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Securities | 9 Months Ended
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Sep. 30, 2021
Investments, Debt and Equity Securities [Abstract] |
Securities | Securities The following tables present the amortized cost, gross unrealized gains and losses and fair value by major categories of AFS debt securities as of September 30, 2021 and December 31, 2020:
($ in thousands) |  | September 30, 2021
| Amortized Cost |  |  |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
AFS debt securities: |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 950,260 |  |  |  |  | $ | 233 |  |  | $ | (8,769) |  |  | $ | 941,724 |
U.S. government agency and U.S. government-sponsored enterprise debt securities |  | 1,386,236 |  |  |  |  | 4,401 |  |  | (27,528) |  |  | 1,363,109 |
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities: |  |  |  |  |  |  |  |  |  |
Commercial mortgage-backed securities |  | 1,277,989 |  |  |  |  | 19,063 |  |  | (22,585) |  |  | 1,274,467 |
Residential mortgage-backed securities |  | 2,814,111 |  |  |  |  | 13,875 |  |  | (36,922) |  |  | 2,791,064 |
Municipal securities |  | 500,907 |  |  |  |  | 8,194 |  |  | (7,612) |  |  | 501,489 |
Non-agency mortgage-backed securities: |  |  |  |  |  |  |  |  |  |
Commercial mortgage-backed securities |  | 463,358 |  |  |  |  | 4,704 |  |  | (3,292) |  |  | 464,770 |
Residential mortgage-backed securities |  | 902,002 |  |  |  |  | 2,490 |  |  | (3,236) |  |  | 901,256 |
Corporate debt securities |  | 626,531 |  |  |  |  | 9,445 |  |  | (17,305) |  |  | 618,671 |
Foreign government bonds |  | 258,119 |  |  |  |  | 657 |  |  | (3,928) |  |  | 254,848 |
Asset-backed securities |  | 76,417 |  |  |  |  | 437 |  |  | (55) |  |  | 76,799 |
CLOs |  | 527,250 |  |  |  |  | 5 |  |  | (2,446) |  |  | 524,809 |
Total AFS debt securities |  | $ | 9,783,180 |  |  |  |  | $ | 63,504 |  |  | $ | (133,678) |  |  | $ | 9,713,006 |
($ in thousands) |  | December 31, 2020
| Amortized Cost |  |  |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
AFS debt securities: |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 50,310 |  |  |  |  | $ | 451 |  |  | $ | — |  |  | $ | 50,761 |
U.S. government agency and U.S. government-sponsored enterprise debt securities |  | 806,814 |  |  |  |  | 8,765 |  |  | (1,260) |  |  | 814,319 |
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities: |  |  |  |  |  |  |  |  |  |
Commercial mortgage-backed securities |  | 1,125,174 |  |  |  |  | 34,306 |  |  | (5,710) |  |  | 1,153,770 |
Residential mortgage-backed securities |  | 1,634,553 |  |  |  |  | 27,952 |  |  | (1,611) |  |  | 1,660,894 |
Municipal securities |  | 382,573 |  |  |  |  | 13,588 |  |  | (88) |  |  | 396,073 |
Non-agency mortgage-backed securities: |  |  |  |  |  |  |  |  |  |
Commercial mortgage-backed securities |  | 234,965 |  |  |  |  | 6,107 |  |  | (1,230) |  |  | 239,842 |
Residential mortgage-backed securities |  | 288,520 |  |  |  |  | 1,761 |  |  | (506) |  |  | 289,775 |
Corporate debt securities |  | 406,323 |  |  |  |  | 3,493 |  |  | (3,848) |  |  | 405,968 |
Foreign government bonds |  | 183,828 |  |  |  |  | 163 |  |  | (1,460) |  |  | 182,531 |
Asset-backed securities |  | 63,463 |  |  |  |  | 10 |  |  | (242) |  |  | 63,231 |
CLOs |  | 294,000 |  |  |  |  | — |  |  | (6,506) |  |  | 287,494 |
Total AFS debt securities |  | $ | 5,470,523 |  |  |  |  | $ | 96,596 |  |  | $ | (22,461) |  |  | $ | 5,544,658 |
The amortized cost of AFS debt securities excludes accrued interest receivables, which are a component of Other assets on the Consolidated Balance Sheet. The accrued interest receivables for AFS debt securities were $27.0 million and $22.3 million as of September 30, 2021 and December 31, 2020, respectively. For the Company’s accounting policy related to AFS debt securities’ accrued interest receivables, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Allowance for Credit Losses on Available-for-Sale Debt Securities to the Consolidated Financial Statements in the Company’s 2020 Form 10-K. Unrealized Losses The following tables present the fair value and the associated gross unrealized losses of the Company’s AFS debt securities, aggregated by investment category and the length of time that the securities have been in a continuous unrealized loss position as of September 30, 2021 and December 31, 2020.
