INVESTMENT SECURITIES

3 Months Ended

Mar. 31, 2025

Investments, Debt and Equity Securities [Abstract]

The following tables summarize the amortized cost, gross unrealized gains and losses and approximate fair value of investment securities available for sale as of March 31, 2025 and December 31, 2024.


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for sale at March 31, 2025

U.S. Government-sponsored agency securities	$	93,758	$	—	$	13,832	$	79,926
State and municipal	994,697		56		149,570		845,183
U.S. Government-sponsored mortgage-backed securities	517,564		996		77,614		440,946
Corporate obligations	12,964		—		530		12,434

Total available for sale	$	1,618,983	$	1,052	$	241,546	$	1,378,489


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for sale at December 31, 2024

U.S. Government-sponsored agency securities	$	95,462	$	—	$	16,081	$	79,381
State and municipal	996,541		19		133,386		863,174
U.S. Government-sponsored mortgage-backed securities	519,943		403		88,724		431,622
Corporate obligations	12,960		—		662		12,298

Total available for sale	$	1,624,906	$	422	$	238,853	$	1,386,475

The following tables summarize the amortized cost, gross unrealized gains and losses, approximate fair value and allowance for credit losses on investment securities held to maturity as of March 31, 2025 and December 31, 2024.


	Amortized Cost		Allowance for Credit Losses		Net Carrying Amount		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Held to maturity at March 31, 2025
U.S. Government-sponsored agency securities	$	341,245	$	—	$	341,245	$	—	$	54,935	$	286,310
State and municipal	1,079,688		245		1,079,443		148		200,377		879,459
U.S. Government-sponsored mortgage-backed securities	626,444		—		626,444		—		88,705		537,739
Foreign investment	1,500		—		1,500		—		2		1,498
Total held to maturity	$	2,048,877	$	245	$	2,048,632	$	148	$	344,019	$	1,705,006


	Amortized Cost		Allowance for Credit Losses		Net Carrying Amount		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Held to maturity at December 31, 2024
U.S. Government-sponsored agency securities	$	345,531	$	—	$	345,531	$	—	$	63,112	$	282,419
State and municipal	1,085,921		245		1,085,676		299		185,784		900,436
U.S. Government-sponsored mortgage-backed securities	641,513		—		641,513		—		102,343		539,170
Foreign investment	1,500		—		1,500		—		5		1,495
Total held to maturity	$	2,074,465	$	245	$	2,074,220	$	299	$	351,244	$	1,723,520

Accrued interest on investment securities available for sale and held to maturity at March 31, 2025 and December 31, 2024 of $19.7 million and $22.5 million, respectively, are included in the Interest Receivable line on the Corporation's Consolidated Condensed Balance Sheets. The total amount of accrued interest is excluded from the amortized cost of available for sale and held to maturity securities presented above.

In determining the allowance for credit losses on investment securities available for sale that are in an unrealized loss position, the Corporation first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through the income statement. For investment securities available for sale that do not meet the aforementioned criteria, the Corporation evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Corporation considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of 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. Unrealized losses that have not been recorded through an allowance for credit losses are recognized in other comprehensive loss. Adjustments to the allowance are reported in the income statement as a component of the provision for credit losses. The Corporation has made the accounting policy election to exclude accrued interest receivable on investment securities available for sale from the estimate of credit losses. Investment securities available for sale are charged off against the allowance or, in the absence of any allowance, written down through the income statement when deemed uncollectible or when either of the aforementioned criteria regarding intent or requirement to sell is met. The Corporation did not record an allowance for credit losses on its investment securities available for sale as the unrealized losses were attributable to changes in interest rates, not credit quality.

