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DEBT SECURITIES | 9 Months Ended
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Sep. 30, 2025
Investments, Debt and Equity Securities [Abstract] |
DEBT SECURITIES | DEBT SECURITIES The following table presents the amortized cost and fair value of the debt securities portfolio as of the dates indicated:
| September 30, 2025
(in thousands) | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Securities available-for-sale |  |  |  |  |  |  |
Obligations of states and political subdivisions | $459,834 |  | $8,954 |  | $(918) |  | $467,870
Mortgage-backed securities - residential | 2,373,146 |  | 28,273 |  | (27,264) |  | 2,374,155
Mortgage-backed securities - commercial | 389,469 |  | 1,402 |  | (12,693) |  | 378,178
Collateralized loan obligations | 188,500 |  | 189 |  | — |  | 188,689
Corporate bonds | 56,558 |  | 417 |  | (3,491) |  | 53,484
U.S. Treasury securities | 20,597 |  | — |  | (18) |  | 20,579
Agency debentures | 7,545 |  | 1 |  | (23) |  | 7,523
Total securities available-for-sale | $3,495,649 |  | $39,236 |  | $(44,407) |  | $3,490,478
Securities held-to-maturity |  |  |  |  |  |  |
Obligations of states and political subdivisions | $15,082 |  | $503 |  | $(9) |  | $15,576
Mortgage-backed securities - residential | 1,037,566 |  | — |  | (144,497) |  | 893,069
Mortgage-backed securities - commercial | 310,988 |  | — |  | (33,373) |  | 277,615
Total securities held-to-maturity | $1,363,636 |  | $503 |  | $(177,879) |  | $1,186,260
| December 31, 2024
(in thousands) | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Securities available-for-sale |  |  |  |  |  |  |
Obligations of states and political subdivisions | $91,799 |  | $699 |  | $(1,199) |  | $91,299
Mortgage-backed securities - residential | 2,694,745 |  | 2,107 |  | (53,164) |  | 2,643,688
Mortgage-backed securities - commercial | 259,793 |  | 22 |  | (18,953) |  | 240,862
Collateralized loan obligations | 50,000 |  | — |  | — |  | 50,000
Corporate bonds | 43,968 |  | — |  | (4,566) |  | 39,402
Total securities available-for-sale | $3,140,305 |  | $2,828 |  | $(77,882) |  | $3,065,251
Securities held-to-maturity |  |  |  |  |  |  |
Obligations of states and political subdivisions | $14,193 |  | $509 |  | $(30) |  | $14,672
Mortgage-backed securities - residential | 1,115,389 |  | — |  | (196,949) |  | 918,440
Mortgage-backed securities - commercial | 310,912 |  | — |  | (48,024) |  | 262,888
Total securities held-to-maturity | $1,440,494 |  | $509 |  | $(245,003) |  | $1,196,000
In addition to the reported fair values of the debt securities reflected above, the Company is entitled to receive accrued interest and dividends from its securities. Included in interest receivable and other assets on the consolidated balance sheets as of September 30, 2025 and December 31, 2024 was $19.6 million and $15.9 million, respectively, of interest and dividends receivable from the Company’s debt securities. Accrued interest receivable from securities available-for-sale totaled $17.4 million and $13.6 million at September 30, 2025 and December 31, 2024, respectively. Accrued interest receivable from securities held-to-maturity totaled $2.2 million and $2.4 million at September 30, 2025 and December 31, 2024, respectively. Substantially all the mortgage-backed securities represent securities issued or guaranteed by government sponsored enterprises and government entities. Municipal bonds are comprised of general obligation bonds (i.e., backed by the general credit of the issuer) and revenue bonds (i.e., backed by either collateral or revenues from the specific project being financed) issued by various municipal and corporate entities. As of September 30, 2025 and December 31, 2024, substantially all securities held, including municipal bonds, corporate debt securities, and collateralized loan obligations were rated investment grade based upon nationally recognized statistical rating organizations where available. At September 30, 2025, the Company held $50.4 million of trading securities, consisting of U.S. Treasury notes used as economic hedges of our single family mortgage servicing rights, which are carried at fair value and reported as trading securities on the consolidated balance sheet. For both the quarter and nine months ended September 30, 2025, the Company had net gains of $98 thousand on trading securities, which were recorded in loan servicing income. At December 31, 2024, there were no trading securities, and there were no net gains or losses on trading securities for the quarter and nine months ended September 30, 2024. In accordance with accounting standards, only the realized gains and losses from securities transactions are included in the consolidated income statement as net gain (loss) on sale of investment securities. In 2025, investment securities were sold primarily to generate liquidity for the Merger. During the first quarter of 2024, the Company executed an investment portfolio restructuring of its AFS investment securities portfolio. The Company sold $1.8 billion of lower yielding AFS securities and realized a loss of $207.2 million. The proceeds from the sale were used to purchase $1.6 billion of higher yielding investments. No gross gains were realized on the sales. The following table presents proceeds, gross realized gains and gross realized losses from sales and calls of available-for- sale investments:
