| Securities |
4. Securities The following tables summarize the Company’s portfolio of securities held-to-maturity at: | | | | | | | | | | | | | | | | | | | | | | | | Allowance | | Net | | Gross | | Gross | | | | | | Amortized | | for | | Carrying | | Unrecognized | | Unrecognized | | | | June 30, 2025 | | Cost | | Credit Losses | | Amount | | Gains | | Losses | | Fair Value | | | | (In thousands) | Municipals | | $ | 43,360 | | $ | (355) | | $ | 43,005 | | $ | — | | $ | (5,065) | | $ | 37,940 | | | | | | | | | | | | | | | | | | | | FNMA | | | 7,826 | | | — | | | 7,826 | | | — | | | (680) | | | 7,146 | | | | | | | | | | | | | | | | | | | | Total | | $ | 51,186 | | $ | (355) | | $ | 50,831 | | $ | — | | $ | (5,745) | | $ | 45,086 |
| | | | | | | | | | | | | | | | | | | | | | | | Allowance | | Net | | Gross | | Gross | | | | | | Amortized | | for | | Carrying | | Unrecognized | | Unrecognized | | | | December 31, 2024 | | Cost | | Credit Losses | | Amount | | Gains | | Losses | | Fair Value | | | | (In thousands) | Municipals | | $ | 44,002 | | $ | (353) | | $ | 43,649 | | $ | — | | $ | (5,834) | | $ | 37,815 | | | | | | | | | | | | | | | | | | | | FNMA | | | 7,836 | | | — | | | 7,836 | | | — | | | (933) | | | 6,903 | | | | | | | | | | | | | | | | | | | | Total | | $ | 51,838 | | $ | (353) | | $ | 51,485 | | $ | — | | $ | (6,767) | | $ | 44,718 |
The following tables summarize the Company’s portfolio of securities available for sale on: | | | | | | | | | | | | | | | | | | | | | | Allowance | | Gross | | Gross | | | | | | Amortized | | | for | | Unrealized | | Unrealized | | | | June 30, 2025 | | Cost | | Credit Losses | | Gains | | Losses | | Fair Value | | | | (In thousands) | U.S. government agencies | | $ | 7,510 | | $ | — | | $ | 40 | | $ | (28) | | $ | 7,522 | Municipals | | | 20,627 | | | (3,066) | | | — | | | (683) | | | 16,878 | Corporate | | | 145,038 | | | — | | | 1,143 | | | (4,554) | | | 141,627 | Mutual funds | | | 12,291 | | | — | | | — | | | — | | | 12,291 | Collateralized loan obligations | | | 384,043 | | | — | | | 562 | | | (1,320) | | | 383,285 | Other | | | 1,428 | | | — | | | — | | | — | | | 1,428 | Total other securities | | | 570,937 | | | (3,066) | | | 1,745 | | | (6,585) | | | 563,031 | REMIC and CMO | | | 632,223 | | | — | | | 1,748 | | | (1,013) | | | 632,958 | GNMA | | | 28,926 | | | — | | | 143 | | | (6) | | | 29,063 | FNMA | | | 94,083 | | | — | | | 1,097 | | | (13) | | | 95,167 | FHLMC | | | 70,648 | | | — | | | 920 | | | — | | | 71,568 | Total mortgage-backed securities | | | 825,880 | | | — | | | 3,908 | | | (1,032) | | | 828,756 | | | | | | | | | | | | | | | | | Total Securities available for sale | | $ | 1,396,817 | | $ | (3,066) | | $ | 5,653 | | $ | (7,617) | | $ | 1,391,787 |
| | | | | | | | | | | | | | | | | | | | | | | | Gross | | Gross | | | | | | Amortized | | | | | Unrealized | | Unrealized | | | | December 31, 2024 | | Cost | | Fair Value | | Gains | | Losses | | Fair Value | | | | (In thousands) | U.S. government agencies | | $ | 8,804 | | $ | — | | $ | 77 | | $ | (33) | | $ | 8,848 | Municipals | | | 20,627 | | | (2,627) | | | — | | | — | | | 18,000 | Corporate | | | 130,882 | | | — | | | 735 | | | (6,368) | | | 125,249 | Mutual funds | | | 11,890 | | | — | | | — | | | — | | | 11,890 | Collateralized loan obligations | | | 420,260 | | | — | | | 1,126 | | | (569) | | | 420,817 | Other | | | 1,465 | | | — | | | — | | | — | | | 1,465 | Total other securities | | | 593,928 | | | (2,627) | | | 1,938 | | | (6,970) | | | 586,269 | REMIC and CMO | | | 707,540 | | | — | | | 1,107 | | | (1,067) | | | 707,580 | GNMA | | | 30,099 | | | — | | | — | | | (154) | | | 29,945 | FNMA | | | 99,183 | | | — | | | 11 | | | (1,048) | | | 98,146 | FHLMC | | | 76,048 | | | — | | | 13 | | | (96) | | | 75,965 | Total mortgage-backed securities | | | 912,870 | | | — | | | 1,131 | | | (2,365) | | | 911,636 | | | | | | | | | | | | | | | | | Total securities available for sale | | $ | 1,506,798 | | $ | (2,627) | | $ | 3,069 | | $ | (9,335) | | $ | 1,497,905 |
