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Investment Securities
 3 Months Ended
Mar. 31, 2022
Investments, Debt and Equity Securities [Abstract]  
Investment Securities
INVESTMENT SECURITIES

The following table summarizes the amortized cost, gross unrealized gains and losses and approximate fair value of investment securities available for sale as of March 31, 2022 and December 31, 2021.

 Amortized
Cost		Gross Unrealized
Gains		Gross Unrealized
Losses		Fair
Value
Available for sale at March 31, 2022    
U.S. Treasury$1,964 $— $5 $1,959 
U.S. Government-sponsored agency securities85,494 7 6,403 79,098 
State and municipal1,543,969 17,890 65,326 1,496,533 
U.S. Government-sponsored mortgage-backed securities629,999 305 47,780 582,524 
Corporate obligations4,031 76 24 4,083 
Total available for sale$2,265,457 $18,278 $119,538 $2,164,197 

 Amortized
Cost		Gross Unrealized
Gains		Gross Unrealized
Losses		Fair
Value
Available for sale at December 31, 2021    
U.S. Treasury$1,000 $— $1 $999 
U.S. Government-sponsored agency securities96,244 437 1,545 95,136 
State and municipal1,495,696 81,734 898 1,576,532 
U.S. Government-sponsored mortgage-backed securities671,684 7,109 11,188 667,605 
Corporate obligations4,031 256 8 4,279 
Total available for sale$2,268,655 $89,536 $13,640 $2,344,551 
The following table summarizes the amortized cost, gross unrealized gains and losses, approximate fair value and allowance for credit losses on investment securities held to maturity as of March 31, 2022 and December 31, 2021.

Amortized
Cost		Allowance for Credit LossesNet Carrying AmountGross Unrealized
Gains		Gross Unrealized
Losses		Fair
Value
Held to maturity at March 31, 2022    
U.S. Government-sponsored agency securities$400,126 $— $400,126 $— $29,998 $370,128 
State and municipal1,082,257 245 1,082,012 5,718 105,731 982,244 
U.S. Government-sponsored mortgage-backed securities841,428 — 841,428 979 50,285 792,122 
Foreign investment1,500 — 1,500 — — 1,500 
Total held to maturity$2,325,311 $245 $2,325,066 $6,697 $186,014 $2,145,994 


Amortized
Cost		Allowance for Credit LossesNet Carrying AmountGross Unrealized
Gains		Gross Unrealized
Losses		Fair
Value
Held to maturity at December 31, 2021    
U.S. Government-sponsored agency securities$371,457 $— $371,457 $226 $7,268 $364,415 
State and municipal1,057,301 245 1,057,056 29,593 2,170 1,084,724 
U.S. Government-sponsored mortgage-backed securities749,789 — 749,789 7,957 5,881 751,865 
Foreign investment1,500 — 1,500 — 1 1,499 
Total held to maturity$2,180,047 $245 $2,179,802 $37,776 $15,320 $2,202,503 


Accrued interest on investment securities available for sale and held to maturity at March 31, 2022 and December 31, 2021 of $26.0 million and $26.8 million, respectively, are included in the Interest Receivable line on the Corporation's Consolidated Condensed Balance Sheets. The total amount of accrued interest is excluded from the amortized cost of available for sale and held to maturity securities presented above.

In determining the allowance for credit losses on investment securities available for sale that are in an unrealized loss position, the Corporation first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through the income statement. For investment securities available for sale that do not meet the aforementioned criteria, the Corporation evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Corporation considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Unrealized losses that have not been recorded through an allowance for credit losses is recognized in other comprehensive income. Adjustments to the allowance are reported in the income statement as a component of the provision for credit loss. The Corporation has made the accounting policy election to exclude accrued interest receivable on investment securities available for sale from the estimate of credit losses. Investment securities available for sale are charged off against the allowance or, in the absence of any allowance, written down through the income statement when deemed uncollectible or when either of the aforementioned criteria regarding intent or requirement to sell is met. The Corporation did not record an allowance for credit losses on its investment securities available for sale as the unrealized losses were attributable to changes in interest rates, not credit quality.

