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Investment Securities | 3 Months Ended
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Mar. 31, 2021
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | Investment Securities Investment securities are designated as AFS, HTM, or equity on the consolidated balance sheets at the time of purchase. The amortized cost and fair values of AFS and HTM securities at March 31, 2022 were as follows:
($ in Thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized (Losses) | Fair Value
Investment securities AFS |  |  |  |
U. S. Treasury securities | $ | 124,328 |  | $ | — |  | $ | (8,196) |  | $ | 116,132 |
Agency securities | 15,000 |  | — |  | (800) |  | 14,200 |
Obligations of state and political subdivisions (municipal securities) | 368,831 |  | 3,764 |  | (195) |  | 372,401 |
Residential mortgage-related securities |  |  |  |
FNMA / FHLMC | 1,993,893 |  | 937 |  | (100,011) |  | 1,894,819 |
GNMA | 59,470 |  | 166 |  | (726) |  | 58,909 |
Commercial mortgage-related securities |  |  |  |
FNMA / FHLMC | 19,290 |  | 496 |  | — |  | 19,786 |
GNMA | 128,019 |  | 18 |  | (1,278) |  | 126,760 |
Asset backed securities |  |  |  |
FFELP | 173,068 |  | — |  | (4,090) |  | 168,978 |
SBA | 5,865 |  | 33 |  | (53) |  | 5,845 |
Other debt securities | 3,000 |  | — |  | (27) |  | 2,973 |
Total investment securities AFS | $ | 2,890,763 |  | $ | 5,416 |  | $ | (115,376) |  | $ | 2,780,803 |
Investment securities HTM |  |  |  |
U. S. Treasury securities | $ | 998 |  | $ | — |  | $ | (34) |  | $ | 964 |
Obligations of state and political subdivisions (municipal securities) | 1,696,536 |  | 32,201 |  | (80,896) |  | 1,647,842 |
Residential mortgage-related securities |  |  |  |
FNMA / FHLMC | 956,470 |  | 35,739 |  | (72,418) |  | 919,790 |
GNMA | 44,742 |  | 116 |  | (643) |  | 44,215 |
Private-label | 384,016 |  | 13,460 |  | (28,955) |  | 368,521 |
Commercial mortgage-related securities |  |  |  |
FNMA/FHLMC | 764,775 |  | 17,620 |  | (88,784) |  | 693,610 |
GNMA | 92,383 |  | 1,032 |  | (3,456) |  | 89,959 |
Total investment securities HTM | $ | 3,939,920 |  | $ | 100,167 |  | $ | (275,186) |  | $ | 3,764,901 |
During the first quarter of 2022, the Corporation redesignated approximately $1.6 billion of mortgage-related securities from AFS to HTM. The reclassification of these investment securities was accounted for at fair value. Management elected to transfer these investment securities as the Corporation has the positive intent and ability to hold these investment securities to maturity. See Note 16 for additional information on the unrealized losses on investment securities transferred from AFS to HTM. The amortized cost and fair values of AFS and HTM securities at December 31, 2021 were as follows:
($ in Thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized (Losses) | Fair Value
Investment securities AFS |  |  |  |
U. S. Treasury securities | $ | 124,291 |  | $ | — |  | $ | (1,334) |  | $ | 122,957 |
Agency securities | 15,000 |  | — |  | (103) |  | 14,897 |
Obligations of state and political subdivisions (municipal securities) | 381,517 |  | 18,940 |  | — |  | 400,457 |
Residential mortgage-related securities |  |  |  |
FNMA / FHLMC | 2,709,399 |  | 3,729 |  | (21,249) |  | 2,691,879 |
GNMA | 66,189 |  | 1,591 |  | — |  | 67,780 |
Private-label | 332,028 |  | 31 |  | (2,335) |  | 329,724 |
Commercial mortgage-related securities |  |  |  |
FNMA / FHLMC | 357,240 |  | 2,686 |  | (9,302) |  | 350,623 |
GNMA | 165,439 |  | 1,360 |  | — |  | 166,799 |
Asset backed securities |  |  |  |
