XML 30 R12.htm IDEA: XBRL DOCUMENT
v3.22.4

Investment Securities | 12 Months Ended
--- | ---
Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | INVESTMENT SECURITIES Held-to-maturity (“HTM”) securities, which include any security for which the Company has both the positive intent and ability to hold until maturity, are carried at historical cost adjusted for amortization of premiums and accretion of discounts. Premiums and discounts are amortized and accreted, respectively, to interest income using the constant effective yield method over the security’s estimated life. Prepayments are anticipated for mortgage-backed and SBA securities. Premiums on callable securities are amortized to their earliest call date. Available-for-sale (“AFS”) securities, which include any security for which the Company has no immediate plan to sell but which may be sold in the future, are carried at fair value. Realized gains and losses, based on specifically identified amortized cost of the individual security, are included in other income. Unrealized gains and losses are recorded, net of related income tax effects, in stockholders’ equity, further discussed below. Premiums and discounts are amortized and accreted, respectively, to interest income using the constant effective yield method over the estimated life of the security. Prepayments are anticipated for mortgage-backed and SBA securities. Premiums on callable securities are amortized to their earliest call date. During the quarters ended June 30, 2022 and September 30, 2021, the Company transferred, at fair value, $1.99 billion and $500.8 million, respectively, of securities from the available-for-sale portfolio to the held-to-maturity portfolio. As of December 31, 2022, the related remaining net unrealized losses of $147.0 million and net unrealized gains of $690,000, respectively, in accumulated other comprehensive income (loss) will be amortized over the remaining life of the securities. No gains or losses on these securities were recognized at the time of transfer. The amortized cost, fair value and allowance for credit losses of investment securities that are classified as HTM are as follows:
(In thousands) | Amortized Cost |  | Allowance for Credit Losses |  | Net Carrying Amount |  | Gross Unrealized Gains |  | Gross Unrealized (Losses) |  | Estimated Fair Value
Held-to-maturity |  |  |  |  |  |  |  |  |  |  |
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |
U.S. Government agencies | $ | 448,012 |  |  | $ | — |  |  | $ | 448,012 |  |  | $ | — |  |  | $ | (102,558) |  |  | $ | 345,454 |
Mortgage-backed securities | 1,190,781 |  |  | — |  |  | 1,190,781 |  |  | 227 |  |  | (118,960) |  |  | 1,072,048 |
State and political subdivisions | 1,861,102 |  |  | (110) |  |  | 1,860,992 |  |  | 56 |  |  | (446,198) |  |  | 1,414,850 |
Other securities | 261,199 |  |  | (1,278) |  |  | 259,921 |  |  | — |  |  | (29,040) |  |  | 230,881 |
Total HTM | $ | 3,761,094 |  |  | $ | (1,388) |  |  | $ | 3,759,706 |  |  | $ | 283 |  |  | $ | (696,756) |  |  | $ | 3,063,233 |
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |
U.S. Government agencies | $ | 232,609 |  |  | $ | — |  |  | $ | 232,609 |  |  | $ | — |  |  | $ | (7,914) |  |  | $ | 224,695 |
Mortgage-backed securities | 70,342 |  |  | — |  |  | 70,342 |  |  | 232 |  |  | (1,425) |  |  | 69,149 |
State and political subdivisions | 1,210,248 |  |  | (1,197) |  |  | 1,209,051 |  |  | 6,166 |  |  | (8,462) |  |  | 1,206,755 |
Other securities | 17,301 |  |  | (82) |  |  | 17,219 |  |  | — |  |  | (440) |  |  | 16,779 |
Total HTM | $ | 1,530,500 |  |  | $ | (1,279) |  |  | $ | 1,529,221 |  |  | $ | 6,398 |  |  | $ | (18,241) |  |  | $ | 1,517,378 |
Mortgage-backed securities (“MBS”) are commercial MBS, secured by commercial properties, and residential MBS, generally secured by single-family residential properties. All mortgage-backed securities included in the table above were issued by U.S. government agencies or corporations. As of December 31, 2022, HTM MBS consisted of $149.2 million and $1.04 billion of commercial MBS and residential MBS, respectively. As of December 31, 2021, HTM MBS consisted of $4.9 million and $65.5 million of commercial MBS and residential MBS, respectively. The amortized cost, fair value and allowance for credit losses of investment securities that are classified as AFS are as follows:
(In thousands) | Amortized Cost |  | Allowance for Credit Losses |  | Gross Unrealized Gains |  | Gross Unrealized (Losses) |  | Estimated Fair Value
Available-for-sale |  |  |  |  |  |  |  |  |
December 31, 2022 |  |  |  |  |  |  |  |  |
U.S. Treasury | $ | 2,257 |  |  | $ | — |  |  | $ | — |  |  | $ | (60) |  |  | $ | 2,197 |
U.S. Government agencies | 191,498 |  |  | — |  |  | 103 |  |  | (7,322) |  |  | 184,279 |
Mortgage-backed securities | 2,809,319 |  |  | — |  |  | 20 |  |  | (266,437) |  |  | 2,542,902 |
