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Securities
 3 Months Ended
Mar. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Securities Securities
Securities - Held to Maturity. A summary of the amortized cost, fair value and allowance for credit losses related to securities held to maturity as of March 31, 2023 and December 31, 2022 is presented below.
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Fair Value		Allowance
for Credit
Losses		Net
Carrying
Amount
March 31, 2023
Residential mortgage-backed securities
$1,273,079 $3,859 $56,728 $1,220,210 $— $1,273,079 
States and political subdivisions
2,437,262 30,964 88,103 2,380,123 (262)2,437,000 
Other1,500 — 76 1,424 — 1,500 
Total$3,711,841 $34,823 $144,907 $3,601,757 $(262)$3,711,579 
December 31, 2022
Residential mortgage-backed securities
$526,122 $— $65,322 $460,800 $— $526,122 
States and political subdivisions
2,111,619 13,048 119,033 2,005,634 (158)2,111,461 
Other1,500 — 69 1,431 — 1,500 
Total$2,639,241 $13,048 $184,424 $2,467,865 $(158)$2,639,083 
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 $438.0 million and $256.3 million at March 31, 2023 and December 31, 2022, respectively. Accrued interest receivable on held-to-maturity securities totaled $20.6 million and $30.2 million at March 31, 2023 and December 31, 2022, 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. The net unamortized, unrealized gain remaining on transferred securities included in accumulated other comprehensive income in the accompanying balance sheet totaled $1.6 million ($1.3 million, net of tax) at March 31, 2023 and $1.8 million ($1.4 million, net of tax) at December 31, 2022. 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 following table summarizes Moody's and/or Standard & Poor's bond ratings for our portfolio of held-to-maturity securities issued by States and political subdivisions and other securities as of March 31, 2023 and December 31, 2022:
States and Political Subdivisions
Not Guaranteed or Pre-RefundedGuaranteed by the Texas PSFGuaranteed by Third PartyPre-RefundedTotalOther
Securities
March 31, 2023
Aaa/AAA$302,021 $1,557,444 $7,476 $59,123 $1,926,064 $— 
Aa/AA506,432 — 4,766 — 511,198 — 
Not rated— — — — — 1,500 
Total$808,453 $1,557,444 $12,242 $59,123 $2,437,262 $1,500 
December 31, 2022
Aaa/AAA$273,201 $1,422,442 $— $121,961 $1,817,604 $— 
Aa/AA
294,015 — — — 294,015 — 
Not rated— — — — — 1,500 
Total$567,216 $1,422,442 $— $121,961 $2,111,619 $1,500 
The following table details activity in the allowance for credit losses on held-to-maturity securities during the three months ended March 31, 2023 and 2022.
Three Months Ended
March 31,
20232022
Beginning balance$158 $158 
Credit loss expense (benefit)104 — 
Ending balance$262 $158 
Securities - Available for Sale. A summary of the amortized cost, fair value and allowance for credit losses related to securities available for sale as of March 31, 2023 and December 31, 2022 is presented below.
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Allowance
for Credit
Losses		Estimated
Fair Value
March 31, 2023
U.S. Treasury$5,453,585 $— $325,489 $— $5,128,096 
Residential mortgage-backed securities
7,857,669 13,622 848,349 — 7,022,942 
States and political subdivisions
6,032,658 12,526 256,889 — 5,788,295 
Other42,497 — — — 42,497 
Total$19,386,409 $26,148 $1,430,727 $— $17,981,830 
December 31, 2022
U.S. Treasury$5,450,546 $— $398,959 $— $5,051,587 
Residential mortgage-backed securities
7,316,824 8,050 948,638 — 6,376,236 
States and political subdivisions
7,098,635 9,108 334,388 — 6,773,355 
Other42,427 — — — 42,427 
Total$19,908,432 $17,158 $1,681,985 $— $18,243,605 
All mortgage-backed securities included in the above table were issued by U.S. government agencies and corporations. At March 31, 2023, 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 75.9% 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 $6.9 billion and $8.0 billion at March 31, 2023 and December 31, 2022, respectively. Accrued interest receivable on available-for-sale securities totaled $91.4 million and $140.6 million at March 31, 2023 and December 31, 2022, respectively, and is included in accrued interest receivable and other assets in the accompanying consolidated balance sheets.
