Investment Securities

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Investment Securities

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

	March 31, 2023
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-sale securities
U.S. Treasury	$	4,947	$	1	$	—	$	4,948
U.S. government agencies	80,000		—		(5,138)		74,862
Municipal	164,110		439		(4,163)		160,386
Corporate notes:
Financial issuers	93,995		—		(11,320)		82,675
Other	1,000		—		—		1,000
Mortgage-backed: (1)
Mortgage-backed securities	3,300,048		1,787		(445,405)		2,856,430
Collateralized mortgage obligations	95,880		—		(16,336)		79,544
Total available-for-sale securities	$	3,739,980	$	2,227	$	(482,362)	$	3,259,845
Held-to-maturity securities
U.S. government agencies	$	339,608	$	24	$	(70,064)	$	269,568
Municipal	174,720		1,117		(2,880)		172,957
Mortgage-backed: (1)
Mortgage-backed securities	2,872,591		1,197		(533,415)		2,340,373
Collateralized mortgage obligations	161,874		—		(22,431)		139,443
Corporate notes	58,061		14		(4,218)		53,857
Total held-to-maturity securities	$	3,606,854	$	2,352	$	(633,008)	$	2,976,198
Less: Allowance for credit losses	(463)
Held-to-maturity securities, net of allowance for credit losses	$	3,606,391
Equity securities with readily determinable fair value	$	116,296	$	3,065	$	(7,418)	$	111,943

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

	December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
Available-for-sale securities
U.S. Treasury	$	14,943	$	5	$	—	$	14,948
U.S. government agencies	80,000		36		(5,814)		74,222
Municipal	173,861		230		(5,436)		168,655
Corporate notes:
Financial issuers	93,994		—		(9,291)		84,703
Other	1,000		2		—		1,002
Mortgage-backed: (1)
Mortgage-backed securities	3,308,494		238		(488,795)		2,819,937
Collateralized mortgage obligations	97,342		—		(17,792)		79,550
Total available-for-sale securities	$	3,769,634	$	511	$	(527,128)	$	3,243,017
Held-to-maturity securities
U.S. government agencies	$	339,614	$	—	$	(75,293)	$	264,321
Municipal	179,027		477		(4,066)		175,438
Mortgage-backed: (1)
Mortgage-backed securities	2,900,031		—		(583,682)		2,316,349
Collateralized mortgage obligations	164,151		—		(23,322)		140,829
Corporate notes	58,232		—		(5,348)		52,884
Total held-to-maturity securities	$	3,641,055	$	477	$	(691,711)	$	2,949,821
Less: Allowance for credit losses	(488)
Held-to-maturity securities, net of allowance for credit losses	$	3,640,567
Equity securities with readily determinable fair value	$	115,552	$	2,935	$	(8,122)	$	110,365

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

	March 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
Available-for-sale securities
U.S. Treasury	$	—	$	—	$	—	$	—
U.S. government agencies	50,000		366		(729)		49,637
Municipal	157,563		1,019		(3,093)		155,489
Corporate notes:
Financial issuers	86,994		1		(5,047)		81,948
Other	1,000		—		(9)		991
Mortgage-backed: (1)
Mortgage-backed securities	2,794,760		591		(177,899)		2,617,452
Collateralized mortgage obligations	103,424		1		(10,044)		93,381
Total available-for-sale securities	$	3,193,741	$	1,978	$	(196,821)	$	2,998,898
Held-to-maturity securities
U.S. government agencies	$	264,661	$	35	$	(27,673)	$	237,023
Municipal	180,548		3,176		(1,693)		182,031
Mortgage-backed: (1)
Mortgage-backed securities	2,772,622		—		(253,254)		2,519,368
Collateralized mortgage obligations	174,273		—		(6,847)		167,426
Corporate notes	43,784		—		(3,205)		40,579
Total held-to-maturity securities	$	3,435,888	$	3,211	$	(292,672)	$	3,146,427
Less: Allowance for credit losses	(159)
Held-to-maturity securities, net of allowance for credit losses	$	3,435,729
Equity securities with readily determinable fair value	$	91,629	$	5,259	$	(4,199)	$	92,689

