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

9 Months Ended

Sep. 30, 2024

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
September 30, 2024
Securities available for sale
U.S. Treasuries	$	6,896	$	11	$	—	$	6,907
Municipal bonds and obligations	64,050		289		(1,408)		62,931		—
Agency collateralized mortgage obligations	308,857		340		(56,765)		252,432		—
Agency mortgage-backed securities	276,077		9		(43,155)		232,931		—
Agency commercial mortgage-backed securities	86,714		—		(16,148)		70,566		—
Corporate bonds	38,697		23		(3,403)		35,317		—
Other bonds and obligations	655		67		(66)		656		—
Total securities available for sale	781,946		739		(120,945)		661,740		—

Securities held to maturity
Municipal bonds and obligations	236,707		421		(17,087)		220,041		45
Agency collateralized mortgage obligations	103,272		—		(15,332)		87,940		—
Agency mortgage-backed securities	44,465		—		(7,048)		37,417		—
Agency commercial mortgage-backed securities	126,312		—		(22,001)		104,311		—
Tax advantaged economic development bonds	1,244		—		(36)		1,208		20
Other bonds and obligations	277		—		—		277		—
Total securities held to maturity	512,277		421		(61,504)		451,194		65

Equity securities	15,035		—		(1,757)		13,278		—
Total	$	1,309,258	$	1,160	$	(184,206)	$	1,126,212	$	65


(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance
December 31, 2023
Securities available for sale
U.S. Treasuries	$	7,980	$	1	$	—	$	7,981	$	—
Municipal bonds and obligations	64,788		494		(1,429)		63,853		—
Agency collateralized mortgage obligations	426,986		—		(79,112)		347,874		—
Agency mortgage-backed securities	492,633		2		(75,155)		417,480		—
Agency commercial mortgage-backed securities	174,879		—		(29,553)		145,326		—
Corporate bonds	43,291		34		(4,210)		39,115		—

Other bonds and obligations	655		67		(66)		656		—
Total securities available for sale	1,211,212		598		(189,525)		1,022,285		—

Securities held to maturity
Municipal bonds and obligations	251,046		698		(16,987)		234,757		48
Agency collateralized mortgage obligations	112,929		—		(18,360)		94,569		—
Agency mortgage-backed securities	47,379		—		(8,052)		39,327		—
Agency commercial mortgage-backed securities	130,169		—		(24,368)		105,801		—
Tax advantaged economic development bonds	1,540		6		(60)		1,486		20
Other bonds and obligations	288		—		—		288		—
Total securities held to maturity	543,351		704		(67,827)		476,228		68

Equity securities	15,035		—		(2,006)		13,029		—
Total	$	1,769,598	$	1,302	$	(259,358)	$	1,511,542	$	68

The following table summarizes the activity in the allowance for credit losses for debt securities held to maturity by security type for the three and nine months ended September 30, 2024 and 2023:


(In thousands)	Municipal bonds and obligations		Tax advantaged economic development bonds		Total
Balance at June 30, 2024	$	45	$	20	$	65
Provision for credit losses	—		—		—
Balance at September 30, 2024	$	45	$	20	$	65


(In thousands)	Municipal bonds and obligations		Tax advantaged economic development bonds		Total
Balance at June 30, 2023	$	49	$	22	$	71
(Benefit) for credit losses	(1)		(1)		(2)
Balance at September 30, 2023	$	48	$	21	$	69


(In thousands)	Municipal bonds and obligations		Tax advantaged economic development bonds		Total
Balance at December 31, 2023	$	48	$	20	$	68
(Benefit) for credit losses	(3)		—		(3)
Balance at September 30, 2024	$	45	$	20	$	65


(In thousands)	Municipal bonds and obligations		Tax advantaged economic development bonds		Total
Balance at December 31, 2022	$	66	$	25	$	91
(Benefit) for credit losses	(18)		(4)		(22)
Balance at September 30, 2023	$	48	$	21	$	69

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 September 30, 2024, 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 September 30, 2024 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	$	7,271	$	7,281	$	646	$	646
Over 1 year to 5 years	19,220		18,903		1,910		1,904
Over 5 years to 10 years	48,936		45,939		48,372		48,226
Over 10 years	34,871		33,688		187,300		170,750
Total bonds and obligations	110,298		105,811		238,228		221,526


Mortgage-backed securities	671,648		555,929		274,049		229,668
Total	$	781,946	$	661,740	$	512,277	$	451,194

During the three and nine months ended September 30, 2024, purchases of AFS securities totaled $46.4 million and $54.2 million, respectively. During the three months ended September 30, 2024, there were no sales of AFS securities. During the nine months ended September 30, 2024, proceeds from sales of AFS securities totaled $361.9 million. During the three and nine months ended September 30, 2023, purchases of AFS securities totaled $7.8 million and $44.6 million, respectively. During the three and nine months ended September 30, 2023, there were no sales of AFS securities. During the three months ended September 30, 2024, there were no gross gains or losses. During the nine months ended September 30, 2024, gross gains totaled $5.1 million and gross losses totaled $54.9 million. During the three and nine months ended September 30, 2023 there were no gross gains or losses.

