
(In thousands)	September 30, 2024		December 31, 2023
Available for sale debt securities	$	9,167,681	$	9,684,760
Trading debt securities	42,645		28,830
Equity securities:
Readily determinable fair value	48,262		5,723
No readily determinable fair value	8,853		6,978
Other:
Federal Reserve Bank stock	35,451		35,166
Federal Home Loan Bank stock	10,119		10,640

Private equity investments	170,973		176,667
Total investment securities (1)	$	9,483,984	$	9,948,764

Most of the Company’s investment securities are classified as available for sale debt securities, and this portfolio is discussed in more detail below. The Company’s equity securities are also discussed below. Other investment securities include Federal Reserve Bank (FRB) stock, Federal Home Loan Bank (FHLB) stock, and investments in portfolio concerns held by the Company’s private equity subsidiary. FRB stock and FHLB stock are held for debt and regulatory purposes. Investment in FRB stock is based on the capital structure of the investing bank, and investment in FHLB stock is tied to the asset size of the borrowing bank and the level of borrowings from the FHLB. These holdings are carried at cost. The Company’s private equity investments are carried at estimated fair value.

The Company’s equity securities portfolio includes mutual funds, common stock, and preferred stock with readily determinable fair values as well as equity securities with no readily determinable fair value. The Company has elected to measure equity securities with no readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes for the identical or similar investment of the same issuer. At March 31, 2024, this portfolio included the Company’s 823,447 shares of Visa Inc. (“Visa”) Class B-1 common stock (formerly Class B common stock), which were held by Commerce Bancshares, Inc. The Company’s Visa Class B-1 shares had a carrying value of zero at March 31, 2024, as there had not been observable price changes in orderly transactions for identical or similar investments of the same issuer.

On April 8, 2024, Visa announced the commencement of a public offering to permit the exchange of its Class B-1 common stock for a combination of shares of its Class B-2 common stock and its Class C common stock (“Exchange Offer”). The Company tendered all of its Visa Class B-1 shares pursuant to the Exchange Offer. On May 3, 2024, the Exchange Offer closed, and in exchange for its 823,447 shares of Visa Class B-1 common stock, the Company received 411,723 shares of Visa Class B-2 common stock (which will be convertible under certain circumstances, as further described below, into Visa’s publicly traded Class A common stock at an initial rate of 1.5875 shares of Class A common for each share of Class B-2 common stock, subject to adjustment) and 163,404 shares of Visa Class C common stock which will automatically convert into four shares of Visa's Class A common stock (subject to future adjustments for any stock splits, recapitalizations or similar transactions) upon any transfer to a person other than a Visa member or an affiliate of a Visa member.

As a condition of participating in the exchange, the Company entered into a Makewhole Agreement with Visa that provides for cash payments to Visa to the extent (if any) that future adjustments to the conversion ratio for the Visa Class B-2 common stock to Class A common stock cause such ratio to fall below zero. Changes to the conversion ratio occur when Visa deposits funds to a litigation escrow established by Visa to pay settlements for certain covered litigation that pre-dated Visa’s initial public offering, for which Visa has been effectively indemnified by Visa USA members through reductions to the conversion ratio for its Class B-1 common stock. The purpose of the Makewhole Agreement is to preserve the economic benefit of these adjustments to the Class B-1 conversion ratio for the benefit of Visa’s Class A and Class C common stockholders following the exchange. As further described in Visa’s related Issuer Tender Offer Statement on Schedule TO and Prospectus, each dated April 8, 2024, publicly filed with the U. S. Securities and Exchange Commission, both the Makewhole Agreement and the related escrow fund and transfer restrictions on Visa’s Class B-1 common stock and the new Class B-2 common stock will terminate whenever the covered litigation is ultimately resolved, at which future date outstanding shares of Visa Class B-2 common stock will be convertible into shares of its Class A common stock at the then-applicable conversion ratio.

