Securities

12 Months Ended

Dec. 31, 2021

Investments, Debt and Equity Securities [Abstract]

The book values and approximate fair values of investment securities at December 31, 2021 and 2020 are summarized as follows:


	2021					2020
	Amortized Cost		Fair Value	Unrealized		Amortized Cost	Fair Value	Unrealized
($ in thousands)				Gains	(Losses)			Gains	(Losses)
Securities available for sale:
Government-sponsored enterprise securities	$	71,951	69,179	—	(2,772)	70,016	70,206	371	(181)
Mortgage-backed securities	2,545,150		2,514,805	9,489	(39,834)	1,318,998	1,337,706	20,832	(2,124)
Corporate bonds	45,380		46,430	1,106	(56)	43,670	45,220	1,760	(210)
Total available for sale	2,662,481		2,630,414	10,595	(42,662)	1,432,684	1,453,132	22,963	(2,515)

Securities held to maturity:
Mortgage-backed securities	20,260		20,845	585	—	29,959	30,900	941	—
State and local governments	493,565		490,854	2,955	(5,666)	137,592	139,834	2,407	(165)
Total held to maturity	$	513,825	511,699	3,540	(5,666)	167,551	170,734	3,348	(165)

All of the Company’s mortgage-backed securities were issued by government-sponsored enterprises, except for private mortgage-backed securities with a fair value of $0.9 million and $1.0 million as of December 31, 2021 and 2020, respectively.

The following table presents information regarding securities with unrealized losses at December 31, 2021:


	Securities in an Unrealized Loss Position for Less than 12 Months			Securities in an Unrealized Loss Position for More than 12 Months		Total
($ in thousands)	Fair Value		Unrealized Losses	Fair Value	Unrealized Losses	Fair Value	Unrealized Losses
Government-sponsored enterprise securities	$	21,436	522	47,743	2,250	69,179	2,772
Mortgage-backed securities	1,773,022		25,977	404,484	13,857	2,177,506	39,834
Corporate bonds	999		1	945	55	1,944	56
State and local governments	228,279		3,797	34,398	1,869	262,677	5,666
Total temporarily impaired securities	$	2,023,736	30,297	487,570	18,031	2,511,306	48,328

The following table presents information regarding securities with unrealized losses at December 31, 2020:


	Securities in an Unrealized Loss Position for Less than 12 Months			Securities in an Unrealized Loss Position for More than 12 Months		Total
($ in thousands)	Fair Value		Unrealized Losses	Fair Value	Unrealized Losses	Fair Value	Unrealized Losses
Government-sponsored enterprise securities	$	29,812	181	—	—	29,812	181
Mortgage-backed securities	497,992		1,957	6,168	167	504,160	2,124
Corporate bonds	3,956		45	835	165	4,791	210
State and local governments	23,310		165	—	—	23,310	165
Total temporarily impaired securities	$	555,070	2,348	7,003	332	562,073	2,680

As of December 31, 2021 and December 31, 2020, the Company's security portfolio held 371 and 69 securities that were in an unrealized loss position, respectively. In the above tables, all of the securities that were in an unrealized loss position at December 31, 2021 and 2020 are bonds that the Company has determined are in a loss position due primarily to interest rate factors and not credit quality concerns. In arriving at this conclusion, the Company reviewed third-party credit ratings and considered the amount of the impairment. In the tables above, substantially all of the mortgage-backed securities in unrealized loss positions at each period end were issued by government-sponsored agencies, including Freddie Mac, Fannie Mae, and Ginnie Mae, which the Company considered in concluding that the unrealized loss position of each security was due to interest rate factors and not credit quality concerns. The Company does not intend to sell these securities, and it is more likely than not that the Company will not be required to sell these securities before recovery of the amortized cost.

No impairment charges were recognized for any securities during the year ended December 31, 2020. At adoption of CECL on January 1, 2021 and at December 31, 2021, the Company determined that expected credit losses associated with HTM debt securities were insignificant. See Note 1 for additional details on the adoption of CECL as it relates to the securities portfolio.

The book values and approximate fair values of investment securities at December 31, 2021, by contractual maturity, are summarized in the table below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.


	Securities Available for Sale			Securities Held to Maturity
($ in thousands)	Amortized Cost		Fair Value	Amortized Cost	Fair Value
Debt securities
Due within one year	$	1,001	1,020	1,246	1,258
Due after one year but within five years	27,629		28,454	—	—
Due after five years but within ten years	87,701		85,191	16,058	16,112
Due after ten years	1,000		944	476,261	473,484
Mortgage-backed securities	2,545,150		2,514,805	20,260	20,845
Total securities	$	2,662,481	2,630,414	513,825	511,699

At December 31, 2021 and 2020, investment securities with carrying values of $951.4 million and $630.3 million, respectively, were pledged as collateral for public deposits.

At December 31, 2021 and 2020, there were no holdings of securities of any one issuer, other than the US Government and its agencies or government sponsored agencies, in an amount greater than 10% of shareholders' equity.

In 2021, the Company received proceeds from sales of securities of $106.5 million and recorded $1.2 million in gross losses from the sales. In 2020, the Company received proceeds from sales of securities of $219.7 million and recorded $8.0 million in gross gains from the sales. In 2019, the Company received proceeds from sales of securities of $39.8 million and recorded $0.1 million in gross gains from the sales.

Included in “Other Assets” in the Consolidated Balance Sheets are investments in FHLB and Federal Reserve stock totaling $22.3 million and $23.5 million at December 31, 2021 and 2020, respectively. These investments do not have readily determinable fair values. The FHLB stock had a cost and fair value of $4.6 million and $5.9 million at December 31, 2021 and 2020, respectively, and serves as part of the collateral for the Company’s line of credit with the FHLB and is also a requirement for membership in the FHLB system. The Federal Reserve stock had a cost and fair value of $17.8 million and $17.7 million at December 31, 2021 and 2020, respectively, and is a requirement for Federal Reserve member bank qualification. Periodically, both the FHLB and Federal Reserve recalculate the Company’s required level of holdings, and the Company either buys more stock or redeems a portion of the stock at cost. The Company determined that neither stock was impaired at either period end.

The Company owns 12,356 Class B shares of Visa, Inc. (“Visa”) stock that were received upon Visa’s initial public offering. These shares are expected to convert into Class A Visa shares subsequent to the settlement of certain litigation against Visa, to which the Company is not a party. The Class B shares have transfer restrictions, and the conversion rate into Class A shares is periodically adjusted as Visa settles litigation. The conversion rate at December 31, 2021 was approximately 1.62, which means the Company would receive approximately 19,993 Class A shares if the stock had converted on that date. This Class B stock does not have a readily determinable fair value

and is carried at zero. If a readily determinable fair value becomes available for the Class B shares, or upon the conversion to Class A shares, the Company will adjust the carrying value of the stock to its market value with a credit to earnings.