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INVESTMENTS | 9 Months Ended
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Sep. 30, 2022
Investments, Debt and Equity Securities [Abstract] |
INVESTMENTS | INVESTMENTS Trading Securities Trading securities are reported on the Company's consolidated statements of condition at fair value. As of September 30, 2022 and December 31, 2021, the fair value of the Company's trading securities were $3.7 million and $4.4 million, respectively. These securities are held in a rabbi trust account and invested in mutual funds. The trading securities will be used for future payments associated with the Company's deferred compensation plan for eligible employees and directors. AFS Debt Securities AFS debt securities are reported on the Company's consolidated statements of condition at fair value. The following table summarizes the amortized cost, estimated fair value, and unrealized gains (losses) of AFS debt securities, as of the dates indicated:
(In thousands) |  | Amortized Cost |  | Unrealized Gains |  | Unrealized Losses |  | Fair Value
September 30, 2022 |  |  |  |  |  |  |  |
Obligations of states and political subdivisions |  | $ | 53,247 |  |  | $ | 1 |  |  | $ | (1,774) |  |  | $ | 51,474 |
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises |  | 622,660 |  |  | 65 |  |  | (92,937) |  |  | 529,788 |
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises |  | 134,872 |  |  | — |  |  | (13,061) |  |  | 121,811 |
Subordinated corporate bonds |  | 23,109 |  |  | — |  |  | (2,564) |  |  | 20,545 |
Total AFS debt securities |  | $ | 833,888 |  |  | $ | 66 |  |  | $ | (110,336) |  |  | $ | 723,618 |
December 31, 2021 |  |  |  |  |  |  |  |
Obligations of U.S. government-sponsored enterprises |  | $ | 8,585 |  |  | $ | — |  |  | $ | (241) |  |  | $ | 8,344 |
Obligations of states and political subdivisions |  | 112,086 |  |  | 5,392 |  |  | — |  |  | 117,478 |
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises |  | 1,003,869 |  |  | 7,856 |  |  | (11,468) |  |  | 1,000,257 |
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises |  | 361,781 |  |  | 2,835 |  |  | (5,767) |  |  | 358,849 |
Subordinated corporate bonds |  | 22,660 |  |  | 152 |  |  | (254) |  |  | 22,558 |
Total AFS debt securities |  | $ | 1,508,981 |  |  | $ | 16,235 |  |  | $ | (17,730) |  |  | $ | 1,507,486 |
As of September 30, 2022 and December 31, 2021, there was no allowance carried on AFS debt securities. In June of 2022, the Company transferred securities with a fair value of $520.3 million from AFS to HTM. The unrealized losses on the AFS debt securities at the time of transfer were $72.1 million, pre-tax, and were reported within AOCI. These unrealized losses are being amortized over the remaining life of the securities from AOCI into interest income on the consolidated statements of income. At September 30, 2022, the net unrealized losses on the transferred securities reported within AOCI were $53.7 million, net of a deferred tax asset of $14.7 million. The net unrealized losses on AFS debt securities reported within AOCI (excluding the aforementioned securities transferred from AFS to HTM) at September 30, 2022, were $86.6 million, net of a deferred tax asset of $23.7 million and at December 31, 2021 were $1.2 million, net of a deferred tax asset of $321,000. The following table details the Company's sales of AFS debt securities for the periods indicated below:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(In thousands) |  | 2022 |  | 2021 |  | 2022 |  | 2021
Proceeds from sales of investments |  | $ | — |  |  | $ | — |  |  | $ | 8,723 |  |  | $ | — |
Gross realized gains |  | — |  |  | — |  |  | 13 |  |  | — |
Gross realized losses |  | — |  |  | — |  |  | (22) |  |  | — |