The corporate securities held by the Company at June 30, 2025 and December 31, 2024, are issued by U.S. banking institutions. The CMOs held by the Company at June 30, 2025 and December 31, 2024, are either fully guaranteed or issued by a government sponsored enterprise. The following tables detail the amortized cost and fair value of the Company’s securities classified as held-to-maturity and available for sale at June 30, 2025, by contractual maturity. 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. | | | | | | | | | Amortized | | | | Securities held-to-maturity: | | Cost | | Fair Value | | | | (In thousands) | Due after ten years | | $ | 43,360 | | $ | 37,940 | Total other securities | | | 43,360 | | | 37,940 | Mortgage-backed securities | | | 7,826 | | | 7,146 | Total securities held-to-maturity | | $ | 51,186 | | $ | 45,086 |
| | | | | | | | | Amortized | | | | Securities available for sale: | | Cost | | Fair Value | | | | (In thousands) | Due after one year through five years | | $ | 60,388 | | $ | 58,710 | Due after five years through ten years | | | 252,833 | | | 251,547 | Due after ten years | | | 245,425 | | | 240,483 | Total other securities | | | 558,646 | | | 550,740 | Mutual funds | | | 12,291 | | | 12,291 | Mortgage-backed securities | | | 825,880 | | | 828,756 | Total securities available for sale | | $ | 1,396,817 | | $ | 1,391,787 |
The following tables show the Company’s securities without an allowance for credit losses with gross unrealized losses and their fair value, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position, at the dates indicated: | | | | | | | | | | | | | | | | | | | | | | | At June 30, 2025 | | | | | Total | | Less than 12 months | | 12 months or more | | | | | | | | Unrealized | | | | | Unrealized | | | | | Unrealized | | | Count | | Fair Value | | Losses | | Fair Value | | Losses | | Fair Value | | Losses | | | | (Dollars in thousands) | Held-to-maturity securities | | | | | | | | | | | | | | | | | | | | | FNMA | | 1 | | | 7,146 | | | (680) | | | — | | | — | | | 7,146 | | | (680) | Total mortgage-backed securities | | 1 | | | 7,146 | | | (680) | | | — | | | — | | | 7,146 | | | (680) | | | | | | | | | | | | | | | | | | | | | | Total | | 1 | | $ | 7,146 | | $ | (680) | | $ | — | | $ | — | | $ | 7,146 | | $ | (680) | | | | | | | | | | | | | | | | | | | | | | Available for sale securities | | | | | | | | | | | | | | | | | | | | | U.S. government agencies | | 3 | | $ | 4,497 | | $ | (28) | | $ | 1,364 | | $ | (6) | | $ | 3,133 | | $ | (22) | Corporate | | 12 | | | 92,648 | | | (4,554) | | | 2,970 | | | (30) | | | 89,678 | | | (4,524) | Collateralized loan obligations | | 19 | | | 252,453 | | | (1,320) | | | 129,928 | | | (191) | | | 122,525 | | | (1,129) | Total other securities | | 34 | | | 349,598 | | | (5,902) | | | 134,262 | | | (227) | | | 215,336 | | | (5,675) | | | | | | | | | | | | | | | | | | | | | | REMIC and CMO | | 20 | | | 253,971 | | | (1,013) | | | 223,583 | | | (630) | | | 30,388 | | | (383) | GNMA | | 1 | | | 1,506 | | | (6) | | | — | | | — | | | 1,506 | | | (6) | FNMA | | 1 | | | 19,628 | | | (13) | | | 19,628 | | | (13) | | | — | | | — | Total mortgage-backed securities | | 22 | | | 275,105 | | | (1,032) | | | 243,211 | | | (643) | | | 31,894 | | | (389) | Total securities available for sale | | 56 | | $ | 624,703 | | $ | (6,934) | | $ | 377,473 | | $ | (870) | | $ | 247,230 | | $ | (6,064) |
| | | | | | | | | | | | | | | | | | | | | | | At December 31, 2024 | | | | | Total | | Less than 12 months | | 12 months or more | | | | | | | | Unrealized | | | | | Unrealized | | | | | Unrealized | | | Count | | Fair Value | | Losses | | Fair Value | | Losses | | Fair Value | | Losses | | | | (Dollars in thousands) | Held-to-maturity securities | | | | | | | | | | | | | | | | | | | | | FNMA | | 1 | | | 6,903 | | | (933) | | | — | | | — | | | 6,903 | | | (933) | Total mortgage-backed securities | | 1 | | | 6,903 | | | (933) | | | — | | | — | | | 6,903 | | | (933) | | | | | | | | | | | | | | | | | | | | | | Total | | 1 | | $ | 6,903 | | $ | (933) | | $ | — | | $ | — | | $ | 6,903 | | $ | (933) | | | | | | | | | | | | | | | | | | | | | | Available for sale securities | | | | | | | | | | | | | | | | | | | | | U.S. government agencies | | 2 | | $ | 3,339 | | $ | (33) | | $ | — | | $ | — | | $ | 3,339 | | $ | (33) | Corporate | | 13 | | | 95,758 | | | (6,368) | | | — | | | — | | | 95,758 | | | (6,368) | Collateralized loan obligations | | 18 | | | 201,470 | | | (569) | | | 201,470 | | | (569) | | | — | | | — | Total other securities | | 33 | | | 300,567 | | | (6,970) | | | 201,470 | | | (569) | | | 99,097 | | | (6,401) | | | | | | | | | | | | | | | | | | | | | | REMIC and CMO | | 19 | | | 287,948 | | | (1,067) | | | 281,570 | | | (936) | | | 6,378 | | | (131) | GNMA | | 4 | | | 29,945 | | | (154) | | | 28,443 | | | (134) | | | 1,502 | | | (20) | FNMA | | 6 | | | 97,417 | | | (1,048) | | | 97,417 | | | (1,048) | | | — | | | — | FHLMC | | 3 | | | 56,540 | | | (96) | | | 56,540 | | | (96) | | | — | | | — | Total mortgage-backed securities | | 32 | | | 471,850 | | | (2,365) | | | 463,970 | | | (2,214) | | | 7,880 | | | (151) | Total | | 65 | | $ | 772,417 | | $ | (9,335) | | $ | 665,440 | | $ | (2,783) | | $ | 106,977 | | $ | (6,552) |
The Company reviewed all available for sale securities that had an unrealized loss at June 30, 2025 and December 31, 2024. The Company does not have the intent to sell these securities, and it is more likely than not the Company will not be required to sell the securities before recovery of the securities’ amortized cost basis. This conclusion is based upon considering the Company’s cash and working capital requirements and contractual and regulatory obligations, none of which the Company believes would cause the sale of the securities. If the Company identifies any decline in the fair value due to credit loss factors and an evaluation indicates that a credit loss exists, then the present value of cash flows that is expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Upon this review management determined one municipal security indicated that a credit loss existed at June 30, 2025, resulting in an allowance for credit losses being recorded. At June 30, 2025, this security is non-accrual with an amortized cost of $20.6 million, an allowance for credit losses of $3.1 million and a fair value of $16.9 million. All but one of the remaining securities held on June 30, 2025, are either rated investment grade or better, and