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INVESTMENT SECURITIES

12 Months Ended

Dec. 31, 2024

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE C: INVESTMENT SECURITIES

The amortized cost and estimated fair value of investment securities as of December 31 are as follows:


		2024												2023
					Gross			Gross									Gross			Gross
		Amortized			Unrealized			Unrealized			Estimated			Amortized			Unrealized			Unrealized			Estimated
(000’s omitted)		Cost			Gains			Losses			Fair Value			Cost			Gains			Losses			Fair Value
Available-for-Sale Portfolio:
U.S. Treasury and agency securities		$	2,389,208		$	0		$	305,422		$	2,083,786		$	2,381,168		$	0		$	300,385		$	2,080,783
Obligations of state and political subdivisions			428,204			288			41,997			386,495			502,879			1,469			29,985			474,363
Government agency mortgage-backed securities			360,102			37			58,915			301,224			400,062			76			51,612			348,526
Corporate debt securities			8,000			0			303			7,697			8,000			0			606			7,394
Government agency collateralized mortgage obligations			6,878			0			366			6,512			9,498			0			572			8,926
Total available-for-sale portfolio		$	3,192,392		$	325		$	407,003		$	2,785,714		$	3,301,607		$	1,545		$	383,160		$	2,919,992
Held-to-Maturity Portfolio:
U.S. Treasury and agency securities		$	1,138,743		$	0		$	123,194		$	1,015,549		$	1,109,101		$	0		$	50,866		$	1,058,235
Government agency mortgage-backed securities			206,412			448			2,241			204,619			63,073			688			180			63,581
Total held-to-maturity portfolio		$	1,345,155		$	448		$	125,435		$	1,220,168		$	1,172,174		$	688		$	51,046		$	1,121,816

As of December 31, 2024, equity and other securities on the consolidated statements of condition consists of equity securities with readily determinable fair values carried at $2.4 million and equity securities without readily determinable fair values carried at $85.1 million, including FHLB common stock of $45.4 million, Federal Reserve Bank (“FRB”) common stock of $33.4 million and other equity securities of $6.3 million.

As of December 31, 2023, equity and other securities on the consolidated statements of condition consists of equity securities with readily determinable fair values carried at $0.4 million and equity securities without readily determinable fair values carried at $72.8 million, including FHLB common stock of $32.5 million, FRB common stock of $33.6 million and other equity securities of $6.7 million.

Pursuant with FRB standards, 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.

The amount of upward and downward adjustments to equity securities without readily determinable fair values was not material for the year ended December 31, 2024, 2023 and 2022.

The gains and losses on equity and other securities for the years ended December 31, 2024, 2023 and 2022 are as follows:


(000's omitted)		2024			2023			2022
Net gain (loss) recognized on equity securities		$	1,231		$	(47)		$	(44)
Less: Net gain (loss) recognized on equity securities sold during the period			0			0			0
Unrealized gain (loss) recognized on equity securities still held		$	1,231		$	(47)		$	(44)

A summary of investment securities that have been in a continuous unrealized loss position for less than or greater than twelve months is as follows:

As of December 31, 2024


	Less than 12 Months							12 Months or Longer						Total
					Gross						Gross						Gross
					Unrealized						Unrealized						Unrealized
(000’s omitted)		Fair Value			Losses			Fair Value			Losses			Fair Value			Losses
Available-for-Sale Portfolio:
U.S. Treasury and agency securities		$	0		$	0		$	2,083,786		$	305,422		$	2,083,786		$	305,422
Obligations of state and political subdivisions			47,144			847			301,202			41,150			348,346			41,997
Government agency mortgage-backed securities			7,943			221			290,786			58,694			298,729			58,915
Corporate debt securities			0			0			7,697			303			7,697			303
Government agency collateralized mortgage obligations			0			0			6,501			366			6,501			366
Total available-for-sale investment portfolio		$	55,087		$	1,068		$	2,689,972		$	405,935		$	2,745,059		$	407,003

Held-to-Maturity Portfolio:
U.S Treasury and agency securities		$	0		$	0		$	1,015,549		$	123,194		$	1,015,549		$	123,194
Government agency mortgage-backed securities			149,742			2,027			15,281			214			165,023			2,241
Total held-to-maturity portfolio		$	149,742		$	2,027		$	1,030,830		$	123,408		$	1,180,572		$	125,435

As of December 31, 2023


		Less than 12 Months						12 Months or Longer						Total
					Gross						Gross						Gross
					Unrealized						Unrealized						Unrealized
(000’s omitted)		Fair Value			Losses			Fair Value			Losses			Fair Value			Losses
Available-for-Sale Portfolio:
U.S. Treasury and agency securities		$	0		$	0		$	2,080,783		$	300,385		$	2,080,783		$	300,385
Obligations of state and political subdivisions			63,541			878			287,191			29,107			350,732			29,985
Government agency mortgage-backed securities			8,586			55			336,266			51,557			344,852			51,612
Corporate debt securities			0			0			7,394			606			7,394			606
Government agency collateralized mortgage obligations			0			0			8,907			572			8,907			572
Total available-for-sale investment portfolio		$	72,127		$	933		$	2,720,541		$	382,227		$	2,792,668		$	383,160

Held-to-Maturity Portfolio:
U.S Treasury and agency securities		$	536,885		$	15,953		$	521,350		$	34,913		$	1,058,235		$	50,866
Government agency mortgage-backed securities			18,951			158			1,393			22			20,344			180
Total held-to-maturity portfolio		$	555,836		$	16,111		$	522,743		$	34,935		$	1,078,579		$	51,046

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 of the financial position of the issuers including financial performance, liquidity and regulatory capital ratios, the issuers of the securities show a remote 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 December 31, 2024 and 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 December 31, 2024 and 2023.

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 December 31, 2024 and 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. The U.S. Treasury securities and government agency mortgage-backed securities held by the Company in the held-to-maturity category carry an AA+ rating from Standard & Poor’s, AAA from Moody’s Investor Services, and AA+ from Fitch. 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 December 31, 2024 and 2023. The Company has the intent and ability to hold the securities to maturity.

The amortized cost and estimated fair value of debt securities at December 31, 2024, 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 are shown separately.


		Held-to-Maturity						Available-for-Sale
(000’s omitted)		Amortized Cost			Fair Value			Amortized Cost			Fair Value
Due in one year or less		$	0		$	0		$	9,386		$	9,333
Due after one through five years			0			0			1,952,103			1,788,434
Due after five years through ten years			565,934			530,096			303,068			257,109
Due after ten years			572,809			485,453			560,855			423,102
Subtotal			1,138,743			1,015,549			2,825,412			2,477,978
Government agency mortgage-backed securities			206,412			204,619			360,102			301,224
Government agency collateralized mortgage obligations			0			0			6,878			6,512
Total		$	1,345,155		$	1,220,168		$	3,192,392		$	2,785,714

Investment securities with a carrying value of $2.27 billion and $2.14 billion at December 31, 2024 and 2023, respectively, were pledged to collateralize certain deposits and borrowings. Securities pledged to collateralize certain deposits and borrowings included $362.1 million and $598.9 million of U.S. Treasury securities that were pledged as collateral for securities sold under agreement to repurchase at December 31, 2024 and 2023, respectively. All securities sold under agreement to repurchase as of December 31, 2024 and 2023 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.