Securities

12 Months Ended

Dec. 31, 2022

Securities

Securities

3) Securities

The amortized cost and estimated fair value of securities at year-end were as follows:

			Gross		Gross		Allowance		Estimated
	Amortized		Unrealized		Unrealized		for Credit		Fair
December 31, 2022	Cost		Gains		(Losses)		Losses		Value
	(Dollars in thousands)
Securities available-for-sale:
U.S. Treasury	$	428,797	$	—	$	(10,323)	$	—	$	418,474
Agency mortgage-backed securities		76,916		—		(5,794)		—		71,122
Total	$	505,713	$	—	$	(16,117)	$	—	$	489,596
			Gross		Gross		Estimated		Allowance
	Amortized		Unrecognized		Unrecognized		Fair		for Credit
December 31, 2022	Cost		Gains		(Losses)		Value		Losses
	(Dollars in thousands)
Securities held-to-maturity:
Agency mortgage-backed securities	$	677,381	$	235	$	(99,977)	$	577,639	$	—
Municipals - exempt from Federal tax		37,623		9		(819)		36,813		(14)
Total	$	715,004	$	244	$	(100,796)	$	614,452	$	(14)

			Gross		Gross		Allowance		Estimated
	Amortized		Unrealized		Unrealized		for Credit		Fair
December 31, 2021	Cost		Gains		(Losses)		Losses		Value
	(Dollars in thousands)
Securities available-for-sale:
Agency mortgage-backed securities	$	99,359	$	2,893	$	—	$	—	$	102,252
Total	$	99,359	$	2,893	$	—	$	—	$	102,252
			Gross		Gross		Estimated		Allowance
	Amortized		Unrecognized		Unrecognized		Fair		for Credit
December 31, 2021	Cost		Gains		(Losses)		Value		Losses
	(Dollars in thousands)
Securities held-to-maturity:
Agency mortgage-backed securities	$	607,377	$	3,157	$	(4,752)	$	605,782	$	—
Municipals - exempt from Federal tax		51,063		804		—		51,867		(43)
Total	$	658,440	$	3,961	$	(4,752)	$	657,649	$	(43)

Securities with unrealized losses at year end, aggregated by investment category and length of time that individual securities have been in an unrealized loss position are as follows:

	Less Than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2022	Value		(Losses)		Value		(Losses)		Value		(Losses)
	(Dollars in thousands)
Securities available-for-sale:
U.S. Treasury	$	418,474	$	(10,323)	$	—	$	—	$	418,474	$	(10,323)
Agency mortgage-backed securities		71,122		(5,794)		—		—		71,122		(5,794)
Total	$	489,596	$	(16,117)	$	—	$	—	$	489,596	$	(16,117)
	Less Than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2022	Value		(Losses)		Value		(Losses)		Value		(Losses)
	(Dollars in thousands)
Securities held-to-maturity:
Agency mortgage-backed securities	$	136,264	$	(12,866)	$	429,257	$	(87,111)	$	565,521	$	(99,977)
Municipals — exempt from Federal tax		31,007		(819)		—		—		31,007		(819)
Total	$	167,271	$	(13,685)	$	429,257	$	(87,111)	$	596,528	$	(100,796)

	Less Than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2021	Value		(Losses)		Value		(Losses)		Value		(Losses)
	(Dollars in thousands)
Securities held-to-maturity:
Agency mortgage-backed securities	$	408,856	$	(3,319)	$	27,997	$	(1,433)	$	436,853	$	(4,752)
Total	$	408,856	$	(3,319)	$	27,997	$	(1,433)	$	436,853	$	(4,752)

There were no holdings of securities of any one issuer, other than the U.S. Government and its sponsored entities, in an amount greater than 10% of shareholders’ equity. At December 31, 2022, the Company held 463 securities (173 available-for-sale and 290 held-to-maturity), of which 439 had fair values below amortized cost. At December 31, 2022, there were $418,474,000 of U.S. Treasury securities available-for-sale, $71,122,000 of agency mortgage-backed securities available-for-sale, $136,264,000 of agency mortgage-backed securities held-to-maturity, and $31,007,000 of municipal securities held-to-maturity, carried with an unrealized loss for less than 12 months, and $429,257,000 of agency mortgage-backed securities held-to-maturity, carried with an unrealized loss for 12 months or more. The total unrealized loss for securities less than 12 months was ($29,802,000) and the total unrealized loss for securities carried for 12 months or more was ($87,111,000) at December 31, 2022. The unrealized losses were due to higher interest rates at period end compared to when the securities were purchased. The issuers are of high credit quality and all principal amounts are expected to be paid when securities mature. The fair value is expected to recover as the securities approach their maturity date and/or

market rates decline. The Company does not believe that it is more likely than not that the Company will be required to sell a security in an unrealized loss position prior to recovery in value. The Company does not consider these securities to have credit-related losses at December 31, 2022.

The proceeds from sales of securities and the resulting gains and losses are listed below:

	2022		2021		2020
	(Dollars in thousands)
Proceeds	$	—	$	—	$	56,598
Gross gains		—		—		277
Gross losses		—		—		—

The amortized cost and fair value of debt securities as of December 31, 2022, by contractual maturity, are shown below. The expected maturities will differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

	Available-for-sale
	Amortized		Estimated
	Cost		Fair Value
	(Dollars in thousands)
Due after 3 months through one year	$	46,065	$	45,736
Due after one through five years		382,732		372,738
Agency mortgage-backed securities		76,916		71,122
Total	$	505,713	$	489,596

	Held-to-maturity
	Amortized		Estimated
	Cost		Fair Value
	(Dollars in thousands)
Due after three months through one year	$	554	$	553
Due after one through five years		7,681		7,613
Due after five through ten years		27,459		26,745
Due after ten years		1,929		1,902
Agency mortgage-backed securities		677,381		577,639
Total	$	715,004	$	614,452

Securities with amortized cost of $66,272,000 and $42,473,000 as of December 31, 2022 and 2021 were pledged to secure public deposits and for other purposes as required or permitted by law or contract.

The table below presents a roll-forward by major security type for the year ended December 31, 2022 of the allowance for credit losses on debt securities held-to-maturity held at period end:

		Municipals
		(Dollars in thousands)
Beginning balance January 1, 2022	$	43
Provision for (recapture of) credit losses		(29)
Ending balance December 31, 2022	$	14

For the year ended December 31, 2022, there was a reduction of $29,000 to the allowance for credit losses on the Company’s held-to-maturity municipal investment securities portfolio. This reduction was the result of a reduction in municipal securities amortized balances resulting from regular payments.