The following table presents the Company's AFS debt securities with gross unrealized losses, for which an ACL has not been recorded, segregated by the length of time the securities have been in a continuous loss position, as of the dates indicated:
|  |  |  | Less Than 12 Months |  | 12 Months or More |  | Total
(In thousands, except number of holdings) |  | Number of Holdings |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
September 30, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Obligations of states and political subdivisions |  | 101 |  |  | $ | 51,026 |  |  | $ | (1,774) |  |  | $ | — |  |  | $ | — |  |  | $ | 51,026 |  |  | $ | (1,774) |
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises |  | 172 |  |  | 203,082 |  |  | (24,432) |  |  | 322,251 |  |  | (68,505) |  |  | 525,333 |  |  | (92,937) |
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises |  | 76 |  |  | 83,532 |  |  | (7,433) |  |  | 38,279 |  |  | (5,628) |  |  | 121,811 |  |  | (13,061) |
Subordinated corporate bonds |  | 13 |  |  | 9,071 |  |  | (910) |  |  | 11,474 |  |  | (1,654) |  |  | 20,545 |  |  | (2,564) |
Total AFS debt securities |  | 362 |  |  | $ | 346,711 |  |  | $ | (34,549) |  |  | $ | 372,004 |  |  | $ | (75,787) |  |  | $ | 718,715 |  |  | $ | (110,336) |
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Obligations of U.S. government-sponsored enterprises |  | 4 |  |  | $ | 8,344 |  |  | $ | (241) |  |  | $ | — |  |  | $ | — |  |  | $ | 8,344 |  |  | $ | (241) |
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises |  | 113 |  |  | 659,851 |  |  | (8,999) |  |  | 61,978 |  |  | (2,469) |  |  | 721,829 |  |  | (11,468) |
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises |  | 56 |  |  | 191,456 |  |  | (4,602) |  |  | 38,117 |  |  | (1,165) |  |  | 229,573 |  |  | (5,767) |
Subordinated corporate bonds |  | 7 |  |  | 11,932 |  |  | (232) |  |  | 979 |  |  | (22) |  |  | 12,911 |  |  | (254) |
Total AFS debt securities |  | 180 |  |  | $ | 871,583 |  |  | $ | (14,074) |  |  | $ | 101,074 |  |  | $ | (3,656) |  |  | $ | 972,657 |  |  | $ | (17,730) |
For the three and nine months ended September 30, 2022 and 2021, the unrealized losses on the Company's AFS debt securities have not been recognized into income because management does not intend to sell and it is not more-likely-than-not it will be required to sell any of the AFS debt securities before recovery of its amortized cost basis. Furthermore, the unrealized losses were due to changes in interest rates and other market conditions and were not reflective of credit events, the issuers continue to make timely principal and interest payments on the bonds. Agency-backed and government-sponsored enterprise securities have a long 40 year history with no credit losses, including during times of severe stress like the 2007-2008 financial crisis. The principal and interest payments on agency guaranteed debt is backed by the U.S. government. Government-sponsored enterprises similarly guarantee principal and interest payments and carry an implicit guarantee from the U.S. Department of the Treasury. Additionally, government-sponsored enterprise securities are exceptionally liquid, readily marketable, and provide a substantial amount of price transparency and price parity, indicating a perception of zero credit losses. At September 30, 2022 and December 31, 2021, total accrued interest receivable on AFS debt securities, which has been excluded from reported amortized cost basis on AFS debt securities, was $2.0 million and $3.4 million, respectively, and was reported within other assets on the consolidated statements of condition. An allowance was not carried on the accrued interest receivable at either date. The amortized cost and estimated fair values of the Company's AFS debt securities by contractual maturity at September 30, 2022, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-related securities are shown in total, as their maturities are highly variable.
