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SECURITIES | 9 Months Ended
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Sep. 30, 2022
Investments, Debt and Equity Securities [Abstract] |
SECURITIES | SECURITIES The amortized cost, gross unrealized gains and losses and estimated fair value of securities at September 30, 2022 and December 31, 2021 are summarized as follows (in thousands):
| September 30, 2022
| Amortized Cost |  |  |  |  |  | Fair Value
Trading: |  |  |  |  |  |  |
Corporate bonds | $ | 27,203 |  |  |  |  |  |  | $ | 28,383 |
| $ | 27,203 |  |  |  |  |  |  | $ | 28,383 |
| September 30, 2022
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Allowance for Credit Losses |  | Fair Value
Available-for-Sale: |  |  |  |  |  |  |  |  |
U.S. Government and agency obligations | $ | 188,046 |  |  | $ | 108 |  |  | $ | (1,643) |  |  | $ | — |  |  | $ | 186,511 |
Municipal bonds | 303,485 |  |  | 14 |  |  | (50,687) |  |  | — |  |  | 252,812 |
Corporate bonds | 133,398 |  |  | — |  |  | (10,749) |  |  | — |  |  | 122,649 |
Mortgage-backed or related securities | 2,586,161 |  |  | 5 |  |  | (372,529) |  |  | — |  |  | 2,213,637 |
Asset-backed securities | 222,451 |  |  | 458 |  |  | (2,345) |  |  | — |  |  | 220,564 |
| $ | 3,433,541 |  |  | $ | 585 |  |  | $ | (437,953) |  |  | $ | — |  |  | $ | 2,996,173 |
| September 30, 2022
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  | Allowance for Credit Losses
Held-to-Maturity: |  |  |  |  |  |  |  |  |
U.S. Government and agency obligations | $ | 312 |  |  | $ | 1 |  |  | $ | (7) |  |  | $ | 306 |  |  | $ | — |
Municipal bonds | 508,002 |  |  | 54 |  |  | (90,655) |  |  | 417,401 |  |  | (193) |
Corporate bonds | 2,994 |  |  | — |  |  | (18) |  |  | 2,976 |  |  | (201) |
Mortgage-backed or related securities | 621,938 |  |  | — |  |  | (95,205) |  |  | 526,733 |  |  | — |
| $ | 1,133,246 |  |  | $ | 55 |  |  | $ | (185,885) |  |  | $ | 947,416 |  |  | $ | (394) |
| 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 $4.4 million and $3.3 million as of September 30, 2022 and December 31, 2021, respectively, and was $12.5 million and $10.1 million on available-for-sale debt securities at September 30, 2022 and December 31, 2021, respectively. 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 September 30, 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):
| September 30, 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 | $ | 83,887 |  |  | $ | (1,239) |  |  | $ | 58,248 |  |  | $ | (404) |  |  | $ | 142,135 |  |  | $ | (1,643) |
Municipal bonds | 229,339 |  |  | (42,086) |  |  | 15,853 |  |  | (8,601) |  |  | 245,192 |  |  | (50,687) |
Corporate bonds | 115,044 |  |  | (9,754) |  |  | 7,006 |  |  | (995) |  |  | 122,050 |  |  | (10,749) |
Mortgage-backed or related securities | 1,356,167 |  |  | (182,947) |  |  | 794,663 |  |  | (189,582) |  |  | 2,150,830 |  |  | (372,529) |
Asset-backed securities | 103,702 |  |  | (2,345) |  |  | — |  |  | — |  |  | 103,702 |  |  | (2,345) |
| $ | 1,888,139 |  |  | $ | (238,371) |  |  | $ | 875,770 |  |  | $ | (199,582) |  |  | $ | 2,763,909 |  |  | $ | (437,953) |
| 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 September 30, 2022, there were 313 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 September 30, 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 nine months ended September 30, 2022 or 2021. There were no securities—trading in a nonaccrual status at September 30, 2022 or December 31, 2021. Net unrealized holding gains of $1.4 million were recognized during the nine months ended September 30, 2022 compared to $1.9 million of net unrealized holding gains recognized during the nine months ended September 30, 2021. The following table presents gross gains and losses on sales and partial calls of securities available-for-sale (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Available-for-Sale: |  |  |  |  |  |  |
Gross Gains | $ | 6 |  |  | $ | 140 |  |  | $ | 522 |  |  | $ | 766 |
Gross Losses | — |  |  | (22) |  |  | (49) |  |  | (132) |
Balance, end of the period | $ | 6 |  |  | $ | 118 |  |  | $ | 473 |  |  | $ | 634 |
There were no securities—available-for-sale in a nonaccrual status at September 30, 2022 or December 31, 2021. The following table presents the amortized cost and estimated fair value of securities at September 30, 2022, by contractual maturity and does not reflect any required periodic payments (in thousands). Expected maturities will differ from contractual maturities because some securities may be called or prepaid with or without call or prepayment penalties.