The table below summarizes, as of March 31, 2023, securities available for sale in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by type of security and length of time in a continuous unrealized loss position.
Less than 12 MonthsMore than 12 MonthsTotal
Estimated
Fair Value		Unrealized
Losses		Estimated
Fair Value		Unrealized
Losses		Estimated
Fair Value		Unrealized
Losses
U.S. Treasury$2,033,194 $44,859 $3,094,902 $280,630 $5,128,096 $325,489 
Residential mortgage-backed securities1,665,095 36,196 4,330,689 812,153 5,995,784 848,349 
States and political subdivisions2,253,851 23,095 1,455,154 233,794 3,709,005 256,889 
Total$5,952,140 $104,150 $8,880,745 $1,326,577 $14,832,885 $1,430,727 
As of March 31, 2023, no allowance for credit losses has been recognized on available for sale securities in an unrealized loss position as management does not believe any of the securities are impaired due to reasons of credit quality. This is based upon our analysis of the underlying risk characteristics, including credit ratings, and other qualitative factors related to our available for sale securities and in consideration of our historical credit loss experience and internal forecasts. The issuers of these securities continue to make timely principal and interest payments under the contractual terms of the securities. Furthermore, management does not have the intent to sell any of the securities classified as available for sale in the table above and believes that it is more likely than not that we will not have to sell any such securities before a recovery of cost. The
unrealized losses are due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline.
Contractual Maturities. The following table summarizes the maturity distribution schedule of securities held to maturity and securities available for sale as of March 31, 2023. Mortgage-backed securities are included in maturity categories based on their stated maturity date. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Other securities classified as available for sale include stock in the Federal Reserve Bank and the Federal Home Loan Bank, which have no maturity date. These securities have been included in the total column only.
Within 1 Year1 - 5 Years5 - 10 YearsAfter 10 YearsTotal
Held To Maturity
Amortized Cost
Residential mortgage-backed securities$— $— $513,796 $759,283 $1,273,079 
States and political subdivisions72,953 17,842 21,713 2,324,754 2,437,262 
Other— 1,500 — — 1,500 
Total$72,953 $19,342 $535,509 $3,084,037 $3,711,841 
Estimated Fair Value
Residential mortgage-backed securities$— $— $459,002 $761,208 $1,220,210 
States and political subdivisions72,976 17,835 21,257 2,268,055 2,380,123 
Other— 1,424 — — 1,424 
Total$72,976 $19,259 $480,259 $3,029,263 $3,601,757 
Available For Sale
Amortized Cost
U. S. Treasury$1,286,682 $2,539,671 $1,435,094 $192,138 $5,453,585 
Residential mortgage-backed securities8 6,422 17,165 7,834,074 7,857,669 
States and political subdivisions268,607 835,006 853,009 4,076,036 6,032,658 
Other— — — — 42,497 
Total$1,555,297 $3,381,099 $2,305,268 $12,102,248 $19,386,409 
Estimated Fair Value
U. S. Treasury$1,251,908 $2,451,237 $1,275,631 $149,320 $5,128,096 
Residential mortgage-backed securities8 6,340 17,181 6,999,413 7,022,942 
States and political subdivisions269,590 839,354 842,226 3,837,125 5,788,295 
Other— — — — 42,497 
Total$1,521,506 $3,296,931 $2,135,038 $10,985,858 $17,981,830 
Sales of Securities. Sales of available for sale securities were as follows:
Three Months Ended
March 31,
20232022
Proceeds from sales$884,273 $— 
Gross realized gains4,856 — 
Gross realized losses(4,835)— 
Tax (expense) benefit of securities gains/losses(4)— 
Premiums and Discounts. Premium amortization and discount accretion included in interest income on securities was as follows:
Three Months Ended
March 31,
20232022
Premium amortization$(25,925)$(29,060)
Discount accretion5,405 1,406 
Net (premium amortization) discount accretion$(20,520)$(27,654)
Trading Account Securities. Trading account securities, at estimated fair value, were as follows:
March 31,
2023		December 31,
2022
U.S. Treasury$26,076 $25,879 
States and political subdivisions2,659 2,166 
Total$28,735 $28,045 
Net gains and losses on trading account securities were as follows:
Three Months Ended
March 31,
20232022
Net gain on sales transactions$968 $340 
Net mark-to-market gains (losses)(17)(168)
Net gain (loss) on trading account securities$951 $172