XML 23 R13.htm IDEA: XBRL DOCUMENT
v3.21.1

Securities | 3 Months Ended
--- | ---
Mar. 31, 2021
Investments, Debt and Equity Securities [Abstract] |
Securities | Securities The amortized cost, estimated fair value, and allowance for securities credit losses of debt securities available-for-sale and held-to-maturity at March 31, 2021 and December 31, 2020 are as follows (in thousands):
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value |  | Allowance for Credit Losses
At March 31, 2021 |  |  |  |  |  |  |  |  |
Debt securities available-for-sale: |  |  |  |  |  |  |  |  |
U.S. government and agency obligations | $ | 169,337 |  |  | $ | 2,570 |  |  | $ | (8) |  |  | $ | 171,899 |  |  | $ | — |
Collateralized loan obligations (“CLOs”) | 96,410 |  |  | 96 |  |  | (40) |  |  | 96,466 |  |  | — |
Mortgage-backed securities - FNMA | 144 |  |  | 2 |  |  | — |  |  | 146 |  |  | — |
Total debt securities available-for-sale | $ | 265,891 |  |  | $ | 2,668 |  |  | $ | (48) |  |  | $ | 268,511 |  |  | $ | — |
Debt securities held-to-maturity: |  |  |  |  |  |  |  |  |
State, municipal and sovereign debt obligations | 278,179 |  |  | 7,043 |  |  | (1,106) |  |  | 284,116 |  |  | (90) |
Corporate debt securities | 72,821 |  |  | 1,542 |  |  | (1,912) |  |  | 72,451 |  |  | (1,511) |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |
FHLMC | 303,539 |  |  | 4,256 |  |  | (3,178) |  |  | 304,617 |  |  | — |
FNMA | 335,307 |  |  | 5,978 |  |  | (2,481) |  |  | 338,804 |  |  | — |
GNMA | 59,904 |  |  | 1,614 |  |  | (23) |  |  | 61,495 |  |  | — |
SBA | 5,190 |  |  | — |  |  | (58) |  |  | 5,132 |  |  | — |
Other | 32,269 |  |  | 861 |  |  | — |  |  | 33,130 |  |  | (116) |
Total mortgage-backed securities | 736,209 |  |  | 12,709 |  |  | (5,740) |  |  | 743,178 |  |  | (116) |
Total debt securities held-to-maturity | $ | 1,087,209 |  |  | $ | 21,294 |  |  | $ | (8,758) |  |  | $ | 1,099,745 |  |  | $ | (1,717) |
Total debt securities | $ | 1,353,100 |  |  | $ | 23,962 |  |  | $ | (8,806) |  |  | $ | 1,368,256 |  |  | $ | (1,717) |
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value |  | Allowance for Credit Losses
At December 31, 2020 |  |  |  |  |  |  |  |  |
Debt securities available-for-sale: |  |  |  |  |  |  |  |  |
U.S. government and agency obligations | $ | 173,790 |  |  | $ | 3,152 |  |  | $ | (2) |  |  | $ | 176,940 |  |  | $ | — |
CLOs | 6,174 |  |  | — |  |  | (4) |  |  | 6,170 |  |  | — |
Mortgage-backed securities - FNMA | 190 |  |  | 2 |  |  | — |  |  | 192 |  |  | — |
Total debt securities available-for-sale | $ | 180,154 |  |  | $ | 3,154 |  |  | $ | (6) |  |  | $ | 183,302 |  |  | $ | — |
Debt securities held-to-maturity: |  |  |  |  |  |  |  |  |
State and municipal obligations | 238,405 |  |  | 11,500 |  |  | (231) |  |  | 249,674 |  |  | (48) |
Corporate debt securities | 72,305 |  |  | 1,615 |  |  | (2,652) |  |  | 71,268 |  |  | (1,550) |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |
FHLMC | 232,942 |  |  | 5,383 |  |  | (124) |  |  | 238,201 |  |  |
FNMA | 293,615 |  |  | 7,640 |  |  | (147) |  |  | 301,108 |  |  |
GNMA | 67,334 |  |  | 2,014 |  |  | (12) |  |  | 69,336 |  |  |
SBA | 5,392 |  |  | — |  |  | (60) |  |  | 5,332 |  |  |
Other | 32,321 |  |  | 1,226 |  |  | — |  |  | 33,547 |  |  | (117) |
Total mortgage-backed securities | 631,604 |  |  | 16,263 |  |  | (343) |  |  | 647,524 |  |  | (117) |
Total debt securities held-to-maturity | $ | 942,314 |  |  | $ | 29,378 |  |  | $ | (3,226) |  |  | $ | 968,466 |  |  | $ | (1,715) |
Total debt securities | $ | 1,122,468 |  |  | $ | 32,532 |  |  | $ | (3,232) |  |  | $ | 1,151,768 |  |  | $ | (1,715) |
There was no allowance for securities credit losses on debt securities available-for-sale at March 31, 2021 and December 31, 2020. The following table presents the activity in the allowance for credit losses for debt securities held-to-maturity for the three months ended March 31, 2021 and March 31, 2020 (in thousands):
