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SECURITIES AND OTHER INVESTMENTS

12 Months Ended

Dec. 31, 2025

Securities [Abstract]

SECURITIES AND OTHER INVESTMENTS

3. SECURITIES AND OTHER INVESTMENTS

Available for Sale

The amortized cost, gross unrealized gains and losses, and estimated fair values of AFS securities as of December 31, are as follows (dollars in thousands):

Amortized

Gross Unrealized

Estimated

 

Cost

 

Gains

 

(Losses)

 

Fair Value

2025

U.S. government and agency securities

$

103,335

$

681

$

(14)

$

104,002

Obligations of states and political subdivisions

589,194

178

(101,487)

487,885

Corporate and other bonds ⁽¹⁾

221,432

709

(4,207)

217,934

Commercial MBS

Agency

354,405

1,276

(39,806)

315,875

Non-agency

115,009

187

(1,905)

113,291

Total commercial MBS

469,414

1,463

(41,711)

429,166

Residential MBS

Agency

2,942,900

15,838

(165,524)

2,793,214

Non-agency

161,767

935

(2,558)

160,144

Total residential MBS

3,104,667

16,773

(168,082)

2,953,358

Other securities

1,956

—

—

1,956

Total AFS securities

$

4,489,998

$

19,804

$

(315,501)

$

4,194,301

⁽¹⁾ Other bonds include asset-backed securities.

The amortized cost, gross unrealized gains and losses, and estimated fair values of AFS securities as of December 31, are as follows (dollars in thousands):


		Amortized			Gross Unrealized						Estimated
		Cost			Gains			(Losses)			Fair Value
2024
U.S. government and agency securities		$	65,650		$	390		$	(27)		$	66,013
Obligations of states and political subdivisions			597,956			84			(129,703)			468,337
Corporate and other bonds ⁽¹⁾			253,526			505			(9,319)			244,712
Commercial MBS
Agency			285,949			348			(44,678)			241,619
Non-agency			61,552			4			(2,110)			59,446
Total commercial MBS			347,501			352			(46,788)			301,065
Residential MBS
Agency			1,478,648			1,375			(216,754)			1,263,269
Non-agency			99,622			672			(3,384)			96,910
Total residential MBS			1,578,270			2,047			(220,138)			1,360,179
Other securities			1,860			—			—			1,860
Total AFS securities		$	2,844,763		$	3,378		$	(405,975)		$	2,442,166

⁽¹⁾Other bonds include asset-backed securities.

The following table shows the gross unrealized losses and fair value of the Company’s AFS securities with unrealized losses, which are aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position for the following periods ended (dollars in thousands).


		Less than 12 months						More than 12 months						Total
		Fair			Unrealized			Fair			Unrealized			Fair			Unrealized
		Value			Losses			Value ⁽²⁾			Losses			Value			Losses
December 31, 2025
U.S. government and agency securities		$	6,689		$	(6)		$	737		$	(8)		$	7,426		$	(14)
Obligations of states and political subdivisions			25			—			473,201			(101,487)			473,226			(101,487)
Corporate and other bonds ⁽¹⁾			37,988			(75)			98,125			(4,132)			136,113			(4,207)
Commercial MBS
Agency			44,536			(166)			161,001			(39,640)			205,537			(39,806)
Non-agency			39,171			(177)			22,429			(1,728)			61,600			(1,905)
Total commercial MBS			83,707			(343)			183,430			(41,368)			267,137			(41,711)
Residential MBS
Agency			359,095			(1,564)			886,626			(163,960)			1,245,721			(165,524)
Non-agency			48,559			(247)			24,868			(2,311)			73,427			(2,558)
Total residential MBS			407,654			(1,811)			911,494			(166,271)			1,319,148			(168,082)
Total AFS securities		$	536,063		$	(2,235)		$	1,666,987		$	(313,266)		$	2,203,050		$	(315,501)

December 31, 2024
U.S. government and agency securities		$	1,935		$	(2)		$	1,286		$	(25)		$	3,221		$	(27)
Obligations of states and political subdivisions			6,560			(322)			444,056			(129,381)			450,616			(129,703)
Corporate and other bonds ⁽¹⁾			8,620			(27)			145,655			(9,292)			154,275			(9,319)
Commercial MBS
Agency			31,291			(359)			160,880			(44,319)			192,171			(44,678)
Non-agency			24,864			(1,188)			21,110			(922)			45,974			(2,110)
Total commercial MBS			56,155			(1,547)			181,990			(45,241)			238,145			(46,788)
Residential MBS
Agency			104,477			(546)			895,714			(216,208)			1,000,191			(216,754)
Non-agency			6,067			(98)			27,851			(3,286)			33,918			(3,384)
Total residential MBS			110,544			(644)			923,565			(219,494)			1,034,109			(220,138)
Total AFS securities		$	183,814		$	(2,542)		$	1,696,552		$	(403,433)		$	1,880,366		$	(405,975)

⁽¹⁾ Other bonds include asset-backed securities.

