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Investment Securities | 9 Months Ended
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Sep. 30, 2023
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | 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.
| September 30, 2023 |
| Amortized Cost |  |  | Gross Unrealized Holding Gain |  |  | Gross Unrealized Holding Loss |  |  | Fair Value |  |  | Total Percent |
| (Dollars in thousands) |
Investment securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government agency/GSE | $ | 34,126 |  |  | $ | — |  |  | $ | (17 | ) |  | $ | 34,109 |  |  |  | 1.19 | %
Mortgage-backed securities |  | 2,925,382 |  |  |  | 1 |  |  |  | (488,759 | ) |  |  | 2,436,624 |  |  |  | 84.81 | %
CMO/REMIC |  | 514,161 |  |  |  | — |  |  |  | (136,663 | ) |  |  | 377,498 |  |  |  | 13.13 | %
Municipal bonds |  | 26,799 |  |  |  | 23 |  |  |  | (3,009 | ) |  |  | 23,813 |  |  |  | 0.83 | %
Other securities |  | 1,119 |  |  |  | — |  |  |  | — |  |  |  | 1,119 |  |  |  | 0.04 | %
Unallocated portfolio layer fair value basis adjustments (1) |  | 24,868 |  |  |  | — |  |  |  | (24,868 | ) |  |  | — |  |  |  | 0.00 | %
Total available-for-sale securities | $ | 3,526,455 |  |  | $ | 24 |  |  | $ | (653,316 | ) |  | $ | 2,873,163 |  |  |  | 100.00 | %
Investment securities held-to-maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government agency/GSE | $ | 534,814 |  |  | $ | — |  |  | $ | (123,981 | ) |  | $ | 410,833 |  |  |  | 21.48 | %
Mortgage-backed securities |  | 673,413 |  |  |  | — |  |  |  | (134,290 | ) |  |  | 539,123 |  |  |  | 27.05 | %
CMO/REMIC |  | 812,006 |  |  |  | — |  |  |  | (194,237 | ) |  |  | 617,769 |  |  |  | 32.62 | %
Municipal bonds |  | 469,208 |  |  |  | 4 |  |  |  | (67,619 | ) |  |  | 401,593 |  |  |  | 18.85 | %
Total held-to-maturity securities | $ | 2,489,441 |  |  | $ | 4 |  |  | $ | (520,127 | ) |  | $ | 1,969,318 |  |  |  | 100.00 | %
(1) Represents the amount of portfolio layer method basis adjustments related to AFS MBS securities hedged in a closed portfolio. Under U.S. GAAP, portfolio layer method basis adjustments are not allocated to individual securities, however the amounts impact the unrealized gains or losses for the individual securities being hedged. Refer to Note 3 and Note 10 for additional information.
| 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 federal income tax.
| Three Months Ended |  |  | Nine Months Ended |
| September 30, |  |  | September 30, |
| 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
| (Dollars in thousands) |
Investment securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |
Taxable | $ | 22,272 |  |  | $ | 18,371 |  |  | $ | 60,887 |  |  | $ | 47,883 |
Tax-advantaged |  | 169 |  |  |  | 172 |  |  |  | 506 |  |  |  | 534 |
Total interest income from available-for-sale securities |  | 22,441 |  |  |  | 18,543 |  |  |  | 61,393 |  |  |  | 48,417 |
Investment securities held-to-maturity: |  |  |  |  |  |  |  |  |  |  |
Taxable |  | 11,139 |  |  |  | 10,845 |  |  |  | 33,939 |  |  |  | 29,927 |
Tax-advantaged |  | 2,437 |  |  |  | 1,989 |  |  |  | 7,333 |  |  |  | 5,284 |
Total interest income from held-to-maturity securities |  | 13,576 |  |  |  | 12,834 |  |  |  | 41,272 |  |  |  | 35,211 |
Total interest income from investment securities | $ | 36,017 |  |  | $ | 31,377 |  |  | $ | 102,665 |  |  | $ | 83,628 |
Approximately 91% of the total investment securities portfolio at September 30, 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 September 30, 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 September 30, 2023 and December 31, 2022.
