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Investment Securities | 12 Months Ended
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Dec. 31, 2024
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | Investment Securities Investment securities are classified as AFS, HTM, or equity on the consolidated balance sheets. The amortized cost and fair values of AFS and HTM securities at December 31, 2024 were as follows:
($ in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized (Losses) | Fair Value
AFS investment securities |  |  |  |
Obligations of state and political subdivisions (municipal securities) | $ | 3,063 |  | $ | — |  | $ | (58) |  | $ | 3,005 |
Residential mortgage-related securities: |  |  |  |
FNMA/FHLMC | 120,272 |  | 190 |  | (9,534) |  | 110,928 |
GNMA | 4,236,199 |  | 5,379 |  | (13,851) |  | 4,227,727 |
Commercial mortgage-related securities: |  |  |  |
FNMA/FHLMC | 18,332 |  | — |  | (1,332) |  | 17,000 |
GNMA | 116,275 |  | — |  | (4,800) |  | 111,475 |
Asset backed securities: |  |  |  |
FFELP | 108,319 |  | 123 |  | (604) |  | 107,839 |
SBA | 495 |  | — |  | (24) |  | 471 |
Other debt securities | 3,000 |  | — |  | (11) |  | 2,989 |
Total AFS investment securities | $ | 4,605,954 |  | $ | 5,693 |  | $ | (30,213) |  | $ | 4,581,434 |
HTM investment securities |  |  |  |
U.S. Treasury securities | $ | 1,000 |  | $ | — |  | $ | (1) |  | $ | 999 |
Obligations of state and political subdivisions (municipal securities) | 1,659,722 |  | 1,122 |  | (174,202) |  | 1,486,642 |
Residential mortgage-related securities: |  |  |  |
FNMA/FHLMC | 885,476 |  | 22,934 |  | (186,464) |  | 721,946 |
GNMA | 43,693 |  | 9 |  | (3,774) |  | 39,927 |
Private-label | 324,182 |  | 8,135 |  | (65,963) |  | 266,353 |
Commercial mortgage-related securities: |  |  |  |
FNMA/FHLMC | 772,456 |  | 10,217 |  | (159,078) |  | 623,595 |
GNMA | 52,219 |  | 236 |  | (6,424) |  | 46,032 |
Total HTM investment securities | $ | 3,738,747 |  | $ | 42,653 |  | $ | (595,906) |  | $ | 3,185,494 |
The amortized cost and fair values of AFS and HTM securities at December 31, 2023 were as follows:
($ in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized (Losses) | Fair Value
AFS investment securities |  |  |  |
U.S. Treasury securities | $ | 39,984 |  | $ | — |  | $ | (4,083) |  | $ | 35,902 |
Obligations of state and political subdivisions (municipal securities) | 94,008 |  | 23 |  | (2,214) |  | 91,817 |
Residential mortgage-related securities: |  |  |  |
FNMA/FHLMC | 1,274,052 |  | 294 |  | (153,552) |  | 1,120,794 |
GNMA | 2,021,242 |  | 24,254 |  | (2,822) |  | 2,042,675 |
Commercial mortgage-related securities: |  |  |  |
FNMA/FHLMC | 18,691 |  | — |  | (1,755) |  | 16,937 |
GNMA | 161,928 |  | — |  | (7,135) |  | 154,793 |
Asset backed securities: |  |  |  |
FFELP | 135,832 |  | 5 |  | (1,862) |  | 133,975 |
SBA | 1,077 |  | 2 |  | (28) |  | 1,051 |
Other debt securities | 3,000 |  | — |  | (50) |  | 2,950 |
Total AFS investment securities | $ | 3,749,814 |  | $ | 24,579 |  | $ | (173,501) |  | $ | 3,600,892 |
HTM investment securities |  |  |  |
U.S. Treasury securities | $ | 999 |  | $ | — |  | $ | (36) |  | $ | 963 |
Obligations of state and political subdivisions (municipal securities) | 1,682,473 |  | 5,638 |  | (134,053) |  | 1,554,059 |
Residential mortgage-related securities: |  |  |  |
