SECURITIES

3 Months Ended

Mar. 31, 2022

Investments, Debt and Equity Securities [Abstract]

Information related to the amortized cost, fair value and allowance for credit losses of securities available-for-sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income is provided in the tables below.


(dollars in thousands)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
March 31, 2022
U.S. Treasury securities	$	2,250	$	0	$	(4)	$	0	$	2,246
U.S. government sponsored agencies	164,514		0		(11,622)		0		152,892
Mortgage-backed securities: residential	634,654		680		(39,013)		0		596,321
Mortgage-backed securities: commercial	96		0		0		0		96
State and municipal securities	838,427		4,608		(72,055)		0		770,980
Total	$	1,639,941	$	5,288	$	(122,694)	$	0	$	1,522,535

December 31, 2021
U.S. Treasury securities	$	900	$	0	$	0	$	0	$	900
U.S. government sponsored agencies	145,858		39		(2,445)		0		143,452
Mortgage-backed securities: residential	487,157		4,455		(4,936)		0		486,676
Mortgage-backed securities: commercial	522		1		0		0		523
State and municipal securities	742,532		25,749		(1,274)		0		767,007
Total	$	1,376,969	$	30,244	$	(8,655)	$	0	$	1,398,558

Information regarding the fair value and amortized cost of available-for-sale debt securities by maturity as of March 31, 2022 is presented below. Maturity information is based on contractual maturity for all securities other than mortgage-backed securities. Actual maturities of securities may differ from contractual maturities because borrowers may have the right to prepay the obligation without a prepayment penalty.


(dollars in thousands)	Amortized Cost		Fair Value
Due in one year or less	$	3,356	$	3,357
Due after one year through five years	11,031		11,140
Due after five years through ten years	54,556		54,559
Due after ten years	936,248		857,062
	1,005,191		926,118
Mortgage-backed securities	634,750		596,417
Total debt securities	$	1,639,941	$	1,522,535

Securities proceeds, gross gains and gross losses are presented below.


	Three Months Ended March 31,
(dollars in thousands)		2022		2021
Sales of securities available-for-sale
Proceeds		$	0	$	13,506
Gross gains		0		753
Gross losses		0		0
Number of securities		0		7

In accordance with ASU No. 2017-8, purchase premiums for callable securities are amortized to the earliest call date and premiums on non-callable securities as well as discounts are recognized in interest income using the interest method over the terms of the securities or over the estimated lives of mortgage-backed securities. Gains and losses on sales are based on the amortized cost of the security sold and recorded on the trade date.

Securities with carrying values of $272.6 million and $300.8 million were pledged as of March 31, 2022 and December 31, 2021, respectively, as collateral for borrowings from the Federal Home Loan Bank and Federal Reserve Bank and for other purposes as permitted or required by law.

Information regarding securities with unrealized losses as of March 31, 2022 and December 31, 2021 is presented below. The tables divide the securities between those with unrealized losses for less than twelve months and those with unrealized losses for twelve months or more.


	Less than 12 months				12 months or more				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
March 31, 2022
U.S. Treasury securities	$	2,246	$	4	$	0	$	0	$	2,246	$	4
U.S. government sponsored agencies	126,338		8,757		26,554		2,865		152,892		11,622
Mortgage-backed securities: residential	441,367		26,752		109,331		12,261		550,698		39,013
Mortgage-backed securities: commercial	96		0		0		0		96		0
State and municipal securities	560,210		71,480		3,497		575		563,707		72,055
Total temporarily impaired	$	1,130,257	$	106,993	$	139,382	$	15,701	$	1,269,639	$	122,694

December 31, 2021
U.S. government sponsored agencies	$	85,968	$	1,364	$	28,676	$	1,081	$	114,644	$	2,445
Mortgage-backed securities: residential	272,264		4,076		22,792		860		295,056		4,936

State and municipal securities	138,659		1,274		0		0		138,659		1,274
Total temporarily impaired	$	496,891	$	6,714	$	51,468	$	1,941	$	548,359	$	8,655

The total number of securities with unrealized losses as of March 31, 2022 and December 31, 2021 is presented below.


	Less than 12 months	12 months or more	Total
March 31, 2022
U.S. Treasury securities	6	0	6
U.S. government sponsored agencies	12	5	17
Mortgage-backed securities: residential	90	15	105
Mortgage-backed securities: commercial	1	0	1
State and municipal securities	376	3	379
Total temporarily impaired	485	23	508

December 31, 2021
U.S. government sponsored agencies	8	5	13
Mortgage-backed securities: residential	29	3	32

State and municipal securities	80	0	80
Total temporarily impaired	117	8	125

Available-for-sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. For available-for sale debt securities in an unrealized loss position, management first assesses whether it intends to sell, or it is more likely than not that the Company 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 consolidated income statement. For available-for sale debt securities that do not meet the criteria, management evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this

assessment, management 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 and the issuer, among other factors. If this assessment indicates that a credit loss exists, management compares the present value of cash flows expected to be collected from the security with 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 for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income (loss), net of applicable taxes. No allowance for credit losses for available-for-sale debt securities was needed at March 31, 2022. Accrued interest receivable on available-for-sale debt securities totaled $8.8 million and $7.4 million at March 31, 2022 and December 31, 2021, respectively, and is excluded from the estimate of credit losses.

The U.S. government sponsored agencies and mortgage-backed securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major credit rating agencies, and have a long history of no credit losses. Therefore, for those securities, we do not record expected credit losses.