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Investment Securities | 12 Months Ended
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Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | Investment Securities The amortized cost and estimated fair value of investment securities that are classified as available-for-sale and held-to-maturity are as follows:
| December 31, 2023
| Available-for-Sale
| Amortized Cost |  | Allowance for Credit Losses |  | Net Carrying Amount |  | Gross Unrealized Gains |  | Gross Unrealized (Losses) |  | Estimated Fair Value
| (In thousands)
U.S. government-sponsored enterprises | $ | 361,494 |  |  | $ | — |  |  | $ | 361,494 |  |  | $ | 2,247 |  |  | $ | (17,093) |  |  | $ | 346,648 |
U.S. government-sponsored mortgage-backed securities | 1,711,668 |  |  | — |  |  | 1,711,668 |  |  | 310 |  |  | (191,557) |  |  | 1,520,421 |
Private mortgage-backed securities | 191,522 |  |  | — |  |  | 191,522 |  |  | — |  |  | (16,117) |  |  | 175,405 |
Non-government-sponsored asset backed securities | 370,203 |  |  | — |  |  | 370,203 |  |  | 821 |  |  | (7,551) |  |  | 363,473 |
State and political subdivisions | 990,318 |  |  | — |  |  | 990,318 |  |  | 1,938 |  |  | (75,931) |  |  | 916,325 |
Other securities | 215,722 |  |  | (2,525) |  |  | 213,197 |  |  | 402 |  |  | (28,030) |  |  | 185,569 |
Total | $ | 3,840,927 |  |  | $ | (2,525) |  |  | $ | 3,838,402 |  |  | $ | 5,718 |  |  | $ | (336,279) |  |  | $ | 3,507,841 |
| December 31, 2023
| Held-to-Maturity
| Amortized Cost |  | Allowance for Credit Losses |  | Net Carrying Amount |  | Gross Unrealized Gains |  | Gross Unrealized (Losses) |  | Estimated Fair Value
| (In thousands)
U.S. government-sponsored enterprises | $ | 43,285 |  |  | $ | — |  |  | $ | 43,285 |  |  | $ | — |  |  | $ | (2,607) |  |  | $ | 40,678 |
U.S. government-sponsored mortgage-backed securities | 130,278 |  |  | — |  |  | 130,278 |  |  | 106 |  |  | (4,362) |  |  | 126,022 |
State and political subdivisions | 1,110,424 |  |  | (2,005) |  |  | 1,108,419 |  |  | 456 |  |  | (105,094) |  |  | 1,003,781 |
Total | $ | 1,283,987 |  |  | $ | (2,005) |  |  | $ | 1,281,982 |  |  | $ | 562 |  |  | $ | (112,063) |  |  | $ | 1,170,481 |
| December 31, 2022
| Available-for-Sale
| Amortized Cost |  | Allowance for Credit Losses |  | Net Carrying Amount |  | Gross Unrealized Gains |  | Gross Unrealized (Losses) |  | Estimated Fair Value
| (In thousands)
U.S. government-sponsored enterprises | $ | 682,316 |  |  | $ | — |  |  | $ | 682,316 |  |  | $ | 2,713 |  |  | $ | (23,209) |  |  | $ | 661,820 |
U.S. government-sponsored mortgage-backed securities | 1,900,796 |  |  | — |  |  | 1,900,796 |  |  | 71 |  |  | (215,405) |  |  | 1,685,462 |
Private mortgage-backed securities | 197,435 |  |  | — |  |  | 197,435 |  |  | — |  |  | (18,302) |  |  | 179,133 |
Non-government-sponsored asset backed securities | 428,933 |  |  | — |  |  | 428,933 |  |  | 95 |  |  | (14,654) |  |  | 414,374 |
State and political subdivisions | 1,021,188 |  |  | (842) |  |  | 1,020,346 |  |  | 1,649 |  |  | (115,698) |  |  | 906,297 |
Other securities | 214,952 |  |  | — |  |  | 214,952 |  |  | 251 |  |  | (20,699) |  |  | 194,504 |
Total | $ | 4,445,620 |  |  | $ | (842) |  |  | $ | 4,444,778 |  |  | $ | 4,779 |  |  | $ | (407,967) |  |  | $ | 4,041,590 |
| December 31, 2022
| Held-to-Maturity
| Amortized Cost |  | Allowance for Credit Losses |  | Net Carrying Amount |  | Gross Unrealized Gains |  | Gross Unrealized (Losses) |  | Estimated Fair Value
| (In thousands)
U.S. government-sponsored enterprises | $ | 43,017 |  |  | $ | — |  |  | $ | 43,017 |  |  | $ | — |  |  | $ | (3,349) |  |  | $ | 39,668 |
U.S. government-sponsored mortgage-backed securities | 135,000 |  |  | — |  |  | 135,000 |  |  | 131 |  |  | (3,756) |  |  | 131,375 |
State and political subdivisions | 1,111,693 |  |  | (2,005) |  |  | 1,109,688 |  |  | 65 |  |  | (154,650) |  |  | 955,103 |
