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Investment Securities
3 Months Ended
Mar. 31, 2024
Investments, Debt and Equity Securities [Abstract]  
Investment Securities Investment Securities
Investment securities are designated as AFS, HTM, or equity on the consolidated balance sheets. The amortized cost and fair values of AFS and HTM securities at March 31, 2024 were as follows:
($ in thousands)Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
(Losses)
Fair Value
AFS investment securities
U.S. Treasury securities$39,985 $— $(4,427)$35,558 
Obligations of state and political subdivisions (municipal securities)83,823 (2,995)80,830 
Residential mortgage-related securities:
FNMA/FHLMC1,247,657 221 (156,880)1,090,998 
GNMA2,219,058 6,114 (10,658)2,214,513 
Commercial mortgage-related securities:
FNMA/FHLMC18,603 — (1,595)17,008 
GNMA159,523 — (7,291)152,232 
Asset backed securities:
FFELP130,196 22 (1,065)129,154 
SBA916 (28)890 
Other debt securities3,000 — (35)2,965 
Total AFS investment securities$3,902,762 $6,359 $(184,973)$3,724,148 
HTM investment securities
U.S. Treasury securities$999 $— $(30)$969 
Obligations of state and political subdivisions (municipal securities)1,676,275 2,292 (154,833)1,523,734 
Residential mortgage-related securities:
FNMA/FHLMC930,148 26,023 (184,227)771,944 
GNMA48,043 24 (3,609)44,457 
Private-label341,153 9,399 (69,484)281,069 
Commercial mortgage-related securities:
FNMA/FHLMC779,310 12,068 (162,450)628,928 
GNMA57,114 338 (7,270)50,183 
Total HTM investment securities$3,833,043 $50,145 $(581,903)$3,301,284 
The amortized cost and fair values of AFS and HTM securities at December 31, 2023 were as follows:
($ in thousands)Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
(Losses)
Fair Value
AFS investment securities
U.S. Treasury securities$39,984 $— $(4,083)$35,902 
Obligations of state and political subdivisions (municipal securities)94,008 23 (2,214)91,817 
Residential mortgage-related securities:
FNMA/FHLMC1,274,052 294 (153,552)1,120,794 
GNMA2,021,242 24,254 (2,822)2,042,675 
Commercial mortgage-related securities:
FNMA/FHLMC18,691 — (1,755)16,937 
GNMA161,928 — (7,135)154,793 
Asset backed securities:
FFELP135,832 (1,862)133,975 
SBA1,077 (28)1,051 
Other debt securities3,000 — (50)2,950 
Total AFS investment securities$3,749,814 $24,579 $(173,501)$3,600,892 
HTM investment securities
U.S. Treasury securities$999 $— $(36)$963 
Obligations of state and political subdivisions (municipal securities)1,682,473 5,638 (134,053)1,554,059 
Residential mortgage-related securities:
FNMA/FHLMC941,973 27,007 (164,587)804,393 
GNMA48,979 92 (2,901)46,170 
Private-label345,083 9,796 (65,372)289,507 
Commercial mortgage-related securities:
FNMA/FHLMC780,995 12,699 (160,781)632,914 
GNMA59,733 386 (7,500)52,619 
 Total HTM investment securities$3,860,235 $55,619 $(535,230)$3,380,624 
Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The expected maturities of AFS and HTM securities at March 31, 2024, are shown below:
 AFSHTM
($ in thousands)Amortized
Cost
Fair
Value
Amortized
Cost
Fair
Value
Due in one year or less$1,915 $1,902 $11,061 $11,011 
Due after one year through five years47,142 42,470 58,092 57,522 
Due after five years through ten years50,863 48,613 166,954 162,309 
Due after ten years26,888 26,368 1,441,167 1,293,862 
Total debt securities126,808 119,353 1,677,274 1,524,703 
Residential mortgage-related securities:
FNMA/FHLMC1,247,657 1,090,998 930,148 771,944 
GNMA2,219,058 2,214,513 48,043 44,457 
Private-label— — 341,153 281,069 
Commercial mortgage-related securities:
FNMA/FHLMC18,603 17,008 779,310 628,928 
GNMA159,523 152,232 57,114 50,183 
Asset backed securities:
FFELP 130,196 129,154 — — 
SBA916 890 — — 
Total investment securities$3,902,762 $3,724,148 $3,833,043 $3,301,284 
Ratio of fair value to amortized cost95.4 %86.1 %
On a quarterly basis, the Corporation refreshes the credit quality of each HTM security. The following table summarizes the credit quality indicators of HTM securities at amortized cost at March 31, 2024:
($ in thousands)AAAAAANot RatedTotal
U.S. Treasury securities$999 $— $— $— $999 
Obligations of state and political subdivisions (municipal securities)768,220 901,215 5,685 1,154 1,676,275 
Residential mortgage-related securities:
FNMA/FHLMC930,148 — — — 930,148 
GNMA48,043 — — — 48,043 
Private-label341,153 — — — 341,153 
Commercial mortgage-related securities:
FNMA/FHLMC779,310 — — — 779,310 
GNMA 57,114 — — — 57,114 
Total HTM securities$2,924,988 $901,215 $5,685 $1,154 $3,833,043 
The following table summarizes the credit quality indicators of HTM securities at amortized cost at December 31, 2023:
($ in thousands)AAAAAANot RatedTotal
U.S. Treasury securities$999 $— $— $— $999 
Obligations of state and political subdivisions (municipal securities)760,329 915,303 5,687 1,155 1,682,473 
Residential mortgage-related securities:
FNMA/FHLMC941,973 — — — 941,973 
GNMA48,979 — — — 48,979 
Private-label345,083 — — — 345,083 
Commercial mortgage-related securities:
FNMA/FHLMC780,995 — — — 780,995 
GNMA 59,733 — — — 59,733 
Total HTM securities$2,938,090 $915,303 $5,687 $1,155 $3,860,235 
The following table summarizes gross realized gains and losses on AFS securities, the gain on sale and net write-up of equity securities, and proceeds from the sale of AFS investment securities for the three months ended March 31, 2024 and 2023:
Three Months Ended Mar 31,
($ in thousands)20242023
Gross realized (losses) on AFS securities$(197)$— 
Gain on sale and net write-up (down) of equity securities4,076 51 
Investment securities gains (losses), net$3,879 $51 
Proceeds from sales of AFS investment securities$9,472 $— 
During the first quarter of 2024, the Corporation sold its remaining Visa Class B restricted shares at a gain of $4 million.
Investment securities with a carrying value of $1.5 billion and $1.6 billion at March 31, 2024 and December 31, 2023, respectively, were pledged as required to secure certain deposits or for other purposes.
Accrued interest receivable on HTM securities totaled $16 million and $18 million at March 31, 2024 and December 31, 2023, respectively. Accrued interest receivable on AFS securities totaled $16 million and $15 million at March 31, 2024 and December 31, 2023, respectively. Accrued interest receivable on both HTM and AFS securities is included in interest receivable on the consolidated balance sheets.
The allowance for credit losses on HTM securities was approximately $76,000 at March 31, 2024 and approximately $75,000 at December 31, 2023, attributable entirely to the Corporation's municipal securities, included in HTM investment securities, net, at amortized cost on the consolidated balance sheets. The Corporation also holds U.S. Treasury, municipal, and mortgage-related securities issued by the U.S. government or a GSE which are backed by the full faith and credit of the U.S. government and private-label residential mortgage-related securities that have credit enhancement which covers the first 15% of losses and, as a result, no allowance for credit losses has been recorded related to these securities.
The following represents gross unrealized losses and the related fair value of AFS and HTM securities, aggregated by investment category and length of time individual securities have been in a continuous unrealized loss position, at March 31, 2024:
 Less than 12 months12 months or moreTotal
($ in thousands)Number
of
Securities
Unrealized
(Losses)
Fair
Value
Number
of
Securities
Unrealized
(Losses)
Fair
Value
Unrealized
(Losses)
Fair
Value
AFS investment securities
U.S. Treasury securities— $— $— $(4,427)$35,558 $(4,427)$35,558 
Obligations of state and political subdivisions (municipal securities)27 (218)13,847 108 (2,777)64,217 (2,995)78,064 
Residential mortgage-related securities:
FNMA/FHLMC24 (694)31,375 71 (156,185)1,045,343 (156,880)1,076,718 
GNMA59 (7,016)1,122,930 10 (3,643)105,462 (10,658)1,228,391 
Commercial mortgage-related securities:
FNMA/FHLMC— — — (1,595)17,008 (1,595)17,008 
GNMA(337)13,668 30 (6,954)138,564 (7,291)152,232 
Asset backed securities:
FFELP(116)40,177 12 (949)75,411 (1,065)115,588 
SBA— — — (28)677 (28)677 
Other debt securities(7)993 (28)1,972 (35)2,965 
Total114 $(8,388)$1,222,990 240 $(176,585)$1,484,212 $(184,973)$2,707,201 
HTM investment securities
U.S. Treasury securities— $— $— $(30)$969 $(30)$969 
Obligations of state and political subdivisions (municipal securities)287 (2,536)324,576 653 (152,297)916,225 (154,833)1,240,801 
Residential mortgage-related securities:
FNMA/FHLMC(40)3,489 113 (184,186)768,182 (184,227)771,671 
GNMA(99)8,674 79 (3,511)34,346 (3,609)43,020 
Private-label— — — 18 (69,484)281,069 (69,484)281,069 
 Commercial mortgage-related securities:
FNMA/FHLMC(263)8,003 44 (162,187)620,926 (162,450)628,928 
GNMA— — — 13 (7,270)50,183 (7,270)50,183 
Total299 $(2,938)$344,741 921 $(578,965)$2,671,899 $(581,903)$3,016,640 
For comparative purposes, the following represents gross unrealized losses and the related fair value of AFS and HTM securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2023:
 Less than 12 months12 months or moreTotal
($ in thousands)Number
of
Securities
Unrealized
(Losses)
Fair
Value
Number
of
Securities
Unrealized
(Losses)
Fair
Value
Unrealized
(Losses)
Fair
Value
AFS investment securities
U.S. Treasury securities— $— $— $(4,083)$35,902 $(4,083)$35,902 
Obligations of state and political subdivisions (municipal securities)41 (347)23,762 92 (1,867)53,022 (2,214)76,784 
Residential mortgage-related securities:
FNMA/FHLMC18 (333)22,870 71 (153,219)1,080,337 (153,552)1,103,207 
GNMA13 (924)156,847 (1,898)26,643 (2,822)183,490 
Commercial mortgage-related securities:
FNMA/FHLMC— — — (1,755)16,937 (1,755)16,937 
GNMA(3,160)103,055 22 (3,975)51,738 (7,135)154,793 
Asset backed securities:
FFELP— — — 14 (1,862)125,339 (1,862)125,339 
SBA— — — (28)761 (28)761 
Other debt securities(9)991 (42)1,958 (50)2,950 
Total82 $(4,773)$307,527 213 $(168,728)$1,392,635 $(173,501)$1,700,162 
HTM investment securities
U.S. Treasury securities— $— $— $(36)$963 $(36)$963 
Obligations of state and political subdivisions (municipal securities)182 (1,535)180,270 537 (132,518)792,940 (134,053)973,210 
Residential mortgage-related securities:
FNMA/FHLMC20 (511)30,323 94 (164,076)771,042 (164,587)801,365 
GNMA(17)2,128 78 (2,884)34,626 (2,901)36,754 
Private-label— — — 18 (65,372)289,507 (65,372)289,507 
Commercial mortgage-related securities:
FNMA/FHLMC(121)8,144 44 (160,660)624,770 (160,781)632,914 
GNMA— — — 13 (7,500)52,619 (7,500)52,619 
Total205 $(2,184)$220,865 785 $(533,046)$2,566,468 $(535,230)$2,787,333 
The Corporation reviews the AFS investment securities portfolio on a quarterly basis to monitor its credit exposure. A determination as to whether a security’s decline in fair value is the result of credit risk takes into consideration numerous factors and the relative significance of any single factor can vary by security. Some factors the Corporation may consider in this impairment analysis include the extent to which the security has been in an unrealized loss position, the change in security rating, financial condition and near-term prospects of the issuer, as well as the security and industry specific economic conditions.
Based on the Corporation’s evaluation, management does not believe any unrealized losses at March 31, 2024 represent credit deterioration as these unrealized losses are primarily attributable to changes in interest rates and the current market conditions. As of March 31, 2024, the Corporation does not intend to sell, nor does it believe that it will be required to sell, the securities in an unrealized loss position before recovery of their amortized cost basis.
FHLB and Federal Reserve Bank stocks: The Corporation is required to maintain Federal Reserve Bank stock and FHLB stock as a member bank of both the Federal Reserve System and the FHLB, and in amounts as required by these institutions. These equity securities are “restricted” in that they can only be sold back to the respective institutions or another member institution at par. Therefore, they are less liquid than other marketable equity securities and their fair value is equal to amortized cost. The Corporation had FHLB stock of $86 million and $143 million at March 31, 2024 and December 31, 2023, respectively. The Corporation had Federal Reserve Bank stock of $88 million and $87 million at March 31, 2024 and December 31, 2023, respectively. Accrued interest receivable on FHLB stock totaled $2 million and $4 million at March 31, 2024 and December 31, 2023, respectively. There was approximately $921,000 of accrued interest receivable on Federal Reserve Bank Stock at March 31, 2024 and none at December 31, 2023. Accrued interest receivable on both FHLB stock and Federal Reserve Bank stock is included in interest receivable on the consolidated balance sheets.
Equity Securities
Equity securities with readily determinable fair values: The Corporation's portfolio of equity securities with readily determinable fair values is primarily comprised of CRA Qualified Investment mutual funds and other mutual funds. The Corporation had equity securities with readily determinable fair values of $7 million at both March 31, 2024 and December 31, 2023.
Equity securities without readily determinable fair values: The Corporation's portfolio of equity securities without readily determinable fair values primarily consists of an investment in a private loan fund. The Corporation had equity securities without readily determinable fair values carried at $13 million and $35 million at March 31, 2024 and December 31, 2023, respectively. During the first quarter of 2024, the Corporation sold all of its remaining Visa Class B restricted shares.