Securities

3 Months Ended

Mar. 31, 2023

Debt Securities [Abstract]

Securities

SecuritiesAvailable for Sale Securities

The amortized cost, gross unrealized gains and losses, allowance for credit losses (“ACL”) and fair value of AFS securities as of March 31, 2023 and December 31, 2022, respectively, were as follows:

	As of March 31, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses		Allowance for Credit Losses		Fair Value
	(In thousands)
Debt securities:
Government-sponsored residential mortgage-backed securities	$	3,557,844	$	—	$	(533,284)	$	—	$	3,024,560
Government-sponsored commercial mortgage-backed securities	1,367,239		—		(187,199)		—		1,180,040
U.S. Agency bonds	235,540		—		(23,733)		—		211,807
U.S. Treasury securities	99,380		1		(5,098)		—		94,283
State and municipal bonds and obligations	198,017		118		(9,986)		—		188,149
Other debt securities	1,300		—		(5)		—		1,295
	$	5,459,320	$	119	$	(759,305)	$	—	$	4,700,134

	As of December 31, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses		Allowance for Credit Losses		Fair Value
	(In thousands)
Debt securities:
Government-sponsored residential mortgage-backed securities	$	4,855,763	$	—	$	(743,855)	$	—	$	4,111,908
Government-sponsored commercial mortgage-backed securities	1,570,119		—		(221,165)		—		1,348,954
U.S. Agency bonds	1,100,891		—		(148,409)		—		952,482
U.S. Treasury securities	99,324		—		(6,267)		—		93,057
State and municipal bonds and obligations	198,039		9		(14,956)		—		183,092
Other debt securities	1,299		—		(14)		—		1,285
	$	7,825,435	$	9	$	(1,134,666)	$	—	$	6,690,778

The Company did not record a provision for credit losses on any AFS securities for either the three months ended March 31, 2023 or 2022. Accrued interest receivable on AFS securities totaled $12.3 million and $12.9 million as of March 31, 2023 and December 31, 2022, respectively, and is included within other assets on the Consolidated Balance Sheets. The Company did not record any write-offs of accrued interest income on AFS securities during either the three months ended March 31, 2023 or 2022. No securities held by the Company were delinquent on contractual payments as of March 31, 2023 and December 31, 2022, nor were any securities placed on non-accrual status for the three and twelve month periods then ended, respectively.

The following table summarizes gross realized gains and losses from sales of AFS securities for the periods indicated:

	Three Months Ended March 31,
	2023		2022
	(In thousands)
Gross realized gains from sales of AFS securities	$	—	$	1,045
Gross realized losses from sales of AFS securities	(333,170)		(3,217)
Losses from sales of AFS securities, net	$	(333,170)	$	(2,172)

Information pertaining to AFS securities with gross unrealized losses as of March 31, 2023 and December 31, 2022, for which the Company did not recognize a provision for credit losses under the current expected credit loss methodology (“CECL”), aggregated by investment category and length of time that individual securities had been in a continuous loss position, is as follows:

	As of March 31, 2023
		Less than 12 Months				12 Months or Longer				Total
	# of Holdings	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
	(Dollars in thousands)
Government-sponsored residential mortgage-backed securities	324	$	4,106	$	84,144	$	529,178	$	2,940,416	$	533,284	$	3,024,560
Government-sponsored commercial mortgage-backed securities	189	2,277		38,532		184,922		1,141,508		187,199		1,180,040
U.S. Agency bonds	23	—		—		23,733		211,807		23,733		211,807
U.S. Treasury securities	5	913		43,924		4,185		45,410		5,098		89,334
State and municipal bonds and obligations	197	2,015		62,057		7,971		97,811		9,986		159,868
Other debt securities	2	—		—		5		1,295		5		1,295
	740	$	9,311	$	228,657	$	749,994	$	4,438,247	$	759,305	$	4,666,904

	As of December 31, 2022
		Less than 12 Months				12 Months or Longer				Total
	# of Holdings	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
	(Dollars in thousands)
Government-sponsored residential mortgage-backed securities	322	$	42,196	$	435,690	$	701,659	$	3,676,218	$	743,855	$	4,111,908
Government-sponsored commercial mortgage-backed securities	199	38,944		300,476		182,221		1,048,478		221,165		1,348,954
U.S. Agency bonds	37	645		4,145		147,764		948,337		148,409		952,482
U.S. Treasury securities	5	1,311		48,451		4,956		44,606		6,267		93,057
State and municipal bonds and obligations	237	14,942		179,614		14		225		14,956		179,839
Other debt securities	2	—		—		14		1,285		14		1,285
	802	$	98,038	$	968,376	$	1,036,628	$	5,719,149	$	1,134,666	$	6,687,525

The Company does not intend to sell these investments and has determined based upon available evidence that it is more likely than not that the Company will not be required to sell each security before the expected recovery of its amortized cost basis. As a result, the Company did not recognize an ACL on these investments as of both March 31, 2023 and December 31, 2022.