Total | $ | 1,289,710 |  |  | $ | (2,005) |  |  | $ | 1,287,705 |  |  | $ | 196 |  |  | $ | (161,755) |  |  | $ | 1,126,146 |
On April 1, 2022, the Company completed the acquisition of Happy. Including the effects of the purchase accounting adjustments, as of the acquisition date, Happy had approximately $1.78 billion in investments, net of purchase accounting adjustments. The Company classified approximately $1.12 billion of investments acquired from Happy as held-to-maturity at the acquisition date. Assets, principally investment securities, having a fair value of approximately $3.57 billion and $2.35 billion at December 31, 2023 and 2022, respectively, were pledged to secure public deposits and for other purposes required or permitted by law. Also, investment securities pledged as collateral for repurchase agreements totaled approximately $142.1 million and $131.1 million at December 31, 2023 and 2022, respectively. The amortized cost and estimated fair value of securities classified as available-for-sale and held-to-maturity at December 31, 2023, by contractual maturity, are shown below. Expected maturities could differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.
| Available-for-Sale |  | Held-to-Maturity
| Amortized Cost |  | Estimated Fair Value |  | Amortized Cost |  | Estimated Fair Value
| (In thousands)
Due in one year or less | $ | 19,327 |  |  | $ | 19,140 |  |  | $ | — |  |  | $ | — |
Due after one year through five years | 224,786 |  |  | 211,009 |  |  | 27,498 |  |  | 26,042 |
Due after five years through ten years | 401,003 |  |  | 358,789 |  |  | 305,944 |  |  | 278,676 |
Due after ten years | 922,418 |  |  | 859,604 |  |  | 820,267 |  |  | 739,741 |
U.S. government-sponsored mortgage-backed securities | 1,711,668 |  |  | 1,520,421 |  |  | 130,278 |  |  | 126,022 |
Private mortgage-backed securities | 191,522 |  |  | 175,405 |  |  | — |  |  | — |
Non-government-sponsored asset backed securities | 370,203 |  |  | 363,473 |  |  | — |  |  | — |
Total | $ | 3,840,927 |  |  | $ | 3,507,841 |  |  | $ | 1,283,987 |  |  | $ | 1,170,481 |
During the year ended December 31, 2023, no available-for-sale securities were sold. During the year ended December 31, 2022, $67.3 million in available-for-sale securities were sold, and no gain or loss was recognized. During the year ended December 31, 2021, $17.9 million in available-for-sale securities were sold, and the gross realized gains on the sales totaled $219,000. The income tax expense/benefit to net security gains and losses was 25.740% of the gross amounts. The following shows gross unrealized losses and estimated fair value of investment securities classified as available-for-sale and held-to-maturity, aggregated by investment category and length of time that individual investment securities have been in a continuous loss position as of December 31, 2023 and 2022:
| December 31, 2023
| Less Than 12 Months |  | 12 Months or More |  | Total
| Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
| (In thousands)
Available-for-sale: |  |  |  |  |  |  |  |  |  |  |
U.S. government-sponsored enterprises | $ | 2,742 |  |  | $ | (2) |  |  | $ | 180,569 |  |  | $ | (17,091) |  |  | $ | 183,311 |  |  | $ | (17,093) |
U.S. government-sponsored mortgage-backed securities | 102,831 |  |  | (2,166) |  |  | 1,392,318 |  |  | (189,391) |  |  | 1,495,149 |  |  | (191,557) |
Private mortgage-backed securities | 9,298 |  |  | (226) |  |  | 166,107 |  |  | (15,891) |  |  | 175,405 |  |  | (16,117) |
Non-government-sponsored asset backed securities | — |  |  | — |  |  | 213,838 |  |  | (7,551) |  |  | 213,838 |  |  | (7,551) |
State and political subdivisions | 28,596 |  |  | (400) |  |  | 769,860 |  |  | (75,531) |  |  | 798,456 |  |  | (75,931) |
Other securities | — |  |  | — |  |  | 164,430 |  |  | (28,030) |  |  | 164,430 |  |  | (28,030) |
