XML 23 R10.htm IDEA: XBRL DOCUMENT v3.24.1.u1
Securities
 3 Months Ended
Mar. 31, 2024
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, 2024 and December 31, 2023 is presented below.
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Fair Value		Allowance
for Credit
Losses		Net
Carrying
Amount
March 31, 2024
Residential mortgage-backed securities
$1,239,420 $— $69,069 $1,170,351 $— $1,239,420 
States and political subdivisions
2,360,119 20,197 100,817 2,279,499 (310)2,359,809 
Other1,500 — 34 1,466 — 1,500 
Total$3,601,039 $20,197 $169,920 $3,451,316 $(310)$3,600,729 
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 
Other1,500 — 45 1,455 — 1,500 
Total$3,619,738 $43,066 $130,760 $3,532,044 $(310)$3,619,428 
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 $820.1 million and $1.0 billion at March 31, 2024 and December 31, 2023, respectively. Accrued interest receivable on held-to-maturity securities totaled $20.3 million and $40.9 million at March 31, 2024 and December 31, 2023, 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 $992 thousand ($784 thousand, net of tax) at March 31, 2024 and $1.2 million ($909 thousand, net of tax) at December 31, 2023. 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, 2024 and December 31, 2023:
States and Political Subdivisions
Not Guaranteed or Pre-RefundedGuaranteed by the Texas PSFGuaranteed by Third PartyPre-RefundedTotalOther
Securities
March 31, 2024
Aaa/AAA$301,620 $1,538,918 $13,648 $1,091 $1,855,277 $— 
Aa/AA498,734 — 6,108 — 504,842 — 
Not rated— — — — — 1,500 
Total$800,354 $1,538,918 $19,756 $1,091 $2,360,119 $1,500 
December 31, 2023
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 
The following table details activity in the allowance for credit losses on held-to-maturity securities during the three months ended March 31, 2024 and 2023.
Three Months Ended
March 31,
20242023
Beginning balance$310 $158 
Credit loss expense (benefit)— 104 
Ending balance$310 $262 
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, 2024 and December 31, 2023 is presented below.
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Allowance
for Credit
Losses		Estimated
Fair Value
March 31, 2024
U.S. Treasury$4,181,301 $— $308,729 $— $3,872,572 
Residential mortgage-backed securities
7,472,195 4,796 1,004,366 — 6,472,625 
States and political subdivisions
5,071,259 2,313 280,056 — 4,793,516 
Other42,870 — — — 42,870 
Total$16,767,625 $7,109 $1,593,151 $— $15,181,583 
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 
Other42,769 — — — 42,769 
Total$17,965,338 $14,828 $1,401,795 $— $16,578,371 
All mortgage-backed securities included in the above table were issued by U.S. government agencies and corporations. At March 31, 2024, 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 72.4% are either guaranteed by the Texas Permanent School Fund (“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 $5.9 billion and $6.1 billion at March 31, 2024 and December 31, 2023, respectively. Accrued interest receivable on available-for-sale securities totaled $78.5 million and $114.9 million at March 31, 2024 and December 31, 2023, respectively, and is included in accrued interest receivable and other assets in the accompanying consolidated balance sheets.
The table below summarizes, as of March 31, 2024, securities available for sale in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by type of security and length of time in a continuous unrealized loss position.
Less than 12 MonthsMore than 12 MonthsTotal
Estimated
Fair Value		Unrealized
Losses		Estimated
Fair Value		Unrealized
Losses		Estimated
Fair Value		Unrealized
Losses
U.S. Treasury$— $— $3,872,572 $308,729 $3,872,572 $308,729 
Residential mortgage-backed securities376,347 3,974 5,633,391 1,000,392 6,009,738 1,004,366 
States and political subdivisions780,308 6,535 3,740,945 273,521 4,521,253 280,056 
Total$1,156,655 $10,509 $13,246,908 $1,582,642 $14,403,563 $1,593,151 
As of March 31, 2024, no allowance for credit losses has been recognized on available for sale securities in an unrealized loss position as management does not believe any of the securities are impaired due to reasons of credit quality. This is based upon our analysis of the underlying risk characteristics, including credit ratings, and other qualitative factors related to our available for sale securities and in consideration of our historical credit loss experience and internal forecasts. The issuers of these securities continue to make timely principal and interest payments under the contractual terms of the securities. Furthermore, management does not have the intent to sell any of the securities classified as available for sale in the table above and believes that it is more likely than not that we will not have to sell any such securities before a recovery of cost. The
unrealized losses are due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline.
Contractual Maturities. The following table summarizes the maturity distribution schedule of securities held to maturity and securities available for sale as of March 31, 2024. Mortgage-backed securities are included in maturity categories based on their stated maturity date. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Other securities classified as available for sale include stock in the Federal Reserve Bank and the Federal Home Loan Bank, which have no maturity date. These securities have been included in the total column only.
Within 1 Year1 - 5 Years5 - 10 YearsAfter 10 YearsTotal
Held To Maturity
Amortized Cost
Residential mortgage-backed securities$— $— $511,806 $727,614 $1,239,420 
States and political subdivisions9,131 4,281 52,003 2,294,704 2,360,119 
Other1,500 — — — 1,500 
Total$10,631 $4,281 $563,809 $3,022,318 $3,601,039 
Estimated Fair Value
Residential mortgage-backed securities$— $— $455,963 $714,388 $1,170,351 
States and political subdivisions9,092 4,268 50,260 2,215,879 2,279,499 
Other1,466 — — — 1,466 
Total$10,558 $4,268 $506,223 $2,930,267 $3,451,316 
Available For Sale
Amortized Cost
U. S. Treasury$499,348 $3,291,567 $197,882 $192,504 $4,181,301 
Residential mortgage-backed securities1,348 1,272 13,807 7,455,768 7,472,195 
States and political subdivisions228,757 234,591 848,067 3,759,844 5,071,259 
Other— — — — 42,870 
Total$729,453 $3,527,430 $1,059,756 $11,408,116 $16,767,625 
Estimated Fair Value
U. S. Treasury$486,430 $3,082,345 $164,133 $139,664 $3,872,572 
Residential mortgage-backed securities1,333 1,275 13,793 6,456,224 6,472,625 
States and political subdivisions228,134 231,649 817,088 3,516,645 4,793,516 
Other— — — — 42,870 
Total$715,897 $3,315,269 $995,014 $10,112,533 $15,181,583 
Sales of Securities. Sales of available for sale securities were as follows:
Three Months Ended
March 31,
20242023
Proceeds from sales$— $884,273 
Gross realized gains— 4,856 
Gross realized losses— (4,835)
Tax (expense) benefit of securities gains/losses— (4)
Premiums and Discounts. Premium amortization and discount accretion included in interest income on securities was as follows:
Three Months Ended
March 31,
20242023
Premium amortization$(17,953)$(25,925)
Discount accretion4,705 5,405 
Net (premium amortization) discount accretion$(13,248)$(20,520)
Trading Account Securities. Trading account securities, at estimated fair value, were as follows:
March 31,
2024		December 31,
2023
U.S. Treasury$29,608 $30,265 
States and political subdivisions10,037 1,452 
Total$39,645 $31,717 
Net gains and losses on trading account securities were as follows:
Three Months Ended
March 31,
20242023
Net gain on sales transactions$1,159 $968 
Net mark-to-market gains (losses)(19)(17)
Net gain (loss) on trading account securities$1,140 $951