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INVESTMENT SECURITIES | 9 Months Ended
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Sep. 30, 2023
INVESTMENT SECURITIES |
INVESTMENT SECURITIES | NOTE D: INVESTMENT SECURITIES The amortized cost and estimated fair value of investment securities as of September 30, 2023 and December 31, 2022 are as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, 2023 | ​ | December 31, 2022
​ | ​ | ​ | ​ | ​ | Gross | ​ | Gross | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Gross | ​ | Gross | ​ | ​ | ​
​ | ​ | Amortized | ​ | Unrealized | ​ | Unrealized | ​ | Fair | ​ | Amortized | ​ | Unrealized | ​ | Unrealized | ​ | Fair
(000’s omitted) |  | Cost |  | Gains |  | Losses |  | Value |  | Cost |  | Gains |  | Losses |  | Value
Available-for-Sale Portfolio: | ​ | ​ | ​ |  | ​ |  |  | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ |  |  | ​ |  | ​ | ​ | ​
U.S. Treasury and agency securities | ​ | $ | 2,378,607 | ​ | $ | 0 | ​ | $ | 399,168 | ​ | $ | 1,979,439 | ​ | $ | 3,660,546 | ​ | $ | 0 | ​ | $ | 417,009 | ​ | $ | 3,243,537
Obligations of state and political subdivisions | ​ |  | 506,838 | ​ |  | 20 | ​ |  | 72,393 | ​ |  | 434,465 | ​ |  | 549,118 | ​ |  | 506 | ​ |  | 45,327 | ​ |  | 504,297
Government agency mortgage-backed securities | ​ |  | 411,083 | ​ |  | 6 | ​ |  | 74,018 | ​ |  | 337,071 | ​ |  | 444,689 | ​ |  | 58 | ​ |  | 60,114 | ​ |  | 384,633
Corporate debt securities | ​ |  | 8,000 | ​ |  | 0 | ​ |  | 826 | ​ |  | 7,174 | ​ |  | 8,000 | ​ |  | 0 | ​ |  | 886 | ​ |  | 7,114
Government agency collateralized mortgage obligations | ​ |  | 10,287 | ​ |  | 0 | ​ |  | 800 | ​ |  | 9,487 | ​ |  | 13,121 | ​ |  | 1 | ​ |  | 852 | ​ |  | 12,270
Total available-for-sale portfolio | ​ | $ | 3,314,815 | ​ | $ | 26 | ​ | $ | 547,205 | ​ | $ | 2,767,636 | ​ | $ | 4,675,474 | ​ | $ | 565 | ​ | $ | 524,188 | ​ | $ | 4,151,851
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Held-to-Maturity Portfolio: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. Treasury and agency securities | ​ | $ | 1,101,679 | ​ | $ | 0 | ​ | $ | 134,091 | ​ | $ | 967,588 | ​ | $ | 1,079,695 | ​ | $ | 0 | ​ | $ | 44,900 | ​ | $ | 1,034,795
Government agency mortgage-backed securities | ​ | ​ | 23,861 | ​ | ​ | 0 | ​ | ​ | 789 | ​ | ​ | 23,072 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0
Total held-to-maturity portfolio | ​ | $ | 1,125,540 | ​ | $ | 0 | ​ | $ | 134,880 | ​ | $ | 990,660 | ​ | $ | 1,079,695 | ​ | $ | 0 | ​ | $ | 44,900 | ​ | $ | 1,034,795
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Equity and Other Securities: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Equity securities, at fair value | ​ | $ | 251 | ​ | $ | 69 | ​ | $ | 0 | ​ | $ | 320 | ​ | $ | 251 | ​ | $ | 168 | ​ | $ | 0 | ​ | $ | 419
Federal Home Loan Bank common stock | ​ |  | 26,524 | ​ |  | 0 | ​ |  | 0 | ​ |  | 26,524 | ​ |  | 47,497 | ​ |  | 0 | ​ |  | 0 | ​ |  | 47,497
Federal Reserve Bank common stock | ​ |  | 33,568 | ​ |  | 0 | ​ |  | 0 | ​ |  | 33,568 | ​ |  | 31,144 | ​ |  | 0 | ​ |  | 0 | ​ |  | 31,144
Other equity securities, at adjusted cost | ​ |  | 5,663 | ​ |  | 750 | ​ |  | 0 | ​ |  | 6,413 | ​ |  | 3,532 | ​ |  | 750 | ​ |  | 0 | ​ |  | 4,282
Total equity and other securities | ​ | $ | 66,006 | ​ | $ | 819 | ​ | $ | 0 | ​ | $ | 66,825 | ​ | $ | 82,424 | ​ | $ | 918 | ​ | $ | 0 | ​ | $ | 83,342
