XML 20 R11.htm IDEA: XBRL DOCUMENT
v3.22.2

Investment Securities | 6 Months Ended
--- | ---
Jun. 30, 2022
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | INVESTMENT SECURITIES The following table summarizes the amortized cost, gross unrealized gains and losses and approximate fair value of investment securities available for sale as of June 30, 2022 and December 31, 2021.
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  |  |  |
Available for sale at June 30, 2022 |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury | $ | 16,300 |  |  | $ | — |  |  | $ | 111 |  |  | $ | 16,189 |  |  |  |  |
U.S. Government-sponsored agency securities | 134,594 |  |  | 204 |  |  | 10,186 |  |  | 124,612 |  |  |  |  |
State and municipal | 1,665,253 |  |  | 2,687 |  |  | 162,690 |  |  | 1,505,250 |  |  |  |  |
U.S. Government-sponsored mortgage-backed securities | 712,216 |  |  | 168 |  |  | 75,925 |  |  | 636,459 |  |  |  |  |
Corporate obligations | 14,069 |  |  | 5 |  |  | 233 |  |  | 13,841 |  |  |  |  |
Total available for sale | $ | 2,542,432 |  |  | $ | 3,064 |  |  | $ | 249,145 |  |  | $ | 2,296,351 |  |  |  |  |
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  |  |  |
Available for sale at December 31, 2021 |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury | $ | 1,000 |  |  | $ | — |  |  | $ | 1 |  |  | $ | 999 |  |  |  |  |
U.S. Government-sponsored agency securities | 96,244 |  |  | 437 |  |  | 1,545 |  |  | 95,136 |  |  |  |  |
State and municipal | 1,495,696 |  |  | 81,734 |  |  | 898 |  |  | 1,576,532 |  |  |  |  |
U.S. Government-sponsored mortgage-backed securities | 671,684 |  |  | 7,109 |  |  | 11,188 |  |  | 667,605 |  |  |  |  |
Corporate obligations | 4,031 |  |  | 256 |  |  | 8 |  |  | 4,279 |  |  |  |  |
Total available for sale | $ | 2,268,655 |  |  | $ | 89,536 |  |  | $ | 13,640 |  |  | $ | 2,344,551 |  |  |  |  |
The following table summarizes the amortized cost, gross unrealized gains and losses, approximate fair value and allowance for credit losses on investment securities held to maturity as of June 30, 2022 and December 31, 2021.
| Amortized Cost |  | Allowance for Credit Losses |  | Net Carrying Amount |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Held to maturity at June 30, 2022 |  |  |  |  |  |  |  |  |  |  |
U.S. Government-sponsored agency securities | $ | 393,331 |  |  | $ | — |  |  | $ | 393,331 |  |  | $ | — |  |  | $ | 47,376 |  |  | $ | 345,955 |
State and municipal | 1,117,526 |  |  | 245 |  |  | 1,117,281 |  |  | 1,368 |  |  | 183,539 |  |  | 935,355 |
U.S. Government-sponsored mortgage-backed securities | 821,567 |  |  | — |  |  | 821,567 |  |  | 43 |  |  | 78,881 |  |  | 742,729 |
Foreign investment | 1,500 |  |  | — |  |  | 1,500 |  |  | — |  |  | 15 |  |  | 1,485 |
Total held to maturity | $ | 2,333,924 |  |  | $ | 245 |  |  | $ | 2,333,679 |  |  | $ | 1,411 |  |  | $ | 309,811 |  |  | $ | 2,025,524 |
| Amortized Cost |  | Allowance for Credit Losses |  | Net Carrying Amount |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Held to maturity at December 31, 2021 |  |  |  |  |  |  |  |  |  |  |
U.S. Government-sponsored agency securities | $ | 371,457 |  |  | $ | — |  |  | $ | 371,457 |  |  | $ | 226 |  |  | $ | 7,268 |  |  | $ | 364,415 |
State and municipal | 1,057,301 |  |  | 245 |  |  | 1,057,056 |  |  | 29,593 |  |  | 2,170 |  |  | 1,084,724 |
U.S. Government-sponsored mortgage-backed securities | 749,789 |  |  | — |  |  | 749,789 |  |  | 7,957 |  |  | 5,881 |  |  | 751,865 |
Foreign investment | 1,500 |  |  | — |  |  | 1,500 |  |  | — |  |  | 1 |  |  | 1,499 |
Total held to maturity | $ | 2,180,047 |  |  | $ | 245 |  |  | $ | 2,179,802 |  |  | $ | 37,776 |  |  | $ | 15,320 |  |  | $ | 2,202,503 |
Accrued interest on investment securities available for sale and held to maturity at June 30, 2022 and December 31, 2021 of $30.4 million and $26.8 million, respectively, are included in the Interest Receivable line on the Corporation's Consolidated Condensed Balance Sheets. The total amount of accrued interest is excluded from the amortized cost of available for sale and held to maturity securities presented above. In determining the allowance for credit losses on investment securities available for sale that are in an unrealized loss position, the Corporation first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through the income statement. For investment securities available for sale that do not meet the aforementioned criteria, the Corporation evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Corporation considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Unrealized losses that have not been recorded through an allowance for credit losses is recognized in other comprehensive income. Adjustments to the allowance are reported in the income statement as a component of the provision for credit loss. The Corporation has made the accounting policy election to exclude accrued interest receivable on investment securities available for sale from the estimate of credit losses. Investment securities available for sale are charged off against the allowance or, in the absence of any allowance, written down through the income statement when deemed uncollectible or when either of the aforementioned criteria regarding intent or requirement to sell is met. The Corporation did not record an allowance for credit losses on its investment securities available for sale as the unrealized losses were attributable to changes in interest rates, not credit quality. The allowance for credit losses on investment securities held to maturity is a contra asset-valuation account that is deducted from the amortized cost basis of investment securities held to maturity to present the net amount expected to be collected. Investment securities held to maturity are charged off against the allowance when deemed uncollectible. Adjustments to the allowance are reported in the income statement as a component of the provision for credit loss. The Corporation measures expected credit losses on investment securities held to maturity on a collective basis by major security type with each type sharing similar risk characteristics, and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The Corporation has made the accounting policy election to exclude accrued interest receivable on investment securities held to maturity from the estimate of credit losses. With regard to U.S. Government-sponsored agency and mortgage-backed securities, all these securities are issued by a U.S. government-sponsored entity and have an implicit or explicit government guarantee; therefore, no allowance for credit losses has been recorded for these securities. With regard to securities issued by states and municipalities and other investment securities held to maturity, management considers (1) issuer bond ratings, (2) historical loss rates for given bond ratings, (3) the financial condition of the issuer, and (4) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities. Historical loss rates associated with securities having similar grades as those in the Corporation's portfolio have been insignificant. Furthermore, as of June 30, 2022, there were no past due principal and interest payments associated with these securities. At CECL adoption, an allowance for credit losses of $245,000 was recorded on the state and municipal securities classified as held to maturity based on applying the long-term historical credit loss rate, as published by Moody’s, for similarly rated securities. The balance of the allowance for credit losses remained unchanged at $245,000 as of June 30, 2022. On a quarterly basis, the Corporation monitors the credit quality of investment securities held to maturity through the use of credit ratings. The following table summarizes the amortized cost of investment securities held to maturity at June 30, 2022, aggregated by credit quality indicator.
| Held to Maturity
| State and municipal |  | Other |  | Total
Credit Rating: |  |  |  |  |
Aaa | $ | 102,051 |  |  | $ | 60,581 |  |  | $ | 162,632 |
Aa1 | 163,091 |  |  | — |  |  | 163,091 |
Aa2 | 185,950 |  |  | — |  |  | 185,950 |
Aa3 | 134,000 |  |  | — |  |  | 134,000 |
A1 | 132,754 |  |  | — |  |  | 132,754 |
A2 | 10,165 |  |  | — |  |  | 10,165 |
A3 | 10,112 |  |  | — |  |  | 10,112 |
Non-rated | 379,403 |  |  | 1,155,817 |  |  | 1,535,220 |
Total | $ | 1,117,526 |  |  | $ | 1,216,398 |  |  | $ | 2,333,924 |
The following tables summarize, as of June 30, 2022 and December 31, 2021, investment securities available for sale in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by security type and length of time in a continuous unrealized loss position.
