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SECURITIES
 9 Months Ended
Sep. 30, 2023
Investments, Debt and Equity Securities [Abstract]  
SECURITIES SECURITIES
Debt securities purchased with the intent and ability to hold to their maturity are classified as held-to-maturity securities. All other investment securities are classified as available-for-sale securities.

Available-for-Sale Securities

Information related to the amortized cost, fair value and allowance for credit losses of securities available-for-sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) is provided in the table below.
(dollars in thousands)Amortized
Cost		Gross Unrealized GainGross Unrealized LossesAllowance for Credit LossesFair Value
September 30, 2023
U.S. Treasury securities$2,873 $0 $(12)$0 $2,861 
U.S. government sponsored agencies148,895 0 (33,224)0 115,671 
Mortgage-backed securities: residential531,807 12 (102,157)0 429,662 
State and municipal securities558,346 1 (131,009)0 427,338 
Total$1,241,921 $13 $(266,402)$0 $975,532 
December 31, 2022
U.S. Treasury securities$3,057 $0 $(23)$0 $3,034 
U.S. government sponsored agencies156,184 0 (29,223)0 126,961 
Mortgage-backed securities: residential578,175 67 (85,934)0 492,308 
State and municipal securities663,367 157 (100,299)0 563,225 
Total$1,400,783 $224 $(215,479)$0 $1,185,528 
Held-to-Maturity Securities
Information related to the amortized cost, fair value and allowance for credit losses of securities held-to-maturity and the related gross unrealized gains and losses is presented in the table below.
(dollars in thousands)Amortized
Cost		Gross Unrealized GainGross Unrealized LossesAllowance for Credit LossesFair Value
September 30, 2023
State and municipal securities$129,494 $0 $(26,865)$0 $102,629 
December 31, 2022
State and municipal securities$128,242 $0 $(17,213)$0 $111,029 
On April 1, 2022, the Company elected to transfer securities from available-for-sale to held-to-maturity as an overall balance sheet management strategy. The fair value of securities transferred was $127.0 million. The unrealized loss on the securities transferred from available-for-sale to held-to-maturity was $24.4 million ($19.3 million, net of tax) based on the fair value of the securities on the transfer date and was $21.4 million ($16.9 million, net of tax) at September 30, 2023. The Company has the current intent and ability to hold the transferred securities until maturity. Any net unrealized gain or loss on the transferred securities included in accumulated other comprehensive income (loss) at the time of the transfer will be amortized over the remaining life of the underlying security as an adjustment to the yield on those securities. There have been no subsequent transfers of securities from available-for-sale to held-to-maturity.
Information regarding the amortized cost and fair value of available-for-sale and held-to-maturity debt securities by maturity as of September 30, 2023 is presented below. Maturity information is based on contractual maturity for all securities other than mortgage-backed securities. Actual maturities of securities may differ from contractual maturities because borrowers may have the right to prepay the obligation without a prepayment penalty.
Available-for-SaleHeld-to-Maturity
(dollars in thousands)Amortized CostFair
Value		Amortized CostFair
Value
Due in one year or less$4,818 $4,806 $0 $0 
Due after one year through five years7,298 6,422 0 0 
Due after five years through ten years38,103 33,697 0 0 
Due after ten years659,895 500,945 129,494 102,629 
710,114 545,870 129,494 102,629 
Mortgage-backed securities531,807 429,662 0 0 
Total debt securities$1,241,921 $975,532 $129,494 $102,629 
Available-for-sale securities proceeds, gross gains and gross losses are presented below.
Three Months Ended September 30,Nine Months Ended September 30,
(dollars in thousands)2023202220232022
Sales of securities available-for-sale
Proceeds$2,876 $0 $102,827 $0 
Gross gains0 0 439 0 
Gross losses(35)0 (455)0 
Number of securities6 0 109 0 
In accordance with ASU No. 2017-8, purchase premiums for callable securities are amortized to the earliest call date and premiums on non-callable securities as well as discounts are recognized in interest income using the interest method over the terms of the securities or over the estimated lives of mortgage-backed securities. Gains and losses on sales are based on the amortized cost of the security sold and recorded on the trade date.
