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Investment Securities

9 Months Ended

Sep. 30, 2024

Investments, Debt and Equity Securities [Abstract]

Investment Securities

INVESTMENT SECURITIES     

Securities Available-for-Sale

The following table presents amortized cost, gross unrealized gains and losses, and fair values of securities available-for-sale as of the dates indicated:

			September 30, 2024
									Allowance												Gross						Gross
			Amortized						for Credit						Net Carrying						Unrealized						Unrealized						Fair
Security Type			Cost						Losses						Amount						Gains						Losses						Value
			(In thousands)
Agency residential MBS			$	1,071,154					$	—					$	1,071,154					$	—					$	(148,706)					$	922,448
Agency commercial MBS			34,193						—						34,193						—						(661)						33,532
Agency residential CMOs			432,183						—						432,183						1,910						(15,853)						418,240
Municipal securities			602						—						602						—						(5)						597
Corporate debt securities			300,996						(199)						300,797						1,753						(35,920)						266,630
Private label residential CMOs			367,168						—						367,168						823						(28,266)						339,725
Collateralized loan obligations			284,743						—						284,743						365						(135)						284,973
Private label commercial MBS			14,415						—						14,415						—						(793)						13,622
Asset-backed securities			16,287						—						16,287						—						(83)						16,204
SBA securities			4,565						—						4,565						—						(252)						4,313
Total (1)			$	2,526,306					$	(199)					$	2,526,107					$	4,851					$	(230,674)					$	2,300,284

_________________________

(1)    Excludes accrued interest receivable of $12.7 million at September 30, 2024 which is recorded in "Other assets" on the condensed consolidated balance sheets.

			December 31, 2023
									Allowance												Gross						Gross
			Amortized						for Credit						Net Carrying						Unrealized						Unrealized						Fair
Security Type			Cost						Losses						Amount						Gains						Losses						Value
			(In thousands)
Agency residential MBS			$	1,388,801					$	—					$	1,388,801					$	—					$	(201,192)					$	1,187,609
U.S. Treasury securities			4,965						—						4,965						3						—						4,968
Agency commercial MBS			268,639						—						268,639						—						(15,333)						253,306
Agency residential CMOs			320,984						—						320,984						—						(36,650)						284,334
Municipal securities			29,192						—						29,192						—						(1,109)						28,083
Corporate debt securities			327,426						(199)						327,227						259						(60,254)						267,232
Private label residential CMOs			193,071						—						193,071						—						(34,659)						158,412
Collateralized loan obligations			109,168						—						109,168						—						(752)						108,416
Private label commercial MBS			22,126						—						22,126						—						(1,313)						20,813
Asset-backed securities			20,241						—						20,241						—						(289)						19,952
SBA securities			14,642						—						14,642						—						(903)						13,739
Total (1)			$	2,699,255					$	(199)					$	2,699,056					$	262					$	(352,454)					$	2,346,864

_________________________

(1)    Excludes accrued interest receivable of $10.0 million at December 31, 2023 which is recorded in "Other assets" on the condensed consolidated balance sheets.

As of September 30, 2024, the Company had recorded an allowance for credit losses on securities available-for-sale of $199,000 on one corporate debt security of other financial institutions that were downgraded to below investment grade by external credit agencies. Except for the corporate debt security noted, we believe there was no credit impairment and the decline in fair value of our securities since acquisition was primarily attributable to changes in interest rates and credit spreads. We do not currently intend to sell any of the securities in an unrealized loss position and it is not more likely than not the Company will be required to sell these securities before their anticipated recovery and the Company has therefore recorded the unrealized losses in accumulated other comprehensive income/(loss) ("AOCI").

As of September 30, 2024, securities available-for-sale with a fair value of $4.3 million were pledged as collateral solely for public deposits.

