Securities

9 Months Ended

Sep. 30, 2024

Investments, Debt and Equity Securities [Abstract]

Available-for-Sale Debt Securities

The following tables summarize available-for-sale debt securities held by the Company at September 30, 2024 and December 31, 2023:


	Available-for-Sale Debt Securities
September 30, 2024	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)

U.S. Treasuries	$	85,036	$	380	$	3,305	$	82,111
Obligations of U.S. Government sponsored entities	408,292		8,241		16,328		400,205
Obligations of U.S. states and political subdivisions	86,583		14		7,079		79,518
Mortgage-backed securities – residential, issued by
U.S. Government agencies	70,886		12		3,798		67,100
U.S. Government sponsored entities	757,108		3,720		82,875		677,953

U.S. corporate debt securities	2,500		0		108		2,392
Total available-for-sale debt securities	$	1,410,405	$	12,367	$	113,493	$	1,309,279


	Available-for-Sale Debt Securities
December 31, 2023	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	114,418	$	495	$	5,009	$	109,904
Obligations of U.S. Government sponsored entities	472,286		6,449		22,277		456,458
Obligations of U.S. states and political subdivisions	89,999		2		8,077		81,924
Mortgage-backed securities – residential, issued by
U.S. Government agencies	49,976		8		4,744		45,240
U.S. Government sponsored entities	819,303		2,422		100,895		720,830

U.S. corporate debt securities	2,500		0		206		2,294
Total available-for-sale debt securities	$	1,548,482	$	9,376	$	141,208	$	1,416,650

Held-to-Maturity Debt Securities

The following tables summarize held-to-maturity debt securities held by the Company at September 30, 2024 and December 31, 2023:


	Held-to-Maturity Debt Securities
September 30, 2024	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	86,103	$	0	$	8,956	$	77,147
Obligations of U.S. Government sponsored entities	226,343		0		26,891		199,452

Total held-to-maturity debt securities	$	312,446	$	0	$	35,847	$	276,599


	Held-to-Maturity Debt Securities
December 31, 2023	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	86,266	$	0	$	11,051	$	75,215
Obligations of U.S. Government sponsored entities	226,135		0		33,895		192,240

Total held-to-maturity debt securities	$	312,401	$	0	$	44,946	$	267,455

The Company may from time to time sell debt securities from its available-for-sale portfolio. Realized gains on sales of available-for-sale debt securities were $50,300 for both the three and nine months ended September 30, 2024 and $0 for both the three and nine months ended September 30, 2023. Realized losses on sales of available-for-sale debt securities were $0 for both the three and nine months ended September 30, 2024, and $62.9 million and $70.0 million for the three and nine months ended September 30, 2023, respectively. The amortized cost of available-for-sale debt securities sold during both the three and nine months ended September 30, 2024 were $39.9 million, compared to $429.6 million and $510.5 million of available-for-sale debt securities sold during the three and nine months ended September 30, 2023, respectively. Sales of available-for-sale debt securities were the result of general investment portfolio, interest rate risk and balance sheet management. Proceeds from the sale of available-for-sale debt securities were $40.0 million for both the three and nine months ended September 30, 2024 and $366.7 million and $440.5 million for the three and nine months ended September 30, 2023, respectively. The Company's investment portfolio includes callable securities that may be called prior to maturity. There were no realized gains or losses on called available-for-sale debt securities for both the three and nine months ended September 30, 2024 and September 30, 2023. The Company also recognized net gains of $34,700 and $14,300 for the three and nine months ended September 30, 2024, respectively, compared to net losses of $36,700 and $35,700 for the three and nine months ended September 30, 2023, respectively, on equity securities, reflecting the change in fair value.

The following table summarizes available-for-sale debt securities that had unrealized losses at September 30, 2024, and December 31, 2023:


September 30, 2024	Less than 12 Months				12 Months or Longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasuries	$	0	$	0	$	67,465	$	3,305	$	67,465	$	3,305
Obligations of U.S. Government sponsored entities	0		0		201,802		16,328		201,802		16,328
Obligations of U.S. states and political subdivisions	0		0		75,370		7,079		75,370		7,079

Mortgage-backed securities – residential, issued by
U.S. Government agencies	27,779		63		39,010		3,735		66,789		3,798
U.S. Government sponsored entities	5,562		31		560,180		82,844		565,742		82,875
U.S. corporate debt securities	0		0		2,392		108		2,392		108
Total available-for-sale debt securities	$	33,341	$	94	$	946,219	$	113,399	$	979,560	$	113,493


December 31, 2023	Less than 12 Months				12 Months or Longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasuries	$	0	$	0	$	65,663	$	5,009	$	65,663	$	5,009
Obligations of U.S. Government sponsored entities	14,453		110		220,913		22,167		235,366		22,277
Obligations of U.S. states and political subdivisions	10,572		106		69,601		7,971		80,173		8,077

Mortgage-backed securities – residential, issued by
U.S. Government agencies	1,145		4		43,764		4,740		44,909		4,744
U.S. Government sponsored entities	5,659		66		609,456		100,829		615,115		100,895
U.S. corporate debt securities	0		0		2,294		206		2,294		206
Total available-for-sale debt securities	$	31,829	$	286	$	1,011,691	$	140,922	$	1,043,520	$	141,208

The following table summarizes held-to-maturity debt securities that had unrealized losses at September 30, 2024 and December 31, 2023:


September 30, 2024	Less than 12 Months				12 Months or Longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasuries	$	0	$	0	$	77,147	$	8,956	$	77,147	$	8,956
Obligations of U.S. Government sponsored entities	0		0		199,452		26,891		199,452		26,891
Total held-to-maturity debt securities	$	0	$	0	$	276,599	$	35,847	$	276,599	$	35,847


December 31, 2023	Less than 12 Months				12 Months or Longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasuries	$	0	$	0	$	75,215	$	11,051	$	75,215	$	11,051
Obligations of U.S. Government sponsored entities	0		0		192,240		33,895		192,240		33,895

Total held-to-maturity debt securities	$	0	$	0	$	267,455	$	44,946	$	267,455	$	44,946

The Company evaluates available-for-sale debt securities for expected credit losses ("ECL") in unrealized loss positions at each measurement date to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors.

