Securities

9 Months Ended

Sep. 30, 2022

Securities

Securities

3.    Securities

The amortized cost and fair value of the Corporation’s investments are shown below. All securities are classified as available-for-sale.

	September 30, 2022
	Amortized		Unrealized		Unrealized
(Dollar amounts in thousands)	Cost		Gains		Losses		Fair Value
U.S. Government agencies	$	117,925	$	26	$	(11,670)	$	106,281
Mortgage Backed Securities - residential		725,085		22		(106,138)		618,969
Mortgage Backed Securities - commercial		11,763		—		(454)		11,309
Collateralized mortgage obligations		230,237		—		(23,877)		206,360
State and municipal obligations		399,040		100		(50,325)		348,815
Municipal taxable		39,326		40		(6,760)		32,606
U.S. Treasury		2,084		—		(28)		2,056
Collateralized debt obligations		—		3,111		—		3,111
Other securities		2,478		—		—		2,478
TOTAL	$	1,527,938	$	3,299	$	(199,252)	$	1,331,985

	December 31, 2021
	Amortized		Unrealized		Unrealized
(Dollar amounts in thousands)	Cost		Gains		Losses		Fair Value
U.S. Government agencies	$	118,176	$	2,688	$	(741)	$	120,123
Mortgage Backed Securities-residential		628,920		4,387		(6,879)		626,428
Mortgage Backed Securities-commercial		15,480		191		—		15,671
Collateralized mortgage obligations		175,501		1,272		(1,768)		175,005
State and municipal obligations		362,843		17,833		(578)		380,098
Municipal taxable		38,445		396		(215)		38,626
U.S. Treasury		205		—		(1)		204
Collateralized debt obligations		—		3,359		—		3,359
Other securities		5,220		—		—		5,220
TOTAL	$	1,344,790	$	30,126	$	(10,182)	$	1,364,734

Contractual maturities of debt securities at September 30, 2022 were as follows.

	Available-for-Sale
	Amortized		Fair
(Dollar amounts in thousands)	Cost		Value
Due in one year or less	$	14,709	$	14,645
Due after one but within five years		45,896		44,462
Due after five but within ten years		88,156		81,746
Due after ten years		412,092		354,494
		560,853		495,347
Mortgage-backed securities and collateralized mortgage obligations		967,085		836,638
TOTAL	$	1,527,938	$	1,331,985

There were zero and $5 thousand in gross gains and zero in losses from investment sales/calls realized by the Corporation for the three and nine months ended September 30, 2022. For the three and nine months ended September 30, 2021 there were $5 thousand and $268 thousand in gross gains and zero and $157 thousand in losses on sales/calls of investment securities.

The following tables show the securities’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position, at September 30, 2022 and December 31, 2021.

	September 30, 2022
	Less Than 12 Months				More Than 12 Months				Total
			Unrealized				Unrealized				Unrealized
(Dollar amounts in thousands)	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
U.S. Government agencies	$	83,013	$	(6,952)	$	22,164	$	(4,718)	$	105,177	$	(11,670)
Mortgage Backed Securities - Residential		364,927		(48,470)		252,690		(57,668)		617,617		(106,138)
Mortgage Backed Securities - Commercial		11,309		(454)		—		—		11,309		(454)
Collateralized mortgage obligations		153,183		(14,893)		43,137		(8,984)		196,320		(23,877)
State and municipal obligations		280,127		(35,118)		38,129		(15,207)		318,256		(50,325)
Municipal taxable		25,851		(5,218)		5,715		(1,542)		31,566		(6,760)
U.S. Treasury		2,056		(28)		—		—		2,056		(28)
Total temporarily impaired securities	$	920,466	$	(111,133)	$	361,835	$	(88,119)	$	1,282,301	$	(199,252)

	December 31, 2021
	Less Than 12 Months				More Than 12 Months				Total
			Unrealized				Unrealized				Unrealized
(Dollar amounts in thousands)	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
U.S. Government agencies	$	48,939	$	(739)	$	146	$	(2)	$	49,085	$	(741)
Mortgage Backed Securities - Residential		436,726		(5,281)		60,807		(1,598)		497,533		(6,879)
Collateralized mortgage obligations		73,530		(1,327)		12,505		(441)		86,035		(1,768)
State and municipal obligations		54,040		(578)		—		—		54,040		(578)
Municipal taxable		15,048		(195)		729		(20)		15,777		(215)
U.S. Treasury		204		(1)		—		—		204		(1)
Total temporarily impaired securities	$	628,487	$	(8,121)	$	74,187	$	(2,061)	$	702,674	$	(10,182)

Management evaluates securities for impairment related to credit losses at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. The investment securities portfolio is evaluated for impairment related to credit losses by segregating the portfolio into two general segments.

In evaluating for impairment, management considers the reason for the decline, the extent of the decline, the duration of the decline and whether the Corporation intends to sell a security or is more likely than not to be required to sell a security before recovery of its amortized cost. If an entity intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, the security’s amortized cost is written down to fair value through income. If an entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis less any current-period loss, a credit loss exists and an allowance for credit losses is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of applicable taxes.

Gross unrealized losses on investment securities were $199.3 million as of September 30, 2022 and $10.2 million as of December 31, 2021. Management believes these losses represent negative adjustments to market value relative to the interest rate environment reflecting the increase in market rates and not losses related to the creditworthiness of the issuer. The portfolio contains primarily government agency, agency backed mortgage backed securities (“MBS”), and collateralized mortgage obligations (“CMO”), which are issued by government sponsored enterprises and are backed by the full faith and credit of the United States government. Secondarily, the Corporation invests in municipal securities issued by state and local governments. Of these, the majority are either insured or contain state enhancements. On the remaining, credit is monitored by the investment committee. Based upon our review of the issuers, we do not believe these investments to be other than temporarily impaired. Management does not intend to sell these securities and it is not more likely than not that we will be required to sell them before their anticipated recovery.

The table below presents a rollforward of the credit losses recognized in earnings for the three and nine month periods ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollar amounts in thousands)	2022		2021		2022		2021
Beginning balance	$	—	$	2,974	$	—	$	2,974
Reductions for securities called during the period		—		—		—		—
Ending balance	$	—	$	2,974	$	—	$	2,974