Securities

9 Months Ended

Sep. 30, 2026

Investments, Debt and Equity Securities [Abstract]

Debt securities

The amortized cost, gross unrealized gains and losses and estimated fair value of investment and mortgage-backed AFS and HTM securities, net of allowance for credit losses, as of September 30, 2026 and December 31, 2025 are reflected in the tables below (in thousands):


	September 30, 2026
	Amortized		Gross Unrealized		Gross Unrealized		Less: Allowance for		Estimated
AVAILABLE FOR SALE	Cost		Gains		Losses		Credit Losses		Fair Value
Investment securities:


State and political subdivisions	$	190,891	$	3	$	32,936	$	—	$	157,958
Corporate bonds and other	43,347		240		364		—		43,223

MBS: (1)
Residential	1,482,525		26		60,233		—		1,422,318
Commercial	—		—		—		—		—
Total	$	1,716,763	$	269	$	93,533	$	—	$	1,623,499



	Amortized		Gross Unrealized		Gross Unrealized		Estimated		Less: Allowance for		Net Carrying
HELD TO MATURITY	Cost		Gains		Losses		Fair Value		Credit Losses		Amount
Investment securities:














State and political subdivisions	$	1,044,582	$	128	$	236,712	$	807,998	$	24	$	1,044,558
Corporate bonds and other	83,495		885		1,108		83,272		—		83,495
MBS: (1)
Residential	70,746		1		8,013		62,734		—		70,746
Commercial	8,696		—		1,302		7,394		—		8,696
Total	$	1,207,519	$	1,014	$	247,135	$	961,398	$	24	$	1,207,495


	December 31, 2025
	Amortized		Gross Unrealized		Gross Unrealized		Less: Allowance for		Estimated
AVAILABLE FOR SALE	Cost		Gains		Losses		Credit Losses		Fair Value
Investment securities:


State and political subdivisions	$	192,268	$	1,423	$	17,055	$	—	$	176,636
Corporate bonds and other	17,793		327		99		—		18,021

MBS: (1)
Residential	1,244,698		15,278		708		—		1,259,268
Commercial	2,227		67		—		—		2,294
Total	$	1,456,986	$	17,095	$	17,862	$	—	$	1,456,219




















	Amortized		Gross Unrealized		Gross Unrealized		Estimated		Less: Allowance for		Net Carrying
HELD TO MATURITY	Cost		Gains		Losses		Fair Value		Credit Losses		Amount
Investment securities:
State and political subdivisions	$	1,042,986	$	2,290	$	139,719	$	905,557	$	25	$	1,042,961
Corporate bonds and other	98,609		694		1,487		97,816		—		98,609
MBS: (1)
Residential	77,080		10		4,898		72,192		—		77,080
Commercial	28,827		—		1,088		27,739		—		28,827
Total	$	1,247,502	$	2,994	$	147,192	$	1,103,304	$	25	$	1,247,477

(1) All MBS are issued and/or guaranteed by U.S. government agencies or U.S. GSEs.

From time to time, we transfer securities from AFS to HTM due to overall balance sheet strategies and our intent and ability to hold these securities until maturity. We did not transfer any securities from AFS to HTM during the nine months ended

September 30, 2026 or the year ended December 31, 2025. The remaining net unamortized, unrealized loss on the transferred securities included in AOCI in the accompanying balance sheets totaled $89.9 million ($71.0 million, net of tax) at September 30, 2026 and $96.6 million ($76.3 million, net of tax) at December 31, 2025. Any net unrealized gain or loss on the transferred securities included in AOCI at the time of transfer will be amortized over the remaining life of the underlying security as an adjustment to the yield on those securities. Securities transferred with losses included in AOCI continue to be included in management’s assessment for impairment for each individual security.

Investment securities and MBS with carrying values of $2.26 billion and $1.94 billion were pledged as of September 30, 2026 and December 31, 2025, respectively, to collateralize borrowings from the FRDW, repurchase agreements and public fund deposits, for potential liquidity needs or other purposes as required by law. At September 30, 2026 and December 31, 2025, the amount of excess collateral at the FRDW was $12.9 million and $241.8 million, respectively.

