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Securities
 6 Months Ended
Jun. 30, 2023
Investments, Debt and Equity Securities [Abstract]  
Securities Securities
Securities available for sale (“AFS”) consist of the following:
Amortized
Cost		Unrealized
GainsLossesFair Value
(In thousands)
June 30, 2023
U.S. agency$11,966 $6 $995 $10,977 
U.S. agency residential mortgage-backed95,336 2 9,935 85,403 
U.S. agency commercial mortgage-backed14,484 — 1,573 12,911 
Private label mortgage-backed98,409 232 8,420 90,221 
Other asset backed158,726 21 3,719 155,028 
Obligations of states and political subdivisions341,965 253 40,889 301,329 
Corporate82,941 — 7,953 74,988 
Trust preferred981 — 61 920 
Total$804,808 $514 $73,545 $731,777 
   
December 31, 2022   
U.S. agency$13,191 $10 $1,100 $12,101 
U.S. agency residential mortgage-backed100,700 19 10,261 90,458 
U.S. agency commercial mortgage-backed15,047 — 1,594 13,453 
Private label mortgage-backed102,196 245 8,596 93,845 
Other asset backed200,755 — 6,030 194,725 
Obligations of states and political subdivisions346,187 55 50,565 295,677 
Corporate87,308 — 9,151 78,157 
Trust preferred979 — 48 931 
Total$866,363 $329 $87,345 $779,347 
Securities held to maturity (“HTM”) consist of the following:
Carrying
Value		Transferred
Unrealized
Loss (1)		ACLAmortized
Cost		UnrealizedFair Value
GainsLosses
(In thousands)
June 30, 2023
U.S. agency$26,748 $1,722 $— $28,470 $— $5,013 $23,457 
U.S. agency residential mortgage-backed113,398 10,277 — 123,675 — 24,667 99,008 
U.S. agency commercial mortgage-backed4,722 199 — 4,921 — 526 4,395 
Private label mortgage-backed7,272 359 1 7,632 — 919 6,713 
Obligations of states and political subdivisions162,272 7,711 39 170,022 24 21,531 148,515 
Corporate45,569 961 116 46,646 15 7,812 38,849 
Trust preferred945 51 4 1,000 — 77 923 
Total$360,926 $21,280 $160 $382,366 $39 $60,545 $321,860 
December 31, 2022
U.S. agency$27,634 $1,839 $— $29,473 $— $5,066 $24,407 
U.S. agency residential mortgage-backed117,650 10,845 — 128,495 — 25,239 103,256 
U.S. agency commercial mortgage-backed4,798 228 — 5,026 — 596 4,430 
Private label mortgage-backed7,242 416 1 7,659 — 997 6,662 
Obligations of states and political subdivisions168,134 8,555 39 176,728 11 25,591 151,148 
Corporate48,418 1,130 123 49,671 — 5,156 44,515 
Trust preferred942 53 5 1,000 — — 1,000 
Total$374,818 $23,066 $168 $398,052 $11 $62,645 $335,418 
(1)Represents the remaining unrealized loss to be accreted on securities that were transferred from AFS to HTM on April 1, 2022.
On April 1, 2022, we transferred certain securities AFS with an amortized cost and unrealized loss at the date of transfer of $418.1 million and $26.5 million, respectively to HTM. The transfer was made at fair value, with the unrealized loss becoming part of the purchase discount which will be accreted over the remaining life of the securities. The other comprehensive loss component is separated from the remaining available for sale securities and is accreted over the remaining life of the securities transferred. We have the ability and intent to hold these securities until they mature, at which time we expect to receive full value for these securities.
Our investments' gross unrealized losses and fair values for securities AFS aggregated by investment type and length of time that individual securities have been at a continuous unrealized loss position follows:
Less Than Twelve MonthsTwelve Months or MoreTotal
Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses
(In thousands)
June 30, 2023
U.S. agency$327 $1 $9,845 $994 $10,172 $995 
U.S. agency residential mortgage-backed3,312 67 81,661 9,868 84,973 9,935 
U.S. agency commercial mortgage-backed— — 12,911 1,573 12,911 1,573 
Private label mortgage-backed4,301 219 85,422 8,201 89,723 8,420 
Other asset backed3,911 34 148,064 3,685 151,975 3,719 
Obligations of states and political subdivisions65 — 299,535 40,889 299,600 40,889 
Corporate3,312 73 71,677 7,880 74,989 7,953 
Trust preferred— — 920 61 920 61 
Total$15,228 $394 $710,035 $73,151 $725,263 $73,545 
December 31, 2022
U.S. agency$8,244 $799 $2,587 $301 $10,831 $1,100 
U.S. agency residential mortgage-backed33,784 1,920 54,793 8,341 88,577 10,261 
U.S. agency commercial mortgage-backed1,609 73 11,844 1,521 13,453 1,594 
Private label mortgage-backed39,954 2,582 53,346 6,014 93,300 8,596 
Other asset backed110,859 2,657 83,802 3,373 194,661 6,030 
Obligations of states and political subdivisions56,455 10,216 231,705 40,349 288,160 50,565 
Corporate24,876 1,737 51,293 7,414 76,169 9,151 
Trust preferred— — 931 48 931 48 
Total$275,781 $19,984 $490,301 $67,361 $766,082 $87,345 
Securities AFS in unrealized loss positions are evaluated quarterly for impairment related to credit losses. For securities AFS in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For securities AFS that do not meet this criteria, we evaluate whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, adverse conditions specifically related to the security and the issuer and the impact of changes in market interest rates on the market value of the security, among other factors. If this assessment indicates that a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an ACL is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Any impairment that has not been recorded through an ACL is recognized in other comprehensive income (loss), net of applicable taxes. No ACL for securities AFS was needed at June 30, 2023 and December 31, 2022. Accrued interest receivable on securities AFS totaled $4.7 million and $4.7 million at June 30, 2023 and December 31, 2022, respectively,
and is excluded from the estimate of credit losses and is included in accrued income and other assets in the Condensed Consolidated Statements of Financial Condition.
U.S. agency, U.S. agency residential mortgage-backed and U.S. agency commercial mortgage-backed securities — at June 30, 2023, we had 31 U.S. agency, 183 U.S. agency residential mortgage-backed and 12 U.S. agency commercial mortgage-backed securities whose fair value is less than amortized cost. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major credit rating agencies, and have a long history of no credit losses. The unrealized losses are largely attributed to widening spreads to Treasury bonds and/or an increase in interest rates since acquisition.
Private label mortgage backed, other asset backed and corporate securities — at June 30, 2023, we had 90 private label mortgage backed, 122 other asset backed, and 81 corporate securities whose fair value is less than amortized cost. The unrealized losses are primarily due to credit spread widening and/or an increase in interest rates since acquisition.
Obligations of states and political subdivisions — at June 30, 2023, we had 335 municipal securities whose fair value is less than amortized cost. The unrealized losses are primarily due to an increase in interest rates since acquisition.
Trust preferred securities — at June 30, 2023, we had one trust preferred security whose fair value is less than amortized cost. This trust preferred security is a single issue security issued by a trust subsidiary of a bank holding company. The pricing of trust preferred securities has suffered from credit spread widening. This security is rated by a major rating agency as investment grade.
At June 30, 2023 management does not intend to liquidate any of the securities discussed above and it is more likely than not that we will not be required to sell these securities prior to recovery of these unrealized losses.
We recorded no credit related charges in our Condensed Consolidated Statements of Operations related to securities AFS during the three and six month periods ended June 30, 2023 and 2022, respectively.
The ACL on securities HTM is a contra asset valuation account that is deducted from the carrying amount of securities HTM to present the net amount expected to be collected. Securities HTM are charged off against the ACL when deemed uncollectible. Adjustments to the ACL are reported in our Condensed Consolidated Statements of Operations in provision for credit losses. We measure expected credit losses on securities HTM on a collective basis by major security type with each type sharing similar risk characteristics, and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Accrued interest receivable on securities HTM totaled $1.7 million and $1.8 million at June 30, 2023 and December 31, 2022, respectively and is excluded from the estimate of credit losses and is included in accrued income and other assets in the Condensed Consolidated Statements of Financial Condition. With regard to U.S. Government-sponsored agency and mortgage-backed securities (residential and commercial), all these securities are issued by a U.S. government-sponsored entity and have an implicit or explicit government guarantee; therefore, no allowance for credit losses has been recorded for these securities. With regard to obligations of states and political subdivisions, private label-mortgage-backed, corporate and trust preferred securities HTM, we consider (1) issuer bond ratings, (2) long-term historical loss rates for given bond ratings, (3) the financial condition of the issuer, and (4) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities. During the first quarter of 2023, one corporate security (Signature Bank) defaulted resulting in a $3.0 million provision for credit losses and a corresponding full charge-off. Despite this lone security loss, the long-term historical loss rates associated with securities having similar grades as those in our portfolio have been insignificant. Furthermore, as of June 30, 2023 and December 31, 2022, there were no past due principal and interest payments associated with these securities. At those same dates an allowance for credit losses of $160,000 and $168,000, respectively was recorded on non U.S. agency securities HTM based on applying the long-term historical credit loss rate, as published by Moody’s, for similarly rated securities.