| Less than 12 Months |  | 12 Months or Longer |  | Total
| Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses
Investment securities available for sale at June 30, 2022 |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury | $ | 16,189 |  |  | $ | 111 |  |  | $ | — |  |  | $ | — |  |  | $ | 16,189 |  |  | $ | 111 |
U.S. Government-sponsored agency securities | 77,942 |  |  | 6,480 |  |  | 22,208 |  |  | 3,706 |  |  | 100,150 |  |  | 10,186 |
State and municipal | 1,285,071 |  |  | 158,718 |  |  | 15,481 |  |  | 3,972 |  |  | 1,300,552 |  |  | 162,690 |
U.S. Government-sponsored mortgage-backed securities | 343,302 |  |  | 26,834 |  |  | 250,678 |  |  | 49,091 |  |  | 593,980 |  |  | 75,925 |
Corporate obligations | 11,794 |  |  | 233 |  |  | — |  |  | — |  |  | 11,794 |  |  | 233 |
Total investment securities available for sale | $ | 1,734,298 |  |  | $ | 192,376 |  |  | $ | 288,367 |  |  | $ | 56,769 |  |  | $ | 2,022,665 |  |  | $ | 249,145 |
| Less than 12 Months |  | 12 Months or Longer |  | Total
| Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses
Investment securities available for sale at December 31, 2021 |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury | $ | 999 |  |  | $ | 1 |  |  | $ | — |  |  | $ | — |  |  | $ | 999 |  |  | $ | 1 |
U.S. Government-sponsored agency securities | 68,524 |  |  | 1,545 |  |  | — |  |  | — |  |  | 68,524 |  |  | 1,545 |
State and municipal | 138,187 |  |  | 894 |  |  | 505 |  |  | 4 |  |  | 138,692 |  |  | 898 |
U.S. Government-sponsored mortgage-backed securities | 427,687 |  |  | 10,791 |  |  | 8,324 |  |  | 397 |  |  | 436,011 |  |  | 11,188 |
Corporate obligations | 992 |  |  | 8 |  |  | — |  |  | — |  |  | 992 |  |  | 8 |
Total investment securities available for sale | $ | 636,389 |  |  | $ | 13,239 |  |  | $ | 8,829 |  |  | $ | 401 |  |  | $ | 645,218 |  |  | $ | 13,640 |
The following table summarizes investment securities available for sale in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by security type and the number of securities in the portfolio for the periods indicated.
| Gross Unrealized Losses |  | Number of Securities
Investment securities available for sale at June 30, 2022 |  |  |
U.S. Treasury | $ | 111 |  |  | 3
U.S. Government-sponsored agency securities | 10,186 |  |  | 14
State and municipal | 162,690 |  |  | 936
U.S. Government-sponsored mortgage-backed securities | 75,925 |  |  | 164
Corporate obligations | 233 |  |  | 9
Total investment securities available for sale | $ | 249,145 |  |  | 1,126 |
| Gross Unrealized Losses |  | Number of Securities
Investment securities available for sale at December 31, 2021 |  |  |
U.S. Treasury | $ | 1 |  |  | 1
U.S. Government-sponsored agency securities | 1,545 |  |  | 8
State and municipal | 898 |  |  | 103
U.S. Government-sponsored mortgage-backed securities | 11,188 |  |  | 48
Corporate obligations | 8 |  |  | 1
Total investment securities available for sale | $ | 13,640 |  |  | 161
The unrealized losses in the Corporation’s investment portfolio were the result of changes in interest rates and not credit quality. As a result, the Corporation expects to recover the amortized cost basis over the term of the securities. The Corporation does not intend to sell the investments and it is not more likely than not that the Corporation will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. Certain investment securities available for sale are reported in the financial statements at an amount less than their historical cost as indicated in the table below.
| June 30, 2022 |  | December 31, 2021
Investments available for sale reported at less than historical cost: |  |  |
Historical cost | $ | 2,271,810 |  |  | $ | 658,858 |
Fair value | 2,022,665 |  |  | 645,218 |
Gross unrealized losses | $ | 249,145 |  |  | $ | 13,640 |
Percent of the Corporation's investments available for sale | 88.1 | % |  | 27.5 | %
In determining the fair value of the investment securities portfolio, the Corporation utilizes a third party for portfolio accounting services, including market value input, for those securities classified as Level 1 and Level 2 in the fair value hierarchy. The Corporation has obtained an understanding of what inputs are being used by the vendor in pricing the portfolio and how the vendor classified these securities based upon these inputs. From these discussions, the Corporation’s management is comfortable that the classifications are proper. The Corporation has gained trust in the data for two reasons: (a) independent spot testing of the data is conducted by the Corporation through obtaining market quotes from various brokers on a periodic basis; and (b) actual gains or loss resulting from the sale of certain securities has proven the data to be accurate over time. Fair value of securities classified as Level 3 in the valuation hierarchy was determined using a discounted cash flow model that incorporated market estimates of interest rates and volatility in markets that have not been active. The amortized cost and fair value of investment securities available for sale and held to maturity at June 30, 2022 and December 31, 2021, by contractual maturity are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity are shown separately.
| Available for Sale |  | Held to Maturity
| Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Maturity Distribution at June 30, 2022 |  |  |  |  |  |  |
Due in one year or less | $ | 6,707 |  |  | $ | 6,664 |  |  | $ | 5,591 |  |  | $ | 5,604 |
Due after one through five years | 28,721 |  |  | 28,420 |  |  | 41,180 |  |  | 41,092 |
Due after five through ten years | 164,626 |  |  | 159,497 |  |  | 174,108 |  |  | 163,070 |
Due after ten years | 1,630,162 |  |  | 1,465,311 |  |  | 1,291,478 |  |  | 1,073,029 |
| 1,830,216 |  |  | 1,659,892 |  |  | 1,512,357 |  |  | 1,282,795 |
U.S. Government-sponsored mortgage-backed securities | 712,216 |  |  | 636,459 |  |  | 821,567 |  |  | 742,729 |
Total investment securities | $ | 2,542,432 |  |  | $ | 2,296,351 |  |  | $ | 2,333,924 |  |  | $ | 2,025,524 |
| Available for Sale |  | Held to Maturity
| Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Maturity Distribution at December 31, 2021 |  |  |  |  |  |  |
Due in one year or less | $ | 6,954 |  |  | $ | 6,965 |  |  | $ | 6,971 |  |  | $ | 6,995 |
Due after one through five years | 5,097 |  |  | 5,309 |  |  | 30,272 |  |  | 31,946 |
Due after five through ten years | 120,460 |  |  | 126,816 |  |  | 177,203 |  |  | 180,129 |
Due after ten years | 1,464,460 |  |  | 1,537,856 |  |  | 1,215,812 |  |  | 1,231,568 |
| 1,596,971 |  |  | 1,676,946 |  |  | 1,430,258 |  |  | 1,450,638 |
U.S. Government-sponsored mortgage-backed securities | 671,684 |  |  | 667,605 |  |  | 749,789 |  |  | 751,865 |
Total investment securities | $ | 2,268,655 |  |  | $ | 2,344,551 |  |  | $ | 2,180,047 |  |  | $ | 2,202,503 |
Securities with a carrying value of approximately $826.1 million and $873.2 million were pledged at June 30, 2022 and December 31, 2021, respectively, to secure certain deposits and securities sold under repurchase agreements, and for other purposes as permitted or required by law. The book value of securities sold under agreements to repurchase amounted to $232.6 million at June 30, 2022 and $175.1 million at December 31, 2021. Gross gains and losses on the sales and redemptions of investment securities available for sale for the three and six months ended June 30, 2022 and 2021 are shown below.
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Sales and redemptions of investment securities available for sale: |  |  |  |  |  |  |
Gross gains | $ | 103 |  |  | $ | 1,822 |  |  | $ | 681 |  |  | $ | 3,898 |
Gross losses | 13 |  |  | 61 |  |  | 25 |  |  | 338 |
Net gains on sales and redemptions of investment securities available for sale | $ | 90 |  |  | $ | 1,761 |  |  | $ | 656 |  |  | $ | 3,560 |

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