XML 28 R10.htm IDEA: XBRL DOCUMENT
v3.22.2

Securities | 6 Months Ended
--- | ---
Jun. 30, 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 June 30, 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
June 30, 2022 |  |  |  |  |  |  |  |  |  |  |
Residential mortgage-backed securities | $ | 526,675 |  |  | $ | — |  |  | $ | 40,383 |  |  | $ | 486,292 |  |  | $ | — |  |  | $ | 526,675 |
States and political subdivisions | 1,418,411 |  |  | 3,956 |  |  | 81,583 |  |  | 1,340,784 |  |  | (158) |  |  | 1,418,253 |
Other | 1,500 |  |  | — |  |  | 61 |  |  | 1,439 |  |  | — |  |  | 1,500 |
Total | $ | 1,946,586 |  |  | $ | 3,956 |  |  | $ | 122,027 |  |  | $ | 1,828,515 |  |  | $ | (158) |  |  | $ | 1,946,428 |
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 |
Other | 1,500 |  |  | — |  |  | — |  |  | 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 $245.5 million and $642.3 million at June 30, 2022 and December 31, 2021, respectively. Accrued interest receivable on held-to-maturity securities totaled $18.0 million and $18.4 million at June 30, 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 $2.1 million ($1.7 million, net of tax) at June 30, 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 June 30, 2022 and December 31, 2021:
| States and Political Subdivisions |  |
| Not Guaranteed or Pre-Refunded |  | Guaranteed by the Texas PSF |  | Pre-Refunded |  | Total |  | Other Securities
June 30, 2022 |  |  |  |  |  |  |  |  |
Aaa/AAA | $ | 161,274 |  |  | $ | 764,405 |  |  | $ | 344,335 |  |  | $ | 1,270,014 |  |  | $ | — |
Aa/AA | 148,397 |  |  | — |  |  | — |  |  | 148,397 |  |  | — |
Not rated | — |  |  | — |  |  | — |  |  | — |  |  | 1,500 |
Total | $ | 309,671 |  |  | $ | 764,405 |  |  | $ | 344,335 |  |  | $ | 1,418,411 |  |  | $ | 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 and six months ended June 30, 2022 and 2021.
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Beginning balance | $ | 158 |  |  | $ | 158 |  |  | $ | 158 |  |  | $ | 160 |
Credit loss expense (benefit) | — |  |  | — |  |  | — |  |  | (2) |
Ending balance | $ | 158 |  |  | $ | 158 |  |  | $ | 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 June 30, 2022 and December 31, 2021 is presented below.
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Allowance for Credit Losses |  | Estimated Fair Value
June 30, 2022 |  |  |  |  |  |  |  |  |
U.S. Treasury | $ | 4,656,896 |  |  | $ | 2,093 |  |  | $ | 242,690 |  |  | $ | — |  |  | $ | 4,416,299 |
Residential mortgage-backed securities | 5,967,803 |  |  | 3,443 |  |  | 635,521 |  |  | — |  |  | 5,335,725 |
States and political subdivisions | 7,183,199 |  |  | 50,465 |  |  | 246,368 |  |  | — |  |  | 6,987,296 |
Other | 42,365 |  |  | — |  |  | — |  |  | — |  |  | 42,365 |
Total | $ | 17,850,263 |  |  | $ | 56,001 |  |  | $ | 1,124,579 |  |  | $ | — |  |  | $ | 16,781,685 |
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 |
Other | 42,359 |  |  | — |  |  | — |  |  | — |  |  | 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 June 30, 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 75.3% 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 $4.4 billion and $5.8 billion at June 30, 2022 and December 31, 2021, respectively. Accrued interest receivable on available-for-sale securities totaled $131.3 million and $120.5 million at June 30, 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 June 30, 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 Months |  | More than 12 Months |  | Total
| Estimated Fair Value |  | Unrealized Losses |  | Estimated Fair Value |  | Unrealized Losses |  | Estimated Fair Value |  | Unrealized Losses
U.S. Treasury | $ | 4,224,018 |  |  | $ | 242,690 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,224,018 |  |  | $ | 242,690 |
Residential mortgage-backed securities | 4,825,871 |  |  | 568,405 |  |  | 369,098 |  |  | 67,116 |  |  | 5,194,969 |  |  | 635,521 |
States and political subdivisions | 3,249,625 |  |  | 241,884 |  |  | 13,824 |  |  | 4,484 |  |  | 3,263,449 |  |  | 246,368 |