​ Included in the Company’s investment securities portfolio is Federal Reserve Bank (“FRB”) common stock with a carrying value of $33.6 million and $31.1 million at September 30, 2023 and December 31, 2022, respectively. The investment in FRB stock represents approximately half of the total required subscription, and the remaining half is unpaid and remains subject to call by the FRB. A summary of investment securities that have been in a continuous unrealized loss position is as follows: As of September 30, 2023 ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Less than 12 Months |  | 12 Months or Longer |  | Total
​ | ​ | ​ | ​ | ​ | ​ | ​ | Gross | ​ | ​ | ​ | ​ | ​ | ​ | Gross | ​ | ​ | ​ | ​ | ​ | ​ | Gross
​ | ​ | ​ | ​ | Fair | ​ | Unrealized | ​ | ​ | ​ | Fair | ​ | Unrealized | ​ | ​ | ​ | Fair | ​ | Unrealized
(000’s omitted) |  | # |  | Value |  | Losses |  | # |  | Value |  | Losses |  | # |  | Value |  | Losses
Available-for-Sale Portfolio: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ |  | ​ | ​ | ​ | ​ | ​ |
U.S. Treasury and agency securities | ​ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | 64 | ​ | $ | 1,979,439 | ​ | $ | 399,168 | ​ | 64 | ​ | $ | 1,979,439 | ​ | $ | 399,168
Obligations of state and political subdivisions | ​ | 285 | ​ |  | 165,835 | ​ |  | 12,417 | ​ | 434 | ​ |  | 263,067 | ​ |  | 59,976 | ​ | 719 | ​ |  | 428,902 | ​ |  | 72,393
Government agency mortgage-backed securities | ​ | 65 | ​ |  | 11,134 | ​ |  | 539 | ​ | 727 | ​ |  | 325,079 | ​ |  | 73,479 | ​ | 792 | ​ |  | 336,213 | ​ |  | 74,018
Corporate debt securities | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | 2 | ​ | ​ | 7,174 | ​ | ​ | 826 | ​ | 2 | ​ | ​ | 7,174 | ​ | ​ | 826
Government agency collateralized mortgage obligations | ​ | 0 | ​ |  | 0 | ​ |  | 0 | ​ | 40 | ​ |  | 9,467 | ​ |  | 800 | ​ | 40 | ​ |  | 9,467 | ​ |  | 800
Total available-for-sale investment portfolio | ​ | 350 | ​ | $ | 176,969 | ​ | $ | 12,956 | ​ | 1,267 | ​ | $ | 2,584,226 | ​ | $ | 534,249 | ​ | 1,617 | ​ | $ | 2,761,195 | ​ | $ | 547,205
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Held-to-Maturity Portfolio: |  | ​ | ​ |  |  | ​ |  |  |  | ​ | ​ |  |  | ​ |  |  |  | ​ | ​ |  |  | ​ |  | ​
U.S. Treasury and agency securities | ​ | 23 | ​ | $ | 967,588 | ​ | $ | 134,091 | ​ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | 23 | ​ | $ | 967,588 | ​ | $ | 134,091
Government agency mortgage-backed securities |  | 16 | ​ | ​ | 23,072 | ​ | ​ | 789 |  | 0 | ​ | ​ | 0 | ​ | ​ | 0 |  | 16 | ​ | ​ | 23,072 | ​ | ​ | 789
Total held-to-maturity portfolio |  | 39 | ​ | $ | 990,660 | ​ | $ | 134,880 |  | 0 | ​ | $ | 0 | ​ | $ | 0 |  | 39 | ​ | $ | 990,660 | ​ | $ | 134,880
​ As of December 31, 2022 ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Less than 12 Months |  | 12 Months or Longer |  | Total
​ | ​ | ​ | ​ | ​ | ​ | ​ | Gross | ​ | ​ | ​ | ​ | ​ | ​ | Gross | ​ | ​ | ​ | ​ | ​ | ​ | Gross
​ | ​ | ​ | ​ | Fair | ​ | Unrealized | ​ | ​ | ​ | Fair | ​ | Unrealized | ​ | ​ | ​ | Fair | ​ | Unrealized
(000’s omitted) |  | # |  | Value |  | Losses |  | # |  | Value |  | Losses |  | # |  | Value |  | Losses
Available-for-Sale Portfolio: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ |  | ​ | ​ |  | ​ | ​ |
U.S. Treasury and agency securities | ​ | 41 | ​ | $ | 1,384,075 | ​ | $ | 132,511 | ​ | 61 | ​ | $ | 1,859,462 | ​ | $ | 284,498 | ​ | 102 | ​ | $ | 3,243,537 | ​ | $ | 417,009
Obligations of state and political subdivisions | ​ | 582 | ​ |  | 370,524 | ​ |  | 35,488 | ​ | 76 | ​ |  | 47,923 | ​ |  | 9,839 | ​ | 658 | ​ |  | 418,447 | ​ |  | 45,327
Government agency mortgage-backed securities | ​ | 497 | ​ |  | 190,727 | ​ |  | 19,508 | ​ | 274 | ​ |  | 189,919 | ​ |  | 40,606 | ​ | 771 | ​ |  | 380,646 | ​ |  | 60,114
