
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Estimated Fair Value
AFS investment securities:
December 31, 2023
U.S. Treasury	$	538,899	$	381	$	(24)	$	539,256
Agency	1,941		—		(73)		1,868
Corporate	481,499		52		(35,208)		446,343

Collateralized mortgage obligations	153,701		—		(1,097)		152,604

Total AFS investment securities	$	1,176,040	$	433	$	(36,402)	$	1,140,071

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:
December 31, 2023
Municipal bonds	$	1,146,244	$	(126)	$	1,146,118	$	819	$	(206,361)	$	940,576
Collateralized mortgage obligations	334,997		—		334,997		1,565		(9,570)		326,992
Mortgage-backed securities	232,157		—		232,157		310		(30,798)		201,669
Other	16,269		—		16,269		—		—		16,269
Total HTM investment securities	$	1,729,667	$	(126)	$	1,729,541	$	2,694	$	(246,729)	$	1,485,506

December 31, 2022
Municipal bonds	$	1,148,055	$	(43)	$	1,148,012	$	44	$	(257,430)	$	890,626
Mortgage-backed securities	231,692		—		231,692		—		(33,621)		198,071
Other	8,399		—		8,399		—		—		8,399
Total HTM investment securities	$	1,388,146	$	(43)	$	1,388,103	$	44	$	(291,051)	$	1,097,096

The Company reassesses classification of certain investments as part of the ongoing review of the investment securities portfolio. During 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 through earnings over the remaining term of the securities. The amortization of the related net after-tax unrealized losses reported in accumulated other comprehensive loss offsets the effect on interest income for the accretion of the unrealized losses associated with the transferred securities. No gains or losses were recorded at the time of transfer.

During 2022, the Company transferred an 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 $2.80 billion and $195.6 million as of December 31, 2023 and 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 2023 was primarily due to the additional investment securities with carrying values of $1.41 billion pledged to the Federal Reserve's discount window and $1.19 billion pledged to the Federal Reserve's new Bank Term Funding Program (“BTFP”) launched in March 2023 to increase the Company’s access to funding and provide liquidity.

Unrealized gains and losses on AFS investment securities are recognized in stockholders’ equity as accumulated other comprehensive income or loss. At December 31, 2023, the Company had a net unrealized loss on AFS investment securities of $36.0 million, or $25.8 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. The decrease of net unrealized loss on AFS investment securities was primarily due to the sale of $1.26 billion of AFS of securities at fair value to reposition the balance sheet, resulting in a net realized pre-tax loss of $254.1 million, or $182.3 million net of tax, during the fourth quarter of 2023.

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 with an offsetting entry to interest income 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 December 31, 2023, the unrealized loss on investment securities transferred from AFS to HTM was $102.9 million, or $73.9 million net of tax. At December 31, 2022, the unrealized loss on investment securities transferred from AFS to HTM was $66.9 million, or $47.9 million net of tax.

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.


	December 31, 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	4	$	98,622	$	(24)	—	$	—	$	—	4	$	98,622	$	(24)
Agency	—	—		—		4	1,868		(73)		4	1,868		(73)
Corporate	1	4,989		(3)		47	431,353		(35,205)		48	436,342		(35,208)

Collateralized mortgage obligations	—	—		—		28	152,604		(1,097)		28	152,604		(1,097)

Total AFS investment securities	5	$	103,611	$	(27)	79	$	585,825	$	(36,375)	84	$	689,436	$	(36,402)


	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 loss, 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 ACL for HTM investment securities is estimated on a collective basis, based on shared risk characteristics, and is determined at the individual security level when the Company deems a security to no longer possess shared risk characteristics. Credit losses on HTM investment securities are representative of the amount needed to reduce the amortized cost basis to reflect the net amount expected to be collected.

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.

For additional information concerning allowance for credit losses on investment securities, refer to Note 1 – Description of Business and Summary of Significant Accounting Policies, of our audited consolidated financial statements included in this Annual Report on Form 10-K.

At December 31, 2023 and 2022, the Company had an ACL of $126,000 and $43,000, respectively, for HTM investment securities classified as municipal bonds. The following table presents a rollforward by major security type of the ACL on the Company's HTM debt securities as of, and for the periods indicated:

The Company had no ACL for AFS investment securities at December 31, 2023 and 2022. The Company performed a qualitative assessment of the AFS investment securities as of December 31, 2023 and determined that the unrealized losses during 2023 were 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 December 31, 2023, the Company has 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 are issued by U.S. government agencies. As of December 31, 2023, 61% of our AFS securities were 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 years ended December 31, 2023 and 2022.

At December 31, 2023 and 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 December 31, 2023 and 2022, there were no securities purchased with deterioration in credit quality since their origination. At December 31, 2023 and 2022, there were no collateral dependent AFS or HTM securities.


	For the Year Ended December 31,
(Dollars in thousands)	2023		2022		2021
Amortized cost of AFS investment securities sold	$	1,822,531	$	934,703	$	884,231

Gross realized gains	$	986	$	13,645	$	23,185
Gross realized losses	(254,913)		(11,935)		(6,279)
Net realized gains on sales of AFS investment securities	$	(253,927)	$	1,710	$	16,906

During the fourth quarter of 2023, the Company sold $1.26 billion of lower-yielding AFS securities at fair value to reposition the securities portfolio, resulting in a net loss of $254.1 million, and redeployed a portion of the sale proceeds into higher-yielding short-term AFS U.S. Treasury securities.


	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:
Treasury	$	538,899	$	539,256	$	—	$	—	$	—	$	—	$	—	$	—	$	538,899	$	539,256
Agency	—		—		—		—		1,190		1,149		751		719		1,941		1,868
Corporate	13,000		12,951		254,872		251,485		213,627		181,907		—		—		481,499		446,343

Collateralized mortgage obligations	—		—		41,266		41,112		63,988		63,288		48,447		48,204		153,701		152,604

Total AFS investment securities	551,899		552,207		296,138		292,597		278,805		246,344		49,198		48,923		1,176,040		1,140,071
HTM investment securities:
Municipal bonds	—		—		26,257		24,543		37,985		33,749		1,082,002		882,284		1,146,244		940,576
Collateralized mortgage obligations	—		—		101		101		—		—		334,896		326,891		334,997		326,992
Mortgage-backed securities	—		—		1,913		2,001		3,482		3,593		226,762		196,075		232,157		201,669
Other	—		—		—		—		—		—		16,269		16,269		16,269		16,269
Total HTM investment securities	—		—		28,271		26,645		41,467		37,342		1,659,929		1,421,519		1,729,667		1,485,506
Total investment securities	$	551,899	$	552,207	$	324,409	$	319,242	$	320,272	$	283,686	$	1,709,127	$	1,470,442	$	2,905,707	$	2,625,577

The Company’s equity securities primarily consist of FHLB and FRB stock, which are considered restricted securities and held as a condition of membership of the FHLB and the Board of Governors of the Federal Reserve System. These equity securities without readily determinable fair values are carried at cost less impairment. At December 31, 2023, the Company had $19.4 million in FHLB stock, $75.2 million in FRB stock, and $4.7 million in other stock. At December 31, 2022, the Company had $27.7 million in FHLB stock, $74.8 million in FRB stock, and $17.4 million in other stock.