Total | $ | 12,299,514 |  |  | $ | 1,052,979 |  |  | $ | 382,922 |  |  | $ | 71,600 |  |  | $ | 12,682,436 |  |  | $ | 1,124,579 |
As of June 30, 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 June 30, 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 Year |  | 1 - 5 Years |  | 5 - 10 Years |  | After 10 Years |  | Total
Held To Maturity |  |  |  |  |  |  |  |  |
Amortized Cost |  |  |  |  |  |  |  |  |
Residential mortgage-backed securities | $ | 3 |  |  | $ | — |  |  | $ | 514,582 |  |  | $ | 12,090 |  |  | $ | 526,675 |
States and political subdivisions | 350,365 |  |  | 84,053 |  |  | 22,102 |  |  | 961,891 |  |  | 1,418,411 |
Other | — |  |  | 1,500 |  |  | — |  |  | — |  |  | 1,500 |
Total | $ | 350,368 |  |  | $ | 85,553 |  |  | $ | 536,684 |  |  | $ | 973,981 |  |  | $ | 1,946,586 |
Estimated Fair Value |  |  |  |  |  |  |  |  |
Residential mortgage-backed securities | $ | 3 |  |  | $ | — |  |  | $ | 475,721 |  |  | $ | 10,568 |  |  | $ | 486,292 |
States and political subdivisions | 351,237 |  |  | 84,787 |  |  | 22,166 |  |  | 882,594 |  |  | 1,340,784 |
Other | — |  |  | 1,439 |  |  | — |  |  | — |  |  | 1,439 |
Total | $ | 351,240 |  |  | $ | 86,226 |  |  | $ | 497,887 |  |  | $ | 893,162 |  |  | $ | 1,828,515 |
Available For Sale |  |  |  |  |  |  |  |  |
Amortized Cost |  |  |  |  |  |  |  |  |
U. S. Treasury | $ | — |  |  | $ | 3,031,706 |  |  | $ | 1,433,320 |  |  | $ | 191,870 |  |  | $ | 4,656,896 |
Residential mortgage-backed securities | 55 |  |  | 11,080 |  |  | 18,743 |  |  | 5,937,925 |  |  | 5,967,803 |
States and political subdivisions | 207,078 |  |  | 1,546,995 |  |  | 902,953 |  |  | 4,526,173 |  |  | 7,183,199 |
Other | — |  |  | — |  |  | — |  |  | — |  |  | 42,365 |
Total | $ | 207,133 |  |  | $ | 4,589,781 |  |  | $ | 2,355,016 |  |  | $ | 10,655,968 |  |  | $ | 17,850,263 |
Estimated Fair Value |  |  |  |  |  |  |  |  |
U. S. Treasury | $ | — |  |  | $ | 2,957,018 |  |  | $ | 1,301,539 |  |  | $ | 157,742 |  |  | $ | 4,416,299 |
Residential mortgage-backed securities | 55 |  |  | 11,231 |  |  | 18,792 |  |  | 5,305,647 |  |  | 5,335,725 |
States and political subdivisions | 209,138 |  |  | 1,579,097 |  |  | 893,132 |  |  | 4,305,929 |  |  | 6,987,296 |
Other | — |  |  | — |  |  | — |  |  | — |  |  | 42,365 |
Total | $ | 209,193 |  |  | $ | 4,547,346 |  |  | $ | 2,213,463 |  |  | $ | 9,769,318 |  |  | $ | 16,781,685 |
Sales of Securities. No held to maturity or available for sale securities were sold during the three or six months ended June 30, 2022 or 2021. Premiums and Discounts. Premium amortization and discount accretion included in interest income on securities was as follows:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Premium amortization | $ | (28,053) |  |  | $ | (30,541) |  |  | $ | (57,113) |  |  | $ | (61,776) |
Discount accretion | 2,482 |  |  | 705 |  |  | 3,888 |  |  | 1,342 |
Net (premium amortization) discount accretion | $ | (25,571) |  |  | $ | (29,836) |  |  | $ | (53,225) |  |  | $ | (60,434) |
Trading Account Securities. Trading account securities, at estimated fair value, were as follows:
| June 30, 2022 |  | December 31, 2021
U.S. Treasury | $ | 24,615 |  |  | $ | 24,237 |
States and political subdivisions | 65 |  |  | 925 |
Total | $ | 24,680 |  |  | $ | 25,162 |
Net gains and losses on trading account securities were as follows:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Net gain on sales transactions | $ | 1,012 |  |  | $ | 293 |  |  | $ | 1,352 |  |  | $ | 402 |
Net mark-to-market gains (losses) | (76) |  |  | — |  |  | (244) |  |  | (69) |
Net gain (loss) on trading account securities | $ | 936 |  |  | $ | 293 |  |  | $ | 1,108 |  |  | $ | 333 |

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsDebtAndEquitySecuritiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_InvestmentsInDebtAndMarketableEquitySecuritiesAndCertainTradingAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration