amortized cost |  | Gross unrealized gains |  | Gross unrealized losses |  | Fair value
AFS |  |  |  |  |  |  |
MBS: |  |  |  |  |  |  |
Residential | $ | 32,905 |  |  | $ | 396 |  |  | $ | (338) |  |  | $ | 32,963 |
Commercial | 62,094 |  |  | 933 |  |  | (235) |  |  | 62,792 |
CMOs: |  |  |  |  |  |  |
Residential | 186,703 |  |  | 2,012 |  |  | (1,321) |  |  | 187,394 |
Commercial | 135,102 |  |  | 1,890 |  |  | (333) |  |  | 136,659 |
Municipal bonds | 516,693 |  |  | 24,154 |  |  | (924) |  |  | 539,923 |
Corporate debt securities | 18,918 |  |  | 699 |  |  | (1) |  |  | 19,616 |
U.S. Treasury securities | 23,348 |  |  | — |  |  | (173) |  |  | 23,175 |
Total | $ | 975,763 |  |  | $ | 30,084 |  |  | $ | (3,325) |  |  | $ | 1,002,522 |
HTM |  |  |  |  |  |  |
Municipal bonds | $ | 4,169 |  |  | $ | 136 |  |  | $ | — |  |  | $ | 4,305 |
At June 30, 2022, the Company held $33.1 million of trading securities, consisting of US Treasury notes used as economic hedges of our mortgage servicing rights, which are carried at fair value and included as investment securities on the balance sheet. Unrealized gains, net, on trading securities, which are included in loan servicing income, were $45 thousand at June 30, 2022. For the three and six months ended June 30, 2022, trading losses of $3.1 million and $3.9 million, respectively, were recorded in servicing income on the consolidated income statements. MBS and CMOs represent securities issued by government sponsored enterprises ("GSEs"). Most of the MBS and CMO securities in our investment portfolio are guaranteed by Fannie Mae, Ginnie Mae or Freddie Mac. Municipal bonds are comprised of general obligation bonds (i.e., backed by the general credit of the issuer) and revenue bonds (i.e., backed by either collateral or revenues from the specific project being financed) issued by various municipal corporations. As of June 30, 2022 and December 31, 2021, all securities held, including municipal bonds and corporate debt securities, were rated investment grade, based upon external ratings where available and, where not available, based upon internal ratings which correspond to ratings as defined by Standard and Poor's Rating Services or Moody's Investors Services. Investment securities AFS that were in an unrealized loss position are presented in the following tables based on the length of time the individual securities have been in an unrealized loss position:
| At June 30, 2022
| Less than 12 months |  | 12 months or more |  | Total
(in thousands) | Gross unrealized losses |  | Fair value |  | Gross unrealized losses |  | Fair value |  | Gross unrealized losses |  | Fair value
AFS |  |  |  |  |  |  |  |  |  |  |
MBS: |  |  |  |  |  |  |  |  |  |  |
Residential | $ | (2,106) |  |  | $ | 60,558 |  |  | $ | (558) |  |  | $ | 2,089 |  |  | $ | (2,664) |  |  | $ | 62,647 |
Commercial | (6,503) |  |  | 63,553 |  |  | — |  |  | — |  |  | (6,503) |  |  | 63,553 |
CMOs: |  |  |  |  |  |  |  |  |  |  |
Residential | (14,699) |  |  | 263,668 |  |  | (3,878) |  |  | 19,095 |  |  | (18,577) |  |  | 282,763 |
Commercial | (4,410) |  |  | 98,776 |  |  | (855) |  |  | 7,267 |  |  | (5,265) |  |  | 106,043 |
Municipal bonds | (44,369) |  |  | 449,658 |  |  | (3,366) |  |  | 10,638 |  |  | (47,735) |  |  | 460,296 |
Corporate debt securities | (1,462) |  |  | 30,259 |  |  | — |  |  | — |  |  | (1,462) |  |  | 30,259 |
U.S. Treasury securities | (2,248) |  |  | 20,930 |  |  | — |  |  | — |  |  | (2,248) |  |  | 20,930 |
Total | $ | (75,797) |  |  | $ | 987,402 |  |  | $ | (8,657) |  |  | $ | 39,089 |  |  | $ | (84,454) |  |  | $ | 1,026,491 |
HTM |  |  |  |  |  |  |  |  |  |  |
Municipal bonds | $ | (32) |  |  | $ | 2,443 |  |  | $ | — |  |  | $ | — |  |  | $ | (32) |  |  | $ | 2,443 |
| At December 31, 2021
| Less than 12 months |  | 12 months or more |  | Total
(in thousands) | Gross unrealized losses |  | Fair value |  | Gross unrealized losses |  | Fair value |  | Gross unrealized losses |  | Fair value
MBS: |  |  |  |  |  |  |  |  |  |  |
Residential | $ | (38) |  |  | $ | 5,324 |  |  | $ | (300) |  |  | $ | 2,406 |  |  | $ | (338) |  |  | $ | 7,730 |
Commercial | (235) |  |  | 18,127 |  |  | — |  |  | — |  |  | (235) |  |  | 18,127 |
CMOs: |  |  |  |  |  |  |  |  |  |  |
Residential | (1,007) |  |  | 53,068 |  |  | (314) |  |  | 7,116 |  |  | (1,321) |  |  | 60,184 |
Commercial | (135) |  |  | 14,806 |  |  | (198) |  |  | 5,132 |  |  | (333) |  |  | 19,938 |
Municipal bonds | (914) |  |  | 64,237 |  |  | (10) |  |  | 1,058 |  |  | (924) |  |  | 65,295 |
Corporate debt securities | (1) |  |  | 3,164 |  |  | — |  |  | — |  |  | (1) |  |  | 3,164 |
U.S. Treasury securities | (173) |  |  | 23,175 |  |  | — |  |  | — |  |  | (173) |  |  | 23,175 |
Total | $ | (2,503) |  |  | $ | 181,901 |  |  | $ | (822) |  |  | $ | 15,712 |  |  | $ | (3,325) |  |  | $ | 197,613 |
The Company has evaluated AFS securities that are in an unrealized loss position and has determined that the decline in value is temporary and is related to the change in market interest rates since purchase. The decline in value is not related to any issuer- or industry-specific credit event. The Company has not identified any expected credit losses on its debt securities as of June 30, 2022 or December 31, 2021. In addition, as of June 30, 2022 and December 31, 2021, the Company had not made a decision to sell any of its debt securities held, nor did the Company consider it more likely than not that it would be required to sell such securities before recovery of their amortized cost basis. The following tables present the fair value of investment securities AFS and HTM by contractual maturity along with the associated contractual yield:
| At June 30, 2022
| Within one year |  | After one year through five years |  | After five years through ten years |  | After ten years |  | Total
(dollars in thousands) | Fair Value |  | Weighted Average Yield |  | Fair Value |  | Weighted Average Yield |  | Fair Value |  | Weighted Average Yield |  | Fair Value |  | Weighted Average Yield |  | Fair Value |  | Weighted Average Yield
AFS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal bonds | $ | 4,122 |  |  | 3.55 | % |  | $ | 16,348 |  |  | 3.02 | % |  | $ | 73,618 |  |  | 3.46 | % |  | $ | 441,265 |  |  | 2.99 | % |  | $ | 535,353 |  |  | 3.05 | %
Corporate debt securities | — |  |  | — | % |  | 5,463 |  |  | 3.50 | % |  | 24,867 |  |  | 4.34 | % |  | — |  |  | — | % |  | 30,330 |  |  | 4.20 | %
U.S. Treasury securities | — |  |  | — | % |  | — |  |  | — | % |  | 20,930 |  |  | 1.16 | % |  | — |  |  | — | % |  | 20,930 |  |  | 1.16 | %
Total | $ | 4,122 |  |  | 3.55 | % |  | $ | 21,811 |  |  | 3.14 | % |  | $ | 119,415 |  |  | 3.22 | % |  | $ | 441,265 |  |  | 2.99 | % |  | $ | 586,613 |  |  | 3.04 | %