Realized Gains and Losses on Securities Available-for-Sale

The following table presents the amortized cost of securities sold with related gross realized gains, gross realized losses, and net realized (losses) gains for the periods indicated:

			Three Months Ended												Nine Months Ended
			September 30,												September 30,
			2024						2023						2024						2023
			(In thousands)
Amortized cost of securities sold			$	741,834					$	—					$	741,834					$	—
Gross realized gains			$	—					$	—					$	—					$	—
Gross realized losses			(59,946)						—						(59,946)						—
Net realized (losses) gains			$	(59,946)					$	—					$	(59,946)					$	—

Unrealized Losses on Securities Available-for-Sale

The following tables present the gross unrealized losses and fair values of securities available-for-sale that were in unrealized loss positions as of the dates indicated:

			September 30, 2024
			Less Than 12 Months												12 Months or More												Total
									Gross												Gross												Gross
			Fair						Unrealized						Fair						Unrealized						Fair						Unrealized
Security Type			Value						Losses						Value						Losses						Value						Losses
			(In thousands)
Agency residential MBS			$	—					$	—					$	922,448					$	(148,706)					$	922,448					$	(148,706)
Agency commercial MBS (1)			21,289						—						12,243						(661)						33,532						(661)
Agency residential CMOs			—						—						109,796						(15,853)						109,796						(15,853)
Municipal securities			—						—						597						(5)						597						(5)
Corporate debt securities			—						—						247,200						(35,920)						247,200						(35,920)
Private label residential CMOs			—						—						138,448						(28,266)						138,448						(28,266)
Collateralized loan obligations			73,503						(135)						—						—						73,503						(135)
Private label commercial MBS			—						—						13,622						(793)						13,622						(793)
Asset-backed securities			16,204						(83)						—						—						16,204						(83)
SBA securities			—						—						4,313						(252)						4,313						(252)
Total			$	110,996					$	(218)					$	1,448,667					$	(230,456)					$	1,559,663					$	(230,674)

_________________________

(1)    Gross unrealized loss is less than $500 in the "Less than 12 months" category.

			December 31, 2023
			Less Than 12 Months												12 Months or More												Total
									Gross												Gross												Gross
			Fair						Unrealized						Fair						Unrealized						Fair						Unrealized
Security Type			Value						Losses						Value						Losses						Value						Losses
			(In thousands)
Agency residential MBS			$	—					$	—					$	1,187,609					$	(201,192)					$	1,187,609					$	(201,192)
Agency commercial MBS			—						—						253,306						(15,333)						253,306						(15,333)
Agency residential CMOs			—						—						284,334						(36,650)						284,334						(36,650)
Municipal securities			—						—						28,083						(1,109)						28,083						(1,109)
Corporate debt securities			—						—						265,431						(60,254)						265,431						(60,254)
Private label residential CMOs			—						—						158,412						(34,659)						158,412						(34,659)
Collateralized loan obligations			—						—						66,886						(752)						66,886						(752)
Private label commercial MBS			—						—						20,813						(1,313)						20,813						(1,313)
Asset-backed securities			—						—						19,952						(289)						19,952						(289)
SBA securities			—						—						13,739						(903)						13,739						(903)
Total			$	—					$	—					$	2,298,565					$	(352,454)					$	2,298,565					$	(352,454)

The securities that were in an unrealized loss position at September 30, 2024, were considered impaired and required further review to determine if the unrealized losses were credit-related. We concluded the unrealized losses were a result of the level of market interest rates relative to the types of securities and pricing changes caused by shifting supply and demand dynamics and not a result of downgraded credit ratings or other indicators of deterioration of the underlying issuers' ability to repay. We also considered the seniority of the tranches and U.S. government agency guarantees, if any, to assess whether an unrealized loss was credit-related. Accordingly, we determined the unrealized losses were not credit-related and recognized the unrealized losses in "Accumulated other comprehensive loss, net" of "Stockholders' equity" on the condensed consolidated balance sheets.

