We periodically sell Private Education Loans (as hereinafter defined) through securitization transactions where we are required to retain a five percent vertical risk retention interest (i.e., five percent of each class issued in the securitizations). We classify those vertical risk retention interests related to the transactions as available-for-sale investments, except for the interest in the residual classes, which we classify as trading investments recorded at fair value with changes recorded through earnings. At September 30, 2024 and December 31, 2023, we had $55 million and $54 million, respectively, classified as trading investments.


As of September 30, 2024 (dollars in thousands)	Amortized Cost		Allowance for credit losses(1)		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale:
Mortgage-backed securities	$	515,923	$	—	$	1,664	$	(54,875)	$	462,712
Utah Housing Corporation bonds	2,849		—		—		(318)		2,531
U.S. government-sponsored enterprises and Treasuries	997,530		—		—		(31,323)		966,207
Other securities	596,955		—		7,024		(12,824)		591,155
Total	$	2,113,257	$	—	$	8,688	$	(99,340)	$	2,022,605

As of December 31, 2023 (dollars in thousands)	Amortized Cost		Allowance for credit losses(1)		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale:
Mortgage-backed securities	$	468,204	$	—	$	703	$	(62,480)	$	406,427
Utah Housing Corporation bonds	3,408		—		—		(279)		3,129
U.S. government-sponsored enterprises and Treasuries	1,645,609		—		—		(66,870)		1,578,739
Other securities	446,763		—		603		(24,039)		423,327
Total	$	2,563,984	$	—	$	1,306	$	(153,668)	$	2,411,622

(1) Represents the amount of impairment that has resulted from credit-related factors and that was recognized in the consolidated balance sheets (as a credit loss expense on available-for-sale securities). The amount excludes unrealized losses related to non-credit factors.

The following table summarizes the amount of gross unrealized losses for our available-for-sale securities and the estimated fair value for securities having gross unrealized loss positions, categorized by length of time the securities have been in an unrealized loss position:


(Dollars in thousands)	Less than 12 months				12 months or more				Total
	Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value
As of September 30, 2024:
Mortgage-backed securities	$	(101)	$	34,601	$	(54,774)	$	309,842	$	(54,875)	$	344,443
Utah Housing Corporation bonds	—		—		(318)		2,531		(318)		2,531
U.S. government-sponsored enterprises and Treasuries	—		—		(31,323)		966,207		(31,323)		966,207
Other securities	(123)		22,933		(12,701)		206,952		(12,824)		229,885
Total	$	(224)	$	57,534	$	(99,116)	$	1,485,532	$	(99,340)	$	1,543,066

As of December 31, 2023:
Mortgage-backed securities	$	(531)	$	51,391	$	(61,949)	$	300,318	$	(62,480)	$	351,709
Utah Housing Corporation bonds	—		—		(279)		3,129		(279)		3,129
U.S. government-sponsored enterprises and Treasuries	—		—		(66,870)		1,578,739		(66,870)		1,578,739
Other securities	(2,221)		90,725		(21,818)		241,253		(24,039)		331,978
Total	$	(2,752)	$	142,116	$	(150,916)	$	2,123,439	$	(153,668)	$	2,265,555

For available-for-sale securities in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell, the security before recovery of its amortized cost basis. If either of these criteria are met, the security’s amortized cost basis is written down to fair value through net income. For securities in an unrealized loss position that do not meet these criteria, we evaluate whether the decline in fair value has resulted from credit loss or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, adverse conditions specifically related to the security, as well as any guarantees (e.g., guarantees by the U.S. Government) that may be applicable to the security. If this assessment indicates a credit loss exists, the credit-related portion of the loss is recorded as an allowance for losses on the security.

Our investment portfolio contains mortgage-backed securities issued by Ginnie Mae, Fannie Mae, and Freddie Mac, as well as Utah Housing Corporation bonds. We own these securities to meet our requirements under the Community Reinvestment Act (“CRA”). We also invest in other U.S. government-sponsored enterprise securities issued by the Federal Home Loan Banks, Freddie Mac, and the Federal Farm Credit Bank. Our mortgage-backed securities that were issued under Ginnie Mae programs carry a full faith and credit guarantee from the U.S. Government. The remaining mortgage-backed securities in a net loss position carry a principal and interest guarantee by Fannie Mae or Freddie Mac, respectively. Our Treasury and other U.S. government-sponsored enterprise bonds are rated Aaa by Moody’s Investors Service or AA+ by Standard and Poor’s. We have the intent and ability to hold these bonds for a period of time sufficient for the market price to recover to at least the adjusted amortized cost of the security. Based on this qualitative analysis, we have determined that no credit impairment exists.

We periodically sell Private Education Loans through securitization transactions where we are required to retain a five percent vertical risk retention interest. We classify the non-residual vertical risk retention interests as available-for-sale investments. We have the intent and ability to hold each of these bonds for a period of time sufficient for the market price to recover to at least the adjusted amortized cost of the security. We expect to receive all contractual cash flows related to these investments and do not consider a credit impairment to exist.


As of September 30, 2024 Year of Maturity (dollars in thousands)	Amortized Cost		Estimated Fair Value
2024	$	49,998	$	49,922
2025	299,564		296,634
2026	549,052		522,070
2027	98,916		97,582
2038	66		68
2039	561		563
2042	2,152		1,914
2043	3,813		3,512
2044	4,125		3,867
2045	4,567		4,170
2046	7,014		6,318
2047	6,980		6,339
2048	1,706		1,597
2049	14,973		13,648
2050	102,417		84,272
2051	146,699		119,429
2052	59,033		53,601
2053	312,243		310,480
2054	132,881		128,397
2055	75,043		73,470
2056	200,334		202,800
2058	41,120		41,952
Total	$	2,113,257	$	2,022,605

Some of the mortgage-backed securities and a portion of the government securities have been pledged to the Federal Reserve Bank (the “FRB”) as collateral against any advances and accrued interest under the Primary Credit lending program sponsored by the FRB. We had $610 million and $612 million par value of securities pledged to this borrowing facility at September 30, 2024 and December 31, 2023, respectively, as discussed further in Notes to Consolidated Financial Statements, Note 9, “Borrowings” in this Form 10-Q.

We hold investments in non-marketable securities and account for these investments at cost, less impairment, plus or minus observable price changes of identical or similar securities of the same issuer. Changes in market value are recorded through earnings. Because these are non-marketable securities, we use observable price changes of identical or similar securities of the same issuer, or when observable prices are not available, use market data of similar entities, in determining any changes in the value of the securities. In the third quarter of 2024, we funded a new investment in non-marketable securities of an issuer whose securities we have not previously purchased. As of September 30, 2024 and December 31, 2023, our total investment in non-marketable securities was $24 million and $14 million, respectively.

We invest in affordable housing projects that qualify for the low-income housing tax credit (“LIHTC”), which is designed to promote private development of low-income housing. These investments generate a return mostly through realization of federal tax credits and tax benefits from net operating losses on the underlying properties. Total carrying value of the LIHTC investments was $84 million at September 30, 2024 and $72 million at December 31, 2023. We are periodically required to provide additional financial support during the investment period. Our liability for these unfunded commitments was $33 million at September 30, 2024 and $30 million at December 31, 2023.

Related to these investments, we recognized tax credits and other tax benefits through tax (benefit) expense of $2 million at September 30, 2024 and $11 million at December 31, 2023. Tax credits and other tax benefits are recognized as part of our annual effective tax rate used to determine tax expense in a given quarter. Accordingly, the portion of a year’s expected tax benefits recognized in any given quarter may differ from 25 percent.