Securities

6 Months Ended

Jun. 30, 2024

Investments, Debt and Equity Securities [Abstract]

The carrying values of investment securities at June 30, 2024 and December 31, 2023 are summarized in the following table (dollars in thousands):


	June 30, 2024				December 31, 2023
	Amount		Percent		Amount		Percent
Securities available for sale
U.S. Treasury	$	373,489	47.34	%	$	422,490	54.20	%
Other securities (FHLB, FHLMC and FNMA)	33,449		4.24		33,049		4.24
State and political subdivisions	299,674		37.98		262,953		33.74
Mortgage-backed securities and collateralized mortgage obligations (MBS and CMO)	82,367		10.44		60,929		7.82
Total securities available for sale	$	788,979	100.00	%	$	779,421	100.00	%

Investment securities have been classified in the consolidated balance sheets according to management’s intent. Available-for-sale securities consist of debt securities not classified as trading or held to maturity. Available-for-sale securities are stated at fair value, and unrealized holding gains and losses, net of the related deferred tax effect, are reported as a separate component of stockholders' equity. Municipal bonds are comprised of general obligation bonds and revenue bonds issued by various municipal corporations. As of June 30, 2024 and December 31, 2023, all securities held were rated investment grade based upon external ratings where available and, where not available, based upon management knowledge of the local issuers and their financial situations. There were no trading or held to maturity securities as of June 30, 2024 or December 31, 2023.

The carrying amount of available-for-sale securities, fair values and allowance for credit losses were as follows as of June 30, 2024 and December 31, 2023 (in thousands):


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Allowance for Credit Losses		Estimated Fair Value
June 30, 2024
U.S. Treasury	$	385,719	$	104	$	(12,334)	$	—	$	373,489
Other securities (FHLB, FHLMC and FNMA)	35,107		—		(1,658)		—		33,449
State and political subdivisions	319,482		1,315		(21,123)		—		299,674
MBS and CMO	88,777		125		(6,535)		—		82,367
Total	$	829,085	$	1,544	$	(41,650)	$	—	$	788,979
December 31, 2023:
U.S. Treasury	$	436,457	$	703	$	(14,670)	$	—	$	422,490
Other securities (FHLB, FHLMC and FNMA)	35,156		—		(2,107)		—		33,049
State and political subdivisions	276,694		1,970		(15,711)		—		262,953
MBS and CMO	66,532		241		(5,844)		—		60,929
Total	$	814,839	$	2,914	$	(38,332)	$	—	$	779,421

The amortized cost and estimated fair value of available-for-sale securities classified according to their contractual maturities at June 30, 2024, were as follows (in thousands) below. Expected maturities of MBS may differ from contractual maturities because the mortgages underlying the securities may be called or prepaid without any penalties. Therefore, these securities are not included in the maturity categories in the following summary.


	Amortized Cost		Fair Value
Due in one year or less	$	219,284	$	216,033
Due after one year through five years	297,721		283,437
Due after five years through ten years	118,188		103,061
Due over ten years	105,115		104,081
	$	740,308	$	706,612
MBS and CMO	88,777		82,367
	$	829,085	$	788,979

As of June 30, 2024, investment securities with a carrying value of $354.59 million were pledged to collateralize other borrowings. As of June 30, 2024, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders' equity.

Sales proceeds and gross realized gains and losses on available-for-sale securities were as follows (in thousands):


	June 30, 2024		June 30, 2023
Sale proceeds	$	—	$	509
Gross realized gains	—		—
Gross realized losses	—		—

The following table shows the fair value, gross unrealized losses and the percentage of fair value represented by gross unrealized losses of applicable investment securities owned by the Company, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2024 and December 31, 2023 (in thousands):


	Less than 12 months							12 months or more							Total
June 30, 2024 Description of Securities	#	Fair Value		Unrealized Loss		%		#	Fair Value		Unrealized Loss		%		#	Fair Value		Unrealized Loss		%
U.S. Treasury	16	$	38,337	$	(357)	0.93	%	99	$	289,301	$	(11,977)	4.14	%	115	$	327,638	$	(12,334)	3.76	%

Other securities (FHLB, FHLMC and FNMA)	—	—		—		—		14	33,449		(1,658)		4.96		14	33,449		(1,658)		4.96

State and political subdivisions	170	67,499		(959)		1.42		676	166,064		(20,164)		12.14		846	233,563		(21,123)		9.04

MBS and CMO	8	23,916		(150)		(0.63)		18	43,688		(6,385)		14.61		26	67,604		(6,535)		9.67

Total	194	$	129,752	$	(1,466)	1.13	%	807	$	532,502	$	(40,184)	7.55	%	1,001	$	662,254	$	(41,650)	6.29	%


	Less than 12 months							12 months or more							Total
December 31, 2023 Description of Securities	#	Fair Value		Unrealized Loss		%		#	Fair Value		Unrealized Loss		%		#	Fair Value		Unrealized Loss		%
U.S. Treasury	1	$	2,390	$	(2)	0.08	%	122	$	370,660	$	(14,668)	3.96	%	123	$	373,050	$	(14,670)	3.93	%

Other securities (FHLB, FHLMC and FNMA)	—	—		—		—		14	33,049		(2,107)		6.38		14	33,049		(2,107)		6.38

State and political subdivisions	115	34,510		(314)		0.91		632	161,614		(15,397)		9.53		747	196,124		(15,711)		8.01

MBS and CMO	—	—		—		—		18	46,483		(5,844)		12.57		18	46,483		(5,844)		12.57

Total	116	$	36,900	$	(316)	0.86	%	786	$	611,806	$	(38,016)	6.21	%	902	$	648,706	$	(38,332)	5.91	%

The Company considered the following information in reaching the conclusion that the unrealized losses disclosed in the table above are not attributable to credit losses. None of the unrealized losses in the above table was due to the deterioration in the credit quality of any of the issues that might result in the non-collection of contractual principal and interest. The unrealized losses are due to changes in interest rates. The Company has not recognized any unrealized loss in income because management does not have the intent to sell the securities included in the previous table. Management has concluded that it is more likely than not that the Company will not be required to sell these securities prior to recovery of the amortized cost basis. The securities are of high credit quality (investment grade credit ratings) and principal and interest payments are made timely with no payments past due as of June 30, 2024. The fair value is expected to recover as the securities approach maturity. The U.S. Treasury and other securities are issued and guaranteed by U.S. government-sponsored entities and agencies. The MBS and CMOs have implied U.S. government guarantees of the agency securities. The Company evaluates if a credit loss exists by monitoring to ensure it has adequate credit support considering the nature of the investment, number and significance of investments in an unrealized loss position, collectability or delinquency issues, the underlying financial statements of the issuers, credit ratings and subsequent changes thereto, and other available relevant information. Considering the above factors, management has determined that no allowance for credit losses is necessary for the securities portfolio as of June 30, 2024.