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INVESTMENT SECURITIES | 9 Months Ended
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Sep. 30, 2025
Investments, Debt and Equity Securities [Abstract] |
INVESTMENT SECURITIES | INVESTMENT SECURITIES The amortized cost and fair value of AFS debt securities are presented in the table below. There was no ACL associated with the AFS portfolio at September 30, 2025 and December 31, 2024. Accrued interest receivable on AFS debt securities totaled $14.1 million at September 30, 2025 and $14.3 million at December 31, 2024, and is excluded from the estimate of credit losses and assessed separately in other assets in the Consolidated Balance Sheets. Accordingly, we have excluded accrued interest receivable from both the fair value and amortized cost basis of AFS debt securities. TABLE 3.1
(in millions) | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  |  |  | Fair Value
Debt Securities AFS: |  |  |  |  |  |  |  |  |
September 30, 2025 |  |  |  |  |  |  |  |  |
U.S. Treasury | $ | 274 |  |  | $ | 2 |  |  | $ | — |  |  |  |  | $ | 276 |
U.S. government agencies | 41 |  |  | — |  |  | — |  |  |  |  | 41 |
U.S. GSE | 332 |  |  | 1 |  |  | (1) |  |  |  |  | 332 |
Residential MBS: |  |  |  |  |  |  |  |  |
Agency MBS | 773 |  |  | 6 |  |  | (9) |  |  |  |  | 770 |
Agency CMO | 694 |  |  | — |  |  | (68) |  |  |  |  | 626 |
Agency commercial MBS | 1,510 |  |  | 17 |  |  | (17) |  |  |  |  | 1,510 |
States of the U.S. and political subdivisions (municipals) | 21 |  |  | — |  |  | (2) |  |  |  |  | 19 |
Other debt securities | 45 |  |  | 1 |  |  | — |  |  |  |  | 46 |
Total debt securities AFS | $ | 3,690 |  |  | $ | 27 |  |  | $ | (97) |  |  |  |  | $ | 3,620 |
(in millions) | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Debt Securities AFS: |  |  |  |  |  |  |
December 31, 2024 |  |  |  |  |  |  |
U.S. Treasury | $ | 274 |  |  | $ | 1 |  |  | $ | (1) |  |  | $ | 274 |
U.S. government agencies | 53 |  |  | — |  |  | — |  |  | 53 |
U.S. GSE | 302 |  |  | — |  |  | (2) |  |  | 300 |
Residential MBS: |  |  |  |  |  |  |
Agency MBS | 714 |  |  | — |  |  | (20) |  |  | 694 |
Agency CMO | 796 |  |  | — |  |  | (98) |  |  | 698 |
Agency commercial MBS | 1,420 |  |  | 3 |  |  | (35) |  |  | 1,388 |
States of the U.S. and political subdivisions (municipals) | 24 |  |  | — |  |  | (2) |  |  | 22 |
Other debt securities | 37 |  |  | — |  |  | — |  |  | 37 |
Total debt securities AFS | $ | 3,620 |  |  | $ | 4 |  |  | $ | (158) |  |  | $ | 3,466 |
The amortized cost and fair value of HTM debt securities are presented in the following table. The ACL for the HTM portfolio was $0.15 million and $0.25 million at September 30, 2025 and December 31, 2024, respectively. Accrued interest receivable on HTM debt securities totaled $14.4 million and $14.6 million at September 30, 2025 and December 31, 2024, respectively, and is excluded from the estimate of credit losses and assessed separately in other assets in the Consolidated Balance Sheets. Accordingly, we have excluded accrued interest receivable from both the fair value and amortized cost basis of HTM debt securities. TABLE 3.2
(in millions) | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  |
Debt Securities HTM: |  |  |  |  |  |  |  |  |
September 30, 2025 |  |  |  |  |  |  |  |  |
U.S. Treasury | $ | 1 |  |  | $ | — |  |  | $ | — |  |  | $ | 1 |  |  |
Residential MBS: |  |  |  |  |  |  |  |  |
Agency MBS | 821 |  |  | 2 |  |  | (62) |  |  | 761 |  |  |
Agency CMO | 637 |  |  | — |  |  | (68) |  |  | 569 |  |  |
Agency commercial MBS | 1,595 |  |  | 16 |  |  | (22) |  |  | 1,589 |  |  |
States of the U.S. and political subdivisions (municipals) | 984 |  |  | 1 |  |  | (77) |  |  | 908 |  |  |
Other debt securities | 11 |  |  | — |  |  | (1) |  |  | 10 |  |  |
Total debt securities HTM | $ | 4,049 |  |  | $ | 19 |  |  | $ | (230) |  |  | $ | 3,838 |  |  |
(in millions) | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  |
Debt Securities HTM: |  |  |  |  |  |  |  |  |
December 31, 2024 |  |  |  |  |  |  |  |  |
U.S. Treasury | $ | 1 |  |  | $ | — |  |  | $ | — |  |  | $ | 1 |  |  |
U.S. GSE | 29 |  |  | — |  |  | — |  |  | 29 |  |  |
Residential MBS: |  |  |  |  |  |  |  |  |
Agency MBS | 901 |  |  | 1 |  |  | (96) |  |  | 806 |  |  |
Agency CMO | 714 |  |  | — |  |  | (95) |  |  | 619 |  |  |
Agency commercial MBS | 1,326 |  |  | 2 |  |  | (44) |  |  | 1,284 |  |  |
States of the U.S. and political subdivisions (municipals) | 992 |  |  | — |  |  | (103) |  |  | 889 |  |  |