Factors that may be indicative of ECL include, but are not limited to, the following:

•Extent to which the fair value is less than the amortized cost basis.

•Adverse conditions specifically related to the security, an industry, or geographic area (changes in technology, business practice).

•Payment structure of the debt security with respect to underlying issuer or obligor.

•Failure of the issuer to make scheduled payment of principal and/or interest.

•Changes to the rating of a security or issuer by a nationally recognized statistical rating organization.

•Changes in tax or regulatory guidelines that impact a security or underlying issuer.

For available-for-sale debt securities in an unrealized loss position, the Company evaluates the securities to determine whether the decline in the fair value below the amortized cost basis (technical impairment) is the result of changes in interest rates or reflects a fundamental change in the credit worthiness of the underlying issuer. Any impairment that is not credit related is recognized in other comprehensive income (loss), net of applicable taxes. Credit-related impairment is recognized as an allowance for credit losses ("ACL") on the Consolidated Statements of Condition, limited to the amount by which the amortized

cost basis exceeds the fair value, with a corresponding adjustment to earnings. Both the ACL and the adjustment to net income may be reversed if conditions change.

Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type with each type sharing similar risk characteristics and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Management has made the accounting policy election to exclude accrued interest receivable on held-to-maturity debt securities from the estimate of credit losses. As of September 30, 2024, the held-to-maturity portfolio consisted of U.S. Treasury securities and securities issued by U.S. government-sponsored enterprises, including the Federal National Mortgage Agency, the Federal Home Loan Bank ("FHLB") and the Federal Farm Credit Banks Funding Corporation. U.S. Treasury securities are backed by the full faith and credit of and/or guaranteed by the U.S. government, and it is expected that the securities will not be settled at prices less than the amortized cost bases of the securities. Securities issued by U.S. government agencies or U.S. government-sponsored enterprises carry the explicit and/or implicit guarantee of the U.S. government, are widely recognized as "risk-free," and have a long history of zero credit loss. As such, the Company did not record an allowance for credit losses for these securities as of September 30, 2024 or December 31, 2023.

The gross unrealized losses reported for residential mortgage-backed securities relate to investment securities issued by U.S. government sponsored entities such as Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, and

U.S. government agencies such as Government National Mortgage Association. The total gross unrealized losses, shown in the tables above, were primarily attributable to changes in interest rates and levels of market liquidity, relative to when the investment securities were purchased, and not due to the credit-related quality of the investment securities. The Company does not have the intent to sell these securities and does not believe it is more likely than not that the Company will be required to sell these securities before a recovery of amortized cost.

The amortized cost and estimated fair value of debt securities by contractual maturity are shown in the following table. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities are shown separately since they are not due at a single maturity date.


September 30, 2024
(In thousands)	Amortized Cost		Fair Value
Available-for-sale debt securities:
Due in one year or less	$	109,842	$	108,632
Due after one year through five years	226,448		219,556
Due after five years through ten years	223,794		217,790
Due after ten years	22,327		18,248
Total	582,411		564,226
Mortgage-backed securities	827,994		745,053
Total available-for-sale debt securities	$	1,410,405	$	1,309,279


December 31, 2023
(In thousands)	Amortized Cost		Fair Value
Available-for-sale debt securities:
Due in one year or less	$	99,242	$	98,650
Due after one year through five years	307,093		296,279
Due after five years through ten years	245,617		233,569
Due after ten years	27,251		22,082
Total	679,203		650,580
Mortgage-backed securities	869,279		766,070
Total available-for-sale debt securities	$	1,548,482	$	1,416,650


September 30, 2024
(In thousands)	Amortized Cost		Fair Value
Held-to-maturity debt securities:

Due after one year through five years	$	76,717	$	68,743
Due after five years through ten years	235,729		207,856
Total held-to-maturity debt securities	$	312,446	$	276,599


December 31, 2023
(In thousands)	Amortized Cost		Fair Value
Held-to-maturity debt securities:


Due after five years through ten years	$	312,401	$	267,455
Total held-to-maturity debt securities	$	312,401	$	267,455

The Company also holds non-marketable Federal Home Loan Bank of New York ("FHLBNY") stock and non-marketable Atlantic Community Bankers Bank ("ACBB") stock, all of which are required to be held for regulatory purposes and for borrowing availability. The required investment in FHLB stock is tied to the Company’s borrowing levels with the FHLB. Holdings of FHLBNY stock and ACBB stock totaled $30.8 million and $95,000, respectively, at September 30, 2024. These securities are carried at par, which is also cost. The FHLBNY continues to pay dividends and repurchase stock. Quarterly, we evaluate our investment in the FHLB for impairment. We evaluate recent and long-term operating performance, liquidity, funding and capital positions, stock repurchase history, dividend history and impact of legislative and regulatory changes. Based on our most recent evaluation, as of September 30, 2024, we determined that no impairment write-downs were required.