SECURITIES

12 Months Ended

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure

SECURITIES    

Trading Securities

The Company had trading securities of $5.0 million and $3.9 million at December 31, 2023 and 2022, respectively. These securities are held in a rabbi trust and will be used for future payments associated with the Company's non-qualified 401(k) Restoration Plan and Non-qualified Deferred Compensation Plan.

Equity Securities

The Company had equity securities of $22.5 million and $21.1 million at December 31, 2023 and 2022, respectively. These securities consist primarily of mutual funds held in a rabbi trust and will be used for future payments associated with the Company’s supplemental executive retirement plans.

The following table represents a summary of the gains and losses recognized within non-interest income and non-interest expense within the consolidated statements of income that relate to equity securities for the periods indicated:

	Years Ended December 31
	2023		2022		2021
	(Dollars in thousands)
Net gains (losses) recognized during the period on equity securities	$	1,180	$	(3,061)	$	554
Less: net gains recognized during the period on equity securities sold during the period	197		—		192
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date	$	983	$	(3,061)	$	362

Available for Sale Securities

The following table summarizes the amortized cost, allowance for credit losses, and fair value of available for sale securities and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) at the dates indicated:

	December 31, 2023										December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for credit losses		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for credit losses		Fair Value
	(Dollars in thousands)
U.S. government agency securities	$	230,198	$	—	$	(23,060)	$	—	$	207,138	$	230,936	$	—	$	(28,636)	$	—	$	202,300
U.S. treasury securities	824,597		—		(55,495)		—		769,102		874,035		—		(82,694)		—		791,341
Agency mortgage-backed securities	314,269		24		(37,246)		—		277,047		359,068		54		(45,434)		—		313,688
Agency collateralized mortgage obligations	35,713		6		(2,530)		—		33,189		41,874		—		(3,031)		—		38,843
State, county, and municipal securities	195		—		(5)		—		190		193		—		(2)		—		191
Pooled trust preferred securities issued by banks and insurers	1,188		—		(170)		—		1,018		1,203		—		(169)		—		1,034
Small business administration pooled securities	53,702		—		(7,130)		—		46,572		59,470		—		(7,713)		—		51,757
Total available for sale securities	$	1,459,862	$	30	$	(125,636)	$	—	$	1,334,256	$	1,566,779	$	54	$	(167,679)	$	—	$	1,399,154

Excluded from the table above is accrued interest on available for sale securities of $3.4 million and $3.6 million at December 31, 2023 and 2022, respectively, which is included within other assets on the consolidated balance sheets. Additionally, the Company did not record any write-offs of accrued interest income on available for sale securities for the years ended December 31, 2023 and 2022. Furthermore, no securities held by the Company were delinquent on contractual payments nor were any securities placed on non-accrual status at December 31, 2023 and 2022.

When securities are sold, the adjusted cost of the specific security sold is used to compute the gain or loss on the sale. The Company had no sales of securities available for sale for the years ended December 31, 2023 and 2022, and therefore no gains or losses were realized during the periods presented.

The following tables show the gross unrealized losses and fair value of the Company’s available for sale securities in an unrealized loss position as of the dates indicated. These available for sale securities are aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position:

		December 31, 2023
		Less than 12 months				12 months or longer				Total
	# of holdings	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
		(Dollars in thousands)
U.S. government agency securities	9	$	—	$	—	$	207,138	$	(23,060)	$	207,138	$	(23,060)
U.S. treasury securities	17	—		—		769,102		(55,495)		769,102		(55,495)
Agency mortgage-backed securities	115	1,091		(11)		273,447		(37,235)		274,538		(37,246)
Agency collateralized mortgage obligations	12	339		(2)		31,682		(2,528)		32,021		(2,530)
State, county, and municipal securities	1	190		(5)		—		—		190		(5)
Pooled trust preferred securities issued by banks and insurers	1	—		—		1,018		(170)		1,018		(170)
Small business administration pooled securities	8	—		—		46,572		(7,130)		46,572		(7,130)
Total impaired available for sale securities	163	$	1,620	$	(18)	$	1,328,959	$	(125,618)	$	1,330,579	$	(125,636)

