Investment Securities

3 Months Ended

Mar. 31, 2021

Investments, Debt and Equity Securities [Abstract]

The following tables are a summary of the investment securities portfolios as of the dates shown:


	March 31, 2021
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-sale securities
U.S. Treasury	$	64,999	$	2	$	—	$	65,001
U.S. Government agencies	77,908		3,618		—		81,526
Municipal	143,711		4,761		(172)		148,300
Corporate notes:
Financial issuers	91,806		461		(935)		91,332
Other	1,000		17		—		1,017
Mortgage-backed: (1)
Mortgage-backed securities	2,007,092		52,855		(26,038)		2,033,909
Collateralized mortgage obligations	9,411		253		—		9,664
Total available-for-sale securities	$	2,395,927	$	61,967	$	(27,145)	$	2,430,749
Held-to-maturity securities
U.S. Government agencies	$	176,160	$	1,644	$	(7,230)	$	170,574
Municipal	197,865		10,713		(535)		208,043
Mortgage-backed securities	1,737,115		265		(49,114)		1,688,266
Corporate notes	55,378		—		(1,196)		54,182
Total held-to-maturity securities	$	2,166,518	$	12,622	$	(58,075)	$	2,121,065
Less: Allowance for credit losses	(99)
Held-to-maturity securities, net of allowance for credit losses	$	2,166,419
Equity securities with readily determinable fair value	$	86,121	$	5,362	$	(1,145)	$	90,338

(1)Consisting entirely of residential mortgage-backed securities, none of which are subprime.


	December 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(Dollars in thousands)
Available-for-sale securities
U.S. Treasury	$	304,956	$	15	$	—	$	304,971
U.S. Government agencies	80,074		4,439		—		84,513
Municipal	141,244		5,707		(41)		146,910
Corporate notes:
Financial issuers	91,786		1,363		(2,764)		90,385
Other	1,000		20		—		1,020
Mortgage-backed: (1)
Mortgage-backed securities	2,330,332		86,721		(15)		2,417,038
Collateralized mortgage obligations	10,689		313		—		11,002
Total available-for-sale securities	$	2,960,081	$	98,578	$	(2,820)	$	3,055,839
Held-to-maturity securities
U.S. Government agencies	$	177,959	$	2,552	$	—	$	180,511
Municipal	200,707		12,232		(214)		212,725
Mortgage-backed securities	200,531		—		—		200,531
Total held-to-maturity securities	$	579,197	$	14,784	$	(214)	$	593,767
Less: Allowance for credit losses	(59)
Held-to-maturity securities, net of allowance for credit losses	$	579,138
Equity securities with readily determinable fair value	$	87,618	$	3,674	$	(430)	$	90,862

(1)Consisting entirely of residential mortgage-backed securities, none of which are subprime.


	March 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(Dollars in thousands)
Available-for-sale securities
U.S. Treasury	$	120,404	$	1,266	$	—	$	121,670
U.S. Government agencies	362,969		5,674		—		368,643
Municipal	143,273		3,571		(235)		146,609
Corporate notes:
Financial issuers	111,718		90		(11,821)		99,987
Other	1,000		31		—		1,031
Mortgage-backed: (1)
Mortgage-backed securities	2,697,264		111,275		(4)		2,808,535
Collateralized mortgage obligations	24,077		416		(9)		24,484
Total available-for-sale securities	$	3,460,705	$	122,323	$	(12,069)	$	3,570,959
Held-to-maturity securities
U.S. Government agencies	$	646,976	$	5,996	$	(4)	$	652,968
Municipal	$	218,470	7,909		(155)		226,224
Total held-to-maturity securities	$	865,446	$	13,905	$	(159)	$	879,192
Less: Allowance for credit losses	(70)
Held-to-maturity securities, net of allowance for credit losses	$	865,376
Equity securities with readily determinable fair value	$	48,060	$	781	$	(1,531)	$	47,310

(1)Consisting entirely of residential mortgage-backed securities, none of which are subprime.

Equity securities without readily determinable fair values totaled $33.3 million as of March 31, 2021. Equity securities without readily determinable fair values are included as part of accrued interest receivable and other assets in the Company's Consolidated Statements of Condition. The Company monitors its equity investments without readily determinable fair values

to identify potential transactions that may indicate an observable price change in orderly transactions for the identical or a similar investment of the same issuer, requiring adjustment to its carrying amount. The Company recorded no upward and no downward adjustments related to such observable price changes for the three months ended March 31, 2021. The Company conducts a quarterly assessment of its equity securities without readily determinable fair values to determine whether impairment exists in such securities, considering, among other factors, the nature of the securities, financial condition of the issuer and expected future cash flows. During the three months ended March 31, 2021, the Company recorded $30,000 of impairment of equity securities without readily determinable fair values.