FNMA/FHLMC | 941,973 |  | 27,007 |  | (164,587) |  | 804,393 |
GNMA | 48,979 |  | 92 |  | (2,901) |  | 46,170 |
Private-label | 345,083 |  | 9,796 |  | (65,372) |  | 289,507 |
Commercial mortgage-related securities: |  |  |  |
FNMA/FHLMC | 780,995 |  | 12,699 |  | (160,781) |  | 632,914 |
GNMA | 59,733 |  | 386 |  | (7,500) |  | 52,619 |
Total HTM investment securities | $ | 3,860,235 |  | $ | 55,619 |  | $ | (535,230) |  | $ | 3,380,624 |
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 December 31, 2024, are shown below:
| AFS | HTM
($ in thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value
Due in one year or less | $ | 1,000 |  | $ | 997 |  | $ | 17,800 |  | $ | 17,746 |
Due after one year through five years | 3,040 |  | 3,026 |  | 62,054 |  | 61,286 |
Due after five years through ten years | 1,390 |  | 1,387 |  | 187,803 |  | 179,653 |
Due after ten years | 633 |  | 585 |  | 1,393,065 |  | 1,228,957 |
Total debt securities | 6,063 |  | 5,994 |  | 1,660,722 |  | 1,487,641 |
Residential mortgage-related securities: |  |  |  |
FNMA/FHLMC | 120,272 |  | 110,928 |  | 885,476 |  | 721,946 |
GNMA | 4,236,199 |  | 4,227,727 |  | 43,693 |  | 39,927 |
Private-label | — |  | — |  | 324,182 |  | 266,353 |
Commercial mortgage-related securities: |  |  |  |
FNMA/FHLMC | 18,332 |  | 17,000 |  | 772,456 |  | 623,595 |
GNMA | 116,275 |  | 111,475 |  | 52,219 |  | 46,032 |
Asset backed securities: |  |  |  |
FFELP | 108,319 |  | 107,839 |  | — |  | — |
SBA | 495 |  | 471 |  | — |  | — |
Total investment securities | $ | 4,605,954 |  | $ | 4,581,434 |  | $ | 3,738,747 |  | $ | 3,185,494 |
Ratio of fair value to amortized cost |  | 99.5 | % |  | 85.2 | %
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 December 31, 2024:
($ in thousands) | AAA | AA | A | Not Rated | Total
U.S. Treasury securities | $ | 1,000 |  | $ | — |  | $ | — |  | $ | — |  | $ | 1,000 |
Obligations of state and political subdivisions (municipal securities) | 767,151 |  | 883,438 |  | 4,911 |  | 4,221 |  | 1,659,722 |
Residential mortgage-related securities: |  |  |  |  |
FNMA/FHLMC | 885,476 |  | — |  | — |  | — |  | 885,476 |
GNMA | 43,693 |  | — |  | — |  | — |  | 43,693 |
Private-label | 324,182 |  | — |  | — |  | — |  | 324,182 |
Commercial mortgage-related securities: |  |  |  |  |
FNMA/FHLMC | 772,456 |  | — |  | — |  | — |  | 772,456 |
GNMA | 52,219 |  | — |  | — |  | — |  | 52,219 |
Total HTM securities | $ | 2,846,177 |  | $ | 883,438 |  | $ | 4,911 |  | $ | 4,221 |  | $ | 3,738,747 |
The following table summarizes the credit quality indicators of HTM securities at amortized cost at December 31, 2023:
($ in thousands) | AAA | AA | A | Not Rated | Total
U.S. Treasury securities | $ | 999 |  | $ | — |  | $ | — |  | $ | — |  | $ | 999 |
Obligations of state and political subdivisions (municipal securities) | 760,329 |  | 915,303 |  | 5,687 |  | 1,155 |  | 1,682,473 |
Residential mortgage-related securities: |  |  |  |  |
FNMA/FHLMC | 941,973 |  | — |  | — |  | — |  | 941,973 |
GNMA | 48,979 |  | — |  | — |  | — |  | 48,979 |
Private-label | 345,083 |  | — |  | — |  | — |  | 345,083 |
Commercial mortgage-related securities: |  |  |  |  |
FNMA/FHLMC | 780,995 |  | — |  | — |  | — |  | 780,995 |
GNMA | 59,733 |  | — |  | — |  | — |  | 59,733 |
Total HTM securities | $ | 2,938,090 |  | $ | 915,303 |  | $ | 5,687 |  | $ | 1,155 |  | $ | 3,860,235 |
