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Securities
 9 Months Ended
Sep. 30, 2024
Investments, Debt and Equity Securities [Abstract]  
Securities Securities
The fair value of securities is as follows:
September 30, 2024
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value
Available for sale
U.S. Treasury and federal agencies$69,421 $— $(6,176)$63,245 
State and municipal351,507 14 (45,496)306,025 
Federal agency collateralized mortgage obligations3,413 — (261)3,152 
Federal agency mortgage-backed pools151,844 — (19,148)132,696 
Corporate notes40,559 — (4,507)36,052 
Total available for sale investment securities$616,744 $14 $(75,588)$541,170 

September 30, 2024
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value
Held to maturity
U.S. Treasury and federal agencies$283,851 $— $(31,817)$252,034 
State and municipal1,056,869 1,713 (150,262)908,320 
Federal agency collateralized mortgage obligations47,232 — (6,441)40,791 
Federal agency mortgage-backed pools308,725 — (37,641)271,084 
Private labeled mortgage-backed pools29,975 — (3,436)26,539 
Corporate notes161,885 — (20,206)141,679 
Total held to maturity investment securities$1,888,537 $1,713 $(249,803)$1,640,447 
Less: Allowance for credit losses(158)
Held to maturity securities, net of allowance for credit losses$1,888,379 

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 municipal353,299 — (49,269)304,030 
Federal agency collateralized mortgage obligations3,931 — (351)3,580 
Federal agency mortgage-backed pools161,130 — (23,833)137,297 
Corporate notes43,317 455 (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
Held to maturity
U.S. Treasury and federal agencies$287,259 $— $(41,299)$245,960 
State and municipal1,088,499 1,185 (150,323)939,361 
Federal agency collateralized mortgage obligations51,325 — (7,846)43,479 
Federal agency mortgage-backed pools323,649 — (48,621)275,028 
Private labeled mortgage-backed pools32,329 — (4,595)27,734 
Corporate notes162,734 — (25,538)137,196 
Total held to maturity investment securities$1,945,795 $1,185 $(278,222)$1,668,758 
Less: Allowance for credit losses(157)
Held to maturity securities, net of allowance for credit losses$1,945,638 
The amortized cost and fair value of securities available for sale and held to maturity at September 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.
September 30, 2024December 31, 2023
Amortized
Cost		Fair
Value		Amortized
Cost		Fair
Value
Available for sale
Within one year$448 $447 $5,505 $5,408 
One to five years148,408 135,879 100,301 89,650 
Five to ten years217,000 184,540 167,764 141,203 
After ten years95,631 84,456 195,984 170,113 
461,487 405,322 469,554 406,374 
Federal agency collateralized mortgage obligations3,413 3,152 3,931 3,580 
Federal agency mortgage–backed pools151,844 132,696 161,130 137,297 
Total available for sale investment securities$616,744 $541,170 $634,615 $547,251 
Held to maturity
Within one year$49,801 $49,143 $33,483 $33,169 
One to five years309,583 294,552 225,957 216,354 
Five to ten years360,008 316,813 350,843 304,067 
After ten years783,213 641,525 928,209 768,927 
1,502,605 1,302,033 1,538,492 1,322,517 
Federal agency collateralized mortgage obligations47,232 40,791 51,325 43,479 
Federal agency mortgage–backed pools308,725 271,084 323,649 275,028 
Private labeled mortgage–backed pools29,975 26,539 32,329 27,734 
Total held to maturity investment securities$1,888,537 $1,640,447 $1,945,795 $1,668,758 
As of September 30, 2024, investment securities with a fair value of $415.2 million were pledged as collateral against outstanding FHLB borrowings.
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.
September 30, 2024
Less than 12 Months12 Months or MoreTotal
Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
Available for Sale Investment Securities
U.S. Treasury and federal agencies$447 $(1)$62,798 $(6,175)$63,245 $(6,176)
State and municipal1,718 (237)303,628 (45,259)305,346 (45,496)
Federal agency collateralized mortgage obligations— — 3,152 (261)3,152 (261)
Federal agency mortgage–backed pools— — 132,696 (19,148)132,696 (19,148)
Corporate notes— — 36,052 (4,507)36,052 (4,507)
Total available for sale investment securities$2,165 $(238)$538,326 $(75,350)$540,491 $(75,588)
December 31, 2023
Less than 12 Months12 Months or MoreTotal
Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
Available for Sale Investment Securities
U.S. Treasury and federal agencies$— $— $64,377 $(8,561)$64,377 $(8,561)
State and municipal2,387 (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 available for sale investment 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 September 30, 2024 and December 31, 2023, the Company had 2,338 and 2,290 securities, respectively, with market values below their cost basis. The total fair value of these investments at September 30, 2024 and December 31, 2023 was $2.2 billion and $2.1 billion, which is approximately 89.7% 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 September 30, 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 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 September 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 September 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 $132.5 million as of September 30, 2024, and $143.7 million as of December 31, 2023.
The following table summarizes credit ratings of our held-to-maturity securities at amortized cost for the periods indicated:
September 30, 2024AAAAAABBBBBNot RatedTotal
U.S. Treasury and federal agencies$— $283,851 $— $— $— $— $283,851 
State and municipal253,333 689,162 112,192 2,182 — — 1,056,869 
Federal agency collateralized mortgage obligations47,232 — — — — — 47,232 
Federal agency mortgage-backed pools308,725 — — — — — 308,725 
Private labeled mortgage-backed pools29,975 — — — — — 29,975 
Corporate notes— 6,184 11,620 75,765 4,546 63,770 161,885 
Total$639,265 $979,197 $123,812 $77,947 $4,546 $63,770 $1,888,537 
December 31, 2023AAAAAABBBBBNot RatedTotal
U.S. Treasury and federal agencies$— $287,259 $— $— $— $— $287,259 
State and municipal285,748 730,907 69,658 2,186 — — 1,088,499 
Federal agency collateralized mortgage obligations51,325 — — — — — 51,325 
Federal agency mortgage-backed pools323,649 — — — — — 323,649 
Private labeled mortgage-backed pools32,329 — — — — — 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 
The following table details activity in the allowance for credit losses on held-to-maturity securities during the three and nine months ended September 30, 2024 and 2023.
Three Months EndedNine Months Ended
September 30, 2024September 30, 2023September 30, 2024September 30, 2023
Beginning balance$158 $164 $157 $257 
Credit loss expense (benefit)— (5)1 (98)
Ending balance$158 $159 $158 $159 
Accrued interest receivable on available for sale debt securities and held to maturity securities totaled $13.8 million at September 30, 2024 and $14.7 million at December 31, 2023 and is excluded from the estimate of credit losses.
The U.S. government sponsored entities and agencies and mortgage–backed securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major credit rating agencies, and have a long history of no credit losses. Therefore, for those securities, we do not record expected credit losses.
Based on an evaluation of available evidence, management believes the unrealized losses on available for sale state and municipal securities, private labeled mortgage–backed pools and corporate notes were due to changes in interest rates. Due to the contractual terms, the issuers of state and municipal securities are not allowed to settle for less than the amortized cost of the security. In addition, the Company does not intend to sell these securities prior to the recovery of the amortized cost, which may not occur until maturity. No allowance for credit losses was recognized for available for sale debt securities at September 30, 2024 and December 31, 2023.
Information regarding security proceeds, gross gains and gross losses, based on specific identification method, are presented below.
Three Months EndedNine Months Ended
September 30, 2024September 30, 2023September 30, 2024September 30, 2023
Sales of securities available for sale
Proceeds$— $— $— $88,194 
Gross gains— — — 215 
Gross losses— — — (695)