| Three Months Ended March 31,
| 2021 |  |  | 2020
Allowance for credit losses |  |  |  |  |
Beginning balance | $ | (1,715) |  |  |  | $ | — |  |
Impact of CECL adoption | — |  |  |  | (1,268) |  |
Provision for credit loss expense | (2) |  |  |  | (1,261) |  |
Total ending allowance balance | $ | (1,717) |  |  |  | $ | (2,529) |  |
During 2013, the Bank transferred $536.0 million of previously designated available-for-sale securities to a held-to-maturity designation at estimated fair value. The securities transferred had an unrealized net loss of $13.3 million at the time of transfer, which continues to be reflected in accumulated other comprehensive income on the consolidated statement of financial condition, net of subsequent amortization, which is being recognized over the life of the securities. The carrying value of the debt securities held-to-maturity at March 31, 2021 and December 31, 2020 is as follows (in thousands):
| March 31, 2021 |  | December 31, 2020
Amortized cost | $ | 1,087,209 |  |  | $ | 942,314 |
Net loss on date of transfer from available-for-sale | (13,347) |  |  | (13,347) |
Allowance for securities credit loss | (1,717) |  |  | (1,715) |
Accretion of net unrealized loss on securities reclassified as held-to-maturity | 10,181 |  |  | 10,001 |
Carrying value | $ | 1,082,326 |  |  | $ | 937,253 |
There were no realized gains or losses on debt securities for the three months ended March 31, 2021 and 2020. The amortized cost and estimated fair value of debt securities at March 31, 2021 by contractual maturity are shown below (in thousands). Actual maturities may differ from contractual maturities in instances where issuers have the right to call or prepay obligations with or without call or prepayment penalties. At March 31, 2021, corporate debt securities with an amortized cost of $54.3 million, and estimated fair value of $54.0 million, and CLOs with an amortized cost of $96.4 million, and estimated fair value of $96.5 million, were callable prior to the maturity date.
March 31, 2021 | Amortized Cost |  | Estimated Fair Value
Less than one year | $ | 105,213 |  |  | $ | 105,784 |
Due after one year through five years | 189,783 |  |  | 194,363 |
Due after five years through ten years | 164,010 |  |  | 162,249 |
Due after ten years | 157,741 |  |  | 162,536 |
| $ | 616,747 |  |  | $ | 624,932 |
Mortgage-backed securities are excluded from the above table since their effective lives are expected to be shorter than the contractual maturity date due to principal prepayments. The estimated fair value of securities pledged as required security for deposits and for other purposes required by law amounted to $533.0 million and $435.9 million at March 31, 2021 and December 31, 2020, respectively, which includes $147.0 million and $152.7 million at March 31, 2021 and December 31, 2020, respectively, pledged as collateral for securities sold under agreements to repurchase. At March 31, 2021, there were no holdings of securities of any one issuer, other than the US government and its agencies and government-sponsored enterprises, in an amount greater than 10% of stockholders’ equity. The estimated fair value and unrealized losses for debt securities available-for-sale and held-to-maturity at March 31, 2021 and December 31, 2020, segregated by the duration of the unrealized losses, are as follows (in thousands):
| At March 31, 2021
| Less than 12 months |  | 12 months or longer |  | Total
| Estimated Fair Value |  | Unrealized Losses |  | Estimated Fair Value |  | Unrealized Losses |  | Estimated Fair Value |  | Unrealized Losses
Debt securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |
U.S. government and agency obligations | $ | 10,139 |  |  | $ | (8) |  |  | $ | — |  |  | $ | — |  |  | $ | 10,139 |  |  | $ | (8) |
