Investment Securities

12 Months Ended

Dec. 31, 2024

Investments, Debt and Equity Securities [Abstract]

Investment securities are classified as AFS, HTM, or equity on the consolidated balance sheets. The amortized cost and fair values of AFS and HTM securities at December 31, 2024 were as follows:


($ in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value


AFS investment securities


Obligations of state and political subdivisions (municipal securities)	$	3,063	$	—	$	(58)	$	3,005
Residential mortgage-related securities:
FNMA/FHLMC	120,272		190		(9,534)		110,928
GNMA	4,236,199		5,379		(13,851)		4,227,727

Commercial mortgage-related securities:
FNMA/FHLMC	18,332		—		(1,332)		17,000
GNMA	116,275		—		(4,800)		111,475
Asset backed securities:
FFELP	108,319		123		(604)		107,839
SBA	495		—		(24)		471
Other debt securities	3,000		—		(11)		2,989
Total AFS investment securities	$	4,605,954	$	5,693	$	(30,213)	$	4,581,434
HTM investment securities
U.S. Treasury securities	$	1,000	$	—	$	(1)	$	999
Obligations of state and political subdivisions (municipal securities)	1,659,722		1,122		(174,202)		1,486,642
Residential mortgage-related securities:
FNMA/FHLMC	885,476		22,934		(186,464)		721,946
GNMA	43,693		9		(3,774)		39,927
Private-label	324,182		8,135		(65,963)		266,353
Commercial mortgage-related securities:
FNMA/FHLMC	772,456		10,217		(159,078)		623,595
GNMA	52,219		236		(6,424)		46,032
Total HTM investment securities	$	3,738,747	$	42,653	$	(595,906)	$	3,185,494

The amortized cost and fair values of AFS and HTM securities at December 31, 2023 were as follows:


($ in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value


AFS investment securities
U.S. Treasury securities	$	39,984	$	—	$	(4,083)	$	35,902

Obligations of state and political subdivisions (municipal securities)	94,008		23		(2,214)		91,817
Residential mortgage-related securities:
FNMA/FHLMC	1,274,052		294		(153,552)		1,120,794
GNMA	2,021,242		24,254		(2,822)		2,042,675

Commercial mortgage-related securities:
FNMA/FHLMC	18,691		—		(1,755)		16,937
GNMA	161,928		—		(7,135)		154,793
Asset backed securities:
FFELP	135,832		5		(1,862)		133,975
SBA	1,077		2		(28)		1,051
Other debt securities	3,000		—		(50)		2,950
Total AFS investment securities	$	3,749,814	$	24,579	$	(173,501)	$	3,600,892
HTM investment securities
U.S. Treasury securities	$	999	$	—	$	(36)	$	963
Obligations of state and political subdivisions (municipal securities)	1,682,473		5,638		(134,053)		1,554,059
Residential mortgage-related securities:
FNMA/FHLMC	941,973		27,007		(164,587)		804,393
GNMA	48,979		92		(2,901)		46,170
Private-label	345,083		9,796		(65,372)		289,507
Commercial mortgage-related securities:
FNMA/FHLMC	780,995		12,699		(160,781)		632,914
GNMA	59,733		386		(7,500)		52,619
Total HTM investment securities	$	3,860,235	$	55,619	$	(535,230)	$	3,380,624

Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The expected maturities of AFS and HTM securities at December 31, 2024, are shown below:


	AFS					HTM
($ in thousands)	Amortized Cost		Fair Value			Amortized Cost		Fair Value
Due in one year or less	$	1,000	$	997		$	17,800	$	17,746
Due after one year through five years	3,040		3,026			62,054		61,286
Due after five years through ten years	1,390		1,387			187,803		179,653
Due after ten years	633		585			1,393,065		1,228,957
Total debt securities	6,063		5,994			1,660,722		1,487,641
Residential mortgage-related securities:
FNMA/FHLMC	120,272		110,928			885,476		721,946
GNMA	4,236,199		4,227,727			43,693		39,927
Private-label	—		—			324,182		266,353
Commercial mortgage-related securities:
FNMA/FHLMC	18,332		17,000			772,456		623,595
GNMA	116,275		111,475			52,219		46,032

