Securities (Tables)

9 Months Ended

Sep. 30, 2022

Investments, Debt and Equity Securities [Abstract]

The amortized cost, estimated fair value, and allowance for securities credit losses of debt securities available-for-sale and held-to-maturity at September 30, 2022 and December 31, 2021 are as follows (in thousands):


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Allowance for Credit Losses
At September 30, 2022
Debt securities available-for-sale:
U.S. government and agency obligations	$	107,198			$	(8,099)	$	99,099	$	—
Corporate debt securities	5,000		—		(628)		4,372		—
Asset-backed securities	296,228		—		(21,355)		274,873		—

Agency commercial mortgage-backed securities (“MBS”)	110,871		—		(18,915)		91,956		—
Total debt securities available-for-sale	$	519,297	$	—	$	(48,997)	$	470,300	$	—
Debt securities held-to-maturity:
State, municipal and sovereign debt obligations	$	263,614	$	—	$	(31,052)	$	232,562	$	(63)
Corporate debt securities	59,000		403		(3,135)		56,268		(1,135)
Mortgage-backed securities:
Agency residential	674,356		103		(89,696)		584,763		—
Agency commercial	7,440		6		(279)		7,167		—
Non-agency commercial	26,973		—		(2,307)		24,666		(36)
Total mortgage-backed securities	708,769		109		(92,282)		616,596		(36)
Total debt securities held-to-maturity	$	1,031,383	$	512	$	(126,469)	$	905,426	$	(1,234)
Total debt securities	$	1,550,680	$	512	$	(175,466)	$	1,375,726	$	(1,234)
At December 31, 2021
Debt securities available-for-sale:
U.S. government and agency obligations	$	164,756	$	1,135	$	(471)	$	165,420	$	—
Corporate debt securities	5,000		42		(11)		5,031		—
Asset-backed securities	298,976		41		(1,489)		297,528		—
Agency commercial MBS	101,142		57		(923)		100,276		—
Total debt securities available-for-sale	$	569,874	$	1,275	$	(2,894)	$	568,255	$	—
Debt securities held-to-maturity:
State, municipal, and sovereign debt obligations	$	281,389	$	10,185	$	(1,164)	$	290,410	$	(85)
Corporate debt securities	68,823		1,628		(1,279)		69,172		(1,343)
Mortgage-backed securities:
Agency residential	756,844		6,785		(7,180)		756,449		—
Agency commercial	4,385		7		(44)		4,348		—
Non-agency commercial	32,107		362		(104)		32,365		(39)
Total mortgage-backed securities	793,336		7,154		(7,328)		793,162		(39)
Total debt securities held-to-maturity	$	1,143,548	$	18,967	$	(9,771)	$	1,152,744	$	(1,467)
Total debt securities	$	1,713,422	$	20,242	$	(12,665)	$	1,720,999	$	(1,467)

Debt Securities, Held-to-maturity, Allowance for Credit Loss

The following table presents the activity in the allowance for credit losses for debt securities held-to-maturity for the three and nine months ended September 30, 2022 and 2021 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Allowance for securities credit losses
Beginning balance	$	(1,293)	$	(1,609)	$	(1,467)	$	(1,715)

Credit loss benefit	59		106		233		212



Total ending allowance balance	$	(1,234)	$	(1,503)	$	(1,234)	$	(1,503)

Schedule of Debt Securities, Held-to-maturity, Credit Quality Indicator

Under this approach, the amortized cost of debt securities held-to-maturity at September 30, 2022, aggregated by credit quality indicator, are as follows (in thousands):



	Investment Grade		Non-Investment Grade/Non-rated		Total
As of September 30, 2022


State, municipal and sovereign debt obligations	$	263,614	$	—	$	263,614
Corporate debt securities	43,635		15,365		59,000






Non-agency commercial MBS	26,973		—		26,973

Total debt securities held-to-maturity	$	334,222	$	15,365	$	349,587

Carrying Value of Held-to-Maturity Investment Securities

The carrying value of the debt securities held-to-maturity at September 30, 2022 and December 31, 2021 is as follows (in thousands):


