Securities

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Securities

2. Securities

The following tables set forth the amortized cost, gross unrealized gains and losses, and estimated fair value of debt securities classified as available for sale and held to maturity at March 31, 2023 and December 31, 2022. Amortized cost of securities does not include accrued interest which is reflected in the accrued interest line item on the consolidated balance sheets totaling $28.3 million at March 31, 2023 and $29.1 million at December 31, 2022.

	March 31, 2023								December 31, 2022
			Gross		Gross						Gross		Gross
Securities Available for Sale	Amortized		Unrealized		Unrealized		Fair		Amortized		Unrealized		Unrealized		Fair
($ in thousands)	Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
U.S. Treasury and government agency securities	$	113,016	$	287	$	1,788	$	111,515	$	113,211	$	—	$	2,346	$	110,865
Municipal obligations		206,219		247		1,997		204,469		207,014		59		3,981		203,092
Residential mortgage-backed securities		2,583,935		240		364,911		2,219,264		2,655,381		224		398,619		2,256,986
Commercial mortgage-backed securities		3,239,281		2,899		299,575		2,942,605		3,234,278		2,032		342,880		2,893,430
Collateralized mortgage obligations		72,884		—		5,241		67,643		76,830		—		6,242		70,588
Corporate debt securities		23,500		—		3,376		20,124		23,500		—		2,420		21,080
	$	6,238,835	$	3,673	$	676,888	$	5,565,620	$	6,310,214	$	2,315	$	756,488	$	5,556,041

	March 31, 2023								December 31, 2022
			Gross		Gross						Gross		Gross
Securities Held to Maturity	Amortized		Unrealized		Unrealized		Fair		Amortized		Unrealized		Unrealized		Fair
($ in thousands)	Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
U.S. Treasury and government agency securities	$	427,643	$	824	$	41,538	$	386,929	$	426,454	$	21	$	49,044	$	377,431
Municipal obligations		696,471		1,987		19,262		679,196		698,908		753		26,558		673,103
Residential mortgage-backed securities		715,499		—		63,526		651,973		734,478		—		72,532		661,946
Commercial mortgage-backed securities		944,292		—		77,653		866,639		948,691		—		87,211		861,480
Collateralized mortgage obligations		41,159		—		2,136		39,023		43,964		—		2,526		41,438
	$	2,825,064	$	2,811	$	204,115	$	2,623,760	$	2,852,495	$	774	$	237,871	$	2,615,398

The following tables present the amortized cost and fair value of debt securities available for sale and held to maturity at March 31, 2023 by contractual maturity. Actual maturities will differ from contractual maturities because of rights to call or repay obligations with or without penalties and scheduled and unscheduled principal payments on mortgage-backed securities and collateralized mortgage obligations.

Debt Securities Available for Sale	Amortized		Fair
($ in thousands)	Cost		Value
Due in one year or less	$	72	$	72
Due after one year through five years		1,024,989		979,364
Due after five years through ten years		2,980,929		2,699,847
Due after ten years		2,232,845		1,886,337
Total available for sale debt securities	$	6,238,835	$	5,565,620

Debt Securities Held to Maturity	Amortized		Fair
($ in thousands)	Cost		Value
Due in one year or less	$	11,637	$	11,573
Due after one year through five years		538,020		520,589
Due after five years through ten years		918,433		851,024
Due after ten years		1,356,974		1,240,574
Total held to maturity securities	$	2,825,064	$	2,623,760

The Company held no securities classified as trading at March 31, 2023 and December 31, 2022.

The following table presents the proceeds from, gross gains on, and gross losses on sales of securities during the three months ended March 31, 2023 and 2022. Net gains or losses are reflected in the "Securities transactions, net" line item on the Consolidated Statements of Income.

	Three Months Ended  March 31,
($ in thousands)	2023		2022
Proceeds	$	—	$	73,219
Gross gains		—		—
Gross losses		—		87
Net gain (loss)	$	—	$	(87	)

Securities with carrying values totaling $6.1 billion and $4.9 billion were pledged as collateral at March 31, 2023 and December 31, 2022, respectively, primarily to secure public deposits or securities sold under agreements to repurchase and as collateral for an available line of credit with the Federal Reserve Bank.

Credit Quality

The Company’s policy is to invest only in securities of investment grade quality. These investments are largely limited to U.S. agency securities and municipal securities. Management has concluded, based on the long history of no credit losses, that the expectation of nonpayment of the held to maturity securities carried at amortized cost is zero for securities that are backed by the full faith and credit of and/or guaranteed by the U.S. government. As such, no allowance for credit losses has been recorded for these securities. The municipal portfolio is analyzed separately for allowance for credit loss in accordance with the applicable guidance for each portfolio as noted below.