⁽²⁾Comprised of 703 and 726 individual securities as of December 31, 2025 and December 31, 2024, respectively.

The Company has evaluated AFS securities in an unrealized loss position for credit related impairment at December 31, 2025 and 2024 and concluded no impairment existed based on several factors which included: (1) the majority of these securities are of high credit quality, (2) unrealized losses are primarily the result of market volatility and increases in market interest rates, (3) the contractual terms of the investments do not permit the issuer(s) to settle the securities at a price less than the cost basis of each investment, (4) issuers continue to make timely principal and interest payments, and (5) the Company does not intend to sell any of the investments and the accounting standard of “more likely than not” has not been met for the Company to be required to sell any of the investments before recovery of its amortized cost basis.

Additionally, the majority of the Company’s MBS are issued by the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and the Government National Mortgage Association and do not have credit risk given the implicit and explicit government guarantees associated with these agencies. In addition, the non-agency mortgage-backed and asset-backed securities generally received a 20% simplified supervisory formula approach rating. The Company’s AFS investment portfolio is generally highly-rated or agency backed. At December 31, 2025 and 2024, all AFS securities were current with no securities past due or on non-accrual, and no ACL was held against the Company’s AFS securities portfolio.

The following table presents the amortized cost and estimated fair value of AFS securities as of December 31, by contractual maturity (dollars in thousands). 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.

2025

2024

 

Amortized

 

Estimated

 

Amortized

 

Estimated

Cost

Fair Value

Cost

Fair Value

Due in one year or less

$

63,692

$

63,993

$

35,954

$

35,808

Due after one year through five years

298,683

299,727

215,517

215,513

Due after five years through ten years

492,242

475,707

286,487

271,443

Due after ten years

3,635,381

3,354,874

2,306,805

1,919,402

Total AFS securities

$

4,489,998

$

4,194,301

$

2,844,763

$

2,442,166

Refer to Note 10 "Commitments and Contingencies" in this Form 10-K for information regarding the estimated fair value of AFS securities that were pledged to secure public deposits, repurchase agreements, and for other purposes as permitted or required by law as of December 31, 2025 and 2024.

Accrued interest receivable on AFS securities totaled $15.0 million and $10.1 million at December 31, 2025 and 2024 respectively, and is included in “Other assets” on the Company’s Consolidated Balance Sheets. For the years ended December 31, 2025, 2024, and 2023, accrued interest receivable write-offs were not material to the Company’s consolidated financial statements.

Held to Maturity

The carrying value, gross unrealized gains and losses, and estimated fair values of HTM securities as of December 31, are as follows (dollars in thousands):

Carrying

Gross Unrealized

Estimated

 

Value

 

Gains

 

(Losses)

Fair Value

2025

Obligations of states and political subdivisions

$

793,162

$

4,139

$

(20,951)

$

776,350

Corporate and other bonds ⁽¹⁾

2,255

—

(26)

2,229

Commercial MBS

Agency

29,074

—

(5,619)

23,455

Non-agency

11,703

103

(504)

11,302

Total commercial MBS

40,777

103

(6,123)

34,757

Residential MBS

Agency

35,793

—

(4,397)

31,396

Non-agency

12,229

—

(149)

12,080

Total residential MBS

48,022

—

(4,546)

43,476

Total HTM securities

$

884,216

$

4,242

$

(31,646)

$

856,812

⁽¹⁾ Other bonds include asset-backed securities.

The carrying value, gross unrealized gains and losses, and estimated fair values of HTM securities as of December 31, are as follows (dollars in thousands):


		Carrying			Gross Unrealized						Estimated
		Value			Gains			(Losses)			Fair Value
2024
Obligations of states and political subdivisions		$	697,683		$	715		$	(31,763)		$	666,635
Corporate and other bonds ⁽¹⁾			3,322			—			(82)			3,240
Commercial MBS
Agency			26,787			—			(6,185)			20,602
Non-agency			17,922			28			(659)			17,291
Total commercial MBS			44,709			28			(6,844)			37,893
Residential MBS
Agency			37,808			—			(6,288)			31,520
Non-agency			20,329			—			(282)			20,047
Total residential MBS			58,137			—			(6,570)			51,567
Total HTM securities		$	803,851		$	743		$	(45,259)		$	759,335

⁽¹⁾ Other bonds include asset-backed securities.