As a result of the exchange, the Company elected the measurement alternative approach for its Visa Class C common stock and marked the stock to fair value, recording a gain based on the conversion privilege of the Visa Class C common stock and the closing price of Visa Class A common stock. During the second quarter of 2024, the Company sold 436 thousand shares of Visa Class A common stock at an average price of $274.91, resulting in proceeds of $119.8 million. During the third quarter of 2024, the Company sold 218 thousand Visa Class A shares at an average price of $260.56, resulting of proceeds of $56.8 million. As of September 30, 2024, the Company has sold all of the Visa Class C shares it received from the Visa Exchange Offer. The Company’s Visa Class B-2 common stock will continue to be carried at cost of $0 as the Company elected the measurement alternative approach for these shares as well, and there are not observable price changes in orderly transactions for identical or similar investments of the same issuer for the Visa Class B-2 shares held by the Company.


	Three Months Ended September 30		Nine Months Ended September 30
(In thousands)	2024			2024
Balance at beginning of period	$	65,780		$	6,978
Observable upward price adjustments	—			178,227
Observable downward price adjustments	(416)			(416)
Impairment charges	—			—
Sales of securities and other activity	(56,511)			(175,936)
Balance at end of period	$	8,853		$	8,853


	Nine Months Ended September 30
(In thousands)		2024
Net gains (losses) recognized during the period on equity securities		$	178,098
Less: Net gains (losses) recognized during the period on equity securities sold during the period		(176,755)
Net unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date		$	1,343

The majority of the Company’s investment portfolio is comprised of available for sale debt securities, which are carried at fair value with changes in fair value reported in accumulated other comprehensive income (AOCI). A summary of the available for sale debt securities by maturity groupings as of September 30, 2024 is shown below. The investment portfolio includes agency mortgage-backed securities, which are guaranteed by agencies such as FHLMC, FNMA, and Government National Mortgage Association (GNMA), in addition to non-agency mortgage-backed securities, which have no guarantee but are collateralized by commercial and residential mortgages. Also included are certain other asset-backed securities, which are primarily collateralized by credit cards, automobiles, student loans, and commercial loans. These securities differ from traditional debt securities primarily in that they may have uncertain maturity dates and are priced based on estimated prepayment rates on the underlying collateral.


(In thousands)	Amortized Cost		Fair Value
U.S. government and federal agency obligations:
Within 1 year	$	351,471	$	351,904
After 1 but within 5 years	1,409,595		1,421,048
After 5 but within 10 years	627,728		633,888

Total U.S. government and federal agency obligations	2,388,794		2,406,840
Government-sponsored enterprise obligations:


After 5 but within 10 years	4,747		4,493
After 10 years	50,686		41,006
Total government-sponsored enterprise obligations	55,433		45,499
State and municipal obligations:
Within 1 year	79,170		78,140
After 1 but within 5 years	362,816		344,045
After 5 but within 10 years	287,859		258,797
After 10 years	119,682		101,400
Total state and municipal obligations	849,527		782,382
Mortgage and asset-backed securities:
Agency mortgage-backed securities	4,295,653		3,673,971
Non-agency mortgage-backed securities	663,426		609,344
Asset-backed securities	1,484,628		1,444,597
Total mortgage and asset-backed securities	6,443,707		5,727,912
Other debt securities:
Within 1 year	74,972		74,027
After 1 but within 5 years	81,414		76,980
After 5 but within 10 years	49,207		43,786
After 10 years	11,000		10,255
Total other debt securities	216,593		205,048
Total available for sale debt securities	$	9,954,054	$	9,167,681

Investments in U.S. government and federal agency obligations include U.S. Treasury inflation-protected securities, which totaled $411.0 million, at fair value, at September 30, 2024. Interest earned on these securities increases with inflation and decreases with deflation, as measured by the non-seasonally adjusted Consumer Price Index (CPI-U). At maturity, the principal paid is the greater of an inflation-adjusted principal or the original principal.

