Securities

3 Months Ended

Mar. 31, 2024

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, 2024 and December 31, 2023. Amortized cost of securities does not include accrued interest which is reflected in the accrued interest line item on the consolidated balance sheets totaling $28.8 million at March 31, 2024 and $27.4 million at December 31, 2023.

	March 31, 2024								December 31, 2023
			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	$	114,086	$	722	$	1,670	$	113,138	$	97,741	$	1,581	$	1,514	$	97,808
Municipal obligations		202,764		—		3,730		199,034		203,533		79		2,200		201,412
Residential mortgage-backed securities		2,401,546		743		357,044		2,045,245		2,440,411		2,734		329,279		2,113,866
Commercial mortgage-backed securities		2,748,086		3,528		265,878		2,485,736		2,683,872		7,176		253,576		2,437,472
Collateralized mortgage obligations		45,230		—		3,357		41,873		47,661		—		3,376		44,285
Corporate debt securities		23,500		—		3,103		20,397		23,500		—		3,148		20,352
Total	$	5,535,212	$	4,993	$	634,782	$	4,905,423	$	5,496,718	$	11,570	$	593,093	$	4,915,195

	March 31, 2024								December 31, 2023
			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	$	409,435	$	—	$	48,083	$	361,352	$	413,490	$	179	$	43,971	$	369,698
Municipal obligations		660,372		739		23,185		637,926		664,488		1,252		19,593		646,147
Residential mortgage-backed securities		636,208		—		64,540		571,668		654,262		—		59,223		595,039
Commercial mortgage-backed securities		917,008		—		80,280		836,728		920,048		—		75,803		844,245
Collateralized mortgage obligations		30,736		—		1,800		28,936		32,491		—		1,702		30,789
Total	$	2,653,759	$	739	$	217,888	$	2,436,610	$	2,684,779	$	1,431	$	200,292	$	2,485,918

The following tables present the amortized cost and fair value of debt securities available for sale and held to maturity at March 31, 2024 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 collateral mortgage obligations.

Debt Securities Available for Sale	Amortized		Fair
($ in thousands)	cost		value
Due in one year or less	$	106,858	$	105,620
Due after one year through five years		585,990		566,852
Due after five years through ten years		2,549,295		2,287,101
Due after ten years		2,293,069		1,945,850
Total available for sale debt securities	$	5,535,212	$	4,905,423

Debt Securities Held to Maturity	Amortized		Fair
($ in thousands)	cost		value
Due in one year or less	$	92,336	$	91,307
Due after one year through five years		734,660		696,030
Due after five years through ten years		716,536		666,275
Due after ten years		1,110,227		982,998
Total held to maturity securities	$	2,653,759	$	2,436,610

The Company held no securities classified as trading at March 31, 2024 and December 31, 2023.

There were no gross gains or gross losses on sales of securities during the three months ended March 31, 2024 and 2023. Net gains or losses, when applicable, are reflected in the "Securities transactions, net" line item on the Consolidated Statements of Income.

Securities with carrying values totaling approximately $4.2 billion and $4.7 billion were pledged as collateral at March 31, 2024 and December 31, 2023, respectively, primarily to secure public deposits or securities sold under agreements to repurchase.

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, 2024	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	$	11,973	$	27	$	7,460	$	1,643	$	19,433	$	1,670
Municipal obligations		19,549		118		176,664		3,612		196,213		3,730
Residential mortgage-backed securities		31,818		86		1,717,118		356,958		1,748,936		357,044
Commercial mortgage-backed securities		35,700		211		2,195,760		265,667		2,231,460		265,878
Collateralized mortgage obligations		—		—		41,873		3,357		41,873		3,357
Corporate debt securities		—		—		18,397		3,103		18,397		3,103
Total	$	99,040	$	442	$	4,157,272	$	634,340	$	4,256,312	$	634,782

Available for Sale
December 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	$	—	$	—	$	7,790	$	1,514	$	7,790	$	1,514
Municipal obligations		49,832		374		128,965		1,826		178,797		2,200
Residential mortgage-backed securities		3,062		25		1,795,154		329,254		1,798,216		329,279
Commercial mortgage-backed securities		—		—		2,227,703		253,576		2,227,703		253,576
Collateralized mortgage obligations		—		—		44,285		3,376		44,285		3,376
Corporate debt securities		—		—		19,852		3,148		19,852		3,148
Total	$	52,894	$	399	$	4,223,749	$	592,694	$	4,276,643	$	593,093

At each reporting period, the Company evaluated 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, 2024	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	$	29,579	$	316	$	331,773	$	47,767	$	361,352	$	48,083
Municipal obligations		71,115		495		544,326		22,690		615,441		23,185
Residential mortgage-backed securities		—		—		571,669		64,540		571,669		64,540
Commercial mortgage-backed securities		—		—		836,727		80,280		836,727		80,280
Collateralized mortgage obligations		—		—		28,936		1,800		28,936		1,800
Total	$	100,694	$	811	$	2,313,431	$	217,077	$	2,414,125	$	217,888

Held to maturity
December 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	$	9,530	$	63	$	339,533	$	43,908	$	349,063	$	43,971
Municipal obligations		343,401		1,801		226,165		17,792		569,566		19,593
Residential mortgage-backed securities		—		—		595,039		59,223		595,039		59,223
Commercial mortgage-backed securities		—		—		844,245		75,803		844,245		75,803
Collateralized mortgage obligations		—		—		30,789		1,702		30,789		1,702
Total	$	352,931	$	1,864	$	2,035,771	$	198,428	$	2,388,702	$	200,292

As of March 31, 2024 and December 31, 2023, the Company had 727 and 698 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, 2024 and December 31, 2023. At March 31, 2024, the Company had adequate liquidity and, therefore, neither planned to nor expected to be required to liquidate these securities before recovery of the amortized cost basis.