State and political subdivisions | 1,056,124 |  |  | — |  |  | 250 |  |  | (185,300) |  |  | 871,074 |
Other securities | 272,215 |  |  | — |  |  | — |  |  | (19,813) |  |  | 252,402 |
Total AFS | $ | 4,331,413 |  |  | $ | — |  |  | $ | 373 |  |  | $ | (478,932) |  |  | $ | 3,852,854 |
December 31, 2021 |  |  |  |  |  |  |  |  |
U.S. Treasury | $ | 300 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 300 |
U.S. Government agencies | 374,754 |  |  | — |  |  | 495 |  |  | (10,608) |  |  | 364,641 |
Mortgage-backed securities | 4,485,548 |  |  | — |  |  | 6,307 |  |  | (43,239) |  |  | 4,448,616 |
State and political subdivisions | 1,791,097 |  |  | — |  |  | 30,556 |  |  | (1,995) |  |  | 1,819,658 |
Other securities | 479,162 |  |  | — |  |  | 6,647 |  |  | (5,479) |  |  | 480,330 |
Total AFS | $ | 7,130,861 |  |  | $ | — |  |  | $ | 44,005 |  |  | $ | (61,321) |  |  | $ | 7,113,545 |
All mortgage-backed securities included in the table above were issued by U.S. government agencies or corporations. As of December 31, 2022, AFS MBS consisted of $1.07 billion and $1.47 billion of commercial MBS and residential MBS, respectively. As of December 31, 2021, AFS MBS consisted of $1.53 billion and $2.92 billion of commercial MBS and residential MBS, respectively. Accrued interest receivable on HTM and AFS securities at December 31, 2022 was $20.7 million and $16.7 million, respectively, and is included in interest receivable on the consolidated balance sheets. The Company has made the election to exclude all accrued interest receivable from securities from the estimate of credit losses. The following table summarizes the Company’s AFS investments in an unrealized loss position for which an allowance for credit loss has not been recorded as of December 31, 2022, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:
| Less Than 12 Months |  | 12 Months or More |  | Total
(In thousands) | Estimated Fair Value |  | Gross Unrealized Losses |  | Estimated Fair Value |  | Gross Unrealized Losses |  | Estimated Fair Value |  | Gross Unrealized Losses
Available-for-sale |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury | $ | 2,197 |  |  | $ | (60) |  |  | $ | — |  |  | $ | — |  |  | $ | 2,197 |  |  | $ | (60) |
U.S. Government agencies | 101,138 |  |  | (3,263) |  |  | 66,970 |  |  | (4,059) |  |  | 168,108 |  |  | (7,322) |
Mortgage-backed securities | 653,288 |  |  | (27,437) |  |  | 1,880,277 |  |  | (239,000) |  |  | 2,533,565 |  |  | (266,437) |
State and political subdivisions | 147,989 |  |  | (24,740) |  |  | 692,478 |  |  | (160,560) |  |  | 840,467 |  |  | (185,300) |
Other securities | 176,505 |  |  | (11,401) |  |  | 75,439 |  |  | (8,412) |  |  | 251,944 |  |  | (19,813) |
Total AFS | $ | 1,081,117 |  |  | $ | (66,901) |  |  | $ | 2,715,164 |  |  | $ | (412,031) |  |  | $ | 3,796,281 |  |  | $ | (478,932) |
As of December 31, 2022, the Company’s investment portfolio included $3.85 billion of AFS securities, of which $3.80 billion, or 98.5%, were in an unrealized loss position that are not deemed to have credit losses. A portion of the unrealized losses were related to the Company’s MBS, which are issued and guaranteed by U.S. government-sponsored entities and agencies, and the Company’s state and political subdivision securities, specifically investments in insured fixed rate municipal bonds for which the issuers continue to make timely principal and interest payments under the contractual terms of the securities. Furthermore, the decline in fair value for each of the above AFS securities is attributable to the rates for those investments yielding less than current market rates. Management does not believe any of the securities are impaired due to reasons of credit quality. Management believes the declines in fair value for the securities are temporary. Management does not have the intent to sell the securities, and management believes it is more likely than not the Company will not have to sell the securities before recovery of their amortized cost basis. Allowance for Credit Losses All MBS held by the Company are issued by U.S. government-sponsored entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. Accordingly, no allowance for credit losses has been recorded for these securities. Regarding securities issued by state and political subdivisions and other HTM securities, management considers (i) issuer bond ratings, (ii) historical loss rates for given bond ratings, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, (iv) internal forecasts, (v) whether or not such securities provide insurance or other credit enhancement or are pre-refunded by the issuers. The following table details activity in the allowance for credit losses by investment security type for the years ended December 31, 2022 and 2021 on the Company’s HTM and AFS securities held.
