Investments

12 Months Ended

Dec. 31, 2021

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

The following table presents the amortized cost, gross unrealized gains and losses and fair value of securities available-for-sale and held-to-maturity:


	December 31, 2021
($ in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-sale securities:
Obligations of U.S. Government-sponsored enterprises	$	175,409	$	3	$	(1,901)	$	173,511
Obligations of states and political subdivisions	571,587		5,907		(2,410)		575,084
Agency mortgage-backed securities	509,243		8,485		(3,869)		513,859
Corporate debt securities	11,750		632		—		12,382
U.S. Treasury Bills	90,971		220		(21)		91,170
Total securities available-for-sale	$	1,358,960	$	15,247	$	(8,201)	$	1,366,006

Held-to-maturity securities:

Obligations of states and political subdivisions	$	236,379	$	1,794	$	(730)	$	237,443
Agency mortgage-backed securities	68,105		940		(666)		68,379
Corporate debt securities	125,811		3,039		—		128,850
Total securities held-to-maturity	$	430,295	$	5,773	$	(1,396)	$	434,672
Allowance for credit losses	(614)
Total securities held-to-maturity, net	$	429,681

	December 31, 2020
($ in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-sale securities:
Obligations of U.S. Government-sponsored enterprises	$	14,978	$	186	$	(3)	$	15,161
Obligations of states and political subdivisions	335,271		8,994		(33)		344,232
Agency mortgage-backed securities	506,703		20,190		(321)		526,572
Corporate debt securities	14,750		248		—		14,998
U.S. Treasury Bills	10,980		486		—		11,466
Total securities available-for-sale	$	882,682	$	30,104	$	(357)	$	912,429

Held-to-maturity securities:

Obligations of states and political subdivisions	$	248,324	$	2,814	$	—	$	251,138
Agency mortgage-backed securities	112,742		2,295		(496)		114,541
Corporate debt securities	126,993		8,851		—		135,844
Total securities held-to-maturity	$	488,059	$	13,960	$	(496)	$	501,523
Allowance for credit losses	(449)
Total securities held-to-maturity, net	$	487,610

During 2020, the Company transferred securities with a book value of $331.0 million and fair value of $352.6 million from available-for-sale to held-to-maturity. The Company believes the held-to-maturity category is more consistent with the Company’s intent for these securities. The transfer of securities was made at fair value at the time of transfer. The unamortized portion of the unrealized holding gain at the time of transfer is retained in accumulated other comprehensive income and in the carrying value of held-to-maturity securities. Accordingly, the

balance of held-to-maturity securities in the “Amortized cost” column in the table above includes a net unamortized unrealized gain of $21.0 million and $25.6 million at December 31, 2021 and 2020, respectively. Such amounts are amortized over the remaining life of the securities. In January 2022, the Company transferred securities with a book value of $116.7 million from available-for-sale to held-to-maturity.

At December 31, 2021, and 2020, there were no holdings of securities of any one issuer in an amount greater than 10% of shareholders’ equity, other than the U.S. Government agencies and sponsored enterprises. The agency mortgage-backed securities are all issued by U.S. Government-sponsored enterprises. Securities having a fair value of $752.7 million and $525.8 million at December 31, 2021, and December 31, 2020, respectively, were pledged as collateral to secure deposits of public institutions and for other purposes as required by law or contract provisions.

The amortized cost and estimated fair value of debt securities at December 31, 2021, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	Available-for-sale				Held-to-maturity
($ in thousands)	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	81,809	$	81,797	$	211	$	214
Due after one year through five years	166,470		165,161		13,793		13,998
Due after five years through ten years	40,130		40,568		143,900		146,933
Due after ten years	561,308		564,621		204,286		205,148
Agency mortgage-backed securities	509,243		513,859		68,105		68,379
	$	1,358,960	$	1,366,006	$	430,295	$	434,672

There were approximately 290 available-for-sale securities and 30 available-for-sale securities in an unrealized loss position as of December 31, 2021 and December 31, 2020, respectively, included in the following tables:


	December 31, 2021
	Less than 12 months				12 months or more				Total
($ in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government-sponsored enterprises	$	163,634	$	1,775	$	4,874	$	126	$	168,508	$	1,901
Obligations of states and political subdivisions	242,188		2,361		1,776		49		243,964		2,410
Agency mortgage-backed securities	259,047		3,685		6,467		184		265,514		3,869

U.S. Treasury Bills	60,961		21		—		—		60,961		21
	$	725,830	$	7,842	$	13,117	$	359	$	738,947	$	8,201



	December 31, 2020
	Less than 12 months				12 months or more				Total
($ in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. Government-sponsored enterprises	$	4,997	$	3	$	—	$	—	$	4,997	$	3
Obligations of states and political subdivisions	4,079		33		—		—		4,079		33
Agency mortgage-backed securities	65,986		321		—		—		65,986		321


	$	75,062	$	357	$	—	$	—	$	75,062	$	357

The unrealized losses at both December 31, 2021, and 2020, were primarily attributable to changes in market interest rates since the securities were purchased. At both December 31, 2021 and 2020, the Company had not recorded an ACL on available-for-sale securities.

Accrued interest receivable on held-to-maturity debt securities totaled $3.4 million and $3.6 million at December 31, 2021 and 2020, respectively, and is excluded from the estimate of expected credit losses. The estimate of expected credit losses considers historical credit loss information adjusted for current conditions and reasonable and supportable forecasts. At December 31, 2021 and 2020, the ACL on held-to-maturity securities was $0.6 million and $0.4 million, respectively.

The proceeds, gross gains and losses realized from sales of available-for-sale investment securities were as follows:


	December 31,
($ in thousands)	2021		2020		2019
Gross gains realized	$	—	$	421	$	400
Gross losses realized	—		—		(449)
Proceeds from sales	27,135		20,221		357,976

Other Investments

At December 31, 2021, and 2020, other investments totaled $59.9 million and $48.8 million, respectively. As a member of the FHLB system administered by the Federal Housing Finance Agency, the Bank is required to maintain a minimum investment in capital stock with the FHLB consisting of membership stock and activity-based stock. The FHLB capital stock of $12.1 million, and $10.8 million at December 31, 2021, and 2020, respectively, is recorded at cost, which represents redemption value, and is included in other investments in the consolidated balance sheets. The remaining amounts in other investments primarily include various investments in SBICs, CDFIs, and the Company’s investment in unconsolidated trusts used to issue preferred securities to third parties, see “Note 11 – Subordinated Debentures.”