Securities

9 Months Ended

Sep. 30, 2022

Investments, Debt and Equity Securities [Abstract]

(3) SECURITIES

The following table summarizes the amortized cost and estimated fair values of debt securities held for investment:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
September 30, 2022	(Dollars in thousands)
Mortgage backed securities (1)	$	16	$	—	$	—	$	16
States and political subdivisions		1,870		—		—		1,870
Other securities		500		—		—		500
Total	$	2,386	$	—	$	—	$	2,386
December 31, 2021
Mortgage backed securities (1)	$	32	$	1	$	—	$	33
States and political subdivisions		2,445		—		—		2,445
Other securities		500		—		—		500
Total	$	2,977	$	1	$	—	$	2,978

The following table summarizes the amortized cost and estimated fair values of debt securities available for sale:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
September 30, 2022	(Dollars in thousands)
U.S. treasuries	$	1,563,520	$	-	$	(104,430	)	$	1,459,090
U.S. federal agencies		16,353		229		(5	)		16,577
Mortgage backed securities (1)		17,866		13		(2,259	)		15,620
States and political subdivisions		7,832		24		(256	)		7,600
Asset backed securities		13,367		—		(399	)		12,968
Other securities		8,000		—		(596	)		7,404
Total	$	1,626,938	$	266	$	(107,945	)	$	1,519,259
December 31, 2021
U.S. treasuries	$	455,701	$	3,693	$	(1,766	)	$	457,628
U.S. federal agencies		21,609		335		(2	)		21,942
Mortgage backed securities (1)		28,897		400		(14	)		29,283
States and political subdivisions		6,128		194		(3	)		6,319
Asset backed securities		13,354		3		—			13,357
Other securities		3,000		—		(6	)		2,994
Total	$	528,689	$	4,625	$	(1,791	)	$	531,523

(1) Primarily consists of FHLMC, FNMA, GNMA and mortgage backed securities through U.S. agencies.

On January 10, 2022, the Company purchased United States Treasury Notes of $600 million par value with an average yield of 1.42% and an average maturity of 53 months. On August 25, 2022, the Company purchased United States Treasury Notes of $300 million par value with an average yield of 3.27% and an average maturity of 58 months.

The maturities of debt securities held for investment and available for sale are summarized in the following table using contractual maturities. Actual maturities may differ from contractual maturities due to obligations that are called or prepaid. For purposes of the maturity table, mortgage-backed securities, which are not due at a single maturity date, have been presented at their contractual maturity.


	September 30, 2022				December 31, 2021
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(Dollars in thousands)
Held for Investment
Contractual maturity of debt securities:
Within one year	$	1,187	$	1,187	$	577	$	577
After one year but within five years		1,197		1,197		2,396		2,397
After five years but within ten years		2		2		4		4
After ten years		—		—		—		—
Total	$	2,386	$	2,386	$	2,977	$	2,978
Available for Sale
Contractual maturity of debt securities:
Within one year	$	96,447	$	95,552	$	58,478	$	58,688
After one year but within five years		1,260,280		1,172,140		408,253		410,049
After five years but within ten years		226,894		211,100		10,851		11,011
After ten years		43,317		40,467		51,107		51,775
Total debt securities	$	1,626,938	$	1,519,259	$	528,689	$	531,523

The following table is a summary of the Company’s book value of securities that were pledged as collateral for public funds on deposit, repurchase agreements and for other purposes as required or permitted by law:


	September 30, 2022		December 31, 2021
	(Dollars in thousands)
Book value of pledged securities	$	487,445	$	473,026

The following is a detail of proceeds from sales and the realized losses on available for sale debt securities:


	Nine Months Ended September 30,
	2022		2021
	(Dollars in thousands)
Proceeds	$	222,474	$	—
Gross losses realized		3,990		—

In March 2022, the Company sold $226 million of debt securities with an average yield of 0.16%, the proceeds of which were subsequently reinvested in $220 million of debt securities with an average yield of 1.86%. The Company used specific identification to reclassify the unrealized loss in other comprehensive income to a realized loss, as shown in the consolidated statements of comprehensive income. There were no sales of debt securities and therefore no proceeds from sales or realized securities gains or losses on available for sale debt securities for the nine months ended September 30, 2021.

Realized gains/losses on debt and equity securities are reported as securities transactions within the noninterest income section of the consolidated statement of comprehensive income.

The following table summarizes debt securities with unrealized losses, segregated by the duration of the unrealized loss, at September 30, 2022 and December 31, 2021 respectively:


			Less than 12 Months				More than 12 Months				Total
	Number of investments		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
			(Dollars in thousands)
September 30, 2022
Available for Sale
U.S. treasuries		73	$	1,440,283	$	102,906	$	18,807	$	1,524	$	1,459,090	$	104,430
U.S. federal agencies		2		515		5		—		—		515		5
Mortgage backed securities		98		13,199		1,976		2,042		283		15,241		2,259
States and political subdivisions		7		2,049		250		195		6		2,244		256
Asset backed securities		1		12,968		399		—		—		12,968		399
Other securities		2		7,404		596		—		—		7,404		596
Total		183	$	1,476,418	$	106,132	$	21,044	$	1,813	$	1,497,462	$	107,945
December 31, 2021
Available for Sale
U.S. treasuries		10	$	298,080	$	1,766	$	—	$	—	$	298,080	$	1,766
U.S. federal agencies		1		376		2		—		—		376		2
Mortgage backed securities		7		2,824		14		—		—		2,824		14
States and political subdivisions		2		505		3		—		—		505		3
Other securities		1		2,994		6		—		—		2,994		6
Total		21	$	304,779	$	1,791	$	—	$	—	$	304,779	$	1,791

The Company has the ability and intent to hold the debt securities classified as held for investment until they mature, at which time the Company will receive full value for the debt securities. Furthermore, as of September 30, 2022 and December 31, 2021, the Company also had the ability and intent to hold the debt securities classified as available for sale for a period of time sufficient for a recovery of cost. The unrealized losses are due to increases in market interest rates over the yields available at the time the underlying debt securities were purchased. The fair value of those debt securities having unrealized losses is expected to recover as the securities approach their maturity date or repricing date, or if market yields for such investments decline. The Company has no intent or requirement to sell before the recovery of the unrealized loss; therefore, no impairment loss was realized in the Company’s consolidated statement of comprehensive income.