The following tables present the fair value and unrealized losses on AFS, if applicable, for which an allowance for credit losses has not been recorded, as well as HTM investment securities and MBS, if applicable, as of September 30, 2026 and December 31, 2025, segregated by major security type and length of time in a continuous loss position (in thousands):


	September 30, 2026
	Less Than 12 Months				More Than 12 Months				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
AVAILABLE FOR SALE
Investment securities:


State and political subdivisions	$	43,927	$	1,230	$	113,272	$	31,706	$	157,199	$	32,936
Corporate bonds and other	33,775		226		4,862		138		38,637		364

MBS:
Residential	1,410,840		59,188		8,817		1,045		1,419,657		60,233

Total	$	1,488,542	$	60,644	$	126,951	$	32,889	$	1,615,493	$	93,533

HELD TO MATURITY
Investment securities:
State and political subdivisions	$	48,633	$	6,072	$	756,522	$	230,640	$	805,155	$	236,712
Corporate bonds and other	6,032		78		43,314		1,030		49,346		1,108
MBS:
Residential	235		1		62,405		8,012		62,640		8,013
Commercial	—		—		7,394		1,302		7,394		1,302
Total	$	54,900	$	6,151	$	869,635	$	240,984	$	924,535	$	247,135

	December 31, 2025
	Less Than 12 Months				More Than 12 Months				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
AVAILABLE FOR SALE
Investment securities:


State and political subdivisions	$	—	$	—	$	128,723	$	17,055	$	128,723	$	17,055
Corporate bonds and other	3,708		42		4,943		57		8,651		99

MBS:
Residential	52,056		32		10,320		676		62,376		708

Total	$	55,764	$	74	$	143,986	$	17,788	$	199,750	$	17,862

HELD TO MATURITY
Investment securities:
State and political subdivisions	$	20,224	$	3,128	$	770,244	$	136,591	$	790,468	$	139,719
Corporate bonds and other	—		—		64,009		1,487		64,009		1,487
MBS:
Residential	—		—		71,782		4,898		71,782		4,898
Commercial	—		—		27,739		1,088		27,739		1,088
Total	$	20,224	$	3,128	$	933,774	$	144,064	$	953,998	$	147,192

For those AFS debt securities in an unrealized loss position (i) where management has the intent to sell or (ii) where it will more-likely-than-not be required to sell the security before the recovery of its amortized cost basis, we recognize the loss in earnings. For those AFS debt securities in an unrealized loss position that do not meet either of these criteria, management assesses whether the decline in fair value has resulted from credit-related factors, using both qualitative and quantitative criteria. Determining the allowance under the credit loss method requires the use of a discounted cash flow method to assess the credit losses. Any credit-related impairment will be recognized in allowance for credit losses on the balance sheet with a corresponding adjustment to earnings. Noncredit-related temporary impairment, the portion of the impairment relating to factors other than credit (such as changes in market interest rates), is recognized in other comprehensive income, net of tax.

As of September 30, 2026 and December 31, 2025, we did not have an allowance for credit losses on our AFS securities, based on our consideration of the qualitative factors associated with each security type in our AFS portfolio. The unrealized losses on our investment and MBS are due to changes in interest rates and spreads and other market conditions. We had 353 and 161 AFS debt securities in an unrealized loss position at September 30, 2026 and December 31, 2025, respectively. Our state and political subdivisions are highly rated municipal securities with a long history of no credit losses. Our AFS MBS are highly rated securities, which are either explicitly or implicitly backed by the U.S. Government through its agencies and which are highly rated by major ratings agencies and also have a long history of no credit losses. Our corporate bonds and other investment securities consist of primarily investment grade bonds.

We assess the likelihood of default and the potential amount of default when assessing our HTM securities for credit losses. At September 30, 2026 and December 31, 2025, the allowance for credit losses on HTM securities was $24,000 and $25,000, respectively.