The allowance for credit losses on investment securities held to maturity is a contra asset-valuation account that is deducted from the amortized cost basis of investment securities held to maturity to present the net amount expected to be collected. Investment securities held to maturity are charged off against the allowance when deemed uncollectible. Adjustments to the allowance are reported in the income statement as a component of the provision for credit loss. The Corporation measures expected credit losses on investment securities held to maturity on a collective basis by major security type with each type sharing similar risk characteristics, and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The Corporation has made the accounting policy election to exclude accrued interest receivable on investment securities held to maturity from the estimate of credit losses. With regard to U.S. Government-sponsored agency and mortgage-backed securities, all these securities are issued by a U.S. government-sponsored entity and have an implicit or explicit government guarantee; therefore, no allowance for credit losses has been recorded for these securities. With regard to securities issued by states and municipalities and other investment securities held to maturity, management considers (1) issuer bond ratings, (2) historical loss rates for given bond ratings, (3) the financial condition of the issuer, and (4) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities. Historical loss rates associated with securities having similar grades as those in the Corporation's portfolio have been insignificant. Furthermore, as of March 31, 2022, there were no past due principal and interest payments associated with these securities. At CECL adoption, an allowance for credit losses of $245,000 was recorded on the state and municipal securities classified as held to maturity based on applying the long-term historical credit loss rate, as published by Moody’s, for similarly rated securities. The balance of the allowance for credit losses remained unchanged at $245,000 as of March 31, 2022.
On a quarterly basis, the Corporation monitors the credit quality of investment securities held to maturity through the use of credit ratings. The following table summarizes the amortized cost of investment securities held to maturity at March 31, 2022, aggregated by credit quality indicator.
Held to Maturity
State and municipalOtherTotal
Credit Rating:
Aaa$96,155 $60,580 $156,735 
Aa1152,330 — 152,330 
Aa2174,021 — 174,021 
Aa3130,579 — 130,579 
A1105,264 — 105,264 
A230,114 — 30,114 
A310,110 — 10,110 
Non-rated383,684 1,182,474 1,566,158 
Total$1,082,257 $1,243,054 $2,325,311 


The following tables summarize, as of March 31, 2022 and December 31, 2021, investment securities available for sale in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by security type and length of time in a continuous unrealized loss position.
Less than 12 Months12 Months or LongerTotal
Fair
Value		Gross
Unrealized
Losses		Fair
Value		Gross
Unrealized
Losses		Fair
Value		Gross
Unrealized
Losses
Investment securities available for sale at March 31, 2022
U.S. Treasury$1,959 $5 $— $— $1,959 $5 
U.S. Government-sponsored agency securities54,473 3,775 23,869 2,628 78,342 6,403 
State and municipal887,898 62,732 16,888 2,594 904,786 65,326 
U.S. Government-sponsored mortgage-backed securities284,223 16,380 265,203 31,400 549,426 47,780 
Corporate obligations976 24 — — 976 24 
Total investment securities available for sale$1,229,529 $82,916 $305,960 $36,622 $1,535,489 $119,538 

 
Less than 12 Months12 Months or LongerTotal
Fair
Value		Gross
Unrealized
Losses		Fair
Value		Gross
Unrealized
Losses		Fair
Value		Gross
Unrealized
Losses
Investment securities available for sale at December 31, 2021
U.S. Treasury$999 $1 $— $— $999 $1 
U.S. Government-sponsored agency securities68,524 1,545 — — 68,524 1,545 
State and municipal138,187 894 505 4 138,692 898 
U.S. Government-sponsored mortgage-backed securities427,687 10,791 8,324 397 436,011 11,188 
Corporate obligations992 8 — — 992 8 
Total investment securities available for sale$636,389 $13,239 $8,829 $401 $645,218 $13,640 


The following table summarizes investment securities available for sale in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by security type and the number of securities in the portfolio for the periods indicated.
Gross
Unrealized
Losses		Number of Securities
Investment securities available for sale at March 31, 2022
U.S. Treasury$5 2
U.S. Government-sponsored agency securities6,403 13
State and municipal65,326 585
U.S. Government-sponsored mortgage-backed securities47,780 120
Corporate obligations24 1
Total investment securities available for sale$119,538 721
Gross
Unrealized
Losses		Number of Securities
Investment securities available for sale at December 31, 2021
U.S. Treasury$1 1
U.S. Government-sponsored agency securities1,545 8
State and municipal898 103
U.S. Government-sponsored mortgage-backed securities11,188 48
Corporate obligations8 1
Total investment securities available for sale$13,640 161


