Quarterly report [Sections 13 or 15(d)]

Note 4 - Securities

v3.25.2
Note 4 - Securities
6 Months Ended
Jun. 30, 2025
Notes to Financial Statements  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

NOTE 4 - SECURITIES

 

The amortized cost and fair value of available-for-sale and held-to-maturity securities at June 30, 2025 and December 31, 2024 are summarized as follows:

 

           

Gross

   

Gross

         
   

Amortized

   

Unrealized

   

Unrealized

   

Fair

 
   

Cost

   

Gain

   

Loss

   

Value

 

June 30, 2025

 

(In Thousands)

 

Debt Securities Available-for-Sale

                               

U.S. Treasury securities

  $ 699,077     $ 2,442     $ (37 )   $ 701,482  

Mortgage-backed securities

    187,193       568       (9,610 )     178,151  

State and municipal securities

    10,366       1       (728 )     9,639  

Corporate debt

    355,315       617       (17,353 )     338,579  

Total

  $ 1,251,951     $ 3,628     $ (27,728 )   $ 1,227,851  

Debt Securities Held-to-Maturity

                               

U.S. Treasury securities

  $ 249,511     $ -     $ (13,349 )   $ 236,162  

Mortgage-backed securities

    428,794       131       (42,904 )     386,021  

State and municipal securities

    8,347       -       (425 )     7,922  

Total

  $ 686,652     $ 131     $ (56,678 )   $ 630,105  
                                 

December 31, 2024

                               

Debt Securities Available-for-Sale

                               

U.S. Treasury securities

  $ 617,350     $ 580     $ (444 )   $ 617,486  

Mortgage-backed securities

    243,435       49       (24,210 )     219,274  

State and municipal securities

    10,516       1       (1,000 )     9,517  

Corporate debt

    335,758       38       (20,673 )     315,123  

Total

  $ 1,207,059     $ 668     $ (46,327 )   $ 1,161,400  

Debt Securities Held-to-Maturity

                               

U.S. Treasury securities

  $ 249,403     $ -     $ (19,632 )   $ 229,771  

Mortgage-backed securities

    457,365       14       (55,150 )     402,229  

State and municipal securities

    8,085       -       (589 )     7,496  

Total

  $ 714,853     $ 14     $ (75,371 )   $ 639,496  

 

The amortized cost and fair value of debt securities as of June 30, 2025 and December 31, 2024 by contractual maturity are shown below. Actual maturities may differ from contractual maturities of mortgage-backed securities since the mortgages underlying the securities may be called or prepaid with or without penalty. Therefore, these securities are not included in the maturity categories along with the other categories of debt securities.

 

   

June 30, 2025

   

December 31, 2024

 
   

Amortized Cost

   

Fair Value

   

Amortized Cost

   

Fair Value

 
   

(In Thousands)

 

Debt securities available-for-sale

                               

Due within one year

  $ 268,240     $ 268,438     $ 223,145     $ 223,477  

Due from one to five years

    505,309       505,923       478,868       475,985  

Due from five to ten years

    276,806       261,360       258,611       240,114  

Due after ten years

    14,403       13,979       3,000       2,550  

Mortgage-backed securities

    187,193       178,151       243,435       219,274  
    $ 1,251,951     $ 1,227,851     $ 1,207,059     $ 1,161,400  
                                 

Debt securities held-to-maturity

                               

Due within one year

  $ 853     $ 847     $ 250     $ 250  

Due from one to five years

    257,005       243,237       256,743       236,586  

Due from five to ten years

    -       -       495       431  

Mortgage-backed securities

    428,794       386,021       457,365       402,229  
    $ 686,652     $ 630,105     $ 714,853     $ 639,496  

 

All mortgage-backed securities are with government-sponsored enterprises (“GSEs”) such as Federal National Mortgage Association, Government National Mortgage Association, Federal Home Loan Bank, and Federal Home Loan Mortgage Corporation.

 

Restricted equity securities are comprised entirely of restricted investment in Federal Home Loan Bank stock for membership requirements.

 

The carrying value of investment securities pledged to secure public funds on deposit and for other purposes as required by law was $1.29 billion and $1.43 billion as of June 30, 2025 and December 31, 2024, respectively.

 

The following table identifies, as of June 30, 2025 and December 31, 2024, the Company’s investment securities that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 or more months.

 

   

Less Than Twelve Months

   

Twelve Months or More

   

Total

 
   

Gross

           

Gross

           

Gross

         
   

Unrealized

           

Unrealized

           

Unrealized

         
   

Losses

   

Fair Value

   

Losses

   

Fair Value

   

Losses

   

Fair Value

 
   

(In Thousands)

 

June 30, 2025

                                               

Debt Securities available-for-sale

                                               

U.S. Treasury securities

  $ (37 )   $ 68,554     $ -     $ -     $ (37 )   $ 68,554  

Mortgage-backed securities

  $ -     $ 72       (9,610 )   $ 106,391     $ (9,610 )   $ 106,463  

State and municipal securities

    -       -       (728 )     9,194       (728 )     9,194  

Corporate debt

    (706 )     23,644       (16,648 )     249,651       (17,353 )     273,295  

Total

  $ (743 )   $ 92,270     $ (26,986 )   $ 365,236     $ (27,728 )   $ 457,506  

Debt Securities held-to-maturity

                                               

U.S. Treasury securities

  $ -     $ -     $ (13,349 )   $ 236,163     $ (13,349 )   $ 236,162  

Mortgage-backed securities

    (125 )     27,124       (42,779 )     341,693       (42,904 )     368,817  

State and municipal securities

    (77 )     2,902       (348 )     4,519       (425 )     7,421  

Total

  $ (202 )   $ 30,026     $ (56,476 )   $ 582,375     $ (56,678 )   $ 612,400  

December 31, 2024

                                               

Debt Securities available-for-sale

                                               

U.S. Treasury securities

  $ (445 )   $ 250,547     $ -     $ -     $ (445 )   $ 250,547  

Mortgage-backed securities

  $ (6 )   $ 577     $ (24,204 )   $ 179,178     $ (24,210 )   $ 179,755  

State and municipal securities

    -       -       (1,000 )     9,072       (1,000 )     9,072  

Corporate debt

    (1,307 )     25,596       (19,366 )     284,489       (20,673 )     310,085  

Total

  $ (1,758 )   $ 276,720     $ (44,570 )   $ 472,739     $ (46,328 )   $ 749,459  

Debt Securities held-to-maturity

                                               

U.S. Treasury securities

  $ -     $ -     $ (19,632 )   $ 229,771     $ (19,632 )   $ 229,771  

Mortgage-backed securities

    (536 )     40,115       (54,614 )     356,215       (55,150 )     396,330  

State and municipal securities

    -       -       (589 )     7,247       (589 )     7,247  

Total

  $ (536 )   $ 40,115     $ (74,835 )   $ 593,233     $ (75,371 )   $ 633,348  

 

At June 30, 2025 and December 31, 2024, no allowance for credit losses (“ACL”) has been recognized on available-for-sale debt securities in an unrealized loss position as the Company does not believe any of the debt securities are credit impaired. This is based on the Company’s analysis of the risk characteristics, including credit ratings, and other qualitative factors related to available-for-sale debt securities. The issuers of these debt securities continue to make timely principal and interest payments under the contractual terms of the securities. During the second quarter of 2025, the Company sold available-for-sale mortgage-backed securities with an amortized cost basis of $70.5 million and recorded a pre-tax loss of $8.6 million, as a result of a portfolio restructuring. The proceeds from the sale were reinvested into higher-yielding securities. The unrealized losses are due to increases in market interest rates over the yields available at the time the debt securities were purchased. Management measures expected credit losses on held-to-maturity securities on a collective basis by major security type with each type sharing similar risk characteristics and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. With regard to U.S. Treasury and mortgage-backed securities issued by the U.S. government, or agencies thereof, it is expected that the securities will not be settled at prices less than the amortized cost bases of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. Accordingly, no allowance for credit losses has been recorded for these securities. With regard to securities issued by states and municipal subdivisions and other held-to-maturity securities, management considers (i) issuer bond ratings, (ii) historical loss rates for given bond ratings, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, and (iv) internal forecasts. Historical loss rates associated with securities having similar grades as those in our portfolio have generally not been significant. Furthermore, as of June 30, 2025 and 2024, there were no past due principal or interest payments associated with these securities. Based upon (i) the issuer’s strong bond ratings and (ii) a zero historical loss rate, no allowance for credit losses has been recorded for held-to-maturity State and Municipal Securities as such amount is not material at June 30, 2025 and 2024. All debt securities in an unrealized loss position as of June 30, 2025 continue to perform as scheduled and the Company does not believe there is a possible credit loss or that an allowance for credit loss on these debt securities is necessary.

 

The following table summarizes information about sales of debt securities available-for-sale.

 

   

Six Months Ended June 30,

 
   

2025

   

2024

 
   

(In Thousands)

 

Sale proceeds

  $ 61,897     $ -  

Gross realized losses

    (8,563 )     -  

Net realized gain (loss)

  $ (8,563 )   $ -