XML 21 R10.htm IDEA: XBRL DOCUMENT

Investment Securities

6 Months Ended

Jun. 30, 2025

2. Investment Securities

As of June 30, 2025 and December 31, 2024, investment securities consisted predominantly of the following investment categories:

Debt securities – includes debt securities issued by U.S. government agencies.

Mortgage-backed securities – includes securities backed by notes or receivables secured by mortgage assets with cash flows based on actual or scheduled payments.

Collateralized mortgage obligations – includes securities backed by a pool of mortgages with cash flows distributed based on certain rules rather than pass through payments.

Collateralized loan obligations – includes structured debt securities backed by a pool of loans, consisting of primarily non-investment grade broadly syndicated corporate loans with additional credit enhancement. These are floating rate securities that have an investment grade rating of AA or better.

Debt securities issued by states and political subdivisions – includes general obligation bonds issued by state and local governments.

As of June 30, 2025 and December 31, 2024, the Company’s investment securities were classified as either available-for-sale or held-to-maturity. Amortized cost, gross unrealized holding gains and losses and fair value of available-for-sale and held-to-maturity investment securities as of June 30, 2025 and December 31, 2024 were as follows:


	June 30, 2025								December 31, 2024
	Amortized		Unrealized		Unrealized		Fair		Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
Government agency debt securities	$	—	$	—	$	—	$	—	$	8,170	$	—	$	(23)	$	8,147
Mortgage-backed securities:
Residential - Government agency		35,295		286		(1,209)		34,372		37,473		—		(1,614)		35,859
Residential - Government-sponsored enterprises		786,643		348		(72,653)		714,338		840,836		—		(102,723)		738,113
Commercial - Government agency		243,434		—		(49,424)		194,010		249,348		—		(53,223)		196,125
Commercial - Government-sponsored enterprises		45,844		—		(1,931)		43,913		48,015		—		(3,107)		44,908
Commercial - Non-agency		88,812		504		—		89,316		22,000		83		—		22,083
Collateralized mortgage obligations:
Government agency		426,641		119		(42,773)		383,987		452,038		—		(54,914)		397,124
Government-sponsored enterprises		338,441		395		(40,184)		298,652		359,416		—		(48,734)		310,682
Collateralized loan obligations		132,796		270		—		133,066		173,152		323		—		173,475
Total available-for-sale securities	$	2,097,906	$	1,922	$	(208,174)	$	1,891,654	$	2,190,448	$	406	$	(264,338)	$	1,926,516

Government agency debt securities	$	47,692	$	—	$	(3,837)	$	43,855	$	49,267	$	—	$	(5,398)	$	43,869
Mortgage-backed securities:
Residential - Government agency		39,037		—		(5,310)		33,727		40,888		—		(6,579)		34,309
Residential - Government-sponsored enterprises		89,907		—		(12,880)		77,027		92,573		—		(14,854)		77,719
Commercial - Government agency		30,779		—		(8,140)		22,639		31,009		—		(8,666)		22,343
Commercial - Government-sponsored enterprises		1,100,422		217		(124,704)		975,935		1,114,549		201		(149,244)		965,506
Collateralized mortgage obligations:
Government agency		863,939		—		(100,312)		763,627		907,565		—		(126,020)		781,545
Government-sponsored enterprises		1,432,249		—		(168,283)		1,263,966		1,500,212		—		(210,721)		1,289,491
Debt securities issued by states and political subdivisions		54,789		—		(4,867)		49,922		54,587		—		(6,860)		47,727
Total held-to-maturity securities	$	3,658,814	$	217	$	(428,333)	$	3,230,698	$	3,790,650	$	201	$	(528,342)	$	3,262,509

Accrued interest receivable related to available-for-sale investment securities was $5.0 million and $5.6 million as of June 30, 2025 and December 31, 2024, respectively. Accrued interest receivable related to held-to-maturity investment securities was $6.3 million and $6.6 million as of June 30, 2025 and December 31, 2024, respectively. Accrued interest receivable is recorded separately from the amortized cost basis of investment securities on the Company’s unaudited interim consolidated balance sheets.

