Investments

12 Months Ended

Dec. 31, 2022

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, 2022
($ in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-sale securities:
Obligations of U.S. Government-sponsored enterprises	$	266,090	$	—	$	(28,305)	$	237,785
Obligations of states and political subdivisions	507,842		27		(90,425)		417,444
Agency mortgage-backed securities	727,931		453		(68,980)		659,404
Corporate debt securities	13,750		—		(1,110)		12,640
U.S. Treasury Bills	213,441		1		(4,908)		208,534
Total securities available-for-sale	$	1,729,054	$	481	$	(193,728)	$	1,535,807

Held-to-maturity securities:

Obligations of states and political subdivisions	$	529,012	$	2,321	$	(65,347)	$	465,986
Agency mortgage-backed securities	57,018		—		(6,416)		50,602
Corporate debt securities	124,620		163		(12,854)		111,929
Total securities held-to-maturity	$	710,650	$	2,484	$	(84,617)	$	628,517
Allowance for credit losses	(735)
Total securities held-to-maturity, net	$	709,915

	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

During 2022, the Company transferred $116.7 million of securities from available-for-sale to held-to-maturity. The Company believes the held-to-maturity category is 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. The balance of held-to-maturity securities in the “Amortized Cost” column in the

table above includes a cumulative net unamortized, unrealized gain of $17.6 million and $21.0 million at December 31, 2022 and 2021, respectively. Such amounts are amortized over the remaining life of the securities.

At December 31, 2022, and 2021, 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 $734.5 million and $752.7 million at December 31, 2022, and December 31, 2021, 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, 2022, 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. The weighted average life of the mortgage-backed securities is approximately 5 years.


	Available-for-sale				Held-to-maturity
($ in thousands)	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	104,362	$	104,000	$	950	$	949
Due after one year through five years	345,957		318,556		41,312		38,210
Due after five years through ten years	67,667		60,425		179,013		165,304
Due after ten years	483,137		393,422		432,357		373,452
Agency mortgage-backed securities	727,931		659,404		57,018		50,602
	$	1,729,054	$	1,535,807	$	710,650	$	628,517

There were approximately 740 available-for-sale securities and 290 available-for-sale securities in an unrealized loss position as of December 31, 2022 and December 31, 2021, respectively, included in the following tables:


	December 31, 2022
	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	$	73,738	$	6,249	$	163,047	$	22,056	$	236,785	$	28,305
Obligations of states and political subdivisions	103,179		13,501		311,634		76,924		414,813		90,425
Agency mortgage-backed securities	334,431		20,038		281,321		48,942		615,752		68,980
Corporate debt securities	12,640		1,110		—		—		12,640		1,110
U.S. Treasury Bills	198,688		4,908		—		—		198,688		4,908
	$	722,676	$	45,806	$	756,002	$	147,922	$	1,478,678	$	193,728



	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

The unrealized losses at both December 31, 2022, and 2021, were primarily attributable to changes in market interest rates since the securities were purchased. At both December 31, 2022 and 2021, the Company had not recorded an ACL on available-for-sale securities.

Accrued interest receivable on held-to-maturity debt securities totaled $5.8 million and $3.4 million at December 31, 2022 and 2021, 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, 2022 and 2021, the ACL on held-to-maturity securities was $0.7 million and $0.6 million, respectively.

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


	December 31,
($ in thousands)	2022		2021		2020
Gross gains realized	$	—	$	—	$	421

Proceeds from sales	—		27,135		20,221

The Company sold $28.4 million of available-for-sale securities in January 2023 for a gain of $0.4 million.

Other Investments

At December 31, 2022, and 2021, other investments totaled $63.8 million and $59.9 million, respectively. As a member of the FHLB, 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 $14.0 million, and $12.1 million at December 31, 2022, and 2021, 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 10 – Subordinated Debentures.”