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Investment Securities | 9 Months Ended
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Sep. 30, 2022
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | The amortized cost and the approximate fair values of investment securities are summarized as follows:
September 30, 2022 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses |  | Estimated Fair Value
Available-for-Sale: |  |  |  |  |
U.S. Treasury notes | $ | 373.5 |  | $ | — |  | $ | (36.7) |  |  | $ | 336.8 |
State, county, and municipal securities | 317.8 |  | — |  | (57.3) |  |  | 260.5 |
Obligations of U.S. government agencies | 216.3 |  | — |  | (17.3) |  |  | 199.0 |
U.S. agency residential & commercial mortgage-backed securities & collateralized mortgage obligations | 4,852.2 |  | 0.2 |  | (442.7) |  |  | 4,409.7 |
Private mortgage-backed securities | 270.3 |  | — |  | (37.1) |  |  | 233.2 |
Collateralized loan obligations | 1,145.5 |  | — |  | (40.4) |  |  | 1,105.1 |
Corporate securities | 272.6 |  | — |  | (33.5) |  |  | 239.1 |
Total | $ | 7,448.2 |  | $ | 0.2 |  | $ | (665.0) |  |  | $ | 6,783.4 |
September 30, 2022 | Amortized Cost | Allowance for Credit Losses | Net Carrying Amount | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value
Held-to-Maturity: |  |  |  |  |  |
U.S. Treasury notes | $ | 396.1 |  | $ | — |  | $ | 396.1 |  | $ | — |  | $ | (10.6) |  | $ | 385.5 |
State, county, and municipal securities | 184.0 |  | (0.1) |  | 183.9 |  | 0.2 |  | (33.2) |  | 150.9 |
Obligations of U.S. government agencies | 350.8 |  | — |  | 350.8 |  | — |  | (51.2) |  | 299.6 |
U.S. agency residential & commercial mortgage-backed securities & collateralized mortgage obligations (1) | 2,476.6 |  | — |  | 2,476.6 |  | — |  | (320.0) |  | 2,156.6 |
Corporate securities | 80.1 |  | (1.8) |  | 78.3 |  | — |  | (7.4) |  | 70.9 |
Total | $ | 3,487.6 |  | $ | (1.9) |  | $ | 3,485.7 |  | $ | 0.2 |  | $ | (422.4) |  | $ | 3,063.5 |
(1) Amortized cost presented above include $20.8 million of unamortized losses and $15.2 million of unamortized gains in U.S. agency residential and commercial mortgage-backed securities and collateralized mortgage obligations related to the 2021 and 2022 transfer of securities from available-for-sale to held-to-maturity.
December 31, 2021 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses |  | Estimated Fair Value
Available-for-Sale: |  |  |  |  |
U.S. Treasury notes | $ | 697.6 |  | $ | — |  | $ | (12.9) |  |  | $ | 684.7 |
State, county, and municipal securities | 434.7 |  | 2.1 |  | (9.3) |  |  | 427.5 |
Obligations of U.S. government agencies | 356.0 |  | 0.1 |  | (9.2) |  |  | 346.9 |
U.S. agency residential & commercial mortgage-backed securities & collateralized mortgage obligations | 2,027.3 |  | 14.1 |  | (23.3) |  |  | 2,018.1 |
Private mortgage-backed securities | 174.4 |  | 0.1 |  | (1.1) |  |  | 173.4 |
Collateralized loan obligation | 898.2 |  | 1.2 |  | — |  |  | 899.4 |
Corporate securities | 271.1 |  | 3.0 |  | (3.6) |  |  | 270.5 |
Total | $ | 4,859.3 |  | $ | 20.6 |  | $ | (59.4) |  |  | $ | 4,820.5 |
December 31, 2021 | Amortized Cost | Allowance for Credit Losses | Net Carrying Amount | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value |
Held-to-Maturity: |  |  |  |  |  |  |
State, county, and municipal securities | $ | 67.6 |  | $ | — |  | $ | 67.6 |  | $ | 2.0 |  | $ | (0.4) |  | $ | 69.2 |  |
U.S. agency residential & commercial mortgage-backed securities & collateralized mortgage obligations(1) | 1,609.0 |  | — |  | 1,609.0 |  | 13.2 |  | (35.3) |  | 1,586.9 |  |
Corporate securities | 11.0 |  | — |  | 11.0 |  | 0.4 |  | — |  | 11.4 |  |
Total | $ | 1,687.6 |  | $ | — |  | $ | 1,687.6 |  | $ | 15.6 |  | $ | (35.7) |  | $ | 1,667.5 |  |
