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Investment Securities | 9 Months Ended
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Sep. 30, 2024
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | Investment Securities The amortized cost and estimated fair value of the Company's AFS and HTM securities are summarized as follows:
(dollars in thousands) |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Allowance for Credit Losses |  | Estimated Fair Value
September 30, 2024 |  |  |  |  |  |  |  |  |  |
Investment securities available-for-sale: |  |  |  |  |  |  |  |  |  |
U.S. treasury bonds |  | $ | 49,970 |  |  | $ | — |  |  | $ | (567) |  |  | $ | — |  |  | $ | 49,403 |
U.S. agency securities |  | 690,699 |  |  | — |  |  | (37,422) |  |  | — |  |  | 653,277 |
Residential mortgage-backed securities |  | 745,006 |  |  | 125 |  |  | (75,086) |  |  | — |  |  | 670,045 |
Commercial mortgage-backed securities |  | 53,711 |  |  | — |  |  | (3,495) |  |  | — |  |  | 50,216 |
Municipal bonds |  | 8,652 |  |  | — |  |  | (385) |  |  | — |  |  | 8,267 |
Corporate bonds |  | 2,000 |  |  | — |  |  | (185) |  |  | (17) |  |  | 1,798 |
Total available-for-sale securities |  | $ | 1,550,038 |  |  | $ | 125 |  |  | $ | (117,140) |  |  | $ | (17) |  |  | $ | 1,433,006 |
(dollars in thousands) |  | Amortized Cost |  | Gross Unrecognized Gains |  | Gross Unrecognized Losses |  | Estimated Fair Value
September 30, 2024 |  |  |  |  |  |  |  |
Investment securities held-to-maturity: |  |  |  |  |  |  |  |
Residential mortgage-backed securities |  | $ | 621,203 |  |  | $ | — |  |  | $ | (66,264) |  |  | $ | 554,939 |
Commercial mortgage-backed securities |  | 89,269 |  |  | — |  |  | (10,008) |  |  | 79,261 |
Municipal bonds |  | 120,307 |  |  | — |  |  | (8,024) |  |  | 112,283 |
Corporate bonds |  | 132,383 |  |  | — |  |  | (10,441) |  |  | 121,942 |
Total |  | $ | 963,162 |  |  | $ | — |  |  | $ | (94,737) |  |  | $ | 868,425 |
Allowance for credit losses |  | (1,237) |  |  |  |  |  |  |
Total held-to-maturity securities, net of ACL |  | $ | 961,925 |  |  |  |  |  |  |
(dollars in thousands) |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Allowance for Credit Losses |  | Estimated Fair Value
December 31, 2023 |  |  |  |  |  |  |  |  |  |
Investment securities available-for-sale: |  |  |  |  |  |  |  |  |  |
U.S. treasury bonds |  | $ | 49,894 |  |  | $ | — |  |  | $ | (1,993) |  |  | $ | — |  |  | $ | 47,901 |
U.S. agency securities |  | 729,090 |  |  | — |  |  | (57,693) |  |  | — |  |  | 671,397 |
Residential mortgage-backed securities |  | 823,992 |  |  | 45 |  |  | (96,684) |  |  | — |  |  | 727,353 |
Commercial mortgage-backed securities |  | 54,557 |  |  | — |  |  | (4,993) |  |  | — |  |  | 49,564 |
Municipal bonds |  | 8,783 |  |  | — |  |  | (293) |  |  | — |  |  | 8,490 |
Corporate bonds |  | 2,000 |  |  | — |  |  | (300) |  |  | (17) |  |  | 1,683 |
Total available-for-sale securities |  | $ | 1,668,316 |  |  | $ | 45 |  |  | $ | (161,956) |  |  | $ | (17) |  |  | $ | 1,506,388 |
(dollars in thousands) |  | Amortized Cost |  | Gross Unrecognized Gains |  | Gross Unrecognized Losses |  | Estimated Fair Value
December 31, 2023 |  |  |  |  |  |  |  |
Investment securities held-to-maturity: |  |  |  |  |  |  |  |
Residential mortgage-backed securities |  | $ | 670,043 |  |  | $ | — |  |  | $ | (79,980) |  |  | $ | 590,063 |
Commercial mortgage-backed securities |  | 90,227 |  |  | — |  |  | (12,867) |  |  | 77,360 |
Municipal bonds |  | 125,114 |  |  | 5 |  |  | (8,540) |  |  | 116,579 |
Corporate bonds |  | 132,309 |  |  | — |  |  | (14,729) |  |  | 117,580 |
Total |  | $ | 1,017,693 |  |  | $ | 5 |  |  | $ | (116,116) |  |  | $ | 901,582 |
Allowance for credit losses |  | (1,956) |  |  |  |  |  |  |
Total held-to-maturity securities, net of ACL |  | $ | 1,015,737 |  |  |  |  |  |  |
