INVESTMENT SECURITIES

12 Months Ended

Dec. 31, 2022

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE C:  INVESTMENT SECURITIES

The amortized cost and estimated fair value of investment securities as of December 31 are as follows:

	2022								2021
			Gross		Gross						Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated		Amortized		Unrealized		Unrealized		Estimated
(000’s omitted)	Cost		Gains		Losses		Fair Value		Cost		Gains		Losses		Fair Value
Available-for-Sale Portfolio:
U.S. Treasury and agency securities	$	3,660,546	$	0	$	417,009	$	3,243,537	$	4,064,624	$	39,997	$	106,057	$	3,998,564
Obligations of state and political subdivisions		549,118		506		45,327		504,297		413,019		17,326		56		430,289
Government agency mortgage-backed securities		444,689		58		60,114		384,633		474,506		7,615		5,065		477,056
Corporate debt securities		8,000		0		886		7,114		8,000		39		77		7,962
Government agency collateralized mortgage obligations		13,121		1		852		12,270		19,953		410		24		20,339
Total available-for-sale portfolio	$	4,675,474	$	565	$	524,188	$	4,151,851	$	4,980,102	$	65,387	$	111,279	$	4,934,210
Equity and other Securities:
Equity securities, at fair value	$	251	$	168	$	0	$	419	$	251	$	212	$	0	$	463
Federal Home Loan Bank common stock		47,497		0		0		47,497		7,188		0		0		7,188
Federal Reserve Bank common stock		31,144		0		0		31,144		33,916		0		0		33,916
Other equity securities, at adjusted cost		3,532		750		0		4,282		2,562		750		0		3,312
Total equity and other securities	$	82,424	$	918	$	0	$	83,342	$	43,917	$	962	$	0	$	44,879
Held-to-Maturity Portfolio:
U.S. Treasury and agency securities	$	1,079,695	$	0	$	44,900	$	1,034,795	$	0	$	0	$	0	$	0
Total held-to-maturity portfolio	$	1,079,695	$	0	$	44,900	$	1,034,795	$	0	$	0	$	0	$	0

In the fourth quarter of 2022, the Company transferred $1.08 billion of U.S. Treasury securities, at fair value, from available-for-sale to held-to-maturity. The securities were reclassified at fair value at the time of the transfer and the transfer represented a non-cash transaction. Accumulated other comprehensive loss at December 31, 2022 included pretax unrealized losses of $341.2 million related to the transfer. These unrealized losses will be amortized, consistent with the amortization of the discount on these securities, over the remaining life as an adjustment of yield, resulting in no impact to net interest income or net income.

A summary of investment securities that have been in a continuous unrealized loss position for less than or greater than twelve months is as follows:

As of December 31, 2022

	Less than 12 Months					12 Months or Longer					Total
				Gross					Gross					Gross
				Unrealized					Unrealized					Unrealized
(000’s omitted)	#	Fair Value		Losses		#	Fair Value		Losses		#	Fair Value		Losses
Available-for-Sale Portfolio:
U.S. Treasury and agency securities	41	$	1,384,075	$	132,511	61	$	1,859,462	$	284,498	102	$	3,243,537	$	417,009
Obligations of state and political subdivisions	582		370,524		35,488	76		47,923		9,839	658		418,447		45,327
Government agency mortgage-backed securities	497		190,727		19,508	274		189,919		40,606	771		380,646		60,114
Corporate debt securities	0		0		0	2		7,114		886	2		7,114		886
Government agency collateralized mortgage obligations	29		9,968		600	17		2,274		252	46		12,242		852
Total available-for-sale investment portfolio	1,149	$	1,955,294	$	188,107	430	$	2,106,692	$	336,081	1,579	$	4,061,986	$	524,188
Held-to-Maturity Portfolio:
U.S Treasury and agency securities	23	$	1,034,795	$	44,900	0	$	0	$	0	23	$	1,034,795	$	44,900
Total held-to-maturity portfolio	23	$	1,034,795	$	44,900	0	$	0	$	0	23	$	1,034,795	$	44,900

As of December 31, 2021

	Less than 12 Months					12 Months or Longer					Total
				Gross					Gross					Gross
				Unrealized					Unrealized					Unrealized
(000’s omitted)	#	Fair Value		Losses		#	Fair Value		Losses		#	Fair Value		Losses
Available-for-Sale Portfolio:
U.S. Treasury and agency securities	47	$	1,224,101	$	14,873	13	$	900,462	$	91,184	60	$	2,124,563	$	106,057
Obligations of state and political subdivisions	27		23,966		56	0		0		0	27		23,966		56
Government agency mortgage-backed securities	147		139,442		2,475	52		67,273		2,590	199		206,715		5,065
Corporate debt securities	1		4,923		77	0		0		0	1		4,923		77
Government agency collateralized mortgage obligations	18		3,146		24	1		53		0	19		3,199		24
Total available-for-sale investment portfolio	240	$	1,395,578	$	17,505	66	$	967,788	$	93,774	306	$	2,363,366	$	111,279

The unrealized losses reported pertaining to available-for-sale securities issued by the U.S. government and its sponsored entities include treasuries, agencies, and mortgage-backed securities issued by Ginnie Mae, Fannie Mae, and Freddie Mac, which are currently rated AAA by Moody’s Investor Services, AA+ by Standard & Poor’s and are guaranteed by the U.S. government. The majority of the obligations of state and political subdivisions carry a credit rating of A or better. Additionally, a portion of the obligations of state and political subdivisions carry a secondary level of credit enhancement. The Company holds two corporate debt securities in an unrealized loss position and based on an analysis done by the Company the issuers of the securities show a low risk of default. Timely principal and interest payments continue to be made on the securities. The unrealized losses in the portfolios are primarily attributable to changes in interest rates. As such, management does not believe any individual unrealized loss as of December 31, 2022 and 2021 represents credit losses and no unrealized losses have been recognized in the provision for credit losses. Accordingly, there is no allowance for credit losses on the Company’s available-for-sale portfolio as of December 31, 2022 and 2021.

Securities classified as held-to-maturity are included under the CECL methodology. Calculation of expected credit loss under CECL is done on a collective (“pooled”) basis, with assets grouped when similar risk characteristics exist. The Company notes that at December 31, 2022 all securities in the held-to-maturity classification are U.S. Treasury securities; therefore, they share the same risk characteristics and can be evaluated on a collective basis. The expected credit loss on these securities is evaluated based on historical credit losses of this security type and the expected possibility of default in the future. U.S. Treasury securities often receive the highest credit rating by rating agencies and the Company has concluded that the possibility of default is considered remote. The U.S. Treasury securities held by the Company in the held-to-maturity category carry an AA+ rating from Standard & Poor’s, Aaa from Moody’s Investor Services, and AAA from Fitch. The Company concludes that the long history with no credit losses for U.S. Treasury securities (adjusted for current conditions and reasonable and supportable forecasts) indicates an expectation that nonpayment of the amortized cost basis is zero. Management has concluded that there is no prepayment risk and it is expected to recover the recorded investment. Accordingly, there is no allowance for credit losses on the Company’s held-to-maturity portfolio as of December 31, 2022 and 2021.

The amortized cost and estimated fair value of debt securities at December 31, 2022, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may 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.

	Held-to-Maturity				Available-for-Sale
(000’s omitted)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	0	$	0	$	521,444	$	516,496
Due after one through five years		0		0		1,728,988		1,574,685
Due after five years through ten years		539,825		524,815		1,161,641		1,020,562
Due after ten years		539,870		509,980		805,591		643,205
Subtotal		1,079,695		1,034,795		4,217,664		3,754,948
Government agency mortgage-backed securities		0		0		444,689		384,633
Government agency collateralized mortgage obligations		0		0		13,121		12,270
Total	$	1,079,695	$	1,034,795	$	4,675,474	$	4,151,851

Investment securities with a carrying value of $2.18 billion and $2.32 billion at December 31, 2022 and 2021, respectively, were pledged to collateralize certain deposits and borrowings. Securities pledged to collateralize certain deposits and borrowings included $466.9 million and $485.4 million of U.S. Treasury securities that were pledged as collateral for securities sold under agreement to repurchase at December 31, 2022 and 2021, respectively. All securities sold under agreement to repurchase as of December 31, 2022 and 2021 have an overnight and continuous maturity.