Investment Securities

12 Months Ended

Dec. 31, 2022

Investments, Debt and Equity Securities [Abstract]

The following tables show the amortized cost, the estimated fair value and the allowance for credit losses of the held-to-maturity securities and available-for-sale securities at December 31, 2022 and 2021, by contractual maturity within each type:


	At December 31, 2022
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
Securities Held-to-Maturity





Residential mortgage-backed securities:
After 1 year to 5 years	$	1,654	$	—	$	(70)	$	—	$	1,584
After 5 years to 10 years	6,076		—		(342)		—		5,734
Over 10 years	146,997		—		(20,247)		—		126,750
	154,727		—		(20,659)		—		134,068




Total	$	154,727	$	—	$	(20,659)	$	—	$	134,068
Securities Available-for-Sale










State and political subdivisions:

After 1 year to 5 years	$	2,327	$	—	$	(42)	$	—	$	2,285


	2,327		—		(42)		—		2,285
Residential mortgage-backed securities:

After 1 year to 5 years	864		—		(37)		—		827
After 5 years to 10 years	10,399		—		(815)		—		9,584
Over 10 years	294,261		7		(41,291)		—		252,977
	305,524		7		(42,143)		—		263,388
Collateralized mortgage obligations:

After 5 years to 10 years	324		—		(22)		—		302
Over 10 years	2,257		—		(237)		—		2,020
	2,581		—		(259)		—		2,322
Corporate bonds:
Within 1 year	1,000		—		—		—		1,000
After 1 year to 5 years	30,679		3		(1,516)		(152)		29,014
After 5 years to 10 years	60,000		—		(6,765)		(988)		52,247

	91,679		3		(8,281)		(1,140)		82,261
Total	$	402,111	$	10	$	(50,725)	$	(1,140)	$	350,256


	At December 31, 2021
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
Securities Held-to-Maturity
U.S. government corporations and agencies:
Within 1 year	$	6,999	$	34	$	—	$	—	$	7,033


	6,999		34		—		—		7,033
Residential mortgage-backed securities:
After 5 years to 10 years	5,208		194		—		—		5,402
Over 10 years	164,776		2,175		(984)		—		165,967
	169,984		2,369		(984)		—		171,369




Total	$	176,983	$	2,403	$	(984)	$	—	$	178,402
Securities Available-for-Sale









State and political subdivisions:

After 1 year to 5 years	$	2,326	$	7	$	—	$	—	$	2,333


	2,326		7		—		—		2,333
Residential mortgage-backed securities:
Within 1 year	31		—		—		—		31
After 1 year to 5 years	153		5		—		—		158
After 5 years to 10 years	2,286		82		—		—		2,368
Over 10 years	220,153		671		(2,276)		—		218,548
	222,623		758		(2,276)		—		221,105
Collateralized mortgage obligations:

After 5 years to 10 years	481		7		—		—		488
Over 10 years	2,813		—		(23)		—		2,790
	3,294		7		(23)		—		3,278
Corporate bonds:
Within 1 year	2,500		4		—		—		2,504
After 1 year to 5 years	28,731		755		(67)		(51)		29,368
After 5 years to 10 years	60,000		—		(703)		(878)		58,419

	91,231		759		(770)		(929)		90,291
Total	$	319,474	$	1,531	$	(3,069)	$	(929)	$	317,007

Gross unrealized gains and losses on available-for-sale securities are recognized in accumulated other comprehensive income (loss) and changes in the allowance for credit loss are recorded in provision for credit loss expense. Expected maturities may differ from contractual maturities because debt issuers may have the right to call or prepay obligations without call or prepayment penalties and mortgage-backed securities typically prepay at a rate faster than contractually due.

Securities with a carrying value of $429.4 million and $281.7 million at December 31, 2022 and 2021, respectively, were pledged to secure public funds deposits and other contractual obligations. There were no pledged securities to secure credit derivatives and interest rate swaps at December 31, 2022. Securities of $23.0 million were pledged to secure credit derivatives and interest rate swaps at December 31, 2021. See Note 18, "Derivative Instruments and Hedging Activities" for additional information.

The following table presents information related to sales of securities available-for-sale during the years ended December 31, 2022, 2021 and 2020:


	For the Years Ended December 31,
(Dollars in thousands)	2022		2021		2020
Securities available-for-sale:
Proceeds from sales	$	1,530	$	4,636	$	66,421
Gross realized gains on sales	30		145		885
Gross realized losses on sales	—		—		14
Tax expense related to net realized gains on sales	6		30		183

At December 31, 2022 and 2021, there were no reportable investments in any single issuer representing more than 10% of shareholders' equity.

