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Investment Securities
 9 Months Ended
Sep. 30, 2025
Investments, Debt and Equity Securities [Abstract]  
Investment Securities

4. INVESTMENT SECURITIES

 

The amortized cost and estimated fair value of investment securities are summarized below. The majority of securities held are available-for-sale ("AFS") securities with fair value 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, 2025

 

 

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

$

34,738

 

 

$

14

 

 

$

—

 

 

$

34,752

 

 

 

1.35

%

Mortgage-backed securities

 

2,186,896

 

 

 

1,810

 

 

 

(225,199

)

 

 

1,963,507

 

 

 

76.13

%

CMO/REMIC

 

668,135

 

 

 

1,170

 

 

 

(111,026

)

 

 

558,279

 

 

 

21.64

%

Municipal bonds

 

21,778

 

 

 

34

 

 

 

(609

)

 

 

21,203

 

 

 

0.82

%

Other securities

 

1,656

 

 

 

—

 

 

 

—

 

 

 

1,656

 

 

 

0.06

%

Unallocated portfolio layer fair value basis
  adjustments (1)

 

(10,838

)

 

 

10,838

 

 

 

—

 

 

 

—

 

 

 

0.00

%

Total available-for-sale securities

$

2,902,365

 

 

$

13,866

 

 

$

(336,834

)

 

$

2,579,397

 

 

 

100.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities held-to-maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government agency/GSE

$

502,460

 

 

$

—

 

 

$

(86,096

)

 

$

416,364

 

 

 

21.87

%

Mortgage-backed securities

 

570,690

 

 

 

2

 

 

 

(87,814

)

 

 

482,878

 

 

 

24.84

%

CMO/REMIC

 

760,193

 

 

 

—

 

 

 

(157,362

)

 

 

602,831

 

 

 

33.07

%

Municipal bonds

 

446,881

 

 

 

861

 

 

 

(31,602

)

 

 

416,140

 

 

 

19.45

%

Other securities (2)

 

17,685

 

 

 

—

 

 

 

—

 

 

 

17,685

 

 

 

0.77

%

Total held-to-maturity securities

$

2,297,909

 

 

$

863

 

 

$

(362,874

)

 

$

1,935,898

 

 

 

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 9 for additional information.

 

(2)
Represents Commercial Property Assessed Clean Energy ("C-PACE") bonds.

 

 

December 31, 2024

 

 

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

$

34,149

 

 

$

106

 

 

$

—

 

 

$

34,255

 

 

 

1.35

%

Mortgage-backed securities

 

2,460,573

 

 

 

337

 

 

 

(326,376

)

 

 

2,134,534

 

 

 

83.97

%

CMO/REMIC

 

471,921

 

 

 

—

 

 

 

(120,399

)

 

 

351,522

 

 

 

13.82

%

Municipal bonds

 

21,755

 

 

 

28

 

 

 

(1,406

)

 

 

20,377

 

 

 

0.80

%

Other securities

 

1,427

 

 

 

—

 

 

 

—

 

 

 

1,427

 

 

 

0.06

%

Unallocated portfolio layer fair value basis
  adjustments (1)

 

7,222

 

 

 

—

 

 

 

(7,222

)

 

 

—

 

 

 

0.00

%

Total available-for-sale securities

$

2,997,047

 

 

$

471

 

 

$

(455,403

)

 

$

2,542,115

 

 

 

100.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities held-to-maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government agency/GSE

$

514,572

 

 

$

—

 

 

$

(106,315

)

 

$

408,257

 

 

 

21.62

%

Mortgage-backed securities

 

614,383

 

 

 

—

 

 

 

(110,020

)

 

 

504,363

 

 

 

25.82

%

CMO/REMIC

 

784,059

 

 

 

—

 

 

 

(170,121

)

 

 

613,938

 

 

 

32.95

%

Municipal bonds

 

455,199

 

 

 

1,158

 

 

 

(40,025

)

 

 

416,332

 

 

 

19.13

%

Other securities (2)

 

11,455

 

 

 

—

 

 

 

—

 

 

 

11,455

 

 

 

0.48

%

Total held-to-maturity securities

$

2,379,668

 

 

$

1,158

 

 

$

(426,481

)

 

$

1,954,345

 

 

 

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 9 for additional information.
(2)
Represents Commercial Property Assessed Clean Energy ("C-PACE") bonds.

 

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

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

September 30,

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

(Dollars in thousands)

 

Investment securities available-for-sale:

 

 

 

 

 

 

 

 

 

 

 

Taxable

$

18,722

 

 

$

20,010

 

 

$

55,466

 

 

$

62,347

 

Tax-advantaged

 

145

 

 

 

168

 

 

 

434

 

 

 

502

 

Total interest income from available-for-sale securities

 

18,867

 

 

 

20,178

 

 

 

55,900

 

 

 

62,849

 

Investment securities held-to-maturity:

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

10,494

 

 

 

10,896

 

 

 

31,690

 

 

 

32,930

 

Tax-advantaged

 

2,318

 

 

 

2,388

 

 

 

7,029

 

 

 

7,201

 

Total interest income from held-to-maturity securities

 

12,812

 

 

 

13,284

 

 

 

38,719

 

 

 

40,131

 

Total interest income from investment securities

$

31,679

 

 

$

33,462

 

 

$

94,619

 

 

$

102,980

 

 

Approximately 90% of the total investment securities portfolio at September 30, 2025 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, 2025 and December 31, 2024.

 

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, 2025 and December 31, 2024.

 

 

September 30, 2025

 

 

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

$

192,418

 

 

$

(957

)

 

$

1,621,368

 

 

$

(224,242

)

 

$

1,813,786

 

 

$

(225,199

)

CMO/REMIC

 

30,549

 

 

 

—

 

 

 

346,830

 

 

 

(111,026

)

 

 

377,379

 

 

 

(111,026

)

Municipal bonds

 

—

 

 

 

—

 

 

 

18,318

 

 

 

(609

)

 

 

18,318

 

 

 

(609

)

Total available-for-sale securities

$

222,967

 

 

$

(957

)

 

$

1,986,516

 

 

$

(335,877

)

 

$

2,209,483

 

 

$

(336,834

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities held-to-maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government agency/GSE

$

—

 

 

$

—

 

 

$

416,364

 

 

$

(86,096

)

 

$

416,364

 

 

$

(86,096

)

Mortgage-backed securities

 

1,826

 

 

 

—

 

 

 

463,805

 

 

 

(87,814

)

 

 

465,631

 

 

 

(87,814

)

CMO/REMIC

 

—

 

 

 

—

 

 

 

602,831

 

 

 

(157,362

)

 

 

602,831

 

 

 

(157,362

)

Municipal bonds

 

61,397

 

 

 

(1,224

)

 

 

294,987

 

 

 

(30,378

)

 

 

356,384

 

 

 

(31,602

)

Total held-to-maturity securities

$

63,223

 

 

$

(1,224

)

 

$

1,777,987

 

 

$

(361,649

)

 

$

1,841,210

 

 

$

(362,874

)

 

 

December 31, 2024

 

 

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

$

204,428

 

 

$

(700

)

 

$

1,757,066

 

 

$

(325,677

)

 

$

1,961,494

 

 

$

(326,377

)

CMO/REMIC

 

1

 

 

 

—

 

 

 

351,521

 

 

 

(120,399

)

 

 

351,522

 

 

 

(120,399

)

Municipal bonds

 

3,215

 

 

 

(155

)

 

 

16,262

 

 

 

(1,250

)

 

 

19,477

 

 

 

(1,405

)

Total available-for-sale securities

$

207,644

 

 

$

(855

)

 

$

2,124,849

 

 

$

(447,326

)

 

$

2,332,493

 

 

$

(448,181

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities held-to-maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government agency/GSE

$

—

 

 

$

—

 

 

$

408,257

 

 

$

(106,315

)

 

$

408,257

 

 

$

(106,315

)

Mortgage-backed securities

 

2,072

 

 

 

(42

)

 

 

502,292

 

 

 

(109,978

)

 

 

504,364

 

 

 

(110,020

)

CMO/REMIC

 

—

 

 

 

—

 

 

 

613,937

 

 

 

(170,121

)

 

 

613,937

 

 

 

(170,121

)

Municipal bonds

 

63,668

 

 

 

(1,067

)

 

 

286,868

 

 

 

(38,958

)

 

 

350,536

 

 

 

(40,025

)

Total held-to-maturity securities

$

65,740

 

 

$

(1,109

)

 

$

1,811,354

 

 

$

(425,372

)

 

$

1,877,094

 

 

$

(426,481

)

 

At September 30, 2025, investment securities with carrying values of $2.70 billion were pledged to secure various types of deposits. In addition, investment securities with carrying values of $1.86 billion were pledged to secure $569 million for repurchase agreements, $1.24 billion for unused borrowing capacity and approximately $57 million for other purposes as required or permitted by law.

 

At December 31, 2024, investment securities with carrying values of $2.79 billion were pledged to secure various types of deposits. In addition, investment securities with carrying values of $1.63 billion were pledged to secure $372.5 million for repurchase agreements, $1.8 billion for outstanding borrowings, $796 million for unused borrowing capacity and approximately $51 million for other purposes as required or permitted by law.

 

The amortized cost and fair value of debt securities at September 30, 2025, by contractual maturity, are shown in the following table. Although mortgage-backed and CMO/REMIC securities have weighted average remaining contractual maturities of approximately 25 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.

 

 

September 30, 2025

 

 

Available-for-sale

 

 

Held-to-maturity

 

 

Amortized Cost

 

 

Fair Value

 

 

Amortized Cost

 

 

Fair Value

 

 

 

 

 

(Dollars in thousands)

 

 

 

 

Due in one year or less

$

39,649

 

 

$

38,038

 

 

$

17,459

 

 

$

17,186

 

Due after one year through five years

 

172,936

 

 

 

169,039

 

 

 

47,510

 

 

 

46,956

 

Due after five years through ten years

 

1,672,996

 

 

 

1,466,221

 

 

 

317,445

 

 

 

286,256

 

Due after ten years

 

1,016,784

 

 

 

906,099

 

 

 

1,915,495

 

 

 

1,585,500

 

Total investment securities

$

2,902,365

 

 

$

2,579,397

 

 

$

2,297,909

 

 

$

1,935,898

 

 

The Bank is a member of the FHLB and members are required to own a certain amount of FHLB stock based on the level of borrowings and other factors. 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, 2025.