Contractual Maturities of Securities Available-for-Sale

The following tables present the contractual maturities of our securities available-for-sale portfolio based on amortized cost and fair value as of the date indicated:

			September 30, 2024
									Due After						Due After
			Due						One Year						Five Years						Due
			Within						Through						Through						After
Security Type			One Year						Five Years						Ten Years						Ten Years						Total
			(In thousands)
Amortized Cost:
Agency residential MBS			$	—					$	—					$	—					$	1,071,154					$	1,071,154
Agency commercial MBS			610						21,290						—						12,293						34,193
Agency residential CMOs			—						—						—						432,183						432,183
Municipal securities			—						602						—						—						602
Corporate debt securities			—						5,000						295,996						—						300,996
Private label residential CMOs			—						—						—						367,168						367,168
Collateralized loan obligations			—						—						125,705						159,038						284,743
Private label commercial MBS			—						—						1,083						13,332						14,415
Asset-backed securities			—						—						—						16,287						16,287
SBA securities			—						—						4,565						—						4,565
Total			$	610					$	26,892					$	427,349					$	2,071,455					$	2,526,306

			September 30, 2024
									Due After						Due After
			Due						One Year						Five Years						Due
			Within						Through						Through						After
Security Type			One Year						Five Years						Ten Years						Ten Years						Total
			(In thousands)
Fair Value:
Agency residential MBS			$	—					$	—					$	—					$	922,448					$	922,448
Agency commercial MBS			606						21,289						—						11,637						33,532
Agency residential CMOs			—						—						—						418,240						418,240
Municipal securities			—						597						—						—						597
Corporate debt securities			—						4,866						261,764						—						266,630
Private label residential CMOs			—						—						—						339,725						339,725
Collateralized loan obligations			—						—						125,884						159,089						284,973
Private label commercial MBS			—						—						1,062						12,560						13,622
Asset-backed securities			—						—						—						16,204						16,204
SBA securities			—						—						4,313						—						4,313
Total			$	606					$	26,752					$	393,023					$	1,879,903					$	2,300,284

CMBS, CMOs, and MBS have contractual maturity dates, but require periodic payments based upon scheduled amortization terms. Actual principal collections on these securities usually occur more rapidly than the scheduled amortization terms because of prepayments made by obligors of the underlying loan collateral.

Securities Held-to-Maturity

Effective June 1, 2022, the Company transferred securities with a fair value of $2.3 billion from available-for-sale to held-to-maturity. At the time of transfer, $218.3 million of unrealized losses, net of tax, was retained in "Accumulated other comprehensive loss, net" on the condensed consolidated balance sheets. The amount remaining in "Accumulated other comprehensive loss, net" at September 30, 2024 was $163.9 million. The following table presents amortized cost, allowance for credit losses, gross unrealized gains and losses, and fair values of securities held-to-maturity as of the date indicated:

			September 30, 2024
									Allowance
									for						Net						Gross						Gross
			Amortized						Credit						Carrying						Unrealized						Unrealized						Fair
Security Type			Cost						Losses						Amount						Gains						Losses						Value
			(In thousands)
Municipal securities			$	1,250,254					$	(140)					$	1,250,114					$	2,670					$	(16,849)					$	1,235,935
Agency commercial MBS			438,781						—						438,781						—						(18,745)						420,036
Private label commercial MBS			354,098						—						354,098						—						(14,694)						339,404
U.S. Treasury securities			189,239						—						189,239						—						(8,812)						180,427
Corporate debt securities			70,391						(1,360)						69,031						—						(15,351)						53,680
Total (1)			$	2,302,763					$	(1,500)					$	2,301,263					$	2,670					$	(74,451)					$	2,229,482

__________________________

(1)    Excludes accrued interest receivable of $11.3 million at September 30, 2024 which is recorded in "Other assets" on the condensed consolidated balance sheets.