The Company evaluates credit impairment for individual securities available for sale whose fair value was below amortized cost with a more than inconsequential risk of default and where the Company had assessed whether the decline in fair value was significant enough to suggest a credit event occurred. There were no securities with a material credit loss event and, therefore, no allowance for credit loss was recorded in any period presented.

The fair value and gross unrealized losses for securities classified as available for sale with unrealized losses for the periods indicated follow.

Available for Sale
March 31, 2023	Losses < 12 months				Losses 12 months or >				Total
($ in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
U.S. Treasury and government agency securities	$	49,332	$	382	$	8,070	$	1,406	$	57,402	$	1,788
Municipal obligations		85,570		649		86,444		1,348		172,014		1,997
Residential mortgage-backed securities		137,406		4,437		2,071,526		360,474		2,208,932		364,911
Commercial mortgage-backed securities		318,876		14,695		2,570,771		284,880		2,889,647		299,575
Collateralized mortgage obligations		—		—		67,643		5,241		67,643		5,241
Corporate debt securities		1,820		180		17,804		3,196		19,624		3,376
	$	593,004	$	20,343	$	4,822,258	$	656,545	$	5,415,262	$	676,888

Available for Sale
December 31, 2022	Losses < 12 months				Losses 12 months or >				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
($ in thousands)	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury and government agency securities	$	102,607		754	$	8,258	$	1,592	$	110,865	$	2,346
Municipal obligations		192,334		3,981		—		—		192,334		3,981
Residential mortgage-backed securities		636,060		49,790		1,611,832		348,829		2,247,892		398,619
Commercial mortgage-backed securities		1,489,974		114,195		1,351,530		228,685		2,841,504		342,880
Collateralized mortgage obligations		41,703		3,275		28,884		2,967		70,587		6,242
Corporate debt securities		13,194		1,306		7,386		1,114		20,580		2,420
	$	2,475,872	$	173,301	$	3,007,890	$	583,187	$	5,483,762	$	756,488

At each reporting period, the Company evaluates its held to maturity municipal obligation portfolio for credit loss using probability of default and loss given default models. The models were run using a long-term average probability of default migration and with a probability weighting of Moody’s economic forecasts. The resulting credit losses, if any, were negligible and no allowance for credit loss was recorded.

The fair value and gross unrealized losses for securities classified as held to maturity with unrealized losses for the periods indicated follow.

Held to maturity
March 31, 2023	Losses < 12 months				Losses 12 months or >				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
($ in thousands)	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury and government agency securities	$	49,176	$	2,085	$	305,813	$	39,453	$	354,989	$	41,538
Municipal obligations		240,561		1,452		183,368		17,810		423,929		19,262
Residential mortgage-backed securities		225,019		9,134		426,955		54,392		651,974		63,526
Commercial mortgage-backed securities		159,220		6,140		707,420		71,513		866,640		77,653
Collateralized mortgage obligations		2,662		30		36,360		2,106		39,022		2,136
	$	676,638	$	18,841	$	1,659,916	$	185,274	$	2,336,554	$	204,115

Held to maturity
December 31, 2022	Losses < 12 months				Losses 12 months or >				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
($ in thousands)	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury and government agency securities	$	145,893	$	13,245	$	226,499	$	35,799	$	372,392	$	49,044
Municipal obligations		560,288		8,878		64,346		17,680		624,634		26,558
Residential mortgage-backed securities		391,146		30,515		270,800		42,017		661,946		72,532
Commercial mortgage-backed securities		697,827		56,899		163,653		30,312		861,480		87,211
Collateralized mortgage obligations		41,438		2,526		—		—		41,438		2,526
	$	1,836,592	$	112,063	$	725,298	$	125,808	$	2,561,890	$	237,871

As of March 31, 2023 and December 31, 2022, the Company had 709 and 757 securities, respectively, with market values below their cost basis. There were no material unrealized losses related to the marketability of the securities or the issuer’s ability to meet contractual obligations. In all cases, the indicated impairment on these debt securities would be recovered no later than the security’s maturity date or possibly earlier if the market price for the security increases with a reduction in the yield required by the market. The unrealized losses were deemed to be materially non-credit related at March 31, 2023 and December 31, 2022. The Company has adequate liquidity and, therefore, neither plans to nor expects to be required to liquidate these securities before recovery of the amortized cost basis.