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v3.22.1

SECURITIES | 3 Months Ended
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Mar. 31, 2022
Investments, Debt and Equity Securities [Abstract] |
SECURITIES | SECURITIES The amortized cost, gross unrealized gains and losses and estimated fair value of securities at March 31, 2022 and December 31, 2021 are summarized as follows (in thousands):
| March 31, 2022
| Amortized Cost |  |  |  |  |  | Fair Value
Trading: |  |  |  |  |  |  |
Corporate bonds | $ | 27,203 |  |  |  |  |  |  | $ | 27,354 |
| $ | 27,203 |  |  |  |  |  |  | $ | 27,354 |
| March 31, 2022
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Allowance for Credit Losses |  | Fair Value
Available-for-Sale: |  |  |  |  |  |  |  |  |
U.S. Government and agency obligations | $ | 194,774 |  |  | $ | 176 |  |  | $ | (756) |  |  | $ | — |  |  | $ | 194,194 |
Municipal bonds | 285,235 |  |  | 3,267 |  |  | (16,238) |  |  | — |  |  | 272,264 |
Corporate bonds | 119,396 |  |  | 383 |  |  | (2,196) |  |  | — |  |  | 117,583 |
Mortgage-backed or related securities | 2,509,530 |  |  | 2,202 |  |  | (153,899) |  |  | — |  |  | 2,357,833 |
Asset-backed securities | 206,278 |  |  | 111 |  |  | (716) |  |  | — |  |  | 205,673 |
| $ | 3,315,213 |  |  | $ | 6,139 |  |  | $ | (173,805) |  |  | $ | — |  |  | $ | 3,147,547 |
| March 31, 2022
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  | Allowance for Credit Losses
Held-to-Maturity: |  |  |  |  |  |  |  |  |
U.S. Government and agency obligations | $ | 315 |  |  | $ | 2 |  |  | $ | (2) |  |  | $ | 315 |  |  | $ | — |
Municipal bonds | 442,328 |  |  | 2,304 |  |  | (28,252) |  |  | 416,380 |  |  | (191) |
Corporate bonds | 3,059 |  |  | — |  |  | (18) |  |  | 3,041 |  |  | (229) |
Mortgage-backed or related securities | 570,240 |  |  | 139 |  |  | (21,575) |  |  | 548,804 |  |  | — |
| $ | 1,015,942 |  |  | $ | 2,445 |  |  | $ | (49,847) |  |  | $ | 968,540 |  |  | $ | (420) |
| December 31, 2021
| Amortized Cost |  |  |  |  |  | Fair Value
Trading: |  |  |  |  |  |  |
Corporate bonds | $ | 27,203 |  |  |  |  |  |  | $ | 26,981 |
| $ | 27,203 |  |  |  |  |  |  | $ | 26,981 |
| December 31, 2021
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Allowance for Credit Losses |  | Fair Value
Available-for-Sale: |  |  |  |  |  |  |  |  |
U.S. Government and agency obligations | $ | 201,101 |  |  | $ | 852 |  |  | $ | (621) |  |  | $ | — |  |  | $ | 201,332 |
Municipal bonds | 293,761 |  |  | 15,171 |  |  | (320) |  |  | — |  |  | 308,612 |
Corporate bonds | 114,427 |  |  | 3,103 |  |  | (183) |  |  | — |  |  | 117,347 |
Mortgage-backed or related securities | 2,837,480 |  |  | 17,749 |  |  | (49,961) |  |  | — |  |  | 2,805,268 |
Asset-backed securities | 206,391 |  |  | 52 |  |  | (9) |  |  | — |  |  | 206,434 |
| $ | 3,653,160 |  |  | $ | 36,927 |  |  | $ | (51,094) |  |  | $ | — |  |  | $ | 3,638,993 |
| December 31, 2021
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  | Allowance for Credit Losses
Held-to-Maturity: |  |  |  |  |  |  |  |  |
U.S. Government and agency obligations | $ | 316 |  |  | $ | 3 |  |  | $ | — |  |  | $ | 319 |  |  | $ | — |
Municipal bonds | 420,555 |  |  | 20,743 |  |  | (1,393) |  |  | 439,905 |  |  | (203) |
Corporate bonds | 3,092 |  |  | — |  |  | (3) |  |  | 3,089 |  |  | (230) |
Mortgage-backed or related securities | 97,392 |  |  | 1,171 |  |  | (23) |  |  | 98,540 |  |  | — |
| $ | 521,355 |  |  | $ | 21,917 |  |  | $ | (1,419) |  |  | $ | 541,853 |  |  | $ | (433) |
Accrued interest receivable on held-to-maturity debt securities was $3.8 million and $3.3 million as of March 31, 2022 and December 31, 2021, respectively, and was $10.1 million on available-for-sale debt securities at both March 31, 2022 and December 31, 2021. Accrued interest receivable on securities is reported in accrued interest receivable on the Consolidated Statements of Financial Condition and is excluded from the calculation of the allowance for credit losses. At March 31, 2022 and December 31, 2021, the gross unrealized losses and the fair value for securities available-for-sale aggregated by the length of time that individual securities have been in a continuous unrealized loss position were as follows (in thousands):
