Held-to-maturity securities (“HTM”), which include any security for which the Company has both the positive intent and ability to hold until maturity, are carried at historical cost adjusted for amortization of premiums and accretion of discounts. Premiums and discounts are amortized and accreted, respectively, to interest income using the constant effective yield method over the security’s estimated life. Prepayments are anticipated for mortgage-backed and SBA securities. Premiums on callable securities are amortized to their earliest call date.

Available-for-sale securities (“AFS”), which include any security for which the Company has no immediate plan to sell but which may be sold in the future, are carried at fair value. Realized gains and losses, based on specifically identified amortized cost of the individual security, are included in other income. Unrealized gains and losses are recorded, net of related income tax effects, in stockholders’ equity, further discussed below. Premiums and discounts are amortized and accreted, respectively, to interest income using the constant effective yield method over the estimated life of the security. Prepayments are anticipated for mortgage-backed and SBA securities. Premiums on callable securities are amortized to their earliest call date.

During the third quarter of 2021, the Company transferred, at fair value, $500.8 million of securities from the available-for-sale portfolio to the held-to-maturity portfolio. The related net unrealized gains of $1.1 million remained in accumulated other comprehensive income (loss) and will be amortized over the remaining life of the securities. No gains or losses on these securities were recognized at the time of transfer.


(In thousands)	Amortized Cost		Allowance for Credit Losses		Net Carrying Amount		Gross Unrealized Gains		Gross Unrealized (Losses)		Estimated Fair Value
Held-to-maturity

September 30, 2021
U.S. Government agencies	$	232,549	$	—	$	232,549	$	—	$	(5,179)	$	227,370
Mortgage-backed securities	57,930		—		57,930		417		(1,024)		57,323
State and political subdivisions	1,210,287		(1,196)		1,209,091		2,206		(24,962)		1,186,335
Other securities	17,310		(83)		17,227		—		(339)		16,888
Total HTM	$	1,518,076	$	(1,279)	$	1,516,797	$	2,623	$	(31,504)	$	1,487,916

December 31, 2020
Mortgage-backed securities	$	22,354	$	—	$	22,354	$	683	$	—	$	23,037
State and political subdivisions	312,416		(2,307)		310,109		8,148		(30)		318,227
Other securities	1,176		(608)		568		93		—		661
Total HTM	$	335,946	$	(2,915)	$	333,031	$	8,924	$	(30)	$	341,925

Mortgage-backed securities (“MBS”) are commercial MBS, secured by commercial properties, and residential MBS, generally secured by single-family residential properties. As of September 30, 2021, HTM MBS consists of $5.4 million and $52.5 million of commercial MBS and residential MBS, respectively. As of December 31, 2020, HTM MBS consists of $7.7 million and $14.7 million of commercial MBS and residential MBS, respectively.


(In thousands)	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized (Losses)		Estimated Fair Value
Available-for-sale

September 30, 2021
U.S. Treasury	$	300	$	—	$	—	$	—	$	300
U.S. Government agencies	361,452		—		635		(7,705)		354,382
Mortgage-backed securities	4,434,981		—		14,741		(28,102)		4,421,620
State and political subdivisions	1,574,674		—		17,877		(17,343)		1,575,208
Other securities	467,336		—		7,328		(3,971)		470,693
Total AFS	$	6,838,743	$	—	$	40,581	$	(57,121)	$	6,822,203

December 31, 2020
U.S. Government agencies	$	477,693	$	—	$	844	$	(1,300)	$	477,237
Mortgage-backed securities	1,374,769		—		21,261		(1,094)		1,394,936
State and political subdivisions	1,416,136		(217)		55,111		(307)		1,470,723
Other securities	128,445		(95)		2,447		(95)		130,702
Total AFS	$	3,397,043	$	(312)	$	79,663	$	(2,796)	$	3,473,598

As of September 30, 2021, AFS MBS consists of $1.56 billion and $2.86 billion of commercial MBS and residential MBS, respectively. As of December 31, 2020, AFS MBS consists of $406.1 million and $988.8 million of commercial MBS and residential MBS, respectively.

Accrued interest receivable on HTM and AFS securities at September 30, 2021 was $8.3 million and $20.9 million, respectively, and is included in interest receivable on the consolidated balance sheets. The Company has made the election to exclude all accrued interest receivable from securities from the estimate of credit losses.

The following table summarizes the Company’s AFS investments in an unrealized loss position for which an allowance for credit loss has not been recorded as of September 30, 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:


	Less Than 12 Months				12 Months or More				Total
(In thousands)	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
Available-for-sale
U.S. Government agencies	$	190,275	$	(3,759)	$	111,662	$	(3,946)	$	301,937	$	(7,705)
Mortgage-backed securities	2,342,244		(27,380)		46,253		(722)		2,388,497		(28,102)
State and political subdivisions	969,120		(16,056)		23,372		(1,287)		992,492		(17,343)
Other securities	157,974		(3,971)		—		—		157,974		(3,971)
Total AFS	$	3,659,613	$	(51,166)	$	181,287	$	(5,955)	$	3,840,900	$	(57,121)

As of September 30, 2021, the Company’s investment portfolio included $6.8 billion of AFS securities, of which $3.8 billion, or 56.3%, were in an unrealized loss position that were not deemed to have credit losses. A portion of the unrealized losses were related to the Company’s MBS, which are issued and guaranteed by U.S. government-sponsored entities and agencies, and the Company’s state and political subdivision securities, specifically investments in insured fixed rate municipal bonds for which the issuers continue to make timely principal and interest payments under the contractual terms of the securities.

Furthermore, the decline in fair value for each of the above AFS securities is attributable to the rates for those investments yielding less than current market rates. Management does not believe any of the securities are impaired due to reasons of credit quality. Management believes the declines in fair value for the securities are temporary. Management does not have the intent to

All MBS held by the Company are issued by U.S. government-sponsored entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, highly rated by major rating agencies and have a long history of no credit losses. Accordingly, no allowance for credit losses has been recorded for these securities.

Regarding securities issued by state and political subdivisions and other HTM securities, management considers (i) issuer bond ratings, (ii) historical loss rates for given bond ratings, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, (iv) internal forecasts, and (v) whether or not such securities provide insurance or other credit enhancement or are pre-refunded by the issuers.


(In thousands)	State and Political Subdivisions		Other Securities		Total
Three Months Ended September 30, 2021
Held-to-maturity
Beginning balance, July 1, 2021	$	871	$	261	$	1,132
Provision for credit loss expense	325		(325)		—
Recoveries	—		147		147
Ending balance, September 30, 2021	$	1,196	$	83	$	1,279

Available-for-sale
Beginning balance, July 1, 2021	$	—	$	—	$	—
Net decrease in allowance on previously impaired securities	—		—		—
Ending balance, September 30, 2021	$	—	$	—	$	—

Nine Months Ended September 30, 2021
Held-to-maturity
Beginning balance, January 1, 2021	$	2,307	$	608	$	2,915
Provision for credit loss expense	(1,111)		(72)		(1,183)
Securities charged-off	—		(600)		(600)
Recoveries	—		147		147
Ending balance, September 30, 2021	$	1,196	$	83	$	1,279

Available-for-sale
Beginning balance, January 1, 2021	$	217	$	95	$	312
Reduction due to sales	—		(11)		(11)
Net decrease in allowance on previously impaired securities	(217)		(84)		(301)
Ending balance, September 30, 2021	$	—	$	—	$	—


(In thousands)	State and Political Subdivisions		Other Securities		Total
Three Months Ended September 30, 2020
Held-to-maturity
Beginning balance, July 1, 2020	$	95	$	212	$	307
Provision for credit loss expense	(22)		88		66
Ending balance, September 30, 2020	$	73	$	300	$	373

Available-for-sale
Beginning balance, July 1, 2020	$	371	$	238	$	609
Credit losses on securities not previously recorded	1,137		23		1,160
Reduction due to sales	$	(294)	$	—	$	(294)
Net decrease in allowance on previously impaired securities	(66)		(201)		(267)
Ending balance, September 30, 2020	$	1,148	$	60	$	1,208

Nine Months Ended September 30, 2020
Held-to-maturity
Beginning balance, January 1, 2020	$	—	$	—	$	—
Impact of ASU 2016-13 adoption	58		311		369
Provision for credit loss expense	15		(11)		4
Ending balance, September 30, 2020	$	73	$	300	$	373

Available-for-sale
Beginning balance, January 1, 2020	$	—	$	—	$	—
Impact of ASU 2016-13 adoption	373		—		373
Credit losses on securities not previously recorded	1,130		78		1,208
Reduction due to sales	(244)		—		(244)
Net increase in allowance on previously impaired securities	(111)		(18)		(129)
Ending balance, September 30, 2020	$	1,148	$	60	$	1,208

Based upon the Company’s analysis of the underlying risk characteristics of its AFS portfolio, including credit ratings and other qualitative factors, as previously discussed, there was no provision for credit losses related to AFS securities recorded in the third quarter of 2021 and it was reduced by $312,000 during the nine months ended September 30, 2021. During the three and nine months ended September 30, 2020, the provision for credit losses was $599,000 and $835,000, respectively, related to AFS securities.


	State and Political Subdivisions
(In thousands)	Not Guaranteed or Pre-Refunded		Other Credit Enhancement or Insurance		Pre-Refunded		Total		Other Securities
Aaa/AAA	$	130,326	$	114,831	$	—	$	245,157	$	—
Aa/AA	495,498		308,656		—		804,154		—
A	45,229		82,432		—		127,661		—
Baa/BBB	1,049		10,302		—		11,351		—
Not Rated	6,322		15,642		—		21,964		17,310
Total	$	678,424	$	531,863	$	—	$	1,210,287	$	17,310

Historical loss rates associated with securities having similar grades as those in the Company’s portfolio have generally not been significant. Pre-refunded securities, if any, have been defeased by the issuer and are fully secured by cash and/or U.S. Treasury

securities held in escrow for payment to holders when the underlying call dates of the securities are reached. Securities with other credit enhancement or insurance continue to make timely principal and interest payments under the contractual terms of the securities. Accordingly, no allowance for credit losses has been recorded for these securities as there is no current expectation of credit losses related to these securities.


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2021		2020		2021		2020
Taxable:
Held-to-maturity	$	1,127	$	256	$	2,477	$	715
Available-for-sale	15,949		6,937		39,313		26,604

Non-taxable:
Held-to-maturity	4,853		65		9,887		205
Available-for-sale	8,788		7,652		27,741		19,802
Total	$	30,717	$	14,910	$	79,418	$	47,326

The amortized cost and estimated fair value by maturity of securities as of September 30, 2021 are shown in the following table. Securities are classified according to their contractual maturities without consideration of principal amortization, potential prepayments or call options. Accordingly, actual maturities may differ from contractual maturities.


	Held-to-Maturity				Available-for-Sale
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
One year or less	$	5,644	$	5,678	$	8,385	$	8,423
After one through five years	7,676		7,993		53,515		54,008
After five through ten years	27,094		26,019		487,966		492,654
After ten years	1,419,732		1,390,903		1,853,165		1,844,768
Securities not due on a single maturity date	57,930		57,323		4,434,981		4,421,620
Other securities (no maturity)	—		—		731		730
Total	$	1,518,076	$	1,487,916	$	6,838,743	$	6,822,203

There were approximately $5.3 million of gross realized gains and $24,500 of gross realized losses from the sale of securities during the three months ended September 30, 2021, and approximately $15.9 million of gross realized gains and $63,600 of gross realized losses from the sale of securities during the nine months ended September 30, 2021. The Company sold approximately $342.6 million of investment securities during the nine months ended September 30, 2021. There were approximately $22.3 of gross realized gains and $1,700 of gross realized losses from the sale of securities during the three months ended September 30, 2020, and approximately $54.8 million of gross realized gains and $4,400 of gross realized losses from the sale of securities during the nine months ended September 30, 2020. During the first half of 2020, the Company sold approximately $1.7 billion of investment securities to create additional liquidity. The income tax expense/benefit related to security gains/losses was 26.135% of the gross amounts in 2021 and 2020.

The Company has entered into various fair value hedging transactions to mitigate the impact of changing interest rates on the fair value of AFS securities. See Note 23: Derivative Instruments for disclosure of the gains and losses recognized on derivative instruments and the cumulative fair value hedging adjustments to the carrying amount of the hedged securities.