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Securities
 6 Months Ended
Jun. 30, 2024
Securities [Abstract]  
Securities
4.
Securities

The amortized cost, estimated fair value and unrealized gains (losses) of AFS securities are as follows:

(In thousands)
  
Amortized
Cost
    
Unrealized
Gains
    
Unrealized
Losses
    
Estimated
Fair Value
  
As of June 30, 2024
                        
U.S. treasury
   $ 143,571     $ 5     $ (8,266 )   $ 135,310  
Federal agency
    
248,366
      
-
      
(34,040
)
    
214,326
  
State & municipal
    
95,856
      
-
      
(9,854
)
    
86,002
  
Mortgage-backed:
                                
Government-sponsored enterprises
    
375,011
      
1
      
(45,918
)
    
329,094
  
U.S. government agency securities
    
70,600
      
9
      
(7,371
)
    
63,238
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
477,441
      
71
      
(49,064
)
    
428,448
  
U.S. government agency securities
    
168,095
      
-
      
(27,055
)
    
141,040
  
Corporate
    
48,461
      
-
      
(6,474
)
    
41,987
  
Total AFS securities
  
$
1,627,401
    
$
86
    
$
(188,042
)
  
$
1,439,445
  
As of December 31, 2023
                                
U.S. treasury
   $ 133,302     $ -     $ (8,278 )   $ 125,024  
Federal agency
    
248,384
      
-
      
(33,644
)
    
214,740
  
State & municipal
    
96,251
      
11
      
(9,956
)
    
86,306
  
Mortgage-backed:
                                
Government-sponsored enterprises
    
399,532
      
7
      
(44,264
)
    
355,275
  
U.S. government agency securities
    
74,281
      
14
      
(7,302
)
    
66,993
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
452,715
      
15
      
(48,257
)
    
404,473
  
U.S. government agency securities
    
162,171
      
-
      
(25,100
)
    
137,071
  
Corporate
    
48,442
      
-
      
(7,466
)
    
40,976
  
Total AFS securities
  
$
1,615,078
    
$
47
    
$
(184,267
)
  
$
1,430,858
  

There was no allowance for credit losses on AFS securities as of June 30, 2024 and December 31, 2023.


During the three months ended June 30, 2024, there were no gains or losses reclassified out of AOCI and into earnings. During the three months ended June 30, 2023, there were $4.5 million of gross realized losses reclassified out of AOCI and into earnings. During the six months ended June 30, 2023, there were $4.5 million of gross realized losses reclassified out of AOCI and into earnings and the Company incurred a $5.0 million loss on the write-off of an AFS corporate debt security from a subordinated debt investment of a financial institution that failed. The $5.0 million loss was reclassified out of AOCI and into earnings in net securities gains (losses) in the unaudited interim consolidated statements of income. During the six months ended June 30, 2024, the Company sold the previously written-off security and recognized a gain of $2.3 million into earnings in net securities gains (losses) in the unaudited interim consolidated statements of income.


The amortized cost, estimated fair value and unrealized gains (losses) of HTM securities are as follows:

(In thousands)
  
Amortized
Cost
    
Unrealized
Gains
    
Unrealized
Losses
    
Estimated
Fair Value
  
As of June 30, 2024
                        
Federal agency
  
$
100,000
    
$
-
    
$
(18,048
)
  
$
81,952
  
Mortgage-backed:
                                
Government-sponsored enterprises
    
218,862
      
-
      
(34,162
)
    
184,700
  
U.S. government agency securities
    
16,733
      
1
      
(734
)
    
16,000
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
177,833
      
-
      
(13,515
)
    
164,318
  
U.S. government agency securities
    
62,490
      
-
      
(11,533
)
    
50,957
  
State & municipal
    
302,991
      
77
      
(20,505
)
    
282,563
  
Total HTM securities
  
$
878,909
    
$
78
    
$
(98,497
)
  
$
780,490
  
As of December 31, 2023
                                
Federal agency
  
$
100,000
    
$
-
    
$
(17,784
)
  
$
82,216
  
Mortgage-backed:
                                
Government-sponsored enterprises
    
228,720
      
-
      
(31,613
)
    
197,107
  
U.S. government agency securities
    
17,086
      
3
      
(566
)
    
16,523
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
187,457
      
57
      
(12,021
)
    
175,493
  
U.S. government agency securities
    
63,878
      
-
      
(10,908
)
    
52,970
  
State & municipal
    
308,126
      
211
      
(18,122
)
    
290,215
  
Total HTM securities
  
$
905,267
    
$
271
    
$
(91,014
)
  
$
814,524
  

At June 30, 2024 and December 31, 2023, all of the mortgage-backed HTM securities were comprised of U.S. government agency and government-sponsored enterprises securities.