| March 31, 2022
| Less Than 12 Months |  | 12 Months or More |  | Total
| Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Available-for-Sale: |  |  |  |  |  |  |  |  |  |  |
U.S. Government and agency obligations | $ | 101,620 |  |  | $ | (182) |  |  | $ | 26,851 |  |  | $ | (574) |  |  | $ | 128,471 |  |  | $ | (756) |
Municipal bonds | 159,886 |  |  | (16,238) |  |  | — |  |  | — |  |  | 159,886 |  |  | (16,238) |
Corporate bonds | 83,374 |  |  | (2,196) |  |  | — |  |  | — |  |  | 83,374 |  |  | (2,196) |
Mortgage-backed or related securities | 1,352,151 |  |  | (88,005) |  |  | 633,689 |  |  | (65,894) |  |  | 1,985,840 |  |  | (153,899) |
Asset-backed securities | 109,187 |  |  | (716) |  |  | — |  |  | — |  |  | 109,187 |  |  | (716) |
| $ | 1,806,218 |  |  | $ | (107,337) |  |  | $ | 660,540 |  |  | $ | (66,468) |  |  | $ | 2,466,758 |  |  | $ | (173,805) |
| December 31, 2021
| Less Than 12 Months |  | 12 Months or More |  | Total
| Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Available-for-Sale: |  |  |  |  |  |  |  |  |  |  |
U.S. Government and agency obligations | $ | — |  |  | $ | — |  |  | $ | 71,306 |  |  | $ | (621) |  |  | $ | 71,306 |  |  | $ | (621) |
Municipal bonds | 40,397 |  |  | (221) |  |  | 8,541 |  |  | (99) |  |  | 48,938 |  |  | (320) |
Corporate bonds | 8,009 |  |  | (121) |  |  | 9,938 |  |  | (62) |  |  | 17,947 |  |  | (183) |
Mortgage-backed or related securities | 1,307,411 |  |  | (38,028) |  |  | 721,454 |  |  | (11,933) |  |  | 2,028,865 |  |  | (49,961) |
Asset-backed securities | 3,382 |  |  | (9) |  |  | — |  |  | — |  |  | 3,382 |  |  | (9) |
| $ | 1,359,199 |  |  | $ | (38,379) |  |  | $ | 811,239 |  |  | $ | (12,715) |  |  | $ | 2,170,438 |  |  | $ | (51,094) |
At March 31, 2022, there were 219 securities—available-for-sale with unrealized losses, compared to 97 at December 31, 2021. Management does not believe that any individual unrealized loss as of March 31, 2022 or December 31, 2021 resulted from credit loss. The decline in fair market value of these securities was generally due to changes in interest rates and changes in market-desired spreads subsequent to their purchase. There were no sales of securities—trading during the three months ended March 31, 2022 or 2021. There were no securities—trading in a nonaccrual status at March 31, 2022 or December 31, 2021. Net unrealized holding gains of $373,000 were recognized during the three months ended March 31, 2022 compared to $59,000 of net unrealized holding gains recognized during the three months ended March 31, 2021. The following table presents gross gains and losses on sales and partial calls of securities available-for-sale (in thousands):
| Three Months Ended March 31, |  |
| 2022 |  | 2021 |  |  |  |
Available-for-Sale: |  |  |  |  |  |  |
Gross Gains | $ | 436 |  |  | $ | 595 |  |  |  |  |
Gross Losses | (1) |  |  | (110) |  |  |  |  |
Balance, end of the period | $ | 435 |  |  | $ | 485 |  |  |  |  |
There were no securities—available-for-sale in a nonaccrual status at March 31, 2022 or December 31, 2021. During the three months ended March 31, 2022, the Company sold no held-to-maturity securities. There were no sales of securities—held-to-maturity during the three months ended March 31, 2021. There were no securities—held-to-maturity in a nonaccrual status or 30 days or more past due at March 31, 2022 or December 31, 2021. There were no sales of equity securities during the three months ended March 31, 2022. During the three months ended March 31, 2021, the Company sold a $4.8 million equity security with a resulting net gain of $46,000. The amortized cost and estimated fair value of securities at March 31, 2022, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because some securities may be called or prepaid with or without call or prepayment penalties. (in thousands).
| March 31, 2022
| Trading |  | Available-for-Sale |  | Held-to-Maturity
| Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Maturing within one year | $ | — |  |  | $ | — |  |  | $ | 9,100 |  |  | $ | 9,126 |  |  | $ | 9,664 |  |  | $ | 9,670 |
Maturing after one year through five years | — |  |  | — |  |  | 187,185 |  |  | 187,107 |  |  | 45,900 |  |  | 46,116 |
Maturing after five years through ten years | — |  |  | — |  |  | 799,161 |  |  | 771,687 |  |  | 26,908 |  |  | 27,091 |
Maturing after ten years | 27,203 |  |  | 27,354 |  |  | 2,319,767 |  |  | 2,179,627 |  |  | 933,470 |  |  | 885,663 |
| $ | 27,203 |  |  | $ | 27,354 |  |  | $ | 3,315,213 |  |  | $ | 3,147,547 |  |  | $ | 1,015,942 |  |  | $ | 968,540 |
The following table presents, as of March 31, 2022, investment securities which were pledged to secure borrowings, public deposits or other obligations as permitted or required by law (in thousands):
| March 31, 2022
| Carrying Value |  | Amortized Cost |  | Fair Value
Purpose or beneficiary: |  |  |  |  |
State and local governments public deposits | $ | 209,143 |  |  | $ | 209,922 |  |  | $ | 207,100 |
Interest rate swap counterparties | 23,765 |  |  | 23,652 |  |  | 23,767 |
Repurchase transaction accounts | 294,032 |  |  | 309,890 |  |  | 289,235 |
Other | 2,509 |  |  | 2,509 |  |  | 2,503 |
Total pledged securities | $ | 529,449 |  |  | $ | 545,973 |  |  | $ | 522,605 |
The Company monitors the credit quality of held-to-maturity debt securities through the use of credit ratings which are reviewed and updated quarterly. The Company’s non-rated held-to-maturity debt securities are primarily United States government sponsored enterprise debentures carrying minimal to no credit risk. The non-rated corporate bonds primarily consist of Community Reinvestment Act related bonds secured by loan instruments from low to moderate income borrowers. The remaining non-rated held-to-maturity debt securities balance is comprised of local municipal debt from within the Company’s geographic footprint and is monitored through quarterly or annual financial review. This municipal debt is predominately essential service or unlimited general obligation backed debt. The following tables summarize the amortized cost of held-to-maturity debt securities by credit rating at March 31, 2022 and December 31, 2021 (in thousands):
| March 31, 2022
| U.S. Government and agency obligations |  | Municipal bonds |  | Corporate bonds |  | Mortgage-backed or related securities |  | Total
AAA/AA/A | $ | — |  |  | $ | 429,085 |  |  | $ | 500 |  |  | $ | 16,826 |  |  | $ | 446,411 |
Not Rated | 315 |  |  | 13,243 |  |  | 2,559 |  |  | 553,414 |  |  | 569,531 |
| $ | 315 |  |  | $ | 442,328 |  |  | $ | 3,059 |  |  | $ | 570,240 |  |  | $ | 1,015,942 |
| December 31, 2021
| U.S. Government and agency obligations |  | Municipal bonds |  | Corporate bonds |  | Mortgage-backed or related securities |  | Total
AAA/AA/A | $ | — |  |  | $ | 406,363 |  |  | $ | 500 |  |  | $ | — |  |  | $ | 406,863 |
Not Rated | 316 |  |  | 14,192 |  |  | 2,592 |  |  | 97,392 |  |  | 114,492 |
| $ | 316 |  |  | $ | 420,555 |  |  | $ | 3,092 |  |  | $ | 97,392 |  |  | $ | 521,355 |
The following tables present the activity in the allowance for credit losses for held-to-maturity debt securities by major type for the three months ended March 31, 2022 and March 31, 2021 (in thousands):
| For the Three Months Ended March 31, 2022
| U.S. Government and agency obligations |  | Municipal bonds |  | Corporate bonds |  | Mortgage-backed or related securities |  | Total
Allowance for credit losses – securities |  |  |  |  |  |  |  |  |
Beginning Balance | $ | — |  |  | $ | 203 |  |  | $ | 230 |  |  | $ | — |  |  | $ | 433 |
Recapture of provision for credit losses | — |  |  | (12) |  |  | (1) |  |  | — |  |  | (13) |
Ending Balance | $ | — |  |  | $ | 191 |  |  | $ | 229 |  |  | $ | — |  |  | $ | 420 |

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