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Securities | 3 Months Ended
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Mar. 31, 2024
Investments, Debt and Equity Securities [Abstract] |
Securities | Securities The fair value of securities is as follows:
| March 31, 2024
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Available for sale |  |  |  |  |  |  |
U.S. Treasury and federal agencies | $ | 71,943 |  |  | $ | — |  |  | $ | (9,017) |  |  | $ | 62,926 |
State and municipal | 352,738 |  |  | — |  |  | (53,483) |  |  | 299,255 |
Federal agency collateralized mortgage obligations | 3,819 |  |  | — |  |  | (369) |  |  | 3,450 |
Federal agency mortgage-backed pools | 157,812 |  |  | — |  |  | (24,670) |  |  | 133,142 |
Corporate notes | 42,119 |  |  | — |  |  | (5,573) |  |  | 36,546 |
Total available for sale investment securities | $ | 628,431 |  |  | $ | — |  |  | $ | (93,112) |  |  | $ | 535,319 |
| March 31, 2024
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  | Allowance for Credit Losses |  | Net Carrying Amount
Held to maturity |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and federal agencies | $ | 284,236 |  |  | $ | — |  |  | $ | (43,199) |  |  | $ | 241,037 |  |  | $ | — |  |  | $ | 284,236 |
State and municipal | 1,078,388 |  |  | 543 |  |  | (167,301) |  |  | 911,630 |  |  | (21) |  |  | 1,078,367 |
Federal agency collateralized mortgage obligations | 49,913 |  |  | — |  |  | (8,088) |  |  | 41,825 |  |  | — |  |  | 49,913 |
Federal agency mortgage-backed pools | 319,181 |  |  | — |  |  | (50,329) |  |  | 268,852 |  |  | — |  |  | 319,181 |
Private labeled mortgage-backed pools | 31,712 |  |  | — |  |  | (4,530) |  |  | 27,182 |  |  | (7) |  |  | 31,705 |
Corporate notes | 162,453 |  |  | — |  |  | (25,126) |  |  | 137,327 |  |  | (130) |  |  | 162,323 |
Total held to maturity investment securities | $ | 1,925,883 |  |  | $ | 543 |  |  | $ | (298,573) |  |  | $ | 1,627,853 |  |  | $ | (158) |  |  | $ | 1,925,725 |
| December 31, 2023
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Available for sale |  |  |  |  |  |  |
U.S. Treasury and federal agencies | $ | 72,938 |  |  | $ | — |  |  | $ | (8,561) |  |  | $ | 64,377 |
State and municipal | 353,299 |  |  | — |  |  | (49,269) |  |  | 304,030 |
Federal agency collateralized mortgage obligations | 3,931 |  |  | — |  |  | (351) |  |  | 3,580 |
Federal agency mortgage-backed pools | 161,130 |  |  | — |  |  | (23,833) |  |  | 137,297 |
Corporate notes | 43,317 |  |  | 455 |  |  | (5,805) |  |  | 37,967 |
Total available for sale investment securities | $ | 634,615 |  |  | $ | 455 |  |  | $ | (87,819) |  |  | $ | 547,251 |
| December 31, 2023
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  | Allowance for Credit Losses |  | Net Carrying Amount
