
	June 30, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for sale
U.S. Treasury and federal agencies	$	71,419	$	—	$	(8,754)	$	62,665
State and municipal	352,223		2		(57,389)		294,836
Federal agency collateralized mortgage obligations	3,702		—		(368)		3,334
Federal agency mortgage-backed pools	154,479		—		(24,161)		130,318

Corporate notes	41,605		—		(5,704)		35,901
Total available for sale investment securities	$	623,428	$	2	$	(96,376)	$	527,054


	June 30, 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	$	284,114	$	—	$	(41,917)	$	242,197	$	—	$	284,114
State and municipal	1,064,638		160		(178,390)		886,408		(21)		1,064,617
Federal agency collateralized mortgage obligations	48,668		—		(8,128)		40,540		—		48,668
Federal agency mortgage-backed pools	314,069		—		(49,255)		264,814		—		314,069
Private labeled mortgage-backed pools	30,780		—		(4,534)		26,246		(7)		30,773
Corporate notes	162,170		—		(25,388)		136,782		(130)		162,040
Total held to maturity investment securities	$	1,904,439	$	160	$	(307,612)	$	1,596,987	$	(158)	$	1,904,281


	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 June 30, 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.


	June 30, 2024				December 31, 2023
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available for sale
Within one year	$	3,646	$	3,618	$	5,505	$	5,408
One to five years	105,358		93,966		100,301		89,650
Five to ten years	175,739		145,553		167,764		141,203
After ten years	180,504		150,265		195,984		170,113
	465,247		393,402		469,554		406,374
Federal agency collateralized mortgage obligations	3,702		3,334		3,931		3,580
Federal agency mortgage–backed pools	154,479		130,318		161,130		137,297

Total available for sale investment securities	$	623,428	$	527,054	$	634,615	$	547,251
Held to maturity
Within one year	$	22,563	$	22,312	$	33,483	$	33,169
One to five years	217,174		207,041		225,957		216,354
Five to ten years	357,082		305,973		350,843		304,067
After ten years	914,103		730,061		928,209		768,927
	1,510,922		1,265,387		1,538,492		1,322,517
Federal agency collateralized mortgage obligations	48,668		40,540		51,325		43,479
Federal agency mortgage–backed pools	314,069		264,814		323,649		275,028
Private labeled mortgage–backed pools	30,780		26,246		32,329		27,734
Total held to maturity investment securities	$	1,904,439	$	1,596,987	$	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.


	June 30, 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	$	—	$	—	$	62,665	$	(8,754)	$	62,665	$	(8,754)
State and municipal	1,664		(291)		292,505		(57,098)		294,169		(57,389)
Federal agency collateralized mortgage obligations	—		—		3,334		(368)		3,334		(368)
Federal agency mortgage–backed pools	—		—		130,319		(24,161)		130,319		(24,161)

Corporate notes	—		—		35,901		(5,704)		35,901		(5,704)
Total temporarily impaired securities	$	1,664	$	(291)	$	524,724	$	(96,085)	$	526,388	$	(96,376)


	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 June 30, 2024 and December 31, 2023, the Company had 2,314 and 2,290 securities, respectively, with market values below their cost basis. The total fair value of these investments at June 30, 2024 and December 31, 2023 was $2.1 billion and $2.1 billion, which is approximately 86.5% 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.

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 Condensed 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 June 30, 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 June 30, 2024 and December 31, 2023, respectively.

On a quarterly basis, the Company refreshes the credit quality indicator of each held-to-maturity security. The Company applies ratings derived from Nationally Recognized Statistical Rating Organizations ("NRSRO"), specifically Moody's and Standard & Poor's. For state and municipal securities where no rating is available from the NRSROs, a consistent internally-assigned rating methodology is applied. The amortized cost of these securities in the following tables subject to this methodology totaled $131.9 million as of June 30, 2024, and $143.7 million as of December 31, 2023.


June 30, 2024	AAA		AA		A		BBB		BB		Not Rated		Total
U.S. Treasury and federal agencies	$	—	$	284,114	$	—	$	—	$	—	$	—	$	284,114
State and municipal	284,849		713,834		63,772		2,183		—		—		1,064,638
Federal agency collateralized mortgage obligations	48,668		—		—		—		—		—		48,668
Federal agency mortgage-backed pools	314,069		—		—		—		—		—		314,069
Private labeled mortgage-backed pools	30,780		—		—		—		—		—		30,780
Corporate notes	—		6,193		11,691		75,926		4,550		63,810		162,170
Total	$	678,366	$	1,004,141	$	75,463	$	78,109	$	4,550	$	63,810	$	1,904,439

December 31, 2023	AAA		AA		A		BBB		BB		Not Rated		Total
U.S. Treasury and federal agencies	$	—	$	287,259	$	—	$	—	$	—	$	—	$	287,259
State and municipal	285,748		730,907		69,658		2,186		—		—		1,088,499
Federal agency collateralized mortgage obligations	51,325		—		—		—		—		—		51,325
Federal agency mortgage-backed pools	323,649		—		—		—		—		—		323,649
Private labeled mortgage-backed pools	32,329		—		—		—		—		—		32,329
Corporate notes	—		4,260		11,831		78,197		4,556		63,890		162,734
Total	$	693,051	$	1,022,426	$	81,489	$	80,383	$	4,556	$	63,890	$	1,945,795

Accrued interest receivable on available for sale debt securities and held to maturity securities totaled $14.4 million at June 30, 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.