all these securities have a long history of no credit losses. The Bank holds approximately $10 million of corporate debt from a New York based bank holding company that at June 30, 2025 was rated B1. At this time, we do not consider the decline in fair value to be credit related given the underlying bond has not missed any payments and financial performance has not deteriorated to a level where the institution is not well capitalized. The Bank has placed the security on the watch list and will continue to monitor this risk position closely to determine if any action steps and valuation adjustments are required in the future. It is not anticipated that this security or any other available for sale security held at June 30, 2025 would be settled at a price that is less than the amortized cost of the Company’s investment. In determining the risk of loss for available for sale securities, the Company considered that mortgage-backed securities are either fully guaranteed or issued by a government sponsored enterprise, which has a credit rating and perceived credit risk comparable to the U.S. government, and that issuers of the collateralized loan obligations (“CLO”) and the issuer of corporate securities are global systematically important banks. Each of these securities is performing according to its terms and, in the opinion of management, will continue to perform according to its terms. Based on this review, management believes that the unrealized losses have resulted from other factors not deemed credit-related and no allowance for credit loss was recorded. The Company reviewed each held-to-maturity security as part of its quarterly Current Expected Credit Loss (“CECL”) process, resulting in an allowance for credit losses of $0.4 million at both June 30, 2025 and December 31, 2024. It is the Company’s policy to exclude accrued interest receivable from the calculation of the allowance for credit losses on held-to-maturity and the valuation of available for sale securities. Accrued interest receivable on held-to-maturity securities totaled $0.1 million at both June 30, 2025 and December 31, 2024 and accrued interest receivable on available for sale debt securities totaled $7.9 million and $8.8 million at June 30, 2025 and December 31, 2024, respectively. The following table presents the activity in the allowance for credit losses for debt securities available for sale. | | | | | | | | | | | | | For the three months ended | | For the six months ended | | June 30, | | June 30, | | 2025 | | 2024 | | 2025 | | 2024 | | | (In thousands) | Beginning balance | $ | 2,627 | | $ | — | | $ | 2,627 | | $ | — | Provision (benefit) | | 439 | | | — | | | 439 | | | — | Allowance for credit losses | $ | 3,066 | | $ | — | | $ | 3,066 | | $ | — |
The following table presents the activity in the allowance for credit losses for debt securities held-to-maturity. | | | | | | | | | | | | | For the three months ended | | For the six months ended | | June 30, | | June 30, | | 2025 | | 2024 | | 2025 | | 2024 | | | (In thousands) | Beginning balance | $ | 359 | | $ | 1,084 | | $ | 353 | | $ | 1,087 | Provision (benefit) | | (4) | | | 5 | | | 2 | | | 2 | Allowance for credit losses | $ | 355 | | $ | 1,089 | | $ | 355 | | $ | 1,089 |
Realized gains and losses on the sales of securities are determined using the specific identification method. The Company did not sell any securities during the three and six months ended June 30, 2025 and 2024.
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