Investment Securities

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

5. INVESTMENT SECURITIES

The amortized cost and estimated fair value of investment securities are summarized below. The fair value of the majority of securities are based on quoted prices for similar assets in active markets or quoted prices for identical assets in markets that are not active. Estimated fair values were obtained from an independent pricing service based upon market quotes.


	March 31, 2023
	Amortized Cost		Gross Unrealized Holding Gain		Gross Unrealized Holding Loss			Fair Value		Total Percent
	(Dollars in thousands)
Investment securities available-for-sale:
Mortgage-backed securities	$	3,109,387	$	41	$	(361,563	)	$	2,747,865		85.75	%
CMO/REMIC		526,922		—		(97,500	)		429,422		13.39	%
Municipal bonds		26,796		80		(718	)		26,158		0.82	%
Other securities		1,079		—		—			1,079		0.04	%
Total available-for-sale securities	$	3,664,184	$	121	$	(459,781	)	$	3,204,524		100.00	%
Investment securities held-to-maturity:
Government agency/GSE	$	543,318	$	—	$	(100,496	)	$	442,822		21.42	%
Mortgage-backed securities		697,766		—		(97,818	)		599,948		27.51	%
CMO/REMIC		822,599		—		(134,774	)		687,825		32.44	%
Municipal bonds		472,296		2,405		(36,727	)		437,974		18.63	%
Total held-to-maturity securities	$	2,535,979	$	2,405	$	(369,815	)	$	2,168,569		100.00	%


	December 31, 2022
	Amortized Cost		Gross Unrealized Holding Gain		Gross Unrealized Holding Loss			Fair Value		Total Percent
	(Dollars in thousands)
Investment securities available-for-sale:
Mortgage-backed securities	$	3,192,151	$	39	$	(403,049	)	$	2,789,141		85.68	%
CMO/REMIC		535,269		—		(95,966	)		439,303		13.50	%
Municipal bonds		26,797		67		(1,177	)		25,687		0.79	%
Other securities		1,080		—		—			1,080		0.03	%
Total available-for-sale securities	$	3,755,297	$	106	$	(500,192	)	$	3,255,211		100.00	%
Investment securities held-to-maturity:
Government agency/GSE	$	548,771	$	—	$	(114,343	)	$	434,428		21.48	%
Mortgage-backed securities		706,796		—		(105,867	)		600,929		27.67	%
CMO/REMIC		827,346		—		(131,730	)		695,616		32.39	%
Municipal bonds		471,388		913		(47,687	)		424,614		18.46	%
Total held-to-maturity securities	$	2,554,301	$	913	$	(399,627	)	$	2,155,587		100.00	%

The following table provides information about the amount of interest income earned on investment securities which is fully taxable and which is exempt from regular federal income tax.


	Three Months Ended
	March 31,
	2023		2022
	(Dollars in thousands)
Investment securities available-for-sale:
Taxable	$	19,428	$	12,649
Tax-advantaged		168		183
Total interest income from available-for-sale securities		19,596		12,832
Investment securities held-to-maturity:
Taxable		11,507		9,105
Tax-advantaged		2,449		1,558
Total interest income from held-to-maturity securities		13,956		10,663
Total interest income from investment securities	$	33,552	$	23,495

Approximately 91% of the total investment securities portfolio at March 31, 2023 represents securities issued by the U.S. government or U.S. government-sponsored enterprises, with the implied guarantee of payment of principal and interest. The remaining securities are predominately AA or better general-obligation municipal bonds. The allowance for credit losses for held-to-maturity investment securities under the CECL model was zero at March 31, 2023 and December 31, 2022.

The following table presents the Company’s available-for-sale and held-to-maturity investment securities, by investment category, in an unrealized loss position for which an allowance for credit losses has not been recorded as of March 31, 2023 and December 31, 2022.


