Securities

3 Months Ended

Mar. 31, 2022

Cash and Cash Equivalents [Abstract]

Note 2 - Securities

Debt securities have been classified in the consolidated balance sheets according to management’s intent. The amortized cost, related gross unrealized gains and losses, allowance for credit losses and the fair value of available-for-sale securities are as follows (dollars in thousands):


	March 31, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
	Cost Basis		Holding Gains		Holding Losses			Fair Value
Securities available-for-sale:
U.S. Treasury securities	$	311,860	$	—	$	(10,516	)	$	301,344
Obligations of states and political subdivisions		2,590,308		26,628		(87,455	)		2,529,481
Residential mortgage-backed securities		3,450,006		2,139		(186,954	)		3,265,191
Commercial mortgage-backed securities		341,506		924		(4,752	)		337,678
Corporate bonds and other		74,287		—		(5,486	)		68,801
Total securities available-for-sale	$	6,767,967	$	29,691	$	(295,163	)	$	6,502,495


	March 31, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
	Cost Basis		Holding Gains		Holding Losses			Fair Value
Securities available-for-sale:
Obligations of states and political subdivisions	$	2,418,227	$	106,988	$	(8,198	)	$	2,517,017
Residential mortgage-backed securities		2,073,647		43,575		(8,628	)		2,108,594
Commercial mortgage-backed securities		431,137		15,916		—			447,053
Corporate bonds and other		38,427		79		(1,539	)		36,967
Total securities available-for-sale	$	4,961,438	$	166,558	$	(18,365	)	$	5,109,631


	December 31, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
	Cost Basis		Holding Gains		Holding Losses			Fair Value
Securities available-for-sale:
U.S. Treasury securities	$	126,716	$	125	$	—		$	126,841
Obligations of states and political subdivisions		2,638,369		116,319		(1,217	)		2,753,471
Residential mortgage-backed securities		3,256,746		23,990		(21,287	)		3,259,449
Commercial mortgage-backed securities		356,207		8,914		(1	)		365,120
Corporate bonds and other		69,472		32		(1,206	)		68,298
Total securities available-for-sale	$	6,447,510	$	149,380	$	(23,711	)	$	6,573,179

The Company did not hold any securities classified as held-to-maturity at March 31, 2022, March 31, 2021, or December 31, 2021.

The Company invests in mortgage-backed securities that have expected maturities that differ from their contractual maturities. These differences arise because borrowers may have the right to call or prepay obligations with or without a prepayment penalty. These securities include collateralized mortgage obligations (CMOs) and other asset backed securities. The expected maturities of these securities at March 31, 2022 and 2021, and December 31, 2021, were computed by using scheduled amortization of balances and historical prepayment rates.

The amortized cost and estimated fair value of available-for-sale securities at March 31, 2022, by contractual and expected maturity, are shown below (in thousands):


	Amortized		Estimated
	Cost Basis		Fair Value
Due within one year	$	285,925	$	287,450
Due after one year through five years		2,975,374		2,896,943
Due after five years through ten years		2,966,491		2,814,749
Due after ten years		540,177		503,353
Total	$	6,767,967	$	6,502,495

The following tables disclose as of March 31, 2022, and 2021 and December 31, 2021, the Company’s investment securities that have been in a continuous unrealized-loss position for less than 12 months and for 12 or more months (in thousands):


	Less than 12 Months				12 Months or Longer				Total
March 31, 2022	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Treasury securities	$	301,344	$	10,516	$	—	$	—	$	301,344	$	10,516
Obligations of states and political subdivisions		1,518,732		85,015		25,679		2,440		1,544,411		87,455
Residential mortgage-backed securities		2,725,934		163,034		303,344		23,920		3,029,278		186,954
Commercial mortgage-backed securities		202,719		4,752		—		—		202,719		4,752
Corporate bonds and other		40,701		2,431		28,100		3,055		68,801		5,486
Total	$	4,789,430	$	265,748	$	357,123	$	29,415	$	5,146,553	$	295,163


	Less than 12 Months				12 Months or Longer				Total
March 31, 2021	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Obligations of states and political subdivisions	$	533,213	$	8,198	$	—	$	—	$	533,213	$	8,198
Residential mortgage-backed securities		589,353		8,618		999		10		590,352		8,628
Commercial mortgage-backed securities		471		—		—		—		471		—
Corporate bonds and other		32,490		1,539		—		—		32,490		1,539
Total	$	1,155,527	$	18,355	$	999	$	10	$	1,156,526	$	18,365


	Less than 12 Months				12 Months or Longer				Total
December 31, 2021	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Obligations of states and political subdivisions	$	163,698	$	1,096	$	18,943	$	122	$	182,641	$	1,218
Residential mortgage-backed securities		2,263,010		19,742		54,392		1,544		2,317,402		21,286
Commercial mortgage-backed securities		820		1		—		—		820		1
Corporate bonds and other		47,436		635		16,432		571		63,868		1,206
Total	$	2,474,964	$	21,474	$	89,767	$	2,237	$	2,564,731	$	23,711

The number of investments in an unrealized loss position totaled 651 at March 31, 2022. We believe any unrealized losses in the U.S. treasury securities, obligations of state and political subdivisions, residential and commercial mortgage-backed and asset-backed investment securities, and corporate bonds and other at March 31, 2022 and 2021, and December 31, 2021, are due to changes in interest rates and not credit-related events. As such, no

allowance for credit losses is required on these securities at March 31, 2022 and 2021, and December 31, 2021. Unrealized losses on investment securities are expected to recover over time as these securities approach maturity. Our mortgage related securities are backed by GNMA, FNMA and FHLMC or are collateralized by securities backed by these agencies. At March 31, 2022, 72.34% of our available-for-sale securities that are obligations of states and political subdivisions were issued within the State of Texas, of which 54.51% are guaranteed by the Texas Permanent School Fund.

At March 31, 2022, $3,896,810,000 of the Company’s securities were pledged as collateral for public or trust fund deposits, repurchase agreements and for other purposes required or permitted by law.

During the three-months ended March 31, 2022, there were no sales of investment securities that were classified as available-for-sale. During the three-months ended March 31, 2021, proceeds from sales of investment securities that were classified as available-for-sale totaled $10,631,000. Gross realized security gains from calls and sales during the three-months ended March 31, 2022 and 2021, totaled $33,000 and $808,000, respectively. Gross realized security losses from calls and sales during the three-months ended March 31, 2022 totaled $2,000 with no gross realized security losses from calls and sales during the three-months ended March 31, 2021.

The specific identification method was used to determine cost in order to compute the realized gains and losses.