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Securities
 3 Months Ended
Mar. 31, 2022
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, 2022 and December 31, 2021 is presented below.
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Fair Value		Allowance
for Credit
Losses		Net
Carrying
Amount
March 31, 2022
Residential mortgage-backed securities
$526,969 $— $17,519 $509,450 $— $526,969 
States and political subdivisions
1,137,154 3,622 11,717 1,129,059 (158)1,136,996 
Other1,500 — 16 1,484 — 1,500 
Total$1,665,623 $3,622 $29,252 $1,639,993 $(158)$1,665,465 
December 31, 2021
Residential mortgage-backed securities
$527,264 $18,766 $— $546,030 $— $527,264 
States and political subdivisions
1,220,573 41,141 101 1,261,613 (158)1,220,415 
Other1,500 — — 1,500 — 1,500 
Total$1,749,337 $59,907 $101 $1,809,143 $(158)$1,749,179 
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 $252.0 million and $642.3 million at March 31, 2022 and December 31, 2021, respectively. Accrued interest receivable on held-to-maturity securities totaled $10.0 million and $18.4 million at March 31, 2022 and December 31, 2021, 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 $2.3 million ($1.8 million, net of tax) at March 31, 2022 and $2.5 million ($2.0 million, net of tax) at December 31, 2021. 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, 2022 and December 31, 2021:
States and Political Subdivisions
Not Guaranteed or Pre-RefundedGuaranteed by the Texas PSFPre-RefundedTotalOther
Securities
March 31, 2022
Aaa/AAA$91,034 $467,039 $471,183 $1,029,256 $— 
Aa/AA107,898 — — 107,898 — 
Not rated— — — — 1,500 
Total$198,932 $467,039 $471,183 $1,137,154 $1,500 
December 31, 2021
Aaa/AAA$92,379 $460,648 $563,251 $1,116,278 $— 
Aa/AA
104,295 — — 104,295 — 
Not rated— — — — 1,500 
Total$196,674 $460,648 $563,251 $1,220,573 $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, 2022 and 2021.
Three Months Ended
March 31,
20222021
Beginning balance$158 $160 
Credit loss expense (benefit)— (2)
Ending balance$158 $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, 2022 and December 31, 2021 is presented below.
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Allowance
for Credit
Losses		Estimated
Fair Value
March 31, 2022
U.S. Treasury$3,658,506 $1,883 $152,643 $— $3,507,746 
Residential mortgage-backed securities
5,696,906 7,246 328,113 — 5,376,039 
States and political subdivisions
7,218,821 135,206 95,634 — 7,258,393 
Other42,361 — — — 42,361 
Total$16,616,594 $144,335 $576,390 $— $16,184,539 
December 31, 2021
U.S. Treasury$2,165,702 $23,333 $9,602 $— $2,179,433 
Residential mortgage-backed securities
4,059,692 31,662 25,089 — 4,066,265 
States and political subdivisions
7,178,135 463,810 5,374 — 7,636,571 
Other42,359 — — — 42,359 
Total$13,445,888 $518,805 $40,065 $— $13,924,628 
All mortgage-backed securities included in the above table were issued by U.S. government agencies and corporations. At March 31, 2022, 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 75.7% 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 $4.8 billion and $5.8 billion at March 31, 2022 and December 31, 2021, respectively. Accrued interest receivable on available-for-sale securities totaled $80.8 million and $120.5 million at March 31, 2022 and December 31, 2021, 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, 2022, 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$3,220,375 $152,643 $— $— $3,220,375 $152,643 
Residential mortgage-backed securities4,583,657 286,421 402,940 41,692 4,986,597 328,113 
States and political subdivisions1,233,614 93,136 13,602 2,498 1,247,216 95,634 
Total$9,037,646 $532,200 $416,542 $44,190 $9,454,188 $576,390 
As of March 31, 2022, 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, 2022. 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$16 $— $514,842 $12,111 $526,969 
States and political subdivisions429,852 118,516 56,735 532,051 1,137,154 
Other— 1,500 — — 1,500 
Total$429,868 $120,016 $571,577 $544,162 $1,665,623 
Estimated Fair Value
Residential mortgage-backed securities$16 $— $498,078 $11,356 $509,450 
States and political subdivisions431,961 119,698 56,973 520,427 1,129,059 
Other— 1,484 — — 1,484 
Total$431,977 $121,182 $555,051 $531,783 $1,639,993 
Available For Sale
Amortized Cost
U. S. Treasury$— $2,033,995 $1,432,731 $191,780 $3,658,506 
Residential mortgage-backed securities102 12,917 19,060 5,664,827 5,696,906 
States and political subdivisions194,416 1,563,829 888,489 4,572,087 7,218,821 
Other— — — — 42,361 
Total$194,518 $3,610,741 $2,340,280 $10,428,694 $16,616,594 
Estimated Fair Value
U. S. Treasury$— $1,978,865 $1,350,553 $178,328 $3,507,746 
Residential mortgage-backed securities103 13,212 19,327 5,343,397 5,376,039 
States and political subdivisions197,231 1,603,985 899,602 4,557,575 7,258,393 
Other— — — — 42,361 
Total$197,334 $3,596,062 $2,269,482 $10,079,300 $16,184,539 
Sales of Securities. No held to maturity or available for sale securities were sold during the three months ended March 31, 2022 or 2021.
Premiums and Discounts. Premium amortization and discount accretion included in interest income on securities was as follows:
Three Months Ended
March 31,
20222021
Premium amortization$(29,060)$(31,235)
Discount accretion1,406 637 
Net (premium amortization) discount accretion$(27,654)$(30,598)
Trading Account Securities. Trading account securities, at estimated fair value, were as follows:
March 31,
2022		December 31,
2021
U.S. Treasury$23,939 $24,237 
States and political subdivisions5,579 925 
Total$29,518 $25,162 
Net gains and losses on trading account securities were as follows:
Three Months Ended
March 31,
20222021
Net gain on sales transactions$340 $109 
Net mark-to-market gains (losses)(168)(69)
Net gain (loss) on trading account securities$172 $40