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INVESTMENT SECURITIES | 9 Months Ended
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Sep. 30, 2024
Investments, Debt and Equity Securities [Abstract] |
INVESTMENT SECURITIES | 5. INVESTMENT SECURITIES Debt Securities The following tables detail the amortized cost, allowance for credit losses and the estimated fair value of the Company's investments in available-for-sale and held-to-maturity debt securities. None of the Company's investments in debt securities are classified as trading.
|  | September 30, 2024
(Dollars in thousands) |  | Amortized Cost |  | Gross Unrealized Gain |  | Gross Unrealized Loss |  | Allowance for Credit Losses |  | Fair Value
Available-for-Sale Debt Securities |  |  |  |  |  |  |  |  |  |
Collateralized mortgage obligation (CMO) |  | $ | 537,666 |  |  | $ | 566 |  |  | $ | 82,749 |  |  | $ | — |  |  | $ | 455,483 |
Fannie Mae (FNMA) mortgage-backed securities (MBS) |  | 3,362,926 |  |  | 793 |  |  | 423,832 |  |  | — |  |  | 2,939,887 |
Freddie Mac (FHLMC) MBS |  | 120,570 |  |  | — |  |  | 8,763 |  |  | — |  |  | 111,807 |
Ginnie Mae (GNMA) MBS |  | 46,150 |  |  | 41 |  |  | 2,368 |  |  | — |  |  | 43,823 |
Government-sponsored enterprises (GSE) agency notes |  | 223,511 |  |  | — |  |  | 37,392 |  |  | — |  |  | 186,119 |
|  | $ | 4,290,823 |  |  | $ | 1,400 |  |  | $ | 555,104 |  |  | $ | — |  |  | $ | 3,737,119 |
Held-to-Maturity Debt Securities(1) |  |  |  |  |  |  |  |  |  |
FNMA MBS |  | $ | 841,697 |  |  | $ | — |  |  | $ | 68,348 |  |  | $ | — |  |  | $ | 773,349 |
State and political subdivisions |  | 184,615 |  |  | 1,795 |  |  | 783 |  |  | 7 |  |  | 185,620 |
|  | $ | 1,026,312 |  |  | $ | 1,795 |  |  | $ | 69,131 |  |  | $ | 7 |  |  | $ | 958,969 |
(1)Held-to-maturity securities transferred from available-for-sale are included in held-to-maturity at fair value basis at the time of transfer. The amortized cost of transferred held-to-maturity securities included net unrealized losses of $105.4 million at September 30, 2024, which are offset in Accumulated other comprehensive loss. At the time of transfer, there was no allowance for credit loss on the available-for-sale securities. Subsequent to transfer, the securities were evaluated for credit loss.
|  | December 31, 2023
(Dollars in thousands) |  | Amortized Cost |  | Gross Unrealized Gain |  | Gross Unrealized Loss |  | Allowance for Credit Losses |  | Fair Value
Available-for-Sale Debt Securities |  |  |  |  |  |  |  |  |  |
CMO |  | $ | 560,952 |  |  | $ | — |  |  | $ | 96,333 |  |  | $ | — |  |  | $ | 464,619 |
FNMA MBS |  | 3,544,762 |  |  | 162 |  |  | 502,574 |  |  | — |  |  | 3,042,350 |
FHLMC MBS |  | 126,856 |  |  | — |  |  | 11,324 |  |  | — |  |  | 115,532 |
GNMA MBS |  | 46,333 |  |  | 6 |  |  | 2,999 |  |  | — |  |  | 43,340 |
GSE agency notes |  | 225,439 |  |  | — |  |  | 44,743 |  |  | — |  |  | 180,696 |
|  | $ | 4,504,342 |  |  | $ | 168 |  |  | $ | 657,973 |  |  | $ | — |  |  | $ | 3,846,537 |
Held-to-Maturity Debt Securities(1) |  |  |  |  |  |  |  |  |  |
FNMA MBS |  | $ | 872,653 |  |  | $ | — |  |  | $ | 74,332 |  |  | $ | — |  |  | $ | 798,321 |
State and political subdivisions |  | 185,912 |  |  | 2,665 |  |  | 959 |  |  | 8 |  |  | 187,610 |
|  | $ | 1,058,565 |  |  | $ | 2,665 |  |  | $ | 75,291 |  |  | $ | 8 |  |  | $ | 985,931 |
(1)Held-to-maturity securities transferred from available-for-sale are included in held-to-maturity at fair value at the time of transfer. The amortized cost of transferred held-to-maturity securities included net unrealized losses of $120.4 million at December 31, 2023, which are offset in Accumulated other comprehensive loss. At the time of transfer, there was no allowance for credit loss on the available-for-sale securities. Subsequent to transfer, the securities were evaluated for credit loss. The scheduled maturities of available-for-sale debt securities at September 30, 2024 and December 31, 2023 are presented in the table below:
|  | Available-for-Sale
|  | Amortized |  | Fair
(Dollars in thousands) |  | Cost |  | Value
September 30, 2024 (1) |  |  |  |
Within one year |  | $ | 16,929 |  |  | $ | 16,709 |
After one year but within five years |  | 128,143 |  |  | 123,447 |
After five years but within ten years |  | 503,009 |  |  | 438,564 |
After ten years |  | 3,642,742 |  |  | 3,158,399 |
|  | $ | 4,290,823 |  |  | $ | 3,737,119 |
