DEBT SECURITIES

12 Months Ended

Dec. 31, 2022

Investments, Debt and Equity Securities [Abstract]

The Company reassessed classification of certain securities in 2022, and transferred a portion of its commercial and residential mortgage-backed securities from available for sale to held to maturity. The transfers occurred at fair value. The unrecognized loss associated with these securities is in OCI, and is being amortized out of OCI with an offsetting entry to investment securities interest income as a yield adjustment over the remaining contractual lives of the securities. No gain or loss was recorded at the time of the transfer.

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


	As of December 31, 2022
	Amortized Cost		Unrealized				Fair Value
			Gross Gains		Gross Losses
Debt securities available for sale
U.S. Treasury securities	$	117,805	$	—	$	(3,744)	$	114,061
Obligations of U.S. government corporations and agencies	20,097		3		(321)		19,779
Obligations of states and political subdivisions	283,481		106		(26,075)		257,512
Asset-backed securities	489,558		—		(19,683)		469,875
Commercial mortgage-backed securities	124,423		—		(16,029)		108,394
Residential mortgage-backed securities	1,463,971		2		(220,717)		1,243,256
Corporate debt securities	273,118		33		(24,635)		248,516
Total debt securities available for sale	$	2,772,453	$	144	$	(311,204)	$	2,461,393

	Amortized Cost		Unrecognized				Fair Value
			Gross Gains		Gross Losses
Debt securities held to maturity
Commercial mortgage-backed securities	$	474,820	$	—	$	(63,738)	$	411,082
Residential mortgage-backed securities	443,492		—		(69,279)		374,213
Total debt securities held to maturity	$	918,312	$	—	$	(133,017)	$	785,295


	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

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 December 31, 2022
	Amortized Cost		Fair Value
Debt securities available for sale
Due in one year or less	$	135,698	$	133,967
Due after one year through five years	395,914		368,754
Due after five years through ten years	364,065		330,280
Due after ten years	1,876,776		1,628,392
Debt securities available for sale	$	2,772,453	$	2,461,393

Debt securities held to maturity

Due after one year through five years	$	44,392	$	41,483
Due after five years through ten years	64,593		57,955
Due after ten years	809,327		685,857
Debt securities held to maturity	$	918,312	$	785,295

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


	Years Ended December 31,
		2022		2021		2020
Realized gains and losses on debt securities
Gross gains on debt securities		$	115	$	543	$	1,732
Gross (losses) on debt securities		(89)		(514)		(8)
Realized net gains (losses) on debt securities1		$	26	$	29	$	1,724

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

Debt securities with carrying amounts of $746.7 million on December 31, 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.

The following information pertains to debt securities with gross unrealized and unrecognized 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 December 31, 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 securities1	$	74	$	—	$	113,987	$	(3,744)	$	114,061	$	(3,744)
Obligations of U.S. government corporations and agencies	19,603		(321)		—		—		19,603		(321)
Obligations of states and political subdivisions	166,147		(10,059)		75,217		(16,016)		241,364		(26,075)
Asset-backed securities	390,164		(15,648)		79,711		(4,035)		469,875		(19,683)
Commercial mortgage-backed securities	89,428		(12,623)		18,966		(3,406)		108,394		(16,029)
Residential mortgage-backed securities	366,221		(38,111)		876,668		(182,606)		1,242,889		(220,717)
Corporate debt securities	39,037		(5,079)		204,310		(19,556)		243,347		(24,635)
Debt securities available for sale with gross unrealized losses	$	1,070,674	$	(81,841)	$	1,368,859	$	(229,363)	$	2,439,533	$	(311,204)

	Less than 12 months				12 months or more				Total
	Fair Value		Unrecognized Losses		Fair Value		Unrecognized Losses		Fair Value		Unrecognized Losses
Debt securities held to maturity
Commercial mortgage-backed securities	$	58,065	$	(8,009)	$	353,017	$	(55,729)	$	411,082	$	(63,738)
Residential mortgage-backed securities	—		—		374,213		(69,279)		374,213		(69,279)
Debt securities held to maturity with gross unrecognized losses	$	58,065	$	(8,009)	$	727,230	$	(125,008)	$	785,295	$	(133,017)

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1.Unrealized losses for U.S. Treasury securities that have been in a continuous loss position for less than 12 months were insignificant, rounding to zero thousand.


	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 or unrecognized loss position is presented in the tables below (dollars in thousands):


	As of December 31, 2022
	Available for Sale			Held to Maturity			Total
Debt securities with gross unrealized or unrecognized losses, fair value	$	2,439,533		$	785,295		$	3,224,828
Gross unrealized or unrecognized losses on debt securities	311,204			133,017			444,221
Ratio of gross unrealized or unrecognized losses to debt securities with gross unrealized or unrecognized losses	12.8		%	16.9		%	13.8		%

Count of debt securities	1,091			55			1,146
Count of debt securities in an unrealized or unrecognized loss position	1,032			55			1,087


	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 and unrecognized 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 or unrecognized 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 December 31, 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.