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Securities
 3 Months Ended
Mar. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Securities Securities
The following tables present the amortized cost, gross unrealized gains and losses and fair value by major categories of AFS and HTM debt securities as of March 31, 2023 and December 31, 2022:
March 31, 2023
($ in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
AFS debt securities:
U.S. Treasury securities$976,615 $37 $(59,670)$916,982 
U.S. government agency and U.S. government-sponsored enterprise debt securities515,639 — (51,779)463,860 
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities:
Commercial mortgage-backed securities564,145 — (67,030)497,115 
Residential mortgage-backed securities1,997,737 46 (225,701)1,772,082 
Municipal securities305,125 47 (39,157)266,015 
Non-agency mortgage-backed securities:
Commercial mortgage-backed securities441,795 157 (45,229)396,723 
Residential mortgage-backed securities743,977 — (105,568)638,409 
Corporate debt securities663,502 — (147,249)516,253 
Foreign government bonds198,517 195 (12,829)185,883 
Asset-backed securities47,938 — (1,631)46,307 
CLOs617,250 — (16,011)601,239 
Total AFS debt securities7,072,240 482 (771,854)6,300,868 
HTM debt securities:
U.S. Treasury securities525,432 — (43,821)481,611 
U.S. government agency and U.S. government-sponsored enterprise debt securities999,855 — (193,514)806,341 
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities:
Commercial mortgage-backed securities505,492 — (83,532)421,960 
Residential mortgage-backed securities773,135 — (134,969)638,166 
Municipal securities189,507 — (34,911)154,596 
Total HTM debt securities2,993,421 — (490,747)2,502,674 
Total debt securities$10,065,661 $482 $(1,262,601)$8,803,542 
December 31, 2022
($ in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
AFS debt securities:
U.S. Treasury securities$676,306 $— $(70,103)$606,203 
U.S. government agency and U.S. government-sponsored enterprise debt securities517,806 67 (56,266)461,607 
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities:
Commercial mortgage-backed securities577,392 — (77,123)500,269 
Residential mortgage-backed securities2,011,054 41 (248,900)1,762,195 
Municipal securities303,884 3 (46,788)257,099 
Non-agency mortgage-backed securities:
Commercial mortgage-backed securities447,512 213 (49,396)398,329 
Residential mortgage-backed securities762,202 — (112,978)649,224 
Corporate debt securities673,502 — (147,228)526,274 
Foreign government bonds241,165 174 (14,286)227,053 
Asset-backed securities51,152 — (2,076)49,076 
CLOs617,250 — (19,586)597,664 
Total AFS debt securities 6,879,225 498 (844,730)6,034,993 
HTM debt securities:
U.S. Treasury securities$524,081 $— $(52,612)471,469 
U.S. government agency and U.S. government-sponsored enterprise debt securities998,972 — (209,560)789,412 
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities:
Commercial mortgage-backed securities506,965 — (98,566)408,399 
Residential mortgage-backed securities782,141 — (148,230)633,911 
Municipal securities189,709 — (37,729)151,980 
Total HTM debt securities3,001,868 — (546,697)2,455,171 
Total debt securities$9,881,093 $498 $(1,391,427)$8,490,164 

As of March 31, 2023 and December 31, 2022, the amortized cost of debt securities excluded accrued interest receivables of $39.1 million and $41.8 million, respectively, which are included in Other assets on the Consolidated Balance Sheet. For the Company’s accounting policy related to debt securities’ accrued interest receivable, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Allowance for Credit Losses on Available-for-Sale Debt Securities and Allowance for Credit Losses on Held-to-Maturity Debt Securities to the Consolidated Financial Statements in the Company’s 2022 Form 10-K.
Unrealized Losses of Available-for-Sale Debt Securities