(1) Amortized cost presented above include $20.1 million of unamortized gains in U.S. agency residential and commercial mortgage-backed securities and collateralized mortgage obligations related to the 2021 transfer of securities from available-for-sale to held-to-maturity. |
On February 1, 2022, in conjunction with the acquisition of GWB and under ASC 320, the Company transferred debt securities classified as held-to-maturity with an amortized cost of $10.7 million and an estimated fair value of $10.9 million to the available-for-sale category classification and transferred debt securities classified as available-for-sale with an amortized cost of $485.9 million and an estimated fair value of $463.6 million to the held-to-maturity classification to maintain the Company’s intended risk profile. The transfer of debt securities into the available-for-sale and held-to-maturity categories were recorded at fair value on the date of transfer. This discount, as well as the related unrealized loss in accumulated other comprehensive income, will be amortized into interest income as a yield adjustment over the remaining term of the securities. The amortization of the unrealized loss reported in accumulated other comprehensive (loss) income will offset the effect on interest income of the accretion of the discount. No gains or losses were recorded at the time of transfer. The following tables show the gross unrealized losses and fair values of investment securities, aggregated by investment category, and the length of time individual investment securities have been in an unrealized loss position as of September 30, 2022 and December 31, 2021.
| Less than 12 Months |  | 12 Months or More |  | Total
September 30, 2022 | Fair Value | Gross Unrealized Losses |  | Fair Value | Gross Unrealized Losses |  | Fair Value | Gross Unrealized Losses
Available-for-Sale: |  |  |  |  |  |  |  |
U.S. Treasury notes | $ | 168.2 |  | $ | (5.1) |  |  | $ | 168.6 |  | $ | (31.6) |  |  | $ | 336.8 |  | $ | (36.7) |
State, county, and municipal securities | 110.6 |  | (14.4) |  |  | 136.4 |  | (42.9) |  |  | 247.0 |  | (57.3) |
Obligations of U.S. government agencies | 152.4 |  | (10.9) |  |  | 45.9 |  | (6.4) |  |  | 198.3 |  | (17.3) |
U.S. agency residential & commercial mortgage-backed securities & collateralized mortgage obligations | 3,697.1 |  | (308.8) |  |  | 699.8 |  | (133.9) |  |  | 4,396.9 |  | (442.7) |
Private mortgage-backed securities | 206.1 |  | (32.3) |  |  | 27.0 |  | (4.8) |  |  | 233.1 |  | (37.1) |
Collateralized loan obligations | 1,076.1 |  | (39.8) |  |  | 29.0 |  | (0.6) |  |  | 1,105.1 |  | (40.4) |
Corporate securities | 144.0 |  | (10.4) |  |  | 95.0 |  | (23.1) |  |  | 239.0 |  | (33.5) |
Total | $ | 5,554.5 |  | $ | (421.7) |  |  | $ | 1,201.7 |  | $ | (243.3) |  |  | $ | 6,756.2 |  | $ | (665.0) |
| Less than 12 Months |  | 12 Months or More |  | Total
December 31, 2021 | Fair Value | Gross Unrealized Losses |  | Fair Value | Gross Unrealized Losses |  | Fair Value | Gross Unrealized Losses
Available-for-Sale: |  |  |  |  |  |  |  |
U.S. Treasury notes | $ | 684.7 |  | $ | (12.9) |  |  | $ | — |  | $ | — |  |  | $ | 684.7 |  | $ | (12.9) |
State, county, and municipal securities | 278.7 |  | (9.1) |  |  | 5.0 |  | (0.2) |  |  | 283.7 |  | (9.3) |
Obligations of U.S. government agencies | 297.0 |  | (8.9) |  |  | 16.4 |  | (0.3) |  |  | 313.4 |  | (9.2) |
U.S. agency residential & commercial mortgage-backed securities & collateralized mortgage obligations | 1,262.8 |  | (23.0) |  |  | 26.4 |  | (0.3) |  |  | 1,289.2 |  | (23.3) |
Private mortgage-backed securities | 127.2 |  | (1.1) |  |  | — |  | — |  |  | 127.2 |  | (1.1) |
Corporate securities | 109.9 |  | (3.3) |  |  | 20.9 |  | (0.3) |  |  | 130.8 |  | (3.6) |
Total | $ | 2,760.3 |  | $ | (58.3) |  |  | $ | 68.7 |  | $ | (1.1) |  |  | $ | 2,829.0 |  | $ | (59.4) |
As of September 30, 2022 and December 31, 2021, there were no holdings of securities of any issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders’ equity. The Company acquired $2,356.9 million of available-for-sale securities and $342.1 million of held-to-maturity securities in connection with the acquisition of GWB. Such securities were evaluated and it was determined that there were no investment securities that met the definition of a PCD asset and none were classified as PCD upon acquisition. The Company determines credit losses on both available-for-sale and held-to-maturity investment securities by a discounted cash flow approach using the security’s effective interest rate at the time of purchase or upon acquisition. The allowance for credit losses is measured as the amount by which an investment security’s amortized cost exceeds the net present value of expected future cash flows. However, the amount of credit losses for available-for-sale investment securities is limited to the amount of a security’s unrealized loss. Credit losses on held-to-maturity investment securities are representative of current expected credit losses that may be incurred over the life of the investment. The allowance for credit losses is established through a charge to provision for credit losses in current period earnings. The available-for-sale securities portfolio contains securities that are guaranteed by a sovereign entity or are generally considered to have non-credit related risks, such as interest rate risk or prepayment and liquidity factors. The Company considers whether the securities are issued by the federal government or its agencies and whether downgrades by bond rating agencies have occurred. The Company had no allowance for credit losses for available-for-sale investment securities as of September 30, 2022 and December 31, 2021. As of September 30, 2022 and December 31, 2021, the Company had 1,239 and 285 individual investment securities, respectively, that were in an unrealized loss position, which was related primarily to fluctuations in current interest rates. As of September 30, 2022, the Company had the intent and ability to hold these investment securities for a period of time sufficient to allow for an anticipated recovery. The Company does not intend to sell any of the available-for-sale securities in the above table and the Company does not anticipate it will have to sell any securities before a recovery in cost. The following table presents the activity in the allowance for credit losses related to held-to-maturity securities classified as corporate and state, county, and municipal securities:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2022 |  | 2021 |  | 2022 |  | 2021
Beginning balance |  | $ | 1.6 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Provision for credit loss expense |  | 0.3 |  |  | — |  |  | 1.9 |  |  | — |
Ending balance of allowance for credit losses |  | $ | 1.9 |  |  | $ | — |  |  | $ | 1.9 |  |  | $ | — |
There was no allowance for credit losses on held-to-maturity securities at December 31, 2021. On a quarterly basis, the Company refreshes the credit quality of each held-to-maturity security. The following table summarizes the credit quality indicators of held-to-maturity securities at amortized cost for the periods indicated:
September 30, 2022 | AAA | AA | A | BBB | BB | Not Rated | Total
U.S. Treasury notes | $ | 396.1 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 396.1 |
State, county, and municipal securities | 69.4 |  | 93.8 |  | 12.0 |  | — |  | — |  | 8.8 |  | 184.0 |
Obligations of U.S. government agencies | 350.8 |  | — |  | — |  | — |  | — |  | — |  | 350.8 |
U.S. agency residential & commercial mortgage-backed securities & collateralized mortgage obligations |  |  |  |  |  |  |
FNMA/FHLMC | 2,261.3 |  | — |  | — |  | — |  | — |  | — |  | 2,261.3 |