On a quarterly basis, we monitor the credit quality of securities HTM through the use of credit ratings. The carrying value of securities HTM aggregated by credit quality follow:
Private
Label
Mortgage-
Backed		Obligations
of States
and Political
Subdivisions		CorporateTrust
Preferred		Carrying
Value
Total
(In thousands)
June 30, 2023
Credit rating:
AAA$7,272 $37,038 $— $— $44,310 
AA— 102,569 — — 102,569 
A— 3,932 6,910 — 10,842 
BBB— 958 35,749 — 36,707 
Non-rated— 17,775 2,910 945 21,630 
Total$7,272 $162,272 $45,569 $945 $216,058 
December 31, 2022
Credit rating:
AAA$7,242 $32,876 $— $— $40,118 
AA— 110,033 — — 110,033 
A— 3,917 6,900 — 10,817 
BBB— 1,167 38,621 — 39,788 
Non-rated— 20,141 2,897 942 23,980 
Total$7,242 $168,134 $48,418 $942 $224,736 
An analysis of the allowance for credit losses by security HTM type for the three months ended June 30 follows:
Private
Label
Mortgage-
Backed		Obligations
of States
and Political
Subdivisions		CorporateTrust
Preferred		Total
(In thousands)
2023
Balance at beginning of period$1 $39 $116 $4 $160 
Additions (deductions)   
Provision for credit losses— — — — — 
Recoveries credited to the allowance— — — — — 
Securities HTM charged against the allowance— — — — — 
Balance at end of period$1 $39 $116 $4 $160 
2022
Balance at beginning of period$— $— $— $— $— 
Additions (deductions)
Provision for credit losses2 30 121 5 158 
Recoveries credited to the allowance— — — — — 
Securities HTM charged against the allowance— — — — — 
Balance at end of period$2 $30 $121 $5 $158 
An analysis of the allowance for credit losses by security HTM type for the six months ended June 30 follows:
Private
Label
Mortgage-
Backed		Obligations
of States
and Political
Subdivisions		CorporateTrust
Preferred		Total
(In thousands)
2023
Balance at beginning of period$1 $39 $123 $5 $168 
Additions (deductions)
Provision for credit losses— — 2,993 (1)2,992 
Recoveries credited to the allowance— — — — — 
Securities HTM charged against the allowance— — (3,000)— (3,000)
Balance at end of period$1 $39 $116 $4 $160 
2022
Balance at beginning of period$— $— $— $— $— 
Additions (deductions)
Provision for credit losses2 30 121 5 158 
Recoveries credited to the allowance— — — — — 
Securities HTM charged against the allowance— — — — — 
Balance at end of period$2 $30 $121 $5 $158 
The amortized cost and fair value of securities AFS and securities HTM at June 30, 2023, by contractual maturity, follow:
Securities AFSSecurities HTM
Amortized
Cost		Fair
Value		Amortized
Cost		Fair
Value
(In thousands)
Maturing within one year$8,524 $8,415 $4,025 $3,970 
Maturing after one year but within five years143,632 130,013 48,629 44,199 
Maturing after five years but within ten years80,766 69,883 106,201 89,422 
Maturing after ten years204,931 179,903 87,283 74,153 
437,853 388,214 246,138 211,744 
U.S. agency residential mortgage-backed95,336 85,403 123,675 99,008 
U.S. agency commercial mortgage-backed14,484 12,911 4,921 4,395 
Private label mortgage-backed98,409 90,221 7,632 6,713 
Other asset backed158,726 155,028 — — 
Total$804,808 $731,777 $382,366 $321,860 
The actual maturity may differ from the contractual maturity because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
Gains and losses realized on the sale of securities AFS are determined using the specific identification method and are recognized on a trade-date basis. A summary of proceeds from the sale of securities AFS and gains and losses for the six month periods ending June 30, follows:
Realized
ProceedsGainsLosses
(In thousands)
2023$278 $— $222 
202270,523 164 439