v3.23.1
Investment Securities
 3 Months Ended
Mar. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Investment Securities INVESTMENT SECURITIES     
Transfer of Securities Available-for-Sale to Held-to Maturity
Effective June 1, 2022, the Company transferred $2.3 billion in fair value of municipal securities, agency commercial MBS, private label commercial MBS, U.S. Treasury securities, and corporate debt securities from available-for-sale to held-to-maturity. At the time of transfer, $218.3 million of unrealized losses, net of tax, was retained in "Accumulated other comprehensive income (loss)" on the condensed consolidated balance sheets.
Securities Available-for-Sale
The following table presents amortized cost, gross unrealized gains and losses, and fair values of securities available-for-sale as of the dates indicated:
 March 31, 2023December 31, 2022
GrossGrossGrossGross
AmortizedUnrealizedUnrealizedFairAmortizedUnrealizedUnrealizedFair
Security TypeCostGainsLossesValueCostGainsLossesValue
 (In thousands)
Agency residential MBS$2,645,975 $— $(396,895)$2,249,080 $2,685,038 $— $(442,996)$2,242,042 
U.S. Treasury securities771,208 — (85,772)685,436 771,145 — (101,075)670,070 
Agency commercial MBS545,480 — (53,799)491,681 549,492 — (61,886)487,606 
Agency residential CMOs509,303 — (53,621)455,682 517,174 — (60,111)457,063 
Municipal securities 395,709 — (50,070)345,639 399,724 — (60,398)339,326 
Corporate debt securities344,747 — (54,953)289,794 344,767 6 (32,868)311,905 
Private label residential CMOs203,088 — (38,685)164,403 207,123 — (40,399)166,724 
Collateralized loan obligations109,166 — (6,172)102,994 109,159 — (6,898)102,261 
Private label commercial MBS27,331 — (1,796)25,535 28,903 — (2,076)26,827 
Asset-backed securities22,864 — (407)22,457 23,568 — (1,155)22,413 
SBA securities16,895 — (989)15,906 18,524 — (1,274)17,250 
Total$5,591,766 $— $(743,159)$4,848,607 $5,654,617 $6 $(811,136)$4,843,487 
As of March 31, 2023, the Company had not recorded an allowance for credit losses on securities available-for-sale. The Company does not consider unrealized losses on such securities to be attributable to credit-related factors, as the unrealized losses have occurred as a result of changes in non-credit related factors such as interest rates, market spreads, and market conditions subsequent to purchase.
As of March 31, 2023, securities available-for-sale with a fair value of $4.6 billion were pledged as collateral primarily for the Bank Term Funding Program borrowings, FRB secured line of credit, and FHLB secured line of credit borrowings.
Realized Gains and Losses on Securities Available-for-Sale
The following table presents the amortized cost of securities sold with related gross realized gains, gross realized losses, and net realized (losses) gains for the years indicated:
Three Months Ended
March 31,
Sales of Securities Available-for-Sale20232022
(In thousands)
Amortized cost of securities sold $— $206,088 
Gross realized gains$— $1,190 
Gross realized losses— (1,086)
Net realized gains (losses) $— $104 
Unrealized Losses on Securities Available-for-Sale
The following tables present the gross unrealized losses and fair values of securities available-for-sale that were in unrealized loss positions as of the dates indicated:
March 31, 2023
 Less Than 12 Months12 Months or MoreTotal
GrossGrossGross
FairUnrealizedFairUnrealizedFairUnrealized
Security TypeValueLossesValueLossesValueLosses
 (In thousands)
Agency residential MBS$6,665 $(306)$2,242,415 $(396,589)$2,249,080 $(396,895)
U.S. Treasury securities4,993 (7)680,443 (85,765)685,436 (85,772)
Agency commercial MBS20,806 (977)470,875 (52,822)491,681 (53,799)
Agency residential CMOs35,116 (2,707)420,566 (50,914)455,682 (53,621)
Municipal securities 836 (44)344,803 (50,026)345,639 (50,070)
Corporate debt securities119,754 (18,667)170,040 (36,286)289,794 (54,953)
Private label residential CMOs1,226 (6)163,177 (38,679)164,403 (38,685)
Collateralized loan obligations18,690 (838)84,304 (5,334)102,994 (6,172)
Private label commercial MBS— — 25,534 (1,796)25,534 (1,796)
Asset-backed securities— — 22,457 (407)22,457 (407)
SBA securities— — 15,906 (989)15,906 (989)