Asset backed securities:
FFELP	108,319		107,839			—		—
SBA	495		471			—		—
Total investment securities	$	4,605,954	$	4,581,434		$	3,738,747	$	3,185,494
Ratio of fair value to amortized cost			99.5		%			85.2		%

On a quarterly basis, the Corporation refreshes the credit quality of each HTM security. The following table summarizes the credit quality indicators of HTM securities at amortized cost at December 31, 2024:


($ in thousands)	AAA		AA		A		Not Rated		Total
U.S. Treasury securities	$	1,000	$	—	$	—	$	—	$	1,000
Obligations of state and political subdivisions (municipal securities)	767,151		883,438		4,911		4,221		1,659,722
Residential mortgage-related securities:
FNMA/FHLMC	885,476		—		—		—		885,476
GNMA	43,693		—		—		—		43,693
Private-label	324,182		—		—		—		324,182
Commercial mortgage-related securities:
FNMA/FHLMC	772,456		—		—		—		772,456
GNMA	52,219		—		—		—		52,219
Total HTM securities	$	2,846,177	$	883,438	$	4,911	$	4,221	$	3,738,747

The following table summarizes the credit quality indicators of HTM securities at amortized cost at December 31, 2023:


($ in thousands)	AAA		AA		A		Not Rated		Total
U.S. Treasury securities	$	999	$	—	$	—	$	—	$	999
Obligations of state and political subdivisions (municipal securities)	760,329		915,303		5,687		1,155		1,682,473
Residential mortgage-related securities:
FNMA/FHLMC	941,973		—		—		—		941,973
GNMA	48,979		—		—		—		48,979
Private-label	345,083		—		—		—		345,083
Commercial mortgage-related securities:
FNMA/FHLMC	780,995		—		—		—		780,995
GNMA	59,733		—		—		—		59,733
Total HTM securities	$	2,938,090	$	915,303	$	5,687	$	1,155	$	3,860,235

The following table summarizes gross realized gains and losses on AFS securities, the gain on sale and net write-up of equity securities, and proceeds from the sale of AFS investment securities for each of the three years ended December 31 shown below:


($ in thousands)	2024		2023		2022
Gross realized gains on AFS securities	$	—	$	83	$	21


Gross realized (losses) on AFS securities	(148,380)		(65,022)		(1,943)


Gain on sale and net write-up of equity securities	4,233		6,037		5,668
Investment securities (losses) gains, net	$	(144,147)	$	(58,903)	$	3,746
Proceeds from sales of AFS investment securities	$	1,141,231	$	715,066	$	110,177

During the fourth quarter of 2024, the Corporation sold lower yielding AFS securities with a carrying value of $1.1 billion at a net loss of $148 million and reinvested the proceeds into higher yielding and lower risk-weighted GNMA securities. Additionally, during the first quarter of 2024, the Corporation sold its remaining Visa Class B restricted shares at a gain of $4 million.

During the fourth quarter of 2023, the Corporation sold lower yielding AFS securities with a carrying value of $715 million at a net loss of $65 million and reinvested the proceeds into higher yielding and lower risk-weighted GNMA securities. Additionally, during the fourth quarter of 2023, the Corporation sold 1,000 shares of its Visa Class B restricted shares and wrote up its remaining shares based on that market price, resulting in a gain of $6 million.

During the fourth quarter of 2022, the Corporation sold $110 million of lower yielding municipal securities at a loss of $2 million and reinvested the proceeds into higher yielding and lower risk-weighted GNMA securities. During the third quarter of 2022, the Corporation sold its Visa Class B restricted shares obtained in the acquisition of First Staunton, which were carried at a zero-cost basis. The remaining shares of Visa Class B restricted shares held by the Corporation, which were carried at fair value, were subsequently written up to reflect the new observable price resulting from that sale.

Investment securities with a carrying value of $1.5 billion at December 31, 2024 and $1.6 billion at December 31, 2023 were pledged as required to secure certain deposits or for other purposes.

Accrued interest receivable on HTM securities totaled $18 million at both December 31, 2024 and 2023. Accrued interest receivable on AFS securities totaled $21 million and $15 million at December 31, 2024 and 2023, respectively. Accrued interest receivable on both HTM and AFS securities is included in interest receivable on the consolidated balance sheets.

The allowance for credit losses on HTM securities was approximately $60,000 and $75,000 at December 31, 2024 and 2023, respectively, attributable entirely to the Corporation's municipal securities, included in HTM investment securities, net, at amortized cost on the consolidated balance sheets. The Corporation also holds U.S. Treasury, municipal, and mortgage-related securities issued by the U.S. government or a GSE which are backed by the full faith and credit of the U.S. government and private-label residential mortgage-related securities that have credit enhancement which covers the first 15% of losses and, as a result, no allowance for credit losses has been recorded related to these securities.

The following represents gross unrealized losses and the related fair value of AFS and HTM securities, aggregated by investment category and length of time individual securities have been in a continuous unrealized loss position, at December 31, 2024:


	Less than 12 months					12 months or more					Total
($ in thousands)	Number of Securities	Unrealized (Losses)		Fair Value		Number of Securities	Unrealized (Losses)		Fair Value		Unrealized (Losses)		Fair Value
AFS investment securities


Obligations of state and political subdivisions (municipal securities)	1	$	(3)	$	542	2	$	(55)	$	828	$	(58)	$	1,370
Residential mortgage-related securities:
FNMA/FHLMC	23	(607)		31,983		14	(8,927)		61,596		(9,534)		93,579
GNMA	116	(13,706)		1,660,642		4	(145)		3,945		(13,851)		1,664,587

Commercial mortgage-related securities:
FNMA/FHLMC	—	—		—		1	(1,332)		17,000		(1,332)		17,000
GNMA	—	—		—		16	(4,800)		111,475		(4,800)		111,475
Asset backed securities:
FFELP	—	—		—		12	(604)		62,830		(604)		62,830
SBA	—	—		—		4	(24)		464		(24)		464
Other debt securities	1	(7)		993		1	(3)		997		(11)		1,989
Total	141	$	(14,323)	$	1,694,159	54	$	(15,890)	$	259,134	$	(30,213)	$	1,953,294
HTM investment securities
U.S. Treasury securities	—	$	—	$	—	1	$	(1)	$	999	$	(1)	$	999
Obligations of state and political subdivisions (municipal securities)	370	(11,860)		483,073		641	(162,343)		866,949		(174,202)		1,350,022
Residential mortgage-related securities:
FNMA/FHLMC	12	(280)		11,617		106	(186,184)		710,114		(186,464)		721,732
GNMA	7	(183)		8,856		79	(3,591)		31,071		(3,774)		39,927
Private-label	—	—		—		18	(65,963)		266,353		(65,963)		266,353
Commercial mortgage-related securities:
FNMA/FHLMC	2	(1,343)		25,518		43	(157,735)		598,077		(159,078)		623,595
GNMA	—	—		—		13	(6,424)		46,032		(6,424)		46,032
Total	391	$	(13,665)	$	529,064	901	$	(582,241)	$	2,519,595	$	(595,906)	$	3,048,660

For comparative purposes, the following represents gross unrealized losses and the related fair value of AFS and HTM securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2023:


	Less than 12 months					12 months or more					Total
($ in thousands)	Number of Securities	Unrealized (Losses)		Fair Value		Number of Securities	Unrealized (Losses)		Fair Value		Unrealized (Losses)		Fair Value
AFS investment securities
U.S. Treasury securities	—	$	—	$	—	1	$	(4,083)	$	35,902	$	(4,083)	$	35,902

Obligations of state and political subdivisions (municipal securities)	41	(347)		23,762		92	(1,867)		53,022		(2,214)		76,784
Residential mortgage-related securities:
FNMA/FHLMC	18	(333)		22,870		71	(153,219)		1,080,337		(153,552)		1,103,207
GNMA	13	(924)		156,847		5	(1,898)		26,643		(2,822)		183,490

Commercial mortgage-related securities:
FNMA/FHLMC	—	—		—		1	(1,755)		16,937		(1,755)		16,937
GNMA	9	(3,160)		103,055		22	(3,975)		51,738		(7,135)		154,793
Asset backed securities:
FFELP	—	—		—		14	(1,862)		125,339		(1,862)		125,339
SBA	—	—		—		5	(28)		761		(28)		761
Other debt securities	1	(9)		991		2	(42)		1,958		(50)		2,950
Total	82	$	(4,773)	$	307,527	213	$	(168,728)	$	1,392,635	$	(173,501)	$	1,700,162
HTM investment securities
U.S. Treasury securities	—	$	—	$	—	1	$	(36)	$	963	$	(36)	$	963
Obligations of state and political subdivisions (municipal securities)	182	(1,535)		180,270		537	(132,518)		792,940		(134,053)		973,210
Residential mortgage-related securities:
FNMA/FHLMC	20	(511)		30,323		94	(164,076)		771,042		(164,587)		801,365
GNMA	2	(17)		2,128		78	(2,884)		34,626		(2,901)		36,754
Private-label	—	—		—		18	(65,372)		289,507		(65,372)		289,507
Commercial mortgage-related securities:
FNMA/FHLMC	1	(121)		8,144		44	(160,660)		624,770		(160,781)		632,914
GNMA	—	—		—		13	(7,500)		52,619		(7,500)		52,619
Total	205	$	(2,184)	$	220,865	785	$	(533,046)	$	2,566,468	$	(535,230)	$	2,787,333

The Corporation reviews the AFS investment securities portfolio on a quarterly basis to monitor its credit exposure. A determination as to whether a security’s decline in fair value is the result of credit risk takes into consideration numerous factors and the relative significance of any single factor can vary by security. Some factors the Corporation may consider in this impairment analysis include the extent to which the security has been in an unrealized loss position, the change in security rating, financial condition and near-term prospects of the issuer, as well as security and industry specific economic conditions.

Based on the Corporation’s evaluation, management does not believe any unrealized losses at December 31, 2024 represent credit deterioration as these unrealized losses are primarily attributable to changes in interest rates and the current market conditions. As of December 31, 2024, the Corporation does not intend to sell, nor does it believe that it will be required to sell, the securities in an unrealized loss position before recovery of their amortized cost basis.

FHLB and Federal Reserve Bank stocks: The Corporation is required to maintain Federal Reserve Bank stock and FHLB stock as a member bank of both the Federal Reserve System and the FHLB, and in amounts as required by these institutions. These equity securities are “restricted” in that they can only be sold back to the respective institutions or another member institution at par. Therefore, they are less liquid than other marketable equity securities and their fair value is equal to amortized cost. The Corporation had FHLB stock of $92 million and $143 million at December 31, 2024 and 2023, respectively. The Corporation had Federal Reserve Bank stock of $88 million and $87 million at December 31, 2024 and 2023, respectively. Accrued interest receivable on FHLB stock totaled $2 million and $4 million at December 31, 2024 and 2023, respectively. There was no accrued interest receivable on Federal Reserve Bank stock at both December 31, 2024 and 2023. Accrued interest receivable on both FHLB stock and Federal Reserve Bank stock is included in interest receivable on the consolidated balance sheets.

Equity Securities

Equity securities with readily determinable fair values: The Corporation's portfolio of equity securities with readily determinable fair values is primarily comprised of mutual funds. At December 31, 2024 and 2023, the Corporation had equity securities with readily determinable fair values of $11 million and $7 million, respectively.

Equity securities without readily determinable fair values: The Corporation's portfolio of equity securities without readily determinable fair values primarily consists of an investment in a private loan fund. The Corporation had equity securities without readily determinable fair values carried at $13 million and $35 million at December 31, 2024 and 2023, respectively. During the first quarter of 2024, the Corporation sold all of its remaining Visa Class B restricted shares.