The Company recorded no gains from calls on HTM securities for the three and six months ended June 30, 2024 and 2023.

AFS and HTM securities with amortized costs totaling $2.04 billion at June 30, 2024 and $2.03 billion at December 31, 2023, were pledged to secure public deposits and for other purposes required or permitted by law. Additionally, at June 30, 2024 and December 31, 2023, AFS and HTM securities with an amortized cost totaling $198.9 million and $177.2 million, respectively, were pledged as collateral for securities sold under repurchase agreements.

The following tables set forth information with regard to gains and (losses) on equity securities:

 
Three Months Ended June 30,
  
(In thousands)
  
2024
    
2023
  
Net (losses) recognized on equity securities
  
$
(92
)
  
$
(191
)
Less: Net (losses) recognized on equity securities sold during the period
    
-
      
-
  
Unrealized (losses) recognized on equity securities still held
  
$
(92
)
  
$
(191
)

 
Six Months Ended June 30,
  
(In thousands)
  
2024
    
2023
  
Net (losses) recognized on equity securities
  
$
(193
)
  
$
(189
)
Less: Net (losses) recognized on equity securities sold during the period
    
-
      
-
  
Unrealized (losses) recognized on equity securities still held
  
$
(193
)
  
$
(189
)

As of June 30, 2024 and December 31, 2023, the carrying value of equity securities without readily determinable fair values was $1.0 million. The Company performed a qualitative assessment to determine whether the investments were impaired and identified no credit concerns as of June 30, 2024 and 2023. There were no impairments, or downward or upward adjustments recognized for equity securities without readily determinable fair values during the three and six months ended June 30, 2024 and 2023.

The following table sets forth information with regard to contractual maturities of debt securities at June 30, 2024:

(In thousands)
  
Amortized
Cost
    
Estimated
Fair Value
  
AFS debt securities:
            
Within one year
  
$
56,084
    
$
55,606
  
From one to five years
    
579,028
      
521,402
  
From five to ten years
    
305,590
      
269,587
  
After ten years
    
686,699
      
592,850
  
Total AFS debt securities
  
$
1,627,401
    
$
1,439,445
  
HTM debt securities:
                
Within one year
  
$
102,069
    
$
101,871
  
From one to five years
    
120,724
      
114,731
  
From five to ten years
    
244,994
      
212,360
  
After ten years
    
411,122
      
351,528
  
Total HTM debt securities
  
$
878,909
    
$
780,490
  

Maturities of mortgage-backed, collateralized mortgage obligations and asset-backed securities are stated based on their estimated average lives. Actual maturities may differ from estimated average lives or contractual maturities because, in certain cases, borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Except for U.S. government securities and government-sponsored enterprises securities, there were no holdings, when taken in the aggregate, of any single issuer that exceeded 10% of consolidated stockholders’ equity at June 30, 2024 and December 31, 2023.

The following table sets forth information with regard to investment securities with unrealized losses, for which an allowance for credit losses has not been recorded, segregated according to the length of time the securities had been in a continuous unrealized loss position:

 
Less Than 12 Months
    
12 Months or Longer
    
Total
  
(In thousands)
  
Fair
Value
    
Unrealized
Losses
    
Number
of
Positions
    
Fair
Value
    
Unrealized
Losses
    
Number
of
Positions
    
Fair
Value
    
Unrealized
Losses
    
Number
of
Positions
  
As of June 30, 2024
                                                      
AFS securities:
  
                                                 
U.S. treasury
   $ 4,976     $ (6 )     1     $ 115,324     $ (8,260 )     7     $ 120,300     $ (8,266 )     8  
Federal agency
    
-
      
-
      
-
      
214,326
      
(34,040
)
    
16
      
214,326
      
(34,040
)
    
16
  
State & municipal
    
758
      
(7
)
    
1
      
85,244
      
(9,847
)
    
66
      
86,002
      
(9,854
)
    
67
  
Mortgage-backed
    
284
      
(3
)
    
6
      
391,446
      
(53,286
)
    
157
      
391,730
      
(53,289
)
    
163
  
Collateralized mortgage obligations
    
26,485
      
(118
)
    
3
      
510,558
      
(76,001
)
    
120
      
537,043
      
(76,119
)
    
123
  
Corporate     1,448       (22 )     1       40,539       (6,452 )     14       41,987       (6,474 )     15  
Total securities with unrealized losses
  
$
33,951
    
$
(156
)
    
12
    
$
1,357,437
    
$
(187,886
)
    
380
    
$
1,391,388
    
$
(188,042
)
    
392
  
HTM securities:
                                                                        
Federal agency
  
$
-
    
$
-
      
-
    
$
81,952
    
$
(18,048
)
    