| Quarter Ended September 30, |  | Nine Months Ended September 30,
(in thousands) | 2025 |  | 2024 |  | 2025 |  | 2024
Proceeds | $1,801 |  | $— |  | $931,770 |  | $1,629,114
Gross gains | 155 |  | — |  | 5,215 |  | —
Gross losses | — |  | — |  | 923 |  | 207,203
Tax-exempt interest income on investment securities was $1.9 million and $776 thousand for the quarter ended September 30, 2025 and 2024, and $3.4 million and $2.4 million for the nine months ended September 30, 2025 and 2024, respectively. The Company reassessed classification of certain investments and effective January 1, 2022, transferred $1.7 billion in residential and commercial mortgage-backed securities from available-for-sale to held-to-maturity securities. The transfer occurred at fair value. The related net unrealized loss of $23.5 million, or $16.7 million net of deferred taxes, included in other comprehensive income remained in other comprehensive income. For the three and nine months ended September 30, 2025 and 2024, $627 thousand, $648 thousand, $1.9 million and $1.9 million, respectively, of the unrealized loss was accreted to interest income as a yield adjustment through earnings and will b e accreted over the remaining term of the securities. No gain or loss was recorded at the time of transfer. The following table summarizes available-for-sale securities with unrealized and unrecognized losses at September 30, 2025 and December 31, 2024 aggregated by major security type and length of time in a continuous unrealized and unrecognized loss position:
| September 30, 2025
| Less than 12 months |  | 12 months or more |  | Total
(dollars in thousands) | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses
Obligations of states and political subdivisions | $60,303 |  | $222 |  | $31,326 |  | $696 |  | $91,629 |  | $918
Mortgage-backed securities - residential | 196,863 |  | 517 |  | 438,518 |  | 26,747 |  | 635,381 |  | 27,264
Mortgage-backed securities - commercial | 46,281 |  | 69 |  | 158,651 |  | 12,624 |  | 204,932 |  | 12,693
Corporate bonds | 3,387 |  | 121 |  | 26,629 |  | 3,370 |  | 30,016 |  | 3,491
U.S. Treasury securities | 20,579 |  | 18 |  | — |  | — |  | 20,579 |  | 18
Agency debentures | 6,511 |  | 23 |  | — |  | — |  | 6,511 |  | 23
Total | $333,924 |  | $970 |  | $655,124 |  | $43,437 |  | $989,048 |  | $44,407
Number of securities with unrealized losses |  |  | 142 |  |  |  | 252 |  |  |  | 394
| December 31, 2024
| Less than 12 months |  | 12 months or more |  | Total
(dollars in thousands) | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses
Obligations of states and political subdivisions | $19,273 |  | $162 |  | $28,394 |  | $1,037 |  | $47,667 |  | $1,199
Mortgage-backed securities - residential | 1,381,125 |  | 15,337 |  | 311,751 |  | 37,827 |  | 1,692,876 |  | 53,164
Mortgage-backed securities - commercial | 98,071 |  | 422 |  | 107,118 |  | 18,531 |  | 205,189 |  | 18,953
Corporate bonds | — |  | — |  | 39,402 |  | 4,566 |  | 39,402 |  | 4,566
Total | $1,498,469 |  | $15,921 |  | $486,665 |  | $61,961 |  | $1,985,134 |  | $77,882
Number of securities with unrealized losses |  |  | 60 |  |  |  | 280 |  |  |  | 340
The Company did not record an ACL on the debt securities portfolio at September 30, 2025 or December 31, 2024. As of both dates, the Company considers any unrealized loss across the classes of major security-type to be related to fluctuations in market conditions, primarily interest rates, and not reflective of a deterioration in credit quality. The Company maintains that it has intent and ability to hold these securities until the amortized cost basis of each security is recovered and likewise concluded as of September 30, 2025 that it was not more likely than not that any of the securities in an unrealized loss position would be required to be sold. The following factors were considered in determining that an ACL was not required at September 30, 2025 or December 31, 2024. Obligations of States and Political Subdivisions: The unrealized losses on the Company’s investments