| September 30, 2022
| Trading |  | Available-for-Sale |  | Held-to-Maturity
| Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Maturing within one year | $ | — |  |  | $ | — |  |  | $ | 5,056 |  |  | $ | 5,025 |  |  | $ | 11,959 |  |  | $ | 11,891 |
Maturing after one year through five years | — |  |  | — |  |  | 264,362 |  |  | 248,564 |  |  | 38,926 |  |  | 37,909 |
Maturing after five years through ten years | — |  |  | — |  |  | 712,311 |  |  | 661,349 |  |  | 21,648 |  |  | 20,506 |
Maturing after ten years | 27,203 |  |  | 28,383 |  |  | 2,451,812 |  |  | 2,081,235 |  |  | 1,060,713 |  |  | 877,110 |
| $ | 27,203 |  |  | $ | 28,383 |  |  | $ | 3,433,541 |  |  | $ | 2,996,173 |  |  | $ | 1,133,246 |  |  | $ | 947,416 |
The following table presents, as of September 30, 2022, investment securities which were pledged to secure borrowings, public deposits or other obligations as permitted or required by law (in thousands):
| September 30, 2022
| Carrying Value |  | Amortized Cost |  | Fair Value
Purpose or beneficiary: |  |  |  |  |
State and local governments public deposits | $ | 232,331 |  |  | $ | 236,203 |  |  | $ | 203,636 |
Interest rate swap counterparties | 7,723 |  |  | 8,183 |  |  | 7,718 |
Repurchase transaction accounts | 272,903 |  |  | 302,344 |  |  | 245,430 |
Other | 2,470 |  |  | 2,470 |  |  | 2,449 |
Total pledged securities | $ | 515,427 |  |  | $ | 549,200 |  |  | $ | 459,233 |
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 September 30, 2022 and December 31, 2021 (in thousands):
| September 30, 2022
| U.S. Government and agency obligations |  | Municipal bonds |  | Corporate bonds |  | Mortgage-backed or related securities |  | Total
AAA/AA/A | $ | — |  |  | $ | 496,267 |  |  | $ | 500 |  |  | $ | 16,731 |  |  | $ | 513,498 |
Not Rated | 312 |  |  | 11,735 |  |  | 2,494 |  |  | 605,207 |  |  | 619,748 |
| $ | 312 |  |  | $ | 508,002 |  |  | $ | 2,994 |  |  | $ | 621,938 |  |  | $ | 1,133,246 |
| 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 and nine months ended September 30, 2022 and September 30, 2021 (in thousands):
| For the Three Months Ended September 30, 2022
| U.S. Government and agency obligations |  | Municipal bonds |  | Corporate bonds |  | Mortgage-backed or related securities |  | Total
Allowance for credit losses – securities |  |  |  |  |  |  |  |  |
Beginning Balance | $ | — |  |  | $ | 196 |  |  | $ | 228 |  |  | $ | — |  |  | $ | 424 |
Recapture of provision for credit losses | — |  |  | (3) |  |  | (52) |  |  | — |  |  | (55) |
Recoveries | — |  |  | — |  |  | 25 |  |  | — |  |  | 25 |
Ending Balance | $ | — |  |  | $ | 193 |  |  | $ | 201 |  |  | $ | — |  |  | $ | 394 |
| For the Nine Months Ended September 30, 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 | — |  |  | (10) |  |  | (54) |  |  | — |  |  | (64) |
Recoveries | — |  |  | — |  |  | 25 |  |  | — |  |  | 25 |
Ending Balance | $ | — |  |  | $ | 193 |  |  | $ | 201 |  |  | $ | — |  |  | $ | 394 |
| For the Three Months Ended September 30, 2021
| U.S. Government and agency obligations |  | Municipal bonds |  | Corporate bonds |  | Mortgage-backed or related securities |  | Total
Allowance for credit losses – securities |  |  |  |  |  |  |  |  |
Beginning Balance | $ | — |  |  | $ | 64 |  |  | $ | 46 |  |  | $ | — |  |  | $ | 110 |
Recapture of provision for credit losses | — |  |  | (1) |  |  | (5) |  |  | — |  |  | (6) |
Ending Balance | $ | — |  |  | $ | 63 |  |  | $ | 41 |  |  | $ | — |  |  | $ | 104 |
| For the Nine Months Ended September 30, 2021
| U.S. Government and agency obligations |  | Municipal bonds |  | Corporate bonds |  | Mortgage-backed or related securities |  | Total
Allowance for credit losses – securities |  |  |  |  |  |  |  |  |
Beginning Balance | $ | — |  |  | $ | 59 |  |  | $ | 35 |  |  | $ | — |  |  | $ | 94 |
Provision for credit losses | — |  |  | 4 |  |  | 6 |  |  | — |  |  | 10 |
Ending Balance | $ | — |  |  | $ | 63 |  |  | $ | 41 |  |  | $ | — |  |  | $ | 104 |

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI https://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2176304 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher SEC -Name Regulation S-K (SK) -Number 229 -Section 1403 -Paragraph (b) + Details
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