Securities with fair values of $740.8 million and $298.2 million were pledged as of September 30, 2023 and December 31, 2022, respectively, as collateral for borrowings from the Federal Home Loan Bank ("FHLB") and Federal Reserve Bank and for other purposes as permitted or required by law.
Unrealized Loss Analysis on Available-for-Sale and Held-to-Maturity Securities
Information regarding available-for-sale securities with unrealized losses as of September 30, 2023 and December 31, 2022 is presented on the following page. The tables divide the securities between those with unrealized losses for less than twelve months and those with unrealized losses for twelve months or more.
Less than 12 months12 months or moreTotal
(dollars in thousands)Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
September 30, 2023            
U.S. Treasury securities$2,466 $8 $395 $4 $2,861 $12 
U.S. government sponsored agencies0 0 115,671 33,224 115,671 33,224 
Mortgage-backed securities: residential3,596 187 425,212 101,970 428,808 102,157 
State and municipal securities26,084 2,106 397,793 128,903 423,877 131,009 
Total available-for-sale$32,146 $2,301 $939,071 $264,101 $971,217 $266,402 
December 31, 2022
U.S. Treasury securities$3,034 $23 $0 $0 $3,034 $23 
U.S. government sponsored agencies8,420 1,350 118,541 27,873 126,961 29,223 
Mortgage-backed securities: residential165,897 18,637 323,727 67,297 489,624 85,934 
State and municipal securities277,967 33,405 244,436 66,894 522,403 100,299 
Total available-for-sale$455,318 $53,415 $686,704 $162,064 $1,142,022 $215,479 
Information regarding held-to-maturity securities with unrealized losses as of September 30, 2023 and December 31, 2022 is presented below. The table divides the securities between those with unrealized losses for less than twelve months and those with unrealized losses for twelve months or more.
Less than 12 months12 months or moreTotal
(dollars in thousands)Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
September 30, 2023
State and municipal securities$0 $0 $102,629 $26,865 $102,629 $26,865 
December 31, 2022
State and municipal securities$0 $0 $111,029 $17,213 $111,029 $17,213 
The total number of securities with unrealized losses as of September 30, 2023 and December 31, 2022 is presented below.
Available-for-saleHeld-to-maturity
Less than
12 months		12 months
or more		TotalLess than
12 months		12 months
or more		Total
September 30, 2023    
U.S. Treasury securities7 1 8 0 0 0 
U.S. government sponsored agencies0 17 17 0 0 0 
Mortgage-backed securities: residential8 126 134 0 0 0 
State and municipal securities47 383 430 0 41 41 
Total temporarily impaired62 527 589 0 41 41 
December 31, 2022
U.S. Treasury securities7 0 7 0 0 0 
U.S. government sponsored agencies1 16 17 0 0 0 
Mortgage-backed securities: residential95 41 136 0 0 0 
State and municipal securities269 223 492 0 41 41 
Total temporarily impaired372 280 652 0 41 41 
Available-for-sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. For available-for-sale debt securities in an unrealized loss position, management first assesses whether it intends to sell, or it is more likely than not that the Company 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 consolidated income statement. For available-for-sale debt securities that do not meet the above criteria and for held-to-maturity securities, management evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management 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 and the issuer, among other factors. If this assessment indicates that a credit loss exists, management compares the present value of cash flows expected to be collected from the security with 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 for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. For available-for-sale debt securities, any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income (loss), net of applicable taxes.
No allowance for credit losses for available-for-sale or held-to-maturity debt securities was recorded at September 30, 2023 or December 31, 2022. Accrued interest receivable on securities totaled $7.1 million and $8.9 million at September 30, 2023 and December 31, 2022, respectively, and is excluded from the estimate of credit losses.
The U.S. government sponsored agencies and mortgage-backed securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major credit rating agencies, and have a long history of no credit losses. Therefore, for those securities, we do not record expected credit losses. State and municipal securities credit losses are benchmarked against highly rated municipal securities of similar duration, as published by Moody's, resulting in an immaterial allowance for credit losses.