Investment Securities

9 Months Ended

Sep. 30, 2024

Investment Securities

Investment Securities

Note 5 — Investment Securities

The following is the amortized cost and fair value of investment securities held to maturity:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
September 30, 2024:
U.S. Government agencies	$	147,271	$	—	$	(19,271)	$	128,000
Residential mortgage-backed securities issued by U.S. government
agencies or sponsored enterprises		1,333,263		—		(188,925)		1,144,338
Residential collateralized mortgage-obligations issued by U.S. government
agencies or sponsored enterprises		419,838		—		(58,371)		361,467
Commercial mortgage-backed securities issued by U.S. government
agencies or sponsored enterprises		349,860		—		(61,691)		288,169
Small Business Administration loan-backed securities		51,075		—		(9,303)		41,772
	$	2,301,307	$	—	$	(337,561)	$	1,963,746
December 31, 2023:
U.S. Government agencies	$	197,267	$	—	$	(24,607)	$	172,660
Residential mortgage-backed securities issued by U.S. government
agencies or sponsored enterprises		1,438,102		—		(227,312)		1,210,790
Residential collateralized mortgage-obligations issued by U.S. government
agencies or sponsored enterprises		444,883		—		(68,139)		376,744
Commercial mortgage-backed securities issued by U.S. government
agencies or sponsored enterprises		354,055		—		(71,327)		282,728
Small Business Administration loan-backed securities		53,133		—		(11,319)		41,814
	$	2,487,440	$	—	$	(402,704)	$	2,084,736

The following is the amortized cost and fair value of investment securities available for sale:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
September 30, 2024:
U.S. Treasuries	$	2,684	$	1	$	—	$	2,685
U.S. Government agencies		191,177		—		(15,453)		175,724
Residential mortgage-backed securities issued by U.S. government
agencies or sponsored enterprises		1,702,457		491		(216,862)		1,486,086
Residential collateralized mortgage-obligations issued by U.S. government
agencies or sponsored enterprises		574,447		49		(82,254)		492,242
Commercial mortgage-backed securities issued by U.S. government
agencies or sponsored enterprises		1,215,415		2,545		(157,131)		1,060,829
State and municipal obligations		1,123,634		63		(134,394)		989,303
Small Business Administration loan-backed securities		363,885		57		(34,432)		329,510
Corporate securities		30,499		—		(2,515)		27,984
	$	5,204,198	$	3,206	$	(643,041)	$	4,564,363
December 31, 2023:
U.S. Treasuries	$	74,720	$	—	$	(830)	$	73,890
U.S. Government agencies		246,089		—		(21,383)		224,706
Residential mortgage-backed securities issued by U.S. government
agencies or sponsored enterprises		1,822,104		294		(264,092)		1,558,306
Residential collateralized mortgage-obligations issued by U.S. government
agencies or sponsored enterprises		626,735		—		(99,313)		527,422
Commercial mortgage-backed securities issued by U.S. government
agencies or sponsored enterprises		1,217,125		1,516		(194,471)		1,024,170
State and municipal obligations		1,129,750		2		(152,291)		977,461
Small Business Administration loan-backed securities		413,950		86		(42,350)		371,686
Corporate securities		30,533		—		(3,786)		26,747
	$	5,561,006	$	1,898	$	(778,516)	$	4,784,388

The following is the amortized cost and carrying value of other investment securities:

	Carrying
(Dollars in thousands)	Value
September 30, 2024:
Federal Home Loan Bank stock	$	32,336
Federal Reserve Bank stock		150,261
Investment in unconsolidated subsidiaries		3,563
Other investment securities		25,298
	$	211,458
December 31, 2023:
Federal Home Loan Bank stock	$	22,836
Federal Reserve Bank stock		150,261
Investment in unconsolidated subsidiaries		3,563
Other investment securities		15,383
	$	192,043

The Company’s other investment securities primarily consist of non-marketable equity securities that have no readily determinable market value. When evaluating the non-marketable equity securities for impairment, management considers the ultimate recoverability of the par value rather than recognizing temporary declines in value. As of September 30, 2024, we determined that there was no impairment on other investment securities.

The amortized cost and fair value of debt securities at September 30, 2024, by contractual maturity are detailed below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without prepayment penalties.

	Securities				Securities
	Held to Maturity				Available for Sale
	Amortized		Fair		Amortized		Fair
(Dollars in thousands)	Cost		Value		Cost		Value
Due in one year or less	$	14,365	$	14,222	$	84,976	$	84,297
Due after one year through five years		36,471		33,648		341,428		327,521
Due after five years through ten years		444,858		393,780		1,217,855		1,084,899
Due after ten years		1,805,613		1,522,096		3,559,939		3,067,646
	$	2,301,307	$	1,963,746	$	5,204,198	$	4,564,363

During the three and nine months ended September 30, 2024, there were no sales of securities available for sale and therefore, there were no gains or losses on sales of securities available for sale. During the three and nine months ended September 30, 2023, there were gross gains of $1.3 million and gross losses of $1.3 million, a net gain of $45,000, realized from the sale of available for sale securities.

There were no sales of held to maturity securities during the three and nine months ended September 30, 2024, or September 30, 2023.

Information pertaining to our securities with gross unrealized losses at September 30, 2024, and December 31, 2023, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position is as follows:

	Less Than				Twelve Months
	Twelve Months				or More
	Gross Unrealized		Fair		Gross Unrealized		Fair
(Dollars in thousands)	Losses		Value		Losses		Value
September 30, 2024:
Securities Held to Maturity
U.S. Government agencies	$	—	$	—	$	19,271	$	128,000
Residential mortgage-backed securities issued by U.S. government
agencies or sponsored enterprises		—		—		188,925		1,144,338
Residential collateralized mortgage-obligations issued by U.S. government
agencies or sponsored enterprises		—		—		58,371		361,467
Commercial mortgage-backed securities issued by U.S. government
agencies or sponsored enterprises		—		—		61,691		288,169
Small Business Administration loan-backed securities		—		—		9,303		41,772
	$	—	$	—	$	337,561	$	1,963,746
Securities Available for Sale
U.S. Treasuries (1)	$	—	$	696	$	—	$	—
U.S. Government agencies		—		—		15,453		175,724
Residential mortgage-backed securities issued by U.S. government
agencies or sponsored enterprises		80		17,925		216,781		1,452,928
Residential collateralized mortgage-obligations issued by U.S. government
agencies or sponsored enterprises		—		—		82,254		487,928
Commercial mortgage-backed securities issued by U.S. government
agencies or sponsored enterprises		—		—		157,131		958,412
State and municipal obligations		1,259		17,464		133,136		960,941
Small Business Administration loan-backed securities		2		684		34,430		311,253
Corporate securities		—		—		2,515		27,984
	$	1,341	$	36,769	$	641,700	$	4,375,170
December 31, 2023:
Securities Held to Maturity
U.S. Government agencies	$	—	$	—	$	24,607	$	172,660
Residential mortgage-backed securities issued by U.S. government
agencies or sponsored enterprises		—		—		227,312		1,210,790
Residential collateralized mortgage-obligations issued by U.S. government
agencies or sponsored enterprises		—		—		68,139		376,745
Commercial mortgage-backed securities issued by U.S. government
agencies or sponsored enterprises		—		—		71,327		282,728
Small Business Administration loan-backed securities		—		—		11,319		41,814
	$	—	$	—	$	402,704	$	2,084,737
Securities Available for Sale
U.S. Treasuries	$	—	$	—	$	830	$	73,890
U.S. Government agencies		—		—		21,383		224,706
Residential mortgage-backed securities issued by U.S. government
agencies or sponsored enterprises		122		9,358		263,970		1,539,208
Residential collateralized mortgage-obligations issued by U.S. government
agencies or sponsored enterprises		—		—		99,313		527,422
Commercial mortgage-backed securities issued by U.S. government
agencies or sponsored enterprises		91		7,959		194,380		955,059
State and municipal obligations		177		6,340		152,114		967,305
Small Business Administration loan-backed securities		128		42,447		42,222		304,770
Corporate securities		18		480		3,768		26,267
	$	536	$	66,584	$	777,980	$	4,618,627

(1) The U.S. Treasury securities in a continuous unrealized losses position for less than twelve months at September 30, 2024, had a combined gross unrealized loss total of less than $1,000.

The Company’s valuation methodology for securities impairment is disclosed in Note 1—Summary of Significant Accounting Policies, under “Investment Securities” section, of our Annual Report on Form 10-K for the year ended December 31, 2023. All debt securities in an unrealized loss position as of September 30, 2024, continue to perform as scheduled and management does not believe there is a credit loss or a provision for credit losses is necessary. Management does not currently intend to sell the securities within the portfolio, and it is not more-likely-than-not that the Company will be required to sell the debt securities. Management continues to monitor all of the securities with a high degree of scrutiny. See Note 2 — Summary of Significant Accounting Policies for further discussion.

At September 30, 2024, investment securities with a market value of $2.3 billion and a carrying value of $2.5 billion were pledged to secure public funds deposits and for other purposes required and permitted by law (excluding securities pledged to secure repurchase agreement disclosed in Note 20 — Short-Term Borrowings, under the “Securities Sold Under Agreements to Repurchase (“Repurchase agreements”)” section). Of the $2.5 billion carrying value of investment securities pledged, $2.2 billion were pledged to secure public funds deposits, $207.5 million were pledged to secure FHLB advances and $106.9 million were pledged to secure interest rate swap positions with correspondent banks. At December 31, 2023, investment securities with a market value of $3.0 billion and a carrying value of $3.2 billion were pledged to secure public funds deposits and for other purposes required and permitted by law. Of the $3.2 billion carrying value of investment securities pledged, $2.4 billion were pledged to secure public funds deposits, $729.4 million were pledged to secure FHLB advances and $115.0 million were pledged to secure interest rate swap positions with correspondent banks.

Trading Securities

At September 30, 2024, and December 31, 2023, trading securities, at estimated fair value, were as follows:

	September 30,		December 31,
(Dollars in thousands)	2024		2023
U.S. Government agencies	$	10,730	$	1,537
Residential mortgage pass-through securities issued or guaranteed by U.S.
government agencies or sponsored enterprises		15,969		14,461
Commercial mortgage-backed securities issued by U.S. government
agencies or sponsored enterprises		24,344		—
State and municipal obligations		26,347		14,620
Small Business Administration loan-backed securities		8,552		—
Other debt securities		1,161		703
	$	87,103	$	31,321

Net losses on trading securities for the three and nine months ended September 30, 2024, and 2023 were as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2024		2023		2024		2023
Net gains (losses) on sales transaction	$	533	$	(76)	$	757	$	(116)
Net mark to mark (losses) gains		(167)		176		(478)		(25)
Net gains (losses) on trading securities	$	366	$	100	$	279	$	(141)