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Securities
 9 Months Ended
Sep. 30, 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 September 30, 2023 and December 31, 2022:
September 30, 2023
($ in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
AFS debt securities:
U.S. Treasury securities$974,615 $48 $(70,562)$904,101 
U.S. government agency and U.S. government-sponsored enterprise debt securities512,712 — (65,248)447,464 
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities:
Commercial mortgage-backed securities545,086 — (82,754)462,332 
Residential mortgage-backed securities1,983,284 15 (288,957)1,694,342 
Municipal securities301,408 — (57,852)243,556 
Non-agency mortgage-backed securities:
Commercial mortgage-backed securities418,451 — (53,131)365,320 
Residential mortgage-backed securities687,674 — (116,887)570,787 
Corporate debt securities653,501 — (178,067)475,434 
Foreign government bonds237,531 75 (14,816)222,790 
Asset-backed securities44,819 — (1,062)43,757 
CLOs617,250 — (7,296)609,954 
Total AFS debt securities6,976,331 138 (936,632)6,039,837 
HTM debt securities:
U.S. Treasury securities528,169 — (57,551)470,618 
U.S. government agency and U.S. government-sponsored enterprise debt securities1,001,298 — (249,007)752,291 
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities:
Commercial mortgage-backed securities494,787 — (112,623)382,164 
Residential mortgage-backed securities750,888 — (183,488)567,400 
Municipal securities189,093 — (53,518)135,575 
Total HTM debt securities2,964,235 — (656,187)2,308,048 
Total debt securities$9,940,566 $138 $(1,592,819)$8,347,885 
December 31, 2022
($ 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 securities524,081 — (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 September 30, 2023 and December 31, 2022, the amortized cost of debt securities excluded accrued interest receivables of $42.6 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 September 30, 2023 and December 31, 2022.
September 30, 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$— $— $605,730 $(70,562)$605,730 $(70,562)
U.S. government agency and U.S. government sponsored enterprise debt securities199,139 (861)248,325 (64,387)447,464 (65,248)
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities:
Commercial mortgage-backed securities4,434 (96)457,898 (82,658)462,332 (82,754)
Residential mortgage-backed securities63,660 (517)1,627,451 (288,440)1,691,111 (288,957)
Municipal securities5,891 (288)237,665 (57,564)243,556 (57,852)
Non-agency mortgage-backed securities:
Commercial mortgage-backed securities— — 365,320 (53,131)365,320 (53,131)
Residential mortgage-backed securities— — 570,787 (116,887)570,787 (116,887)
Corporate debt securities— — 475,434 (178,067)475,434 (178,067)
Foreign government bonds109,413 (249)85,433 (14,567)194,846 (14,816)
Asset-backed securities— — 43,757 (1,062)43,757 (1,062)
CLOs— — 609,954 (7,296)609,954 (7,296)
Total AFS debt securities$382,537 $(2,011)$5,327,754 $(934,621)$5,710,291 $(936,632)
December 31, 2022
Less Than 12 Months12 Months or MoreTotal
($ 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 September 30, 2023, the Company had 567 AFS debt securities in a gross unrealized loss position with no credit impairment, primarily consisting of 269 U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities, 66 corporate debt securities, and 99 non-agency mortgage-backed 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, and 68 corporate debt 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 September 30, 2023 were mainly comprised of the following:

•Non-agency mortgage-backed securities — The market value decline as of September 30, 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 September 30, 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 in the first nine months 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 September 30, 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 September 30, 2023 and December 31, 2022. In addition, there was no provision for credit losses recognized for the three and nine months ended September 30, 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 September 30, 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 both September 30, 2023 and December 31, 2022. 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 from the sales and impairment write-off of AFS debt securities and the related tax expense (benefit) included in earnings for the three and nine months ended September 30, 2023 and 2022:
Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands)2023202220232022
Gross realized gains from sales$— $— $— $1,306 
Impairment write-off (1)
$— $— $10,000 $— 
Related tax expense (benefit) $— $— $(2,956)$386 
(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 and nine months ended September 30, 2023 and 2022:
Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands)2023202220232022
Taxable interest$63,877 $46,172 $189,065 $125,626 
Nontaxable interest5,901 4,920 15,614 14,309 
Total interest income on debt securities$69,778 $51,092 $204,679 $139,935 
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 September 30, 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$298,323 $676,292 $— $— $974,615 
Fair value298,371 605,730 — — 904,101 
Weighted-average yield (1)
5.44 %1.20 %— %— %2.50 %
U.S. government agency and U.S. government-sponsored enterprise debt securities
Amortized cost150,000 96,472 103,171 163,069 512,712 
Fair value149,616 91,343 82,252 124,253 447,464 
Weighted-average yield (1)
4.98 %3.08 %1.39 %2.18 %3.01 %
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities
Amortized cost— 42,260 144,846 2,341,264 2,528,370 
Fair value— 39,718 128,933 1,988,023 2,156,674 
Weighted-average yield (1) (2)
— %3.16 %2.73 %3.68 %3.62 %
Municipal securities
Amortized cost2,400 36,850 9,007 253,151 301,408 
Fair value2,383 33,794 7,596 199,783 243,556 
Weighted-average yield (1) (2)
3.13 %2.34 %2.87 %2.24 %2.28 %
Non-agency mortgage-backed securities
Amortized cost99,830 92,328 11,056 902,911 1,106,125 
Fair value98,420 89,370 10,793 737,524 936,107 
Weighted-average yield (1)
6.27 %4.16 %0.80 %2.58 %3.02 %
Corporate debt securities
Amortized cost— — 349,501 304,000 653,501 
Fair value— — 280,812 194,622 475,434 
Weighted-average yield (1)
— %— %3.48 %1.97 %2.78 %
Foreign government bonds
Amortized cost32,875 104,656 50,000 50,000 237,531 
Fair value32,810 104,546 49,609 35,825 222,790 
Weighted-average yield (1)
3.02 %2.28 %5.71 %1.50 %2.94 %
Asset-backed securities
Amortized cost— — — 44,819 44,819 
Fair value— — — 43,757 43,757 
Weighted-average yield (1)
— %— %— %6.01 %6.01 %
CLOs
Amortized cost— — 319,000 298,250 617,250 
Fair value— — 314,219 295,735 609,954 
Weighted-average yield (1)
— %— %6.71 %6.76 %6.73 %
Total AFS debt securities
Amortized cost$583,428 $1,048,858 $986,581 $4,357,464 $6,976,331 
Fair value$581,600 $964,501 $874,214 $3,619,522 $6,039,837 
Weighted-average yield (1)
5.32 %1.86 %4.27 %3.40 %3.45 %
($ 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$—$528,169$—$—$528,169
Fair value—470,618——470,618
Weighted-average yield (1)
— %1.05 %— %— %1.05 %
U.S. government agency and U.S. government-sponsored enterprise debt securities
Amortized cost——328,870672,4281,001,298
Fair value——265,107487,184752,291
Weighted-average yield (1)
— %— %1.92 %1.89 %1.90 %
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities
Amortized cost——94,9921,150,6831,245,675
Fair value——76,426873,138949,564
Weighted-average yield (1) (2)
— %— %1.56 %1.68 %1.67 %
Municipal securities
Amortized cost———189,093189,093
Fair value———135,575135,575
Weighted-average yield (1) (2)
— %— %— %1.99 %1.99 %
Total HTM debt securities
Amortized cost$—$528,169$423,862$2,012,204$2,964,235
Fair value$—$470,618$341,533$1,495,897$2,308,048
Weighted-average yield (1)
— %1.05 %1.84 %1.78 %1.66 %
(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 September 30, 2023 and December 31, 2022, AFS and HTM debt securities with carrying values of $7.04 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 September 30, 2023 and December 31, 2022:
($ in thousands)September 30, 2023December 31, 2022
Federal Reserve Bank of San Francisco (“FRBSF”) stock$62,272 $61,374 
FHLB stock17,250 17,250 
Total restricted equity securities$79,522 $78,624