The allowance for credit losses on investment securities held to maturity is a contra asset-valuation account that is deducted from the amortized cost basis of investment securities held to maturity to present the net amount expected to be collected. Investment securities held to maturity are charged off against the allowance when deemed uncollectible. Adjustments to the allowance are reported in the income statement as a component of the provision for credit losses. The Corporation measures expected credit losses on investment securities held to maturity 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. The Corporation has made the accounting policy election to exclude accrued interest receivable on investment securities held to maturity from the estimate of credit losses. With regard to U.S. Government-sponsored agency and U.S. Government-sponsored mortgage-backed securities, all these securities are issued by a U.S. Government-sponsored entity and have an implicit or explicit government guarantee; therefore, no allowance for credit losses has been recorded for these securities. With regard to securities issued by states and municipalities and other investment securities held to maturity, management considers (1) issuer bond ratings, (2) historical loss rates for given bond ratings, (3) the financial condition of the issuer, and (4) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities. Historical loss rates associated with securities having similar grades as those in the Corporation's portfolio have been insignificant. Furthermore, as of March 31, 2025, there were no past due

principal and interest payments associated with these securities. The balance of the allowance for credit losses on investment securities held to maturity remained unchanged at $245,000 as of March 31, 2025 and December 31, 2024 based on applying the long-term historical credit rate, as published by Moody's, for similar rated securities.

On a quarterly basis, the Corporation monitors the credit quality of investment securities held to maturity through the use of credit ratings. The following table summarizes the amortized cost of investment securities held to maturity at March 31, 2025 and December 31, 2024, aggregated by credit quality indicator.


	March 31, 2025
	U.S. Government-sponsored agency securities (1)		State and municipal		U.S. Government-sponsored mortgage-backed securities (1)		Foreign investment		Total
Credit Rating:
Aaa	$	341,245	$	120,618	$	626,444	$	—	$	1,088,307
Aa1	—		149,926		—		—		149,926
Aa2	—		183,052		—		—		183,052
Aa3	—		185,117		—		—		185,117
A1	—		65,659		—		—		65,659
A2	—		20,321		—		—		20,321


Non-rated	—		354,995		—		1,500		356,495
Total	$	341,245	$	1,079,688	$	626,444	$	1,500	$	2,048,877


	December 31, 2024
	U.S. Government-sponsored agency securities (1)		State and municipal		U.S. Government-sponsored mortgage-backed securities (1)		Foreign investment		Total
Credit Rating:
Aaa	$	345,531	$	120,801	$	641,513	$	—	$	1,107,845
Aa1	—		148,923		—		—		148,923
Aa2	—		184,341		—		—		184,341
Aa3	—		185,166		—		—		185,166
A1	—		65,665		—		—		65,665
A2	—		20,317		—		—		20,317


Non-rated	—		360,708		—		1,500		362,208
Total	$	345,531	$	1,085,921	$	641,513	$	1,500	$	2,074,465

(1) U.S. Government agency securities and U.S. Government mortgage-backed securities are included within the Aaa credit rating category due to their explicit or implicit government guarantees, which provide a high level of assurance regarding the timely collection of principal and interest payments.

The following tables summarize, as of March 31, 2025 and December 31, 2024, investment securities available for sale in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by security type and length of time in a continuous unrealized loss position.


	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Investment securities available for sale at March 31, 2025

U.S. Government-sponsored agency securities	$	—	$	—	$	79,926	$	13,832	$	79,926	$	13,832
State and municipal	14,702		921		828,805		148,649		843,507		149,570
U.S. Government-sponsored mortgage-backed securities	55,519		645		320,890		76,969		376,409		77,614
Corporate obligations	—		—		12,402		530		12,402		530
Total investment securities available for sale	$	70,221	$	1,566	$	1,242,023	$	239,980	$	1,312,244	$	241,546


	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Investment securities available for sale at December 31, 2024

U.S. Government-sponsored agency securities	$	—	$	—	$	79,381	$	16,081	$	79,381	$	16,081
State and municipal	40,398		2,115		820,663		131,271		861,061		133,386
U.S. Government-sponsored mortgage-backed securities	82,724		1,660		318,310		87,064		401,034		88,724
Corporate obligations	—		—		12,268		662		12,268		662
Total investment securities available for sale	$	123,122	$	3,775	$	1,230,622	$	235,078	$	1,353,744	$	238,853

The following tables summarize investment securities available for sale in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by security type and the number of securities in the portfolio as of the dates indicated.


	Gross Unrealized Losses		Number of Securities
Investment securities available for sale at March 31, 2025

U.S. Government-sponsored agency securities	$	13,832	12
State and municipal	149,570		611
U.S. Government-sponsored mortgage-backed securities	77,614		114
Corporate obligations	530		10
Total investment securities available for sale	$	241,546	747


	Gross Unrealized Losses		Number of Securities
Investment securities available for sale at December 31, 2024

U.S. Government-sponsored agency securities	$	16,081	12
State and municipal	133,386		611
U.S. Government-sponsored mortgage-backed securities	88,724		127
Corporate obligations	662		10
Total investment securities available for sale	$	238,853	760

The unrealized losses in the Corporation’s investment portfolio were the result of changes in interest rates and not credit quality. As a result, the Corporation expects to recover the amortized cost basis over the term of the securities. The Corporation does not intend to sell the investments and it is not more likely than not that the Corporation will be required to sell the investments before recovery of their amortized cost basis, which may be maturity.

Certain investment securities available for sale are reported in the financial statements at an amount less than their historical cost as indicated in the table below.


	March 31, 2025			December 31, 2024
Investments available for sale reported at less than historical cost:
Historical cost	$	1,553,790		$	1,592,597
Fair value	1,312,244			1,353,744
Gross unrealized losses	$	241,546		$	238,853
Percentage of the Corporation's investment securities available for sale in an unrealized loss position	95.2		%	97.6		%

In determining the fair value of the investment securities portfolio, the Corporation utilizes a third party for portfolio accounting services, including market value input, for those securities classified as Level 1 and Level 2 in the fair value hierarchy. The Corporation has obtained an understanding of what inputs are being used by the vendor in pricing the portfolio and how the vendor classified these securities based upon these inputs. From these discussions, the Corporation’s management is comfortable that the classifications are proper. The Corporation has gained trust in the data for two reasons: (a) independent spot testing of the data is conducted by the Corporation through obtaining market quotes from various brokers on a periodic basis; and (b) actual gains or losses resulting from the sale of certain securities has proven the data to be accurate over time. Fair value of securities classified as Level 3 in the valuation hierarchy was determined using a discounted cash flow model that incorporated market estimates of interest rates and volatility in markets that have not been active.

The amortized cost and fair value of investment securities available for sale and held to maturity at March 31, 2025 and December 31, 2024, by contractual maturity are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity are shown separately.


	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Maturity Distribution at March 31, 2025
Due in one year or less	$	1,317	$	1,316	$	5,268	$	5,264
Due after one through five years	12,995		12,608		119,035		114,249
Due after five through ten years	178,514		159,809		187,050		165,301
Due after ten years	908,593		763,810		1,111,080		882,453
	1,101,419		937,543		1,422,433		1,167,267
U.S. Government-sponsored mortgage-backed securities	517,564		440,946		626,444		537,739

Total investment securities	$	1,618,983	$	1,378,489	$	2,048,877	$	1,705,006


	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Maturity Distribution at December 31, 2024
Due in one year or less	$	1,800	$	1,795	$	5,268	$	5,254
Due after one through five years	12,189		11,857		124,004		117,999
Due after five through ten years	168,338		151,467		174,533		154,533
Due after ten years	922,636		789,734		1,129,147		906,564
	1,104,963		954,853		1,432,952		1,184,350
U.S. Government-sponsored mortgage-backed securities	519,943		431,622		641,513		539,170

Total investment securities	$	1,624,906	$	1,386,475	$	2,074,465	$	1,723,520

Securities with a carrying value of approximately $3.4 billion and $3.3 billion were pledged at March 31, 2025 and December 31, 2024, respectively, to secure certain deposits and securities sold under repurchase agreements, and for other purposes as permitted or required by law.

The book value of securities pledged and available under agreements to repurchase amounted to $143.7 million at March 31, 2025 and $173.0 million at December 31, 2024.

Gross gains and losses on the sales of investment securities available for sale for the three months ended March 31, 2025 and 2024 are shown below.


	Three Months Ended March 31,
	2025		2024
Sales and redemptions of investment securities available for sale:
Gross gains	$	—	$	—
Gross losses	(7)		(2)

Net gains (losses) on sales and redemptions of investment securities available for sale	$	(7)	$	(2)