
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Allowance for Credit Losses		Net Carrying Amount
September 30, 2020

Residential mortgage-backed securities	$	529,290	$	45,504	$	—	$	574,794	$	—	$	529,290
States and political subdivisions	1,420,754		61,808		—		1,482,562		(160)		1,420,594
Other	1,500		—		1		1,499		—		1,500
Total	$	1,951,544	$	107,312	$	1	$	2,058,855	$	(160)	$	1,951,384
December 31, 2019

Residential mortgage-backed securities	$	530,861	$	22	$	9,365	$	521,518	$	—	$	530,861
States and political subdivisions	1,497,644		28,909		896		1,525,657		—		1,497,644
Other	1,500		—		—		1,500		—		1,500
Total	$	2,030,005	$	28,931	$	10,261	$	2,048,675	$	—	$	2,030,005

All mortgage-backed securities included in the above table were issued by U.S. government agencies and corporations. The carrying value of held-to-maturity securities pledged to secure public funds, trust deposits, repurchase agreements and for other purposes, as required or permitted by law was $663.2 million and $561.4 million at September 30, 2020 and December 31, 2019, respectively. Accrued interest receivable on held-to-maturity securities totaled $11.9 million and $21.1 million at September 30, 2020 and December 31, 2019, respectively and is included in accrued interest receivable and other assets in the accompanying consolidated balance sheets.

From time to time, we have reclassified certain securities from available for sale to held to maturity. During the fourth quarter of 2019, we reclassified securities with an aggregate fair value of $377.8 million and an aggregate net unrealized gain of $3.3 million ($2.6 million, net of tax) on the date of the transfer. The net unamortized, unrealized gain remaining on transferred securities, including those transferred in 2019 and in years prior, included in accumulated other comprehensive income in the accompanying balance sheet totaled $3.8 million ($3.0 million, net of tax) at September 30, 2020 and $4.8 million ($3.8 million, net of tax) at December 31, 2019. This amount will be amortized out of accumulated other comprehensive income over the remaining life of the underlying securities as an adjustment of the yield on those securities.

The allowance for credit losses on held-to-maturity securities is a contra-asset valuation account that is deducted from the amortized cost basis of held-to-maturity securities to present the net amount expected to be collected. Management measures expected credit losses on held-to-maturity securities on a collective basis by major security type with each type sharing similar risk characteristics, and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. With regard to U.S. Treasury and residential mortgage-backed securities issued by the U.S. government, or agencies thereof, it is expected that the securities will not be settled at prices less than the amortized cost bases of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. Accordingly, no allowance for credit losses has been recorded for these securities. With regard to securities issued by States and political subdivisions and other held-to-maturity securities, management considers (i) issuer bond ratings, (ii) historical loss rates for given bond ratings, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, (iv) internal forecasts and (v) whether or not such securities are guaranteed by the Texas Permanent School Fund (“PSF”) or pre-refunded by the issuers.


	States and Political Subdivisions
	Not Guaranteed or Pre-Refunded		Guaranteed by the Texas PSF		Pre-Refunded		Total		Other Securities
Aaa/AAA	$	115,385	$	797,659	$	332,240	$	1,245,284	$	—
Aa/AA	112,614		—		—		112,614		—
A	62,856		—		—		62,856		—
Not rated	—		—		—		—		1,500
Total	$	290,855	$	797,659	$	332,240	$	1,420,754	$	1,500

Historical loss rates associated with securities having similar grades as those in our portfolio have generally not been significant. Furthermore, as of September 30, 2020, there were no past due principal or interest payments associated with these securities. The PSF is a sovereign wealth fund which serves to provide revenues for funding of public primary and secondary education in the State of Texas. Based upon (i) the PSF's AAA insurer financial strength rating, (ii) the PSF's substantial capitalization and excess guarantee capacity and (iii) a zero historical loss rate, no allowance for credit losses has been recorded for securities guaranteed by the PSF as there is no current expectation of credit losses related to these securities. Pre-refunded securities have been defeased by the issuer and are fully secured by cash and/or U.S. Treasury securities held in escrow for payment to holders when the underlying call dates of the securities are reached. Accordingly, no allowance for credit losses has been recorded for securities that have been defeased as there is no current expectation of credit losses related to these securities.


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
September 30, 2020
U.S. Treasury	$	1,084,210	$	40,755	$	—	$	—	$	1,124,965

Residential mortgage-backed securities	2,092,184		72,021		43		—		2,164,162
States and political subdivisions	6,695,946		577,059		—		—		7,273,005
Other	42,348		—		—		—		42,348
Total	$	9,914,688	$	689,835	$	43	$	—	$	10,604,480

December 31, 2019
U.S. Treasury	$	1,941,283	$	18,934	$	12,084	$	—	$	1,948,133

Residential mortgage-backed securities	2,176,275		32,608		1,289		—		2,207,594
States and political subdivisions	6,717,344		353,857		204		—		7,070,997
Other	42,867		—		—		—		42,867
Total	$	10,877,769	$	405,399	$	13,577	$	—	$	11,269,591

All mortgage-backed securities included in the above table were issued by U.S. government agencies and corporations. At September 30, 2020, all of the securities in our available for sale municipal bond portfolio were issued by the State of Texas or political subdivisions or agencies within the State of Texas, of which approximately 75.8% are either guaranteed by the PSF or have been pre-refunded. Securities with limited marketability, such as stock in the Federal Reserve Bank and the Federal Home Loan Bank, are carried at cost and are reported as other available for sale securities in the table above. The carrying value of available-for-sale securities pledged to secure public funds, trust deposits, repurchase agreements and for other purposes, as required or permitted by law was $3.8 billion and $3.4 billion at September 30, 2020 and December 31, 2019, respectively. Accrued interest receivable on available-for-sale securities totaled $66.6 million and $115.9 million at September 30, 2020 and December 31, 2019, respectively, and is included in accrued interest receivable and other assets in the accompanying consolidated balance sheets.

As of September 30, 2020, no allowance for credit losses has been recognized on available for sale securities in an unrealized loss position as management does not believe any of the securities are impaired due to reasons of credit quality. This is based upon our analysis of the underlying risk characteristics, including credit ratings, and other qualitative factors (such as a PSF guarantee) related to our available for sale securities and in consideration of our historical credit loss experience and internal forecasts. The issuers of these securities continue to make timely principal and interest payments under the contractual terms of the securities. Furthermore, management does not have the intent to sell any of the securities classified as available for sale in the table above and believes that it is more likely than not that we will not have to sell any such securities before a recovery of cost. The unrealized losses are due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline.

Contractual Maturities. The following table summarizes the maturity distribution schedule of securities held to maturity and securities available for sale as of September 30, 2020. Mortgage-backed securities are included in maturity categories based on their stated maturity date. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Other securities classified as available for sale include stock in the Federal Reserve Bank and the Federal Home Loan Bank, which have no maturity date. These securities have been included in the total column only.


	Within 1 Year		1 - 5 Years		5 - 10 Years		After 10 Years		Total
Held To Maturity
Amortized Cost

Residential mortgage-backed securities	$	—	$	231	$	516,368	$	12,691	$	529,290
States and political subdivisions	55,180		355,409		399,377		610,788		1,420,754
Other	—		1,500		—		—		1,500
Total	$	55,180	$	357,140	$	915,745	$	623,479	$	1,951,544
Estimated Fair Value

Residential mortgage-backed securities	$	—	$	233	$	560,456	$	14,105	$	574,794
States and political subdivisions	56,043		369,536		411,517		645,466		1,482,562
Other	—		1,499		—		—		1,499
Total	$	56,043	$	371,268	$	971,973	$	659,571	$	2,058,855
Available For Sale
Amortized Cost
U. S. Treasury	$	299,355	$	784,855	$	—	$	—	$	1,084,210
Residential mortgage-backed securities	175		45,832		22,949		2,023,228		2,092,184
States and political subdivisions	201,529		1,029,750		696,654		4,768,013		6,695,946
Other	—		—		—		—		42,348
Total	$	501,059	$	1,860,437	$	719,603	$	6,791,241	$	9,914,688
Estimated Fair Value
U. S. Treasury	$	305,121	$	819,844	$	—	$	—	$	1,124,965
Residential mortgage-backed securities	182		47,995		23,439		2,092,546		2,164,162
States and political subdivisions	204,107		1,127,267		757,126		5,184,505		7,273,005
Other	—		—		—		—		42,348
Total	$	509,410	$	1,995,106	$	780,565	$	7,277,051	$	10,604,480


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Proceeds from sales	$	—	$	4,944,537	$	1,162,352	$	8,236,066
Gross realized gains	—		96		108,989		899
Gross realized losses	—		—		—		(634)
Tax (expense) benefit of securities gains/losses	—		(21)		(22,888)		(56)