4
    
$
81,952
    
$
(18,048
)
    
4
  
Mortgage-backed
    
-
      
-
      
-
      
200,630
      
(34,896
)
    
34
      
200,630
      
(34,896
)
    
34
  
Collateralized mortgage obligation
     7,822
       (84 )     1
       207,453
       (24,964 )     52
       215,275
       (25,048 )     53
  
State & municipal
    
6,557
      
(83
)
    
6
      
178,192
      
(20,422
)
    
203
      
184,749
      
(20,505
)
    
209
  
Total securities with unrealized losses
  
$
14,379
    
$
(167
)
    
7
    
$
668,227
    
$
(98,330
)
    
293
    
$
682,606
    
$
(98,497
)
    
300
  
                                                                         
As of December 31, 2023
                                                                        
AFS securities:
                                                                        
U.S. treasury
   $ -     $ -       -     $ 125,024     $ (8,278 )     8     $ 125,024     $ (8,278 )     8  
Federal agency
    
-
      
-
      
-
      
214,740
      
(33,644
)
     16      
214,740
      
(33,644
)
    
16
  
State & municipal
     -       -       -       85,528       (9,956 )     66       85,528       (9,956 )     66  
Mortgage-backed
    
53
      
(1
)
    
7
      
421,259
      
(51,565
)
    
156
      
421,312
      
(51,566
)
    
163
  
Collateralized mortgage obligations
    
1,333
      
(6
)
    
2
      
536,678
      
(73,351
)
     118
      
538,011
      
(73,357
)
    
120
  
Corporate
     1,379       (75 )     1       39,597       (7,391 )     14       40,976       (7,466 )     15  
Total securities with unrealized losses
  
$
2,765
    
$
(82
)
    
10
    
$
1,422,826
    
$
(184,185
)
    
378
    
$
1,425,591
    
$
(184,267
)
    
388
  
HTM securities:
                                                                        
Federal agency
   $ -     $ -       -     $ 82,216     $ (17,784 )     4     $ 82,216     $ (17,784 )     4  
Mortgage-backed     12,221       (365 )     1       201,320       (31,814 )     33       213,541       (32,179 )     34  
Collateralized mortgage obligations     -       -       -       219,820       (22,929 )     54       219,820       (22,929 )     54  
State & municipal
    
14,422
      
(127
)
    
21
      
171,904
      
(17,995
)
     189      
186,326
      
(18,122
)
    
210
  
Total securities with unrealized losses
  
$
26,643
    
$
(492
)
    
22
    
$
675,260
    
$
(90,522
)
     280    
$
701,903
    
$
(91,014
)
    
302
  

The Company does not believe the AFS securities that were in an unrealized loss position as of June 30, 2024 and December 31, 2023, which consisted of 392 and 388 individual securities, respectively, represented a credit loss impairment. AFS debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. As of June 30, 2024 and December 31, 2023, the majority of the AFS securities in an unrealized loss position consisted of debt securities issued by U.S. government agencies or U.S. government-sponsored enterprises that carry the explicit and/or implicit guarantee of the U.S. government, which are widely recognized as “risk- free” and have a long history of zero credit losses. Total gross unrealized losses were primarily attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. The Company does not intend to sell, nor is it more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, which may be at maturity. The Company elected to exclude AIR from the amortized cost basis of debt securities. AIR on AFS debt securities totaled $4.0 million at June 30, 2024 and $3.9 million at December 31, 2023, and is excluded from the estimate of credit losses and reported in the other assets financial statement line.

None of the Bank’s HTM debt securities were past due or on nonaccrual status as of June 30, 2024 and December 31, 2023. There was no accrued interest reversed against interest income for the three and six months ended June 30, 2024 or the year ended December 31, 2023 as all securities remained in accrual status. In addition, there were no collateral-dependent HTM debt securities as of June 30, 2024 and December 31, 2023. There was no allowance for credit losses on HTM securities as of June 30, 2024 and December 31, 2023. As of June 30, 2024 and December 31, 2023, 66% of the Company’s HTM debt securities were issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government, which are widely recognized as “risk-free,” and have a long history of zero credit losses. Therefore, the Company did not record an allowance for credit losses for these securities as of June 30, 2024 and December 31, 2023. The remaining HTM debt securities at June 30, 2024 and December 31, 2023 were comprised of state and municipal obligations with bond ratings of A to AAA. Utilizing the CECL methodology , the Company determined that the expected credit loss on its HTM municipal bond portfolio was immaterial and therefore no allowance for credit loss was recorded as of June 30, 2024 and December 31, 2023. AIR on HTM debt securities totaled $4.2 million at June 30, 2024 and $4.7 million at December 31, 2023 and is excluded from the estimate of credit losses and reported in the other assets financial statement line.