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Available-for-Sale and Held-to-Maturity Securities
 12 Months Ended
Dec. 31, 2024
Investments, Debt and Equity Securities [Abstract]  
Available-for-Sale and Held-to-Maturity Securities

NOTE 7 – Available-for-Sale and Held-to-Maturity Securities

The following tables provide a summary of the amortized cost and fair values of the available-for-sale securities and held-to-maturity securities at December 31, 2024 and 2023 (in thousands):

 

 

December 31, 2024

 

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains (1)

 

 

Gross
Unrealized
Losses (1)

 

 

Fair Value

 

Available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agency securities

 

$

2,407

 

 

$

—

 

 

$

(141

)

 

$

2,266

 

State and municipal securities

 

 

2,350

 

 

 

—

 

 

 

(1

)

 

 

2,349

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

Agency

 

 

1,045,344

 

 

 

334

 

 

 

(124,115

)

 

 

921,563

 

Commercial

 

 

69,430

 

 

 

—

 

 

 

(1,474

)

 

 

67,956

 

Non-agency

 

 

206

 

 

 

—

 

 

 

(7

)

 

 

199

 

Corporate fixed income securities

 

 

507,824

 

 

 

—

 

 

 

(43,832

)

 

 

463,992

 

Asset-backed securities

 

 

127,148

 

 

 

202

 

 

 

(1,077

)

 

 

126,273

 

 

 

$

1,754,709

 

 

$

536

 

 

$

(170,647

)

 

$

1,584,598

 

Held-to-maturity securities (2)

 

 

 

 

 

 

 

 

 

 

 

 

Asset-backed securities

 

$

6,524,954

 

 

$

26,498

 

 

$

(3,805

)

 

$

6,547,647

 

 

 

December 31, 2023

 

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains (1)

 

 

Gross
Unrealized
Losses (1)

 

 

Fair Value

 

Available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agency securities

 

$

2,376

 

 

$

5

 

 

$

(162

)

 

$

2,219

 

State and municipal securities

 

 

2,350

 

 

 

1

 

 

 

—

 

 

 

2,351

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

Agency

 

 

855,456

 

 

 

—

 

 

 

(109,286

)

 

 

746,170

 

Commercial

 

 

70,326

 

 

 

—

 

 

 

(3,655

)

 

 

66,671

 

Non-agency

 

 

274

 

 

 

—

 

 

 

(13

)

 

 

261

 

Corporate fixed income securities

 

 

615,131

 

 

 

—

 

 

 

(58,970

)

 

 

556,161

 

Asset-backed securities

 

 

181,717

 

 

 

—

 

 

 

(3,864

)

 

 

177,853

 

 

 

$

1,727,630

 

 

$

6

 

 

$

(175,950

)

 

$

1,551,686

 

Held-to-maturity securities (2)

 

 

 

 

 

 

 

 

 

 

 

 

Asset-backed securities

 

$

5,888,798

 

 

$

6,387

 

 

$

(43,009

)

 

 

5,852,176

 

(1)
Unrealized gains/(losses) related to available-for-sale securities are reported in accumulated other comprehensive income.
(2)
Held-to-maturity securities are carried in the consolidated statements of financial condition at amortized cost, and the changes in the value of these securities, other than impairment charges, are not reported on the consolidated financial statements.

We are required to evaluate our available-for-sale and held-to-maturity debt securities for any expected losses with recognition of an allowance for credit losses, when applicable. For more information, see Note 2 – Summary of Significant Accounting Policies. At December 31, 2024, we did not have an allowance for credit losses recorded on our investment portfolio.

Accrued interest receivable for our investment portfolio at December 31, 2024 and 2023, was $106.8 million and $95.7 million, respectively, and is reported in other assets in the consolidated statements of financial condition. We do not include reserves for interest receivable in the measurement of the allowance for credit losses.

There were no sales of available-for-sale securities during the year ended December 31, 2024. For the year ended December 31, 2023, we received proceeds of $2.4 million from the sale of available-for-sale securities, which resulted in a realized loss of $7.6 million. For the year ended December 31, 2022, we received proceeds of $80.0 million from the sale of available-for-sale securities, which resulted in a realized gain of $0.1 million.

The table below summarizes the amortized cost and fair values of our securities by contractual maturity (in thousands). Expected maturities may differ significantly from contractual maturities, as issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

 

 

December 31, 2024

 

 

December 31, 2023

 

 

 

Amortized
Cost

 

 

Fair Value

 

 

Amortized
Cost

 

 

Fair Value

 

Available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

Within one year

 

$

78,491

 

 

$

78,080

 

 

$

105,389

 

 

$

104,113

 

After one year through three years

 

 

143,648

 

 

 

137,049

 

 

 

184,975

 

 

 

174,827

 

After three years through five years

 

 

-

 

 

 

-

 

 

 

38,462

 

 

 

34,316

 

After five years through ten years

 

 

395,884

 

 

 

352,736

 

 

 

448,931

 

 

 

398,624

 

After ten years

 

 

1,136,686

 

 

 

1,016,733

 

 

 

949,873

 

 

 

839,806

 

 

 

$

1,754,709

 

 

$

1,584,598

 

 

$

1,727,630

 

 

$

1,551,686

 

Held-to-maturity securities

 

 

 

 

