Investment Securities

6 Months Ended

Jun. 30, 2023

Investment Securities

Investment Securities

Note 2:   Investment Securities

The amortized cost and approximate fair values, together with gross unrealized gains and losses, of securities available for sale and held to maturity were as follows:

	June 30, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In thousands)
Securities available for sale:
Treasury notes	$	158,741	$	43	$	849	$	157,935
Federal agencies		249,994		—		8,422		241,572
Mortgage-backed - Government-sponsored entity (GSE)		248,497		6		7		248,496
Total securities available for sale	$	657,232	$	49	$	9,278	$	648,003
Securities held to maturity:
Mortgage-backed - Non-GSE multi-family	$	835,649	$	—	$	42	$	835,607
Mortgage-backed - Non-GSE residential		222,119		—		3,075		219,044
Mortgage-backed - Government - sponsored entity (GSE)		4,249		—		310		3,939
Total securities held to maturity	$	1,062,017	$	—	$	3,427	$	1,058,590

	December 31, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In thousands)
Securities available for sale:
Treasury notes	$	37,234	$	1	$	955	$	36,280
Federal agencies		284,986		—		13,096		271,890
Mortgage-backed - Government-sponsored entity (GSE)		15,167		7		7		15,167
Total securities available for sale	$	337,387	$	8	$	14,058	$	323,337
Securities held to maturity:
Mortgage-backed - Non-GSE multi-family	$	871,772	$	12	$	—	$	871,784
Mortgage-backed - Non-GSE residential		247,306		—		124		247,182
Total securities held to maturity	$	1,119,078	$	12	$	124	$	1,118,966

At June 30, 2023 and December 31, 2022, GSE mortgage-backed securities included in the tables above are primarily backed by multi-family loans. The tables above for June 30, 2023 and December 31, 2022 primarily include securities held to maturity that were purchased following the September 2022 loan sale and securitization transactions.

Accrued interest on securities available for sale totaled $1.9 million at June 30, 2023 and $0.5 million at December 31, 2022, respectively, and is excluded from the estimate of credit losses.

Accrued interest on securities held to maturity totaled $4.4 million at June 30, 2023 and $4.3 at December 31, 2022, respectively, and is excluded from the estimate of credit losses.

The amortized cost and fair value of available for sale securities at June 30, 2023 and December 31, 2022, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

	June 30, 2023				December 31, 2022
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Securities available for sale:	(In thousands)
Within one year	$	321,992	$	316,487	$	118,984	$	115,386
After one through five years		86,743		83,020		203,236		192,784
		408,735		399,507		322,220		308,170
Mortgage-backed - Government-sponsored entity (GSE)		248,497		248,496		15,167		15,167
	$	657,232	$	648,003	$	337,387	$	323,337
Securities held to maturity:
Mortgage-backed - Non-GSE multi-family	$	835,649	$	835,607	$	871,772	$	871,784
Mortgage-backed - Non-GSE residential		222,119		219,044		—		—
Mortgage-backed - Government - sponsored entity (GSE)		4,249		3,939		247,306		247,182
	$	1,062,017	$	1,058,590	$	1,119,078	$	1,118,966

During the three and six months ended June 30, 2023, proceeds from sales of securities available for sale were $132,000 and the net gain was inconsequential. During the three and six months ended June 30, 2022, no securities available for sale were sold.

The following tables show the Company’s gross unrealized losses and fair value of the Company’s investment securities with unrealized losses for which an ACL has not been recorded, aggregated by investment class and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2023 and December 31, 2022:

	June 30, 2023
					12 Months or
	Less than 12 Months				Longer				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
Securities available for sale:
Treasury notes	$	7,645	$	101	$	30,185	$	748	$	37,830	$	849
Federal agencies		14,854		146		226,718		8,276		241,572		8,422
Mortgage-backed - Government-sponsored entity (GSE)		444		3		191		4		635		7
	$	22,943	$	250	$	257,094	$	9,028	$	280,037	$	9,278
Securities held to maturity:
Mortgage-backed - Non-GSE multi-family	$	835,607	$	42	$	—	$	—	$	835,607	$	42
Mortgage-backed - Non-GSE residential		219,044		3,075		—		—		219,044		3,075
Mortgage-backed - Government - sponsored entity (GSE)		3,939		310		—		—		3,939		310
	$	1,058,590	$	3,427	$	—	$	—	$	1,058,590	$	3,427

	December 31, 2022
					12 Months or
	Less than 12 Months				Longer				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
Securities available for sale:
Treasury notes	$	29,560	$	762	$	5,798	$	193	$	35,358	$	955
Federal agencies		19,276		724		252,613		12,372		271,889		13,096
Mortgage-backed - Government-sponsored entity (GSE)		709		7		—		—		709		7
	$	49,545	$	1,493	$	258,411	$	12,565	$	307,956	$	14,058
Securities held to maturity:
Mortgage-backed - Non-GSE residential		247,182		124		—		—		247,182		124
	$	247,182	$	124	$	—	$	—	$	247,182	$	124

Allowance for Credit Losses

For available for sale securities with an unrealized loss position, the Company evaluates the securities to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or non-credit related factors. Any impairment that is not credit-related is recognized in accumulated other comprehensive income, net of tax. Credit-related impairment is recognized as an ACL for available for sale securities on the balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings. Accrued interest receivable is excluded from the estimate of credit losses. Both the ACL and the adjustment to net income may be reversed if conditions change. However, if the Company expects, or is required, to sell an impaired available for sale security before recovering its amortized cost basis, the entire impairment amount would be recognized

in earnings with a corresponding adjustment to the security’s amortized cost basis. Because the security’s amortized cost basis is adjusted to fair value, there is no ACL in this situation.

In evaluating available for sale securities in unrealized loss positions for impairment and the criteria regarding its intent or requirement to sell such securities, the Company considers the extent to which fair value is less than amortized cost, whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuers’ financial condition, among other factors. Unrealized losses on the Company’s investment securities portfolio have not been recognized as an expense because the securities are of high credit quality, and the decline in fair values is attributable to changes in the prevailing interest rate environment since the purchase date. Fair value is expected to recover as securities reach maturity and/or the interest rate environment returns to conditions similar to when these securities were purchased. There were no credit related factors underlying unrealized losses on available for sale debt securities at June 30, 2023 and December 31, 2022.

Securities held to maturity are comprised of non-GSE mortgage-backed securities secured by multi-family or single-family properties, and GSE mortgage-backed securities secured by multi-family properties. The GSE security is a Government National Mortgage Association (“Ginnie Mae”) mortgage-backed security and backed by the full faith and credit of the U.S. government. Accordingly, no allowance for credit losses has been recorded for this security. The non-GSE securities were purchased under securitization arrangements where a credit loss component was purchased by third party investors. These securities were evaluated for credit losses over and above the credit loss percentage sold under the arrangements, and the Company does not anticipate any such losses. Additional qualitative factors are evaluated, including the timeliness of principal and interest payments under the contractual terms of the securities. Accordingly, no allowance for credit losses has been recorded for the non-GSE securities.