The following tables present the fair value and the associated gross unrealized losses of the Company’s AFS debt securities, aggregated by investment category and the length of time that the securities have been in a continuous unrealized loss position as of March 31, 2023 and December 31, 2022.
March 31, 2023
Less Than 12 Months12 Months or MoreTotal
($ in thousands)Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
AFS debt securities:
U.S. Treasury securities$201,775 $(52)$616,680 $(59,618)$818,455 $(59,670)
U.S. government agency and U.S. government sponsored enterprise debt securities207,936 (1,021)255,924 (50,758)463,860 (51,779)
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities:
Commercial mortgage-backed securities37,222 (1,722)459,893 (65,308)497,115 (67,030)
Residential mortgage-backed securities23,200 (721)1,741,855 (224,980)1,765,055 (225,701)
Municipal securities2,053 (24)256,240 (39,133)258,293 (39,157)
Non-agency mortgage-backed securities:
Commercial mortgage-backed securities6,833 (151)380,497 (45,078)387,330 (45,229)
Residential mortgage-backed securities332 (15)638,077 (105,553)638,409 (105,568)
Corporate debt securities48,026 (3,976)468,227 (143,273)516,253 (147,249)
Foreign government bonds71,392 (512)37,683 (12,317)109,075 (12,829)
Asset-backed securities— — 46,307 (1,631)46,307 (1,631)
CLOs— — 601,239 (16,011)601,239 (16,011)
Total AFS debt securities$598,769 $(8,194)$5,502,622 $(763,660)$6,101,391 $(771,854)
December 31, 2022
Less Than 12 Months12 Months or MoreTotal
($ in thousands)Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
AFS debt securities:
U.S. Treasury securities$131,843 $(8,761)$474,360 $(61,342)$606,203 $(70,103)
U.S. government agency and U.S. government-sponsored enterprise debt securities97,403 (6,902)214,136 (49,364)311,539 (56,266)
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities:
Commercial mortgage-backed securities252,144 (30,029)248,125 (47,094)500,269 (77,123)
Residential mortgage-backed securities307,536 (20,346)1,448,658 (228,554)1,756,194 (248,900)
Municipal securities95,655 (10,194)159,439 (36,594)255,094 (46,788)
Non-agency mortgage-backed securities:
Commercial mortgage-backed securities106,184 (3,309)282,301 (46,087)388,485 (49,396)
Residential mortgage-backed securities22,715 (1,546)626,509 (111,432)649,224 (112,978)
Corporate debt securities173,595 (17,907)352,679 (129,321)526,274 (147,228)
Foreign government bonds107,576 (429)36,143 (13,857)143,719 (14,286)
Asset-backed securities12,450 (524)36,626 (1,552)49,076 (2,076)
CLOs144,365 (4,735)453,299 (14,851)597,664 (19,586)
Total AFS debt securities$1,451,466 $(104,682)$4,332,275 $(740,048)$5,783,741 $(844,730)
As of March 31, 2023, the Company had 555 AFS debt securities in a gross unrealized loss position with no credit impairment, primarily consisting of 259 U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities, 100 non-agency mortgage-backed securities, 67 corporate debt securities, and 17 U.S. Treasury securities. In comparison, as of December 31, 2022, the Company had 559 AFS debt securities in a gross unrealized loss position with no credit impairment, primarily consisting of 263 U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities, 100 non-agency mortgage-backed securities, 68 corporate debt securities, and 15 U.S. Treasury securities.

Allowance for Credit Losses on Available-for-Sale Debt Securities

The Company evaluates each AFS debt security where the fair value declines below amortized cost. For a discussion of the factors and criteria the Company uses in analyzing securities for impairment related to credit losses, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Allowance for Credit Losses on Available-for-Sale Debt Securities to the Consolidated Financial Statements in the Company’s 2022 Form 10-K.