 

 

 

 

 

 

 

 

After three years through five years

 

 

91,184

 

 

 

91,238

 

 

 

—

 

 

 

—

 

After five years through ten years

 

 

3,063,278

 

 

 

3,075,645

 

 

 

2,754,817

 

 

 

2,740,154

 

After ten years

 

 

3,370,492

 

 

 

3,380,764

 

 

 

3,133,981

 

 

 

3,112,022

 

 

 

$

6,524,954

 

 

$

6,547,647

 

 

$

5,888,798

 

 

$

5,852,176

 

The maturities of our available-for-sale (fair value) and held-to-maturity (amortized cost) securities at December 31, 2024, are as follows (in thousands):

 

 

Within 1
Year

 

 

1-5 Years

 

 

5-10 Years

 

 

After 10
Years

 

 

Total

 

Available-for-sale securities (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agency securities

 

$

—

 

 

$

2,266

 

 

$

—

 

 

$

—

 

 

$

2,266

 

State and municipal securities

 

 

—

 

 

 

2,349

 

 

 

—

 

 

 

—

 

 

 

2,349

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Agency

 

 

—

 

 

 

206

 

 

 

73,709

 

 

 

847,648

 

 

 

921,563

 

Commercial

 

 

—

 

 

 

—

 

 

 

—

 

 

 

67,956

 

 

 

67,956

 

Non-agency

 

 

—

 

 

 

—

 

 

 

199

 

 

 

—

 

 

 

199

 

Corporate fixed income securities

 

 

78,080

 

 

 

132,228

 

 

 

253,684

 

 

 

—

 

 

 

463,992

 

Asset-backed securities

 

 

—

 

 

 

 

 

 

25,144

 

 

 

101,129

 

 

 

126,273

 

 

 

$

78,080

 

 

$

137,049

 

 

$

352,736

 

 

$

1,016,733

 

 

$

1,584,598

 

Held-to-maturity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-backed securities

 

$

—

 

 

$

91,184

 

 

$

3,063,278

 

 

$

3,370,492

 

 

$

6,524,954

 

(1)
Due to the immaterial amount of income recognized on tax-exempt securities, yields were not calculated on a tax-equivalent basis.

At December 31, 2024 and 2023, securities of $842.3 million and $746.4 million, respectively, were pledged at the Federal Home Loan Bank as collateral for borrowings and letters of credit obtained to secure public deposits. At December 31, 2024 and 2023, securities of $2.2 billion and $1.3 billion, respectively, were pledged with the Federal Reserve discount window.

The following table shows the gross unrealized losses and fair value of the Company’s investment securities with unrealized losses, aggregated by investment category and length of time the individual investment securities have been in continuous unrealized loss positions, at December 31, 2024 (in thousands):

 

 

Less than 12 months

 

 

12 months or more

 

 

Total

 

 

 

Gross
Unrealized
Losses

 

 

Fair Value

 

 

Gross
Unrealized
Losses

 

 

Fair Value

 

 

Gross
Unrealized
Losses

 

 

Fair Value

 

Available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agency securities

 

$

(1

)

 

$

453

 

 

$

(140

)

 

$

1,813

 

 

$

(141

)

 

$

2,266

 

State and municipal securities

 

 

(1

)

 

 

2,349

 

 

 

—

 

 

 

—

 

 

 

(1

)

 

 

2,349

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Agency

 

 

(1,852

)

 

 

189,220

 

 

 

(122,263

)

 

 

637,174

 

 

 

(124,115

)

 

 

826,394

 

Commercial

 

 

—

 

 

 

—

 

 

 

(1,474

)

 

 

67,956

 

 

 

(1,474

)

 

 

67,956

 

Non-agency

 

 

—

 

 

 

—

 

 

 

(7

)

 

 

199

 

 

 

(7

)

 

 

199

 

Corporate fixed income securities

 

 

—

 

 

 

—

 

 

 

(43,832

)

 

 

463,992

 

 

 

(43,832

)

 

 

463,992

 

Asset-backed securities

 

 

(12

)

 

 

6,960

 

 

 

(1,065

)

 

 

87,111

 

 

 

(1,077

)

 

 

94,071

 

 

 

$

(1,866

)

 

$

198,982

 

 

$

(168,781

)

 

$

1,258,245

 

 

$

(170,647

)

 

$

1,457,227

 

At December 31, 2024, the amortized cost of 251 securities classified as available for sale exceeded their fair value by $170.6 million, of which $168.8 million related to investment securities that had been in a loss position for 12 months or longer. The total fair value of these investments at December 31, 2024, was $1.5 billion, which was 92.0% of our available-for-sale portfolio.

Credit Quality Indicators

The Company uses Moody credit ratings as the primary credit quality indicator for its held-to-maturity debt securities. Each security is evaluated at least quarterly. The indicators represent the rating for debt securities, as of the date presented, based on the most recent assessment performed. The following table shows the amortized cost of our held-to-maturity securities by credit quality indicator at December 31, 2024 (in thousands):

 

 

AAA

 

 

AA

 

 

C

 

 

Total

 

Held-to-maturity securities

 

 

 

 

 

 

 

 

 

 

 

 

Asset-backed securities

 

$

2,989,195

 

 

$

3,535,084

 

 

$

675

 

 

$

6,524,954