At September 30, 2024 and December 31, 2023, the Company held $37.7 million and $25.7 million, respectively, of equity securities in a combination of Federal Reserve System ("Federal Reserve Board," "Federal Reserve" or "FRB") and FHLB stocks, which are required to be held for regulatory purposes. These securities cannot be disposed of other than through redemption by the issuer and, if redeemed, would be redeemed at the original cost. At September 30, 2024 and December 31, 2023, the Company had $46.5 million and $51.7 million, respectively, of unamortized unrealized losses outstanding following the transfer of investment securities from AFS to HTM in 2022. These unrealized losses are included in accumulated other comprehensive loss and are amortized through interest income as a yield adjustment over the remaining term of the securities. Accrued interest receivable on investment securities totaled $7.4 million and $7.6 million at September 30, 2024 and December 31, 2023, respectively. The accrued interest receivable is excluded from the amortized cost of the securities and is reported in other assets in the Consolidated Balance Sheets. The following tables summarize AFS and HTM 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
September 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. treasury bonds |  | 2 |  |  | $ | — |  |  | $ | — |  |  | $ | 49,403 |  |  | $ | (567) |  |  | $ | 49,403 |  |  | $ | (567) |
U. S. agency securities |  | 76 |  |  | 2,498 |  |  | (3) |  |  | 650,779 |  |  | (37,419) |  |  | 653,277 |  |  | (37,422) |
Residential mortgage-backed securities |  | 146 |  |  | — |  |  | — |  |  | 660,627 |  |  | (75,086) |  |  | 660,627 |  |  | (75,086) |
Commercial mortgage-backed securities |  | 13 |  |  | — |  |  | — |  |  | 50,216 |  |  | (3,495) |  |  | 50,216 |  |  | (3,495) |
Municipal bonds |  | 1 |  |  | — |  |  | — |  |  | 8,267 |  |  | (385) |  |  | 8,267 |  |  | (385) |
Corporate bonds |  | 1 |  |  | — |  |  | — |  |  | 1,797 |  |  | (185) |  |  | 1,797 |  |  | (185) |
Total |  | 239 |  |  | $ | 2,498 |  |  | $ | (3) |  |  | $ | 1,421,089 |  |  | $ | (117,137) |  |  | $ | 1,423,587 |  |  | $ | (117,140) |
|  |  |  | 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
September 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities held-to-maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage-backed securities |  | 141 |  | $ | — |  |  | $ | — |  |  | $ | 554,939 |  |  | $ | (66,264) |  |  | $ | 554,939 |  |  | $ | (66,264) |
Commercial mortgage-backed securities |  | 16 |  | — |  |  | — |  |  | 79,261 |  |  | (10,008) |  |  | 79,261 |  |  | (10,008) |
Municipal bonds |  | 38 |  | 3,503 |  |  | (23) |  |  | 107,779 |  |  | (8,001) |  |  | 111,282 |  |  | (8,024) |
Corporate bonds |  | 30 |  | — |  |  | — |  |  | 109,899 |  |  | (10,441) |  |  | 109,899 |  |  | (10,441) |
Total |  | 225 |  |  | $ | 3,503 |  |  | $ | (23) |  |  | $ | 851,878 |  |  | $ | (94,714) |  |  | $ | 855,381 |  |  | $ | (94,737) |
|  |  |  | 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, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. treasury bonds |  | 2 |  |  | $ | — |  |  | $ | — |  |  | $ | 47,901 |  |  | $ | (1,993) |  |  | $ | 47,901 |  |  | $ | (1,993) |
U. S. agency securities |  | 78 |  |  | 3,084 |  |  | (4) |  |  | 668,313 |  |  | (57,689) |  |  | 671,397 |  |  | (57,693) |
Residential mortgage-backed securities |  | 149 |  |  | — |  |  | — |  |  | 718,042 |  |  | (96,684) |  |  | 718,042 |  |  | (96,684) |
Commercial mortgage-backed securities |  | 13 |  |  | — |  |  | — |  |  | 49,564 |  |  | (4,993) |  |  | 49,564 |  |  | (4,993) |
Municipal bonds |  | 1 |  |  | — |  |  | — |  |  | 8,490 |  |  | (293) |  |  | 8,490 |  |  | (293) |
Corporate bonds |  | 1 |  |  | — |  |  | — |  |  | 1,683 |  |  | (300) |  |  | 1,683 |  |  | (300) |
Total |  | 244 |  |  | $ | 3,084 |  |  | $ | (4) |  |  | $ | 1,493,993 |  |  | $ | (161,952) |  |  | $ | 1,497,077 |  |  | $ | (161,956) |
|  |  |  | 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, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities held-to-maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage-backed securities |  | 142 |  |  | $ | — |  |  | $ | — |  |  | $ | 590,063 |  |  | $ | (79,980) |  |  | $ | 590,063 |  |  | $ | (79,980) |
Commercial mortgage-backed securities |  | 16 |  |  | — |  |  | — |  |  | 77,360 |  |  | (12,867) |  |  | 77,360 |  |  | (12,867) |
Municipal bonds |  | 40 |  |  | — |  |  | — |  |  | 113,031 |  |  | (8,540) |  |  | 113,031 |  |  | (8,540) |