| September 30, 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: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government agency/GSE | $ | 34,109 |  |  | $ | (17 | ) |  | $ | — |  |  | $ | — |  |  | $ | 34,109 |  |  | $ | (17 | )
Mortgage-backed securities |  | 825 |  |  |  | (16 | ) |  |  | 2,435,125 |  |  |  | (488,743 | ) |  |  | 2,435,950 |  |  |  | (488,759 | )
CMO/REMIC |  | 3 |  |  |  | — |  |  |  | 377,495 |  |  |  | (136,663 | ) |  |  | 377,498 |  |  |  | (136,663 | )
Municipal bonds |  | 5,699 |  |  |  | (451 | ) |  |  | 16,948 |  |  |  | (2,558 | ) |  |  | 22,647 |  |  |  | (3,009 | )
Total available-for-sale securities | $ | 40,636 |  |  | $ | (484 | ) |  | $ | 2,829,568 |  |  | $ | (627,964 | ) |  | $ | 2,870,204 |  |  | $ | (628,448 | )
Investment securities held-to-maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government agency/GSE | $ | — |  |  | $ | — |  |  | $ | 410,833 |  |  | $ | (123,981 | ) |  | $ | 410,833 |  |  | $ | (123,981 | )
Mortgage-backed securities |  | — |  |  |  | — |  |  |  | 539,123 |  |  |  | (134,290 | ) |  |  | 539,123 |  |  |  | (134,290 | )
CMO/REMIC |  | — |  |  |  | — |  |  |  | 617,769 |  |  |  | (194,237 | ) |  |  | 617,769 |  |  |  | (194,237 | )
Municipal bonds |  | 109,966 |  |  |  | (7,127 | ) |  |  | 288,267 |  |  |  | (60,492 | ) |  |  | 398,233 |  |  |  | (67,619 | )
Total held-to-maturity securities | $ | 109,966 |  |  | $ | (7,127 | ) |  | $ | 1,855,992 |  |  | $ | (513,000 | ) |  | $ | 1,965,958 |  |  | $ | (520,127 | )
| 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 September 30, 2023, investment securities with carrying values of $2.16 billion were pledged to secure various types of deposits, including $1.34 billion of public funds. In addition, investment securities with carrying values of $2.94 billion were pledged to secure $433.5 million for repurchase agreements, $870 million for outstanding borrowings, $1.58 billion for unused borrowing capacity and approximately $52 million for other purposes as required or permitted by law. At December 31, 2022, investment securities with carrying values of $1.56 billion were pledged to secure various types of deposits, including $1.13 billion of public funds. In addition, investment securities, with carrying values of $3.15 billion were pledged to secure $652.0 million for repurchase agreements, $550 million for outstanding borrowings, $105 million for unused borrowing capacity and approximately $27 million for other purposes as required or permitted by law. The amortized cost and fair value of debt securities at September 30, 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 yea rs, 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.
| September 30, 2023 |
| Available-for-sale |  |  | Held-to-maturity |
| Amortized Cost |  |  | Fair Value |  |  | Amortized Cost |  |  | Fair Value |
|  |  |  | (Dollars in thousands) |  |  |  |
Due in one year or less | $ | 35,816 |  |  | $ | 35,794 |  |  | $ | 12,414 |  |  | $ | 11,874 |
Due after one year through five years |  | 321,428 |  |  |  | 278,310 |  |  |  | 34,306 |  |  |  | 32,206 |
Due after five years through ten years |  | 2,403,432 |  |  |  | 1,964,310 |  |  |  | 323,267 |  |  |  | 273,094 |
Due after ten years |  | 765,779 |  |  |  | 594,749 |  |  |  | 2,119,454 |  |  |  | 1,652,144 |
Total investment securities | $ | 3,526,455 |  |  | $ | 2,873,163 |  |  | $ | 2,489,441 |  |  | $ | 1,969,318 |
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 September 30, 2023.

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