Total$208,086 $(23,552)$4,640,520 $(719,607)$4,848,606 $(743,159)
December 31, 2022
 Less Than 12 Months12 Months or MoreTotal
GrossGrossGross
FairUnrealizedFairUnrealizedFairUnrealized
Security TypeValueLossesValueLossesValueLosses
 (In thousands)
Agency residential MBS$52,556 $(6,193)$2,189,485 $(436,803)$2,242,041 $(442,996)
U.S. Treasury securities4,972 (26)665,098 (101,049)670,070 (101,075)
Agency commercial MBS316,892 (31,139)170,714 (30,747)487,606 (61,886)
Agency residential CMOs245,755 (22,748)211,309 (37,363)457,064 (60,111)
Municipal securities 37,380 (3,129)298,266 (57,269)335,646 (60,398)
Corporate debt securities302,643 (32,124)4,256 (744)306,899 (32,868)
Private label residential CMOs19,261 (1,294)147,464 (39,105)166,725 (40,399)
Collateralized loan obligations27,704 (1,818)74,558 (5,080)102,262 (6,898)
Private label commercial MBS10,204 (508)16,623 (1,568)26,827 (2,076)
Asset-backed securities22,413 (1,155)— — 22,413 (1,155)
SBA securities17,250 (1,274)— — 17,250 (1,274)
Total$1,057,030 $(101,408)$3,777,773 $(709,728)$4,834,803 $(811,136)
The securities that were in an unrealized loss position at March 31, 2023, were considered impaired and required further review to determine if the unrealized losses were credit-related. We concluded the unrealized losses were a result of the level of market interest rates relative to the types of securities and pricing changes caused by shifting supply and demand dynamics and not a result of downgraded credit ratings or other indicators of deterioration of the underlying issuers' ability to repay. We also considered the seniority of the tranches and U.S. government agency guarantees, if any, to assess whether an unrealized loss was credit-related. Accordingly, we determined the unrealized losses were not credit-related and recognized the unrealized losses in "Accumulated other comprehensive (loss) income" of "Stockholders' equity" on the condensed consolidated balance sheets. Although we periodically sell securities for portfolio management purposes, we do not foresee having to sell any impaired securities and believe that it is more likely than not we would not be required to sell any impaired securities before recovery of their amortized cost.
Contractual Maturities of Securities Available-for-Sale
The following table presents the contractual maturities of our securities available-for-sale portfolio based on amortized cost and carrying value as of the date indicated:
March 31, 2023
Due AfterDue After
Due One Year Five YearsDue
WithinThroughThroughAfter
Security TypeOne YearFive YearsTen YearsTen YearsTotal
(In thousands)
Amortized Cost:
Agency residential MBS$— $— $— $2,645,975 $2,645,975 
U.S. Treasury securities4,999 503,869 262,340 — 771,208 
Agency commercial MBS— 205,442 321,502 18,536 545,480 
Agency residential CMOs— — 175,473 333,830 509,303 
Municipal securities— 53,855 319,463 22,391 395,709 
Corporate debt securities— 5,000 339,747 — 344,747 
Private label residential CMOs— — — 203,088 203,088 
Collateralized loan obligations— — 70,329 38,837 109,166 
Private label commercial MBS— — — 27,331 27,331 
Asset-backed securities— — — 22,864 22,864 
SBA securities— 3,409 — 13,486 16,895 
Total$4,999 $771,575 $1,488,854 $3,326,338 $5,591,766 
Fair Value:
Agency residential MBS$— $— $— $2,249,080 $2,249,080 
U.S. Treasury securities4,993 448,478 231,965 — 685,436 
Agency commercial MBS— 191,319 282,520 17,842 491,681 
Agency residential CMOs— — 154,603 301,079 455,682 
Municipal securities— 48,293 276,487 20,859 345,639 
Corporate debt securities— 4,957 284,837 — 289,794 
Private label residential CMOs— — — 164,403 164,403 
Collateralized loan obligations— — 67,321 35,673 102,994 
Private label commercial MBS— — — 25,535 25,535 
Asset-backed securities— — — 22,457 22,457 
SBA securities— 3,279 — 12,627 15,906 
Total$4,993 $696,326 $1,297,733 $2,849,555 $4,848,607 
CMBS, CMOs, and MBS have contractual maturity dates, but require periodic payments based upon scheduled amortization terms. Actual principal collections on these securities usually occur more rapidly than the scheduled amortization terms because of prepayments made by obligors of the underlying loan collateral.
Securities Held-to-Maturity
The following table presents amortized cost, allowance for credit losses, gross unrealized gains and losses, and fair values of securities held-to-maturity as of the date indicated:
 March 31, 2023
Allowance
forNetGrossGross
AmortizedCreditCarryingUnrealizedUnrealizedFair
Security TypeCostLossesAmountGainsLossesValue
 (In thousands)
Municipal securities $1,244,441 $(140)$1,244,301 $814 $(41,203)$1,203,912 
Agency commercial MBS428,995 — 428,995 — (26,135)402,860 
Private label commercial MBS346,976 — 346,976 — (28,371)318,605 
U.S. Treasury securities184,862 — 184,862 — (8,233)176,629 
Corporate debt securities69,876 (1,360)68,516 — (13,466)55,050 
Total (1)
$2,275,150 $(1,500)$2,273,650 $814 $(117,408)$2,157,056 
__________________________
(1)    Excludes accrued interest receivable of $11.3 million at March 31, 2023 which is recorded in "Other assets" on the condensed consolidated balance sheets.
 December 31, 2022
Allowance
forNetGrossGross
AmortizedCreditCarryingUnrealizedUnrealizedFair
Security TypeCostLossesAmountGainsLossesValue
 (In thousands)
Municipal securities $1,243,443 $(140)$1,243,303 $8 $(77,526)$1,165,785 
Agency commercial MBS427,411 — 427,411 — (34,287)393,124 
Private label commercial MBS345,825 — 345,825 — (26,027)319,798 
U.S. Treasury securities184,162 — 184,162 — (12,462)171,700 
Corporate debt securities69,794 (1,360)68,434 — (8,369)60,065 
Total (1)
$2,270,635 $(1,500)$2,269,135 $8 $(158,671)$2,110,472 
__________________________
(1)    Excludes accrued interest receivable of $13.5 million at December 31, 2022 which is recorded in "Other assets" on the condensed consolidated balance sheets.
As of March 31, 2023, securities held-to-maturity with a fair value of $2.1 billion were pledged as collateral primarily for public deposits, the FRB secured line of credit, Bank Term Funding Program borrowings, and letters of credit.
Allowance for Credit Losses on Securities Held-to-Maturity
The following table presents the changes by major security type in our allowance for credit losses on securities held-to-maturity for the periods indicated:
Allowance forProvision Allowance for
Credit Losses,for Credit Losses,
Beginning Credit End of
Security Typeof PeriodLossesCharge-offsRecoveriesPeriod
(In thousands)
Three Months Ended March 31, 2023
Municipal securities$140 $— $— $— $140 
Corporate debt securities1,360 — — — 1,360 
Total$1,500 $— $— $— $1,500 
Credit losses on HTM securities are recorded at the time of purchase, acquisition, or when the Company designates securities as held-to-maturity. Credit losses on HTM securities are representative of current expected credit losses that may be incurred over the life of the investment. Accrued interest receivable on HTM securities, which is included in other assets on the condensed consolidated balance sheets, is excluded from the estimate of expected credit losses. HTM U.S. treasury securities and agency-backed MBS securities are considered to have no risk of loss as they are either explicitly or implicitly guaranteed by the U.S. government. The change in fair value in the HTM private label CMBS portfolio is solely driven by changes in interest rates. The Company has no knowledge of any underlying credit issues and the cash flows underlying the debt securities have not changed and are not expected to be impacted by changes in interest rates and, thus, there is no related ACL for this portfolio. The underlying bonds in the Company’s HTM municipal securities and HTM corporate debt securities portfolios are evaluated for credit losses in conjunction with management’s estimate of the allowance for credit losses based primarily on credit ratings.
Securities Held-to-Maturity by Credit Quality Indicator
The Company uses S&P, Moody's, Fitch, Kroll, and Egan Jones ratings as the credit quality indicators for its held-to-maturity securities. The following table presents our securities held-to-maturity portfolio at amortized cost by the lowest available credit rating as of the dates indicated:
March 31, 2023
Security TypeAAAAA+AAAA-AA-BBBNRTotal
(In thousands)
Amortized Cost:
Municipal securities$551,978 $397,018 $174,273 $95,566 $1,898 $— $— $23,708 $1,244,441 
Agency commercial MBS— 428,995 — — — — — — 428,995 
Private label commercial
MBS346,976 — — — — — — — 346,976 
U.S. Treasury securities— 184,862 — — — — — — 184,862 
Corporate debt securities— — — — — 23,268 21,007 25,601 69,876 
Total$898,954 $1,010,875 $174,273 $95,566 $1,898 $23,268 $21,007 $49,309 $2,275,150 
December 31, 2022
Security TypeAAAAA+AAAA-AA-BBBNRTotal
(In thousands)
Amortized Cost:
Municipal securities$568,674 $385,990 $173,751 $95,471 $1,901 $— $— $17,656 $1,243,443 
Agency commercial MBS— 427,411 — — — — — — 427,411 
Private label commercial
MBS345,825 — — — — — — — 345,825 
U.S. Treasury securities— 184,162 — — — — — — 184,162 
Corporate debt securities— — — — — 23,244 20,999 25,551 69,794 
Total$914,499 $997,563 $173,751 $95,471 $1,901 $23,244 $20,999 $43,207 $2,270,635 
Contractual Maturities of Securities Held-to-Maturity
The following table presents the contractual maturities of our securities held-to-maturity portfolio based on amortized cost and fair value as of the date indicated:
March 31, 2023
Due AfterDue After
Due One Year Five YearsDue
WithinThroughThroughAfter
Security TypeOne YearFive YearsTen YearsTen YearsTotal
(In thousands)
Amortized Cost:
Municipal securities$— $— $350,751 $893,690 $1,244,441 
Agency commercial MBS— — 407,855 21,140 428,995 
Private label commercial MBS— — 36,089 310,887 346,976 
U.S. Treasury securities— — 184,862 — 184,862 
Corporate debt securities— — — 69,876 69,876 
Total$— $— $979,557 $1,295,593 $2,275,150 
Fair Value:
Municipal securities$— $— $335,601 $868,311 $1,203,912 
Agency commercial MBS— — 382,601 20,259 402,860 
Private label commercial MBS— — 33,282 285,323 318,605 
U.S. Treasury securities— — 176,629 — 176,629 
Corporate debt securities— — — 55,050 55,050 
Total$— $— $928,113 $1,228,943 $2,157,056 
CMBS have contractual maturity dates, but require periodic payments based upon scheduled amortization terms. Actual principal collections on these securities usually occur more rapidly than the scheduled amortization terms because of prepayments made by obligors of the underlying loan collateral.
Interest Income on Investment Securities
The following table presents the composition of our interest income on investment securities, including available-for-sale and held-to-maturity, for the periods indicated:
Three Months Ended
March 31,
20232022
(In thousands)
Taxable interest$38,692 $44,642 
Non-taxable interest4,903 8,519 
Dividend income642 261 
Total interest income on investment securities$44,237 $53,422