The following table shows the fair value of securities that were in an unrealized loss position for which an allowance for credit losses has not been recorded at December 31, 2022 and 2021, by the length of time those securities were in a continuous loss position.


	Less than Twelve Months				Twelve Months or Longer				Total
(Dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
At December 31, 2022
Securities Held-to-Maturity

Residential mortgage-backed securities	$	65,044	$	(5,894)	$	69,024	$	(14,765)	$	134,068	$	(20,659)

Total	$	65,044	$	(5,894)	$	69,024	$	(14,765)	$	134,068	$	(20,659)
Securities Available-for-Sale


State and political subdivisions	$	1,255	$	(42)	$	—	$	—	$	1,255	$	(42)
Residential mortgage-backed securities	128,831		(13,843)		133,902		(28,300)		262,733		(42,143)
Collateralized mortgage obligations	302		(22)		2,020		(237)		2,322		(259)
Corporate bonds	500		(1)		—		—		500		(1)
Total	$	130,888	$	(13,908)	$	135,922	$	(28,537)	$	266,810	$	(42,445)

At December 31, 2021
Securities Held-to-Maturity

Residential mortgage-backed securities	$	89,837	$	(984)	$	—	$	—	$	89,837	$	(984)

Total	$	89,837	$	(984)	$	—	$	—	$	89,837	$	(984)
Securities Available-for-Sale



Residential mortgage-backed securities	$	164,326	$	(1,816)	$	12,097	$	(460)	$	176,423	$	(2,276)
Collateralized mortgage obligations	2,790		(23)		—		—		2,790		(23)
Corporate bonds	779		(1)		—		—		779		(1)
Total	$	167,895	$	(1,840)	$	12,097	$	(460)	$	179,992	$	(2,300)

At December 31, 2022, the fair value of held-to-maturity securities in an unrealized loss position for which an allowance for credit losses has not been recorded was $134.1 million, including unrealized losses of $20.7 million. These holdings were comprised of 84 federal agency mortgage-backed securities, which are U.S. government entities and agencies and are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. The Corporation did not recognize any credit losses on held-to-maturity debt securities for the year ended December 31, 2022 or 2021. Accrued interest receivable on held-to-maturity debt securities totaled $330 thousand at December 31, 2022 and is included within Accrued interest receivable and other assets on the consolidated balance sheet. This amount is excluded from the estimate of expected credit losses.

At December 31, 2022, the fair value of available-for-sale securities in an unrealized loss position for which an allowance for credit losses has not been recorded was $266.8 million, including unrealized losses of $42.4 million. These holdings were comprised of (1) 107 federal agency mortgage-backed securities, which are U.S. government entities and agencies and are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses, (2) two collateralized mortgage obligation bonds, (3) one state and political subdivisions bond and (4) one investment grade corporate bond. The Corporation does not intend to sell the securities in an unrealized loss position and is unlikely to be required to sell these securities before a recovery of fair value, which may be maturity. The Corporation concluded that the decline in fair value of these securities was not indicative of a credit loss. Accrued interest receivable on available-for-sale debt securities totaled $1.0 million at December 31, 2022 and is included within Accrued interest receivable and other assets on the consolidated balance sheet. This amount is excluded from the estimate of expected credit losses.

The table below presents a rollforward by major security type for the years ended December 31, 2022 and 2021 of the allowance for credit losses on securities available-for-sale.


(Dollars in thousands)	Corporate Bonds
For the Year Ended December 31, 2022
Securities Available-for-Sale
Beginning balance	$	(929)
Additions for securities for which no previous expected credit losses were recognized	(153)
Change in securities for which a previous expected credit loss was recognized	(58)
Ending balance	$	(1,140)

For the Year Ended December 31, 2021
Securities Available-for-Sale
Beginning balance	$	(869)
Additions for securities for which no previous expected credit losses were recognized	(44)
Change in securities for which a previous expected credit loss was recognized	(16)
Ending balance	$	(929)

At December 31, 2022, the fair value of available-for-sale securities in an unrealized loss position for which an allowance for credit losses has been recorded was $80.8 million, including unrealized losses of $9.4 million, and allowance for credit losses of $1.1 million. These holdings were comprised of 39 investment grade corporate bonds which fluctuate in value based on changes in market conditions. For these securities, fluctuations were primarily due to changes in the interest rate environment. The Corporation does not have the intent to sell these securities and it is not likely that it will be required to sell the securities before their anticipated recovery. The underlying issuers continue to make timely principal and interest payments on the securities.

The Corporation recognized a $198 thousand net loss and a $161 thousand net gain on equity securities during the years ended December 31, 2022 and 2021, respectively, in other noninterest income. There were no sales of equity securities during the years ended December 31, 2022 or 2021.