			December 31, 2023
									Allowance
									for						Net						Gross						Gross
			Amortized						Credit						Carrying						Unrealized						Unrealized						Fair
Security Type			Cost						Losses						Amount						Gains						Losses						Value
			(In thousands)
Municipal securities			$	1,247,310					$	(140)					$	1,247,170					$	1,760					$	(28,170)					$	1,220,760
Agency commercial MBS			433,827						—						433,827						—						(30,665)						403,162
Private label commercial MBS			350,493						—						350,493						—						(29,289)						321,204
U.S. Treasury securities			187,033						—						187,033						—						(11,454)						175,579
Corporate debt securities			70,128						(1,360)						68,768						—						(21,157)						47,611
Total (1)			$	2,288,791					$	(1,500)					$	2,287,291					$	1,760					$	(120,735)					$	2,168,316

__________________________

(1)    Excludes accrued interest receivable of $13.4 million at December 31, 2023 which is recorded in "Other assets" on the condensed consolidated balance sheets.

As of September 30, 2024, securities held-to-maturity with an amortized cost of $2.2 billion and a fair value of $2.2 billion were pledged as collateral primarily for the FRB secured line of credit and public deposits.

Allowance for Credit Losses on Securities Held-to-Maturity

The following table presents the changes by major security type in our allowance for credit losses on securities held-to-maturity for the periods indicated:

			Allowance for						Provision																		Allowance for
			Credit Losses,						for																		Credit Losses,
			Beginning						Credit																		End of
Security Type			of Period						Losses						Charge-offs						Recoveries						Period
			(In thousands)
Three Months Ended September 30, 2024
Municipal securities			$	140					$	—					$	—					$	—					$	140
Corporate debt securities			1,360						—						—						—						1,360
Total			$	1,500					$	—					$	—					$	—					$	1,500
Nine Months Ended September 30, 2024
Municipal securities			$	140					$	—					$	—					$	—					$	140
Corporate debt securities			1,360						—						—						—						1,360
Total			$	1,500					$	—					$	—					$	—					$	1,500

			Allowance for						Provision																		Allowance for
			Credit Losses,						for																		Credit Losses,
			Beginning						Credit																		End of
Security Type			of Period						Losses						Charge-offs						Recoveries						Period
			(In thousands)
Three Months Ended September 30, 2023
Municipal securities			$	140					$	—					$	—					$	—					$	140
Corporate debt securities			1,360						—						—						—						1,360
Total			$	1,500					$	—					$	—					$	—					$	1,500
Nine Months Ended September 30, 2023
Municipal securities			$	140					$	—					$	—					$	—					$	140
Corporate debt securities			1,360						—						—						—						1,360
Total			$	1,500					$	—					$	—					$	—					$	1,500

Credit losses on HTM securities are recorded at the time of purchase, acquisition, or when the Company designates securities as held-to-maturity. Credit losses on HTM securities are representative of current expected credit losses that may be incurred over the life of the investment. Accrued interest receivable on HTM securities, which is included in other assets on the condensed consolidated balance sheets, is excluded from the estimate of expected credit losses. HTM U.S. treasury securities and agency-backed MBS securities are considered to have no risk of loss as they are either explicitly or implicitly guaranteed by the U.S. government. The change in fair value in the HTM private label CMBS portfolio is solely driven by changes in interest rates. The Company has no knowledge of any underlying credit issues and the cash flows underlying the debt securities have not changed and are not expected to be impacted by changes in interest rates and, thus, there is no related ACL for this portfolio. The underlying bonds in the Company’s HTM municipal securities and HTM corporate debt securities portfolios are evaluated for credit losses in conjunction with management’s estimate of the allowance for credit losses based primarily on credit ratings.

Securities Held-to-Maturity by Credit Quality Indicator

The Company uses S&P, Moody's, Fitch, Kroll, and Egan Jones ratings as the credit quality indicators for its held-to-maturity securities. The following table presents our securities held-to-maturity portfolio at amortized cost by the lowest available credit rating as of the dates indicated:

