Debt Securities

3 Months Ended

Mar. 31, 2022

Debt Securities

Debt Securities

Note 3:  Debt Securities

During the three months ended March 31, 2022, a portion of the securities available for sale were transferred to securities held to maturity.  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 March 31, 2022
	Amortized		Unrealized				Fair
	Cost		Gross Gains		Gross Losses		Value
Debt securities available for sale
U.S. Treasury securities	$	160,990	$	16	$	(3,498)	$	157,508
Obligations of U.S. government corporations and agencies		34,069		243		(11)		34,301
Obligations of states and political subdivisions		308,514		1,378		(10,300)		299,592
Asset-backed securities		491,269		12		(2,677)		488,604
Commercial mortgage-backed securities		111,535		30		(4,063)		107,502
Residential mortgage-backed securities		1,678,891		629		(104,144)		1,575,376
Corporate debt securities		297,447		361		(14,636)		283,172
Total debt securities available for sale	$	3,082,715	$	2,669	$	(139,329)	$	2,946,055
Debt securities held to maturity
Commercial mortgage-backed securities	$	503,285	$	—	$	(15,521)	$	487,764
Residential mortgage-backed securities		472,796		—		(17,714)		455,082
Total debt securities held to maturity	$	976,081	$	—	$	(33,235)	$	942,846

	As of December 31, 2021
	Amortized		Unrealized				Fair
	Cost		Gross Gains		Gross Losses		Value
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 March 31, 2022
	Amortized		Fair
	Cost		Value
Debt securities available for sale
Due in one year or less	$	174,918	$	174,182
Due after one year through five years		456,926		441,159
Due after five years through ten years		313,336		303,050
Due after ten years		2,137,535		2,027,664
Debt securities available for sale	$	3,082,715	$	2,946,055
Debt securities held to maturity
Due in one year or less	$	—	$	—
Due after one year through five years		48,405		47,185
Due after five years through ten years		66,693		64,572
Due after ten years		860,983		831,089
Debt securities held to maturity	$	976,081	$	942,846

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 March 31,
	2022		2021
Realized gains and losses on debt securities
Gross security gains	$	113	$	25
Gross security (losses)		(7)		—
Realized net gains (losses) on debt securities	$	106	$	25

Debt securities with carrying amounts of $717.6 million on March 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.

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 March 31, 2022
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Debt securities available for sale
U.S. Treasury securities	$	155,422	$	(3,498)	$	—	$	—	$	155,422	$	(3,498)
Obligations of U.S. government corporations and agencies		390		(11)		—		—		390		(11)
Obligations of states and political subdivisions		158,528		(9,277)		9,847		(1,023)		168,375		(10,300)
Asset-backed securities		470,964		(2,677)		—		—		470,964		(2,677)
Commercial mortgage-backed securities		87,087		(3,558)		7,203		(505)		94,290		(4,063)
Residential mortgage-backed securities		1,054,313		(65,980)		393,830		(38,164)		1,448,143		(104,144)
Corporate debt securities		216,592		(11,652)		39,598		(2,984)		256,190		(14,636)
Debt securities available for sale with gross unrealized losses	$	2,143,296	$	(96,653)	$	450,478	$	(42,676)	$	2,593,774	$	(139,329)
Debt securities held to maturity
Commercial mortgage-backed securities	$	281,462	$	(9,329)	$	206,302	$	(6,192)	$	487,764	$	(15,521)
Residential mortgage-backed securities		412,450		(15,940)		42,632		(1,774)		455,082		(17,714)
Debt securities held to maturity with gross unrealized losses	$	693,912	$	(25,269)	$	248,934	$	(7,966)	$	942,846	$	(33,235)

	As of December 31, 2021
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		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 March 31, 2022
	Available for Sale			Held to Maturity			Total
Debt securities with gross unrealized losses, fair value	$	2,593,774		$	942,846		$	3,536,620
Gross unrealized losses on debt securities	$	139,329		$	33,235		$	172,564
Ratio of gross unrealized losses to debt securities with gross unrealized losses		5.4	%		3.5	%		4.9	%
Count of debt securities		1,185			55			1,240
Count of debt securities in an unrealized loss position		645			55			700

	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 the Company’s debt securities, and the impairment related to noncredit factors is recognized in AOCI, net of applicable taxes.  As of March 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.