SECURITIES AVAILABLE FOR SALE, HELD TO MATURITY, AND EQUITY SECURITIES

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

SECURITIES AVAILABLE FOR SALE, HELD TO MATURITY, AND EQUITY SECURITIES

SECURITIES AVAILABLE FOR SALE, HELD TO MATURITY, AND

EQUITY SECURITIES

The following is a summary of securities available for sale, held to maturity, and marketable equity securities:


(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance
March 31, 2023
Securities available for sale
U.S Treasuries	$	8,981	$	—	$	—	$	8,981
Municipal bonds and obligations	65,849		749		(1,981)		64,617		—
Agency collateralized mortgage obligations	612,727		—		(86,778)		525,949		—
Agency mortgage-backed securities	628,243		1		(88,647)		539,597		—
Agency commercial mortgage-backed securities	261,167		—		(33,759)		227,408		—
Corporate bonds	43,349		66		(3,352)		40,063		—
Other bonds and obligations	655		67		(66)		656		—
Total securities available for sale	1,620,971		883		(214,583)		1,407,271		—

Securities held to maturity
Municipal bonds and obligations	263,818		1,174		(19,260)		245,732		49
Agency collateralized mortgage obligations	124,335		—		(18,041)		106,294		—
Agency mortgage-backed securities	50,152		—		(8,511)		41,641		—
Agency commercial mortgage-backed securities	134,180		—		(22,781)		111,399		—
Tax advantaged economic development bonds	1,830		7		(103)		1,734		22
Other bonds and obligations	291		—		—		291		—
Total securities held to maturity	574,606		1,181		(68,696)		507,091		71

Marketable equity securities	15,036		—		(1,964)		13,072		—
Total	$	2,210,613	$	2,064	$	(285,243)	$	1,927,434	$	71


(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance
December 31, 2022
Securities available for sale
U.S Treasuries	$	11,972	$	1	$	—	$	11,973	$	—
Municipal bonds and obligations	65,943		422		(3,030)		63,335		—
Agency collateralized mortgage obligations	631,732		—		(99,787)		531,945		—
Agency mortgage-backed securities	643,308		1		(96,996)		546,313		—
Agency commercial mortgage-backed securities	264,218		—		(35,750)		228,468		—
Corporate bonds	43,368		80		(2,938)		40,510		—

Other bonds and obligations	655		67		(66)		656		—
Total securities available for sale	1,661,196		571		(238,567)		1,423,200		—

Securities held to maturity
Municipal bonds and obligations	266,793		691		(23,704)		243,780		66
Agency collateralized mortgage obligations	128,136		—		(20,420)		107,716		—
Agency mortgage-backed securities	50,958		—		(9,240)		41,718		—
Agency commercial mortgage-backed securities	135,206		—		(23,203)		112,003		—
Tax advantaged economic development bonds	2,069		8		(121)		1,956		25
Other bonds and obligations	291		—		—		291		—
Total securities held to maturity	583,453		699		(76,688)		507,464		91

Marketable equity securities	15,035		—		(2,179)		12,856		—
Total	$	2,259,684	$	1,270	$	(317,434)	$	1,943,520	$	91

The following table summarizes the activity in the allowance for credit losses for debt securities held to maturity by security type for the three months ended March 31, 2023 and 2022:


(In thousands)	Municipal bonds and obligations		Tax advantaged economic development bonds		Total
Balance at December 31, 2022	$	66	$	25	$	91
(Benefit)/provision for credit losses	(17)		(3)		(20)
Balance at March 31, 2023	$	49	$	22	$	71


(In thousands)	Municipal bonds and obligations		Tax advantaged economic development bonds		Total
Balance at December 31, 2021	$	70	$	35	$	105
(Benefit)/provision for credit losses	(3)		(3)		(6)
Balance at March 31, 2022	$	67	$	32	$	99

Credit Quality Information

The Company monitors the credit quality of held to maturity securities through credit ratings from various rating agencies. Credit ratings express opinions about the credit quality of a security and are utilized by the Company to make informed decisions. Investment grade securities are rated BBB-/Baa3 or higher and generally considered by the rating agencies and market participants to be of low credit risk. Conversely, securities rated below investment grade are considered to have distinctively higher credit risk than investment grade securities. For securities without credit ratings, the Company utilizes other financial information indicating the financial health of the underlying municipality, agency, or organization.

