Investment Securities

3 Months Ended

Mar. 31, 2024

Investments, Debt and Equity Securities [Abstract]

Investment Securities

The following table shows 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 March 31, 2024 and December 31, 2023, by contractual maturity within each type:


	At March 31, 2024
(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	$	1,660	$	—	$	(60)	$	—	$	1,600
After 5 years to 10 years	11,934		—		(596)		—		11,338
Over 10 years	129,880		—		(18,796)		—		111,084
	143,474		—		(19,452)		—		124,022




Total	$	143,474	$	—	$	(19,452)	$	—	$	124,022
Securities Available-for-Sale









State and political subdivisions:
Within 1 year	$	1,299	$	—	$	(30)	$	—	$	1,269



	1,299		—		(30)		—		1,269
Residential mortgage-backed securities:

After 1 year to 5 years	499		—		(18)		—		481
After 5 years to 10 years	13,082		—		(1,040)		—		12,042
Over 10 years	289,639		128		(38,141)		—		251,626
	303,220		128		(39,199)		—		264,149
Collateralized mortgage obligations:

After 5 years to 10 years	218		—		(10)		—		208
Over 10 years	1,902		—		(183)		—		1,719
	2,120		—		(193)		—		1,927
Corporate bonds:
Within 1 year	18,503		—		(95)		(8)		18,400
After 1 year to 5 years	12,840		13		(643)		(43)		12,167
After 5 years to 10 years	60,000		—		(6,327)		(766)		52,907

	91,343		13		(7,065)		(817)		83,474
Total	$	397,982	$	141	$	(46,487)	$	(817)	$	350,819


	At December 31, 2023
(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	$	1,871	$	—	$	(62)	$	—	$	1,809
After 5 years to 10 years	12,047		—		(462)		—		11,585
Over 10 years	131,859		—		(16,976)		—		114,883
	145,777		—		(17,500)		—		128,277




Total	$	145,777	$	—	$	(17,500)	$	—	$	128,277
Securities Available-for-Sale









State and political subdivisions:
Within 1 year	$	1,030	$	—	$	(1)	$	—	$	1,029
After 1 year to 5 years	1,298		—		(26)		—		1,272


	2,328		—		(27)		—		2,301
Residential mortgage-backed securities:

After 1 year to 5 years	567		—		(20)		—		547
After 5 years to 10 years	13,653		—		(964)		—		12,689
Over 10 years	285,628		131		(34,443)		—		251,316
	299,848		131		(35,427)		—		264,552
Collateralized mortgage obligations:

After 5 years to 10 years	241		—		(11)		—		230
Over 10 years	1,960		—		(189)		—		1,771
	2,201		—		(200)		—		2,001
Corporate bonds:
Within 1 year	18,011		1		(176)		(27)		17,809
After 1 year to 5 years	13,339		23		(671)		(43)		12,648
After 5 years to 10 years	60,000		—		(7,097)		(661)		52,242

	91,350		24		(7,944)		(731)		82,699
Total	$	395,727	$	155	$	(43,598)	$	(731)	$	351,553

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 $456.6 million and $464.0 million at March 31, 2024 and December 31, 2023, respectively, were pledged to secure public funds deposits and contingency funding. There were no pledged securities to secure credit derivatives and interest rate swaps at March 31, 2024 or December 31, 2023. See Note 11, "Derivative Instruments and Hedging Activities" for additional information.

There were no sales of securities available-for-sale during the three months ended March 31, 2024 or 2023.

At March 31, 2024 and December 31, 2023, 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 March 31, 2024 and December 31, 2023, 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 March 31, 2024
Securities Held-to-Maturity

Residential mortgage-backed securities	$	7,006	$	(170)	$	117,016	$	(19,282)	$	124,022	$	(19,452)

Total	$	7,006	$	(170)	$	117,016	$	(19,282)	$	124,022	$	(19,452)
Securities Available-for-Sale



Residential mortgage-backed securities	$	9,515	$	(37)	$	244,887	$	(39,162)	$	254,402	$	(39,199)
Collateralized mortgage obligations	—		—		1,927		(193)		1,927		(193)
Corporate bonds	499		(1)		4,995		(5)		5,494		(6)
Total	$	10,014	$	(38)	$	251,809	$	(39,360)	$	261,823	$	(39,398)
At December 31, 2023
Securities Held-to-Maturity

Residential mortgage-backed securities	$	6,005	$	(94)	$	122,272	$	(17,406)	$	128,277	$	(17,500)

Total	$	6,005	$	(94)	$	122,272	$	(17,406)	$	128,277	$	(17,500)
Securities Available-for-Sale


State and political subdivisions	$	1,029	$	(1)	$	—	$	—	$	1,029	$	(1)
Residential mortgage-backed securities	16,992		(65)		238,053		(35,362)		255,045		(35,427)
Collateralized mortgage obligations	—		—		2,001		(200)		2,001		(200)
Corporate bonds	780		(1)		—		—		780		(1)
Total	$	18,801	$	(67)	$	240,054	$	(35,562)	$	258,855	$	(35,629)

At March 31, 2024, 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 $124.0 million, including unrealized losses of $19.5 million. These holdings were comprised of 89 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 three months ended March 31, 2024.

At March 31, 2024, 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 $261.8 million, including unrealized losses of $39.4 million. These holdings were comprised of (1) 113 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, and (3) two investment grade corporate bonds. 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 $1.2 million at March 31, 2024 and is included within Accrued interest receivable and other assets on the condensed 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 three months ended March 31, 2024 and March 31, 2023 of the allowance for credit losses on securities available-for-sale.


(Dollars in thousands)	Corporate Bonds
Three months ended March 31, 2024
Securities Available-for-Sale
Beginning balance	$	(731)

Change in securities for which a previous expected credit loss was recognized	(86)
Ending balance	$	(817)
Three months ended March 31, 2023
Securities Available-for-Sale
Beginning balance	$	(1,140)

Change in securities for which a previous expected credit loss was recognized	(292)
Ending balance	$	(1,432)

At March 31, 2024, the fair value of available-for-sale securities in an unrealized loss position for which an allowance for credit losses has been recorded was $77.8 million, including unrealized losses of $7.9 million, and allowance for credit losses of $817 thousand. These holdings were comprised of 36 investment grade corporate bonds and one municipal bond 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 $36 thousand and a $69 thousand net loss on equity securities during the three months ended March 31, 2024 and 2023, respectively, in other noninterest income. There were no sales of equity securities during the three months ended March 31, 2024 or 2023.