FFELP | 177,974 |  | 475 |  | (1,123) |  | 177,325 |
SBA | 6,594 |  | 39 |  | (54) |  | 6,580 |
Other debt securities | 3,000 |  | — |  | (6) |  | 2,994 |
Total investment securities AFS | $ | 4,338,671 |  | $ | 28,850 |  | $ | (35,506) |  | $ | 4,332,015 |
Investment securities HTM |  |  |  |
U. S. Treasury securities | $ | 1,000 |  | $ | 1 |  | $ | — |  | $ | 1,001 |
Obligations of state and political subdivisions (municipal securities) | 1,628,759 |  | 113,179 |  | (1,951) |  | 1,739,988 |
Residential mortgage-related securities |  |  |  |
FNMA / FHLMC | 34,347 |  | 1,792 |  | — |  | 36,139 |
GNMA | 48,053 |  | 1,578 |  | — |  | 49,631 |
Commercial mortgage-related securities |  |  |  |
FNMA / FHLMC | 425,937 |  | 122 |  | (6,659) |  | 419,400 |
GNMA | 100,907 |  | 1,799 |  | (200) |  | 102,506 |
Total investment securities HTM | $ | 2,239,003 |  | $ | 118,471 |  | $ | (8,809) |  | $ | 2,348,664 |
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. The expected maturities of AFS and HTM securities at March 31, 2022, are shown below:
| AFS | HTM
($ in Thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value
Due in one year or less | $ | 5,167 |  | $ | 5,171 |  | $ | 18,432 |  | $ | 18,503 |
Due after one year through five years | 89,914 |  | 87,185 |  | 34,156 |  | 34,343 |
Due after five years through ten years | 378,692 |  | 374,733 |  | 163,456 |  | 164,057 |
Due after ten years | 37,386 |  | 38,617 |  | 1,481,489 |  | 1,431,903 |
Total debt securities | 511,159 |  | 505,706 |  | 1,697,534 |  | 1,648,806 |
Residential mortgage-related securities |  |  |  |
FNMA / FHLMC | 1,993,893 |  | 1,894,819 |  | 956,470 |  | 919,790 |
GNMA | 59,470 |  | 58,909 |  | 44,742 |  | 44,215 |
Private-label | — |  | — |  | 384,016 |  | 368,521 |
Commercial mortgage-related securities |  |  |  |
FNMA / FHLMC | 19,290 |  | 19,786 |  | 764,775 |  | 693,610 |
GNMA | 128,019 |  | 126,760 |  | 92,383 |  | 89,959 |
Asset backed securities |  |  |  |
FFELP | 173,068 |  | 168,978 |  | — |  | — |
SBA | 5,865 |  | 5,845 |  | — |  | — |
Total investment securities | $ | 2,890,763 |  | $ | 2,780,803 |  | $ | 3,939,920 |  | $ | 3,764,901 |
Ratio of fair value to amortized cost |  | 96.2 | % |  | 95.6 | %
On a quarterly basis, the Corporation refreshes the credit quality of each HTM security. The following table summarizes the credit quality indicators of HTM securities at amortized cost at March 31, 2022:
($ in Thousands) | AAA | AA | A |  |  |  | Not Rated | Total
U. S. Treasury securities | $ | 998 |  | $ | — |  | $ | — |  |  |  |  | $ | — |  | $ | 998 |
Obligations of state and political subdivisions (municipal securities) | 762,066 |  | 920,883 |  | 12,692 |  |  |  |  | 895 |  | 1,696,536 |
Residential mortgage-related securities |  |  |  |  |  |  |  |
FNMA / FHLMC | 956,470 |  | — |  | — |  |  |  |  | — |  | 956,470 |
GNMA | 44,742 |  | — |  | — |  |  |  |  | — |  | 44,742 |
Private-label | 384,016 |  | — |  | — |  |  |  |  | — |  | 384,016 |
Commercial mortgage-related securities |  |  |  |  |  |  |  |
FNMA / FHLMC | 764,775 |  | — |  | — |  |  |  |  | — |  | 764,775 |
GNMA | 92,383 |  | — |  | — |  |  |  |  | — |  | 92,383 |
Total HTM securities | $ | 3,005,450 |  | $ | 920,883 |  | $ | 12,692 |  |  |  |  | $ | 895 |  | $ | 3,939,920 |
The following table summarizes the credit quality indicators of HTM securities at amortized cost at December 31, 2021:
($ in Thousands) | AAA | AA | A |  |  |  | Not Rated | Total
U. S. Treasury securities | $ | 1,000 |  | $ | — |  | $ | — |  |  |  |  | $ | — |  | $ | 1,000 |
Obligations of state and political subdivisions (municipal securities) | 702,399 |  | 914,591 |  | 10,873 |  |  |  |  | 896 |  | 1,628,759 |
Residential mortgage-related securities |  |  |  |  |  |  |  |
FNMA / FHLMC | 34,347 |  | — |  | — |  |  |  |  | — |  | 34,347 |
GNMA | 48,053 |  | — |  | — |  |  |  |  | — |  | 48,053 |
Commercial mortgage-related securities |  |  |  |  |  |  |  |
FNMA / FHLMC | 425,937 |  | — |  | — |  |  |  |  | — |  | 425,937 |
GNMA | 100,907 |  | — |  | — |  |  |  |  | — |  | 100,907 |
Total HTM securities | $ | 1,312,642 |  | $ | 914,591 |  | $ | 10,873 |  |  |  |  | $ | 896 |  | $ | 2,239,003 |
Investment securities gains (losses), net includes proceeds from the sale of AFS investment securities. The proceeds from the sale of AFS investment securities for the three months ended March 31, 2022 and 2021, are shown below:
| Three Months Ended Mar 31, |
($ in Thousands) | 2022 | 2021 |  |
Gross gains on AFS securities | $ | 21 |  | $ | 36 |  |  |
Gross (losses) on AFS securities | — |  | (75) |  |  |
Investment securities gains (losses), net | 21 |  | (39) |  |  |
Proceeds from sales of investment securities AFS | $ | 734 |  | $ | 51,295 |  |  |
During the first quarter of 2021, the Corporation sold $51 million of lower yielding U.S. Treasury and Agency securities at a slight loss to take advantage of the steeper yield curve by reinvesting the proceeds into similar but higher yielding, longer duration securities. Investment securities with a carrying value of $2.2 billion and $2.3 billion at March 31, 2022 and December 31, 2021, respectively, were pledged to secure certain deposits or for other purposes. Accrued interest receivable on HTM securities totaled $16 million and $15 million at March 31, 2022 and December 31, 2021, respectively. Accrued interest receivable on AFS securities totaled $8 million and $9 million at March 31, 2022 and December 31, 2021, respectively. Accrued interest receivable on both HTM and AFS securities is included in interest receivable on the consolidated balance sheets. There was no interest income reversed for investments going into nonaccrual at both March 31, 2022 and 2021. A security is considered past due once it is 30 days past due under the terms of the agreement. At both March 31, 2022 and December 31, 2021, the Corporation had no past due HTM securities. The allowance for credit losses on HTM securities was approximately $65,000 at March 31, 2022 and approximately $55,000 at December 31, 2021, attributable entirely to the Corporation's municipal securities, included in investment securities HTM, net, at amortized cost on the consolidated balance sheets. The Corporation also holds U.S. Treasury, municipal and mortgage-related securities issued by the U.S. government or a GSE which are backed by the full faith and credit of the U.S. government and, as a result, no allowance for credit losses has been recorded related to these securities. The following represents gross unrealized losses and the related fair value of AFS and HTM securities, aggregated by investment category and length of time individual securities have been in a continuous unrealized loss position, at March 31, 2022:
| Less than 12 months | 12 months or more | Total
($ in Thousands) | Number of Securities | Unrealized (Losses) | Fair Value | Number of Securities | Unrealized (Losses) | Fair Value | Unrealized (Losses) | Fair Value
Investment securities AFS |  |  |  |  |  |  |  |
U.S. Treasury securities | 5 |  | $ | (7,346) |  | $ | 107,050 |  | 2 |  | (850) |  | $ | 9,082 |  | $ | (8,196) |  | $ | 116,132 |
Agency securities | 1 |  | (800) |  | 14,200 |  | — |  | — |  | — |  | (800) |  | 14,200 |