in obligations of states and political subdivisions are primarily due to changes in interest rates and not due to credit losses. Management monitors these securities on an ongoing basis and performs an internal analysis which takes into account the impact from market rates movements, severity and duration of the unrealized loss position, viability of the issuer, recent downgrades in ratings, and external credit rating assessments. As a result, management expects to recover the entire amortized cost basis of these securities. Mortgage-Backed Securities - Residential and Commercial: The unrealized losses on the Company’s investments in residential and commercial MBS are primarily due to changes in interest rates. These securities are either implicitly or explicitly guaranteed by the U.S. government, as such management expects to recover the entire amortized cost basis of these securities. Collateralized Loan Obligations: There were no unrealized losses on the Company’s collateralized loan obligations. Corporate Bonds: The unrealized losses on the Company’s investments in corporate bonds are due to slight discount margin variances related to changes in market rates and not due to credit losses. Management monitors these securities on an ongoing basis and performs an internal analysis which includes a review of credit quality, changes in ratings, assessment of regulatory and financial ratios, and general standing versus peer group. Management expects to recover the entire amortized cost basis of these securities. U.S. Treasury Securities: The unrealized losses on the Company’s investments in U.S. Treasury securities are primarily due to changes in interest rates. These securities are backed by the full faith and credit of the U.S. government, as such management expects to recover the entire amortized cost basis of these securities. Agency Debentures: The unrealized losses on the Company’s investments in agency debentures are primarily due to changes in interest rates. These securities are either implicitly or explicitly guaranteed by the U.S. government, as such management expects to recover the entire amortized cost basis of these securities. At September 30, 2025, investment securities with a carrying value of $3.0 billion were pledged to secure borrowings from the Federal Reserve, and investment securities with a carrying value of $1.5 billion were pledged to secure the Company’s obligations for securities sold under agreements to repurchase and to collateralize certain public, trust and bankruptcy deposits as required by law. As of September 30, 2025, there were no past due or nonaccrual available-for-sale or held-to-maturity securities. The fair value of available-for-sale securities and the amortized cost and fair value of held-to-maturity debt securities are shown by contractual maturity in the following tables. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Contractual maturities of securities as of September 30, 2025 were as follows:
| September 30, 2025
(in thousands) | Within One Year |  | After One Through Five Years |  | After Five Through Ten Years |  | After Ten Years |  | Total
Securities available-for-sale |  |  |  |  |  |  |  |  |
Obligations of states and political subdivisions | $345 |  | $45,276 |  | $90,330 |  | $331,919 |  | $467,870
Mortgage-backed securities - residential | 446 |  | 16,887 |  | 26,601 |  | 2,330,221 |  | 2,374,155
Mortgage-backed securities - commercial | 2,460 |  | 190,384 |  | 158,333 |  | 27,001 |  | 378,178
Collateralized loan obligations | — |  | — |  | — |  | 188,689 |  | 188,689
Corporate bonds | — |  | 3,388 |  | 50,096 |  | — |  | 53,484
U.S. Treasury securities | — |  | 20,579 |  | — |  | — |  | 20,579
Agency debentures | — |  | 1,384 |  | 3,942 |  | 2,197 |  | 7,523
Total | $3,251 |  | $277,898 |  | $329,302 |  | $2,880,027 |  | $3,490,478
| September 30, 2025
(in thousands) | Within One Year |  | After One Through Five Years |  | After Five Through Ten Years |  | After Ten Years |  | Total
Securities held-to- maturity | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Obligations of states and political subdivisions | $5,244 |  | $5,243 |  | $3,592 |  | $3,635 |  | $4,621 |  | $4,966 |  | $1,625 |  | $1,732 |  | $15,082 |  | $15,576
Mortgage-backed securities - residential | — |  | — |  | 58 |  | 57 |  | — |  | — |  | 1,037,508 |  | 893,012 |  | 1,037,566 |  | 893,069
Mortgage-backed securities - commercial | — |  | — |  | 139,756 |  | 126,430 |  | 171,232 |  | 151,185 |  | — |  | — |  | 310,988 |  | 277,615
Total | $5,244 |  | $5,243 |  | $143,406 |  | $130,122 |  | $175,853 |  | $156,151 |  | $1,039,133 |  | $894,744 |  | $1,363,636 |  | $1,186,260

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