Corporate bonds |  | 30 |  |  | — |  |  | — |  |  | 105,523 |  |  | (14,729) |  |  | 105,523 |  |  | (14,729) |
Total |  | 228 |  |  | $ | — |  |  | $ | — |  |  | $ | 885,977 |  |  | $ | (116,116) |  |  | $ | 885,977 |  |  | $ | (116,116) |
Unrealized losses at September 30, 2024 were generally attributable to changes in market interest rates and interest spread relationships subsequent to the dates the securities were originally purchased and were considered to be temporary, and not due to credit quality concerns on the investment securities. The fair values of these securities are expected to recover as the securities approach their respective maturity dates. The Company does not intend to sell and it is likely that it will not be required to sell the securities prior to their anticipated recovery. The Company measures its AFS and HTM security portfolios for current expected credit losses as part of its ACL analysis. For further information on provision for credit losses on AFS and HTM securities, including balances for the three and nine months ended September 30, 2024 and 2023, see Allowance for Credit Losses discussion in "Note 1. Summary of Significant Accounting Policies". At September 30, 2024, the Company had a total allowance of $17 thousand on its AFS securities and $1.2 million on its HTM securities, each of which primarily comprise allowances for corporate bonds. The following table summarizes the Company's investment in AFS securities and HTM securities by contractual maturity. Expected maturities for mortgage-backed securities ("MBS") will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
|  | September 30, 2024
(dollars in thousands) |  | Amortized Cost |  | Estimated Fair Value
Investment securities available-for-sale: |  |  |  |
Within one year |  | $ | 226,404 |  |  | $ | 223,552 |
One to five years |  | 419,569 |  |  | 394,901 |
Five to ten years |  | 85,553 |  |  | 76,816 |
Beyond ten years |  | 19,795 |  |  | 17,493 |
Residential mortgage-backed securities |  | 745,006 |  |  | 670,045 |
Commercial mortgage-backed securities |  | 53,711 |  |  | 50,216 |
Less: allowance for credit losses |  | — |  |  | (17) |
Total investment securities available-for-sale |  | 1,550,038 |  |  | 1,433,006 |
Investment securities held-to-maturity: |  |  |  |
Within one year |  | 7,699 |  |  | 7,636 |
One to five years |  | 57,804 |  |  | 56,704 |
Five to ten years |  | 118,626 |  |  | 107,212 |
Beyond ten years |  | 68,561 |  |  | 62,673 |
Residential mortgage-backed securities: |  | 621,203 |  |  | 554,939 |
Commercial mortgage-backed securities |  | 89,269 |  |  | 79,261 |
Less: allowance for credit losses |  | (1,237) |  |  | — |
Total investment securities held-to-maturity |  | 961,925 |  |  | 868,425 |
Total |  | $ | 2,511,963 |  |  | $ | 2,301,431 |
For the three and nine months ended September 30, 2024, gross realized gains on calls of investment securities were $3 thousand and $10 thousand, respectively, as compared to $5 thousand and $126 thousand for the three and nine months ended September 30, 2023. There were no gross realized losses on sales or calls of investment securities during the three and nine months ended September 30, 2024, nor during the three months ended September 30, 2023. During the nine months ended September 30, 2023, there were $140 thousand of gross realized losses on sales or calls of investment securities. Gross sales and call proceeds were $4.5 million and $31.6 million for the three and nine months ended September 30, 2024, respectively, and $2.6 million and $11.2 million for the same periods in 2023. 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 September 30, 2024 and December 31, 2023 was $1.4 billion and $2.1 billion, respectively. These balances were well in excess of required amounts in order to operationally provide significant reserve amounts for new business. As of September 30, 2024 and December 31, 2023, there were no holdings of securities of any one issuer, other than the U.S. Government and U.S. agency securities, that exceeded ten percent of shareholders' equity.

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