
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Allowance for Credit Losses		Net Carrying Amount
December 31, 2023

Residential mortgage-backed securities	$	1,250,431	$	76	$	54,175	$	1,196,332	$	—	$	1,250,431
States and political subdivisions	2,367,807		42,990		76,540		2,334,257		(310)		2,367,497
Other	1,500		—		45		1,455		—		1,500
Total	$	3,619,738	$	43,066	$	130,760	$	3,532,044	$	(310)	$	3,619,428
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
Other	1,500		—		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 $1.0 billion and $256.3 million at December 31, 2023 and 2022, respectively. Accrued interest receivable on held-to-maturity securities totaled $40.9 million and $30.2 million at December 31, 2023 and 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 securities transferred in years prior to 2020 included in accumulated other comprehensive income in the accompanying balance sheet totaled $1.2 million ($909 thousand, net of tax) at December 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 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		Guaranteed by Third Party		Pre-Refunded		Total		Other Securities
Aaa/AAA	$	301,721	$	1,541,913	$	13,651	$	1,401	$	1,858,686	$	—
Aa/AA	503,016		—		6,105		—		509,121		—

Not rated	—		—		—		—		—		1,500
Total	$	804,737	$	1,541,913	$	19,756	$	1,401	$	2,367,807	$	1,500

Historical loss rates associated with securities having similar grades as those in our portfolio have generally not been significant. Furthermore, as of December 31, 2023, 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
December 31, 2023
U.S. Treasury	$	5,212,894	$	—	$	285,305	$	—	$	4,927,589

Residential mortgage-backed securities	7,463,954		9,066		876,338		—		6,596,682
States and political subdivisions	5,245,721		5,762		240,152		—		5,011,331
Other	42,769		—		—		—		42,769
Total	$	17,965,338	$	14,828	$	1,401,795	$	—	$	16,578,371

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
Other	42,427		—		—		—		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 December 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 73.5% 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 $6.1 billion and $8.0 billion at December 31, 2023 and 2022, respectively. Accrued interest receivable on available-for-sale securities totaled $114.9 million and $140.6 million at December 31, 2023 and 2022, respectively, and is included in accrued interest receivable and other assets in the accompanying consolidated balance sheets.


	Less than 12 Months				More than 12 Months				Total
	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
U.S. Treasury	$	—	$	—	$	4,927,590	$	285,305	$	4,927,590	$	285,305
Residential mortgage-backed securities	879,380		6,883		5,062,456		869,455		5,941,836		876,338
States and political subdivisions	1,810,373		10,035		2,652,951		230,117		4,463,324		240,152
Total	$	2,689,753	$	16,918	$	12,642,997	$	1,384,877	$	15,332,750	$	1,401,795

As of December 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 December 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 Year		1 - 5 Years		5 - 10 Years		After 10 Years		Total
Held To Maturity
Amortized Cost

Residential mortgage-backed securities	$	—	$	—	$	512,995	$	737,436	$	1,250,431
States and political subdivisions	8,170		12,008		52,106		2,295,523		2,367,807
Other	—		1,500		—		—		1,500
Total	$	8,170	$	13,508	$	565,101	$	3,032,959	$	3,619,738
Estimated Fair Value

Residential mortgage-backed securities	$	—	$	—	$	461,253	$	735,079	$	1,196,332
States and political subdivisions	8,175		11,999		50,728		2,263,355		2,334,257
Other	—		1,455		—		—		1,455
Total	$	8,175	$	13,454	$	511,981	$	2,998,434	$	3,532,044
Available For Sale
Amortized Cost
U. S. Treasury	$	1,534,307	$	3,288,365	$	197,809	$	192,413	$	5,212,894
Residential mortgage-backed securities	1,740		1,827		13,985		7,446,402		7,463,954
States and political subdivisions	370,259		183,228		880,659		3,811,575		5,245,721
Other	—		—		—		—		42,769
Total	$	1,906,306	$	3,473,420	$	1,092,453	$	11,450,390	$	17,965,338
Estimated Fair Value
U. S. Treasury	$	1,514,227	$	3,101,776	$	167,219	$	144,367	$	4,927,589
Residential mortgage-backed securities	1,718		1,826		13,963		6,579,175		6,596,682
States and political subdivisions	370,111		182,786		859,675		3,598,759		5,011,331
Other	—		—		—		—		42,769
Total	$	1,886,056	$	3,286,388	$	1,040,857	$	10,322,301	$	16,578,371