Held to maturity |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and federal agencies | $ | 287,259 |  |  | $ | — |  |  | $ | (41,299) |  |  | $ | 245,960 |  |  | $ | — |  |  | $ | 287,259 |
State and municipal | 1,088,499 |  |  | 1,185 |  |  | (150,323) |  |  | 939,361 |  |  | (20) |  |  | 1,088,479 |
Federal agency collateralized mortgage obligations | 51,325 |  |  | — |  |  | (7,846) |  |  | 43,479 |  |  | — |  |  | 51,325 |
Federal agency mortgage-backed pools | 323,649 |  |  | — |  |  | (48,621) |  |  | 275,028 |  |  | — |  |  | 323,649 |
Private labeled mortgage-backed pools | 32,329 |  |  | — |  |  | (4,595) |  |  | 27,734 |  |  | (7) |  |  | 32,322 |
Corporate notes | 162,734 |  |  | — |  |  | (25,538) |  |  | 137,196 |  |  | (130) |  |  | 162,604 |
Total held to maturity investment securities | $ | 1,945,795 |  |  | $ | 1,185 |  |  | $ | (278,222) |  |  | $ | 1,668,758 |  |  | $ | (157) |  |  | $ | 1,945,638 |
The amortized cost and fair value of securities available for sale and held to maturity at March 31, 2024 and December 31, 2023, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
| March 31, 2024 |  | December 31, 2023
| Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Available for sale |  |  |  |  |  |  |
Within one year | $ | 4,511 |  |  | $ | 4,451 |  |  | $ | 5,505 |  |  | $ | 5,408 |
One to five years | 105,444 |  |  | 93,731 |  |  | 100,301 |  |  | 89,650 |
Five to ten years | 175,871 |  |  | 146,861 |  |  | 167,764 |  |  | 141,203 |
After ten years | 180,974 |  |  | 153,684 |  |  | 195,984 |  |  | 170,113 |
| 466,800 |  |  | 398,727 |  |  | 469,554 |  |  | 406,374 |
Federal agency collateralized mortgage obligations | 3,819 |  |  | 3,450 |  |  | 3,931 |  |  | 3,580 |
Federal agency mortgage–backed pools | 157,812 |  |  | 133,142 |  |  | 161,130 |  |  | 137,297 |
Total available for sale investment securities | $ | 628,431 |  |  | $ | 535,319 |  |  | $ | 634,615 |  |  | $ | 547,251 |
Held to maturity |  |  |  |  |  |  |
Within one year | $ | 31,450 |  |  | $ | 31,092 |  |  | $ | 33,483 |  |  | $ | 33,169 |
One to five years | 220,119 |  |  | 209,813 |  |  | 225,957 |  |  | 216,354 |
Five to ten years | 357,690 |  |  | 307,839 |  |  | 350,843 |  |  | 304,067 |
After ten years | 915,818 |  |  | 741,250 |  |  | 928,209 |  |  | 768,927 |
| 1,525,077 |  |  | 1,289,994 |  |  | 1,538,492 |  |  | 1,322,517 |
Federal agency collateralized mortgage obligations | 49,913 |  |  | 41,825 |  |  | 51,325 |  |  | 43,479 |
Federal agency mortgage–backed pools | 319,181 |  |  | 268,852 |  |  | 323,649 |  |  | 275,028 |
Private labeled mortgage–backed pools | 31,712 |  |  | 27,182 |  |  | 32,329 |  |  | 27,734 |
Total held to maturity investment securities | $ | 1,925,883 |  |  | $ | 1,627,853 |  |  | $ | 1,945,795 |  |  | $ | 1,668,758 |
The following tables show the gross unrealized losses and the fair value of the Company’s available for sale investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.