Securities for which fair value is less than amortized cost are reviewed for impairment. Special emphasis is placed on securities whose credit rating has fallen below Baa3 (Moody's) or BBB- (Standard & Poor's), whose fair values have fallen more than 20% below purchase price, or those which have been identified based on management’s judgment. These securities are placed on a watch list and cash flow analyses are prepared on an individual security basis. Certain securities are analyzed using a projected cash flow model, discounted to present value, and compared to the current amortized cost bases of the securities. The model uses input factors such as cash flow projections, contractual payments required, expected delinquency rates, credit support from other tranches, prepayment speeds, collateral loss severity rates (including loan to values), and various other information related to the underlying collateral. Securities not analyzed using the cash flow model are analyzed by reviewing credit ratings, credit support agreements, and industry knowledge to project future cash flows and any possible credit impairment.

At September 30, 2024, the fair value of securities on this watch list was $814.5 million compared to $1.2 billion at December 31, 2023. Almost all of the securities included on the Company's watch list in the current quarter were experiencing unrealized loss positions due to the significant increase in interest rates and were analyzed outside of the cash flow model. At September 30, 2024, the securities on the Company's watch list that were not deemed to be solely related to increasing interest rates were securities backed by government-guaranteed student loans and are expected to perform as contractually required. As of September 30, 2024, the Company did not identify any securities for which a credit loss exists, and for the nine months ended September 30, 2024 and 2023, the Company did not recognize a credit loss expense on any available for sale debt securities.

The table below summarizes debt securities available for sale in an unrealized loss position, aggregated by length of loss period, for which an allowance for credit losses has not been recorded at September 30, 2024 and December 31, 2023. Unrealized losses on these available for sale securities have not been recognized into income because after review, the securities were deemed not to be impaired. The unrealized losses on these securities are primarily attributable to changes in interest rates and current market conditions. At September 30, 2024, the Company does not intend to sell the securities, nor is it anticipated that it would be required to sell any of these securities at a loss.


	Less than 12 months				12 months or longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
September 30, 2024
U.S. government and federal agency obligations	$	359,913	$	851	$	357,083	$	12,528	$	716,996	$	13,379
Government-sponsored enterprise obligations	—		—		45,499		9,934		45,499		9,934
State and municipal obligations	7,676		476		756,489		66,715		764,165		67,191
Mortgage and asset-backed securities:
Agency mortgage-backed securities	314		1		3,636,235		622,281		3,636,549		622,282
Non-agency mortgage-backed securities	27		—		604,980		54,228		605,007		54,228
Asset-backed securities	28,052		1,078		1,273,016		39,177		1,301,068		40,255
Total mortgage and asset-backed securities	28,393		1,079		5,514,231		715,686		5,542,624		716,765
Other debt securities	—		—		205,048		11,545		205,048		11,545
Total	$	395,982	$	2,406	$	6,878,350	$	816,408	$	7,274,332	$	818,814
December 31, 2023
U.S. government and federal agency obligations	$	51,585	$	809	$	714,400	$	24,025	$	765,985	$	24,834
Government-sponsored enterprise obligations	—		—		43,962		11,696		43,962		11,696
State and municipal obligations	24,022		760		1,167,607		148,478		1,191,629		149,238
Mortgage and asset-backed securities:
Agency mortgage-backed securities	4,382		59		3,875,432		720,649		3,879,814		720,708
Non-agency mortgage-backed securities	—		—		1,152,045		173,526		1,152,045		173,526
Asset-backed securities	19,086		156		2,081,293		93,076		2,100,379		93,232
Total mortgage and asset-backed securities	23,468		215		7,108,770		987,251		7,132,238		987,466
Other debt securities	—		—		460,136		47,250		460,136		47,250
Total	$	99,075	$	1,784	$	9,494,875	$	1,218,700	$	9,593,950	$	1,220,484

The entire available for sale debt portfolio included $7.3 billion of securities that were in a loss position at September 30, 2024, compared to $9.6 billion at December 31, 2023. The total amount of unrealized loss on these securities was $818.8 million at September 30, 2024, a decrease of $401.7 million compared to the unrealized loss at December 31, 2023. Securities with significant unrealized losses are discussed in the "Allowance for credit losses on available for sale debt securities" section above.


