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Investment Securities | 6 Months Ended
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Jun. 30, 2023
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | Investment Securities The amortized cost and estimated fair value of the Company's available-for-sale and held-to-maturity securities are summarized as follows:
(dollars in thousands) |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Allowance for Credit Losses |  | Estimated Fair Value
June 30, 2023 |  |  |  |  |  |  |  |  |  |
Investment securities available-for-sale: |  |  |  |  |  |  |  |  |  |
U.S. treasury bonds |  | $ | 49,843 |  |  | $ | — |  |  | $ | (3,214) |  |  | $ | — |  |  | $ | 46,629 |
U.S. agency securities |  | 739,585 |  |  | 1 |  |  | (74,170) |  |  | — |  |  | 665,416 |
Residential mortgage-backed securities |  | 877,441 |  |  | 1 |  |  | (112,852) |  |  | — |  |  | 764,590 |
Commercial mortgage-backed securities |  | 54,982 |  |  | — |  |  | (6,013) |  |  | — |  |  | 48,969 |
Municipal bonds |  | 8,871 |  |  | — |  |  | (559) |  |  | — |  |  | 8,312 |
Corporate bonds |  | 2,000 |  |  | — |  |  | (310) |  |  | (17) |  |  | 1,673 |
Total available-for-sale securities |  | $ | 1,732,722 |  |  | $ | 2 |  |  | $ | (197,118) |  |  | $ | (17) |  |  | $ | 1,535,589 |
(dollars in thousands) |  | Amortized Cost |  | Gross Unrecognized Gains |  | Gross Unrecognized Losses |  | Estimated Fair Value
June 30, 2023 |  |  |  |  |  |  |  |
Investment securities held-to-maturity: |  |  |  |  |  |  |  |
Residential mortgage-backed securities |  | $ | 705,256 |  |  | $ | — |  |  | $ | (89,484) |  |  | $ | 615,772 |
Commercial mortgage-backed securities |  | 91,838 |  |  | — |  |  | (13,480) |  |  | 78,358 |
Municipal bonds |  | 127,825 |  |  | — |  |  | (10,705) |  |  | 117,120 |
Corporate bonds |  | 132,272 |  |  | — |  |  | (20,209) |  |  | 112,063 |
Total |  | $ | 1,057,191 |  |  | $ | — |  |  | $ | (133,878) |  |  | $ | 923,313 |
Allowance for credit losses |  | (2,010) |  |  |  |  |  |  |
Total held-to-maturity securities, net of ACL |  | $ | 1,055,181 |  |  |  |  |  |  |
(dollars in thousands) |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Allowance for Credit Losses |  | Estimated Fair Value
December 31, 2022 |  |  |  |  |  |  |  |  |  |
Investment securities available-for-sale: |  |  |  |  |  |  |  |  |  |
U.S. treasury bonds |  | $ | 49,793 |  |  | $ | — |  |  | $ | (3,466) |  |  | $ | — |  |  | $ | 46,327 |
U.S. agency securities |  | 747,777 |  |  | — |  |  | (78,049) |  |  | — |  |  | 669,728 |
Residential mortgage-backed securities |  | 937,557 |  |  | 18 |  |  | (117,072) |  |  | — |  |  | 820,503 |
Commercial mortgage-backed securities |  | 56,071 |  |  | — |  |  | (5,858) |  |  | — |  |  | 50,213 |
Municipal bonds |  | 10,700 |  |  | 45 |  |  | (658) |  |  | — |  |  | 10,087 |
Corporate bonds |  | 2,000 |  |  | — |  |  | (175) |  |  | (17) |  |  | 1,808 |
Total available-for-sale securities |  | $ | 1,803,898 |  |  | $ | 63 |  |  | $ | (205,278) |  |  | $ | (17) |  |  | $ | 1,598,666 |
(dollars in thousands) |  | Amortized Cost |  | Gross Unrecognized Gains |  | Gross Unrecognized Losses |  | Estimated Fair Value
December 31, 2022 |  |  |  |  |  |  |  |
Investment securities held-to-maturity: |  |  |  |  |  |  |  |
Residential mortgage-backed securities |  | $ | 741,057 |  |  | $ | — |  |  | $ | (88,390) |  |  | $ | 652,667 |
Commercial mortgage-backed securities |  | 92,557 |  |  | — |  |  | (11,993) |  |  | 80,564 |
Municipal bonds |  | 128,273 |  |  | — |  |  | (12,092) |  |  | 116,181 |
Corporate bonds |  | 132,253 |  |  | — |  |  | (12,958) |  |  | 119,295 |
Total |  | $ | 1,094,140 |  |  | $ | — |  |  | $ | (125,433) |  |  | $ | 968,707 |
Allowance for credit losses |  | (766) |  |  |  |  |  |  |
Total held-to-maturity securities, net of ACL |  | $ | 1,093,374 |  |  |  |  |  |  |