		December 31, 2022
		Less than 12 months				12 months or longer				Total
	# of holdings	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. government agency securities	9	$	60,575	$	(7,292)	$	141,725	$	(21,344)	$	202,300	$	(28,636)
U.S. treasury securities	18	43,035		(6,350)		748,306		(76,344)		791,341		(82,694)
Agency mortgage-backed securities	123	155,944		(15,186)		154,653		(30,248)		310,597		(45,434)
Agency collateralized mortgage obligations	13	38,843		(3,031)		—		—		38,843		(3,031)
State, county, and municipal securities	1	191		(2)		—		—		191		(2)
Pooled trust preferred securities issued by banks and insurers	1	—		—		1,034		(169)		1,034		(169)
Small business administration pooled securities	8	34,511		(3,550)		17,246		(4,163)		51,757		(7,713)
Total impaired available for sale securities	173	$	333,099	$	(35,411)	$	1,062,964	$	(132,268)	$	1,396,063	$	(167,679)

The Company does not intend to sell these investments and has determined, based upon available evidence, that it is more likely than not that the Company will not be required to sell each security before the recovery of its amortized cost basis. In addition, management does not believe that any of the securities are impaired due to reasons of credit quality. As a result, the Company did not recognize a provision for credit losses on these investments for the years ended December 31, 2023 and 2022. The Company made this determination by reviewing various qualitative and quantitative factors regarding each investment category, such as current market conditions, extent and nature of changes in fair value, issuer rating changes and trends, volatility of earnings, and current analysts’ evaluations.

As a result of the Company’s review of these qualitative and quantitative factors, the causes of the impairments listed in the table above by category were as follows at December 31, 2023:

•U.S. Government Agency Securities, U.S. Treasury Securities, Agency Mortgage-Backed Securities, Agency Collateralized Mortgage Obligations and Small Business Administration Pooled Securities: These portfolios have contractual terms that generally do not permit the issuer to settle the securities at a price less than the current par value of the investment. The decline in market value of these securities is attributable to changes in interest rates and not credit quality. Additionally, these securities are implicitly guaranteed by the U.S. Government or one of its agencies.

•State, County and Municipal Securities: This portfolio has contractual terms that generally do not permit the issuer to settle the securities at a price less than the current par value of the investment. The decline in market value of these securities is attributable to changes in interest rates and not credit quality.

•Pooled Trust Preferred Securities: This portfolio consists of one security which is performing. The unrealized loss on this security is attributable to the illiquid nature of the trust preferred market in the current economic and regulatory environment. Management evaluates collateral credit and instrument structure, including current and expected deferral and default rates and timing. In addition, discount rates are determined by evaluating comparable spreads observed currently in the market for similar instruments.

Held to Maturity Securities

The following table summarizes the amortized cost, fair value and allowance for credit losses of held to maturity securities and the corresponding amounts of gross unrealized gains and losses at the dates indicated:

	December 31, 2023										December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for credit losses		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for credit losses		Fair Value
	(Dollars in thousands)
U.S. government agency securities	$	29,521	$	—	$	(1,113)	$	—	$	28,408	$	31,258	$	—	$	(2,222)	—		$	29,036
U.S. treasury securities	100,712		—		(9,177)		—		91,535		100,634		—		(11,755)		—		88,879
Agency mortgage-backed securities	829,431		175		(65,878)		—		763,728		898,927		408		(83,383)		—		815,952
Agency collateralized mortgage obligations	477,517		—		(69,606)		—		407,911		535,971		—		(77,554)		—		458,417
Single issuer trust preferred securities issued by banks	1,500		—		(127)		—		1,373		1,500		8		—		—		1,508
Small business administration pooled securities	130,426		384		(6,157)		—		124,653		136,830		313		(6,225)		—		130,918
Total held to maturity securities	$	1,569,107	$	559	$	(152,058)	$	—	$	1,417,608	$	1,705,120	$	729	$	(181,139)	$	—	$	1,524,710

Substantially all held to maturity securities held by the Company are guaranteed by the U.S. federal government or other government sponsored agencies and have a long history of no credit losses. As a result, management has determined these securities to have a zero loss expectation and therefore the Company did not record a provision for estimated credit losses on any held to maturity securities for the years ended December 31, 2023 and 2022. Excluded from the table above is accrued interest on held to maturity securities of $4.3 million and $4.4 million at December 31, 2023 and 2022, respectively, which is included within other assets on the consolidated balance sheets. Additionally, the Company did not record any write-offs of accrued interest income on held to maturity securities for the years ended December 31, 2023 and 2022. Furthermore, no securities held by the Company were delinquent on contractual payments nor were any securities placed on non-accrual status at December 31, 2023 and 2022.

When securities are sold, the adjusted cost of the specific security sold is used to compute the gain or loss on the sale. The Company had no sales of held to maturity securities for the years ended December 31, 2023 and 2022, and therefore no gains or losses were realized during the periods presented.

The Company monitors the credit quality of held to maturity securities through the use of credit ratings. Credit ratings are monitored by the Company on at least a quarterly basis. At December 31, 2023 and 2022, all held to maturity securities held by the Company were rated investment grade or higher.

The actual maturities of certain available for sale or held to maturity securities may differ from the contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. A schedule of the contractual maturities of securities available for sale and securities held to maturity at December 31, 2023 is presented below:

	Due in one year or less				Due after one year to five years				Due after five to ten years				Due after ten years				Total
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(Dollars in thousands)
Available for sale securities
U.S. government agency securities	$	—	$	—	$	199,371	$	179,973	$	30,827	$	27,165	$	—	$	—	$	230,198	$	207,138
U.S. treasury securities	197,553		193,192		627,044		575,910		—		—		—		—		824,597		769,102
Agency mortgage-backed securities	3		3		141,212		126,484		40,183		34,939		132,871		115,621		314,269		277,047
Agency collateralized mortgage obligations	—		—		—		—		2,923		2,680		32,790		30,509		35,713		33,189
State, county, and municipal securities	—		—		195		190		—		—		—		—		195		190
Pooled trust preferred securities issued by banks and insurers	—		—		—		—		—		—		1,188		1,018		1,188		1,018
Small business administration pooled securities	—		—		—		—		—		—		53,702		46,572		53,702		46,572
Total available for sale securities	$	197,556	$	193,195	$	967,822	$	882,557	$	73,933	$	64,784	$	220,551	$	193,720	$	1,459,862	$	1,334,256
Held to maturity securities
U.S. government agency securities	$	29,521	$	28,408	$	—	$	—	$	—	$	—	$	—	$	—	$	29,521	$	28,408
U.S. Treasury securities	—		—		99,720		90,703		992		832		—		—		100,712		91,535
Agency mortgage-backed securities	—		—		411,746		383,514		222,825		198,122		194,860		182,092		829,431		763,728
Agency collateralized mortgage obligations	—		—		63,596		58,934		20,210		17,864		393,711		331,113		477,517		407,911
Single issuer trust preferred securities issued by banks	—		—		1,500		1,373		—		—		—		—		1,500		1,373
Small business administration pooled securities	—		—		—		—		5,742		5,272		124,684		119,381		130,426		124,653
Total held to maturity securities	$	29,521	$	28,408	$	576,562	$	534,524	$	249,769	$	222,090	$	713,255	$	632,586	$	1,569,107	$	1,417,608
Total	$	227,077	$	221,603	$	1,544,384	$	1,417,081	$	323,702	$	286,874	$	933,806	$	826,306	$	3,028,969	$	2,751,864

Included in the table above is $25.4 million of callable securities at December 31, 2023.

The carrying value of securities pledged to secure public funds, trust deposits, and for other purposes, as required or permitted by law, was $1.7 billion and $959.8 million at December 31, 2023 and 2022, respectively. The elevated balance at December 31, 2023 was primarily attributable to additional securities pledged during the year as part of the Company's strategy to bolster off-balance sheet liquidity.

At December 31, 2023 and 2022, the Company had no investments in obligations of individual states, counties, or municipalities which exceeded 10% of stockholders’ equity.