(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
September 30, 2024
U.S. government and federal agency obligations	$	2,388,794	$	31,425	$	(13,379)	$	—	$	2,406,840
Government-sponsored enterprise obligations	55,433		—		(9,934)		—		45,499
State and municipal obligations	849,527		46		(67,191)		—		782,382
Mortgage and asset-backed securities:
Agency mortgage-backed securities	4,295,653		600		(622,282)		—		3,673,971
Non-agency mortgage-backed securities	663,426		146		(54,228)		—		609,344
Asset-backed securities	1,484,628		224		(40,255)		—		1,444,597
Total mortgage and asset-backed securities	6,443,707		970		(716,765)		—		5,727,912
Other debt securities	216,593		—		(11,545)		—		205,048
Total	$	9,954,054	$	32,441	$	(818,814)	$	—	$	9,167,681
December 31, 2023
U.S. government and federal agency obligations	$	841,267	$	81	$	(24,834)	$	—	$	816,514
Government-sponsored enterprise obligations	55,658		—		(11,696)		—		43,962
State and municipal obligations	1,346,633		24		(149,238)		—		1,197,419
Mortgage and asset-backed securities:
Agency mortgage-backed securities	4,621,821		233		(720,708)		—		3,901,346
Non-agency mortgage-backed securities	1,331,288		136		(173,526)		—		1,157,898
Asset-backed securities	2,200,712		5		(93,232)		—		2,107,485
Total mortgage and asset-backed securities	8,153,821		374		(987,466)		—		7,166,729
Other debt securities	507,386		—		(47,250)		—		460,136
Total	$	10,904,765	$	479	$	(1,220,484)	$	—	$	9,684,760


	For the Nine Months Ended September 30
(In thousands)	2024		2023
Proceeds from sales of securities:
Available for sale debt securities	$	1,057,589	$	1,101,782
Equity securities	176,780		—
Other investments	38,558		40,167
Total proceeds	$	1,272,927	$	1,141,949

Investment securities gains (losses), net:
Available for sale debt securities:

Gains realized on sales	$	—	$	143
Losses realized on sales	(192,938)		(8,587)

Equity securities:




Gains (losses) on equity securities, net	178,098		(757)
Other:
Gains realized on sales	3,082		884
Losses realized on sales	(1,601)		(1,245)
Fair value adjustments, net	20,205		16,946
Total investment securities gains (losses), net	$	6,846	$	7,384

Net gains on investment securities for the nine months ended September 30, 2024 were mainly comprised of net gains of $178.1 million on equity investments and net gains in fair value of $20.2 million recorded on private equity investments. These gains were largely offset by net losses of $192.9 million on sales of available for sale securities.

Subsequent to the successful close of the Exchange Offer in early May 2024, the Company approved and executed a plan to reposition a portion of its available for sale debt securities portfolio during the second quarter of 2024 through the sale of securities with an amortized cost of $1.2 billion. The securities that the Company sold had a yield of approximately 2.1%, which resulted in a loss of $179.1 million, and the Company reinvested $928.8 million of the proceeds into U.S. Treasury securities yielding approximately 4.6%.

At September 30, 2024, securities totaling $6.2 billion in fair value were pledged to secure public fund deposits, securities sold under agreements to repurchase, trust funds, and borrowings at the FRB and FHLB, compared to $7.5 billion at December 31, 2023. Except for obligations of various government-sponsored enterprises such as FNMA, FHLB and FHLMC, no investment in a single issuer exceeded 10% of stockholders’ equity.