($ in thousands) |  | September 30, 2021
| Less Than 12 Months |  | 12 Months or More |  | Total
| Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses
AFS debt securities: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 768,909 |  |  | $ | (8,769) |  |  | $ | — |  |  | $ | — |  |  | $ | 768,909 |  |  | $ | (8,769) |
U.S. government agency and U.S. government- sponsored enterprise debt securities |  | 1,008,979 |  |  | (21,747) |  |  | 144,196 |  |  | (5,781) |  |  | 1,153,175 |  |  | (27,528) |
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |
Commercial mortgage-backed securities |  | 603,554 |  |  | (17,164) |  |  | 107,752 |  |  | (5,421) |  |  | 711,306 |  |  | (22,585) |
Residential mortgage-backed securities |  | 1,904,559 |  |  | (35,792) |  |  | 17,591 |  |  | (1,130) |  |  | 1,922,150 |  |  | (36,922) |
Municipal securities |  | 249,055 |  |  | (7,612) |  |  | — |  |  | — |  |  | 249,055 |  |  | (7,612) |
Non-agency mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |
Commercial mortgage-backed securities |  | 151,915 |  |  | (2,158) |  |  | 40,233 |  |  | (1,134) |  |  | 192,148 |  |  | (3,292) |
Residential mortgage-backed securities |  | 561,635 |  |  | (3,233) |  |  | 8,145 |  |  | (3) |  |  | 569,780 |  |  | (3,236) |
Corporate debt securities |  | 207,861 |  |  | (6,139) |  |  | 178,833 |  |  | (11,166) |  |  | 386,694 |  |  | (17,305) |
Foreign government bonds |  | 54,228 |  |  | (3,514) |  |  | 84,977 |  |  | (414) |  |  | 139,205 |  |  | (3,928) |
Asset-backed securities |  | 21,631 |  |  | (55) |  |  | — |  |  | — |  |  | 21,631 |  |  | (55) |
CLOs |  | 183,192 |  |  | (58) |  |  | 291,612 |  |  | (2,388) |  |  | 474,804 |  |  | (2,446) |
Total AFS debt securities |  | $ | 5,715,518 |  |  | $ | (106,241) |  |  | $ | 873,339 |  |  | $ | (27,437) |  |  | $ | 6,588,857 |  |  | $ | (133,678) |
($ in thousands) |  | December 31, 2020
| Less Than 12 Months |  | 12 Months or More |  | Total
| Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses
AFS debt securities: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 352,521 |  |  | $ | (1,260) |  |  | $ | — |  |  | $ | — |  |  | $ | 352,521 |  |  | $ | (1,260) |
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |
Commercial mortgage-backed securities |  | 292,596 |  |  | (5,656) |  |  | 3,543 |  |  | (54) |  |  | 296,139 |  |  | (5,710) |
Residential mortgage-backed securities |  | 342,561 |  |  | (1,611) |  |  | — |  |  | — |  |  | 342,561 |  |  | (1,611) |
Municipal securities |  | 24,529 |  |  | (88) |  |  | — |  |  | — |  |  | 24,529 |  |  | (88) |
Non-agency mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |
Commercial mortgage-backed securities |  | 58,738 |  |  | (1,230) |  |  | 7,920 |  |  | — |  |  | 66,658 |  |  | (1,230) |
Residential mortgage-backed securities |  | 90,156 |  |  | (506) |  |  | — |  |  | — |  |  | 90,156 |  |  | (506) |
Corporate debt securities |  | 251,674 |  |  | (3,645) |  |  | 9,798 |  |  | (203) |  |  | 261,472 |  |  | (3,848) |
Foreign government bonds |  | 106,828 |  |  | (1,460) |  |  | — |  |  | — |  |  | 106,828 |  |  | (1,460) |
Asset-backed securities |  | — |  |  | — |  |  | 34,104 |  |  | (242) |  |  | 34,104 |  |  | (242) |
CLOs |  | — |  |  | — |  |  | 287,494 |  |  | (6,506) |  |  | 287,494 |  |  | (6,506) |
Total AFS debt securities |  | $ | 1,519,603 |  |  | $ | (15,456) |  |  | $ | 342,859 |  |  | $ | (7,005) |  |  | $ | 1,862,462 |  |  | $ | (22,461) |
As of September 30, 2021, the Company had a total of 359 AFS debt securities in a gross unrealized loss position with no credit impairment, consisting primarily of 150 U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities, 48 U.S. government agency and U.S. government-sponsored enterprise debt securities, and 22 corporate debt securities. In comparison, as of December 31, 2020, the Company had a total of 104 AFS debt securities in a gross unrealized loss position with no credit impairment, consisting primarily of 46 U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities and 17 corporate debt securities. Allowance for Credit Losses Each reporting period, the Company assesses each AFS debt security that is in an unrealized loss position to determine whether the decline in fair value below the amortized cost basis resulted from a credit loss or other factors. For a discussion of the factors and criteria the Company uses in analyzing securities for impairment related to credit losses, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Allowance for Credit Losses on Available-for-Sale Debt Securities to the Consolidated Financial Statements in the Company’s 2020 Form 10-K. The gross unrealized losses presented in the above tables were primarily attributable to interest rate movement and widened liquidity spreads. Securities that were in unrealized loss positions as of September 30, 2021 were mainly comprised of the following: •U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities — The market value decline as of September 30, 2021 was primarily due to interest rate movement. These securities (issued by Ginnie Mae, Fannie Mae, and Freddie Mac) are guaranteed or sponsored by agencies