SECURITIES

12 Months Ended

Dec. 31, 2022

SECURITIES

SECURITIES

4.SECURITIES:

The fair value of securities available-for-sale and related gross unrealized gains and losses recognized in accumulated other comprehensive income were as follows:

	December 31, 2022
	Amortized		Unrealized		Unrealized
(Dollar amounts in thousands)	Cost		Gains		Losses		Fair Value
U.S. Government agencies	$	110,226	$	24	$	(11,777)	$	98,473
Mortgage Backed Securities - residential		711,131		133		(91,016)		620,248
Mortgage Backed Securities - commercial		10,103		—		(426)		9,677
Collateralized mortgage obligations		228,344		60		(24,919)		203,485
State and municipal obligations		396,522		745		(37,114)		360,153
Municipal taxable		39,321		41		(6,847)		32,515
U.S. Treasury		2,979		—		(35)		2,944
Collateralized debt obligations		—		2,986		—		2,986
TOTAL	$	1,498,626	$	3,989	$	(172,134)	$	1,330,481

	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
TOTAL	$	1,339,570	$	30,126	$	(10,182)	$	1,359,514

As of December 31, 2022, the Corporation does not have any securities from any issuer, other than the U.S. Government, with an aggregate book or fair value that exceeds ten percent of shareholders’ equity.

Securities with a carrying value of approximately $946.3 million and $814.7 million at December 31, 2022 and 2021, respectively, were pledged as collateral for short-term borrowings and for other purposes.

Below is a summary of the gross gains and losses realized by the Corporation on investment sales and calls during the years ended December 31, 2022, 2021 and 2020, respectively.

(Dollar amounts in thousands)		2022		2021		2020
Proceeds	$	1,565	$	12,886	$	36,696
Gross gains		6		274		290
Gross losses		(3)		(160)		(57)

Gains of $6 thousand and losses of $3 thousand in 2022 and gains of $274 thousand and losses of $160 thousand in 2021 and gains of $290 thousand and losses of $57 thousand in 2020 resulted from redemption premiums on called and sold securities.

Contractual maturities of debt securities at year-end 2022 were as follows. Securities not due at a single maturity or with no maturity date, primarily mortgage-backed and collateralized mortgage obligations, are shown separately.

	Available-for-Sale
	Amortized		Fair
(Dollar amounts in thousands)	Cost		Value
Due in one year or less	$	8,031	$	7,984
Due after one but within five years		45,010		43,566
Due after five but within ten years		88,684		83,055
Due after ten years		407,323		362,466
		549,048		497,071
Mortgage-backed securities and collateralized mortgage obligations		949,578		833,410
TOTAL	$	1,498,626	$	1,330,481

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 December 31, 2022 and 2021.

	December 31, 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	$	58,462	$	(4,034)	$	38,959	$	(7,743)	$	97,421	$	(11,777)
Mortgage Backed Securities - Residential		234,488		(19,757)		379,520		(71,259)		614,008		(91,016)
Mortgage Backed Securities - Commercial		9,677		(426)		—		—		9,677		(426)
Collateralized mortgage obligations		135,135		(11,331)		63,792		(13,588)		198,927		(24,919)
State and municipal obligations		233,439		(24,291)		41,510		(12,823)		274,949		(37,114)
Municipal taxable		18,637		(3,706)		12,837		(3,141)		31,474		(6,847)
U.S. Treasury		2,944		(35)		—		—		2,944		(35)
Total temporarily impaired securities	$	692,782	$	(63,580)	$	536,618	$	(108,554)	$	1,229,400	$	(172,134)

	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)

The Corporation held 895 investment securities with an amortized cost greater than fair value as of December 31, 2022. The unrealized losses on collateralized mortgage obligations, all mortgage-backed securities and state and municipal obligations represent negative adjustments to fair value relative to the rate of interest paid on the securities and not losses related to the creditworthiness of the issuer. Gross unrealized losses on investment securities were $172.1 million as of December 31, 2022 and $10.2 million as of December 31, 2021. Management does not intend to sell and it is not more likely than not that management would be required to sell the securities prior to their anticipated recovery. Management believes the value will recover as the securities approach maturity or market rates change.

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.

In prior years, a significant portion of the total unrealized losses relates to collateralized debt obligations that were separately evaluated under FASB ASC 325-40, Beneficial Interests in Securitized Financial Assets. Based upon qualitative considerations, such as a downgrade in credit rating or further defaults of underlying issuers during the year, and an analysis of expected cash flows, we determined that three CDOs included in collateralized debt obligations were other-than-temporarily impaired. One of the CDO’s was called in first quarter 2017. A second was called in second quarter 2018. The remaining CDO has a contractual balance of $3.7 million at December 31, 2022 which has been reduced to $3.0 million by $750 thousand of interest payments received, $3.0 million of cumulative credit loss charges recorded through earnings to date and increased by $3.0 million recorded in other comprehensive income. These securities are collateralized by trust preferred securities issued primarily by bank holding companies, but certain pools do include a limited number of insurance companies.

The table below presents a rollforward of the credit losses recognized in earnings for the years presented:

(Dollar amounts in thousands)	2022		2021			2020
Beginning balance	$	2,974	$	2,974	$	2,974
Reductions for securities called during the period		—		—		—
Ending balance	$	2,974	$	2,974	$	2,974