Investment Securities

12 Months Ended

Dec. 31, 2024

Investments, Debt and Equity Securities [Abstract]

INVESTMENT SECURITIES

The following is a summary of investment securities as of the dates indicated:



	December 31, 2024						December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(Dollars in thousands)
Debt securities AFS:
U.S. Treasury securities	$	—	$	—	$	—	$	—	$	103,691	$	21	$	(35)	$	103,677
U.S. Government agency and U.S. Government sponsored enterprises:
Agency securities	4,000		—		(43)		3,957		4,000		—		(100)		3,900
CMOs	861,179		152		(139,425)		721,906		888,631		367		(141,279)		747,719
MBS:
Residential	473,099		—		(86,039)		387,060		499,431		—		(79,133)		420,298
Commercial	466,929		—		(56,078)		410,851		445,207		113		(53,432)		391,888
Asset-backed securities	103,081		157		(14)		103,224		150,992		—		(1,322)		149,670
Corporate securities	23,254		—		(2,560)		20,694		23,302		—		(3,868)		19,434
Municipal securities	191,138		28		(15,615)		175,551		314,554		5,698		(11,779)		308,473
Total investment securities AFS	$	2,122,680	$	337	$	(299,774)	$	1,823,243	$	2,429,808	$	6,199	$	(290,948)	$	2,145,059

Debt securities HTM:
U.S. Government agency and U.S. Government sponsored enterprises:
MBS:
Residential	$	142,059	$	—	$	(12,629)	$	129,430	$	150,369	$	—	$	(6,663)	$	143,706
Commercial	110,326		—		(8,632)		101,694		113,543		—		(6,731)		106,812
Total investment securities HTM	$	252,385	$	—	$	(21,261)	$	231,124	$	263,912	$	—	$	(13,394)	$	250,518

Accrued interest receivable for investment debt securities at December 31, 2024 and 2023, totaled $7.6 million and $11.0 million, respectively.

At December 31, 2024 and 2023, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.

The table below summarizes the proceeds from and gains and losses on the sales and calls of investment securities AFS, for the periods presented below.


	Twelve Months Ended December 31,
	2024		2023		2022
	(Dollars in thousands)
Proceeds from sales and calls of investment securities AFS	$	276,252	$	—	$	—

Gains from sales of investment securities AFS	$	2,908	$	—	$	—
Losses from sales of investment securities AFS	(1,972)		—		—


Net gain on sales and calls of investment securities AFS	$	936	$	—	$	—

At December 31, 2024 and 2023, $210.5 million and $200.2 million in unrealized losses on investment securities AFS, net of taxes, respectively, were included in AOCI. For the year ended December 31, 2024, $936 thousand was reclassified out of AOCI into earnings as net gains on sales of investment securities AFS, compared with no reclassifications for the same periods of 2023 and 2022 as there were no sales of investments securities AFS.

The following table presents a breakdown of interest income recorded for investment securities that are taxable and nontaxable.


	Year Ended December 31,
	2024		2023		2022
	(Dollars in thousands)
Interest income on investment securities
Taxable	$	65,285	$	61,696	$	50,043
Nontaxable	3,264		4,367		2,177
Total	$	68,549	$	66,063	$	52,220

The amortized cost and estimated fair value of investment securities at December 31, 2024, by contractual maturity, are presented in the table below. Collateralized mortgage obligations, mortgage-backed securities, and asset-backed securities are presented by final maturity. 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
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(Dollars in thousands)
Debt securities:
Due within one year	$	—	$	—	$	—	$	—
Due after one year through five years	141,306		134,899		23,785		23,288
Due after five years through ten years	130,997		123,088		8,815		8,348
Due after ten years	1,850,377		1,565,256		219,785		199,488
Total	$	2,122,680	$	1,823,243	$	252,385	$	231,124

Securities with carrying values of approximately $219.4 million and $1.70 billion at December 31, 2024 and 2023, respectively, were pledged to secure public deposits, for various borrowings, and for other purposes as required or permitted by law. The decrease was primarily due to securities no longer being pledged at the Bank Term Funding Program (“BTFP”) as of December 31, 2024, as the BTFP was no longer extending new advances as of March 2024.

The following tables show the Company’s investments’ gross unrealized losses and estimated fair values, aggregated by investment category and the length of time that the individual securities have been in a continuous unrealized loss position as of the dates indicated. The length of time that the individual securities have been in a continuous unrealized loss position is not a factor in determining credit impairment.