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
September 30, 2024

Securities available for sale
U.S. Treasuries	$	—	$	—	$	—	$	—	$	—	$	—
Municipal bonds and obligations	61		10,885		1,347		26,465		1,408		37,350
Agency collateralized mortgage obligations	—		—		56,765		212,953		56,765		212,953
Agency mortgage-backed securities	—		—		43,155		232,132		43,155		232,132
Agency commercial mortgage-backed securities	—		—		16,148		70,566		16,148		70,566
Corporate bonds	—		—		3,403		34,501		3,403		34,501

Other bonds and obligations	—		—		66		295		66		295



Total securities available for sale	$	61	$	10,885	$	120,884	$	576,912	$	120,945	$	587,797

Securities held to maturity
Municipal bonds and obligations	$	107	$	34,770	$	16,980	$	115,023	$	17,087	$	149,793
Agency collateralized mortgage obligations	—		—		15,332		87,940		15,332		87,940
Agency mortgage-backed securities	—		—		7,048		37,417		7,048		37,417
Agency commercial mortgage-backed securities	—		—		22,001		104,311		22,001		104,311
Tax advantaged economic development bonds	5		370		31		838		36		1,208
Total securities held to maturity	112		35,140		61,392		345,529		61,504		380,669

Total	$	173	$	46,025	$	182,276	$	922,441	$	182,449	$	968,466

December 31, 2023

Securities available for sale
Municipal bonds and obligations	$	76	$	9,326	$	1,353	$	22,739	$	1,429	$	32,065
Agency collateralized mortgage obligations	—		—		79,112		347,874		79,112		347,874
Agency mortgage-backed securities	1		22		75,154		417,151		75,155		417,173
Agency commercial mortgage-backed securities	—		—		29,553		145,326		29,553		145,326
Corporate bonds	457		6,543		3,753		31,690		4,210		38,233

Other bonds and obligations	—		—		66		295		66		295



Total securities available for sale	$	534	$	15,891	$	188,991	$	965,075	$	189,525	$	980,966

Securities held to maturity
Municipal bonds and obligations	$	229	$	28,895	$	16,758	$	92,063	$	16,987	$	120,958
Agency collateralized mortgage obligations	1		21		18,359		94,548		18,360		94,569
Agency mortgage-backed securities	—		—		8,052		39,327		8,052		39,327
Agency commercial mortgage-backed securities	—		—		24,368		105,801		24,368		105,801
Tax advantaged economic development bonds	—		—		60		922		60		922
Total securities held to maturity	230		28,916		67,597		332,661		67,827		361,577
Total	$	764	$	44,807	$	256,588	$	1,297,736	$	257,352	$	1,342,543

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 September 30, 2024, 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 September 30, 2024:

AFS municipal bonds and obligations

At September 30, 2024, 40 of the 91 securities in the Company’s portfolio of AFS municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 3.6% 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 has determined that 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 September 30, 2024, 37 of the 40 securities in the Company’s portfolio of AFS collateralized mortgage obligations were in unrealized loss positions. Aggregate unrealized losses represented 21.1% 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 September 30, 2024, 28 of the 28 securities in the Company’s portfolio of AFS mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 16.4% 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 September 30, 2024, 13 of the 14 securities in the Company’s portfolio of AFS corporate bonds were in unrealized loss positions. Aggregate unrealized losses represents 9.0% 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 September 30, 2024, 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 September 30, 2024, 111 of the 161 securities in the Company’s portfolio of HTM municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 10.2% 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 has determined that 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 September 30, 2024, 12 of the 12 securities in the Company’s portfolio of HTM collateralized mortgage obligations were in unrealized loss positions. Aggregate unrealized losses represented 14.9% 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 September 30, 2024, 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 September 30, 2024, 2 of the 2 securities in the Company’s portfolio of tax-advantaged economic development bonds were in unrealized loss positions. Aggregate unrealized losses represented 2.9% of the amortized cost of securities in unrealized loss positions. The Company believes that more likely than not all the principal outstanding will be collected. All securities are performing.