Securities

3 Months Ended

Mar. 31, 2021

Investments, Debt and Equity Securities [Abstract]

Securities

Securities

Available-for-Sale Debt Securities

The following table summarizes available-for-sale debt securities held by the Company at March 31, 2021:

	Available-for-Sale Debt Securities
March 31, 2021	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	29,634	$	0	$	523	$	29,111
Obligations of U.S. Government sponsored entities	793,360		8,063		13,636		787,787
Obligations of U.S. states and political subdivisions	117,242		2,286		207		119,321
Mortgage-backed securities – residential, issued by
U.S. Government agencies	141,110		2,163		1,069		142,204
U.S. Government sponsored entities	857,438		9,999		13,461		853,976
U.S. corporate debt securities	2,500		0		84		2,416
Total available-for-sale debt securities	$	1,941,284	$	22,511	$	28,980	$	1,934,815

 The following table summarizes available-for-sale debt securities held by the Company at December 31, 2020:  

	Available-for-Sale Debt Securities
December 31, 2020	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
Obligations of U.S. Government sponsored entities	599,652		9,820		1,992		607,480
Obligations of U.S. states and political subdivisions	126,642		3,144		40		129,746
Mortgage-backed securities – residential, issued by
U.S. Government agencies	179,538		3,216		646		182,108
U.S. Government sponsored entities	691,562		14,593		675		705,480
U.S. corporate debt securities	2,500		0		121		2,379
Total available-for-sale debt securities	$	1,599,894	$	30,773	$	3,474	$	1,627,193

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 $329,000 for the three months ended March 31, 2021 and $178,000 for the same period during 2020. Realized losses on sales of available-for-sale debt securities were $0 for the three months ended March 31, 2021 and $0 for the same period during 2020. The sales of available-for-sale investment securities were the result of general investment portfolio and interest rate risk management. The Company's available-for-sale portfolio includes callable securities that may be called prior to maturity. Realized gains on called available-for-sale debt securities were $0 for the three months ended March 31, 2021 and $251,000 for the three months ended March 31, 2020. The Company also recognized losses on equity securities of $12,000 for the three months ended March 31, 2021 and gains of $14,000 for the three months ended March 31, 2020, reflecting the change in fair value.

The following table summarizes available-for-sale debt securities that had unrealized losses at March 31, 2021:  

	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	$	29,111	$	523	$0		$0		$	29,111	$	523
Obligations of U.S. Government sponsored entities	531,501		13,636		0		0		531,501		13,636
Obligations of U.S. states and political subdivisions	19,227		207		0		0		19,227		207
Mortgage-backed securities – residential, issued by
U.S. Government agencies	55,053		642		4,736		427		59,789		1,069
U.S. Government sponsored entities	471,855		13,347		5,378		114		477,233		13,461
U.S. corporate debt securities	0		0		2,416		84		2,416		84
Total available-for-sale debt securities	$	1,106,747	$	28,355	$	12,530	$	625	$	1,119,277	$	28,980

The following table summarizes available-for-sale debt securities that had unrealized losses at December 31, 2020:  

	Less than 12 Months				12 Months or Longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government sponsored entities	$	310,711	$	1,992	$	0	$	0	$	310,711	$	1,992
Obligations of U.S. states and political subdivisions	8,868		40		0		0		8,868		40
Mortgage-backed securities – residential, issued by
U.S. Government agencies	10,560		396		1,819		250		12,379		646
U.S. Government sponsored entities	87,643		586		5,068		89		92,711		675
U.S. corporate debt securities	0		0		2,379		121		2,379		121
Total available-for-sale debt securities	$	417,782	$	3,014	$	9,266	$	460	$	427,048	$	3,474

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 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.

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. In addition, the Company does not intend to sell other-than-temporarily impaired investment securities that are in an unrealized loss position until recovery of unrealized losses (which may be until maturity), and it is not more-likely-than not that the Company will be required to sell the investment securities, before recovery of their amortized cost basis, which may be at maturity.

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.

March 31, 2021
(In thousands)	Amortized Cost		Fair Value
Available-for-sale debt securities:
Due in one year or less	$	76,967	$	77,746
Due after one year through five years	427,769		432,308
Due after five years through ten years	372,692		363,992
Due after ten years	65,308		64,589
Total	942,736		938,635
Mortgage-backed securities	998,548		996,180
Total available-for-sale debt securities	$	1,941,284	$	1,934,815

December 31, 2020
(In thousands)	Amortized Cost		Fair Value
Available-for-sale debt securities:
Due in one year or less	$	54,484	$	55,008
Due after one year through five years	379,044		388,132
Due after five years through ten years	228,572		229,107
Due after ten years	66,694		67,358
Total	728,794		739,605
Mortgage-backed securities	871,100		887,588
Total available-for-sale debt securities	$	1,599,894	$	1,627,193

The Company also holds non-marketable Federal Home Loan Bank New York (“FHLBNY”) stock, non-marketable Federal Home Loan Bank Pittsburgh (“FHLBPITT”) 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, FHLBPITT stock, and ACBB stock totaled $11.0 million, $5.2 million and $95,000, respectively, at March 31, 2021. These securities are carried at par, which is also cost. The FHLBNY and FHLBPITT continue 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 March 31, 2021, we determined that no impairment write-downs were required.