
	December 31, 2022
	Amortized		Gross Unrealized		Gross Unrealized		Estimated
AVAILABLE FOR SALE	Cost		Gains		Losses		Fair Value
Investment securities:


State and political subdivisions	$	1,039,453	$	956	$	75,557	$	964,852
Corporate bonds and other	8,692		26		14		8,704

MBS: (1)
Residential	328,400		250		13,623		315,027
Commercial	11,329		50		948		10,431
Total	$	1,387,874	$	1,282	$	90,142	$	1,299,014

HELD TO MATURITY
Investment securities:
State and political subdivisions	$	1,037,556	$	3,969	$	163,283	$	878,242
Corporate bonds and other	152,552		575		7,993		145,134
MBS: (1)
Residential	93,796		21		8,343		85,474
Commercial	42,825		—		2,519		40,306
Total	$	1,326,729	$	4,565	$	182,138	$	1,149,156


	December 31, 2021
	Amortized		Gross Unrealized		Gross Unrealized		Estimated
AVAILABLE FOR SALE	Cost		Gains		Losses		Fair Value
Investment securities:
U.S. Treasury	$	58,084	$	843	$	50	$	58,877

State and political subdivisions	1,962,257		93,893		4,214		2,051,936
Corporate bonds and other	133,333		2,408		209		135,532

MBS: (1)
Residential	411,727		14,895		272		426,350
Commercial	90,193		1,642		205		91,630
Total	$	2,655,594	$	113,681	$	4,950	$	2,764,325


HELD TO MATURITY
Investment securities:
State and political subdivisions	$	788	$	3	$	—	$	791
MBS: (1)
Residential	38,644		2,103		—		40,747
Commercial	51,348		2,349		—		53,697
Total	$	90,780	$	4,455	$	—	$	95,235

From time to time, we transfer securities from AFS to HTM due to overall balance sheet strategies. We transferred securities from AFS to HTM with an estimated fair value of $1.25 billion during the year ended December 31, 2022. There were no securities transferred from AFS to HTM during the year ended December 31, 2021. The remaining net unamortized, unrealized loss on the transferred securities included in AOCI in the accompanying balance sheets totaled $121.5 million ($96.0 million, net of tax) at December 31, 2022 and $1.5 million ($1.2 million, net of tax) at December 31, 2021. Any net unrealized gain or loss on the transferred securities included in AOCI at the time of transfer will be amortized over the remaining life of the underlying security as an adjustment to the yield on those securities. Securities transferred with losses included in AOCI continue to be included in management’s assessment for impairment for each individual security. We transferred these securities due to overall balance sheet strategies, and our management has the current intent and ability to hold these securities until maturity.

Investment securities and MBS with carrying values of $1.82 billion and $1.61 billion were pledged as of December 31, 2022 and December 31, 2021, respectively, to collateralize FHLB borrowings, borrowings from the FRDW, repurchase agreements and public fund deposits, for potential liquidity needs or other purposes as required by law.

The following tables present the fair value and unrealized losses on AFS and HTM investment securities and MBS, if applicable, for which an allowance for credit losses has not been recorded as of December 31, 2022 or 2021, segregated by major security type and length of time in a continuous loss position (in thousands):


	December 31, 2022
	Less Than 12 Months				More Than 12 Months				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
AVAILABLE FOR SALE
Investment securities:


State and political subdivisions	$	859,270	$	68,683	$	26,620	$	6,874	$	885,890	$	75,557
Corporate bonds and other	3,678		14		—		—		3,678		14

MBS:
Residential	306,294		13,623		—		—		306,294		13,623
Commercial	5,613		318		2,545		630		8,158		948
Total	$	1,174,855	$	82,638	$	29,165	$	7,504	$	1,204,020	$	90,142

HELD TO MATURITY
Investment securities:
State and political subdivisions	$	426,382	$	66,898	$	323,385	$	96,385	$	749,767	$	163,283
Corporate bonds and other	125,250		6,660		12,738		1,333		137,988		7,993
Mortgage-backed securities:
Residential	80,801		7,799		3,932		544		84,733		8,343
Commercial	40,306		2,519		—		—		40,306		2,519
Total	$	672,739	$	83,876	$	340,055	$	98,262	$	1,012,794	$	182,138

	December 31, 2021
	Less Than 12 Months				More Than 12 Months				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
AVAILABLE FOR SALE
Investment securities:
U.S. Treasury	$	9,947	$	50	$	—	$	—	$	9,947	$	50

State and political subdivisions	260,509		3,622		7,608		592		268,117		4,214
Corporate bonds and other	35,597		209		—		—		35,597		209

MBS:
Residential	1,225		3		5,168		269		6,393		272
Commercial	4,274		7		4,674		198		8,948		205
Total	$	311,552	$	3,891	$	17,450	$	1,059	$	329,002	$	4,950

For those AFS debt securities in an unrealized loss position where management (i) has the intent to sell or (ii) where it will more-likely-than-not be required to sell the security before the recovery of its amortized cost basis, we recognize the loss in earnings. For those AFS debt securities in an unrealized loss position that do not meet either of these criteria, management assesses whether the decline in fair value has resulted from credit-related factors, using both qualitative and quantitative criteria. Determining the allowance under the credit loss method requires the use of a discounted cash flow method to assess the credit losses. Any credit-related impairment will be recognized in allowance for credit losses on the balance sheet with a corresponding adjustment to earnings. Noncredit-related temporary impairment, the portion of the impairment relating to factors other than credit (such as changes in market interest rates), is recognized in other comprehensive income, net of tax.

