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Securities
 9 Months Ended
Sep. 30, 2024
Securities [Abstract]  
Securities
5.
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 September 30, 2024
                        
U.S. treasury
   $ 133,704     $ 118     $ (5,284 )   $ 128,538  
Federal agency
    
248,357
      
-
      
(25,718
)
    
222,639
  
State & municipal
    
95,657
      
7
      
(6,761
)
    
88,903
  
Mortgage-backed:
                                
Government-sponsored enterprises
    
387,388
      
138
      
(33,068
)
    
354,458
  
U.S. government agency securities
    
72,076
      
14
      
(4,824
)
    
67,266
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
478,051
      
303
      
(36,269
)
    
442,085
  
U.S. government agency securities
    
184,570
      
116
      
(22,642
)
    
162,044
  
Corporate
    
48,472
      
-
      
(5,067
)
    
43,405
  
Total AFS securities
  
$
1,648,275
    
$
696
    
$
(139,633
)
  
$
1,509,338
  
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 September 30, 2024 and December 31, 2023.


During the three months ended September 30, 2024 and September 30, 2023, no gains or losses were reclassified out of AOCI and into earnings. During the nine months ended September 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 nine months ended September 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 September 30, 2024
                        
Federal agency
  
$
100,000
    
$
-
    
$
(14,264
)
  
$
85,736
  
Mortgage-backed:
                                
Government-sponsored enterprises
    
213,569
      
-
      
(26,732
)
    
186,837
  
U.S. government agency securities
    
15,616
      
2
      
(139
)
    
15,479
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
172,596
      
84
      
(8,240
)
    
164,440
  
U.S. government agency securities
    
61,657
      
-
      
(9,481
)
    
52,176
  
State & municipal
    
291,503
      
169
      
(14,472
)
    
277,200
  
Total HTM securities
  
$
854,941
    
$
255
    
$
(73,328
)
  
$
781,868
  
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 September 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 nine months ended September 30, 2024 and 2023.

AFS and HTM securities with amortized costs totaling $1.88 billion at September 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 September 30, 2024 and December 31, 2023, AFS and HTM securities with an amortized cost totaling $190.7 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
September 30,
  
(In thousands)
  
2024
    
2023
  
Net gains (losses) recognized on equity securities
  
$
476
    
$
(183
)
Less: Net gains (losses) recognized on equity securities sold during the period
    
-
      
-
  
Unrealized gains (losses) recognized on equity securities still held
  
$
476
    
$
(183
)

 
Nine Months Ended
September 30,
  
(In thousands)
  
2024
    
2023
  
Net gains (losses) recognized on equity securities
  
$
283
    
$
(372
)
Less: Net gains (losses) recognized on equity securities sold during the period
    
-
      
-
  
Unrealized gains (losses) recognized on equity securities still held
  
$
283
    
$
(372
)

As of September 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 September 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 nine months ended September 30, 2024 and 2023.

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

(In thousands)
  
Amortized
Cost
    
Estimated
Fair Value
  
AFS debt securities:
            
Within one year
  
$
40,409
    
$
40,282
  
From one to five years
    
637,648
      
590,469
  
From five to ten years
    
244,195
      
224,850
  
After ten years
    
726,023
      
653,737
  
Total AFS debt securities
  
$
1,648,275
    
$
1,509,338
  
HTM debt securities:
                
Within one year
  
$
94,236
    
$
94,130
  
From one to five years
    
143,062
      
139,223
  
From five to ten years
    
218,104
      
194,873
  
After ten years
    
399,539
      
353,642
  
Total HTM debt securities
  
$
854,941
    
$
781,868
  

Maturities of mortgage-backed, collateralized mortgage obligations and asset-backed securities are 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 September 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 were 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 September 30, 2024
                                                      
AFS securities:
  
                                                 
U.S. treasury
   $ -     $ -     -     $ 118,430     $ (5,284 )     7     $ 118,430     $ (5,284 )     7  
Federal agency
    
-
      
-
      
-
      
222,639
      
(25,718
)
    
16
      
222,639
      
(25,718
)
    
16
  
State & municipal
    
-
      
-
   
-
      
88,132
      
(6,761
)
    
66
      
88,132
      
(6,761
)
    
66
  
Mortgage-backed
    
15,893
      
(47
)
    
2
      
389,558
      
(37,845
)
    
153
      
405,451
      
(37,892
)
    
155
  
Collateralized mortgage obligations
    
36,841
      
(74
)
    
5
      
510,166
      
(58,837
)
    
119
      
547,007
      
(58,911
)
    
124
  
Corporate     1,455       (24 )     1       41,950       (5,043 )     14       43,405       (5,067 )     15  
Total securities with unrealized losses
  
$
54,189
    
$
(145
)
    
8
    
$
1,370,875
    
$
(139,488
)
    
375
    
$
1,425,064
    
$
(139,633
)
    
383
  
HTM securities:
                                                                        
Federal agency
  
$
-
    
$
-
      
-
    
$
85,736
    
$
(14,264
)
    
4
    
$
85,736
    
$
(14,264
)
    
4
  
Mortgage-backed
    
-
      
-
      
-
      
202,256
      
(26,871
)
    
34
      
202,256
      
(26,871
)
    
34
  
Collateralized mortgage obligation
     -
       -     -
       208,993
       (17,721 )     52
       208,993
       (17,721 )     52
  
State & municipal
    
2,908
      
(2
)
    
3
      
174,003
      
(14,470
)
    
187
      
176,911
      
(14,472
)
    
190
  
Total securities with unrealized losses
  
$
2,908
    
$
(2
)
    
3
    
$
670,988
    
$
(73,326
)
    
277
    
$
673,896
    
$
(73,328
)
    
280
  
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 that the AFS securities in an unrealized loss position as of September 30, 2024 and December 31, 2023, which consisted of 383 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 September 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, nor is it more likely than not that the Company will be required to sell these securities 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 $4.1 million at September 30, 2024 and $3.9 million at December 31, 2023, and is excluded from the estimate of credit losses and is 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 September 30, 2024 and December 31, 2023. There was no accrued interest reversed against interest income for the three and nine months ended September 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 September 30, 2024 and December 31, 2023. There was no allowance for credit losses on HTM securities as of September 30, 2024 and December 31, 2023. As of September 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 September 30, 2024 and December 31, 2023. The remaining HTM debt securities at September 30, 2024 and December 31, 2023 were comprised of state and municipal obligations with bond ratings of A to AAA. Based on the Company's CECL methodology, the expected credit loss on the HTM municipal bond portfolio was deemed immaterial, therefore no allowance for credit loss was recorded as of September 30, 2024 and December 31, 2023. AIR on HTM debt securities totaled $3.8 million at September 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.