The following table presents the amortized cost of HTM securities as of December 31, by security type and credit rating (dollars in thousands):


		Obligations of states and political			Corporate and other			Mortgage-backed			Total HTM
		subdivisions			bonds			securities			securities
2025
Credit Rating:
AAA/AA/A		$	782,453		$	—		$	1,702		$	784,155
BBB/BB/B			1,122			—			—			1,122
Not Rated – Agency ⁽¹⁾			—			—			64,867			64,867
Not Rated – Non-Agency ⁽²⁾			9,587			2,255			22,230			34,072
Total		$	793,162		$	2,255		$	88,799		$	884,216
2024
Credit Rating:
AAA/AA/A		$	686,923		$	—		$	5,748		$	692,671
BBB/BB/B			1,144			—			—			1,144
Not Rated – Agency ⁽¹⁾			—			—			64,595			64,595
Not Rated – Non-Agency ⁽²⁾			9,616			3,322			32,503			45,441
Total		$	697,683		$	3,322		$	102,846		$	803,851

⁽¹⁾ Generally considered not to have credit risk given the government guarantees associated with these agencies.

⁽²⁾ Non-agency mortgage-backed and asset-backed securities have limited credit risk, supported by most receiving a 20% simplified supervisory formula approach rating.

The following table presents the amortized cost and estimated fair value of HTM securities as of December 31, by contractual maturity (dollars in thousands). 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.

2025

2024

 

Carrying

 

Estimated

 

Carrying

 

Estimated

Value

Fair Value

Value

Fair Value

Due in one year or less

$

507

$

503

$

3,369

$

3,358

Due after one year through five years

18,813

19,150

18,293

18,547

Due after five years through ten years

222,284

216,095

115,243

109,358

Due after ten years

642,612

621,064

666,946

628,072

Total HTM securities

$

884,216

$

856,812

$

803,851

$

759,335

Refer to Note 10 “Commitments and Contingencies” in this Form 10-K for information regarding the estimated fair value of HTM securities that were pledged to secure public deposits as permitted or required by law as of December 31, 2025 and 2024.

Accrued interest receivable on HTM securities totaled $9.9 million and $8.4 million at December 31, 2025 and 2024, respectively, and is included in “Other assets” on the Company’s Consolidated Balance Sheets. For the years ended December 31, 2025, 2024, and 2023, accrued interest receivable write-offs were not material to the Company’s consolidated financial statements.

The Company’s HTM investment portfolio primarily consists of highly rated municipal securities and agency mortgage-backed securities. At December 31, 2025 and 2024, the Company’s HTM securities were all current, with no securities past due or on non-accrual. The Company’s HTM securities ACL was immaterial at December 31, 2025 and 2024.

Restricted Stock, at cost

The FHLB required the Bank to maintain stock in an amount equal to 4.75% of outstanding borrowings and a specific percentage of the member’s total assets at December 31, 2025 and 2024. The FRB requires the Company to maintain stock with a par value equal to 6% of its outstanding capital. At December 31, 2025 and 2024, restricted stock consists of FRB stock in the amount of $141.2 million and $82.9 million, respectively, and FHLB stock in the amount of $49.0 million and $20.1 million, respectively.

Tax Equity Investments

For the years ended December 31, 2025, 2024, and 2023, the Company recognized amortization of $10.8 million, $8.8 million, and $4.8 million, respectively, and tax credits and tax savings of $14.2 million, $10.3 million, and $5.7 million, respectively, associated with these investments within “Income tax expense” on the Company’s Consolidated Statements of Income. The carrying value of the Company’s investments in these tax equity investments was $136.5 million and $88.7 million at December 31, 2025 and 2024, respectively. At December 31, 2025 and 2024, the Company’s recorded liability totaled $91.5 million and $55.6 million, respectively, for the related unfunded commitments, which is expected to be paid throughout the years 2026 through 2043.

Realized Gains and Losses

The following table presents the gross realized gains and losses on and the proceeds from the sale of securities during the years ended December 31, (dollars in thousands):


		2025			2024			2023
Realized gains (losses): ⁽¹⁾
Gross realized gains		$	36		$	33		$	1,355
Gross realized losses			(117)			(6,526)			(42,344)
Net realized losses		$	(81)		$	(6,493)		$	(40,989)
Proceeds from sales of securities		$	630,097		$	642,985		$	899,872

⁽¹⁾ Includes gains (losses) on sales and calls of securities