| March 31, 2024
| Less than 12 Months |  | 12 Months or More |  | Total
| Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Investment Securities |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and federal agencies | $ | — |  |  | $ | — |  |  | $ | 62,926 |  |  | $ | (9,017) |  |  | $ | 62,926 |  |  | $ | (9,017) |
State and municipal | 2,356 |  |  | (267) |  |  | 296,899 |  |  | (53,216) |  |  | 299,255 |  |  | (53,483) |
Federal agency collateralized mortgage obligations | — |  |  | — |  |  | 3,450 |  |  | (369) |  |  | 3,450 |  |  | (369) |
Federal agency mortgage–backed pools | — |  |  | — |  |  | 133,142 |  |  | (24,670) |  |  | 133,142 |  |  | (24,670) |
Corporate notes | — |  |  | — |  |  | 36,547 |  |  | (5,573) |  |  | 36,547 |  |  | (5,573) |
Total temporarily impaired securities | $ | 2,356 |  |  | $ | (267) |  |  | $ | 532,964 |  |  | $ | (92,845) |  |  | $ | 535,320 |  |  | $ | (93,112) |
| December 31, 2023
| Less than 12 Months |  | 12 Months or More |  | Total
| Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Investment Securities |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and federal agencies | $ | — |  |  | $ | — |  |  | $ | 64,377 |  |  | $ | (8,561) |  |  | $ | 64,377 |  |  | $ | (8,561) |
State and municipal | 2,387 |  |  | (236) |  |  | 301,643 |  |  | (49,033) |  |  | 304,030 |  |  | (49,269) |
Federal agency collateralized mortgage obligations | — |  |  | — |  |  | 3,580 |  |  | (351) |  |  | 3,580 |  |  | (351) |
Federal agency mortgage–backed pools | — |  |  | — |  |  | 137,289 |  |  | (23,833) |  |  | 137,289 |  |  | (23,833) |
Corporate notes | — |  |  | — |  |  | 36,359 |  |  | (5,805) |  |  | 36,359 |  |  | (5,805) |
Total temporarily impaired securities | $ | 2,387 |  |  | $ | (236) |  |  | $ | 543,248 |  |  | $ | (87,583) |  |  | $ | 545,635 |  |  | $ | (87,819) |
Certain investments in debt securities are reported in the consolidated financial statements at an amount less than their historical cost. As of March 31, 2024 and December 31, 2023, the Company had 2,320 and 2,290 securities, respectively, with market values below their cost basis. The total fair value of these investments at March 31, 2024 and December 31, 2023 was $2.1 billion and $2.1 billion, which is approximately 86.0% and 85.1%, respectively, of the Company's available for sale and held to maturity securities portfolio. These declines resulted primarily from fluctuations in market interest rates after purchase. Management believes the declines in fair value for these securities are temporary. No allowance for credit losses for available for sale debt securities was recorded at March 31, 2024 or December 31, 2023. The allowance for credit losses for held to maturity securities is a contra asset valuation account that is deducted from the carrying amount of held to maturity securities to present the net amount expected to be collected. Held to maturity securities are charged off against the allowance for credit loss when deemed uncollectible. Adjustments to the allowance for credit loss are reported in our Consolidated Statements of Income in credit loss expense. We measure expected credit losses on held to maturity securities on a collective basis by major security type with each type sharing similar risk characteristics, and consider historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. With regard to U.S. Government-sponsored treasuries, agency and mortgage-backed securities, all these securities are issued by a U.S. government-sponsored entity and have an implicit or explicit government guarantee; therefore, no allowance for credit losses has been recorded for these securities. With regard to obligations of states and municipal, private label mortgage-backed and corporate note held to maturity securities, we consider (1) issuer bond ratings, (2) historical loss rates for given bond ratings, (3) the financial condition of the issuer, and (4) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities. Historical loss rates associated with securities having similar grades as those in our portfolio have been insignificant. As of March 31, 2024 and December 31, 2023, there were no past due principal and interest payments associated with these securities. An allowance for credit loss of $158,000 and $157,000 was recorded on these securities based on applying the long-term historical rating agency credit loss rate for similarly rated securities at March 31, 2024 and December 31, 2023, respectively. Accrued interest receivable on available for sale debt securities and held to maturity securities totaled $14.4 million at March 31, 2024 and $14.7 million at December 31, 2023 and is excluded from the estimate of credit losses. The U.S. government sponsored entities and 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. Based on an evaluation of available evidence, management believes the unrealized losses on state and municipal securities, private labeled mortgage–backed pools and corporate notes were due to changes in interest rates. Due to the contractual terms, the issuers of state and municipal securities are not allowed to settle for less than the amortized cost of the security. In addition, the Company does not intend to sell these securities prior to the recovery of the amortized cost, which may not occur until maturity. Information regarding security proceeds, gross gains and gross losses are presented below.
|  |  | Three Months Ended
|  |  | March 31
|  |  |  |  | 2024 |  | 2023
Sales of securities available for sale |  |  |  |  |  |  |
Proceeds |  |  |  |  | $ | — |  |  | $ | 63,526 |
Gross gains |  |  |  |  | — |  |  | 129 |
Gross losses |  |  |  |  | — |  |  | (629) |

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