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Investment Securities | 6 Months Ended
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Jun. 30, 2025
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | Note 3 Investment Securities Investment securities include investment securities available for sale and marketable equity securities. The investment securities portfolio consisted of the following at the dates indicated (in thousands):
| June 30, 2025
| Amortized Cost |  | Gross Unrealized |  | Carrying Value
|  | Gains |  | Losses |
Investment securities available for sale: |  |  |  |  |  |  |
U.S. Treasury securities | $ | 149,875 |  |  | $ | 998 |  |  | $ | (8,304) |  |  | $ | 142,569 |
U.S. Government agency and sponsored enterprise residential MBS | 2,721,476 |  |  | 10,330 |  |  | (19,268) |  |  | 2,712,538 |
U.S. Government agency and sponsored enterprise commercial MBS | 548,402 |  |  | 450 |  |  | (48,527) |  |  | 500,325 |
Private label residential MBS and CMOs | 2,586,509 |  |  | 1,502 |  |  | (226,507) |  |  | 2,361,504 |
Private label commercial MBS | 2,119,814 |  |  | 2,902 |  |  | (27,677) |  |  | 2,095,039 |
Single family real estate-backed securities | 207,306 |  |  | 240 |  |  | (4,193) |  |  | 203,353 |
Collateralized loan obligations | 1,119,184 |  |  | 690 |  |  | (1,043) |  |  | 1,118,831 |
Non-mortgage asset-backed securities | 91,483 |  |  | 6 |  |  | (1,699) |  |  | 89,790 |
State and municipal obligations | 111,897 |  |  | 51 |  |  | (8,074) |  |  | 103,874 |
SBA securities | 66,443 |  |  | 27 |  |  | (1,901) |  |  | 64,569 |
| $ | 9,722,389 |  |  | $ | 17,196 |  |  | $ | (347,193) |  |  | $ | 9,392,392 |
Marketable equity securities |  |  |  |  |  |  | 8,679 |
|  |  |  |  |  |  | $ | 9,401,071 |
| December 31, 2024
| Amortized Cost |  | Gross Unrealized |  | Carrying Value
|  | Gains |  | Losses |
Investment securities available for sale: |  |  |  |  |  |  |
U.S. Treasury securities | $ | 214,796 |  |  | $ | 165 |  |  | $ | (12,009) |  |  | $ | 202,952 |
U.S. Government agency and sponsored enterprise residential MBS | 2,672,554 |  |  | 3,607 |  |  | (26,471) |  |  | 2,649,690 |
U.S. Government agency and sponsored enterprise commercial MBS | 557,489 |  |  | 156 |  |  | (61,892) |  |  | 495,753 |
Private label residential MBS and CMOs | 2,491,033 |  |  | 506 |  |  | (253,493) |  |  | 2,238,046 |
Private label commercial MBS | 1,822,881 |  |  | 1,836 |  |  | (40,688) |  |  | 1,784,029 |
Single family real estate-backed securities | 335,047 |  |  | 108 |  |  | (8,074) |  |  | 327,081 |
Collateralized loan obligations | 1,131,088 |  |  | 1,804 |  |  | (193) |  |  | 1,132,699 |
Non-mortgage asset-backed securities | 96,865 |  |  | 144 |  |  | (2,555) |  |  | 94,454 |
State and municipal obligations | 110,388 |  |  | 13 |  |  | (6,391) |  |  | 104,010 |
SBA securities | 74,900 |  |  | 37 |  |  | (2,235) |  |  | 72,702 |
| $ | 9,507,041 |  |  | $ | 8,376 |  |  | $ | (414,001) |  |  | $ | 9,101,416 |
Marketable equity securities |  |  |  |  |  |  | 28,828 |
|  |  |  |  |  |  | $ | 9,130,244 |
Accrued interest receivable on investments totaled $31 million and $36 million at June 30, 2025 and December 31, 2024, respectively, and is included in other assets in the accompanying consolidated balance sheets. At June 30, 2025, contractual maturities of investment securities available for sale, adjusted for anticipated prepayments when applicable, were as follows (in thousands):
| Amortized Cost |  | Fair Value
Due in one year or less | $ | 801,840 |  |  | $ | 781,538 |
Due after one year through five years | 5,300,383 |  |  | 5,211,984 |
Due after five years through ten years | 2,429,925 |  |  | 2,304,295 |
Due after ten years | 1,190,241 |  |  | 1,094,575 |
| $ | 9,722,389 |  |  | $ | 9,392,392 |
The carrying value of securities pledged as collateral for FHLB advances, public deposits, interest rate swaps and to secure borrowing capacity at the FRB totaled $8.1 billion and $7.9 billion at June 30, 2025 and December 31, 2024, respectively. The following table provides information about gains (losses) on investment securities for the periods indicated (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024 |  |
Gross realized gains on investment securities AFS | $ | 731 |  |  | $ | 398 |  |  | $ | 1,593 |  |  | $ | 425 |  |  |
Gross realized losses on investment securities AFS | (118) |  |  | (48) |  |  | (155) |  |  | (103) |  |  |