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

Equity securities without readily determinable fair values totaled $52.5 million as of March 31, 2023. 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 or downward adjustments related to such observable price changes for the three months ended March 31, 2023 or March 31, 2022. 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, 2023, the Company recorded no impairment of equity securities without readily determinable fair values. During the three months ended March 31, 2022, the Company recorded $571,000 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, 2023:

	Continuous unrealized losses existing for less than 12 months				Continuous unrealized losses existing for greater than 12 months				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available-for-sale securities
U.S. government agencies	$	29,945	$	(55)	$	44,917	$	(5,083)	$	74,862	$	(5,138)
Municipal	58,695		(624)		55,413		(3,539)		114,108		(4,163)
Corporate notes:
Financial issuers	9,912		(87)		72,763		(11,233)		82,675		(11,320)
Mortgage-backed: (1)
Mortgage-backed securities	219,643		(7,558)		2,297,025		(437,847)		2,516,668		(445,405)
Collateralized mortgage obligations	72		(1)		79,472		(16,335)		79,544		(16,336)
Total available-for-sale securities	$	318,267	$	(8,325)	$	2,549,590	$	(474,037)	$	2,867,857	$	(482,362)

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

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, 2023 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 at March 31, 2023 were primarily mortgage-backed securities with unrealized losses due to increased market rates during such period.

See Note (6) “Allowance for Credit Losses” for further discussion regarding any credit losses associated with held-to-maturity securities at March 31, 2023.

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,
(In thousands)	2023		2022
Realized gains on investment securities	$	605	$	258
Realized losses on investment securities	(45)		(8)
Net realized gains on investment securities	560		250
Unrealized gains on equity securities with readily determinable fair value	2,290		180
Unrealized losses on equity securities with readily determinable fair value	(1,452)		(2,641)
Net unrealized gains (losses) on equity securities with readily determinable fair value	838		(2,461)
Upward adjustments of equity securities without readily determinable fair values	—		—
Downward adjustments of equity securities without readily determinable fair values	—		—
Impairment of equity securities without readily determinable fair values	—		(571)
Adjustment and impairment, net, of equity securities without readily determinable fair values	—		(571)
Gains (losses) on investment securities, net	$	1,398	$	(2,782)
Proceeds from sales of available-for-sale securities(1)	$	—	$	—
Proceeds from sales of equity securities with readily determinable fair value	23,592		18,753
Proceeds from sales and capital distributions of equity securities without readily determinable fair value	67		250

(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, 2023, December 31, 2022 and March 31, 2022, 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, 2023				December 31, 2022				March 31, 2022
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available-for-sale securities
Due in one year or less	$	108,880	$	108,429	$	119,830	$	119,275	$	48,130	$	47,945
Due in one to five years	131,959		122,172		63,644		61,701		67,138		66,034
Due in five to ten years	39,019		35,158		115,734		105,076		110,960		105,670
Due after ten years	64,194		58,112		64,590		57,478		69,329		68,416
Mortgage-backed	3,395,928		2,935,974		3,405,836		2,899,487		2,898,184		2,710,833
Total available-for-sale securities	$	3,739,980	$	3,259,845	$	3,769,634	$	3,243,017	$	3,193,741	$	2,998,898
Held-to-maturity securities
Due in one year or less	$	2,302	$	2,300	$	1,340	$	1,332	$	1,208	$	1,213
Due in one to five years	98,207		93,717		94,705		89,093		83,085		80,210
Due in five to ten years	110,967		110,892		115,318		113,758		101,410		102,940
Due after ten years	360,913		289,473		365,510		288,460		303,290		275,270
Mortgage-backed	3,034,465		2,479,816		3,064,182		2,457,178		2,946,895		2,686,794
Total held-to-maturity securities	$	3,606,854	$	2,976,198	$	3,641,055	$	2,949,821	$	3,435,888	$	3,146,427
Less: Allowance for credit losses	(463)				(488)				(159)
Held-to-maturity securities, net of allowance for credit losses	$	3,606,391			$	3,640,567			$	3,435,729

Securities having a carrying value of $5.7 billion at March 31, 2023 as well as securities having a carrying value of $2.8 billion and $2.5 billion at December 31, 2022 and March 31, 2022, 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, 2023, there were no securities of a single issuer, other than U.S. government-sponsored agency securities, which exceeded 10% of shareholders’ equity.