Total | $ | 143,467 |  |  | $ | (2,794) |  |  | $ | 2,887,122 |  |  | $ | (333,485) |  |  | $ | 3,030,589 |  |  | $ | (336,279) |
Held-to-maturity: |  |  |  |  |  |  |  |  |  |  |
U.S. government-sponsored enterprises | $ | — |  |  | $ | — |  |  | $ | 40,677 |  |  | $ | (2,607) |  |  | $ | 40,677 |  |  | $ | (2,607) |
U.S. government-sponsored mortgage-backed securities | 48,498 |  |  | (861) |  |  | 65,573 |  |  | (3,501) |  |  | 114,071 |  |  | (4,362) |
State and political subdivisions | 21,493 |  |  | (297) |  |  | 956,578 |  |  | (104,797) |  |  | 978,071 |  |  | (105,094) |
Total | $ | 69,991 |  |  | $ | (1,158) |  |  | $ | 1,062,828 |  |  | $ | (110,905) |  |  | $ | 1,132,819 |  |  | $ | (112,063) |
| December 31, 2022
| Less Than 12 Months |  | 12 Months or More |  | Total
| Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
| (In thousands)
Available-for-sale: |  |  |  |  |  |  |  |  |  |  |
U.S. government-sponsored enterprises | $ | 315,531 |  |  | $ | (3,056) |  |  | $ | 128,527 |  |  | $ | (20,153) |  |  | $ | 444,058 |  |  | $ | (23,209) |
U.S. government-sponsored mortgage-backed securities | 850,268 |  |  | (46,505) |  |  | 807,566 |  |  | (168,900) |  |  | 1,657,834 |  |  | (215,405) |
Private mortgage-backed securities | 179,133 |  |  | (18,302) |  |  | — |  |  | — |  |  | 179,133 |  |  | (18,302) |
Non-government-sponsored asset backed securities | 285,724 |  |  | (9,726) |  |  | 39,133 |  |  | (4,928) |  |  | 324,857 |  |  | (14,654) |
State and political subdivisions | 485,817 |  |  | (50,484) |  |  | 338,638 |  |  | (65,214) |  |  | 824,455 |  |  | (115,698) |
Other securities | 138,976 |  |  | (15,314) |  |  | 34,423 |  |  | (5,385) |  |  | 173,399 |  |  | (20,699) |
Total | $ | 2,255,449 |  |  | $ | (143,387) |  |  | $ | 1,348,287 |  |  | $ | (264,580) |  |  | $ | 3,603,736 |  |  | $ | (407,967) |
Held-to-maturity: |  |  |  |  |  |  |  |  |  |  |
U.S. government-sponsored enterprises | $ | 39,668 |  |  | $ | (3,349) |  |  | $ | — |  |  | $ | — |  |  | $ | 39,668 |  |  | $ | (3,349) |
U.S. government-sponsored mortgage-backed securities | 106,840 |  |  | (3,756) |  |  | — |  |  | — |  |  | 106,840 |  |  | (3,756) |
State and political subdivisions | 955,563 |  |  | (154,650) |  |  | — |  |  | — |  |  | 955,563 |  |  | (154,650) |
Total | $ | 1,102,071 |  |  | $ | (161,755) |  |  | $ | — |  |  | $ | — |  |  | $ | 1,102,071 |  |  | $ | (161,755) |
Debt securities available-for-sale ("AFS") are reported at fair value with unrealized holding gains and losses reported as a separate component of stockholders’ equity and other comprehensive income (loss), net of taxes. Securities that are held as available-for-sale are used as a part of our asset/liability management strategy. Securities that may be sold in response to interest rate changes, changes in prepayment risk, the need to increase regulatory capital, and other similar factors are classified as available-for-sale. The Company evaluates all securities quarterly to determine if any securities in a loss position require a provision for credit losses in accordance with ASC 326, Measurement of Credit Losses on Financial Instruments ("ASC 326"). The Company first assesses whether it intends to sell or is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For securities that do not meet these criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, and changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. The Company has made the election to exclude accrued interest receivable on AFS securities from the estimate of credit losses and report accrued interest separately on the consolidated balance sheets. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of a security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Debt securities held-to-maturity ("HTM"), which include any security for which we have the positive intent and ability to hold until maturity, are reported at historical cost adjusted for amortization of premiums and accretion of discounts. Premiums and discounts are amortized/accreted to the call date to interest income using the constant effective yield method over the estimated life of the security. The Company evaluates all securities quarterly to determine if any securities in a loss position require a provision for credit losses in accordance with ASC 326. The Company measures expected credit losses on HTM securities on a collective basis by major security type, with each type sharing similar risk characteristics. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The Company has made the election to exclude accrued interest receivable on HTM securities from the estimate of credit losses and report accrued interest separately on the consolidated balance sheets. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of a security is confirmed. During the year ended December 31, 2023, one of the Company’s AFS subordinated debt investment securities was downgraded below investment grade. As result, the Company wrote down the value of the investment to its unrealized loss position, which required a $1.7 million provision. The remaining $842,000 allowance for credit losses on AFS investments is associated with certain securities in the subordinated debt portfolio within the banking sector. These investments are classified within the other securities category of the AFS portfolio. The $2.0 million allowance for credit losses for the held-to-maturity portfolio was considered adequate. No additional provision for credit losses was considered necessary for the HTM portfolio.
Available-for-Sale Investment Securities
| Years Ended December 31,
| 2023 |  | 2022 |  | 2021
| (In thousands) |  |
Allowance for credit losses: |  |  |  |  |
Beginning balance | $ | 842 |  |  | $ | 842 |  |  | $ | 842 |
Provision for credit loss | 1,683 |  |  | — |  |  | — |
Ending balance, December 31, | $ | 2,525 |  |  | $ | 842 |  |  | $ | 842 |
Held-to-Maturity Investment Securities
| Years Ended December 31,
| 2023 |  | 2022 |  | 2021
Allowance for credit losses: | (In thousands)
Beginning balance | $ | 2,005 |  |  | $ | — |  |  | $ | — |
Provision for credit loss - acquired securities | — |  |  | 2,005 |  |  | — |
Securities charged-off | — |  |  | — |  |  | — |
Recoveries | — |  |  | — |  |  | — |
Ending balance, December 31, | $ | 2,005 |  |  | $ | 2,005 |  |  | $ | — |
For the year ended December 31, 2023, the Company had available-for-sale investment securities with approximately $333.5 million in unrealized losses, which have been in continuous loss positions for more than twelve months. With the exception of the securities with credit losses noted above, the Company’s assessments indicated that the cause of the market depreciation was primarily due to the change in interest rates and not the issuer’s financial condition, or downgrades by rating agencies. In addition, approximately 30.4% of the Company’s available-for-sale investment portfolio will mature or are expected to pay down within five years or less. As a result, the Company has the ability and intent to hold such securities until maturity. For the year ended December 31, 2022, the Company had available-for-sale investment securities with approximately $264.6 million in unrealized losses, which had been in continuous loss positions for more than twelve months. The Company’s assessments indicated that the cause of the market depreciation was primarily due to the change in interest rates and not the issuer’s financial condition, or downgrades by rating agencies. In addition, approximately 33.0% of the Company’s available-for-sale investment portfolio was expected to mature or pay down within five years or less. As a result, the Company has the ability and intent to hold such securities until maturity. As of December 31, 2023, the Company's available-for-sale securities portfolio consisted of 1,583 investment securities, 1,296 of which were in an unrealized loss position. As noted in the table above, the total amount of the unrealized loss was $336.3 million. The U.S government-sponsored enterprises portfolio contained unrealized losses of $17.1 million on 59 securities. The U.S. government-sponsored mortgage-backed securities portfolio contained $191.6 million of unrealized losses on 669 securities, and the private mortgage-backed securities portfolio contained $16.1 million of unrealized losses on 32 securities. The non-government-sponsored asset backed securities portfolio contained $7.6 million of unrealized losses on 31 securities. The state and political subdivisions portfolio contained. In addition, the other securities portfolio contained $75.9 million of unrealized losses on 444 securities. In addition, the other securities portfolio contained $28.0 million of unrealized losses on 61 securities. With the exception of the investments for which an allowance for credit losses has been established, the unrealized losses on the Company's investments were primarily a result of interest rate changes, and the Company expects to recover the amortized cost basis over the term of the securities. The Company has determined that, as of December 31, 2023, an additional provision for credit losses is not necessary because the decline in market value was attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. As of December 31, 2023, the Company's held-to-maturity securities portfolio consisted of 507 investment securities, 486 of which were in an unrealized loss position. As noted in the table above, the total amount of the unrealized loss was $112.1 million. The U.S. government-sponsored enterprises portfolio contained unrealized losses of $2.6 million on 5 securities. The U.S. government-sponsored mortgage-backed securities portfolio contained $4.4 million of unrealized losses on 18 securities. The state and political subdivisions portfolio contained $105.1 million of unrealized losses on 463 securities. The unrealized losses on the Company's held-to-maturity investments were a result of interest rate changes. The Company expects to recover the amortized cost basis over the term of the securities. Because the decline in market value was attributable to changes in interest rates and not credit quality, the Company has determined that an additional provision for credit losses is not necessary as of December 31, 2023. The following table summarizes bond ratings for the Company's held-to-maturity portfolio, based upon amortized cost, issued by state and political subdivisions and other securities as of December 31, 2023:
| State and Political Subdivisions |  | U.S. government-sponsored enterprises |  | U.S. government-sponsored mortgage-backed securities |  | Total
| (In thousands)
Aaa/AAA | $ | 235,557 |  |  | $ | 43,285 |  |  | $ | — |  |  | $ | 278,842 |
Aa/AA | 845,418 |  |  | — |  |  | — |  |  | 845,418 |
A | 27,667 |  |  | — |  |  | — |  |  | 27,667 |
Not rated | 1,782 |  |  | — |  |  | — |  |  | 1,782 |
Agency Backed | — |  |  | — |  |  | 130,278 |  |  | 130,278 |
Total | $ | 1,110,424 |  |  | $ | 43,285 |  |  | $ | 130,278 |  |  | $ | 1,283,987 |
Income earned on securities for the years ended is as follows:
| December 31,
| 2023 |  | 2022 |  | 2021
| (In thousands)
Taxable: |  |  |  |  |
Available-for-sale | $ | 108,650 |  |  | $ | 71,352 |  |  | $ | 30,054 |
Held-to-maturity | 29,925 |  |  | 20,581 |  |  | — |
Tax-exempt: |  |  |  |  |
Available-for-sale | 19,104 |  |  | 19,168 |  |  | 19,642 |
Held-to-maturity | 12,514 |  |  | 9,188 |  |  | — |
Total | $ | 170,193 |  |  | $ | 120,289 |  |  | $ | 49,696 |

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