Securities

12 Months Ended

Dec. 31, 2022

Investments, Debt and Equity Securities [Abstract]

The book values and approximate fair values of investment securities at December 31, 2022 and 2021 are summarized as follows:


	2022					2021
	Amortized Cost		Fair Value	Unrealized		Amortized Cost	Fair Value	Unrealized
($ in thousands)				Gains	(Losses)			Gains	(Losses)
Securities available for sale:
US Treasury securities	$	174,420	168,758	—	(5,662)	—	—	—	—
Government-sponsored enterprise securities	71,957		57,456	—	(14,501)	71,951	69,179	—	(2,772)
Mortgage-backed securities	2,467,839		2,045,000	4	(422,843)	2,545,150	2,514,805	9,489	(39,834)
Corporate bonds	44,340		43,279	—	(1,061)	45,380	46,430	1,106	(56)
Total available for sale	$	2,758,556	2,314,493	4	(444,067)	2,662,481	2,630,414	10,595	(42,662)

Securities held to maturity:
Mortgage-backed securities	$	15,150	14,221	—	(929)	20,260	20,845	585	—
State and local governments	526,550		418,307	7	(108,250)	493,565	490,854	2,955	(5,666)
Total held to maturity	$	541,700	432,528	7	(109,179)	513,825	511,699	3,540	(5,666)

All of the Company’s mortgage-backed securities were issued by government-sponsored enterprises ("GSEs"), except for private mortgage-backed securities with a fair value of $0.8 million and $0.9 million as of December 31, 2022 and 2021, respectively.

The following table presents information regarding securities with unrealized losses at December 31, 2022:


	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
US Treasury securities	$	168,758	5,662	—	—	168,758	5,662
Government-sponsored enterprise securities	—		—	57,456	14,501	57,456	14,501
Mortgage-backed securities	221,006		18,215	1,835,958	405,557	2,056,964	423,772
Corporate bonds	40,644		947	886	114	41,530	1,061
State and local governments	48,385		8,323	368,897	99,927	417,282	108,250
Total temporarily impaired securities	$	478,793	33,147	2,263,197	520,099	2,741,990	553,246

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

As of December 31, 2022, the Company's securities portfolio held 666 securities of which 644 securities were in an unrealized loss position. As of December 31, 2021, the Company's securities portfolio held 648 securities of which 371 securities were in an unrealized loss position.

In the above tables, all of the securities that were in an unrealized loss position at December 31, 2022 and 2021 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 severity of the impairment. The state and local government investments are comprised almost entirely of highly-rated municipal bonds issued by state and local governments throughout the nation. The Company has no significant concentrations of bond holdings from one state or local government entity. Nearly all of our mortgage-backed securities were issued by FHLMC, FNMA, GNMA, or the SBA, each of which is a government agency or GSE and guarantees the repayment of its securities. 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.

At December 31, 2022 and 2021, the Company determined that expected credit losses associated with HTM securities and AFS debt securities were insignificant.

The book values and approximate fair values of investment securities at December 31, 2022, 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	$	25,078	25,036	—	—
Due after one year but within five years	176,932		171,224	997	873
Due after five years but within ten years	87,707		72,348	61,509	50,726
Due after ten years	1,000		885	464,044	366,708
Mortgage-backed securities	2,467,839		2,045,000	15,150	14,221
Total securities	$	2,758,556	2,314,493	541,700	432,528

At December 31, 2022 and 2021, investment securities with carrying values of $758.0 million and $951.4 million, respectively, were pledged as collateral for public deposits.

At December 31, 2022 and 2021, there were no holdings of securities of any one issuer, other than the US Government and its agencies or GSEs, in an amount greater than 10% of shareholders' equity.

In 2022, there were no sales of investment securities. In 2021, the Company received proceeds from sales of securities of $106.5 million and recorded in $1.2 million net losses from the sales. In 2020, the Company received proceeds from sales of securities of $219.7 million and recorded $8.0 million in net gains from the sales.

Included in “Other Assets” in the consolidated balance sheets are investments in FHLB and Federal Reserve stock totaling $39.6 million and $22.3 million at December 31, 2022 and 2021, respectively. These investments do not have readily determinable fair values. The FHLB stock had a cost and fair value of $14.7 million and $4.6 million at December 31, 2022 and 2021, 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 $24.9 million and $17.8 million at December 31, 2022 and 2021, 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, 2022 was approximately 1.60, which means the Company would receive approximately 19,758 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.