(In thousands) | State and Political Subdivisions |  | Other Securities |  | Total
December 31, 2022 |  |  |  |  |
Held-to-maturity |  |  |  |  |
Beginning balance, January 1, 2022 | $ | 1,197 |  |  | $ | 82 |  |  | $ | 1,279 |
Provision for credit loss expense | — |  |  | — |  |  | — |
Net increase (decrease) in allowance on previously impaired securities | (1,180) |  |  | 1,180 |  |  | — |
Recoveries | 93 |  |  | 16 |  |  | 109 |
Ending balance, December 31, 2022 | $ | 110 |  |  | $ | 1,278 |  |  | $ | 1,388 |
December 31, 2021 |  |  |  |  |
Held-to-maturity |  |  |  |  |
Beginning balance, January 1, 2021 | $ | 2,307 |  |  | $ | 608 |  |  | $ | 2,915 |
Provision for credit loss expense | (1,110) |  |  | (73) |  |  | (1,183) |
Securities charged-off | — |  |  | (600) |  |  | (600) |
Recoveries | — |  |  | 147 |  |  | 147 |
Ending balance, December 31, 2021 | $ | 1,197 |  |  | $ | 82 |  |  | $ | 1,279 |
Available-for-sale |  |  |  |  |
Beginning balance, January 1, 2021 | $ | 217 |  |  | $ | 95 |  |  | $ | 312 |
Reduction due to sales | — |  |  | (11) |  |  | (11) |
Net decrease in allowance on previously impaired securities | (217) |  |  | (84) |  |  | (301) |
Ending balance, December 31, 2021 | $ | — |  |  | $ | — |  |  | $ | — |
Based upon the Company’s analysis of the underlying risk characteristics of its AFS portfolio, including credit ratings and other qualitative factors, as previously discussed, there was no provision for credit losses related to AFS securities recorded during the twelve months ended December 31, 2022. During the year ended December 31, 2021, the provision for credit losses related to AFS securities was reduced by $312,000. The following table summarizes bond ratings for the Company’s HTM portfolio issued by state and political subdivisions and other securities as of December 31, 2022:
| State and Political Subdivisions |  |
(In thousands) | Not Guaranteed or Pre-Refunded |  | Other Credit Enhancement or Insurance |  | Pre-Refunded |  | Total |  | Other Securities
Aaa/AAA | $ | 183,096 |  |  | $ | 284,142 |  |  | $ | — |  |  | $ | 467,238 |  |  | $ | — |
Aa/AA | 665,150 |  |  | 504,783 |  |  | — |  |  | 1,169,933 |  |  | — |
A | 45,471 |  |  | 157,439 |  |  | — |  |  | 202,910 |  |  | 173,142 |
Baa/BBB | — |  |  | 5,938 |  |  | — |  |  | 5,938 |  |  | 53,573 |
Not Rated | 8,215 |  |  | 6,868 |  |  | — |  |  | 15,083 |  |  | 34,484 |
Total | $ | 901,932 |  |  | $ | 959,170 |  |  | $ | — |  |  | $ | 1,861,102 |  |  | $ | 261,199 |
Historical loss rates associated with securities having similar grades as those in the Company’s portfolio have generally not been significant. Pre-refunded securities, if any, have been defeased by the issuer and are fully secured by cash and/or U.S. Treasury securities held in escrow for payment to holders when the underlying call dates of the securities are reached. Securities with other credit enhancement or insurance continue to make timely principal and interest payments under the contractual terms of the securities. Accordingly, no allowance for credit losses has been recorded for these securities as there is no current expectation of credit losses related to these securities. Income earned on securities for the years ended December 31, 2022, 2021 and 2020, is as follows:
(In thousands) | 2022 |  | 2021 |  | 2020
Taxable: |  |  |  |  |
Held-to-maturity | $ | 33,778 |  |  | $ | 4,208 |  |  | $ | 985 |
Available-for-sale | 60,659 |  |  | 54,768 |  |  | 34,054 |
Non-taxable: |  |  |  |  |
Held-to-maturity | 36,516 |  |  | 16,047 |  |  | 919 |
Available-for-sale | 27,250 |  |  | 36,670 |  |  | 28,575 |
