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SECURITIES

9 Months Ended

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

X

- References

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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)

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