The causes of the impairments listed in the tables above by category are as follows as of March 31, 2023 and December 31, 2022:

•Government-sponsored residential mortgage-backed securities – The securities with unrealized losses in this portfolio have contractual terms that generally do not permit the issuer to settle the security at a price less than the current par value of the investment. The decline in market value of these securities is attributable to changes in interest rates and not credit quality. Additionally, these securities are implicitly guaranteed by the U.S. government or one of its agencies.

•Government-sponsored commercial mortgage-backed securities – The securities with unrealized losses in this portfolio have contractual terms that generally do not permit the issuer to settle the security at a price less than the current par value of the investment. The decline in market value of these securities is attributable to changes in interest rates and not credit quality. Additionally, these securities are implicitly guaranteed by the U.S. government or one of its agencies.

•U.S. Agency bonds – The securities with unrealized losses in this portfolio have contractual terms that generally do not permit the issuer to settle the security at a price less than the current par value of the investment. The decline in market value of these securities is attributable to changes in interest rates and not credit quality. Additionally, these securities are implicitly guaranteed by the U.S. government or one of its agencies.

•U.S. Treasury securities – The securities with unrealized losses in this portfolio have contractual terms that generally do not permit the issuer to settle the security at a price less than the current par value of the investment. The decline in market value of these securities is attributable to changes in interest rates and not credit quality. Additionally, these securities are implicitly guaranteed by the U.S. government or one of its agencies.

•State and municipal bonds and obligations – The securities with unrealized losses in this portfolio have contractual terms that generally do not permit the issuer to settle the security at a price less than the current par value of the investment. The decline in market value of these securities is attributable to changes in interest rates and not credit quality.

•Other debt securities – This securities portfolio consists of two foreign debt securities which are performing in accordance with the terms of the respective contractual agreements. The decline in market value of these securities is attributable to changes in interest rates and not credit quality.

Held to Maturity Securities

The amortized cost, gross unrealized gains and losses, and fair value of HTM securities as of the dates indicated were as follows:

	As of March 31, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses		Allowance for Credit Losses		Fair Value
	(In thousands)
Debt securities:
Government-sponsored residential mortgage-backed securities	$	271,655	$	—	$	(24,829)	$	—	$	246,826
Government-sponsored commercial mortgage-backed securities	199,530		—		(20,929)		—		178,601
	$	471,185	$	—	$	(45,758)	$	—	$	425,427

	As of December 31, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses		Allowance for Credit Losses		Fair Value
	(In thousands)
Debt securities:
Government-sponsored residential mortgage-backed securities	$	276,493	$	—	$	(30,150)	$	—	$	246,343
Government-sponsored commercial mortgage-backed securities	200,154		—		(23,271)		—		176,883
	$	476,647	$	—	$	(53,421)	$	—	$	423,226

The Company did not record a provision for estimated credit losses on any HTM securities for either the three months ended March 31, 2023 or 2022. The accrued interest receivable on HTM securities totaled $1.0 million as of both March 31, 2023 and December 31, 2022 and is included within other assets on the Consolidated Balance Sheets. The Company did not record any write-offs of accrued interest receivable on HTM securities during either the three months ended March 31, 2023 or 2022. No securities held by the Company were delinquent on contractual payments as of March 31, 2023 and December 31, 2022 nor were any securities placed on non-accrual status for the periods then ended.

Available for Sale and Held to Maturity Securities Contractual Maturity

The amortized cost and estimated fair value of AFS and HTM securities by contractual maturities as of March 31, 2023 and December 31, 2022 are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without prepayment penalties.