	September 30,		December 31,
	2022		2021
Amortized cost	$	1,031,383	$	1,143,548
Net loss on date of transfer from available-for-sale	(13,556)		(13,556)
Allowance for securities credit losses	(1,234)		(1,467)
Accretion of net unrealized loss on securities reclassified as held-to-maturity	11,119		10,668
Carrying value	$	1,027,712	$	1,139,193

The realized and unrealized gains or losses on equity securities for the three and nine months ended September 30, 2022 and 2021 are shown in the table below (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net gain (loss) on equity investments	$	3,362	$	(466)	$	(7,502)	$	8,397
Less: Net gains recognized on equity securities sold	—		—		1,351		8,123
Unrealized gain (loss) recognized on equity securities still held	$	3,362	$	(466)	$	(8,853)	$	274

Amortized Cost and Estimated Fair Value of Investment Securities by Contractual Maturity

The amortized cost and estimated fair value of debt securities at September 30, 2022 by contractual maturity are shown below (in thousands).


September 30, 2022	Amortized Cost		Estimated Fair Value
Less than one year	$	55,326	$	54,972
Due after one year through five years	166,980		154,459
Due after five years through ten years	225,771		205,348
Due after ten years	282,963		252,395
	$	731,040	$	667,174

Estimated Fair Value and Unrealized Loss for Securities Available-for-Sale and Held-to-Maturity

The estimated fair value and unrealized losses for debt securities available-for-sale and held-to-maturity at September 30, 2022 and December 31, 2021, segregated by the duration of the unrealized losses, are as follows (in thousands):


	Less than 12 months				12 months or longer				Total
	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
At September 30, 2022
Debt securities available-for-sale:
U.S. government and agency obligations	$	75,464	$	(5,924)	$	23,635	$	(2,175)	$	99,099	$	(8,099)
Corporate debt securities	3,496		(504)		877		(124)		4,373		(628)
Asset-backed securities	216,926		(16,650)		57,947		(4,705)		274,873		(21,355)
Agency commercial MBS	77,878		(16,233)		14,078		(2,682)		91,956		(18,915)
Total debt securities available-for-sale	373,764		(39,311)		96,537		(9,686)		470,301		(48,997)
Debt securities held-to-maturity:


State, municipal and sovereign debt obligations	172,090		(22,460)		58,649		(8,592)		230,739		(31,052)
Corporate debt securities	14,142		(319)		36,516		(2,816)		50,658		(3,135)

MBS:
Agency residential	252,724		(26,933)		318,925		(62,763)		571,649		(89,696)
Agency commercial	3,609		(242)		2,092		(37)		5,701		(279)
Non-agency commercial	20,512		(1,981)		4,154		(326)		24,666		(2,307)
Total MBS	276,845		(29,156)		325,171		(63,126)		602,016		(92,282)
Total debt securities held-to-maturity	463,077		(51,935)		420,336		(74,534)		883,413		(126,469)
Total debt securities	$	836,841	$	(91,246)	$	516,873	$	(84,220)	$	1,353,714	$	(175,466)
At December 31, 2021
Debt securities available-for-sale:
U.S. government and agency obligations	$	82,395	$	(471)	$	—	$	—	$	82,395	$	(471)
Corporate debt securities	1,989		(11)		—		—		1,989		(11)
Asset-backed securities	279,486		(1,489)		—		—		279,486		(1,489)
Agency commercial MBS	80,726		(923)		—		—		80,726		(923)
Total debt securities available-for-sale	444,596		(2,894)		—		—		444,596		(2,894)
Debt securities held-to-maturity:


State, municipal, and sovereign debt obligations	75,329		(1,063)		4,383		(101)		79,712		(1,164)
Corporate debt securities	38,304		(1,279)		—		—		38,304		(1,279)

MBS:
Agency residential	445,399		(5,822)		50,133		(1,358)		495,532		(7,180)
Agency commercial	2,255		(41)		886		(3)		3,141		(44)
Non-agency commercial	10,722		(104)		—		—		10,722		(104)
Total MBS	458,376		(5,967)		51,019		(1,361)		509,395		(7,328)
Total debt securities held-to-maturity	572,009		(8,309)		55,402		(1,462)		627,411		(9,771)
Total debt securities	$	1,016,605	$	(11,203)	$	55,402	$	(1,462)	$	1,072,007	$	(12,665)