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Investment Securities
 9 Months Ended
Sep. 30, 2024
Investments, Debt and Equity Securities [Abstract]  
Investment Securities Investment Securities
The amortized cost, estimated fair values and allowance for credit losses of investments in debt securities are summarized in the following tables:
September 30, 2024
(in thousands)Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Fair
Value
Debt Securities Available for Sale
Obligations of U.S. government agencies$1,234,038 $76 $(132,117)$1,101,997 
Obligations of states and political subdivisions249,709 159 (20,526)229,342 
Corporate bonds6,179 20 (335)5,864 
Asset backed securities364,561 492 (1,513)363,540 
Non-agency collateralized mortgage obligations305,221 352 (27,046)278,527 
Total debt securities available for sale$2,159,708 $1,099 $(181,537)$1,979,270 
Debt Securities Held to Maturity
Obligations of U.S. government agencies$114,558 $4 $(5,253)109,309 
Obligations of states and political subdivisions2,701 6 (29)2,678 
Total debt securities held to maturity$117,259 $10 $(5,282)$111,987 

December 31, 2023
(in thousands)Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Fair
Value
Debt Securities Available for Sale
Obligations of U.S. government agencies$1,386,772 $2 $(165,037)$1,221,737 
Obligations of states and political subdivisions262,879 268 (26,772)236,375 
Corporate bonds6,173 — (571)5,602 
Asset backed securities359,214 255 (4,188)355,281 
Non-agency collateralized mortgage obligations369,287 — (35,778)333,509 
Total debt securities available for sale$2,384,325 $525 $(232,346)$2,152,504 
Debt Securities Held to Maturity
Obligations of U.S. government agencies$130,823 $— $(8,331)$122,492 
Obligations of states and political subdivisions2,671 6 (43)2,634 
Total debt securities held to maturity$133,494 $6 $(8,374)$125,126 
Proceeds from the sale of available for sale investment securities totaled $28.6 million and $24.2 million for the nine months ended September 30, 2024 and 2023, respectively, resulting in gross realized losses of $2.9 million and $0.2 million, respectively. In addition, during the nine months ended September 30, 2024, the Company participated in and completed an exchange offering with Visa, which resulted in a gain of $2.9 million. See further discussion in Note 9 - Commitments and Contingencies. There were no sales of investment securities during the three months ended September 30, 2024 or 2023. Investment securities with an aggregate carrying value of $761.6 million and $702.2 million at September 30, 2024 and December 31, 2023, respectively, were pledged as collateral for specific borrowings, lines of credit or local agency deposits.
The amortized cost and estimated fair value of debt securities at September 30, 2024 by contractual maturity are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. At September 30, 2024, obligations of U.S. government corporations and agencies with a cost basis totaling $1.3 billion consist almost entirely of residential real estate mortgage-backed securities whose contractual maturity, or principal repayment, will follow the repayment of the underlying mortgages. For purposes of the following table, the entire outstanding balance of these mortgage-backed securities issued by U.S. government corporations and agencies is categorized based on final maturity date. At September 30, 2024, the Company estimates the average remaining life of these mortgage-backed securities issued by U.S. government corporations and agencies to be approximately 6.67 years. Average remaining life is defined as the time span after which the principal balance has been reduced by half.
As of September 30, 2024, the contractual final maturity for available for sale and held to maturity investment securities is as follows:
Debt SecuritiesAvailable for SaleHeld to Maturity
(in thousands)Amortized
Cost		Estimated
Fair Value		Amortized
Cost		Estimated
Fair Value
Due in one year$6,625 $6,421 $1,137 $1,143 
Due after one year through five years62,174 60,553 3,453 3,361 
Due after five years through ten years239,924 231,415 87,693 83,990 
Due after ten years1,850,985 1,680,881 24,976 23,493 
Totals$2,159,708 $1,979,270 $117,259 $111,987 
Based on an evaluation of available information including security type, counterparty credit quality, past events, current conditions, and reasonable and supportable forecasts that are relevant to collectability of cash flows, as of September 30, 2024, the Company has concluded that it expects to receive all contractual cash flows from each security held in its AFS and HTM debt securities portfolio. There was no allowance for credit losses related to investment securities as of September 30, 2024 or December 31, 2023.