Net realized gain | 613 |  |  | 350 |  |  | 1,438 |  |  | 322 |  |  |
Net gain (loss) on marketable equity securities recognized in earnings | (266) |  |  | 71 |  |  | (147) |  |  | 874 |  |  |
Gain on investment securities, net | $ | 347 |  |  | $ | 421 |  |  | $ | 1,291 |  |  | $ | 1,196 |  |  |
The following tables present the aggregate fair value and the aggregate amount by which amortized cost exceeded fair value for investment securities available for sale in unrealized loss positions aggregated by investment category and length of time that individual securities had been in continuous unrealized loss positions at the dates indicated (in thousands):
| June 30, 2025
| Less than 12 Months |  | 12 Months or Greater |  | Total
| Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
U.S. Treasury securities | $ | 53,724 |  |  | $ | (1,442) |  |  | $ | 42,776 |  |  | $ | (6,862) |  |  | $ | 96,500 |  |  | $ | (8,304) |
U.S. Government agency and sponsored enterprise residential MBS | 334,189 |  |  | (2,077) |  |  | 711,375 |  |  | (17,191) |  |  | 1,045,564 |  |  | (19,268) |
U.S. Government agency and sponsored enterprise commercial MBS | 37,967 |  |  | (376) |  |  | 401,394 |  |  | (48,151) |  |  | 439,361 |  |  | (48,527) |
Private label residential MBS and CMOs | 201,978 |  |  | (1,503) |  |  | 1,967,841 |  |  | (225,004) |  |  | 2,169,819 |  |  | (226,507) |
Private label commercial MBS | 440,202 |  |  | (1,056) |  |  | 633,038 |  |  | (26,621) |  |  | 1,073,240 |  |  | (27,677) |
Single family real estate-backed securities | — |  |  | — |  |  | 156,151 |  |  | (4,193) |  |  | 156,151 |  |  | (4,193) |
Collateralized loan obligations | 573,567 |  |  | (1,043) |  |  | — |  |  | — |  |  | 573,567 |  |  | (1,043) |
Non-mortgage asset-backed securities | — |  |  | — |  |  | 68,714 |  |  | (1,699) |  |  | 68,714 |  |  | (1,699) |
State and municipal obligations | 15,813 |  |  | (72) |  |  | 51,218 |  |  | (8,002) |  |  | 67,031 |  |  | (8,074) |
SBA securities | — |  |  | — |  |  | 60,862 |  |  | (1,901) |  |  | 60,862 |  |  | (1,901) |
| $ | 1,657,440 |  |  | $ | (7,569) |  |  | $ | 4,093,369 |  |  | $ | (339,624) |  |  | $ | 5,750,809 |  |  | $ | (347,193) |
| December 31, 2024
| Less than 12 Months |  | 12 Months or Greater |  | Total
| Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
U.S. Treasury securities | $ | 126,710 |  |  | $ | (3,195) |  |  | $ | 40,791 |  |  | $ | (8,814) |  |  | $ | 167,501 |  |  | $ | (12,009) |
U.S. Government agency and sponsored enterprise residential MBS | 895,759 |  |  | (5,474) |  |  | 936,106 |  |  | (20,997) |  |  | 1,831,865 |  |  | (26,471) |
U.S. Government agency and sponsored enterprise commercial MBS | 55,431 |  |  | (1,545) |  |  | 394,735 |  |  | (60,347) |  |  | 450,166 |  |  | (61,892) |
Private label residential MBS and CMOs | 147,700 |  |  | (954) |  |  | 2,040,335 |  |  | (252,539) |  |  | 2,188,035 |  |  | (253,493) |
Private label commercial MBS | 44,000 |  |  | (302) |  |  | 1,199,150 |  |  | (40,386) |  |  | 1,243,150 |  |  | (40,688) |
Single family real estate-backed securities | — |  |  | — |  |  | 301,973 |  |  | (8,074) |  |  | 301,973 |  |  | (8,074) |
Collateralized loan obligations | 336,924 |  |  | (189) |  |  | 7,726 |  |  | (4) |  |  | 344,650 |  |  | (193) |
Non-mortgage asset-backed securities | — |  |  | — |  |  | 71,789 |  |  | (2,555) |  |  | 71,789 |  |  | (2,555) |
State and municipal obligations | 15,765 |  |  | (148) |  |  | 54,820 |  |  | (6,243) |  |  | 70,585 |  |  | (6,391) |
SBA securities | — |  |  | — |  |  | 67,880 |  |  | (2,235) |  |  | 67,880 |  |  | (2,235) |
| $ | 1,622,289 |  |  | $ | (11,807) |  |  | $ | 5,115,305 |  |  | $ | (402,194) |  |  | $ | 6,737,594 |  |  | $ | (414,001) |
The Company monitors its investment securities available for sale for credit loss impairment on an individual security basis. No securities were determined to be credit loss impaired during the three and six months ended June 30, 2025 and 2024. At June 30, 2025, the Company did not have an intent to sell securities that were in significant unrealized loss positions, and it was not more likely than not that the Company would be required to sell these securities before recovery of the amortized cost basis, which may be at maturity. In making this determination, the Company considered its current and projected liquidity position including its ability to pledge securities to generate liquidity, its