of the U.S. government, and the credit profiles are strong (rated Aaa, AA+ and AAA by Moody’s Investors Service (“Moody’s”), Standard and Poor's (“S&P”) and Fitch Ratings (“Fitch”), respectively). The Company expects to receive all contractual cash flows on time and believes the risk of credit losses on these securities is remote. •U.S. government agency and U.S. government-sponsored enterprise debt securities — The market value decline as of September 30, 2021 was primarily due to interest rate movement. The securities consisted o f the debt securities issued by: –Federal Farm Credit Bank, Fannie Mae, Freddie Mac, and U.S. International Development Finance Corporation (rated Aaa, AA+ and AAA by Moody’s, S&P and Fitch, respectively). –FHLB (rated Aaa and AA+ by Moody’s and S&P, respectively). These securities are guaranteed or issued by entities sponsored by the U.S. government and the credit profiles are strong. The Company expects to receive all contractual cash flows on time and believes the risk of credit losses on these securities is remote. •Corporate debt securities — The market value decline as of September 30, 2021 was primarily due to interest rate movement and spread widening. Since credit profiles of these securities are strong (rated BBB- or higher by Moody’s, S&P, Fitch, and Kroll Bond Rating Agency), and the contractual payments from these securities have been and are expected to be received on time, the Company believes that the risk of credit losses on these securities is remote. The impact of the Coronavirus Disease 2019 (“COVID-19”) pandemic has been greatly mitigated by the government’s aggressive monetary policy and economic stimulus plans, including benchmark rate cuts, and various relief measures that contributed to the gradual and steady recovery of the market to pre-pandemic levels. Overall, the Company believes that the credit support levels of the AFS debt securities are strong and, based on current assessments and macroeconomic forecasts, expects that full contractual cash flows will be received, even if near-term credit performance could suffer from future unpredictable impacts of the COVID-19 pandemic, including new and more contagious variants. As of September 30, 2021 and December 31, 2020, the Company had the intent to hold the AFS debt securities with unrealized losses through the anticipated recovery period and it was more-likely-than-not that the Company will not have to sell these securities before the recovery of their amortized cost. The issuers of these securities have not, to the Company’s knowledge, established any cause for default on these securities. As a result, the Company expects to recover the entire amortized cost basis of these securities. Accordingly, there was no allowance for credit losses as of September 30, 2021 and December 31, 2020 provided against these securities. In addition, there was no provision for credit losses recognized for the three and nine months ended September 30, 2021 and 2020. Realized Gains and Losses The following table presents the gross realized gains and tax expense related to the sales of AFS debt securities for the three and nine months ended September 30, 2021 and 2020:
($ in thousands) |  | Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Gross realized gains |  | $ | 354 |  |  | $ | 698 |  |  | $ | 1,178 |  |  | $ | 11,867 |
Related tax expense |  | $ | 104 |  |  | $ | 206 |  |  | $ | 348 |  |  | $ | 3,508 |
Contractual Maturities of Available-for-Sale Debt Securities The following table presents the contractual maturities of AFS debt securities as of September 30, 2021. Expected maturities will differ from contractual maturities on certain securities as the issuers and borrowers of the underlying collateral may have the right to call or prepay obligations with or without prepayment penalties.
($ in thousands) |  | Amortized Cost |  | Fair Value
Due within one year |  | $ | 1,522,146 |  |  | $ | 1,486,148 |
Due after one year through five years |  | 845,850 |  |  | 848,562 |
Due after five years through ten years |  | 1,618,344 |  |  | 1,618,061 |
Due after ten years |  | 5,796,840 |  |  | 5,760,235 |
Total AFS debt securities |  | $ | 9,783,180 |  |  | $ | 9,713,006 |
As of September 30, 2021 and December 31, 2020, AFS debt securities with fair valu es of $859.9 million and $588.5 million, respectively, were pledged to secure public deposits, repurchase agreements and for other purposes required or permitted by law. Restricted Equity Securities The following table presents the restricted equity securities on the Consolidated Balance Sheet as of September 30, 2021 and December 31, 2020:
($ in thousands) |  | September 30, 2021 |  | December 31, 2020
Federal Reserve Bank of San Francisco (“FRBSF”) stock |  | $ | 59,950 |  |  | $ | 59,249 |
FHLB stock |  | 17,250 |  |  | 23,797 |
Total restricted equity securities |  | $ | 77,200 |  |  | $ | 83,046 |

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2176304 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher SEC -Name Regulation S-K (SK) -Number 229 -Section 1403 -Paragraph (b) + Details
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