Securities

9 Months Ended

Sep. 30, 2024

Investments, Debt and Equity Securities [Abstract]

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 September 30, 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 $29.6 million at September 30, 2024 and $27.4 million at December 31, 2023.


	September 30, 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	$	171,333	$	3,806	$	1,371	$	173,768	$	97,741	$	1,581	$	1,514	$	97,808
Municipal obligations		201,128		55		1,824		199,359		203,533		79		2,200		201,412
Residential mortgage-backed securities		2,469,381		6,687		280,396		2,195,672		2,440,411		2,734		329,279		2,113,866
Commercial mortgage-backed securities		2,839,988		13,836		185,916		2,667,908		2,683,872		7,176		253,576		2,437,472
Collateralized mortgage obligations		39,950		—		1,964		37,986		47,661		—		3,376		44,285
Corporate debt securities		23,500		—		2,046		21,454		23,500		—		3,148		20,352
Total	$	5,745,280	$	24,384	$	473,517	$	5,296,147	$	5,496,718	$	11,570	$	593,093	$	4,915,195


	September 30, 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	$	400,115	$	661	$	34,673	$	366,103	$	413,490	$	179	$	43,971	$	369,698
Municipal obligations		628,365		915		15,255		614,025		664,488		1,252		19,593		646,147
Residential mortgage-backed securities		593,502		—		43,613		549,889		654,262		—		59,223		595,039
Commercial mortgage-backed securities		824,601		—		55,404		769,197		920,048		—		75,803		844,245
Collateralized mortgage obligations		27,050		—		1,006		26,044		32,491		—		1,702		30,789
Total	$	2,473,633	$	1,576	$	149,951	$	2,325,258	$	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 September 30, 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	$	66,226	$	66,092
Due after one year through five years		946,854		934,210
Due after five years through ten years		2,292,196		2,121,901
Due after ten years		2,440,004		2,173,944
Total available for sale debt securities	$	5,745,280	$	5,296,147


Debt Securities Held to Maturity	Amortized		Fair
($ in thousands)	Cost		Value
Due in one year or less	$	95,237	$	94,381
Due after one year through five years		791,983		763,985
Due after five years through ten years		581,877		554,189
Due after ten years		1,004,536		912,703
Total held to maturity securities	$	2,473,633	$	2,325,258

The Company held no securities classified as trading at September 30, 2024 and December 31, 2023.

There were no gross gains or gross losses on sales of securities during the nine months ended September 30, 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 $3.4 billion and $4.7 billion were pledged as collateral at September 30, 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
September 30, 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	$	7,982	$	17	$	7,545	$	1,354	$	15,527	$	1,371
Municipal obligations		2,820		—		174,748		1,824		177,568		1,824
Residential mortgage-backed securities		38,596		72		1,674,765		280,324		1,713,361		280,396
Commercial mortgage-backed securities		—		—		2,246,784		185,916		2,246,784		185,916
Collateralized mortgage obligations		—		—		37,986		1,964		37,986		1,964
Corporate debt securities		—		—		19,454		2,046		19,454		2,046
Total	$	49,398	$	89	$	4,161,282	$	473,428	$	4,210,680	$	473,517


Available for Sale
December 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	$	—	$	—	$	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
September 30, 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	$	—	$	—	$	336,218	$	34,673	$	336,218	$	34,673
Municipal obligations		21,719		53		498,414		15,202		520,133		15,255
Residential mortgage-backed securities		—		—		549,890		43,613		549,890		43,613
Commercial mortgage-backed securities		—		—		769,197		55,404		769,197		55,404
Collateralized mortgage obligations		—		—		26,044		1,006		26,044		1,006
Total	$	21,719	$	53	$	2,179,763	$	149,898	$	2,201,482	$	149,951


Held to Maturity
December 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	$	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 September 30, 2024 and December 31, 2023, the Company had 663 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 non-credit related at September 30, 2024 and December 31, 2023. At September 30, 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.