			September 30, 2024
Security Type			AAA						AA+						AA						AA-						A+						A						A-						BBB						NR						Total
			(In thousands)
Amortized Cost:
Municipal securities			$	570,454					$	368,821					$	218,026					$	60,843					$	11,990					$	1,671					$	—					$	—					$	18,449					$	1,250,254
Agency commercial
MBS			—						438,781						—						—						—						—						—						—						—						438,781
Private label
commercial MBS			354,098						—						—						—						—						—						—						—						—						354,098
U.S. Treasury
securities			—						189,239						—						—						—						—						—						—						—						189,239
Corporate debt
securities			—						—						—						—						—						—						—						44,472						25,919						70,391
Total			$	924,552					$	996,841					$	218,026					$	60,843					$	11,990					$	1,671					$	—					$	44,472					$	44,368					$	2,302,763

			December 31, 2023
Security Type			AAA						AA+						AA						AA-						A+						A						A-						BBB						NR						Total
			(In thousands)
Amortized Cost:
Municipal securities			$	564,127					$	397,542					$	167,905					$	86,243					$	12,007					$	1,787					$	—					$	—					$	17,699					$	1,247,310
Agency commercial
MBS			—						433,827						—						—						—						—						—						—						—						433,827
Private label
commercial MBS			350,493						—						—						—						—						—						—						—						—						350,493
U.S. Treasury
securities			—						187,033						—						—						—						—						—						—						—						187,033
Corporate debt
securities			—						—						—						—						—						—						—						44,371						25,757						70,128
Total			$	914,620					$	1,018,402					$	167,905					$	86,243					$	12,007					$	1,787					$	—					$	44,371					$	43,456					$	2,288,791

Contractual Maturities of Securities Held-to-Maturity

The following tables present the contractual maturities of our securities held-to-maturity portfolio based on amortized cost and fair value as of the date indicated:

			September 30, 2024
									Due After						Due After
			Due						One Year						Five Years						Due
			Within						Through						Through						After
Security Type			One Year						Five Years						Ten Years						Ten Years						Total
			(In thousands)
Amortized Cost:
Municipal securities			$	—					$	20,246					$	441,137					$	788,871					$	1,250,254
Agency commercial MBS			—						—						438,781						—						438,781
Private label commercial MBS			—						—						36,733						317,365						354,098
U.S. Treasury securities			—						—						189,239						—						189,239
Corporate debt securities			—						—						10,162						60,229						70,391
Total			$	—					$	20,246					$	1,116,052					$	1,166,465					$	2,302,763

			September 30, 2024
									Due After						Due After
			Due						One Year						Five Years						Due
			Within						Through						Through						After
Security Type			One Year						Five Years						Ten Years						Ten Years						Total
			(In thousands)
Fair Value:
Municipal securities			$	—					$	20,275					$	436,537					$	779,123					$	1,235,935
Agency commercial MBS			—						—						420,036						—						420,036
Private label commercial MBS			—						—						35,873						303,531						339,404
U.S. Treasury securities			—						—						180,427						—						180,427
Corporate debt securities			—						—						9,544						44,136						53,680
Total			$	—					$	20,275					$	1,082,417					$	1,126,790					$	2,229,482

Commercial MBS have contractual maturity dates, but require periodic payments based upon scheduled amortization terms. Actual principal collections on these securities usually occur more rapidly than the scheduled amortization terms because of prepayments made by obligors of the underlying loan collateral.

Interest Income on Investment Securities

The following table presents the composition of our interest income on investment securities, including available-for-sale and held-to-maturity, for the periods indicated:

			Three Months Ended												Nine Months Ended
			September 30,												September 30,
			2024						2023						2024						2023
			(In thousands)
Taxable interest			$	28,576					$	38,062					$	83,241					$	114,961
Non-taxable interest			4,622						4,872						14,088						14,697
Dividend income			1,714						2,392						5,722						4,058
Total interest income on investment securities			$	34,912					$	45,326					$	103,051					$	133,716

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Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//320/tableOfContent

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Accounting Standards Codification
-Topic 321
-Publisher FASB
-URI https://asc.fasb.org//321/tableOfContent

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Accounting Standards Codification
-Topic 325
-Publisher FASB
-URI https://asc.fasb.org//325/tableOfContent

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