investment policy as to permissible holdings and concentration limits, regulatory requirements and other relevant factors. At June 30, 2025, 393 securities available for sale were in unrealized loss positions. The amount of unrealized losses related to 101 of these securities was considered insignificant both individually and in the aggregate, totaling approximately $0.8 million and no further analysis with respect to these securities was considered necessary. The basis for concluding that AFS securities were not credit loss impaired and no ACL was considered necessary at June 30, 2025, is further discussed below. Unrealized losses were primarily attributable to a sustained higher interest rate environment and in some cases, wider spreads compared to levels at which securities were purchased. The investment securities AFS portfolio was in a net unrealized loss position of $330.0 million at June 30, 2025, compared to $405.6 million at December 31, 2024, improving by $75.6 million during the six months ended June 30, 2025. While the majority of securities in the portfolio were floating rate at June 30, 2025, fixed rate securities accounted for the substantial majority of unrealized losses. U.S. Government, U.S. Government Agency and Government Sponsored Enterprise Securities At June 30, 2025, six U.S. treasury, 67 U.S. Government agency and sponsored enterprise residential MBS, 20 U.S. Government agency and sponsored enterprise commercial MBS, and 17 SBA securities were in unrealized loss positions. The timely payment of principal and interest on these securities is explicitly or implicitly guaranteed by the U.S. Government. As such, there is an assumption of zero credit loss and the Company expects to recover the amortized cost basis of these securities. Private Label Securities None of the impaired private label securities had missed principal or interest payments or had been downgraded by a NRSRO at June 30, 2025. The Company performed an analysis comparing the present value of cash flows expected to be collected to the amortized cost basis of impaired securities. This analysis was based on a scenario that we believe to be generally more conservative than our reasonable and supportable economic forecast at June 30, 2025, and incorporated assumptions about voluntary prepayment rates, collateral defaults, delinquencies, severity and other relevant factors as described further below. Our analysis also considered the structural characteristics of each security and the level of credit enhancement provided by that structure. Private label residential MBS and CMOs At June 30, 2025, 115 private label residential MBS and CMOs were in unrealized loss positions. Our analysis of cash flows expected to be collected on these securities incorporated assumptions about collateral default rates, voluntary prepayment rates, loss severity, delinquencies and recovery lag. In developing those assumptions, we took into account collateral quality measures such as FICO, LTV, documentation, loan type, property type, agency availability criteria and performing status. We also regularly monitor sector data including home price appreciation, forbearance, delinquency, special servicing and prepay trends as well as other economic data that could be indicative of stress in the sector. Underlying delinquencies in this sector remain low. Our June 30, 2025 analysis projected weighted average collateral losses for impaired securities in this category of 2.5% compared to weighted average credit support of 18.3%. As of June 30, 2025, 94% of impaired securities in this category, based on carrying value, were externally rated AAA, 4% were rated AA, 1% were rated A and one security was not externally rated. Private label commercial MBS At June 30, 2025, 40 private label commercial MBS were in unrealized loss positions. Our analysis of cash flows expected to be collected on these securities incorporated assumptions about collateral default rates, voluntary prepayment rates, loss severity, delinquencies and recovery lag. In developing those assumptions, we took into account collateral quality and type, loan size, loan purpose and other qualitative factors. We also regularly monitor collateral concentrations, collateral watch lists, bankruptcy data, defeasance data, special servicing trends, delinquency and other economic data that could be indicative of stress in the sector. We consider collateral, deal, sector