In addition, at June 30, 2023 and December 31, 2022 the Company held $46.2 million and $65.1 million, respectively, in equity securities in a combination of Federal Reserve Bank and FHLB stocks, which were required to be held for regulatory purposes and which were not marketable, and therefore are carried at cost. The Company reassessed classification of certain investments in the first quarter of 2022 and, effective March 31, 2022, it transferred a total of $1.1 billion of mortgage-backed securities, municipal bonds and corporate bonds from available-for-sale to held-to-maturity securities, including $237.0 million of securities acquired in the first quarter of 2022 for which its intention to hold to maturity was finalized. At the time of transfer, the Company reversed the allowance for credit losses associated with the available-for-sale securities through the provision for credit losses. The securities were transferred at their amortized cost basis, net of any remaining unrealized gain or loss reported in accumulated other comprehensive income. The related unrealized loss of $66.2 million was included in other comprehensive loss at the time of transfer and, as of June 30, 2023, $55.3 million remains in accumulated other comprehensive loss, to be amortized through interest income as a yield adjustment over the remaining term of the securities. No gain or loss was recorded at the time of transfer. Subsequent to transfer, the allowance for credit losses on these securities was evaluated under the accounting policy for held-to-maturity securities. Accrued interest receivable on available-for-sale securities totaled $4.2 million and $4.3 million at June 30, 2023 and December 31, 2022, respectively, and accrued interest receivable on held-to-maturity securities totaled $3.5 million at both June 30, 2023 and December 31, 2022. The accrued interest on investment securities is excluded from the amortized cost of the securities and is reported in other assets in the Consolidated Balance Sheets. The following tables summarizes available-for-sale and held-to-maturity securities in an unrealized loss position by length of time:
|  |  |  | Less Than 12 Months |  | 12 Months or Greater |  | Total
(dollars in thousands) |  | Number of Securities |  | Estimated Fair Value |  | Unrealized Losses |  | Estimated Fair Value |  | Unrealized Losses |  | Estimated Fair Value |  | Unrealized Losses
June 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. treasury bonds |  | 2 |  |  | $ | — |  |  | $ | — |  |  | $ | 46,629 |  |  | $ | (3,214) |  |  | $ | 46,629 |  |  | $ | (3,214) |
U. S. agency securities |  | 79 |  |  | 495,037 |  |  | (54,665) |  |  | 166,750 |  |  | (19,505) |  |  | 661,787 |  |  | (74,170) |
Residential mortgage-backed securities |  | 158 |  |  | — |  |  | — |  |  | 764,204 |  |  | (112,852) |  |  | 764,204 |  |  | (112,852) |
Commercial mortgage-backed securities |  | 13 |  |  | — |  |  | — |  |  | 48,969 |  |  | (6,013) |  |  | 48,969 |  |  | (6,013) |
Municipal bonds |  | 1 |  |  | — |  |  | — |  |  | 8,312 |  |  | (559) |  |  | 8,312 |  |  | (559) |
Corporate bonds |  | 1 |  |  | — |  |  | — |  |  | 1,673 |  |  | (310) |  |  | 1,673 |  |  | (310) |
Total |  | 254 |  |  | $ | 495,037 |  |  | $ | (54,665) |  |  | $ | 1,036,537 |  |  | $ | (142,453) |  |  | $ | 1,531,574 |  |  | $ | (197,118) |
|  |  |  | Less Than 12 Months |  | 12 Months or Greater |  | Total
(dollars in thousands) |  | Number of Securities |  | Estimated Fair Value |  | Unrecognized Losses |  | Estimated Fair Value |  | Unrecognized Losses |  | Estimated Fair Value |  | Unrecognized Losses
June 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities held-to-maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage-backed securities |  | 143 |  | $ | — |  |  | $ | — |  |  | $ | 615,772 |  |  | $ | (89,484) |  |  | $ | 615,772 |  |  | $ | (89,484) |
Commercial mortgage-backed securities |  | 16 |  | — |  |  | — |  |  | 78,358 |  |  | (13,480) |  |  | 78,358 |  |  | (13,480) |
Municipal bonds |  | 43 |  | 2,890 |  |  | (16) |  |  | 114,230 |  |  | (10,689) |  |  | 117,120 |  |  | (10,705) |
Corporate bonds |  | 32 |  | 20,888 |  |  | (3,096) |  |  | 91,175 |  |  | (17,113) |  |  | 112,063 |  |  | (20,209) |
Total |  | 234 |  |  | $ | 23,778 |  |  | $ | (3,112) |  |  | $ | 899,535 |  |  | $ | (130,766) |  |  | $ | 923,313 |  |  | $ | (133,878) |
|  |  |  | Less Than 12 Months |  | 12 Months or Greater |  | Total
(dollars in thousands) |  | Number of Securities |  | Estimated Fair Value |  | Unrealized Losses |  | Estimated Fair Value |  | Unrealized Losses |  | Estimated Fair Value |  | Unrealized Losses