CLOs | 47,053 |  |  | (40) |  |  | — |  |  | — |  |  | 47,053 |  |  | (40) |
Total debt securities available-for-sale | 57,192 |  |  | (48) |  |  | — |  |  | — |  |  | 57,192 |  |  | (48) |
Debt securities held-to-maturity: |  |  |  |  |  |  |  |  |  |  |
State, municipal and sovereign debt obligations | $ | 50,696 |  |  | $ | (890) |  |  | $ | 5,748 |  |  | $ | (216) |  |  | $ | 56,444 |  |  | $ | (1,106) |
Corporate debt securities | 39,041 |  |  | (1,774) |  |  | 3,818 |  |  | (138) |  |  | 42,859 |  |  | (1,912) |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |
FHLMC | 158,632 |  |  | (3,178) |  |  | — |  |  | — |  |  | 158,632 |  |  | (3,178) |
FNMA | 163,103 |  |  | (2,478) |  |  | 293 |  |  | (3) |  |  | 163,396 |  |  | (2,481) |
GNMA | 6,104 |  |  | (23) |  |  | — |  |  | — |  |  | 6,104 |  |  | (23) |
SBA | 2,015 |  |  | (48) |  |  | 3,116 |  |  | (10) |  |  | 5,131 |  |  | (58) |
Total mortgage-backed securities | 329,854 |  |  | (5,727) |  |  | 3,409 |  |  | (13) |  |  | 333,263 |  |  | (5,740) |
Total debt securities held-to-maturity | 419,591 |  |  | (8,391) |  |  | 12,975 |  |  | (367) |  |  | 432,566 |  |  | (8,758) |
Total debt securities | $ | 476,783 |  |  | $ | (8,439) |  |  | $ | 12,975 |  |  | $ | (367) |  |  | $ | 489,758 |  |  | $ | (8,806) |
| At December 31, 2020
| Less than 12 months |  | 12 months or longer |  | Total
| Estimated Fair Value |  | Unrealized Losses |  | Estimated Fair Value |  | Unrealized Losses |  | Estimated Fair Value |  | Unrealized Losses
Debt securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |
U.S. government and agency obligations | $ | 17,029 |  |  | $ | (2) |  |  | $ | — |  |  | $ | — |  |  | $ | 17,029 |  |  | $ | (2) |
CLOs | 4,766 |  |  | (4) |  |  | — |  |  | — |  |  | 4,766 |  |  | (4) |
Total debt securities available-for-sale | 21,795 |  |  | (6) |  |  | — |  |  | — |  |  | 21,795 |  |  | (6) |
Debt securities held-to-maturity: |  |  |  |  |  |  |  |  |  |  |
State and municipal obligations | 2,823 |  |  | (23) |  |  | 7,509 |  |  | (208) |  |  | 10,332 |  |  | (231) |
Corporate debt securities | 10,192 |  |  | (255) |  |  | 35,935 |  |  | (2,397) |  |  | 46,127 |  |  | (2,652) |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |
FHLMC | 24,661 |  |  | (117) |  |  | 669 |  |  | (7) |  |  | 25,330 |  |  | (124) |
FNMA | 39,365 |  |  | (128) |  |  | 939 |  |  | (19) |  |  | 40,304 |  |  | (147) |
GNMA | 5,856 |  |  | (11) |  |  | 207 |  |  | (1) |  |  | 6,063 |  |  | (12) |
SBA | 3,626 |  |  | (12) |  |  | 1,706 |  |  | (48) |  |  | 5,332 |  |  | (60) |
Total mortgage-backed securities | 73,508 |  |  | (268) |  |  | 3,521 |  |  | (75) |  |  | 77,029 |  |  | (343) |
Total debt securities held-to-maturity | 86,523 |  |  | (546) |  |  | 46,965 |  |  | (2,680) |  |  | 133,488 |  |  | (3,226) |
Total debt securities | $ | 108,318 |  |  | $ | (552) |  |  | $ | 46,965 |  |  | $ | (2,680) |  |  | $ | 155,283 |  |  | $ | (3,232) |
The Company concluded that the corporate debt securities were not impaired at March 31, 2021 and the Company considered several factors in its analysis. The Company noted that each issuer made all the contractually due payments when required. There were no defaults on principal or interest payments and no interest payments were deferred. Based on management’s analysis of each individual security, the issuers appear to have the ability to meet debt service requirements over the life of the security. Furthermore, the Company does not intend to sell these corporate debt securities and it is more likely than not that the Company will not be required to sell the securities. Historically, the Company has not utilized securities sales as a source of liquidity. The Company’s long range liquidity plans indicate adequate sources of liquidity outside the securities portfolio. The mortgage-backed securities are issued and guaranteed by either FHLMC, FNMA, GNMA, or