	March 31, 2023
	Less Than 12 Months					12 Months or Longer					Total
	Fair Value		Gross Unrealized Holding Losses			Fair Value		Gross Unrealized Holding Losses			Fair Value		Gross Unrealized Holding Losses
	(Dollars in thousands)
Investment securities available-for-sale:
Mortgage-backed securities	$	753,978	$	(43,323	)	$	1,992,196	$	(318,240	)	$	2,746,174	$	(361,563	)
CMO/REMIC		6,062		(148	)		423,357		(97,352	)		429,419		(97,500	)
Municipal bonds		4,141		(51	)		14,660		(667	)		18,801		(718	)
Total available-for-sale securities	$	764,181	$	(43,522	)	$	2,430,213	$	(416,259	)	$	3,194,394	$	(459,781	)
Investment securities held-to-maturity:
Government agency/GSE	$	23,225	$	(579	)	$	419,597	$	(99,917	)	$	442,822	$	(100,496	)
Mortgage-backed securities		128,307		(2,858	)		471,641		(94,960	)		599,948		(97,818	)
CMO/REMIC		48,202		(2,033	)		639,623		(132,741	)		687,825		(134,774	)
Municipal bonds		98,653		(2,271	)		220,735		(34,456	)		319,388		(36,727	)
Total held-to-maturity securities	$	298,387	$	(7,741	)	$	1,751,596	$	(362,074	)	$	2,049,983	$	(369,815	)


	December 31, 2022
	Less Than 12 Months					12 Months or Longer					Total
	Fair Value		Gross Unrealized Holding Losses			Fair Value		Gross Unrealized Holding Losses			Fair Value		Gross Unrealized Holding Losses
	(Dollars in thousands)
Investment securities available-for-sale:
Mortgage-backed securities	$	1,658,331	$	(187,842	)	$	1,129,257	$	(215,207	)	$	2,787,588	$	(403,049	)
CMO/REMIC		54,005		(4,796	)		385,295		(91,170	)		439,300		(95,966	)
Municipal bonds		24,507		(1,177	)		-		-			24,507		(1,177	)
Total available-for-sale securities	$	1,736,843	$	(193,815	)	$	1,514,552	$	(306,377	)	$	3,251,395	$	(500,192	)

Investment securities held-to-maturity:
Government agency/GSE		179,348		(39,866	)		255,080		(74,477	)		434,428		(114,343	)
Mortgage-backed securities		188,480		(9,042	)		412,449		(96,825	)		600,929		(105,867	)
CMO/REMIC		376,540		(60,598	)		319,076		(71,132	)		695,616		(131,730	)
Municipal bonds		312,702		(35,656	)		53,350		(12,031	)		366,052		(47,687	)
Total held-to-maturity securities	$	1,057,070	$	(145,162	)	$	1,039,955	$	(254,465	)	$	2,097,025	$	(399,627	)

At March 31, 2023 and December 31, 2022, investment securities having a carrying value of approximately $4.0 billion and $2.90 billion, respectively, were pledged to secure public deposits, short and long-term borrowings, and for other purposes as required or permitted by law.

The amortized cost and fair value of debt securities at March 31, 2023, by contractual maturity, are shown in the table below. Although mortgage-backed and CMO/REMIC securities have weighted average remaining contractual maturities of approximately 23 years, expected maturities will differ from contractual maturities because borrowers may have the right to prepay such obligations without penalty. Mortgage-backed and CMO/REMIC securities are included in maturity categories based upon estimated average lives which incorporate estimated prepayment speeds.


	March 31, 2023
	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
			(Dollars in thousands)
Due in one year or less	$	1,495	$	1,500	$	11,608	$	11,147
Due after one year through five years		327,651		314,059		35,679		34,823
Due after five years through ten years		1,945,392		1,688,229		299,200		270,717
Due after ten years		1,389,646		1,200,736		2,189,492		1,851,882
Total investment securities	$	3,664,184	$	3,204,524	$	2,535,979	$	2,168,569

The investment in FHLB stock is periodically evaluated for impairment based on, among other things, the capital adequacy of the FHLB and its overall financial condition. No impairment losses have been recorded through March 31, 2023.