Corporate debt securities | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | 2 | ​ | ​ | 7,114 | ​ | ​ | 886 | ​ | 2 | ​ | ​ | 7,114 | ​ | ​ | 886
Government agency collateralized mortgage obligations | ​ | 29 | ​ |  | 9,968 | ​ |  | 600 | ​ | 17 | ​ |  | 2,274 | ​ |  | 252 | ​ | 46 | ​ |  | 12,242 | ​ |  | 852
Total available-for-sale investment portfolio | ​ | 1,149 | ​ | $ | 1,955,294 | ​ | $ | 188,107 | ​ | 430 | ​ | $ | 2,106,692 | ​ | $ | 336,081 | ​ | 1,579 | ​ | $ | 4,061,986 | ​ | $ | 524,188
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Held-to-Maturity Portfolio: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. Treasury and agency securities | ​ | 23 | ​ | $ | 1,034,795 | ​ | $ | 44,900 | ​ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | 23 | ​ | $ | 1,034,795 | ​ | $ | 44,900
Total held-to-maturity portfolio | ​ | 23 | ​ | $ | 1,034,795 | ​ | $ | 44,900 | ​ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | 23 | ​ | $ | 1,034,795 | ​ | $ | 44,900
​ The unrealized losses reported pertaining to available-for-sale securities issued by the U.S. government and its sponsored entities include treasuries, agencies, and mortgage-backed securities issued by Ginnie Mae, Fannie Mae, and Freddie Mac, which are currently rated AAA by Moody’s Investor Services, AA+ by Standard & Poor’s and are guaranteed by the U.S. government. The majority of the obligations of state and political subdivisions carry a credit rating of A or better. Additionally, a portion of the obligations of state and political subdivisions carry a secondary level of credit enhancement. The Company holds two corporate debt securities in an unrealized loss position and, based on an analysis done by the Company, the issuers of the securities show a low risk of default. Timely interest payments continue to be made on the securities. The unrealized losses in the portfolios are primarily attributable to changes in interest rates. As such, management does not believe any individual unrealized loss as of September 30, 2023 represents credit losses and no unrealized losses have been recognized in the provision for credit losses. Accordingly, there is no allowance for credit losses on the Company’s available-for-sale investment portfolio as of September 30, 2023. Accrued interest receivable on available-for-sale debt securities, included in accrued interest and fees receivable on the consolidated statements of condition, totaled $11.8 million at September 30, 2023 and is excluded from the estimate of credit losses. Securities classified as held-to-maturity are included under the CECL methodology. Calculation of expected credit loss under CECL is done on a collective (“pooled”) basis, with assets grouped when similar risk characteristics exist. The Company notes that at September 30, 2023 all securities in the held-to-maturity classification are U.S. Treasury securities and government agency mortgage-backed securities; therefore, they share the same risk characteristics and can be evaluated on a collective basis. The expected credit loss on these securities is evaluated based on historical credit losses of this security type and the expected possibility of default in the future, and these securities are guaranteed by the U.S. government. U.S. Treasury securities and government agency mortgage-backed securities often receive the highest credit rating by rating agencies and the Company has concluded that the possibility of default is considered remote. At September 30, 2023, the U.S. Treasury securities and government agency mortgage-backed securities held by the Company in the held-to-maturity category carry an AAA rating from Moody’s Investor Services and