The gross unrealized losses presented in the preceding tables were primarily attributable to interest rate movement and the widening of liquidity and/or credit spreads. U.S. Treasury, U.S. government agency, U.S. government-sponsored agency, and U.S. government-sponsored enterprise debt and mortgage-backed securities are issued, guaranteed, or otherwise supported by the U.S. government and have a zero credit loss assumption. The remaining securities that were in an unrealized loss position as of March 31, 2023 were mainly comprised of the following:

•Non-agency mortgage-backed securities — The market value decline as of March 31, 2023, was primarily due to interest rate movement and spread widening. Since these securities are rated investment grade by nationally recognized statistical rating organizations (“NRSROs”), or have high priority in the cash flow waterfall within the securitization structure, and the contractual payments have historically been on time, the Company believes the risk of credit losses on these securities is low.
•Corporate debt securities — The market value decline as of March 31, 2023 was primarily due to interest rate movement and spread widening. A portion of the corporate debt securities is comprised of subordinated debt securities issued by U.S. banks. Despite the reduction of the market value of these securities after the banking sector disruption during the first quarter of 2023, these securities are nearly all rated investment grade by NRSROs or issued by well-capitalized financial institutions with strong profitability. The contractual payments from these corporate debt securities have been and are expected to be received on time. The Company will continue to monitor the market developments in the banking sector and the credit performance of these securities.

As of both March 31, 2023 and December 31, 2022, the Company intended to hold the AFS debt securities with unrealized losses through the anticipated recovery period and it was more-likely-than-not that the Company would not have to sell these securities before the recovery of their amortized cost. The issuers of these securities have not, to the Company’s knowledge, established any cause for default on these securities. As a result, the Company expects to recover the entire amortized cost basis of these securities. Accordingly, there was no allowance for credit losses provided against these securities as of both March 31, 2023 and December 31, 2022. In addition, there was no provision for credit losses recognized for the three months ended March 31, 2023 and 2022.

Allowance for Credit Losses on Held-to-Maturity Debt Securities

The Company separately evaluates its HTM debt securities for any credit losses using an expected loss model, similar to the methodology used for loans. For additional information on the Company’s credit loss methodology, refer to Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Allowance for Credit Losses on Held-to-Maturity Debt Securities to the Consolidated Financial Statements in the Company’s 2022 Form 10-K.

The Company monitors the credit quality of the HTM debt securities using external credit ratings. As of March 31, 2023, all HTM securities were rated investment grade by NRSROs and issued, guaranteed, or supported by U.S. government entities and agencies. Accordingly, the Company applied a zero credit loss assumption and no allowance for credit losses was recorded as of March 31, 2023. Overall, the Company believes that the credit support levels of the debt securities are strong and, based on current assessments and macroeconomic forecasts, expects that full contractual cash flows will be received.
Realized Gains and Losses

The following table presents the gross realized gains and tax expense related to the sales and impairment write-off of AFS debt securities included in earnings for the three months ended March 31, 2023 and 2022:
Three Months Ended March 31,
($ in thousands)20232022
Gross realized gains from sales$— $1,278 
Impairment write-off (1)
$10,000 $— 
Related tax (benefit) expense $(2,956)$378 
(1)During the first quarter of 2023, the Company fully wrote down a subordinated debt security and recorded the impairment loss as a component of noninterest income in the Company’s Consolidated Statement of Income.

Interest Income

The following table presents the composition of interest income on debt securities for the three months ended March 31, 2023 and 2022:
Three Months Ended March 31,
($ in thousands)20232022
Taxable interest$61,049 $38,204 
Nontaxable interest4,882 4,463 
Total interest income on debt securities$65,931 $42,667 
Contractual Maturities of Available-for-Sale and Held-to-Maturity Debt Securities