Proceeds from calls and sales of investment securities were $0.5 million and nil, respectively, for the three months ended June 30, 2025, and $40.6 million and nil, respectively, for the six months ended June 30, 2025. Proceeds from calls and sales of investment securities were $23.4 million and nil, respectively, for the three months ended June 30, 2024 and $33.8 million and nil, respectively, for the six months ended June 30, 2024. The Company recorded gross realized gains of nil and gross realized losses of nil for the three and six months ended June 30, 2025 and 2024. The income tax expense related to the Company’s net realized gain on the sale of investment securities was nil for the three and six months ended June 30, 2025 and 2024. Gains and losses realized on sales of securities are determined using the specific identification method.

Interest income from taxable investment securities was $25.7 million and $28.5 million, respectively, for the three months ended June 30, 2025 and 2024, and $52.4 million and $57.7 million, respectively, for the six months ended June 30, 2025 and 2024. Interest income from non-taxable investment securities was $3.1 million and $3.2 million, respectively, for the three months ended June 30, 2025 and 2024, and $6.2 million and $6.4 million, respectively, for the six months ended June 30, 2025 and 2024.

The amortized cost and fair value of debt securities issued by government agencies and states and political subdivisions, non-agency mortgage-backed securities and collateralized loan obligations as of June 30, 2025, by contractual maturity, are shown below. Mortgage-backed securities and collateralized mortgage obligations issued by government agencies and government-sponsored enterprises are disclosed separately in the table below as remaining expected maturities will differ from contractual maturities as borrowers have the right to prepay obligations.


	June 30, 2025
	Amortized		Fair
(dollars in thousands)	Cost		Value
Available-for-sale securities
Due in one year or less	$	—	$	—
Due after one year through five years		80,853		81,325
Due after five years through ten years		126,755		127,022
Due after ten years		14,000		14,035
		221,608		222,382

Mortgage-backed securities:
Residential - Government agency		35,295		34,372
Residential - Government-sponsored enterprises		786,643		714,338
Commercial - Government agency		243,434		194,010
Commercial - Government-sponsored enterprises		45,844		43,913
Total mortgage-backed securities		1,111,216		986,633
Collateralized mortgage obligations:
Government agency		426,641		383,987
Government-sponsored enterprises		338,441		298,652
Total collateralized mortgage obligations		765,082		682,639
Total available-for-sale securities	$	2,097,906	$	1,891,654

Held-to-maturity securities
Due in one year or less	$	—	$	—
Due after one year through five years		—		—
Due after five years through ten years		51,856		48,536
Due after ten years		50,625		45,241
		102,481		93,777

Mortgage-backed securities:
Residential - Government agency		39,037		33,727
Residential - Government-sponsored enterprises		89,907		77,027
Commercial - Government agency		30,779		22,639
Commercial - Government-sponsored enterprises		1,100,422		975,935
Total mortgage-backed securities		1,260,145		1,109,328
Collateralized mortgage obligations:
Government agency		863,939		763,627
Government-sponsored enterprises		1,432,249		1,263,966
Total collateralized mortgage obligations		2,296,188		2,027,593
Total held-to-maturity securities	$	3,658,814	$	3,230,698

At June 30, 2025, pledged securities totaled $4.2 billion, of which $2.4 billion was pledged to secure borrowing capacity, $1.7 billion was pledged to secure public deposits and $50.7 million was pledged to secure other financial transactions. At December 31, 2024, pledged securities totaled $3.8 billion, of which $2.1 billion was pledged to secure borrowing capacity, $1.7 billion was pledged to secure public deposits and $19.3 million was pledged to secure other financial transactions.

The Company held no securities of any single issuer, other than debt securities issued by government agencies and government-sponsored enterprises, which were in excess of 10% of stockholders’ equity as of June 30, 2025 and December 31, 2024.

The following tables present the unrealized gross losses and fair values of securities in the available-for-sale portfolio by length of time that the 144 and 159 individual securities in each category have been in a continuous loss position as of June 30, 2025 and December 31, 2024, respectively. The unrealized losses on available-for-sale investment securities were attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities.

