

(Dollars in thousands)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Estimated Fair Value
AFS investment securities:
June 30, 2023
U.S. Treasury	$	14,944	$	—	$	(1,840)	$	13,104
Agency	463,958		—		(50,103)		413,855
Corporate	561,128		104		(63,113)		498,119

Collateralized mortgage obligations	357,766		—		(30,509)		327,257
Mortgage-backed securities	888,740		—		(129,284)		759,456
Total AFS investment securities	$	2,286,536	$	104	$	(274,849)	$	2,011,791





December 31, 2022
U.S. Treasury	$	49,156	$	—	$	(2,139)	$	47,017
Agency	485,331		—		(53,893)		431,438
Corporate	586,652		—		(44,104)		542,548

Collateralized mortgage obligations	829,928		—		(65,699)		764,229
Mortgage-backed securities	953,678		—		(137,897)		815,781
Total AFS investment securities	$	2,904,745	$	—	$	(303,732)	$	2,601,013



(Dollars in thousands)	Amortized Cost		Allowance for Credit Losses		Net Carrying Amount		Gross Unrecognized Gain		Gross Unrecognized Loss		Estimated Fair Value
HTM investment securities:
June 30, 2023
Municipal bonds	$	1,147,604	$	(113)	$	1,147,491	$	—	$	(238,542)	$	908,949
Collateralized mortgage obligations	349,328		—		349,328		70		(7,385)		342,013
Mortgage-backed securities	224,470		—		224,470		—		(33,460)		191,010
Other	16,315		—		16,315		—		—		16,315
Total HTM investment securities	$	1,737,717	$	(113)	$	1,737,604	$	70	$	(279,387)	$	1,458,287

The Company reassesses classification of certain investments as part of the ongoing review of the investment securities portfolio. During the first half of 2023, the Company transferred $410.7 million of AFS collateralized mortgage obligations to HTM securities. The Company intends and has the ability to hold the securities transferred to maturity. The transfer of these securities was accounted for at fair value on the transfer date. These collateralized mortgage obligations securities had a net carrying amount of $360.3 million with a pre-tax unrealized loss of $50.4 million, which are accreted into interest income as yield adjustments over the remaining term of the securities. No gains or losses were recorded at the time of transfer.

During the first half of 2022, the Company transferred AFS municipal bond portfolio of $831.4 million and mortgage-backed securities of $255.0 million to HTM securities. The Company intends and has the ability to hold the securities transferred to maturity. The transfer of these securities was accounted for at fair value on the transfer date. The municipal bonds had a net carrying amount of $780.7 million with a pre-tax unrealized loss of $50.8 million, and the mortgage-backed securities had a net carrying amount of $238.8 million with a pre-tax unrealized loss of $16.2 million, both of which are accreted into interest income as yield adjustments over the remaining term of the securities. No gains or losses were recorded at the time of transfer.

Investment securities with carrying values of $3.70 billion and $195.6 million as of June 30, 2023 and December 31, 2022, respectively, were pledged to other borrowings, secure public deposits, and for other purposes as required or permitted by law. The increase in the investment securities pledged during the first half of 2023 was primarily due to the additional investment securities with carrying values of $1.68 billion pledged to the Federal Reserve's discount window and $1.83 billion pledged to the Federal Reserve's new Bank Term Funding Program launched in March 2023 to increase the Company’s access to funding and provide liquidity.

Unrealized gains and losses on AFS investment securities, net of tax, are recognized in stockholders’ equity as accumulated other comprehensive income or loss. At June 30, 2023, the Company had a net unrealized loss on AFS investment securities of $274.7 million, or $196.6 million net of tax in accumulated other comprehensive loss, compared to a net unrealized loss of $303.7 million, or $217.4 million net of tax in accumulated other comprehensive loss, at December 31, 2022.

For investment securities transferred from AFS to HTM, the net after-tax unrealized gains and losses at the date of transfer continue to be reported in stockholders’ equity as accumulated other comprehensive loss and are amortized over the remaining lives of the securities as an adjustment of yield in a manner consistent with the amortization of a premium or discount, with an offsetting entry to interest income for the accretion of the unrealized loss associated with the transferred securities. At June 30, 2023, the unrealized loss on investment securities transferred from AFS to HTM was $110.1 million, or $78.8 million net of tax in accumulated other comprehensive loss.

The table below summarizes the number, fair value, and gross unrealized holding losses of the Company’s AFS investment securities in an unrealized loss position for which an allowance for credit losses has not been recorded as of the dates indicated, aggregated by investment category and length of time in a continuous loss position.


	June 30, 2023
	Less than 12 Months					12 Months or Longer					Total
(Dollars in thousands)	Number	Fair Value		Gross Unrealized Losses		Number	Fair Value		Gross Unrealized Losses		Number	Fair Value		Gross Unrealized Losses
AFS investment securities:
U.S. Treasury	—	$	—	$	—	1	$	13,104	$	(1,840)	1	$	13,104	$	(1,840)
Agency	4	43,105		(895)		37	370,751		(49,208)		41	413,856		(50,103)
Corporate	2	26,068		(3,932)		50	457,013		(59,181)		52	483,081		(63,113)

Collateralized mortgage obligations	4	69,635		(991)		49	257,622		(29,518)		53	327,257		(30,509)
Mortgage-backed securities.	2	27,663		(323)		78	731,793		(128,961)		80	759,456		(129,284)
Total AFS investment securities	12	$	166,471	$	(6,141)	215	$	1,830,283	$	(268,708)	227	$	1,996,754	$	(274,849)


	December 31, 2022
	Less than 12 Months					12 Months or Longer					Total
(Dollars in thousands)	Number	Fair Value		Gross Unrealized Losses		Number	Fair Value		Gross Unrealized Losses		Number	Fair Value		Gross Unrealized Losses
AFS investment securities:
U.S. Treasury	5	$	33,982	$	(237)	1	$	13,036	$	(1,902)	6	$	47,018	$	(2,139)
Agency	8	79,895		(1,265)		35	351,543		(52,628)		43	431,438		(53,893)
Corporate	35	327,984		(20,840)		21	214,565		(23,264)		56	542,549		(44,104)

Collateralized mortgage obligations	41	522,955		(33,318)		40	241,229		(32,381)		81	764,184		(65,699)
Mortgage-backed securities	13	91,762		(6,987)		68	724,019		(130,910)		81	815,781		(137,897)
Total AFS investment securities	102	$	1,056,578	$	(62,647)	165	$	1,544,392	$	(241,085)	267	$	2,600,970	$	(303,732)

The Company reviews individual securities classified as AFS to determine whether unrealized losses are deemed credit related or due to other factors such as changes in interest rates and general market conditions. An ACL on AFS investment securities is recorded when unrealized losses have been deemed, through the Company’s qualitative assessment, to be credit related. Non-credit related unrealized losses on AFS investment securities, which may be attributed to changes in interest rates and other market-related factors, are not recorded through an ACL. Such declines are recorded as an adjustment to accumulated other comprehensive income, net of tax. In the event the Company is required to sell or has the intent to sell an AFS security that has experienced a decline in fair value below its amortized cost, the Company writes the amortized cost of the security down to fair value in the current period.

The Company determines credit losses on both AFS and HTM investment securities through the use of a discounted cash flow approach using the security’s effective interest rate. The ACL is measured as the amount by which an investment security’s amortized cost exceeds the net present value of expected future cash flows. However, the amount of credit losses for AFS investment securities is limited to the amount of a security’s unrealized loss. The ACL is established through a charge to provision for credit losses in current period earnings.

At June 30, 2023 and December 31, 2022, the Company had an ACL of $113,000 and $43,000, respectively, for HTM investment securities classified as municipal bonds. The following table presents a rollforward by major security type of the allowance for credit losses on the Company's HTM debt securities as of and for the periods indicated:

The Company had no ACL for AFS investment securities at June 30, 2023 and December 31, 2022. The Company performed a qualitative assessment of these investments as of June 30, 2023 and determined that the decrease in unrealized losses was the result of general market conditions, including changes in interest rates driven by the Federal Reserve’s policy to reduce levels of inflation, and does not believe the declines in fair value were credit related. As of June 30, 2023, the Company had not recorded credit losses on certain AFS securities that were in an unrealized loss position due to the high quality of the investments, with investment grade ratings, and many of them issued by U.S. government agencies. As of June 30, 2023, 75% of our AFS securities are U.S. Treasury, U.S. government agency, and U.S. government-sponsored enterprise securities. Additionally, the Company continues to receive contractual principal and interest payments in a timely manner. It is more likely than not that the Company will not be required to sell the securities prior to their anticipated recoveries, and at this time the Company does not intend to sell these securities. There was no provision for credit losses recognized for AFS investment securities during the three months ended June 30, 2023 and June 30, 2022, nor during the six months ended June 30, 2023 and June 30, 2022.

At June 30, 2023 and December 31, 2022, there were no AFS or HTM securities in nonaccrual status. All securities in the portfolio were current with their contractual principal and interest payments. At June 30, 2023 and December 31, 2022, there were no securities purchased with deterioration in credit quality since their origination. At June 30, 2023 and December 31, 2022, there were no collateral dependent AFS or HTM securities.


	Three Months Ended		Six Months Ended
	June 30,		June 30,		June 30,		June 30,
(Dollars in thousands)	2023		2022		2023		2022
Amortized cost of AFS investment securities sold	$	—	$	45,121	$	304,182	$	703,626

Gross realized gains	$	—	$	7	$	986	$	13,645
Gross realized (losses)	—		(38)		(848)		(11,542)
Net realized gains on sales of AFS investment securities	$	—	$	(31)	$	138	$	2,103


	Due in One Year or Less				Due after One Year through Five Years				Due after Five Years through Ten Years				Due after Ten Years				Total
(Dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
AFS investment securities:
U.S. Treasury	$	—	$	—	$	14,944	$	13,104	$	—	$	—	$	—	$	—	$	14,944	$	13,104
Agency	17,140		16,989		314,680		289,909		106,988		88,101		25,150		18,856		463,958		413,855
Corporate	—		—		288,165		283,555		272,963		214,564		—		—		561,128		498,119

Collateralized mortgage obligations	15,504		15,441		54,631		53,788		193,285		170,373		94,346		87,655		357,766		327,257
Mortgage-backed securities	27,986		27,663		—		—		502,381		438,835		358,373		292,958		888,740		759,456
Total AFS investment securities	60,630		60,093		672,420		640,356		1,075,617		911,873		477,869		399,469		2,286,536		2,011,791
HTM investment securities:
Municipal bonds	—		—		10,641		10,179		53,352		47,279		1,083,611		851,491		1,147,604		908,949
Collateralized mortgage obligations	—		—		132		132		—		—		349,196		341,881		349,328		342,013
Mortgage-backed securities	—		—		—		—		—		—		224,470		191,010		224,470		191,010
Other	—		—		—		—		—		—		16,315		16,315		16,315		16,315
Total HTM investment securities	—		—		10,773		10,311		53,352		47,279		1,673,592		1,400,697		1,737,717		1,458,287
Total investment securities	$	60,630	$	60,093	$	683,193	$	650,667	$	1,128,969	$	959,152	$	2,151,461	$	1,800,166	$	4,024,253	$	3,470,078