SBA, corporations which are chartered by the United States Government and whose debt obligations are rated AA+/Aaa by S&P and Moody’s, respectively. Additionally, there are private label commercial mortgage-backed securities with credit ratings ranging between Aaa and Aa2. The Company considers the unrealized losses to be the result of changes in interest rates, and not credit quality, which over time can have both a positive and negative impact on the estimated fair value of the mortgage-backed securities. The Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell the securities before recovery of their amortized cost. As a result, the Company concluded that these securities were not impaired at March 31, 2021. State, municipal, and sovereign debt obligations are securities issued by state, local and national governments for various purposes. The Company is not aware of any information subsequent to the purchase of any state, municipal, and sovereign debt obligations that indicates an inability on the part of an issuer to meet all of its financial commitments. The weighted average credit rating of these securities is Aa/AA with no credit rating below Baa2/BBB. The Company has the ability and stated intention to hold these securities to maturity at which time the Company expects to receive full repayment. Current unrealized losses are considered to be the result of changes in interest rates which over time can have both a positive and negative impact on the estimated fair value of the securities. As a result, the Company concluded that these securities were not impaired as of March 31, 2021. The Company monitors the credit quality of debt securities held-to-maturity on a quarterly basis through the use of internal credit analysis supplemented by external credit ratings. The following table summarized the amortized cost of debt securities held-to-maturity at March 31, 2021, aggregated by credit quality indicator (in thousands):
| AAA |  | AA |  | A |  | BBB |  | BB |  | Total
As of March 31, 2021 |  |  |  |  |  |  |  |  |  |  |
State, municipal and sovereign debt obligations | $ | 33,421 |  |  | $ | 138,734 |  |  | $ | 72,959 |  |  | $ | 33,065 |  |  | $ | — |  |  | $ | 278,179 |
Corporate debt securities | — |  |  | 497 |  |  | 11,995 |  |  | 48,995 |  |  | 11,334 |  |  | 72,821 |
Mortgage-backed securities - Other | 11,111 |  |  | 21,158 |  |  | — |  |  | — |  |  | — |  |  | 32,269 |
Total debt securities held-to-maturity | $ | 44,532 |  |  | $ | 160,389 |  |  | $ | 84,954 |  |  | $ | 82,060 |  |  | $ | 11,334 |  |  | $ | 383,269 |
Equity investments At March 31, 2021 and December 31, 2020, the Company held equity investments at an estimated fair value of $50.2 million and $107.1 million, respectively. The equity investments primarily comprised of select financial services institutions’ common and preferred stocks paying attractive dividends. The realized and unrealized gains or losses on equity securities for the three months ended March 31, 2021 and March 31, 2020 are shown in the table below (in thousands):
| Three Months Ended March 31, |  |
| 2021 |  | 2020 |  |  |  |
Net gain on equity investments | $ | 8,287 |  |  | $ | 155 |  |  |  |  |
Less: Net gains recognized on equity securities sold | 8,123 |  |  | — |  |  |  |  |
Unrealized gain recognized on equity securities still held | $ | 164 |  |  | $ | 155 |  |  |  |  |

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsDebtAndEquitySecuritiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 http://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 http://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 http://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 http://asc.fasb.org/subtopic&trid=2176304 + Details
Name: | us-gaap_InvestmentsInDebtAndMarketableEquitySecuritiesAndCertainTradingAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration