Investments in AFS Debt Securities

6 Months Ended

Jun. 30, 2022

Investments, Debt and Equity Securities [Abstract]

In the third quarter of 2021, we began investing in debt securities. As of June 30, 2022 and December 31, 2021, all of our investments in debt securities were classified as available-for-sale. During the first quarter of 2022, we acquired additional investments in AFS debt securities with the Bank Merger. The following table presents our investments in AFS debt securities as of the dates indicated:


	June 30, 2022
	Amortized Cost(1)		Accrued Interest		Gross Unrealized Gains		Gross Unrealized Losses(2)		Fair Value
Investments in AFS debt securities(3):
U.S. Treasury securities	$	121,284	$	151	$	—	$	(3,249)	$	118,186
Multinational securities(4)	19,785		109		—		(692)		19,202
Corporate bonds	42,125		256		—		(2,477)		39,904

Agency mortgage-backed securities	9,650		24		—		(731)		8,943
Other asset-backed securities	9,583		5		—		(466)		9,122

Other(5)	2,741		21		—		(186)		2,576
Total investments in AFS debt securities	$	205,168	$	566	$	—	$	(7,801)	$	197,933

	December 31, 2021
	Amortized Cost		Accrued Interest		Gross Unrealized Gains		Gross Unrealized Losses(2)		Fair Value
Investments in AFS debt securities(3):
U.S. Treasury securities	$	103,014	$	73	$	—	$	(584)	$	102,503
Multinational securities(4)	19,911		109		—		(154)		19,866
Corporate bonds	39,894		235		—		(480)		39,649
Agency TBA(6)	7,457		13		4		(8)		7,466
Agency mortgage-backed securities	4,153		14		—		(31)		4,136
Other asset-backed securities	9,610		5		—		(91)		9,524
Commercial paper	9,939		—		—		—		9,939
Other(5)	1,818		13		—		(7)		1,824
Total investments in AFS debt securities	$	195,796	$	462	$	4	$	(1,355)	$	194,907

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(1) Amortized cost basis reflects the amortization of premiums of $186 and $477 during the three and six months ended June 30, 2022, respectively.

(2) As of June 30, 2022 and December 31, 2021, we determined that our unrealized loss positions related to credit losses were immaterial. Additionally, we do not intend to sell the securities in loss positions nor is it more likely than not that we will be required to sell the securities prior to recovery of the amortized cost basis. Further, no such investments have been in a continuous unrealized loss position for more than 12 months.

(3) Investments in AFS debt securities are recorded at fair value.

(4) Includes sovereign foreign and supranational bonds.

(5) Includes state and city municipal bond securities.

(6) Represented to-be-announced (“TBA”) securities, which were securities that were delivered under the purchase contract at a later date when the underlying security was issued. The December 31, 2021 balance was paid in cash during 2022.

The following table presents the amortized cost and fair value of our investments in AFS debt securities by contractual maturity as of the date indicated:


	Due Within One Year			Due After One Year Through Five Years			Due After Five Years Through Ten Years			Due After Ten Years			Total
June 30, 2022
Investments in AFS debt securities—Amortized cost:
U.S. Treasury securities	$	45,021		$	76,263		$	—		$	—		$	121,284
Multinational securities	3,942			15,843			—			—			19,785
Corporate bonds	328			38,441			3,356			—			42,125

Agency mortgage-backed securities	—			104			678			8,868			9,650
Other asset-backed securities	—			7,600			1,983			—			9,583

Other	600			1,207			—			934			2,741
Total investments in AFS debt securities	$	49,891		$	139,458		$	6,017		$	9,802		$	205,168
Weighted average yield for investments in AFS debt securities(1)	(1.19)		%	(4.49)		%	(4.73)		%	(22.78)		%	(4.57)		%

Investments in AFS debt securities—Fair value(2):
U.S. Treasury securities	$	43,986		$	74,049		$	—		$	—		$	118,035
Multinational securities	3,841			15,252			—			—			19,093
Corporate bonds	318			36,158			3,172			—			39,648

Agency mortgage-backed securities	—			98			630			8,191			8,919
Other asset-backed securities	—			7,224			1,893			—			9,117

Other	598			1,174			—			783			2,555
Total investments in AFS debt securities	$	48,743		$	133,955		$	5,695		$	8,974		$	197,367

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(1) The weighted average yield represents the effective yield for the investment securities and is computed based on the amortized cost of each security as of June 30, 2022.

(2) Presentation of fair values of our investments in AFS debt securities by contractual maturity excludes total accrued interest of $566 as of June 30, 2022.

The following table presents the gross proceeds and gross realized gains and losses from sales, maturities and paydowns of our investments in AFS debt securities during the three and six months ended June 30, 2022. Realized gains and losses are presented within noninterest income—other in the unaudited condensed consolidated statements of operations and comprehensive income (loss). There were no transfers between classifications of our investments in AFS debt securities during the periods presented.


	Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
Investments in AFS debt securities
Gross realized gains included in earnings	$	—	$	—
Gross realized losses included in earnings	(124)		(285)
Net realized losses	(124)		(285)
Gross proceeds from sales, maturities and paydowns(1)	$	7,788	$	37,403

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(1) Proceeds from maturities and paydowns of investments in AFS debt securities during the three and six months ended June 30, 2022 were $1,942 and $13,906, respectively.

See Note 11 for unrealized gains and losses on our investments in AFS debt securities and amounts reclassified out of accumulated other comprehensive income (loss) (“AOCI”).