December 31, 2023 (1) |  |  |  |
Within one year |  | $ | — |  |  | $ | — |
After one year but within five years |  | 86,224 |  |  | 82,387 |
After five years but within ten years |  | 569,956 |  |  | 485,593 |
After ten years |  | 3,848,162 |  |  | 3,278,557 |
|  | $ | 4,504,342 |  |  | $ | 3,846,537 |
(1)Actual maturities could differ from contractual maturities. As of September 30, 2024, the Company’s available-for-sale investment securities consisted of 986 securities, 953 of which were in an unrealized loss position. As of September 30, 2024, substantially all of the Corporation’s available-for-sale investment securities were mortgage-backed securities or collateral mortgage obligations which were issued or guaranteed by U.S. government-sponsored entities and agencies. As of September 30, 2024 and December 31, 2023, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholders’ equity. The scheduled maturities of held-to-maturity debt securities at September 30, 2024 and December 31, 2023 are presented in the table below:
|  | Held-to-Maturity
|  | Amortized |  | Fair
(Dollars in thousands) |  | Cost |  | Value
September 30, 2024 (1) |  |  |  |
Within one year |  | $ | — |  |  | $ | — |
After one year but within five years |  | 14,343 |  |  | 14,317 |
After five years but within ten years |  | 53,396 |  |  | 53,382 |
After ten years |  | 958,573 |  |  | 891,270 |
|  | $ | 1,026,312 |  |  | $ | 958,969 |
December 31, 2023 (1) |  |  |  |
Within one year |  | $ | — |  |  | $ | — |
After one year but within five years |  | 10,932 |  |  | 10,856 |
After five years but within ten years |  | 46,489 |  |  | 46,246 |
After ten years |  | 1,001,144 |  |  | 928,829 |
|  | $ | 1,058,565 |  |  | $ | 985,931 |
(1)Actual maturities could differ from contractual maturities. MBS may have expected maturities that differ from their contractual maturities. These differences arise because issuers may have the right to call securities and borrowers may have the right to prepay obligations with or without prepayment penalty. The estimated weighted average duration of MBS was 5.7 years at September 30, 2024. The held-to-maturity debt securities are not collateral-dependent securities as these are general obligation bonds issued by cities, states, counties, or other local and foreign governments. Investment securities with fair market values aggregating $3.3 billion were pledged as collateral for investment sweep repurchase agreements, municipal deposits, and other obligations as of September 30, 2024 and December 31, 2023. During the nine months ended September 30, 2024 and 2023, the Company had no sales of debt securities categorized as available-for-sale. As of September 30, 2024 and December 31, 2023, the Company's debt securities portfolio had remaining unamortized premiums of $50.3 million and $56.9 million, respectively, and unaccreted discounts of $18.5 million and $20.9 million, respectively. For debt securities in an unrealized loss position, the table below shows the gross unrealized losses and fair value by investment category and length of time that individual debt securities were in a continuous unrealized loss position at September 30, 2024.
|  | Duration of Unrealized Loss Position |  |  |  |
|  | Less than 12 months |  | 12 months or longer |  | Total
|  | Fair |  | Unrealized |  | Fair |  | Unrealized |  | Fair |  | Unrealized
(Dollars in thousands) |  | Value |  | Loss |  | Value |  | Loss |  | Value |  | Loss
Available-for-sale debt securities: |  |  |  |  |  |  |  |  |  |  |  |
CMO |  | $ | — |  |  | $ | — |  |  | $ | 444,751 |  |  | $ | 82,749 |  |  | $ | 444,751 |  |  | $ | 82,749 |
FNMA MBS |  | 3,126 |  |  | 7 |  |  | 2,889,219 |  |  | 423,825 |  |  | 2,892,345 |  |  | 423,832 |
FHLMC MBS |  | — |  |  | — |  |  | 111,801 |  |  | 8,763 |  |  | 111,801 |  |  | 8,763 |
GNMA MBS |  | 1,896 |  |  | 3 |  |  | 37,791 |  |  | 2,365 |  |  | 39,687 |  |  | 2,368 |
GSE agency notes |  | — |  |  | — |  |  | 186,119 |  |  | 37,392 |  |  | 186,119 |  |  | 37,392 |
|  | $ | 5,022 |  |  | $ | 10 |  |  | $ | 3,669,681 |  |  | $ | 555,094 |  |  | $ | 3,674,703 |  |  | $ | 555,104 |
For debt securities in an unrealized loss position, the table below shows the gross unrealized losses and fair value by investment category and length of time that individual debt securities were in a continuous unrealized loss position at December 31, 2023.
|  | Duration of Unrealized Loss Position |  |  |  |
|  | Less than 12 months |  | 12 months or longer |  | Total
|  | Fair |  | Unrealized |  | Fair |  | Unrealized |  | Fair |  | Unrealized
(Dollars in thousands) |  | Value |  | Loss |  | Value |  | Loss |  | Value |  | Loss
Available-for-sale debt securities: |  |  |  |  |  |  |  |  |  |  |  |
CMO |  | $ | — |  |  | $ | — |  |  | $ | 464,619 |  |  | $ | 96,333 |  |  | $ | 464,619 |  |  | $ | 96,333 |
FNMA MBS |  | 9,068 |  |  | 125 |  |  | 3,026,520 |  |  | 502,449 |  |  | 3,035,588 |  |  | 502,574 |
FHLMC MBS |  | — |  |  | — |  |  | 115,525 |  |  | 11,324 |  |  | 115,525 |  |  | 11,324 |
GNMA MBS |  | 10,543 |  |  | 217 |  |  | 31,681 |  |  | 2,782 |  |  | 42,224 |  |  | 2,999 |
GSE agency notes |  | — |  |  | — |  |  | 180,696 |  |  | 44,743 |  |  | 180,696 |  |  | 44,743 |
|  | $ | 19,611 |  |  | $ | 342 |  |  | $ | 3,819,041 |  |  | $ | 657,631 |  |  | $ | 3,838,652 |  |  | $ | 657,973 |
The Company does not have the intent to sell, nor is it more likely than not it will be required to sell these securities before it is able to recover the amortized cost basis. The unrealized losses are the result of changes in market interest rates subsequent to purchase, not credit loss, as these are highly rated agency securities with no expected credit loss, in the event of a default. As a result, there is no allowance for credit losses recorded for available-for-sale debt securities as of September 30, 2024. At September 30, 2024 and December 31, 2023, held-to-maturity debt securities had an amortized cost basis of $1.0 billion and $1.1 billion, respectively. The held-to-maturity debt security portfolio primarily consists of mortgage-backed securities which were issued or guaranteed by U.S. government-sponsored entities and agencies and highly rated municipal bonds. The Company monitors credit quality of its non-government and non-agency securities through credit ratings. The following table summarizes the amortized cost of debt securities held-to-maturity as of September 30, 2024, aggregated by credit quality indicator:
(Dollars in thousands) |  | FNMA MBS |  | State and political subdivisions |  |
A+ rated or higher |  | $ | — |  |  | $ | 184,615 |  |  |
Not rated |  | 841,697 |  |  | — |  |  |
Ending balance |  | $ | 841,697 |  |  | $ | 184,615 |  |  |
The following table summarizes the amortized cost of debt securities held-to-maturity as of December 31, 2023, aggregated by credit quality indicator:
(Dollars in thousands) |  | FNMA MBS |  | State and political subdivisions |  |
A+ rated or higher |  | $ | — |  |  | $ | 185,912 |  |  |
Not rated |  | 872,653 |  |  | — |  |  |
Ending balance |  | $ | 872,653 |  |  | $ | 185,912 |  |  |
The Company reviewed its held-to-maturity debt securities by major security type for potential credit losses. There was no activity in the allowance for credit losses for FNMA MBS debt securities for the nine months ended September 30, 2024 and 2023. The following table presents the activity in the allowance for credit losses for state and political subdivisions debt securities for the three and nine months ended September 30, 2024 and 2023:
|  | Three months ended September 30, |  | Nine months ended September 30,
(Dollars in thousands) |  | 2024 |  | 2023 |  | 2024 |  | 2023
Allowance for credit losses: |  |  |  |  |  |  |  |
Beginning balance |  | $ | 7 |  |  | $ | 8 |  |  | $ | 8 |  |  | $ | 10 |
Release of credit losses |  | — |  |  | — |  |  | (1) |  |  | (2) |
Ending balance |  | $ | 7 |  |  | $ | 8 |  |  | $ | 7 |  |  | $ | 8 |
Accrued interest receivable of $3.1 million and $3.7 million as of September 30, 2024 and December 31, 2023, respectively, for held-to-maturity debt securities were excluded from the evaluation of allowance for credit losses. There were no nonaccrual or past due held-to-maturity debt securities as of September 30, 2024 and December 31, 2023. Equity Investments The Company had equity investments of $17.0 million and $17.4 million as of September 30, 2024 and December 31, 2023, respectively. During the three and nine months ended September 30, 2024, the Company recognized realized gains of $0.1 million and $2.2 million, respectively, related to our equity investments. During the three and nine months ended September 30, 2023, the Company recognized $0.7 million of net gains and $1.0 million of net losses, respectively, related to our equity method investments within Other income on the unaudited Consolidated Statements of Income.

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