As of March 31, 2023, none of the Company's investment securities were delinquent or in non-accrual status.

The amortized cost and estimated fair value of available for sale (“AFS”) and held to maturity (“HTM”) securities segregated by contractual maturity at March 31, 2023 are presented below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities are shown in total, as their maturities are highly variable.


	Available for sale				Held to maturity
	Amortized		Fair		Amortized		Fair
(In thousands)	Cost		Value		Cost		Value

Within 1 year	$	9,800	$	9,801	$	802	$	803
Over 1 year to 5 years	10,863		10,694		2,222		2,218
Over 5 years to 10 years	52,127		49,259		34,563		34,659
Over 10 years	46,044		44,563		228,352		210,077
Total bonds and obligations	118,834		114,317		265,939		247,757


Mortgage-backed securities	1,502,137		1,292,954		308,667		259,334
Total	$	1,620,971	$	1,407,271	$	574,606	$	507,091

During the three months ended March 31, 2023, purchases of AFS securities totaled $28.9 million. During the three months ended March 31, 2023, there were no sales of AFS securities. During the three months ended March 31, 2022, purchases of AFS securities totaled $386.6 million. During the three months ended March 31, 2022, there were no sales of AFS securities.

Securities available for sale and held to maturity with unrealized losses, segregated by the duration of their continuous unrealized loss positions, are summarized as follows:


	Less Than Twelve Months				Over Twelve Months				Total
	Gross				Gross				Gross
	Unrealized		Fair		Unrealized		Fair		Unrealized		Fair
(In thousands)	Losses		Value		Losses		Value		Losses		Value
March 31, 2023

Securities available for sale

Municipal bonds and obligations	$	356	$	13,295	$	1,625	$	15,813	$	1,981	$	29,108
Agency collateralized mortgage obligations	250		9,999		86,528		515,950		86,778		525,949
Agency mortgage-backed securities	142		4,110		88,505		535,398		88,647		539,508
Agency commercial mortgage-backed securities	911		10,783		32,848		216,624		33,759		227,407
Corporate bonds	1,301		24,063		2,051		15,089		3,352		39,152

Other bonds and obligations	—		—		66		295		66		295



Total securities available for sale	$	2,960	$	62,250	$	211,623	$	1,299,169	$	214,583	$	1,361,419

Securities held to maturity
Municipal bonds and obligations	$	633	$	46,988	$	18,627	$	78,012	$	19,260	$	125,000
Agency collateralized mortgage obligations	1,065		37,271		16,976		69,023		18,041		106,294
Agency mortgage-backed securities	—		—		8,511		41,641		8,511		41,641
Agency commercial mortgage-backed securities	—		—		22,781		111,399		22,781		111,399
Tax advantaged economic development bonds	—		—		103		989		103		989
Total securities held to maturity	1,698		84,259		66,998		301,064		68,696		385,323

Total	$	4,658	$	146,509	$	278,621	$	1,600,233	$	283,279	$	1,746,742

December 31, 2022

Securities available for sale
Municipal bonds and obligations	$	2,406	$	36,696	$	624	$	2,763	$	3,030	$	39,459
Agency collateralized mortgage obligations	23,052		247,509		76,735		284,434		99,787		531,943
Agency mortgage-backed securities	3,124		37,540		93,872		508,683		96,996		546,223
Agency commercial mortgage-backed securities	9,885		96,396		25,865		132,043		35,750		228,439
Corporate bonds	1,709		25,657		1,229		9,929		2,938		35,586

Other bonds and obligations	—		—		66		295		66		295



Total securities available for sale	$	40,176	$	443,798	$	198,391	$	938,147	$	238,567	$	1,381,945

Securities held to maturity
Municipal bonds and obligations	$	5,476	$	125,494	$	18,228	$	38,341	$	23,704	$	163,835
Agency collateralized mortgage obligations	2,734		49,539		17,686		58,177		20,420		107,716
Agency mortgage-backed securities	300		2,419		8,940		39,299		9,240		41,718
Agency commercial mortgage-backed securities	447		9,713		22,756		102,290		23,203		112,003
Tax advantaged economic development bonds	1		142		120		1,008		121		1,150
Total securities held to maturity	8,958		187,307		67,730		239,115		76,688		426,422
Total	$	49,134	$	631,105	$	266,121	$	1,177,262	$	315,255	$	1,808,367

Debt Securities

The Company expects to recover its amortized cost basis on all debt securities in its AFS and HTM portfolios. Furthermore, the Company does not intend to sell nor does it anticipate that it will be required to sell any of its securities in an unrealized loss position as of March 31, 2023, prior to this recovery. The Company’s ability and intent to hold these securities until recovery is supported by the Company’s strong capital and liquidity positions as well as its historically low portfolio turnover.