The following table summarizes gross realized gains and losses on AFS securities, the gain on sale and net write-up of equity securities, and proceeds from the sale of AFS investment securities for each of the three years ended December 31 shown below:
($ in thousands) | 2024 | 2023 | 2022
Gross realized gains on AFS securities | $ | — |  | $ | 83 |  | $ | 21 |
Gross realized (losses) on AFS securities | (148,380) |  | (65,022) |  | (1,943) |
Gain on sale and net write-up of equity securities | 4,233 |  | 6,037 |  | 5,668 |
Investment securities (losses) gains, net | $ | (144,147) |  | $ | (58,903) |  | $ | 3,746 |
Proceeds from sales of AFS investment securities | $ | 1,141,231 |  | $ | 715,066 |  | $ | 110,177 |
During the fourth quarter of 2024, the Corporation sold lower yielding AFS securities with a carrying value of $1.1 billion at a net loss of $148 million and reinvested the proceeds into higher yielding and lower risk-weighted GNMA securities. Additionally, during the first quarter of 2024, the Corporation sold its remaining Visa Class B restricted shares at a gain of $4 million. During the fourth quarter of 2023, the Corporation sold lower yielding AFS securities with a carrying value of $715 million at a net loss of $65 million and reinvested the proceeds into higher yielding and lower risk-weighted GNMA securities. Additionally, during the fourth quarter of 2023, the Corporation sold 1,000 shares of its Visa Class B restricted shares and wrote up its remaining shares based on that market price, resulting in a gain of $6 million. During the fourth quarter of 2022, the Corporation sold $110 million of lower yielding municipal securities at a loss of $2 million and reinvested the proceeds into higher yielding and lower risk-weighted GNMA securities. During the third quarter of 2022, the Corporation sold its Visa Class B restricted shares obtained in the acquisition of First Staunton, which were carried at a zero-cost basis. The remaining shares of Visa Class B restricted shares held by the Corporation, which were carried at fair value, were subsequently written up to reflect the new observable price resulting from that sale. Investment securities with a carrying value of $1.5 billion at December 31, 2024 and $1.6 billion at December 31, 2023 were pledged as required to secure certain deposits or for other purposes. Accrued interest receivable on HTM securities totaled $18 million at both December 31, 2024 and 2023. Accrued interest receivable on AFS securities totaled $21 million and $15 million at December 31, 2024 and 2023, respectively. Accrued interest receivable on both HTM and AFS securities is included in interest receivable on the consolidated balance sheets. The allowance for credit losses on HTM securities was approximately $60,000 and $75,000 at December 31, 2024 and 2023, respectively, attributable entirely to the Corporation's municipal securities, included in HTM investment securities, net, at amortized cost on the consolidated balance sheets. The Corporation also holds U.S. Treasury, municipal, and mortgage-related securities issued by the U.S. government or a GSE which are backed by the full faith and credit of the U.S. government and private-label residential mortgage-related securities that have credit enhancement which covers the first 15% of losses and, as a result, no allowance for credit losses has been recorded related to these securities. The following represents gross unrealized losses and the related fair value of AFS and HTM securities, aggregated by investment category and length of time individual securities have been in a continuous unrealized loss position, at December 31, 2024:
| Less than 12 months | 12 months or more | Total
($ in thousands) | Number of Securities | Unrealized (Losses) | Fair Value | Number of Securities | Unrealized (Losses) | Fair Value | Unrealized (Losses) | Fair Value
AFS investment securities |  |  |  |  |  |  |  |
Obligations of state and political subdivisions (municipal securities) | 1 |  | $ | (3) |  | $ | 542 |  | 2 |  | $ | (55) |  | $ | 828 |  | $ | (58) |  | $ | 1,370 |
Residential mortgage-related securities: |  |  |  |  |  |  |  |
FNMA/FHLMC | 23 |  | (607) |  | 31,983 |  | 14 |  | (8,927) |  | 61,596 |  | (9,534) |  | 93,579 |
GNMA | 116 |  | (13,706) |  | 1,660,642 |  | 4 |  | (145) |  | 3,945 |  | (13,851) |  | 1,664,587 |
Commercial mortgage-related securities: |  |  |  |  |  |  |  |
FNMA/FHLMC | — |  | — |  | — |  | 1 |  | (1,332) |  | 17,000 |  | (1,332) |  | 17,000 |
GNMA | — |  | — |  | — |  | 16 |  | (4,800) |  | 111,475 |  | (4,800) |  | 111,475 |
Asset backed securities: |  |  |  |  |  |  |  |
FFELP | — |  | — |  | — |  | 12 |  | (604) |  | 62,830 |  | (604) |  | 62,830 |
SBA | — |  | — |  | — |  | 4 |  | (24) |  | 464 |  | (24) |  | 464 |
Other debt securities | 1 |  | (7) |  | 993 |  | 1 |  | (3) |  | 997 |  | (11) |  | 1,989 |
Total | 141 |  | $ | (14,323) |  | $ | 1,694,159 |  | 54 |  | $ | (15,890) |  | $ | 259,134 |  | $ | (30,213) |  | $ | 1,953,294 |
HTM investment securities |  |  |  |  |  |  |  |
U.S. Treasury securities | — |  | $ | — |  | $ | — |  | 1 |  | $ | (1) |  | $ | 999 |  | $ | (1) |  | $ | 999 |
Obligations of state and political subdivisions (municipal securities) | 370 |  | (11,860) |  | 483,073 |  | 641 |  | (162,343) |  | 866,949 |  | (174,202) |  | 1,350,022 |
Residential mortgage-related securities: |  |  |  |  |  |  |  |
FNMA/FHLMC | 12 |  | (280) |  | 11,617 |  | 106 |  | (186,184) |  | 710,114 |  | (186,464) |  | 721,732 |
GNMA | 7 |  | (183) |  | 8,856 |  | 79 |  | (3,591) |  | 31,071 |  | (3,774) |  | 39,927 |
Private-label | — |  | — |  | — |  | 18 |  | (65,963) |  | 266,353 |  | (65,963) |  | 266,353 |
Commercial mortgage-related securities: |  |  |  |  |  |  |  |
FNMA/FHLMC | 2 |  | (1,343) |  | 25,518 |  | 43 |  | (157,735) |  | 598,077 |  | (159,078) |  | 623,595 |
GNMA | — |  | — |  | — |  | 13 |  | (6,424) |  | 46,032 |  | (6,424) |  | 46,032 |
Total | 391 |  | $ | (13,665) |  | $ | 529,064 |  | 901 |  | $ | (582,241) |  | $ | 2,519,595 |  | $ | (595,906) |  | $ | 3,048,660 |
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, 2023:
| 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
AFS investment securities |  |  |  |  |  |  |  |
U.S. Treasury securities | — |  | $ | — |  | $ | — |  | 1 |  | $ | (4,083) |  | $ | 35,902 |  | $ | (4,083) |  | $ | 35,902 |
Obligations of state and political subdivisions (municipal securities) | 41 |  | (347) |  | 23,762 |  | 92 |  | (1,867) |  | 53,022 |  | (2,214) |  | 76,784 |
Residential mortgage-related securities: |  |  |  |  |  |  |  |
FNMA/FHLMC | 18 |  | (333) |  | 22,870 |  | 71 |  | (153,219) |  | 1,080,337 |  | (153,552) |  | 1,103,207 |
GNMA | 13 |  | (924) |  | 156,847 |  | 5 |  | (1,898) |  | 26,643 |  | (2,822) |  | 183,490 |
Commercial mortgage-related securities: |  |  |  |  |  |  |  |
FNMA/FHLMC | — |  | — |  | — |  | 1 |  | (1,755) |  | 16,937 |  | (1,755) |  | 16,937 |
GNMA | 9 |  | (3,160) |  | 103,055 |  | 22 |  | (3,975) |  | 51,738 |  | (7,135) |  | 154,793 |
Asset backed securities: |  |  |  |  |  |  |  |
FFELP | — |  | — |  | — |  | 14 |  | (1,862) |  | 125,339 |  | (1,862) |  | 125,339 |
SBA | — |  | — |  | — |  | 5 |  | (28) |  | 761 |  | (28) |  | 761 |
Other debt securities | 1 |  | (9) |  | 991 |  | 2 |  | (42) |  | 1,958 |  | (50) |  | 2,950 |
Total | 82 |  | $ | (4,773) |  | $ | 307,527 |  | 213 |  | $ | (168,728) |  | $ | 1,392,635 |  | $ | (173,501) |  | $ | 1,700,162 |
HTM investment securities |  |  |  |  |  |  |  |
U.S. Treasury securities | — |  | $ | — |  | $ | — |  | 1 |  | $ | (36) |  | $ | 963 |  | $ | (36) |  | $ | 963 |
Obligations of state and political subdivisions (municipal securities) | 182 |  | (1,535) |  | 180,270 |  | 537 |  | (132,518) |  | 792,940 |  | (134,053) |  | 973,210 |
Residential mortgage-related securities: |  |  |  |  |  |  |  |
FNMA/FHLMC | 20 |  | (511) |  | 30,323 |  | 94 | (164,076) |  | 771,042 |  | (164,587) |  | 801,365 |
GNMA | 2 |  | (17) |  | 2,128 |  | 78 |  | (2,884) |  | 34,626 |  | (2,901) |  | 36,754 |
Private-label | — |  | — |  | — |  | 18 | (65,372) |  | 289,507 |  | (65,372) |  | 289,507 |
Commercial mortgage-related securities: |  |  |  |  |  |  |  |
FNMA/FHLMC | 1 |  | (121) |  | 8,144 |  | 44 |  | (160,660) |  | 624,770 |  | (160,781) |  | 632,914 |
GNMA | — |  | — |  | — |  | 13 |  | (7,500) |  | 52,619 |  | (7,500) |  | 52,619 |
Total | 205 |  | $ | (2,184) |  | $ | 220,865 |  | 785 |  | $ | (533,046) |  | $ | 2,566,468 |  | $ | (535,230) |  | $ | 2,787,333 |
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 security and industry specific economic conditions. Based on the Corporation’s evaluation, management does not believe any unrealized losses at December 31, 2024 represent credit deterioration as these unrealized losses are primarily attributable to changes in interest rates and the current market conditions. As of December 31, 2024, 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 $92 million and $143 million at December 31, 2024 and 2023, respectively. The Corporation had Federal Reserve Bank stock of $88 million and $87 million at December 31, 2024 and 2023, respectively. Accrued interest receivable on FHLB stock totaled $2 million and $4 million at December 31, 2024 and 2023, respectively. There was no accrued interest receivable on Federal Reserve Bank stock at both December 31, 2024 and 2023. 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 mutual funds. At December 31, 2024 and 2023, the Corporation had equity securities with readily determinable fair values of $11 million and $7 million, respectively. Equity securities without readily determinable fair values: The Corporation's portfolio of equity securities without readily determinable fair values primarily consists of an investment in a private loan fund. The Corporation had equity securities without readily determinable fair values carried at $13 million and $35 million at December 31, 2024 and 2023, respectively. During the first quarter of 2024, the Corporation sold all of its remaining Visa Class B restricted shares.

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