(In thousands) |  | Amortized Cost |  | Fair Value
Due in one year or less |  | $ | 501 |  |  | $ | 500 |
Due after one year through five years |  | 15,785 |  |  | 14,033 |
Due after five years through ten years |  | 60,070 |  |  | 57,486 |
Due after ten years |  | — |  |  | — |
Subtotal |  | 76,356 |  |  | 72,019 |
Mortgage-related securities |  | 757,532 |  |  | 651,599 |
Total |  | $ | 833,888 |  |  | $ | 723,618 |
HTM Debt Securities HTM debt securities are reported on the Company's consolidated statements of condition at amortized cost. The following table summarizes the amortized cost, estimated fair value and unrealized gains (losses) of HTM debt securities as of the dates indicated:
(In thousands) |  | Amortized Cost |  | Unrealized Gains |  | Unrealized Losses |  | Fair Value
September 30, 2022 |  |  |  |  |  |  |  |
Obligations of U.S. government-sponsored enterprises |  | $ | 7,422 |  |  | $ | — |  |  | $ | (664) |  |  | $ | 6,758 |
Obligations of states and political subdivisions |  | 55,908 |  |  | — |  |  | (3,595) |  |  | 52,313 |
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises |  | 320,850 |  |  | — |  |  | (27,067) |  |  | 293,783 |
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises |  | 147,753 |  |  | — |  |  | (10,990) |  |  | 136,763 |
Subordinated corporate bonds |  | 2,376 |  |  | — |  |  | (234) |  |  | 2,142 |
Total HTM debt securities |  | $ | 534,309 |  |  | $ | — |  |  | $ | (42,550) |  |  | $ | 491,759 |
December 31, 2021 |  |  |  |  |  |  |  |
Obligations of states and political subdivisions |  | $ | 1,291 |  |  | $ | 89 |  |  | $ | — |  |  | $ | 1,380 |
Total HTM debt securities |  | $ | 1,291 |  |  | $ | 89 |  |  | $ | — |  |  | $ | 1,380 |
In June of 2022, the Company transferred securities with a fair value of $520.3 million from AFS to HTM. See discussion above for details. As of September 30, 2022, the Company's HTM debt securities portfolio was primarily comprised of holdings issued or guaranteed by U.S. government sponsored enterprises and municipal debt. Agency-backed and government-sponsored enterprise securities have a long 40 year history with no credit losses, including during times of severe stress like the 2007-2008 financial crisis. The principal and interest payments on agency guaranteed debt is backed by the U.S. government. Government-sponsored enterprises similarly guarantee principal and interest payments and carry an implicit guarantee from the U.S. Department of the Treasury. Additionally, government-sponsored enterprise securities are exceptionally liquid, readily marketable, and provide a substantial amount of price transparency and price parity, indicating a perception of zero credit losses. HTM municipal debt holdings are comprised solely of high credit quality (rated A- or higher) state and municipal obligations. High credit quality state and municipal obligations have a history of zero to near-zero credit loss. As of December 31, 2021, the Company’s HTM debt securities portfolio was made up of three investment grade municipal debt securities, of which two securities also carried credit enhancements. Accordingly, the Company determined that the expected credit loss on its HTM portfolio was immaterial, and therefore it did not carry an allowance on its HTM debt securities at September 30, 2022 or December 31, 2021. As of September 30, 2022 and December 31, 2021, none of the Company's HTM debt securities were past due or on non-accrual status. For the three and nine months ended September 30, 2022 and 2021, the Company did not recognize any interest income on non-accrual HTM debt securities. At September 30, 2022 and December 31, 2021, total accrued interest receivable on HTM debt securities, which has been excluded from reported amortized cost basis on HTM debt securities, was $1.4 million and $10,000, respectively, and was reported within other assets on the consolidated statements of condition. An allowance was not carried on the accrued interest receivable at either date. The amortized cost and estimated fair values of HTM debt securities by contractual maturity at September 30, 2022 are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
(In thousands) |  | Amortized Cost |  | Fair Value
Due in one year or less |  | $ | — |  |  | $ | — |
Due after one year through five years |  | 864 |  |  | 845 |
Due after five years through ten years |  | 14,562 |  |  | 13,538 |
Due after ten years |  | 50,280 |  |  | 46,830 |
Subtotal |  | 65,706 |  |  | 61,213 |
Mortgage-related securities |  | 468,603 |  |  | 430,546 |
Total |  | $ | 534,309 |  |  | $ | 491,759 |
AFS and HTM Debt Securities Pledged At September 30, 2022 and December 31, 2021, AFS and HTM debt securities with an amortized cost of $765.8 million and $640.1 million and estimated fair values of $673.6 million and $641.2 million, respectively, were pledged to secure FHLBB advances, public deposits, and securities sold under agreements to repurchase and for other purposes required or permitted by law. Other Investments The Company's FHLBB and FRB common stock are reported at cost within other investments on the consolidated statements of condition. The Company evaluates these investments for impairment based on the ultimate recoverability of the par value. The Company did not record any impairment on its FHLBB and FRB stock for the three and nine months ended September 30, 2022 and 2021. The following table summarizes the Company's investment in FHLBB stock and FRBB stock as presented within other investments on the consolidated statements of condition, as of the dates indicated:
(In thousands) |  | September 30, 2022 |  | December 31, 2021
FHLBB |  | $ | 9,734 |  |  | $ | 4,906 |
FRB |  | 5,374 |  |  | 5,374 |
Total other investments |  | $ | 15,108 |  |  | $ | 10,280 |

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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) + Details
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