Total | $ | 158,203 |  |  | $ | 111,693 |  |  | $ | 64,533 |
The amortized cost and estimated fair value by maturity of securities are shown in the following table as of December 31, 2022. Securities are classified according to their contractual maturities without consideration of principal amortization, potential prepayments or call options. Accordingly, actual maturities may differ from contractual maturities.
|  | Held-to-Maturity |  | Available-for-Sale
(In thousands) |  | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
One year or less |  | $ | 2,639 |  |  | $ | 2,635 |  |  | $ | 12,368 |  |  | $ | 12,169 |
After one through five years |  | 7,822 |  |  | 7,660 |  |  | 184,524 |  |  | 176,836 |
After five through ten years |  | 352,450 |  |  | 310,335 |  |  | 258,451 |  |  | 238,768 |
After ten years |  | 2,207,402 |  |  | 1,670,555 |  |  | 1,066,291 |  |  | 881,720 |
Securities not due on a single maturity date |  | 1,190,781 |  |  | 1,072,048 |  |  | 2,809,319 |  |  | 2,542,901 |
Other securities (no maturity) |  | — |  |  | — |  |  | 460 |  |  | 460 |
Total |  | $ | 3,761,094 |  |  | $ | 3,063,233 |  |  | $ | 4,331,413 |  |  | $ | 3,852,854 |
The carrying value, which approximates the fair value, of securities pledged as collateral, to secure public deposits and for other purposes, amounted to $3.96 billion at December 31, 2022 and $3.88 billion at December 31, 2021. No securities were sold during 2022, while the Company sold approximately $342.6 million of investment securities during 2021 and approximately $1.70 billion of investment securities during 2020. Securities sold in 2020 were in large part related to efforts by the Company to increase liquidity in response to the early stages of the COVID-19 pandemic, while the securities sold during 2021 were part of a strategic plan to realize gains on securities with projected calls within the short-term period. The decrease in net gains on the sale and call of securities in 2022 as compared to 2021 and 2020 reflect the rising interest rate environment experienced during the current year as compared to 2021 and 2020. There were approximately $46,000 of gross realized gains and $324,000 of gross realized losses from the call of securities during the year ended December 31, 2022. There were approximately $15.9 million of gross realized gains and $422,000 of gross realized losses from the sale of securities during the year ended December 31, 2021. There were approximately $54.8 million of gross realized gains and $15,000 of gross realized losses from the sale of securities during the year ended December 31, 2020. The income tax expense/benefit related to security gains/losses was 26.135% of the gross amounts in 2022, 2021 and 2020. The Company has entered into various fair value hedging transactions to mitigate the impact of changing interest rates on the fair value of AFS securities. See Note 21, Derivative Instruments, for disclosure of the gains and losses recognized on derivative instruments and the cumulative fair value hedging adjustments to the carrying amount of the hedged securities.

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsDebtAndEquitySecuritiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI https://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2176304 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher SEC -Name Regulation S-K (SK) -Number 229 -Section 1403 -Paragraph (b) + Details
Name: | us-gaap_InvestmentsInDebtAndMarketableEquitySecuritiesAndCertainTradingAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration