Held-to-maturity (“HTM”) securities, 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 (“AFS”) securities, 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 quarters ended June 30, 2022 and September 30, 2021, the Company transferred, at fair value, $1.99 billion and $500.8 million, respectively, of securities from the AFS portfolio to the HTM portfolio. As of December 31, 2023, the related remaining combined net unrealized losses of $126.4 million in accumulated other comprehensive income (loss) 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

December 31, 2023
U.S. Government agencies	$	453,121	$	—	$	453,121	$	—	$	(89,203)	$	363,918
Mortgage-backed securities	1,161,694		—		1,161,694		354		(107,834)		1,054,214
State and political subdivisions	1,858,680		(2,006)		1,856,674		284		(369,509)		1,487,449
Other securities	256,007		(1,208)		254,799		—		(25,010)		229,789
Total HTM	$	3,729,502	$	(3,214)	$	3,726,288	$	638	$	(591,556)	$	3,135,370

December 31, 2022
U.S. Government agencies	$	448,012	$	—	$	448,012	$	—	$	(102,558)	$	345,454
Mortgage-backed securities	1,190,781		—		1,190,781		227		(118,960)		1,072,048
State and political subdivisions	1,861,102		(110)		1,860,992		56		(446,198)		1,414,850
Other securities	261,199		(1,278)		259,921		—		(29,040)		230,881
Total HTM	$	3,761,094	$	(1,388)	$	3,759,706	$	283	$	(696,756)	$	3,063,233

Mortgage-backed securities (“MBS”) are commercial MBS, secured by commercial properties, and residential MBS, generally secured by single-family residential properties. All mortgage-backed securities included in the table above were issued by U.S. government agencies or corporations. As of December 31, 2023, HTM MBS consisted of $141.6 million and $1.02 billion of commercial MBS and residential MBS, respectively. As of December 31, 2022, HTM MBS consisted of $149.2 million and $1.04 billion 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

December 31, 2023
U.S. Treasury	$	2,285	$	—	$	—	$	(31)	$	2,254
U.S. Government agencies	74,460		—		35		(1,993)		72,502
Mortgage-backed securities	2,138,652		—		8		(198,353)		1,940,307
State and political subdivisions	1,035,147		—		187		(132,541)		902,793
Other securities	259,165		—		—		(24,868)		234,297
Total AFS	$	3,509,709	$	—	$	230	$	(357,786)	$	3,152,153

December 31, 2022
U.S. Treasury	$	2,257	$	—	$	—	$	(60)	$	2,197
U.S. Government agencies	191,498		—		103		(7,322)		184,279
Mortgage-backed securities	2,809,319		—		20		(266,437)		2,542,902
State and political subdivisions	1,056,124		—		250		(185,300)		871,074
Other securities	272,215		—		—		(19,813)		252,402
Total AFS	$	4,331,413	$	—	$	373	$	(478,932)	$	3,852,854

All mortgage-backed securities included in the table above were issued by U.S. government agencies or corporations. As of December 31, 2023, AFS MBS consisted of $710.1 million and $1.23 billion of commercial MBS and residential MBS, respectively. As of December 31, 2022, AFS MBS consisted of $1.07 billion and $1.47 billion of commercial MBS and residential MBS, respectively.

Accrued interest receivable on HTM and AFS securities at December 31, 2023 was $20.6 million and $24.7 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 December 31, 2023, 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. Treasury	$	—	$	—	$	2,254	$	(31)	$	2,254	$	(31)
U.S. Government agencies	8,614		(39)		59,732		(1,954)		68,346		(1,993)
Mortgage-backed securities	9,182		(135)		1,930,105		(198,218)		1,939,287		(198,353)
State and political subdivisions	3,050		(163)		869,379		(132,378)		872,429		(132,541)
Other securities	11,016		(2,654)		223,025		(22,214)		234,041		(24,868)
Total AFS	$	31,862	$	(2,991)	$	3,084,495	$	(354,795)	$	3,116,357	$	(357,786)

As of December 31, 2023, the Company’s investment portfolio included $3.15 billion of AFS securities, of which $3.12 billion, or 98.9%, were in an unrealized loss position that are 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 immediate intent to sell the securities, and management believes the accounting standard of “more likely than not” has not been met regarding whether the Company would be required to sell any of the AFS securities before recovery of amortized cost.

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, are 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, the adequacy of the reserve for credit loss is determined quarterly based on methodology similar to the methodology for determining the allowance for credit losses on loans. The methodology considers, but is not limited to: (i) issuer bond ratings, (ii) issuer geography, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, (iv) probability-weighted multiple scenario forecasts, and (v) the issuers’ size.


(In thousands)	State and Political Subdivisions		Other Securities		Total
December 31, 2023
Held-to-maturity
Beginning balance, January 1, 2023	$	110	$	1,278	$	1,388
Provision for credit loss expense	824		1,002		1,826
Net increase (decrease) in allowance on previously impaired securities	1,072		(1,072)		—
Ending balance, December 31, 2023	$	2,006	$	1,208	$	3,214

Available-for-sale
Beginning balance, January 1, 2023	$	—	$	—	$	—
Provision for credit loss expense	—		12,800		12,800
Reduction due to sales	—		(2,078)		(2,078)
Securities charged-off	—		(7,000)		(7,000)
Net decrease in allowance on previously impaired securities	—		(3,722)		(3,722)
Ending balance, December 31, 2023	$	—	$	—	$	—

December 31, 2022
Held-to-maturity
Beginning balance, January 1, 2022	$	1,197	$	82	$	1,279
Provision for credit loss expense	—		—		—
Net increase (decrease) in allowance on previously impaired securities	(1,180)		1,180		—
Recoveries	93		16		109
Ending balance, December 31, 2022	$	110	$	1,278	$	1,388

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, the provision for credit losses related to AFS securities recorded during the twelve months ended December 31, 2023 was $9.1 million. During the year ended December 31, 2023, the Company charged-off $7.0 million directly related to one corporate bond which was deemed uncollectible during the period. There was no provision for credit losses related to AFS securities recorded during the year ended December 31, 2022.


	State and Political Subdivisions
(In thousands)	Not Guaranteed or Pre-Refunded		Other Credit Enhancement or Insurance		Pre-Refunded		Total		Other Securities
Aaa/AAA	$	179,585	$	299,910	$	—	$	479,495	$	—
Aa/AA	635,749		524,037		—		1,159,786		—
A	46,932		161,189		—		208,121		102,393
Baa/BBB	—		4,376		—		4,376		153,614
Not Rated	6,902		—		—		6,902		—
Total	$	869,168	$	989,512	$	—	$	1,858,680	$	256,007

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.

The amortized cost and estimated fair value by maturity of securities are shown in the following table as of December 31, 2023. 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	$	1,473	$	1,412	$	10,418	$	10,115
After one through five years	9,159		8,877		115,387		114,069
After five through ten years	387,939		345,785		216,076		190,533
After ten years	2,169,237		1,725,082		1,028,920		896,873
Securities not due on a single maturity date	1,161,694		1,054,214		2,138,652		1,940,307
Other securities (no maturity)	—		—		256		256
Total	$	3,729,502	$	3,135,370	$	3,509,709	$	3,152,153

The Company sold approximately $247.9 million of investment securities during 2023 and approximately $342.6 million of investment securities during 2021. No securities were sold during 2022. Securities sold in 2023 were in large part related to a strategic decision by the Company to sell low yield securities and use the proceeds to pay off higher rate wholesale fundings, including both brokered deposits and Federal Home Loan Bank (“FHLB”) advances, while the securities sold during 2021 were part of a strategic plan to realize gains on securities with projected calls within the short-term period. The net losses on the sale and call of securities in 2023 and 2022 as compared to 2021 reflect the rising interest rate environment experienced over the comparative period. There were no gross realized gains and approximately $20.6 million of gross realized losses from the sale of securities during the year ended December 31, 2023. There were approximately $46,000 of gross realized gains and $324,000 of gross realized losses from the call of securities during the year ended December 31, 2022. There were approximately $15.9 million of gross realized gains and $422,000 of gross realized losses from the sale of securities during the year ended December 31, 2021. The income tax expense/benefit related to security gains/losses was 26.135% of the gross amounts in 2023, 2022 and 2021.

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 21, 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.