The following table presents the portion of the Company’s available-for-sale investment securities portfolios that have gross unrealized losses, reflecting the length of time that individual securities have been in a continuous unrealized loss position at March 31, 2021:


	Continuous unrealized losses existing for less than 12 months				Continuous unrealized losses existing for greater than 12 months				Total
(Dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available-for-sale securities
U.S. Treasury	$	—	$	—	$	—	$	—	$	—	$	—
U.S. Government agencies	—		—		—		—		—		—
Municipal	24,326		(168)		110		(4)		24,436		(172)
Corporate notes:
Financial issuers	14,850		(150)		48,196		(785)		63,046		(935)
Other	—		—		—		—		—		—
Mortgage-backed:
Mortgage-backed securities	571,821		(26,037)		61		(1)		571,882		(26,038)
Collateralized mortgage obligations	—		—		—		—		—		—
Total available-for-sale securities	$	610,997	$	(26,355)	$	48,367	$	(790)	$	659,364	$	(27,145)

The Company conducts a regular assessment of its investment securities to determine whether securities are experiencing credit losses. Factors for consideration include the nature of the securities, credit ratings or financial condition of the issuer, the extent of the unrealized loss, expected cash flows, market conditions and the Company’s ability to hold the securities through the anticipated recovery period.

The Company does not consider available-for-sale securities with unrealized losses at March 31, 2021 to be experiencing credit losses and recognized no resulting allowance for credit losses for such individually assessed credit losses. The Company does not intend to sell these investments and it is more likely than not that the Company will not be required to sell these investments before recovery of the amortized cost bases, which may be the maturity dates of the securities. The unrealized losses within each category have occurred as a result of changes in interest rates, market spreads and market conditions subsequent to purchase. Available-for-sale securities with continuous unrealized losses existing for more than twelve months were primarily corporate notes.

See Note 6—Allowance for Credit Losses for further discussion regarding any credit losses associated with held-to-maturity securities at March 31, 2021.

The following table provides information as to the amount of gross gains and losses, adjustments and impairment on investment securities recognized in earnings and proceeds received through the sale or call of investment securities:


	Three months ended March 31,
(Dollars in thousands)	2021		2020
Realized gains on investment securities	$	216	$	496
Realized losses on investment securities	(6)		(5)
Net realized gains on investment securities	210		491
Unrealized gains on equity securities with readily determinable fair value	1,875		—
Unrealized losses on equity securities with readily determinable fair value	(901)		(3,546)
Net unrealized gains (losses) on equity securities with readily determinable fair value	974		(3,546)
Upward adjustments of equity securities without readily determinable fair values	—		393
Downward adjustments of equity securities without readily determinable fair values	—		—
Impairment of equity securities without readily determinable fair values	(30)		(1,697)
Adjustment and impairment, net, of equity securities without readily determinable fair values	(30)		(1,304)
Gains (losses) on investment securities, net	$	1,154	$	(4,359)





Proceeds from sales of available-for-sale securities(1)	$	—	$	—

Proceeds from sales of equity securities with readily determinable fair value	1,509		30
Proceeds from sales and capital distributions of equity securities without readily determinable fair value	386		288

(1)Includes proceeds from available-for-sale securities sold in accordance with written covered call options sold to a third party.

The amortized cost and fair value of available-for-sale and held-to-maturity investment securities as of March 31, 2021, December 31, 2020 and March 31, 2020, by contractual maturity, are shown in the following table. Contractual maturities may differ from actual maturities as borrowers may have the right to call or repay obligations with or without call or prepayment penalties. Mortgage-backed securities are not included in the maturity categories in the following maturity summary as actual maturities may differ from contractual maturities because the underlying mortgages may be called or prepaid without penalties:


	March 31, 2021				December 31, 2020				March 31, 2020
(Dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available-for-sale securities
Due in one year or less	$	100,140	$	100,361	$	343,601	$	343,846	$	186,538	$	187,789
Due in one to five years	76,104		78,291		67,901		70,334		70,812		71,825
Due in five to ten years	110,125		110,928		111,886		112,178		174,262		164,479
Due after ten years	93,055		97,596		95,672		101,441		307,752		313,847
Mortgage-backed	2,016,503		2,043,573		2,341,021		2,428,040		2,721,341		2,833,019
Total available-for-sale securities	$	2,395,927	$	2,430,749	$	2,960,081	$	3,055,839	$	3,460,705	$	3,570,959
Held-to-maturity securities
Due in one year or less	$	6,812	$	6,863	$	7,138	$	7,186	$	5,310	$	5,333
Due in one to five years	50,318		50,734		22,217		23,068		23,801		24,158
Due in five to ten years	184,677		191,539		150,621		159,293		143,783		148,746
Due after ten years	187,596		183,663		198,690		203,689		692,552		700,955
Mortgage-backed	1,737,115		1,688,266		200,531		200,531		—		—
Total held-to-maturity securities	$	2,166,518	$	2,121,065	$	579,197	$	593,767	$	865,446	$	879,192
Less: Allowance for credit losses	(99)				(59)				(70)
Held-to-maturity securities, net of allowance for credit losses	$	2,166,419			$	579,138			$	865,376

Securities having a carrying value of $2.1 billion at March 31, 2021 as well as securities having a carrying value of $2.4 billion and $1.5 billion at December 31, 2020 and March 31, 2020, respectively, were pledged as collateral for public deposits, trust deposits, Federal Home Loan Bank ("FHLB") advances and available lines of credit, securities sold under repurchase

agreements and derivatives. At March 31, 2021, there were no securities of a single issuer, other than U.S. Government-sponsored agency securities, which exceeded 10% of shareholders’ equity.