Other debt securities | 16 |  |  | — |  |  | — |  |  | 16 |  |  |
Total debt securities HTM | $ | 3,979 |  |  | $ | 3 |  |  | $ | (338) |  |  | $ | 3,644 |  |  |
There were no significant gross gains or gross losses realized on investment securities during the nine months ended September 30, 2025 or 2024. Net unrealized losses on the AFS and HTM portfolios are primarily due to the increase in market interest rates since the time of purchase, with 86.2% of these securities backed or sponsored by the U.S. government as of September 30, 2025. As of September 30, 2025, the amortized cost and fair value of debt securities, by contractual maturities, were as follows: TABLE 3.3
| Available for Sale |  | Held to Maturity
(in millions) | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Due in one year or less | $ | 206 |  |  | $ | 206 |  |  | $ | 4 |  |  | $ | 5 |
Due after one year but within five years | 424 |  |  | 425 |  |  | 89 |  |  | 86 |
Due after five years but within ten years | 62 |  |  | 63 |  |  | 239 |  |  | 229 |
Due after ten years | 21 |  |  | 20 |  |  | 664 |  |  | 599 |
| 713 |  |  | 714 |  |  | 996 |  |  | 919 |
Residential MBS: |  |  |  |  |  |  |
Agency MBS | 773 |  |  | 770 |  |  | 821 |  |  | 761 |
Agency CMO | 694 |  |  | 626 |  |  | 637 |  |  | 569 |
Agency commercial MBS | 1,510 |  |  | 1,510 |  |  | 1,595 |  |  | 1,589 |
Total debt securities | $ | 3,690 |  |  | $ | 3,620 |  |  | $ | 4,049 |  |  | $ | 3,838 |
Actual maturities may differ from contractual terms because security issuers may have the right to call or prepay obligations with or without penalties. Periodic principal payments are received on residential MBS based on the payment patterns of the underlying collateral. Following is information relating to investment securities pledged: TABLE 3.4
(dollars in millions) | September 30, 2025 |  | December 31, 2024
Securities pledged (carrying value): |  |  |
To secure public deposits, trust deposits and for other purposes as required by law | $ | 6,272 |  |  | $ | 6,271 |
As collateral for short-term borrowings | 163 |  |  | 182 |
Securities pledged as a percent of total securities | 83.9 | % |  | 86.7 | %
Following are summaries of the fair values of AFS debt securities in an unrealized loss position for which an ACL has not been recorded, segregated by security type and length of time in a continuous loss position: TABLE 3.5
| Less than 12 Months |  | 12 Months or More |  | Total
(dollars in millions) | # |  | Fair Value |  | Unrealized Losses |  | # |  | Fair Value |  | Unrealized Losses |  | # |  | Fair Value |  | Unrealized Losses
Debt Securities AFS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
September 30, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies | 7 |  |  | $ | 12 |  |  | $ | — |  |  | 10 |  |  | $ | 19 |  |  | $ | — |  |  | 17 |  |  | $ | 31 |  |  | $ | — |
U.S. GSE | 1 |  |  | 30 |  |  | — |  |  | 5 |  |  | 101 |  |  | (1) |  |  | 6 |  |  | 131 |  |  | (1) |
Residential MBS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency MBS | 2 |  |  | 50 |  |  | — |  |  | 92 |  |  | 276 |  |  | (9) |  |  | 94 |  |  | 326 |  |  | (9) |
Agency CMO | — |  |  | — |  |  | — |  |  | 65 |  |  | 626 |  |  | (68) |  |  | 65 |  |  | 626 |  |  | (68) |
Agency commercial MBS | 3 |  |  | 90 |  |  | — |  |  | 24 |  |  | 435 |  |  | (17) |  |  | 27 |  |  | 525 |  |  | (17) |
States of the U.S. and political subdivisions (municipals) | — |  |  | — |  |  | — |  |  | 9 |  |  | 19 |  |  | (2) |  |  | 9 |  |  | 19 |  |  | (2) |
Other debt securities | 1 |  |  | 4 |  |  | — |  |  | 3 |  |  | 9 |  |  | — |  |  | 4 |  |  | 13 |  |  | — |
Total | 14 |  |  | $ | 186 |  |  | $ | — |  |  | 208 |  |  | $ | 1,485 |  |  | $ | (97) |  |  | 222 |  |  | $ | 1,671 |  |  | $ | (97) |
| Less than 12 Months |  | 12 Months or More |  | Total
(dollars in millions) | # |  | Fair Value |  | Unrealized Losses |  | # |  | Fair Value |  | Unrealized Losses |  | # |  | Fair Value |  | Unrealized Losses
Debt Securities AFS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury | 3 |  |  | $ | 74 |  |  | $ | (1) |  |  | 2 |  |  | $ | 75 |  |  | $ | — |  |  | 5 |  |  | $ | 149 |  |  | $ | (1) |
U.S. government agencies | 6 |  |  | 11 |  |  | — |  |  | 12 |  |  | 25 |  |  | — |  |  | 18 |  |  | 36 |  |  | — |
U.S. GSE | 2 |  |  | 75 |  |  | — |  |  | 7 |  |  | 126 |  |  | (2) |  |  | 9 |  |  | 201 |  |  | (2) |
Residential MBS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency MBS | 9 |  |  | 235 |  |  | (1) |  |  | 92 |  |  | 355 |  |  | (19) |  |  | 101 |  |  | 590 |  |  | (20) |
Agency CMO | — |  |  | — |  |  | — |  |  | 66 |  |  | 698 |  |  | (98) |  |  | 66 |  |  | 698 |  |  | (98) |
Agency commercial MBS | 23 |  |  | 709 |  |  | (8) |  |  | 20 |  |  | 359 |  |  | (27) |  |  | 43 |  |  | 1,068 |  |  | (35) |
States of the U.S. and political subdivisions (municipals) | — |  |  | — |  |  | — |  |  | 10 |  |  | 22 |  |  | (2) |  |  | 10 |  |  | 22 |  |  | (2) |
Other debt securities | — |  |  | — |  |  | — |  |  | 4 |  |  | 10 |  |  | — |  |  | 4 |  |  | 10 |  |  | — |
Total | 43 |  |  | $ | 1,104 |  |  | $ | (10) |  |  | 213 |  |  | $ | 1,670 |  |  | $ | (148) |  |  | 256 |  |  | $ | 2,774 |  |  | $ | (158) |
We evaluated the AFS debt securities that were in an unrealized loss position at September 30, 2025. Based on the credit ratings and/or implied government guarantee for these securities, we concluded the loss position is temporary and caused by the significant movement of interest rates since 2022 and does not reflect any expected credit losses. We do not intend to sell these AFS debt securities and it is not more likely than not that we will be required to sell these securities before the recovery of their amortized cost basis. Credit Quality Indicators We use credit ratings and the most recent financial information to help evaluate the credit quality of our credit-related AFS and HTM securities portfolios. Management reviews the credit profile of each issuer on an annual basis, and more frequently as needed. Based on the nature of the issuers and current conditions, we have determined that investment securities backed by the U.S. Department of the Treasury, Fannie Mae, Freddie Mac, FHLB, Ginnie Mae, and the SBA have zero expected credit loss. Our municipal bond portfolio, with a carrying amount of $1.0 billion as of September 30, 2025 is highly rated with an average rating of AA and 98% of the portfolio is rated A or better. All of the investment securities in the municipal portfolio are general obligation bonds. Geographically, municipal bonds support our primary footprint as 59% of the securities are from municipalities located in the primary states within which we conduct business. The average holding size of the securities in the municipal bond portfolio is $2.5 million. The ACL on the HTM municipal bond portfolio is calculated on each bond using: •The bond’s underlying credit rating, time to maturity and exposure amount; •Credit enhancements that improve the bond’s credit rating (e.g., insurance); and •Moody’s U.S. Municipal Bond Default and Recovery Rates, 1970-2024. By using these components, we derive the expected credit loss on the HTM general obligation municipal bond portfolio. We further refine the expected credit loss by factoring in economic forecast data using our Commercial and Industrial Non-Manufacturing loan portfolio forecast adjustment as derived through our assessment of the loan portfolio as a proxy for our municipal bond portfolio. Our corporate bond portfolio, with a carrying amount of $57.3 million as of September 30, 2025 consists of debentures of banks and bank holding companies. The average holding size of the securities in the corporate bond portfolio is $3.4 million. The ACL on the HTM corporate bond portfolio is calculated using: •The bond’s credit rating, time to maturity and exposure amount; •Moody’s Annual Default Study, 02/28/2025; and •The most recent financial statements. By using these components, we derive the expected credit loss on the HTM corporate bond portfolio. We further refine the expected credit loss by factoring in economic forecast data using our bank-wide loan portfolio forecast adjustment as derived through our assessment of FNBPA's loan portfolio as a proxy for our corporate bond portfolio. For the year-to-date periods ending September 30, 2025 and 2024, we had no significant provision expense and no charge-offs or recoveries for the investment securities portfolio. The ACL on the HTM portfolio was $0.15 million, consisting of $0.07 million relating to the municipal bond portfolio and $0.09 million relating to other debt securities, as of September 30, 2025, and $0.07 million relating to the municipal bond portfolio and $0.18 million relating to other debt securities as of December 31, 2024. The AFS securities portfolios did not have an ACL at September 30, 2025 or December 31, 2024 and there were no investment securities that were past due or on non-accrual at either date.

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