Gross unrealized losses on debt securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:
September 30, 2024:Less than 12 months12 months or moreTotal
(in thousands)Fair
Value		Unrealized
Loss		Fair
Value		Unrealized
Loss		Fair
Value		Unrealized
Loss
Debt Securities Available for Sale
Obligations of U.S. government agencies$7 $(1)$1,092,624 $(132,116)$1,092,631 $(132,117)
Obligations of states and political subdivisions— — 216,428 (20,526)216,428 (20,526)
Corporate bonds— — 4,598 (335)4,598 (335)
Asset backed securities107,510 (164)109,099 (1,349)216,609 (1,513)
Non-agency collateralized mortgage obligations— — 245,023 (27,046)245,023 (27,046)
Total debt securities available for sale$107,517 $(165)$1,667,772 $(181,372)$1,775,289 $(181,537)
Debt Securities Held to Maturity
Obligations of U.S. government agencies$— $— $109,144 $(5,253)$109,144 $(5,253)
Obligations of states and political subdivisions506 (3)1,029 (26)1,535 (29)
Total debt securities held to maturity$506 $(3)$110,173 $(5,279)$110,679 $(5,282)
December 31, 2023:Less than 12 months12 months or moreTotal
(in thousands)Fair
Value		Unrealized
Loss		Fair
Value		Unrealized
Loss		Fair
Value		Unrealized
Loss
Debt Securities Available for Sale
Obligations of U.S. government agencies$224 $— $1,221,320 $(165,037)$1,221,544 $(165,037)
Obligations of states and political subdivisions6,229 (75)216,497 (26,697)222,726 (26,772)
Corporate bonds— — 5,602 (571)5,602 (571)
Asset backed securities15,928 (93)264,731 (4,095)280,659 (4,188)
Non-agency collateralized mortgage obligations44,276 (583)289,233 (35,195)333,509 (35,778)
Total debt securities available for sale$66,657 $(751)$1,997,383 $(231,595)$2,064,040 $(232,346)
Debt Securities Held to Maturity
Obligations of U.S. government agencies$— $— $122,259 $(8,331)$122,259 $(8,331)
Obligations of states and political subdivisions— — 1,012 (43)1,012 (43)
Total debt securities held to maturity$— $— $123,271 $(8,374)$123,271 $(8,374)
Obligations of U.S. government agencies: The unrealized losses on investments in obligations of U.S. government agencies are caused by interest rate increases and illiquidity. The contractual cash flows of these securities are guaranteed by U.S. Government Sponsored Entities (principally Fannie Mae and Freddie Mac). It is expected that the securities would not be settled at a price less than the amortized cost of the investment. Because management believes the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, there is no impairment on these securities
and there has been no credit losses recorded as of September 30, 2024. At September 30, 2024, 144 debt securities representing obligations of U.S. government agencies had unrealized losses with aggregate depreciation of 10.79% from the Company’s amortized cost basis.
Obligations of states and political subdivisions: The unrealized losses on investments in obligations of states and political subdivisions were caused by increases in required yields by investors in these types of securities. It is expected that the securities would not be settled at a price less than the amortized cost of the investment. Because management believes the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, there is no impairment on these securities and there has been no credit losses recorded as of September 30, 2024. At September 30, 2024, 148 debt securities representing obligations of states and political subdivisions had unrealized losses with aggregate depreciation of 8.66% from the Company’s amortized cost basis.
Corporate bonds: The unrealized losses on investments in corporate bonds were caused by increases in required yields by investors in these types of securities. It is expected that the securities would not be settled at a price less than the amortized cost of the investment. Because management believes the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, there is no impairment on these securities and there has been no credit losses recorded as of September 30, 2024. At September 30, 2024, 5 debt securities representing corporate bonds had unrealized losses with aggregate depreciation of 6.81% from the Company’s amortized cost basis.
Asset backed securities: The unrealized losses on investments in asset backed securities were caused by increases in required yields by investors for these types of securities. At the time of purchase, each of these securities was rated AA or AAA and through September 30, 2024 has not experienced any deterioration in credit rating. At September 30, 2024, 24 asset backed securities had unrealized losses with aggregate depreciation of 0.69% from the Company’s amortized cost basis. The Company continues to monitor these securities for changes in credit rating or other indications of credit deterioration. Because management believes the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, there is no impairment on these securities and there has been no credit losses recorded as of September 30, 2024.
Non-agency collateralized mortgage obligations: The unrealized losses on investments in asset backed securities were caused by increases in required yields by investors in these types of securities. It is expected that the securities would not be settled at a price less than the amortized cost of the investment. Because management believes the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, there is no impairment on these securities and there has been no credit losses recorded as of September 30, 2024. At September 30, 2024, 18 asset backed securities had unrealized losses with aggregate depreciation of 9.94% from the Company’s amortized cost basis.
The Company monitors credit quality of debt securities held-to-maturity through the use of credit rating. The Company monitors the credit rating on a monthly basis. The following table summarizes the amortized cost of debt securities held-to-maturity at the dates indicated, aggregated by credit quality indicator:
September 30, 2024December 31, 2023
(in thousands)
AAA/AA/ABBB/BB/BAAA/AA/ABBB/BB/B
Obligations of U.S. government agencies$114,558 $— $130,823 $— 
Obligations of states and political subdivisions2,701 — 2,671 — 
Total debt securities held to maturity$117,259 $— $133,494 $—