Obligations of state and political subdivisions (municipal securities) | 64 |  | (195) |  | 35,501 |  | — |  | — |  | — |  | (195) |  | 35,501 |
Residential mortgage-related securities |  |  |  |  |  |  |  |
FNMA / FHLMC | 88 |  | (80,850) |  | 1,617,123 |  | 8 |  | (19,161) |  | 235,380 |  | (100,011) |  | 1,852,503 |
GNMA | 9 |  | (726) |  | 44,614 |  | — |  | — |  | — |  | (726) |  | 44,614 |
GNMA commercial mortgage-related securities | 31 |  | (1,278) |  | 113,831 |  | — |  | — |  | — |  | (1,278) |  | 113,831 |
Asset backed securities |  |  |  |  |  |  |  |
FFELP | 7 |  | (1,955) |  | 110,489 |  | 8 |  | (2,135) |  | 58,489 |  | (4,090) |  | 168,978 |
SBA | — |  | — |  | — |  | 8 |  | (53) |  | 2,763 |  | (53) |  | 2,763 |
Other debt securities | 2 |  | (27) |  | 1,973 |  | — |  | — |  | — |  | (27) |  | 1,973 |
Total | 207 |  | $ | (93,177) |  | $ | 2,044,781 |  | 26 |  | $ | (22,199) |  | $ | 305,713 |  | $ | (115,376) |  | $ | 2,350,494 |
Investment securities HTM |  |  |  |  |  |  |  |
U.S. Treasury securities | 1 |  | $ | (34) |  | $ | 964 |  | — |  | $ | — |  | $ | — |  | $ | (34) |  | $ | 964 |
Obligations of state and political subdivisions (municipal securities) | 346 |  | (79,571) |  | 576,351 |  | 5 |  | (1,325) |  | 5,100 |  | (80,896) |  | 581,451 |
Residential mortgage-related securities |  |  |  |  |  |  |  |
FNMA / FHLMC | 51 |  | (72,418) |  | 896,284 |  | — |  | — |  | — |  | (72,418) |  | 896,284 |
GNMA | 46 |  | (643) |  | 33,468 |  | — |  | — |  | — |  | (643) |  | 33,468 |
Private-label | 18 |  | (28,955) |  | 368,521 |  | — |  | — |  | — |  | (28,955) |  | 368,521 |
Commercial mortgage-related securities |  |  |  |  |  |  |  |
FNMA / FHLMC | 15 |  | (79,178) |  | 342,543 |  | 7 |  | (9,606) |  | 72,787 |  | (88,784) |  | 415,331 |
GNMA | 33 |  | (3,456) |  | 368,244 |  | — |  | — |  | — |  | (3,456) |  | 368,244 |
Total | 510 |  | $ | (264,255) |  | $ | 2,586,375 |  | 12 |  | $ | (10,930) |  | $ | 77,887 |  | $ | (275,186) |  | $ | 2,664,262 |
For comparative purposes, the following represents gross unrealized losses and the related fair value of AFS and HTM securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2021:
| Less than 12 months | 12 months or more | Total
($ in Thousands) | Number of Securities | Unrealized (Losses) | Fair Value | Number of Securities | Unrealized (Losses) | Fair Value | Unrealized (Losses) | Fair Value
Investment securities AFS |  |  |  |  |  |  |  |
U.S. Treasury securities | 7 |  | $ | (1,334) |  | $ | 122,957 |  | — |  | $ | — |  | $ | — |  | $ | (1,334) |  | $ | 122,957 |
Agency securities | 1 |  | (103) |  | 14,897 |  | — |  | — |  | — |  | (103) |  | 14,897 |
Residential mortgage-related securities |  |  |  |  |  |  |  |
FNMA / FHLMC | 74 |  | (21,249) |  | 2,172,837 |  | — |  | — |  | — |  | (21,249) |  | 2,172,837 |
Private-label | 12 |  | (2,335) |  | 248,617 |  | — |  | — |  | — |  | (2,335) |  | 248,617 |
FNMA / FHLMC commercial mortgage-related securities | 19 |  | (9,302) |  | 328,568 |  | — |  | — |  | — |  | (9,302) |  | 328,568 |
Asset backed securities |  |  |  |  |  |  |  |
FFELP | 4 |  | (256) |  | 64,282 |  | 8 |  | (867) |  | 62,576 |  | (1,123) |  | 126,858 |
SBA | — |  | — |  | — |  | 9 |  | (54) |  | 3,902 |  | (54) |  | 3,902 |
Other debt securities | 3 |  | (6) |  | 2,994 |  | — |  | — |  | — |  | (6) |  | 2,994 |
Total | 120 |  | $ | (34,586) |  | $ | 2,955,152 |  | 17 |  | $ | (920) |  | $ | 66,478 |  | $ | (35,506) |  | $ | 3,021,630 |
Investment securities HTM |  |  |  |  |  |  |  |
Obligations of state and political subdivisions (municipal securities) | 49 |  | $ | (1,951) |  | $ | 112,038 |  | — |  | $ | — |  | $ | — |  | $ | (1,951) |  | $ | 112,038 |
Commercial mortgage-related securities |  |  |  |  |  |  |  |
FNMA/FHLMC | 18 |  | (6,272) |  | 388,072 |  | 1 |  | $ | (387) |  | $ | 10,775 |  | (6,659) |  | 398,847 |
GNMA | 5 |  | (200) |  | 33,468 |  | — |  | — |  | — |  | (200) |  | 33,468 |
Total | 72 |  | $ | (8,422) |  | $ | 533,577 |  | 1 |  | $ | (387) |  | $ | 10,775 |  | $ | (8,809) |  | $ | 544,352 |
The Corporation reviews the AFS investment securities portfolio on a quarterly basis to monitor its credit exposure. A determination as to whether a security’s decline in fair value is the result of credit risk takes into consideration numerous factors and the relative significance of any single factor can vary by security. Some factors the Corporation may consider in this impairment analysis include the extent to which the security has been in an unrealized loss position, the change in security rating, financial condition and near-term prospects of the issuer, as well as the security and industry specific economic conditions. Based on the Corporation’s evaluation, management does not believe any unrealized losses at March 31, 2022 represent credit deterioration as these unrealized losses are primarily attributable to changes in interest rates and the current market conditions. The Corporation does not intend to sell nor does it believe that it will be required to sell the securities in an unrealized loss position before recovery of their amortized cost basis. FHLB and Federal Reserve Bank stocks: The Corporation is required to maintain Federal Reserve Bank stock and FHLB stock as a member bank of both the Federal Reserve System and the FHLB, and in amounts as required by these institutions. These equity securities are “restricted” in that they can only be sold back to the respective institutions or another member institution at par. Therefore, they are less liquid than other marketable equity securities and their fair value is equal to amortized cost. The Corporation had FHLB stock of $82 million at both March 31, 2022 and December 31, 2021. The Corporation had Federal Reserve Bank stock of $87 million at both March 31, 2022 and December 31, 2021. Accrued interest receivable on FHLB stock totaled approximately $962,000 and $975,000 at March 31, 2022 and December 31, 2021, respectively. There was $520,000 accrued interest receivable on Federal Reserve Bank stock at March 31, 2022 and none at December 31, 2021. Accrued interest receivable on both FHLB stock and Federal Reserve Bank stock is included in interest receivable on the consolidated balance sheets. Equity Securities Equity securities with readily determinable fair values: The Corporation's portfolio of equity securities with readily determinable fair values is primarily comprised of CRA Qualified Investment mutual funds and other mutual funds. At both March 31, 2022 and December 31, 2021, the Corporation had equity securities with readily determinable fair values of $5 million. Equity securities without readily determinable fair values: The Corporation's portfolio of equity securities without readily determinable fair values, which primarily consists of approximately 78,000 Visa Class B restricted shares, was carried at $14 million at both March 31, 2022 and December 31, 2021

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2176304 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher SEC -Name Regulation S-K (SK) -Number 229 -Section 1403 -Paragraph (b) + Details
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