The scheduled contractual maturities of AFS and HTM securities as of the dates indicated were as follows:

	As of March 31, 2023
	Due in one year or less				Due after one year to five years				Due after five to ten years				Due after ten years				Total
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
AFS securities
Government-sponsored residential mortgage-backed securities	$	—	$	—	$	19,044	$	18,333	$	42,405	$	40,021	$	3,496,395	$	2,966,206	$	3,557,844	$	3,024,560
Government-sponsored commercial mortgage-backed securities	—		—		105,580		96,920		540,677		472,689		720,982		610,431		1,367,239		1,180,040
U.S. Agency bonds	—		—		201,660		181,969		33,880		29,838		—		—		235,540		211,807
U.S. Treasury securities	—		—		99,380		94,283		—		—		—		—		99,380		94,283
State and municipal bonds and obligations	212		209		24,605		24,093		41,409		40,921		131,791		122,926		198,017		188,149
Other debt securities	1,300		1,295		—		—		—		—		—		—		1,300		1,295
Total available for sale securities	1,512		1,504		450,269		415,598		658,371		583,469		4,349,168		3,699,563		5,459,320		4,700,134
HTM securities
Government-sponsored residential mortgage-backed securities	—		—		—		—		—		—		271,655		246,826		271,655		246,826
Government-sponsored commercial mortgage-backed securities	—		—		—		—		199,530		178,601		—		—		199,530		178,601
Total held to maturity securities	—		—		—		—		199,530		178,601		271,655		246,826		471,185		425,427
Total	$	1,512	$	1,504	$	450,269	$	415,598	$	857,901	$	762,070	$	4,620,823	$	3,946,389	$	5,930,505	$	5,125,561

	As of December 31, 2022
	Due in one year or less				Due after one year to five years				Due after five to ten years					Due after ten years				Total
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value			Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
AFS securities
Government-sponsored residential mortgage-backed securities	$	—	$	—	$	21,221	$	20,284	$	727,908	$	648,132		$	4,106,634	$	3,443,492	$	4,855,763	$	4,111,908
Government-sponsored commercial mortgage-backed securities	—		—		191,762		171,992		649,659		556,641			728,698		620,321		1,570,119		1,348,954
U.S. Agency bonds	—		—		877,371		767,464		223,520		185,018			—		—		1,100,891		952,482
U.S. Treasury securities	—		—		99,324		93,057		—		—			—		—		99,324		93,057
State and municipal bonds and obligations	213		209		22,100		21,283		42,554		40,970			133,172		120,630		198,039		183,092
Other debt securities	1,299		1,285		—		—		—		—			—		—		1,299		1,285
Total available for sale securities	1,512		1,494		1,211,778		1,074,080		1,643,641		1,430,761			4,968,504		4,184,443		7,825,435		6,690,778
HTM securities
Government-sponsored residential mortgage-backed securities	—		—		—		—		—		—			276,493		246,343		276,493		246,343
Government-sponsored commercial mortgage-backed securities	—		—		—		—		200,154		176,883		0	—		—		200,154		176,883
Total held to maturity securities	—		—		—		—		200,154		176,883			276,493		246,343		476,647		423,226
Total	$	1,512	$	1,494	$	1,211,778	$	1,074,080	$	1,843,795	$	1,607,644		$	5,244,997	$	4,430,786	$	8,302,082	$	7,114,004

Securities Pledged as Collateral

As of both March 31, 2023 and December 31, 2022, securities with a carrying value of $440.3 million and $437.9 million, respectively, were pledged to secure public deposits and for other purposes required by law. As of March 31, 2023 and December 31, 2022, deposits with associated pledged collateral included cash accounts from the Company’s wealth management division (“Eastern Wealth Management”) and municipal deposit accounts.

In March 2023 the Federal Reserve created the Bank Term Funding Program (the “Program”) in order to support American businesses and households. The Program helps make available additional funding to eligible depository institutions in order to help assure banks have the ability to meet the needs of their depositors. The Program offers loans up to one year in length to banks in return for any collateral eligible for purchase by the Federal Reserve Banks in open market operations, such as U.S. Treasuries, U.S. agency securities, and U.S. agency mortgage-backed securities. As of March 31, 2023, securities with a carrying value of $2.6 billion were pledged as collateral through the Program. In addition, the Company pledged securities with a carrying value of $376.8 million to the Federal Reserve Discount Window (the “Discount Window”) as of March 31, 2023. No securities were pledged to the Program or the Discount Window as of December 31, 2022.