The unrealized losses in the Corporation’s investment portfolio were the result of changes in interest rates and not credit quality. As a result, the Corporation expects to recover the amortized cost basis over the term of the securities. The Corporation does not intend to sell the investments and it is not more likely than not that the Corporation will be required to sell the investments before recovery of their amortized cost basis, which may be maturity.

Certain investment securities available for sale are reported in the financial statements at an amount less than their historical cost as indicated in the table below.
March 31, 2022December 31, 2021
Investments available for sale reported at less than historical cost:  
Historical cost$1,655,027 $658,858 
Fair value1,535,489 645,218 
Gross unrealized losses$119,538 $13,640 
Percent of the Corporation's investments available for sale71.0 %27.5 %


In determining the fair value of the investment securities portfolio, the Corporation utilizes a third party for portfolio accounting services, including market value input, for those securities classified as Level 1 and Level 2 in the fair value hierarchy.  The Corporation has obtained an understanding of what inputs are being used by the vendor in pricing the portfolio and how the vendor classified these securities based upon these inputs.  From these discussions, the Corporation’s management is comfortable that the classifications are proper.  The Corporation has gained trust in the data for two reasons:  (a) independent spot testing of the data is conducted by the Corporation through obtaining market quotes from various brokers on a periodic basis; and (b) actual gains or loss resulting from the sale of certain securities has proven the data to be accurate over time.   Fair value of securities classified as Level 3 in the valuation hierarchy was determined using a discounted cash flow model that incorporated market estimates of interest rates and volatility in markets that have not been active.

The amortized cost and fair value of investment securities available for sale and held to maturity at March 31, 2022 and December 31, 2021, by contractual maturity are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity are shown separately.
 Available for SaleHeld to Maturity
 Amortized CostFair ValueAmortized CostFair Value
Maturity Distribution at March 31, 2022    
Due in one year or less$6,240 $6,189 $7,718 $7,737 
Due after one through five years6,106 6,128 30,156 30,777 
Due after five through ten years135,605 135,384 179,256 173,697 
Due after ten years1,487,507 1,433,972 1,266,753 1,141,661 
 1,635,458 1,581,673 1,483,883 1,353,872 
U.S. Government-sponsored mortgage-backed securities629,999 582,524 841,428 792,122 
Total investment securities$2,265,457 $2,164,197 $2,325,311 $2,145,994 
 
 
Available for SaleHeld to Maturity
Amortized CostFair ValueAmortized CostFair Value
Maturity Distribution at December 31, 2021    
Due in one year or less$6,954 $6,965 $6,971 $6,995 
Due after one through five years5,097 5,309 30,272 31,946 
Due after five through ten years120,460 126,816 177,203 180,129 
Due after ten years1,464,460 1,537,856 1,215,812 1,231,568 
 1,596,971 1,676,946 1,430,258 1,450,638 
U.S. Government-sponsored mortgage-backed securities671,684 667,605 749,789 751,865 
Total investment securities$2,268,655 $2,344,551 $2,180,047 $2,202,503 
Securities with a carrying value of approximately $831.8 million and $873.2 million were pledged at March 31, 2022 and December 31, 2021, respectively, to secure certain deposits and securities sold under repurchase agreements, and for other purposes as permitted or required by law.

The book value of securities sold under agreements to repurchase amounted to $174.5 million at March 31, 2022 and $175.1 million at
December 31, 2021.

Gross gains and losses on the sales and redemptions of investment securities available for sale for the three months ended March 31, 2022 and 2021 are shown below.
Three Months Ended
March 31,
20222021
Sales and redemptions of investment securities available for sale:  
Gross gains$578 $2,076 
Gross losses12 277 
Net gains on sales and redemptions of investment securities available for sale$566 $1,799