	December 31, 2024
	Less than 12 months					12 months or longer					Total
Description of Securities AFS	Number of Securities	Fair Value		Gross Unrealized Losses		Number of Securities	Fair Value		Gross Unrealized Losses		Number of Securities	Fair Value		Gross Unrealized Losses
	(Dollars in thousands)

U.S. Government agency and U.S. Government sponsored enterprises:
Agency securities	—	$	—	$	—	1	$	3,957	$	(43)	1	$	3,957	$	(43)
CMOs	7	59,661		(527)		95	636,472		(138,898)		102	696,133		(139,425)
MBS:
Residential	2	19,183		(1,029)		63	367,877		(85,010)		65	387,060		(86,039)
Commercial	10	70,728		(2,406)		57	340,123		(53,672)		67	410,851		(56,078)
Asset-backed securities	1	5,007		(14)		—	—		—		1	5,007		(14)
Corporate securities	—	—		—		6	20,694		(2,560)		6	20,694		(2,560)
Municipal securities	18	77,119		(3,348)		39	83,515		(12,267)		57	160,634		(15,615)
Total	38	$	231,698	$	(7,324)	261	$	1,452,638	$	(292,450)	299	$	1,684,336	$	(299,774)


	December 31, 2023
	Less than 12 months					12 months or longer					Total
Description of Securities AFS	Number of Securities	Fair Value		Gross Unrealized Losses		Number of Securities	Fair Value		Gross Unrealized Losses		Number of Securities	Fair Value		Gross Unrealized Losses
	(Dollars in thousands)
U.S. Treasury securities	—	$	—	$	—	1	$	3,963	$	(35)	1	$	3,963	$	(35)
U.S. Government agency and U.S. Government sponsored enterprises:
Agency securities	—	—		—		1	3,900		(100)		1	3,900		(100)
CMOs	3	19,800		(378)		115	717,662		(140,901)		118	737,462		(141,279)
MBS:
Residential	—	—		—		65	420,298		(79,133)		65	420,298		(79,133)
Commercial	6	53,255		(2,129)		53	331,450		(51,303)		59	384,705		(53,432)
Asset-backed securities	—	—		—		18	149,670		(1,322)		18	149,670		(1,322)
Corporate securities	—	—		—		6	19,434		(3,868)		6	19,434		(3,868)
Municipal securities	11	42,760		(263)		42	91,707		(11,516)		53	134,467		(11,779)
Total	20	$	115,815	$	(2,770)	301	$	1,738,084	$	(288,178)	321	$	1,853,899	$	(290,948)

The Company had agency securities, collateralized mortgage obligations, mortgage-backed, corporate, and municipal securities classified as AFS that were in a continuous loss position for twelve months or longer at December 31, 2024. The collateralized mortgage obligations and mortgage-backed securities were investments in U.S. Government agency and U.S. Government sponsored enterprises and had high credit ratings (“AA” grade or better). The interest on corporate and municipal securities that were in an unrealized loss position has been paid as agreed, and the Company believes this will continue in the future and that the securities will be paid in full as scheduled. The market value declines for these securities were primarily due to movements in interest rates and were not reflective of management’s expectations of the Company’s ability to fully recover any unrealized losses, which may be at maturity. With the adoption of CECL, the length of time that the fair value of investment securities has been less than amortized cost is not considered when assessing for credit impairment.

85.6% of the Company’s investment portfolio at December 31, 2024, consisted of securities that were issued by U.S. Government agency and U.S. Government sponsored enterprises. Although a government guarantee exists on securities issued by U.S. Government sponsored agencies, these entities are not legally backed by the full faith and credit of the federal government, and the current support is subject to a cap as part of the Housing and Economic Recovery Act of 2008. Nonetheless, at this time the Company does not foresee any set of circumstances in which the government would not fund its commitments on these investments as the issuers are an integral part of the U.S. housing market in providing liquidity and stability. Therefore, the Company concluded that a zero allowance approach for these investments was appropriate. The Company also had one asset-backed security, six corporate securities, and 57 municipal bonds in unrealized loss positions at December 31, 2024.

Allowance for Credit Losses on Securities AFS—The Company evaluates investment securities AFS in unrealized loss positions for impairment related to credit losses on at least a quarterly basis. Investment securities AFS in unrealized loss positions are first assessed as to whether the Company intends to sell, or if it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If one of the criteria is met, the security’s amortized cost basis is written down to fair value through earnings. For securities that do not meet these criteria, the Company evaluates whether the decline in fair value resulted from credit losses or other factors. In evaluating whether a credit loss exists, the Company has set up an initial quantitative filter for impairment triggers. Once the quantitative filter has been triggered, a security is placed on a watch list and an additional assessment is performed to identify whether a credit impairment exists. 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, the Company compares the present value of cash flows expected to be collected from the security with the amortized cost basis. 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. Unrealized losses that have not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of applicable taxes. The Company did not have an allowance for credit losses on investment securities AFS at December 31, 2024 and 2023.

Allowance for Credit Losses on Securities HTM—For each major HTM debt security type, the allowance for credit losses is estimated collectively for groups of securities with similar risk characteristics. For securities that do not share similar risk characteristics, the losses are estimated individually. Debt securities that are issued by a U.S. government or government-sponsored enterprises are highly rated by major rating agencies and have a long history of no credit losses. Therefore, the Company applies a zero credit loss assumption on these investments. Any expected credit loss is recorded through the allowance for credit losses on investment securities HTM and deducted from the amortized cost basis of the security, so that the balance sheet reflects the net amount the Company expects to collect. At December 31, 2024, all of the Company’s investment securities HTM were issued by a U.S. government agency or government-sponsored enterprise. The Company did not have an allowance for credit losses on investment securities HTM at December 31, 2024.