The following tables present the contractual maturities, amortized cost, fair value and weighted average yields of AFS and HTM debt securities as of March 31, 2023. Expected maturities will differ from contractual maturities on certain securities as the issuers and borrowers of the underlying collateral may have the right to call or prepay obligations with or without prepayment penalties.
($ in thousands)Within One Year
After One Year through Five Years
After Five Years through Ten Years After Ten Years Total
AFS debt securities:
U.S. Treasury securities
Amortized cost$300,316 $676,299 $— $— $976,615 
Fair value300,302 616,680 — — 916,982 
Weighted-average yield (1)
4.57 %1.20 %— %— %2.24 %
U.S. government agency and U.S. government-sponsored enterprise debt securities
Amortized cost100,000 148,135 100,000 167,504 515,639 
Fair value99,798 143,681 83,478 136,903 463,860 
Weighted-average yield (1)
4.97 %3.72 %1.26 %2.10 %2.96 %
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities
Amortized cost— 31,502 154,131 2,376,249 2,561,882 
Fair value— 30,182 141,815 2,097,200 2,269,197 
Weighted-average yield (1) (2)
— %3.22 %2.67 %3.39 %3.34 %
Municipal securities
Amortized cost2,304 37,282 10,778 254,761 305,125 
Fair value2,287 34,889 9,610 219,229 266,015 
Weighted-average yield (1) (2)
2.21 %2.46 %2.73 %2.24 %2.28 %
Non-agency mortgage-backed securities
Amortized cost71,090 139,963 19,881 954,838 1,185,772 
Fair value70,089 134,268 19,290 811,485 1,035,132 
Weighted-average yield (1)
7.23 %4.42 %0.84 %2.61 %3.07 %
Corporate debt securities
Amortized cost10,000 — 349,502 304,000 663,502 
Fair value9,817 — 294,170 212,266 516,253 
Weighted average yield (1)
3.49 %— %3.48 %1.97 %2.79 %
Foreign government bonds
Amortized cost62,096 36,421 50,000 50,000 198,517 
Fair value62,280 36,390 49,530 37,683 185,883 
Weighted-average yield (1)
3.19 %2.35 %4.94 %1.50 %3.05 %
Asset-backed securities
Amortized cost— — — 47,938 47,938 
Fair value— — — 46,307 46,307 
Weighted-average yield (1)
— %— %— %5.59 %5.59 %
CLOs
Amortized cost— — 319,000 298,250 617,250 
Fair value— — 310,154 291,085 601,239 
Weighted average yield (1)
— %— %5.93 %5.99 %5.96 %
Total AFS debt securities
Amortized cost$545,806 $1,069,602 $1,003,292 $4,453,540 $7,072,240 
Fair value$544,573 $996,090 $908,047 $3,852,158 $6,300,868 
Weighted-average yield (1)
4.80 %2.11 %3.93 %3.19 %3.25 %
($ in thousands)Within One Year
After One Year through Five Years
After Five Years through Ten YearsAfter Ten YearsTotal
HTM debt securities:
U.S. Treasury securities
Amortized cost$—$525,432$—$—$525,432
Fair value—481,611——481,611
Weighted-average yield (1)
— %1.05 %— %— %1.05 %
U.S. government agency and U.S. government-sponsored enterprise debt securities
Amortized cost——280,289719,566999,855
Fair value——240,780565,561806,341
Weighted-average yield (1)
— %— %1.92 %1.89 %1.90 %
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities
Amortized cost——95,6931,182,9341,278,627
Fair value——81,608978,5181,060,126
Weighted-average yield (1) (2)
— %— %1.56 %1.67 %1.66 %
Municipal securities
Amortized cost———189,507189,507
Fair value———154,596154,596
Weighted-average yield (1) (2)
— %— %— %1.98 %1.98 %
Total HTM debt securities
Amortized cost$—$525,432$375,982$2,092,007$2,993,421
Fair value$—$481,611$322,388$1,698,675$2,502,674
Weighted-average yield (1)
— %1.05 %1.83 %1.77 %1.65 %
(1)Weighted-average yields are computed based on amortized cost balances.
(2)Yields on tax-exempt securities are not presented on a tax-equivalent basis.

As of March 31, 2023 and December 31, 2022, AFS and HTM debt securities with carrying values of $7.34 billion and $794.2 million, respectively, were pledged to secure borrowings, public deposits, repurchase agreements and for other purposes required or permitted by law.

Restricted Equity Securities

The following table presents the restricted equity securities included in Other assets on the Consolidated Balance Sheet as of March 31, 2023 and December 31, 2022:
($ in thousands)March 31, 2023December 31, 2022
Federal Reserve Bank of San Francisco (“FRBSF”) stock$61,622 $61,374 
FHLB stock17,250 17,250 
Total restricted equity securities$78,872 $78,624