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. treasury bond |  | 2 |  |  | $ | — |  |  | $ | — |  |  | $ | 46,327 |  |  | $ | (3,466) |  |  | $ | 46,327 |  |  | $ | (3,466) |
U. S. agency securities |  | 85 |  |  | 490,699 |  |  | (58,437) |  |  | 179,029 |  |  | (19,612) |  |  | 669,728 |  |  | (78,049) |
Residential mortgage-backed securities |  | 157 |  |  | 3,994 |  |  | — |  |  | 808,697 |  |  | (117,072) |  |  | 812,691 |  |  | (117,072) |
Commercial mortgage-backed securities |  | 14 |  |  | 471 |  |  | (2) |  |  | 49,742 |  |  | (5,856) |  |  | 50,213 |  |  | (5,858) |
Municipal bonds |  | 1 |  |  | — |  |  | — |  |  | 8,299 |  |  | (658) |  |  | 8,299 |  |  | (658) |
Corporate bonds |  | 1 |  |  | — |  |  | — |  |  | 1,825 |  |  | (175) |  |  | 1,825 |  |  | (175) |
Total |  | 260 |  |  | $ | 495,164 |  |  | $ | (58,439) |  |  | $ | 1,093,919 |  |  | $ | (146,839) |  |  | $ | 1,589,083 |  |  | $ | (205,278) |
|  |  |  | Less Than 12 Months |  | 12 Months or Greater |  | Total
(dollars in thousands) |  | Number of Securities |  | Estimated Fair Value |  | Unrecognized Losses |  | Estimated Fair Value |  | Unrecognized Losses |  | Estimated Fair Value |  | Unrecognized Losses
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities held-to-maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage-backed securities |  | 143 |  |  | $ | — |  |  | $ | — |  |  | $ | 652,667 |  |  | $ | (88,390) |  |  | $ | 652,667 |  |  | $ | (88,390) |
Commercial mortgage-backed securities |  | 16 |  |  | — |  |  | — |  |  | 80,564 |  |  | (11,993) |  |  | 80,564 |  |  | (11,993) |
Municipal bonds |  | 43 |  |  | 3,110 |  |  | (45) |  |  | 113,071 |  |  | (12,047) |  |  | 116,181 |  |  | (12,092) |
Corporate bonds |  | 30 |  |  | 20,771 |  |  | (3,183) |  |  | 86,451 |  |  | (9,775) |  |  | 107,222 |  |  | (12,958) |
Total |  | 232 |  |  | $ | 23,881 |  |  | $ | (3,228) |  |  | $ | 932,753 |  |  | $ | (122,205) |  |  | $ | 956,634 |  |  | $ | (125,433) |
Unrealized losses at June 30, 2023 were generally attributable to changes in market interest rates and interest spread relationships subsequent to the dates the securities were originally purchased, and not due to credit quality concerns on the investment securities. The Company measures its AFS and HTM security portfolios for current expected credit losses as part of its allowance for credit losses analysis. During the six months ended June 30, 2023, the Company recorded a provision for credit losses on its held-to-maturity portfolio of $1.2 million. No provision was recorded for its available-for-sale security portfolio was recorded during the six months ended June 30, 2023. At June 30, 2023, the Company had a total allowance of $17 thousand and $2.0 million on its available-for-sale securities and held-to-maturity securities, respectively, each of which primarily comprise allowances for corporate bonds. The weighted average duration of debt securities, which comprise 100% of total investment securities, is 4.73 years. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security's credit rating, prepayment assumptions and other factors such as credit loss assumptions. The Company currently has no plans to sell the investments, and it is more likely than not that the Company will not have to sell the securities before recovery of its amortized cost basis, which may be at maturity. The amortized cost and estimated fair value of available-for-sale and held-to-maturity securities at June 30, 2023 and December 31, 2022 by contractual maturity are shown in the table below. Contractual maturities for mortgage-backed securities ("MBS") are excluded as they may differ significantly from expected maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
|  | June 30, 2023 |  | December 31, 2022
|  | Amortized |  | Estimated |  | Amortized |  | Estimated
(dollars in thousands) |  | Cost (1) |  | Fair Value |  | Cost |  | Fair Value
Investment securities available-for-sale |  |  |  |  |  |  |  |
U. S. agency securities maturing: |  |  |  |  |  |  |  |
One year or less |  | 549,703 |  |  | 495,038 |  |  | $ | 549,137 |  |  | $ | 490,699 |