Time in Continuous Loss as of June 30, 2025

Less Than 12 Months

12 Months or More

Total

Unrealized

(dollars in thousands)

Losses

Fair Value

Losses

Fair Value

Losses

Fair Value

Mortgage-backed securities:

Residential - Government agency

—

(1,209)

8,540

(1,209)

8,540

Residential - Government-sponsored enterprises

(119)

82,667

(72,534)

594,518

(72,653)

677,185

Commercial - Government agency

—

(49,424)

194,010

(49,424)

194,010

Commercial - Government-sponsored enterprises

—

(1,931)

43,913

(1,931)

43,913

Collateralized mortgage obligations:

Government agency

(123)

46,917

(42,650)

300,687

(42,773)

347,604

Government-sponsored enterprises

—

(40,184)

243,192

(40,184)

243,192

Total available-for-sale securities with unrealized losses

(242)

129,584

(207,932)

1,384,860

(208,174)

1,514,444


	Time in Continuous Loss as of December 31, 2024
	Less Than 12 Months				12 Months or More				Total
	Unrealized				Unrealized				Unrealized
(dollars in thousands)	Losses		Fair Value		Losses		Fair Value		Losses		Fair Value
Government agency debt securities	$	—	$	—	$	(23)	$	8,147	$	(23)	$	8,147
Mortgage-backed securities:
Residential - Government agency		(154)		27,127		(1,460)		8,732		(1,614)		35,859
Residential - Government-sponsored enterprises		(2,997)		116,084		(99,726)		622,029		(102,723)		738,113
Commercial - Government agency		—		—		(53,223)		196,125		(53,223)		196,125
Commercial - Government-sponsored enterprises		—		—		(3,107)		44,908		(3,107)		44,908
Collateralized mortgage obligations:
Government agency		(712)		76,968		(54,202)		310,171		(54,914)		387,139
Government-sponsored enterprises		(912)		57,509		(47,822)		253,173		(48,734)		310,682
Total available-for-sale securities with unrealized losses	$	(4,775)	$	277,688	$	(259,563)	$	1,443,285	$	(264,338)	$	1,720,973

At June 30, 2025 and December 31, 2024, the Company did not have any available-for-sale securities with the intent to sell and determined it was more likely than not that the Company would not be required to sell the securities prior to recovery of the amortized cost basis. As the Company had the intent and ability to hold the remaining available-for-sale securities in an unrealized loss position as of June 30, 2025 and December 31, 2024, each security with an unrealized loss position in the above tables has been further assessed to determine if a credit loss exists. As of June 30, 2025 and December 31, 2024, the Company did not expect any credit losses in its available-for-sale debt securities and no credit losses were recognized on available-for-sale securities during the three and six months ended June 30, 2025 and for the year ended December 31, 2024.

As of June 30, 2025 and December 31, 2024, the Company’s investment securities were comprised primarily of debt securities, mortgage-backed securities and collateralized mortgage obligations issued by U.S. government agencies and government-sponsored enterprises, with under 5% of the investment securities comprised of collateralized loan obligations rated AA or better, obligations issued by local state and political subdivisions rated AA or better and non-agency commercial mortgage-backed securities rated AAA. For investment securities issued by the U.S. Government, its agencies and government-sponsored enterprises, management has concluded that the long history with no credit losses from these issuers indicates an expectation that nonpayment of the amortized cost basis is zero, and these securities are explicitly or implicitly fully guaranteed by the U.S. government. The U.S. government can print its own currency and its currency is routinely held by central banks and other major financial institutions. The dollar is used in international commerce, and commonly is viewed as a reserve currency, all of which qualitatively indicates that historical credit loss information should be minimally affected by current conditions and reasonable and supportable forecasts. For collateralized loan obligations, debt securities issued by local state and political subdivisions and non-agency commercial mortgage-backed securities, these securities are investment grade and highly rated and carry either sufficient credit enhancement or days cash on hand to support timely payments of principal and interest. As a result, the Company does not expect any future payment defaults and has not recorded an allowance for credit losses for its available-for-sale and held-to-maturity debt securities as of June 30, 2025 or December 31, 2024.