The following summarizes, by investment security type, the basis for the conclusion that the debt securities in an unrealized loss position within the Company’s AFS and HTM portfolios were not other-than-temporarily impaired at March 31, 2023:

AFS municipal bonds and obligations

At March 31, 2023, 30 of the 94 securities in the Company’s portfolio of AFS municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 6.4% of the amortized cost of securities in unrealized loss positions. The Company continually monitors the municipal bond sector of the market carefully and periodically evaluates the appropriate level of exposure to the market. At this time, the Company feels the bonds in this portfolio carry minimal risk of default and the Company is appropriately compensated for that risk. There were no material underlying credit downgrades during the quarter. All securities are performing.

AFS collateralized mortgage obligations

At March 31, 2023, 243 of the 245 securities in the Company’s portfolio of AFS collateralized mortgage obligations were in unrealized loss positions. Aggregate unrealized losses represented 14.2% of the amortized cost of securities in unrealized loss positions. The Federal National Mortgage Association (“FNMA”), Federal Home Loan Mortgage Corporation (“FHLMC”), and Government National Mortgage Association (“GNMA”) guarantee the contractual cash flows of all of the Company’s collateralized mortgage obligations. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. All securities are performing.

AFS commercial and residential mortgage-backed securities

At March 31, 2023, 136 of the 139 securities in the Company’s portfolio of AFS mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 13.8% of the amortized cost of securities in unrealized loss positions. The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of all of the Company’s mortgage-backed securities. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. All securities are performing.

AFS corporate bonds

At March 31, 2023, 14 of the 15 securities in the Company’s portfolio of AFS corporate bonds were in unrealized loss positions. Aggregate unrealized losses represents 7.9% of the amortized cost of the bonds in unrealized loss positions. The Company reviews the financial strength of all of these bonds and has concluded that the amortized cost remains supported by the expected future cash flows of these securities. All securities are performing.

AFS other bonds and obligations

At March 31, 2023, 2 of the 3 securities in the Company’s portfolio of AFS other bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represents 18.3% of the amortized cost of the bonds in unrealized loss positions. The Company reviews the financial strength of all of these bonds and has concluded that the amortized cost remains supported by the expected future cash flows of these securities. All securities are performing.

HTM municipal bonds and obligations

At March 31, 2023, 94 of the 186 securities in the Company’s portfolio of HTM municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 13.4% of the amortized cost of securities in unrealized loss positions. The Company continually monitors the municipal bond sector of the market carefully and periodically evaluates the appropriate level of exposure to the market. At this time, the Company feels the bonds in this portfolio carry minimal risk of default and the Company is appropriately compensated for that risk. There were no material underlying credit downgrades during the quarter. All securities are performing.

HTM collateralized mortgage obligations

At March 31, 2023, 13 of the 13 securities in the Company’s portfolio of HTM collateralized mortgage obligations were in unrealized loss positions. Aggregate unrealized losses represented 14.5% of the amortized cost of the securities in unrealized loss positions. The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of all of the Company's collateralized residential mortgage obligations. The securities are investment grade rated, and there were no material underlying credit downgrades during the quarter. All securities are performing.

HTM commercial and residential mortgage-backed securities

At March 31, 2023, 17 of the 17 securities in the Company’s portfolio of HTM mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 17.0% of the amortized cost of securities in unrealized loss positions. The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of the Company’s mortgage-backed securities. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. All securities are performing.

HTM tax-advantaged economic development bonds

At March 31, 2023, 1 of the 2 securities in the Company’s portfolio of tax-advantaged economic development bonds was in unrealized loss positions. Aggregate unrealized losses represented 9.4% of the amortized cost of the security in unrealized loss positions. The Company believes that more likely than not all the principal outstanding will be collected. All securities are performing.