After one year through five years |  | 125,808 |  |  | 113,310 |  |  | 111,742 |  |  | 100,297 |
After five years through ten years |  | 51,836 |  |  | 47,266 |  |  | 73,886 |  |  | 68,180 |
After ten years |  | 12,238 |  |  | 9,802 |  |  | 13,012 |  |  | 10,552 |
Residential mortgage-backed securities |  | 877,441 |  |  | 764,590 |  |  | 937,557 |  |  | 820,503 |
Commercial mortgage-backed securities |  | 54,982 |  |  | 48,969 |  |  | 56,071 |  |  | 50,213 |
Municipal bonds maturing: |  |  |  |  |  |  |  |
One year or less |  | — |  |  | — |  |  | 300 |  |  | 300 |
After one year through five years |  | — |  |  | — |  |  | 1,444 |  |  | 1,488 |
After five years through ten years |  | 8,871 |  |  | 8,312 |  |  | 8,956 |  |  | 8,299 |
After ten years |  | — |  |  | — |  |  | — |  |  | — |
Corporate bonds maturing: |  |  |  |  |  |  |  |
One year or less |  | — |  |  | — |  |  | — |  |  | — |
After one year through five years |  | 2,000 |  |  | 1,690 |  |  | 2,000 |  |  | 1,825 |
After five years through ten years |  | — |  |  | — |  |  | — |  |  | — |
U.S. Treasury |  | 49,843 |  |  | 46,629 |  |  | 49,793 |  |  | 46,327 |
Allowance for credit losses |  | — |  |  | (17) |  |  | — |  |  | (17) |
|  | 1,732,722 |  |  | 1,535,589 |  |  | 1,803,898 |  |  | 1,598,666 |
Investment securities held-to-maturity |  |  |  |  |  |  |  |
U. S. agency securities maturing: |  |  |  |  |  |  |  |
One year or less |  | — |  |  | — |  |  | — |  |  | — |
After one year through five years |  | — |  |  | — |  |  | — |  |  | — |
After five years through ten years |  | — |  |  | — |  |  | — |  |  | — |
Residential mortgage-backed securities |  | 705,256 |  |  | 615,772 |  |  | 741,057 |  |  | 652,667 |
Commercial mortgage-backed securities |  | 91,838 |  |  | 78,358 |  |  | 92,557 |  |  | 80,564 |
Municipal bonds maturing: |  |  |  |  |  |  |  |
One year or less |  | 2,907 |  |  | 2,890 |  |  | 3,139 |  |  | 3,110 |
After one year through five years |  | 40,325 |  |  | 37,922 |  |  | 35,579 |  |  | 33,743 |
After five years through ten years |  | 72,368 |  |  | 65,014 |  |  | 77,262 |  |  | 67,945 |
After ten years |  | 12,225 |  |  | 11,294 |  |  | 12,293 |  |  | 11,383 |
Corporate bonds maturing: |  |  |  |  |  |  |  |
One year or less |  | 23,984 |  |  | 20,889 |  |  | 23,954 |  |  | 20,771 |
After one year through five years |  | 91,441 |  |  | 77,941 |  |  | 84,953 |  |  | 77,997 |
After five years through ten years |  | 16,847 |  |  | 13,233 |  |  | 23,346 |  |  | 20,527 |
Allowance for credit losses |  | (2,010) |  |  | — |  |  | (766) |  |  | — |
|  | 1,055,181 |  |  | 923,313 |  |  | 1,093,374 |  |  | 968,707 |
|  | $ | 2,787,903 |  |  | $ | 2,458,902 |  |  | $ | 2,897,272 |  |  | $ | 2,567,373 |
(1)Amortized cost for investment securities held-to-maturity is presented net of the allowance for credit losses on the Consolidated Balance Sheet. For the three and six months ended June 30, 2023, gross realized gains on sales and calls of investments securities were $2 thousand and $7 thousand, respectively, as compared to $11 thousand for the three and six months ended June 30, 2022. For the six months ended June 30, 2023, gross realized losses on sales of investments securities were $26 thousand as compared to $162 thousand and $187 thousand for the three and six months ended June 30, 2022, respectively. There were no realized losses incurred during the three months ended June 30, 2023. Gross sales and call proceeds were $273 thousand and $8.6 million for the three and six months ended June 30, 2023, respectively, and $6.2 million for the three and six months ended June 30, 2022. The book value of securities pledged as collateral for certain government deposits, securities sold under agreements to repurchase, and certain lines of credit with correspondent banks at June 30, 2023 and December 31, 2022 was $2.3 billion and $220.1 million, respectively, which were well in excess of required amounts in order to operationally provide significant reserve amounts for new business. As of June 30, 2023 and December 31, 2022, there were no holdings of securities of any one issuer, other than the U.S. Government and U.S. agency securities, which exceeded ten percent of shareholders' equity.

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