and tranche level performance as well as maturity and refinance risk. While we have observed some deterioration in collateral performance in this segment, particularly in the office sector, the high credit quality of these securities and adequacy of subordination to cover projected collateral losses supports the conclusion that there is no credit loss impairment. Our June 30, 2025 analysis projected weighted average collateral losses for impaired securities in this category of 7.1% compared to weighted average credit support of 47.0%. As of June 30, 2025, 83% of impaired securities in this category, based on carrying value, were externally rated AAA, 15% were rated AA and 2% were rated A. There was no single-asset, single-borrower exposure. Single family real estate-backed securities At June 30, 2025, seven single family rental real estate-backed securities were in unrealized loss positions. Our analysis of cash flows expected to be collected on these securities incorporated assumptions about collateral default rates, loss severity, delinquencies and recovery lag. We regularly monitor sector data including home price appreciation, forbearance, delinquency and prepay trends as well as other economic data that could be indicative of stress in the sector. We consider collateral, deal, sector and tranche level performance as well as maturity and refinance risk. Our June 30, 2025 analysis projected weighted average collateral losses for this category of 6.9% compared to weighted average credit support of 61.2%. As of June 30, 2025, 60% of impaired securities in this category, based on carrying value, were externally rated AAA and 40% were rated AA. Collateralized loan obligations At June 30, 2025, ten collateralized loan obligations were in unrealized loss positions. Unrealized losses totaled less than 1% of total amortized cost of this segment at June 30, 2025. Our analysis of cash flows expected to be collected on these securities incorporated assumptions about collateral default rates, loss severity, and delinquencies, calibrated to take into account idiosyncratic risks associated with the underlying collateral. In developing those assumptions, we took into account each sector’s performance pre-, during and post the 2008 financial crisis. We regularly engage with bond managers to monitor trends in underlying collateral including potential downgrades and subsequent cash flow diversions, liquidity, ratings migration, and any other relevant developments. The high credit quality of these securities and adequacy of subordination to cover projected collateral losses supports the conclusion that there is no credit loss impairment. Our June 30, 2025 analysis projected weighted average collateral losses for impaired securities in this category of 14.2% compared to weighted average credit support of 41.4%. As of June 30, 2025, 85% of the impaired securities in this category, based on carrying value, were externally rated AAA, and 15% were rated AA. Non-mortgage asset-backed securities At June 30, 2025, five non-mortgage asset-backed securities were in unrealized loss positions. These securities are backed by student loan collateral. Our analysis of cash flows expected to be collected on these securities incorporated assumptions about collateral default rates, loss severity, delinquencies, voluntary prepayment rates and recovery lag. In developing assumptions, we took into account collateral type, delineated by whether collateral consisted of loans to borrowers in school, refinancing, or a mixture. Our June 30, 2025 analysis projected weighted average collateral losses for impaired securities in this category of 3.7% compared to weighted average credit support of 31.6%. As of June 30, 2025, 26% of the impaired securities in this category, based on carrying value, were externally rated AAA, and 74% were rated AA. State and Municipal Obligations At June 30, 2025, five state and municipal obligations were in unrealized loss positions. Our analysis of potential credit loss impairment for these securities incorporates a comprehensive analysis and quantitative score of the underlying obligor's credit worthiness provided by a third-party vendor as well as other relevant qualitative considerations. As of June 30, 2025, 100% of the impaired securities in this category, based on carrying value, were externally rated AA

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