As of December 31, 2022 and December 31, 2021, we did not have an allowance for credit losses on our AFS securities, based on our consideration of the qualitative factors associated with each security type in our AFS portfolio. The unrealized losses on our investment and MBS are due to changes in interest rates and spreads and other market conditions. At December 31, 2022, we had 687 AFS debt securities in an unrealized loss position. Our state and political subdivisions are highly rated municipal securities with a long history of no credit losses. Our AFS MBS are highly rated securities which are either explicitly or implicitly backed by the U.S. Government through its agencies which are highly rated by major ratings agencies and also have a long history of no credit losses. Our corporate bonds and other investment securities consist of investment grade bonds and private placement bonds.

We assess the likelihood of default and the potential amount of default when assessing our HTM securities for credit losses. We utilize term structures and, due to no prior loss exposure on our state and political subdivision securities or our corporate securities, we currently apply a third-party average loss given default rate to model these securities. We elected to use the specific identification method to model our HTM securities which aligns with our third-party fair value measurement process. The model determined any expected credit loss over the life of these securities to be insignificant. Management further evaluated the remote expectation of loss along with the qualitative factors associated with these securities and concluded that, due to the securities being highly rated municipals and investment grade corporates and private placement bonds with a long history of no credit losses, no credit loss should be recognized for these securities for the years ended December 31, 2022 or 2021.

The accrued interest receivable on our debt securities is excluded from the credit loss estimate and is included in interest receivable on our consolidated balance sheets. As of December 31, 2022, accrued interest receivable on AFS and HTM debt securities totaled $16.9 million and $13.6 million, respectively. As of December 31, 2021, accrued interest receivable on AFS and HTM debt securities totaled $25.6 million and $244,000, respectively. No HTM debt securities were past-due or on nonaccrual status as of December 31, 2022 or 2021.

There was a $3.8 million net realized loss from the AFS securities portfolio for the year ended December 31, 2022, which consisted of $4.4 million in realized losses and $584,000 in realized gains. There was a $3.9 million net realized gain from the AFS securities portfolio for the year ended December 31, 2021, which consisted of $4.1 million in realized gains and $218,000 in realized losses. There was a $8.3 million net realized gain from the AFS securities portfolio for the year ended December 31, 2020, which consisted of $8.4 million in realized gains and $129,000 in realized losses. There were no sales from the HTM portfolio during the years ended December 31, 2022, 2021 or 2020. We calculate realized gains and losses on sales of securities under the specific identification method.

Expected maturities on our securities may differ from contractual maturities because issuers may have the right to call or prepay obligations. MBS are presented in total by category since MBS are typically issued with stated principal amounts and are backed by pools of mortgages that have loans with varying maturities. The characteristics of the underlying pool of mortgages, such as fixed-rate or adjustable-rate, as well as prepayment risk, are passed on to the security holder. The term of a mortgage-backed pass-through security thus approximates the term of the underlying mortgages and can vary significantly due to prepayments.


	December 31, 2022
	Amortized Cost		Fair Value
AVAILABLE FOR SALE
Investment securities:
Due in one year or less	$	528	$	529
Due after one year through five years	1,485		1,498
Due after five years through ten years	57,795		57,890
Due after ten years	988,337		913,639
	1,048,145		973,556
MBS:	339,729		325,458
Total	$	1,387,874	$	1,299,014


	December 31, 2022
	Amortized Cost		Fair Value
HELD TO MATURITY
Investment securities:
Due in one year or less	$	125	$	124
Due after one year through five years	24,810		24,615
Due after five years through ten years	133,794		126,505
Due after ten years	1,031,379		872,132
	1,190,108		1,023,376
MBS:	136,621		125,780
Total	$	1,326,729	$	1,149,156

Equity investments on our consolidated balance sheets include CRA funds with a readily determinable fair value as well as equity investments without readily determinable fair values. At December 31, 2022 and 2021, we had equity investments recorded in our consolidated balance sheets of $11.2 million and $11.8 million, respectively.


	Years Ended December 31,
	2022		2021		2020
Net gains (losses) recognized during the period on equity investments	$	(685)	$	(174)	$	(427)
Less: Net gains recognized during the period on equity investments sold during the period	—		—		—
Unrealized gains (losses) recognized during the reporting period on equity investments still held at the reporting date	$	(685)	$	(174)	$	(427)

Our FHLB stock, which has limited marketability, is carried at cost and is assessed quarterly for other-than-temporary impairment. Based upon evaluation by management at December 31, 2022, our FHLB stock was not impaired and thus was not considered to be other-than-temporarily impaired.