Securities

6 Months Ended

Jun. 30, 2024

Securities

Securities

4.    Securities

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

	June 30, 2024
	Amortized		Unrealized		Unrealized
(Dollar amounts in thousands)	Cost		Gains		Losses		Fair Value
U.S. Government agencies	$	98,999	$	7	$	(12,076)	$	86,930
Mortgage Backed Securities - residential		630,097		85		(86,427)		543,755
Mortgage Backed Securities - commercial		7,843		—		(399)		7,444
Collateralized mortgage obligations		199,245		9		(28,946)		170,308
State and municipal obligations		392,250		347		(32,760)		359,837
Municipal taxable		39,616		1		(5,499)		34,118
U.S. Treasury		470		—		(3)		467
Collateralized debt obligations		—		2,892		—		2,892
TOTAL	$	1,368,520	$	3,341	$	(166,110)	$	1,205,751

	December 31, 2023
	Amortized		Unrealized		Unrealized
(Dollar amounts in thousands)	Cost		Gains		Losses		Fair Value
U.S. Government agencies	$	102,978	$	4	$	(11,542)	$	91,440
Mortgage Backed Securities-residential		653,507		53		(83,675)		569,885
Mortgage Backed Securities-commercial		7,919		—		(436)		7,483
Collateralized mortgage obligations		209,398		6		(28,575)		180,829
State and municipal obligations		397,413		1,407		(28,009)		370,811
Municipal taxable		39,872		12		(5,599)		34,285
U.S. Treasury		1,411		—		(9)		1,402
Collateralized debt obligations		—		3,002		—		3,002
TOTAL	$	1,412,498	$	4,484	$	(157,845)	$	1,259,137

Contractual maturities of debt securities at June 30, 2024 were as follows.

	Available-for-Sale
	Amortized		Fair
(Dollar amounts in thousands)	Cost		Value
Due in one year or less	$	8,545	$	8,472
Due after one but within five years		44,994		43,141
Due after five but within ten years		108,667		104,810
Due after ten years		369,129		327,821
		531,335		484,244
Mortgage-backed securities and collateralized mortgage obligations		837,185		721,507
TOTAL	$	1,368,520	$	1,205,751

There were no gross gains and losses from investment sales/calls realized by the Corporation for the three and six months ended June 30, 2024, and June 30, 2023.

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 June 30, 2024 and December 31, 2023.

	June 30, 2024
	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	$	—	$	—	$	86,212	$	(12,076)	$	86,212	$	(12,076)
Mortgage Backed Securities - Residential		8,455		(69)		526,511		(86,358)		534,966		(86,427)
Mortgage Backed Securities - Commercial		—		—		7,444		(399)		7,444		(399)
Collateralized mortgage obligations		—		—		167,423		(28,946)		167,423		(28,946)
State and municipal obligations		69,381		(531)		246,421		(32,229)		315,802		(32,760)
Municipal taxable		1,308		(7)		31,809		(5,492)		33,117		(5,499)
U.S. Treasury		468		(3)		—		—		468		(3)
Total temporarily impaired securities	$	79,612	$	(610)	$	1,065,820	$	(165,500)	$	1,145,432	$	(166,110)

	December 31, 2023
	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	$	3,757	$	(73)	$	87,291	$	(11,469)	$	91,048	$	(11,542)
Mortgage Backed Securities - Residential		3,810		(41)		556,414		(83,634)		560,224		(83,675)
Mortgage Backed Securities - Commercial		—		—		7,483		(436)		7,483		(436)
Collateralized mortgage obligations		12,981		(303)		164,871		(28,272)		177,852		(28,575)
State and municipal obligations		45,154		(319)		212,022		(27,690)		257,176		(28,009)
Municipal taxable		—		—		31,958		(5,599)		31,958		(5,599)
U.S. Treasury		1,402		(9)		—		—		1,402		(9)
Total temporarily impaired securities	$	67,104	$	(745)	$	1,060,039	$	(157,100)	$	1,127,143	$	(157,845)

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 $166.1 million as of June 30, 2024 and $157.8 million as of December 31, 2023. 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, almost half 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 month period ended June 30, 2024 and 2023:

	Three Months Ended June 30,				Six Months Ended June 30,
(Dollar amounts in thousands)	2024		2023		2024		2023
Beginning balance	$	2,974	$	2,974	$	2,974	$	2,974
Reductions for securities called during the period		—		—		—		—
Ending balance	$	2,974	$	2,974	$	2,974	$	2,974