Debt Securities

9 Months Ended

Sep. 30, 2022

Investments, Debt and Equity Securities [Abstract]

The tables below provide the amortized cost, unrealized gains and losses, and fair values of debt securities summarized by major category (dollars in thousands):


	As of September 30, 2022
	Amortized Cost		Unrealized				Fair Value
			Gross Gains		Gross Losses
Debt securities available for sale
U.S. Treasury securities	$	145,495	$	—	$	(4,653)	$	140,842
Obligations of U.S. government corporations and agencies	25,287		4		(358)		24,933
Obligations of states and political subdivisions	298,653		35		(27,853)		270,835
Asset-backed securities	490,076		—		(23,552)		466,524
Commercial mortgage-backed securities	98,719		—		(10,968)		87,751
Residential mortgage-backed securities	1,538,308		1		(233,995)		1,304,314
Corporate debt securities	279,310		20		(27,488)		251,842
Total debt securities available for sale	$	2,875,848	$	60	$	(328,867)	$	2,547,041

Debt securities held to maturity
Commercial mortgage-backed securities	$	486,116	$	—	$	(60,341)	$	425,775
Residential mortgage-backed securities	450,212		—		(67,102)		383,110
Total debt securities held to maturity	$	936,328	$	—	$	(127,443)	$	808,885


	As of December 31, 2021
	Amortized Cost		Unrealized				Fair Value
			Gross Gains		Gross Losses
Debt securities available for sale
U.S. Treasury securities	$	166,768	$	41	$	(1,047)	$	165,762
Obligations of U.S. government corporations and agencies	37,579		891		—		38,470
Obligations of states and political subdivisions	300,602		7,760		(1,493)		306,869
Asset-backed securities	492,055		295		(164)		492,186
Commercial mortgage-backed securities	625,339		3,425		(13,766)		614,998
Residential mortgage-backed securities	2,095,104		8,889		(34,680)		2,069,313
Corporate debt securities	296,076		1,081		(3,504)		293,653
Total debt securities available for sale	$	4,013,523	$	22,382	$	(54,654)	$	3,981,251

Maturities of debt securities

Amortized cost and fair value of debt securities, by contractual maturity or pre-refunded date, are shown below. Mortgages underlying mortgage-backed securities and asset-backed securities may be called or prepaid; therefore, actual maturities could differ from the contractual maturities. All mortgage-backed securities were issued by U.S. government corporations and agencies (dollars in thousands):


	As of September 30, 2022
	Amortized Cost		Fair Value
Debt securities available for sale
Due in one year or less	$	176,516	$	174,227
Due after one year through five years	410,372		379,095
Due after five years through ten years	353,968		319,381
Due after ten years	1,934,992		1,674,338
Debt securities available for sale	$	2,875,848	$	2,547,041

Debt securities held to maturity
Due after one year through five years	46,961		43,738
Due after five years through ten years	65,516		58,346
Due after ten years	823,851		706,801
Debt securities held to maturity	$	936,328	$	808,885

Gains and losses on debt securities

Realized gains and losses related to sales and calls of debt securities available for sale are summarized as follows (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Realized gains and losses on debt securities
Gross gains on debt securities	$	—	$	—	$	114	$	524
Gross (losses) on debt securities	(74)		(5)		(86)		(410)
Realized net gains (losses) on debt securities1	$	(74)	$	(5)	$	28	$	114

1.Net gains (losses) on sales of securities reported in the unaudited Consolidated Statements of Income include sales of equity securities, excluded in this table.

Debt securities with carrying amounts of $675.8 million on September 30, 2022, and $708.9 million on December 31, 2021, were pledged as collateral for public deposits, securities sold under agreements to repurchase, and for other purposes as required.

Debt securities in an unrealized loss position

The following information pertains to debt securities with gross unrealized losses, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (dollars in thousands):


	As of September 30, 2022
	Less than 12 months				12 months or more				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Debt securities available for sale
U.S. Treasury securities	$	2,067	$	(5)	$	138,775	$	(4,648)	$	140,842	$	(4,653)
Obligations of U.S. government corporations and agencies	21,629		(358)		—		—		21,629		(358)
Obligations of states and political subdivisions	220,960		(20,029)		41,779		(7,824)		262,739		(27,853)
Asset-backed securities	441,896		(21,681)		24,628		(1,871)		466,524		(23,552)
Commercial mortgage-backed securities	74,334		(8,761)		13,417		(2,207)		87,751		(10,968)
Residential mortgage-backed securities	557,046		(72,807)		747,141		(161,188)		1,304,187		(233,995)
Corporate debt securities	75,608		(9,426)		173,266		(18,062)		248,874		(27,488)
Debt securities available for sale with gross unrealized losses	$	1,393,540	$	(133,067)	$	1,139,006	$	(195,800)	$	2,532,546	$	(328,867)

Debt securities held to maturity
Commercial mortgage-backed securities	$	109,085	$	(15,592)	$	316,690	$	(44,749)	$	425,775	$	(60,341)
Residential mortgage-backed securities	162,575		(29,243)		220,535		(37,859)		383,110		(67,102)
Debt securities held to maturity with gross unrealized losses	$	271,660	$	(44,835)	$	537,225	$	(82,608)	$	808,885	$	(127,443)


	As of December 31, 2021
	Less than 12 months				12 months or more				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Debt securities available for sale
U.S. Treasury securities	$	163,653	$	(1,047)	$	—	$	—	$	163,653	$	(1,047)
Obligations of states and political subdivisions	92,680		(1,493)		—		—		92,680		(1,493)
Asset-backed securities	89,983		(164)		—		—		89,983		(164)
Commercial mortgage-backed securities	389,078		(10,186)		85,905		(3,580)		474,983		(13,766)
Residential mortgage-backed securities	1,700,187		(33,453)		20,538		(1,227)		1,720,725		(34,680)
Corporate debt securities	241,153		(3,504)		—		—		241,153		(3,504)
Debt securities available for sale with gross unrealized losses	$	2,676,734	$	(49,847)	$	106,443	$	(4,807)	$	2,783,177	$	(54,654)

Additional information about debt securities in an unrealized loss position is presented in the tables below (dollars in thousands):


	As of September 30, 2022
	Available for Sale			Held to Maturity			Total
Debt securities with gross unrealized losses, fair value	$	2,532,546		$	808,885		$	3,341,431
Gross unrealized losses on debt securities	$	328,867		$	127,443		$	456,310
Ratio of gross unrealized losses to debt securities with gross unrealized losses	13.0		%	15.8		%	13.7		%

Count of debt securities	1,145			55			1,200
Count of debt securities in an unrealized loss position	1,109			55			1,164


	As of December 31, 2021
	Available for Sale			Held to Maturity		Total
Debt securities with gross unrealized losses, fair value	$	2,783,177		$	—	$	2,783,177
Gross unrealized losses on debt securities	$	54,654		$	—	$	54,654
Ratio of gross unrealized losses to debt securities with gross unrealized losses	2.0		%	—		2.0		%

Count of debt securities	1,252			—		1,252
Count of debt securities in an unrealized loss position	373			—		373

Unrealized losses were related to changes in market interest rates and market conditions that do not represent credit-related impairments. The Company does not intend to sell securities that are in an unrealized loss position, and it is more likely than not that the Company will recover the amortized cost prior to being required to sell the debt securities. Full collection of the amounts due according to the contractual terms of the debt securities is expected; therefore, no ACL was recorded in relation to debt securities, and the impairment related to noncredit factors is recognized in AOCI, net of applicable taxes. As of September 30, 2022, the Company did not hold general obligation bonds of any single issuer, the aggregate of which exceeded 10% of the Company’s stockholders’ equity.