an AA+ rating from Standard & Poor’s. On August 1, 2023, Fitch downgraded the U.S. government’s long term rating from AAA to AA+. The credit rating downgrade does not impact the Company’s conclusion regarding the credit risk of U.S. government debt securities held in its investment portfolio. The Company concludes that the long history with no credit losses for these securities (adjusted for current conditions and reasonable and supportable forecasts) indicates an expectation that nonpayment of the amortized cost basis is zero. Management has concluded that the prepayment risk associated with these securities is insignificant and it is expected to recover the recorded investment. Accordingly, there is no allowance for credit losses on the Company’s held-to-maturity debt portfolio as of September 30, 2023. Accrued interest receivable on held-to-maturity debt securities, included in accrued interest and fees receivable on the consolidated statements of condition, totaled $2.9 million at September 30, 2023 and is excluded from the estimate of credit losses. The Company has the intent and ability to hold the securities to maturity. The amortized cost and estimated fair value of debt securities at September 30, 2023, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date, including government agency mortgage-backed securities and government agency collateralized mortgage obligations, are shown separately. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Held-to-Maturity | ​ | Available-for-Sale
​ | ​ | Amortized | ​ | Fair | ​ | Amortized | ​ | Fair
(000’s omitted) |  | Cost |  | Value |  | Cost |  | Value
Due in one year or less | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 17,031 | ​ | $ | 16,799
Due after one through five years | ​ |  | 0 | ​ |  | 0 | ​ | ​ | 1,473,904 | ​ | ​ | 1,295,411
Due after five years through ten years | ​ |  | 549,555 | ​ |  | 506,275 | ​ | ​ | 685,913 | ​ | ​ | 587,185
Due after ten years | ​ |  | 552,124 | ​ |  | 461,313 | ​ | ​ | 716,597 | ​ | ​ | 521,683
Subtotal | ​ |  | 1,101,679 | ​ |  | 967,588 | ​ | ​ | 2,893,445 | ​ | ​ | 2,421,078
Government agency mortgage-backed securities | ​ |  | 23,861 | ​ |  | 23,072 | ​ | ​ | 411,083 | ​ | ​ | 337,071
Government agency collateralized mortgage obligations | ​ |  | 0 | ​ |  | 0 | ​ | ​ | 10,287 | ​ | ​ | 9,487
Total | ​ | $ | 1,125,540 | ​ | $ | 990,660 | ​ | $ | 3,314,815 | ​ | $ | 2,767,636
​ Investment securities with a fair value of $2.19 billion and $2.18 billion at September 30, 2023 and December 31, 2022, respectively, were pledged to collateralize certain deposits, borrowings and potential future borrowings. Securities pledged to collateralize certain deposits and borrowings included $542.8 million and $466.9 million of U.S. Treasury securities that were pledged as collateral for securities sold under agreement to repurchase at September 30, 2023 and December 31, 2022, respectively. All securities sold under agreement to repurchase as of September 30, 2023 and December 31, 2022 have an overnight and continuous maturity. During the first quarter of 2023, the Company sold $786.1 million in book value of available-for-sale U.S. Treasury and agency securities, recognizing $52.3 million of gross realized losses. The sales were completed in January and February 2023 as part of a strategic balance sheet repositioning and were unrelated to the negative developments in the banking industry that occurred in March 2023. The proceeds from these sales of $733.8 million were redeployed entirely towards paying off existing overnight borrowings.

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