HTM |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal bonds | $ | 646 |  |  | 3.49 | % |  | $ | 2,443 |  |  | 2.06 | % |  | $ | — |  |  | — | % |  | $ | — |  |  | — | % |  | $ | 3,089 |  |  | 2.35 | %
| At December 31, 2021
| Within one year |  | After one year through five years |  | After five years through ten years |  | After ten years |  | Total
(dollars in thousands) | Fair Value |  | Weighted Average Yield |  | Fair Value |  | Weighted Average Yield |  | Fair Value |  | Weighted Average Yield |  | Fair Value |  | Weighted Average Yield |  | Fair Value |  | Weighted Average Yield
AFS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal bonds | $ | 4,933 |  |  | 3.79 | % |  | $ | 14,366 |  |  | 3.26 | % |  | $ | 68,025 |  |  | 3.60 | % |  | $ | 452,599 |  |  | 3.23 | % |  | $ | 539,923 |  |  | 3.28 | %
Corporate debt securities | — |  |  | — | % |  | 6,563 |  |  | 3.60 | % |  | 13,053 |  |  | 5.03 | % |  | — |  |  | — | % |  | 19,616 |  |  | 4.55 | %
U.S. Treasury securities | — |  |  | — | % |  | — |  |  | — | % |  | 23,175 |  |  | 1.27 | % |  | — |  |  | — | % |  | 23,175 |  |  | 1.27 | %
Total | $ | 4,933 |  |  | 3.79 | % |  | $ | 20,929 |  |  | 3.37 | % |  | $ | 104,253 |  |  | 3.23 | % |  | $ | 452,599 |  |  | 3.23 | % |  | $ | 582,714 |  |  | 3.24 | %
HTM |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal bonds | $ | 1,684 |  |  | 2.86 | % |  | $ | 2,621 |  |  | 2.12 | % |  | $ | — |  |  | — | % |  | $ | — |  |  | — | % |  | $ | 4,305 |  |  | 2.42 | %
The weighted-average yield is computed using the contractual coupon of each security weighted based on the fair value of each security and does not include adjustments to a tax equivalent basis. MBS and CMOs are excluded from the tables above because such securities are not due on a single maturity date. The weighted average yield of MBS and CMOs as of June 30, 2022 and December 31, 2021 was 2.30% and 1.82%, respectively. Sales of AFS investment securities were as follows:
| Quarter Ended June 30, |  | Six Months Ended June 30,
(in thousands) | 2022 |  | 2021 |  | 2022 |  | 2021
Proceeds | $ | — |  |  | $ | 28,187 |  |  | $ | 962 |  |  | $ | 28,187 |
Gross gains | — |  |  | 288 |  |  | 71 |  |  | 288 |
Gross losses | — |  |  | (226) |  |  | — |  |  | (226) |
The following table summarizes the carrying value of securities pledged as collateral to secure public deposits, borrowings and other purposes as permitted or required by law:
(in thousands) | At June 30, 2022 |  | At December 31, 2021
Washington, Oregon and California to secure public deposits | $ | 195,497 |  |  | $ | 206,153 |
Other securities pledged | 4,787 |  |  | 5,258 |
Total securities pledged as collateral | $ | 200,284 |  |  | $ | 211,411 |
The Company assesses the creditworthiness of the counterparties that hold the pledged collateral and has determined that these arrangements have little credit risk. Tax-exempt interest income on investment securities was $3.1 million and $2.5 million for the quarters ended June 30, 2022 and 2021, respectively, and $5.8 million and $5.0 million for the six months ended June 30, 2022 and 2021, respectively.

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsDebtAndEquitySecuritiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of marketable securities. This may consist of investments in certain debt and equity securities, short-term investments and other assets. + References No definition available. + Details
Name: | us-gaap_MarketableSecuritiesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration