XML 20 R11.htm IDEA: XBRL DOCUMENT
v3.23.3

INVESTMENT SECURITIES | 9 Months Ended
--- | ---
Sep. 30, 2023
Investments, Debt and Equity Securities [Abstract] |
INVESTMENT SECURITIES | INVESTMENT SECURITIES The following table presents the amortized cost and fair value of the investment securities portfolio as of the dates indicated:
($ in thousands) |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Allowance for Credit Losses |  | Fair Value
September 30, 2023 |  |  |  |  |  |  |  |  |  |
Securities held-to-maturity: |  |  |  |  |  |  |  |  |  |
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities |  | $ | 152,748 |  |  | $ | — |  |  | $ | (35,680) |  |  | $ | — |  |  | $ | 117,068 |
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations |  | 61,337 |  |  | — |  |  | (15,688) |  |  | — |  |  | 45,649 |
Municipal securities |  | 114,202 |  |  | — |  |  | (26,634) |  |  | — |  |  | 87,568 |
Total securities held-to-maturity |  | $ | 328,287 |  |  | $ | — |  |  | $ | (78,002) |  |  | $ | — |  |  | $ | 250,285 |
Securities available-for-sale: |  |  |  |  |  |  |  |  |  |
SBA loan pool securities |  | $ | 8,721 |  |  | $ | 5 |  |  | $ | (27) |  |  | $ | — |  |  | $ | 8,699 |
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities |  | 79,786 |  |  | — |  |  | (2,942) |  |  | — |  |  | 76,844 |
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations |  | 93,696 |  |  | — |  |  | (7,864) |  |  | — |  |  | 85,832 |
Non-agency residential mortgage-backed securities |  | 120,062 |  |  | — |  |  | (15,102) |  |  | — |  |  | 104,960 |
Collateralized loan obligations |  | 489,940 |  |  | — |  |  | (6,136) |  |  | — |  |  | 483,804 |
Corporate debt securities |  | 175,804 |  |  | — |  |  | (19,853) |  |  | (1,036) |  |  | 154,915 |
Total securities available-for-sale |  | $ | 968,009 |  |  | $ | 5 |  |  | $ | (51,924) |  |  | $ | (1,036) |  |  | $ | 915,054 |
December 31, 2022 |  |  |  |  |  |  |  |  |  |
Securities held-to-maturity: |  |  |  |  |  |  |  |  |  |
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities |  | $ | 153,033 |  |  | $ | — |  |  | $ | (29,807) |  |  | $ | — |  |  | $ | 123,226 |
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations |  | 61,404 |  |  | — |  |  | (11,946) |  |  | — |  |  | 49,458 |
Municipal securities |  | 114,204 |  |  | — |  |  | (24,428) |  |  | — |  |  | 89,776 |
Total securities held-to-maturity |  | $ | 328,641 |  |  | $ | — |  |  | $ | (66,181) |  |  | $ | — |  |  | $ | 262,460 |
Securities available-for-sale: |  |  |  |  |  |  |  |  |  |
SBA loan pool securities |  | $ | 11,241 |  |  | $ | — |  |  | $ | (54) |  |  | $ | — |  |  | $ | 11,187 |
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities |  | 40,431 |  |  | — |  |  | (225) |  |  | — |  |  | 40,206 |
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations |  | 99,075 |  |  | — |  |  | (5,884) |  |  | — |  |  | 93,191 |
Non-agency residential mortgage-backed securities |  | 90,832 |  |  | — |  |  | (10,340) |  |  | — |  |  | 80,492 |
Collateralized loan obligations |  | 492,203 |  |  | — |  |  | (15,600) |  |  | — |  |  | 476,603 |
Corporate debt securities |  | 175,781 |  |  | 32 |  |  | (9,195) |  |  | — |  |  | 166,618 |
Total securities available-for-sale |  | $ | 909,563 |  |  | $ | 32 |  |  | $ | (41,298) |  |  | $ | — |  |  | $ | 868,297 |
During the first quarter of 2022, certain longer-duration fixed-rate mortgage-backed securities and municipal securities with an amortized cost basis of $346.0 million were transferred from the available-for-sale (“AFS”) portfolio to the held-to-maturity (“HTM”) portfolio. At the time of the transfer, the securities had an unrealized gross loss of $16.6 million, which became part of the securities’ amortized cost basis. This amount, along with the unrealized loss included in accumulated other comprehensive income, is subsequently amortized over the remaining life of the security as an adjustment to its yield using the interest method. As a result, there is no impact on the consolidated statements of operations. At September 30, 2023, the gross unrealized loss included in accumulated other comprehensive income was $15.0 million. At September 30, 2023, our investment securities portfolio consisted of agency securities, municipal securities, mortgage-backed securities (“MBS”), collateralized loan obligations (“CLOs”), and corporate debt securities. The expected maturities of these types of securities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Accrued interest receivable on AFS and HTM securities totaled $11.8 million and $9.2 million at September 30, 2023 and December 31, 2022, and is included within other assets in the accompanying consolidated statements of financial condition. At September 30, 2023 and December 31, 2022, there were no holdings of any one issuer, other than U.S. government agency and sponsored enterprises, in an amount greater than 10 percent of our stockholders’ equity. Pledged Securities Investment securities with carrying values of $525.7 million and $356.5 million as of September 30, 2023 and December 31, 2022 were pledged to secure FHLB advances, FRB borrowings, public deposits and for other deposits as required or permitted by law. Securities Available-for-Sale The following table presents proceeds from sales and calls of AFS securities and the associated gross gains and losses realized through earnings upon the sales and calls of AFS securities for the periods indicated:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
($ in thousands) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Gross realized gains |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 209 |
Gross realized losses |  | — |  |  | — |  |  | — |  |  | (193) |
Net realized gains on sales and calls |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 16 |
Proceeds from sales and calls |  | $ | — |  |  | $ | — |  |  | $ | 20,000 |  |  | $ | 56,145 |
The following table summarizes the AFS investment securities with unrealized losses by security type and length of time in a continuous, unrealized loss position as of the dates indicated:
|  | Less Than 12 Months |  | 12 Months or Longer |  | Total
($ in thousands) |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses
September 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |
Securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |
SBA loan pool securities |  | $ | — |  |  | $ | — |  |  | $ | 7,060 |  |  | $ | (27) |  |  | $ | 7,060 |  |  | $ | (27) |
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities |  | 76,844 |  |  | (2,942) |  |  | — |  |  | — |  |  | 76,844 |  |  | (2,942) |
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations |  | 50,151 |  |  | (1,131) |  |  | 35,690 |  |  | (6,733) |  |  | 85,841 |  |  | (7,864) |
Non-agency residential mortgage-backed securities |  | 67,769 |  |  | (3,112) |  |  | 37,191 |  |  | (11,990) |  |  | 104,960 |  |  | (15,102) |
Collateralized loan obligations |  | 24,859 |  |  | (141) |  |  | 441,944 |  |  | (5,995) |  |  | 466,803 |  |  | (6,136) |
Corporate debt securities |  | 14,774 |  |  | (1,430) |  |  | 140,140 |  |  | (18,423) |  |  | 154,914 |  |  | (19,853) |
Total securities available-for-sale |  | $ | 234,397 |  |  | $ | (8,756) |  |  | $ | 662,025 |  |  | $ | (43,168) |  |  | $ | 896,422 |  |  | $ | (51,924) |
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |
Securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |
SBA loan pool securities |  | $ | 2,260 |  |  | $ | (3) |  |  | $ | 8,927 |  |  | $ | (51) |  |  | $ | 11,187 |  |  | $ | (54) |
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities |  | 40,206 |  |  | (225) |  |  | — |  |  | — |  |  | 40,206 |  |  | (225) |
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations |  | 76,441 |  |  | (2,533) |  |  | 16,750 |  |  | (3,351) |  |  | 93,191 |  |  | (5,884) |
Non-agency residential mortgage-backed securities |  | 80,492 |  |  | (10,340) |  |  | — |  |  | — |  |  | 80,492 |  |  | (10,340) |
Collateralized loan obligations |  | 235,936 |  |  | (7,492) |  |  | 240,667 |  |  | (8,108) |  |  | 476,603 |  |  | (15,600) |
Corporate debt securities |  | 159,492 |  |  | (8,374) |  |  | 4,180 |  |  | (821) |  |  | 163,672 |  |  | (9,195) |
Total securities available-for-sale |  | $ | 594,827 |  |  | $ | (28,967) |  |  | $ | 270,524 |  |  | $ | (12,331) |  |  | $ | 865,351 |  |  | $ | (41,298) |
At September 30, 2023, our AFS securities portfolio consisted of 86 securities, of which 84 securities were in an unrealized loss position. At December 31, 2022, our AFS securities portfolio consisted of 77 securities, of which 76 securities were in an unrealized loss position. We monitor our securities portfolio for identification of potential credit impairment. During the three and nine months ended September 30, 2023, we recognized zero and $1.0 million in provision for credit losses on three corporate debt securities of other financial institutions that were downgraded to below investment grade by external credit agencies. During the three and nine months ended September 30, 2022, there was no provision for credit losses related to AFS or HTM securities. Except for the corporate debt securities noted above, we believe there was no credit impairment and the decline in fair value of our securities since acquisition was attributable to a combination of changes in interest rates and general volatility in market conditions. As of September 30, 2023, we did not have the intent to sell securities in an unrealized loss position and further believe, it is more likely than not, that we will not be required to sell these securities before their anticipated recovery. As of September 30, 2023, 81 of our 84 AFS securities in an unrealized loss position received an investment grade credit rating, and all of our HTM securities in an unrealized loss position received an investment grade credit rating. The following table presents the amortized cost and fair value of the investment securities portfolio as of September 30, 2023, based on the earlier of contractual maturity dates or next repricing date:
|  | Held-to-Maturity |  | Available-for-Sale
($ in thousands) |  | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Earlier of maturity or next repricing date: |  |  |  |  |  |  |  |
Within one year |  | $ | — |  |  | $ | — |  |  | $ | 503,799 |  |  | $ | 497,569 |
One to five years |  | — |  |  | — |  |  | 171,294 |  |  | 150,580 |
Five to ten years |  | 37,305 |  |  | 30,544 |  |  | 41,786 |  |  | 34,950 |
Greater than ten years |  | 290,982 |  |  | 219,741 |  |  | 251,130 |  |  | 231,955 |
Total |  | $ | 328,287 |  |  | $ | 250,285 |  |  | $ | 968,009 |  |  | $ | 915,054 |
Contractual maturities may not reflect the actual maturities of the investments. The average lives for MBS and collateralized mortgage obligations (“CMOs”) will likely be shorter than their contractual maturities due to prepayments and amortization. The following table presents the fair value and weighted average yields using amortized cost of the AFS securities portfolio as of September 30, 2023, based on the earlier of contractual maturity dates or next repricing dates:
|  | One year or less |  | More than One Year through Five Years |  | More than Five Years through Ten Years |  | More than Ten Years |  | Total
($ 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
Securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
SBA loan pool securities |  | $ | 8,699 |  |  | 5.79 | % |  | $ | — |  |  | — | % |  | $ | — |  |  | — | % |  | $ | — |  |  | — | % |  | $ | 8,699 |  |  | 5.79 | %
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities |  | — |  |  | — | % |  | — |  |  | — | % |  | — |  |  | — | % |  | 76,844 |  |  | 5.52 | % |  | 76,844 |  |  | 5.52 | %
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations |  | 5,066 |  |  | 5.98 | % |  | 7,528 |  |  | 3.72 | % |  | 23,087 |  |  | 3.25 | % |  | 50,151 |  |  | 5.21 | % |  | 85,832 |  |  | 4.52 | %
Non-agency residential mortgage-backed securities |  | — |  |  | — | % |  | — |  |  | — | % |  | — |  |  | — | % |  | 104,960 |  |  | 4.02 | % |  | 104,960 |  |  | 4.02 | %
Collateralized loan obligations |  | 483,804 |  |  | 7.20 | % |  | — |  |  | — | % |  | — |  |  | — | % |  | — |  |  | — | % |  | 483,804 |  |  | 7.20 | %
Corporate debt securities |  | — |  |  | — | % |  | 143,052 |  |  | 4.82 | % |  | 11,863 |  |  | 5.73 | % |  | — |  |  | — | % |  | 154,915 |  |  | 4.89 | %
Total securities available-for-sale |  | $ | 497,569 |  |  | 7.16 | % |  | $ | 150,580 |  |  | 4.76 | % |  | $ | 34,950 |  |  | 4.04 | % |  | $ | 231,955 |  |  | 4.74 | % |  | $ | 915,054 |  |  | 5.97 | %
The following table presents the amortized cost and weighted average yields using amortized cost of the HTM securities portfolio as of September 30, 2023, based on the earlier of contractual maturity dates or next repricing dates:
|  | One year or less |  | More than One Year through Five Years |  | More than Five Years through Ten Years |  | More than Ten Years |  | Total
($ in thousands) |  | Amortized Cost |  | Weighted-Average Yield |  | Amortized Cost |  | Weighted-Average Yield |  | Amortized Cost |  | Weighted-Average Yield |  | Amortized Cost |  | Weighted-Average Yield |  | Amortized Cost |  | Weighted-Average Yield
Securities held-to-maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities |  | $ | — |  |  | — | % |  | $ | — |  |  | — | % |  | $ | 9,334 |  |  | 2.52 | % |  | $ | 143,414 |  |  | 2.70 | % |  | $ | 152,748 |  |  | 2.69 | %
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations |  | — |  |  | — | % |  | — |  |  | — | % |  | — |  |  | — | % |  | 61,337 |  |  | 2.64 | % |  | 61,337 |  |  | 2.64 | %
Municipal securities |  | — |  |  | — | % |  | — |  |  | — | % |  | 27,971 |  |  | 2.32 | % |  | 86,231 |  |  | 2.72 | % |  | 114,202 |  |  | 2.62 | %
Total securities held-to-maturity |  | $ | — |  |  | — | % |  | $ | — |  |  | — | % |  | $ | 37,305 |  |  | 2.37 | % |  | $ | 290,982 |  |  | 2.69 | % |  | $ | 328,287 |  |  | 2.65 | %

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 The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 320 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//320/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 320 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481800/320-10-50-10 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6B -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-6B Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6B -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-6B Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Name Regulation S-K (SK) -Number 229 -Section 1403 -Paragraph (b) -Publisher SEC Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 946 -SubTopic 320 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//946-320/tableOfContent Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 940 -SubTopic 320 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//940-320/tableOfContent Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 942 -SubTopic 320 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//942-320/tableOfContent + Details
Name: | us-gaap_InvestmentsInDebtAndMarketableEquitySecuritiesAndCertainTradingAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration