Annual report pursuant to Section 13 and 15(d)

SECURITIES

v3.22.0.1
SECURITIES
12 Months Ended
Dec. 31, 2021
Securities [Abstract]  
SECURITIES

3. SECURITIES

Available for Sale

The Company’s AFS investment portfolio is generally highly-rated or agency backed. All AFS securities were current with no securities past due or on non-accrual as of December 31, 2021 and 2020.

​

The amortized cost, gross unrealized gains and losses, and estimated fair values of AFS securities as of December 31, 2021 are summarized as follows (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Amortized

​

Gross Unrealized

​

Estimated

​

    

Cost

    

Gains

    

(Losses)

    

Fair Value

December 31, 2021

 

​

  

 

​

  

 

​

  

​

​

  

U.S. government and agency securities

​

$

73,830

​

$

179

​

$

(160)

​

$

73,849

Obligations of states and political subdivisions

​

 

971,126

​

 

39,343

​

 

(2,073)

​

 

1,008,396

Corporate and other bonds (1)

​

 

150,201

​

 

3,353

​

 

(178)

​

 

153,376

Commercial MBS

​

 

​

​

​

​

​

​

​

​

 

​

Agency

​

​

361,806

​

 

6,761

​

 

(4,215)

​

​

364,352

Non-agency

​

​

107,087

​

 

139

​

 

(421)

​

​

106,805

Total commercial MBS

​

​

468,893

​

 

6,900

​

 

(4,636)

​

​

471,157

Residential MBS

​

​

​

​

​

​

​

​

​

​

​

​

Agency

​

​

1,691,651

​

 

15,180

​

 

(24,337)

​

​

1,682,494

Non-agency

​

​

91,443

​

 

243

​

 

(948)

​

​

90,738

Total residential MBS

​

​

1,783,094

​

 

15,423

​

 

(25,285)

​

​

1,773,232

Other securities

​

 

1,640

​

 

—

​

 

—

​

 

1,640

Total AFS securities

​

$

3,448,784

​

$

65,198

​

$

(32,332)

​

$

3,481,650

(1) Other bonds includes asset-backed securities.

​

The amortized cost, gross unrealized gains and losses, and estimated fair values of AFS securities as of December 31, 2020 are summarized as follows (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Amortized

​

Gross Unrealized

​

Estimated

​

    

Cost

    

Gains

    

(Losses)

    

Fair Value

December 31, 2020

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government and agency securities

​

$

13,009

​

$

437

​

$

(52)

​

$

13,394

Obligations of states and political subdivisions

​

​

786,466

​

​

50,878

​

​

(18)

​

​

837,326

Corporate and other bonds (1)

​

 

148,747

​

 

2,430

​

 

(99)

​

 

151,078

Commercial MBS

​

 

​

​

​

​

​

​

​

​

 

​

Agency

​

​

321,015

​

​

16,277

​

​

(2)

​

​

337,290

Non-agency

​

​

51,244

​

​

167

​

​

(17)

​

​

51,394

Total commercial MBS

​

​

372,259

​

​

16,444

​

​

(19)

​

​

388,684

Residential MBS

​

​

​

​

​

​

​

​

​

​

​

​

Agency

​

​

1,012,237

​

​

31,816

​

​

(1,946)

​

​

1,042,107

Non-agency

​

​

104,904

​

​

1,507

​

​

(206)

​

​

106,205

Total residential MBS

​

​

1,117,141

​

​

33,323

​

​

(2,152)

​

​

1,148,312

Other securities

​

 

1,625

​

 

—

​

 

—

​

 

1,625

Total AFS securities

​

$

2,439,247

​

$

103,512

​

$

(2,340)

​

$

2,540,419

(1) Other bonds includes asset-backed securities.

​

​

The following table shows the gross unrealized losses and fair value of the Company’s AFS securities with unrealized losses for which an ACL has not been recorded at December 31, 2021 and 2020 and that are not deemed to be impaired as of those dates. These are aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position (dollars in thousands).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Less than 12 months

​

More than 12 months

​

Total

​

  

Fair

  

Unrealized

  

Fair

  

Unrealized

  

Fair

  

Unrealized

​

​

Value

​

Losses

​

Value

​

Losses

​

Value

​

Losses

December 31, 2021

​

 

​

​

 

​

​

 

​

​

 

​

​

 

​

​

 

​

U.S. government and agency securities

​

$

64,474

​

$

(115)

​

$

3,900

​

$

(45)

​

$

68,374

​

$

(160)

Obligations of states and political subdivisions

​

​

249,701

​

​

(2,020)

​

​

2,123

​

​

(53)

​

​

251,824

​

​

(2,073)

Corporate and other bonds(1)

​

 

21,134

​

 

(177)

​

 

703

​

 

(1)

​

 

21,837

​

 

(178)

Commercial MBS

​

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Agency

​

​

175,588

​

​

(4,053)

​

​

3,172

​

​

(162)

​

​

178,760

​

​

(4,215)

Non-agency

​

​

33,759

​

​

(313)

​

​

11,029

​

​

(108)

​

​

44,788

​

​

(421)

Total commercial MBS

​

​

209,347

​

​

(4,366)

​

​

14,201

​

​

(270)

​

​

223,548

​

​

(4,636)

Residential MBS

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Agency

​

​

1,140,701

​

​

(21,147)

​

​

106,104

​

​

(3,190)

​

​

1,246,805

​

​

(24,337)

Non-agency

​

​

48,392

​

​

(584)

​

​

12,716

​

​

(364)

​

​

61,108

​

​

(948)

Total residential MBS

​

​

1,189,093

​

​

(21,731)

​

​

118,820

​

​

(3,554)

​

​

1,307,913

​

​

(25,285)

Total AFS securities

​

$

1,733,749

​

$

(28,409)

​

$

139,747

​

$

(3,923)

​

$

1,873,496

​

$

(32,332)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2020

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

U.S. government and agency securities

​

$

—

​

$

—

​

$

5,456

​

$

(52)

​

$

5,456

​

$

(52)

Obligations of states and political subdivisions

​

​

5,091

​

​

(18)

​

​

—

​

​

—

​

​

5,091

​

​

(18)

Corporate and other bonds(1)

​

 

17,946

​

 

(52)

​

 

10,698

​

 

(47)

​

 

28,644

​

 

(99)

Commercial MBS

​

 

​

​

 

​

​

 

​

​

 

​

​

 

​

​

 

​

Agency

​

​

5,893

​

​

(2)

​

​

376

​

​

—

​

​

6,269

​

​

(2)

Non-agency

​

​

17,654

​

​

(17)

​

​

—

​

​

—

​

​

17,654

​

​

(17)

Total commercial MBS

​

​

23,547

​

​

(19)

​

​

376

​

​

—

​

​

23,923

​

​

(19)

Residential MBS

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Agency

​

​

219,388

​

​

(1,944)

​

​

1,055

​

​

(2)

​

​

220,443

​

​

(1,946)

Non-agency

​

​

36,942

​

​

(206)

​

​

—

​

​

—

​

​

36,942

​

​

(206)

Total residential MBS

​

​

256,330

​

​

(2,150)

​

​

1,055

​

​

(2)

​

​

257,385

​

​

(2,152)

Total AFS securities

​

$

302,914

​

$

(2,239)

​

$

17,585

​

$

(101)

​

$

320,499

​

$

(2,340)

​

(1) Other bonds includes asset-backed securities

​

As of December 31, 2021, there were $139.7 million, comprised of 33 individual AFS securities that had been in a continuous loss position for more than 12 months and had an aggregate unrealized loss of $3.9 million. As of December 31, 2020, there were $17.6 million, comprised of 15 individual securities that had been in a continuous loss position for more than 12 months and had an aggregate unrealized loss of $101,000.

The Company has evaluated AFS securities in an unrealized loss position for credit related impairment at December 31, 2021 and 2020 and concluded no impairment existed based on several factors which included: (1) the majority of these securities are of high credit quality, (2) unrealized losses are primarily the result of market volatility, (3) the contractual terms of the investments do not permit the issuer(s) to settle the securities at a price less than the cost basis of each investment, (4) issuers continue to make timely principal and interest payments, and (5) the Company does not intend to sell any of the investments and the accounting standard of “more likely than not” has not been met for the Company to be required to sell any of the investments before recovery of its amortized cost basis.

​

Additionally, the majority of the Company’s MBS are issued by FNMA, FHLMC, and GNMA and do not have credit risk given the implicit and explicit government guarantees associated with these agencies. In addition, the non-agency mortgage-backed and asset-backed securities generally received a 20% SSFA rating.

​

The following table presents the amortized cost and estimated fair value of AFS securities as of December 31, 2021 and 2020, by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2021

​

December 31, 2020

​

    

Amortized

    

Estimated

    

Amortized

    

Estimated

​

​

Cost

​

Fair Value

​

Cost

​

Fair Value

Due in one year or less

​

$

18,247

​

$

18,317

​

$

19,875

​

$

19,997

Due after one year through five years

​

 

180,080

​

 

183,981

​

 

161,448

​

 

169,103

Due after five years through ten years

​

 

324,615

​

 

331,215

​

 

235,021

​

 

242,791

Due after ten years

​

 

2,925,842

​

 

2,948,137

​

 

2,022,903

​

 

2,108,528

Total AFS securities

​

$

3,448,784

​

$

3,481,650

​

$

2,439,247

​

$

2,540,419

​

Refer to Note 10 "Commitments and Contingencies" for information regarding the estimated fair value of AFS securities that were pledged to secure public deposits, repurchase agreements, and for other purposes as permitted or required by law as of December 31, 2021 and 2020.

Held to Maturity

The Company’s HTM investment portfolio primarily consists of highly-rated municipal securities. The Company’s HTM securities were all current, with no securities past due or on non-accrual at December 31, 2021 and 2020.

​

The Company reports HTM securities on the Company’s Consolidated Balance Sheets at carrying value. Carrying value is amortized cost, which includes any unamortized unrealized gains and losses recognized in accumulated other comprehensive income prior to reclassifying the securities from AFS securities to HTM securities. Investment securities transferred into the HTM category from the AFS category are recorded at fair value at the date of transfer. The unrealized holding gain or loss at the date of transfer is retained in accumulated other comprehensive income and in the carrying value of the HTM securities. Such unrealized gains or losses are accreted over the remaining life of the security with no impact on future net income.

​

The carrying value, gross unrealized gains and losses, and estimated fair values of HTM securities as of December 31, 2021 are summarized as follows (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Carrying

​

Gross Unrealized

​

Estimated

​

    

Value

    

Gains

    

(Losses)

​

Fair Value

December 31, 2021

 

​

  

 

​

  

 

​

  

​

​

  

U.S. government and agency securities

​

$

2,604

​

$

—

​

$

(29)

​

$

2,575

Obligations of states and political subdivisions

​

​

620,873

​

​

65,982

​

​

(121)

​

​

686,734

Commercial MBS

​

 

​

​

​

​

​

​

​

​

​

​

Agency

​

​

4,523

​

​

—

​

​

(58)

​

​

4,465

Total commercial MBS

​

​

4,523

​

​

—

​

​

(58)

​

​

4,465

Total held-to-maturity securities

​

$

628,000

​

$

65,982

​

$

(208)

​

$

693,774

​

​

The carrying value, gross unrealized gains and losses, and estimated fair values of HTM securities as of December 31, 2020 are summarized as follows (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Carrying

​

Gross Unrealized

​

Estimated

​

    

Value

    

Gains

    

(Losses)

    

Fair Value

December 31, 2020

​

 

  

​

 

  

​

 

  

​

 

  

U.S. government and agency securities

​

$

2,751

​

$

—

​

$

(18)

​

$

2,733

Obligations of states and political subdivisions

​

​

536,767

​

​

74,978

​

​

—

​

​

611,745

Commercial MBS

​

​

​

​

 

​

​

 

​

​

 

​

Agency

​

​

5,333

​

​

4

​

​

(50)

​

​

5,287

Total commercial MBS

​

​

5,333

​

​

4

​

​

(50)

​

​

5,287

Total held-to-maturity securities

​

$

544,851

​

$

74,982

​

$

(68)

​

$

619,765

​

Credit Quality Indicators & Allowance for Credit Losses - HTM

For HTM securities, the Company evaluates the credit risk of its securities on at least a quarterly basis. The Company estimates expected credit losses on HTM debt securities on an individual basis based on the PD/LGD methodology primarily using security-level credit ratings. The Company’s HTM securities ACL was immaterial at December 31, 2021 and 2020. The primary indicators of credit quality for the Company’s HTM portfolio are security type and credit rating, which is influenced by a number of factors including obligor cash flow, geography, seniority, and others. The Company’s only HTM securities with credit risk are obligations of states and political subdivisions.

​

The following table presents the amortized cost of HTM securities as of December 31, 2021 and 2020 by security type and credit rating (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

U.S. Government and Agency

    

Obligations of states and political

    

Mortgage-backed

    

Total HTM

​

​

securities

​

subdivisions

​

securities

​

securities

December 31, 2021

​

​

​

​

​

​

​

​

​

​

​

​

Credit Rating:

​

 

​

​

 

​

​

​

​

​

​

​

AAA/AA/A

​

$

—

​

$

620,873

​

$

—

​

$

620,873

Not Rated - Agency(1)

​

​

2,604

​

​

—

​

​

4,523

​

​

7,127

Total

​

$

2,604

​

$

620,873

​

$

4,523

​

$

628,000

December 31, 2020

​

​

​

​

​

​

​

​

​

​

​

​

Credit Rating:

​

 

​

​

 

​

​

​

​

​

​

​

AAA/AA/A

​

$

—

​

$

532,157

​

$

—

​

$

532,157

Not Rated - Agency(1)

​

​

2,751

​

​

—

​

​

5,333

​

​

8,084

Not Rated - Non-Agency

​

​

—

​

 

4,610

​

​

—

​

​

4,610

Total

​

$

2,751

​

$

536,767

​

$

5,333

​

$

544,851

​

(1) Generally considered not to have credit risk given the government guarantees associated with these agencies

​

The following table presents the amortized cost and estimated fair value of HTM securities as of December 31, 2021 and 2020, by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2021

​

December 31, 2020

​

    

Carrying

    

Estimated

    

Carrying

    

Estimated

​

​

Value

​

Fair Value

​

Value

​

Fair Value

Due in one year or less

​

$

3,034

​

$

3,027

​

$

1,443

​

$

1,460

Due after one year through five years

​

 

5,852

​

 

6,065

​

 

8,577

​

 

8,893

Due after five years through ten years

​

 

14,019

​

 

15,984

​

 

1,744

​

 

1,805

Due after ten years

​

 

605,095

​

 

668,698

​

 

533,087

​

 

607,607

Total HTM securities

​

$

628,000

​

$

693,774

​

$

544,851

​

$

619,765

​

Refer to Note 10 “Commitments and Contingencies” for information regarding the estimated fair value of HTM securities that were pledged to secure public deposits as permitted or required by law as of December 31, 2021 and December 31, 2020.

Restricted Stock, at cost

Due to restrictions placed upon the Bank’s common stock investment in the FRB and the FHLB, these securities have been classified as restricted equity securities and carried at cost. These restricted securities are not subject to the investment security classifications and are included as a separate line item on the Company’s Consolidated Balance Sheets. Restricted stock consists of FRB stock in the amount of $67.0 million for December 31, 2021 and 2020, and FHLB stock in the amount of $9.8 million and $27.8 million as of December 31, 2021 and 2020, respectively.

Realized Gains and Losses

The following table presents the gross realized gains and losses on and the proceeds from the sale of securities during the years ended December 31, 2021, 2020, and 2019 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

    

2021

    

2020

    

2019

Realized gains (losses)(1):

​

​

​

​

​

​

​

​

​

Gross realized gains

 

$

147

 

$

12,522

 

$

9,530

Gross realized losses

​

 

(60)

​

 

(228)

​

 

(1,855)

Net realized gains

 

$

87

 

$

12,294

 

$

7,675

Proceeds from sales of securities

 

$

45,436

 

$

257,945

 

$

514,070

​

​

​

(1) Includes gains (losses) on sales and calls of securities