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Securities

9 Months Ended

Sep. 30, 2025

Investments, Debt and Equity Securities [Abstract]

Securities

Securities

Debt securities

The amortized cost, gross unrealized gains and losses and estimated fair value of investment and mortgage-backed AFS and HTM securities, net of allowance for credit losses, as of September 30, 2025 and December 31, 2024 are reflected in the tables below (in thousands):

						September 30, 2025
						Amortized						Gross Unrealized						Gross Unrealized						Less: Allowance for						Estimated
AVAILABLE FOR SALE						Cost						Gains						Losses						Credit Losses						Fair Value
Investment securities:
U.S. Treasury						$	49,650					$	12					$	—					$	—					$	49,662
State and political subdivisions						274,142						1,195						27,246						—						248,091
Corporate bonds and other						16,717						460						234						—						16,943
MBS: (1)
Residential						965,126						11,311						998						—						975,439
Commercial						2,229						67						—						—						2,296
Total						$	1,307,864					$	13,045					$	28,478					$	—					$	1,292,431

						Amortized						Gross Unrealized						Gross Unrealized												Estimated						Less: Allowance for						Net Carrying
HELD TO MATURITY						Cost						Gains						Losses												Fair Value						Credit Losses						Amount
Investment securities:
State and political subdivisions						$	1,042,425					$	776					$	149,376											$	893,825					$	26					$	1,042,399
Corporate bonds and other						112,668						665						2,716												110,617						29						112,639
MBS: (1)
Residential						79,349						12						5,416												73,945						—						79,349
Commercial						29,014						—						1,215												27,799						—						29,014
Total						$	1,263,456					$	1,453					$	158,723											$	1,106,186					$	55					$	1,263,401

						December 31, 2024
						Amortized						Gross Unrealized						Gross Unrealized						Less: Allowance for						Estimated
AVAILABLE FOR SALE						Cost						Gains						Losses						Credit Losses						Fair Value
Investment securities:
U.S. Treasury						$	173,880					$	76					$	—					$	—					$	173,956
State and political subdivisions						458,013						36						43,717						—						414,332
Corporate bonds and other						14,646						263						401						—						14,508
MBS: (1)
Residential						935,639						835						10,088						—						926,386
Commercial						5,238						—						526						—						4,712
Total						$	1,587,416					$	1,210					$	54,732					$	—					$	1,533,894

						Amortized						Gross Unrealized						Gross Unrealized						Estimated						Less: Allowance for						Net Carrying
HELD TO MATURITY						Cost						Gains						Losses						Fair Value						Credit Losses						Amount
Investment securities:
State and political subdivisions						$	1,040,912					$	4,004					$	152,697					$	892,219					$	—					$	1,040,912
Corporate bonds and other						124,095						17						6,553						117,559						—						124,095
MBS: (1)
Residential						84,660						8						8,549						76,119						—						84,660
Commercial						29,567						—						1,982						27,585						—						29,567
Total						$	1,279,234					$	4,029					$	169,781					$	1,113,482					$	—					$	1,279,234

(1) All MBS are issued and/or guaranteed by U.S. government agencies or U.S. GSEs.

From time to time, we transfer securities from AFS to HTM due to overall balance sheet strategies and our intent and ability to hold these securities until maturity. We did not transfer any securities from AFS to HTM during the nine months ended September 30, 2025 or the year ended December 31, 2024. The remaining net unamortized, unrealized loss on the transferred securities included in AOCI in the accompanying balance sheets totaled $98.9 million ($78.2 million, net of tax) at September 30, 2025 and $105.1 million ($83.0 million, net of tax) at December 31, 2024. 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.

Investment securities and MBS with carrying values of $1.95 billion and $2.18 billion were pledged as of September 30, 2025 and December 31, 2024, respectively, to collateralize borrowings from the FRDW, repurchase agreements and public fund deposits, for potential liquidity needs or other purposes as required by law. At September 30, 2025 and December 31, 2024, the amount of excess collateral at the FRDW was $382.2 million and $431.7 million, respectively.

The following tables present the fair value and unrealized losses on AFS, if applicable, for which an allowance for credit losses has not been recorded, as well as HTM investment securities and MBS, if applicable, as of September 30, 2025 and December 31, 2024, segregated by major security type and length of time in a continuous loss position (in thousands):

			September 30, 2025
			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			$	—					$	—					$	200,368					$	27,246					$	200,368					$	27,246
Corporate bonds and other			—						—						5,748						234						5,748						234
MBS:
Residential			64,783						260						10,828						738						75,611						998
Total			$	64,783					$	260					$	216,944					$	28,218					$	281,727					$	28,478
HELD TO MATURITY
Investment securities:
State and political subdivisions			$	127,853					$	5,503					$	716,470					$	143,873					$	844,323					$	149,376
Corporate bonds and other			—						—						84,432						2,716						84,432						2,716
MBS:
Residential			2,460						197						71,055						5,219						73,515						5,416
Commercial			—						—						27,799						1,215						27,799						1,215
Total			$	130,313					$	5,700					$	899,756					$	153,023					$	1,030,069					$	158,723
			December 31, 2024
			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			$	12,089					$	64					$	398,304					$	43,653					$	410,393					$	43,717
Corporate bonds and other			2,967						33						5,612						368						8,579						401
MBS:
Residential			723,855						6,517						31,527						3,571						755,382						10,088
Commercial			2,223						12						2,489						514						4,712						526
Total			$	741,134					$	6,626					$	437,932					$	48,106					$	1,179,066					$	54,732
HELD TO MATURITY
Investment securities:
State and political subdivisions			$	73,272					$	1,779					$	704,563					$	150,918					$	777,835					$	152,697
Corporate bonds and other			2,212						149						111,392						6,404						113,604						6,553
MBS:
Residential			2,548						292						73,064						8,257						75,612						8,549
Commercial			—						—						27,585						1,982						27,585						1,982
Total			$	78,032					$	2,220					$	916,604					$	167,561					$	994,636					$	169,781

For those AFS debt securities in an unrealized loss position (i) where management 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 September 30, 2025 and December 31, 2024, 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. We had 191 and 421 AFS debt securities in an unrealized loss position at September 30, 2025 and December 31, 2024, respectively. 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 and 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 primarily investment grade 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 collective evaluation method to model our HTM securities, which aligns with our third-party fair value measurement process. The model determined an expected credit loss over the life of the HTM securities of $55,000, and such amount was recognized as credit loss for the nine months ended September 30, 2025, and no provision of credit loss was recognized for the three months ended September 30, 2025. For the three and nine months ended September 30, 2024, no provision for credit loss was recognized. Management evaluated the remote expectation of loss on the HTM portfolio, along with the qualitative factors associated with these securities, as well as the credit loss estimate of the model and concluded that an allowance for credit loss of $55,000 was sufficient as of September 30, 2025, due to the securities being highly rated municipals and primarily investment grade corporates with a long history of no credit losses. As of September 30, 2025, two corporate bonds were rated below investment grade.

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 September 30, 2025, accrued interest receivable on AFS and HTM debt securities totaled $7.1 million and $7.8 million, respectively. As of December 31, 2024, accrued interest receivable on AFS and HTM debt securities totaled $13.6 million and $12.9 million, respectively. No HTM debt securities were past-due or on nonaccrual status as of September 30, 2025 or December 31, 2024.

The following table reflects interest income recognized on securities for the periods presented (in thousands):

			Three Months Ended September 30,
			2025						2024
U.S. Treasury			$	734					$	2,315
State and political subdivisions			11,424						12,994
Corporate bonds and other			1,665						1,654
MBS			14,174						11,976
Total interest income on securities			$	27,997					$	28,939

			Nine Months Ended September 30,
			2025						2024
U.S. Treasury			$	3,737					$	6,404
State and political subdivisions			34,743						41,151
Corporate bonds and other			4,875						5,182
MBS			40,737						33,179
Total interest income on securities			$	84,092					$	85,916

There was a $24.9 million net realized loss as a result of sales from the AFS securities portfolio for the nine months ended September 30, 2025, which consisted of $25.4 million in realized losses and $2.0 million in realized gains, as well as a net loss of $1.5 million on the unwind of fair value MBS and municipal securities hedges in the AFS securities portfolio. There was a $2.5 million net realized loss as a result of sales from the AFS securities portfolio for the nine months ended September 30, 2024, which consisted of $6.1 million in realized losses and $88,000 in realized gains, offset by a net gain of $3.5 million on the unwinding of fair value hedges on municipal securities in the AFS securities portfolio. In addition, during the three months ended September 30, 2024, we recorded an impairment charge of $868,000 consisting of a loss of $685,000 on the sale of approximately $10.0 million of AFS municipal securities and a loss of $183,000 on the unwind of the related fair value hedges, sold on October 1, 2024. There were no sales from the HTM portfolio during the three and nine months ended September 30, 2025 or 2024.  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.

The amortized cost and estimated fair value of AFS and HTM securities at September 30, 2025, are presented below by contractual maturity (in thousands):

			September 30, 2025
			Amortized Cost						Fair Value
AVAILABLE FOR SALE
Investment securities:
Due in one year or less			$	50,084					$	50,098
Due after one year through five years			4,991						5,081
Due after five years through ten years			16,007						16,195
Due after ten years			269,427						243,322
			340,509						314,696
MBS:			967,355						977,735
Total			$	1,307,864					$	1,292,431

			September 30, 2025
			Amortized Cost						Fair Value
HELD TO MATURITY
Investment securities:
Due in one year or less			$	140					$	139
Due after one year through five years			25,238						25,351
Due after five years through ten years			125,603						123,125
Due after ten years			1,004,112						855,827
			1,155,093						1,004,442
MBS:			108,363						101,744
Total			$	1,263,456					$	1,106,186

Equity Investments

Equity investments on our consolidated balance sheets include Community Reinvestment Act funds with a readily determinable fair value as well as equity investments without readily determinable fair values. At September 30, 2025 and December 31, 2024, we had equity investments recorded in our consolidated balance sheets of $9.6 million and $9.5 million, respectively.

Any realized and unrealized gains and losses on equity investments are reported in income. Equity investments without readily determinable fair values are recorded at cost, less impairment, if any. For the three and nine months ended September 30, 2025, there was no gain or loss on the sale of equity securities.

The following is a summary of unrealized and realized gains and losses on equity investments recognized in other noninterest income in the consolidated statements of income during the periods presented (in thousands):

			Three Months Ended September 30,												Nine Months Ended September 30,
			2025						2024						2025						2024
Net gains (losses) recognized during the period on equity investments			$	51					$	191					$	146					$	112
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 held at the reporting date			$	51					$	191					$	146					$	112

Equity investments are assessed quarterly for other-than-temporary impairment. Based upon that evaluation, management does not consider any of our equity investments to be other-than-temporarily impaired at September 30, 2025.

FHLB Stock

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 September 30, 2025, our FHLB stock was not impaired and thus was not considered to be other-than-temporarily impaired.

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The entire disclosure for investments in certain debt and equity securities.

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Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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-Name Regulation S-K (SK)
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-Section 1403
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