The accrued interest receivable on our debt securities (including the effect of interest rate swaps) is excluded from the credit loss estimate and is included in interest receivable on our consolidated balance sheets. As of September 30, 2026, accrued interest receivable on AFS and HTM debt securities totaled $8.8 million and $7.4 million, respectively. As of December 31, 2025, accrued interest receivable on AFS and HTM debt securities totaled $9.4 million and $12.7 million, respectively. No HTM debt securities were past-due or on nonaccrual status as of September 30, 2026 or December 31, 2025.

The following table reflects interest income recognized on securities for the periods presented (in thousands):



	Three Months Ended September 30,
	2026		2025
U.S. Treasury	$	—	$	734

State and political subdivisions	9,317		11,424

Corporate bonds and other	1,729		1,665
MBS	19,698		14,174
Total interest income on securities	$	30,744	$	27,997



	Nine Months Ended September 30,
	2026		2025
U.S. Treasury	$	—	$	3,737

State and political subdivisions	27,967		34,743
Corporate bonds and other	4,713		4,875
MBS	56,068		40,737
Total interest income on securities	$	88,748	$	84,092

There were no sales from the AFS securities portfolio during the nine months ended September 30, 2026. There was a $24.9 million net realized loss as a result of sales from the AFS securities portfolio for the nine months ended September 30, 2025, which consisted of $25.4 million in realized losses and $2.0 million in realized gains, as well as a net loss of $1.5 million on the unwind of fair value MBS and municipal securities hedges in the AFS securities portfolio. We calculate realized gains and losses on sales of securities under the specific identification method.

Expected maturities on our securities may differ from contractual maturities because issuers may have the right to call or prepay obligations. MBS are presented in total by category since MBS are typically issued with stated principal amounts and are backed by pools of mortgages that have loans with varying maturities. The characteristics of the underlying pool of mortgages, such as fixed-rate or adjustable-rate, as well as prepayment risk, are passed on to the security holder. The term of a mortgage-backed pass-through security thus approximates the term of the underlying mortgages and can vary significantly due to prepayments.

The amortized cost and estimated fair value of AFS and HTM securities at September 30, 2026, are presented below by contractual maturity (in thousands):


	September 30, 2026
	Amortized Cost		Fair Value
AVAILABLE FOR SALE
Investment securities:
Due in one year or less	$	260	$	260
Due after one year through five years	8,622		8,746
Due after five years through ten years	30,696		30,397
Due after ten years	194,660		161,778
	234,238		201,181
MBS:	1,482,525		1,422,318
Total	$	1,716,763	$	1,623,499


	September 30, 2026
	Amortized Cost		Fair Value
HELD TO MATURITY
Investment securities:
Due in one year or less	$	140	$	138
Due after one year through five years	55,440		54,619
Due after five years through ten years	82,692		78,580
Due after ten years	989,805		757,933
	1,128,077		891,270
MBS:	79,442		70,128
Total	$	1,207,519	$	961,398

Equity Investments

Equity investments on our consolidated balance sheets include Community Reinvestment Act funds with a readily determinable fair value as well as equity investments without readily determinable fair values. At September 30, 2026 and December 31, 2025, we had equity investments recorded in our consolidated balance sheets of $9.3 million and $9.6 million, respectively.

Any realized and unrealized gains and losses on equity investments are reported in income. Equity investments without readily determinable fair values are recorded at cost, less impairment, if any. For the three and nine months ended September 30, 2026, there was no gain or loss on the sale of equity securities.

The following is a summary of unrealized and realized gains and losses on equity investments recognized in other noninterest income in the consolidated statements of income during the periods presented (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Net gains (losses) recognized during the period on equity investments	$	(202)	$	51	$	(258)	$	146
Less: Net gains recognized during the period on equity investments sold during the period	—		—		—		—
Unrealized gains (losses) recognized during the reporting period on equity investments held at the reporting date	$	(202)	$	51	$	(258)	$	146

Equity investments are assessed quarterly for other-than-temporary impairment. Based upon that evaluation, management does not consider any of our equity investments to be other-than-temporarily impaired at September 30, 2026.

FHLB Stock

Our FHLB stock, which has limited marketability, is carried at cost, less impairment, if any. Based upon our quarterly evaluation by management at September 30, 2026, our FHLB stock was not impaired