GNMA | 215.3 |  | — |  | — |  | — |  | — |  | — |  | 215.3 |
Corporate securities | — |  | — |  | — |  | 65.1 |  | 10.0 |  | 5.0 |  | 80.1 |
Total | $ | 3,292.9 |  | $ | 93.8 |  | $ | 12.0 |  | $ | 65.1 |  | $ | 10.0 |  | $ | 13.8 |  | $ | 3,487.6 |
December 31, 2021 | AAA | AA | A | BBB | Not Rated | Total
State, county, and municipal securities | $ | 17.2 |  | $ | 31.6 |  | $ | 14.7 |  | $ | — |  | $ | 4.1 |  | $ | 67.6 |
U.S. agency residential & commercial mortgage-backed securities & collateralized mortgage obligations |  |  |  |  |  |
FNMA/FHLMC | 1,439.1 |  | — |  | — |  | — |  | — |  | 1,439.1 |
GNMA | 169.9 |  | — |  | — |  | — |  | — |  | 169.9 |
Corporate securities | — |  | — |  | 4.0 |  | 7.0 |  | — |  | 11.0 |
Total | $ | 1,626.2 |  | $ | 31.6 |  | $ | 18.7 |  | $ | 7.0 |  | $ | 4.1 |  | $ | 1,687.6 |
As of September 30, 2022 and December 31, 2021, the Company had $34.3 million and $16.6 million, respectively, of accrued interest receivable on the consolidated balance sheet. The Company does not consider accrued interest receivable in the carrying amount of financial assets held at the amortized cost basis or in the allowance for credit losses calculation. As of September 30, 2022 and December 31, 2021, there were no available-for-sale or held-to-maturity securities on nonaccrual status. All securities in the portfolio were current with their contractual principal and interest payments. As of September 30, 2022 and December 31, 2021, there were no collateral dependent available-for-sale or held-to-maturity securities. There were no material gross realized gains and $46.3 million in gross realized losses on the disposition of available-for-sale investment securities, primarily related to the $500.0 million in US treasury notes, during the three months ended September 30, 2022. The gross realized losses were offset by $22.1 million in deferred gains realized related to the termination of the fair value derivative for a net realized loss of $24.2 million. For the nine months ended September 30, 2022, there were no material gross realized gains and $46.4 million in gross realized losses. For the three and the nine month periods ended September 30, 2021, there were no material gross realized gains and no material gross realized losses. Maturities of securities do not reflect rate repricing opportunities present in adjustable-rate mortgage-backed securities. Maturities of mortgage-backed securities have been adjusted to reflect shorter maturities based upon estimated prepayments of principal. All other investment securities maturities are shown at contractual maturity dates.
| Available-for-Sale |  | Held-to-Maturity
September 30, 2022 | Amortized Cost | Estimated Fair Value |  | Amortized Cost | Estimated Fair Value
Within one year | $ | 57.1 |  | $ | 56.4 |  |  | $ | 5.1 |  | $ | 5.0 |
After one year but within five years | 1,049.0 |  | 998.0 |  |  | 546.0 |  | 524.2 |
After five years but within ten years | 1,918.3 |  | 1,710.2 |  |  | 797.1 |  | 695.2 |
After ten years | 4,423.8 |  | 4,018.8 |  |  | 2,139.4 |  | 1,839.1 |
Total | $ | 7,448.2 |  | $ | 6,783.4 |  |  | $ | 3,487.6 |  | $ | 3,063.5 |
As of September 30, 2022, the Company held investment securities callable within one year having amortized costs and estimated fair values of $777.7 million and $706.2 million, respectively. These investment securities are primarily included in the “after five years but within ten years” category in the table above. As of September 30, 2022, the Company had no callable structured notes. As of September 30, 2022 and December 31, 2021, the Company has amortized costs of $4,836.7 million and $2,617.8 million, respectively, for investment securities pledged to secure public deposits and securities sold under repurchase agreements and had approximate fair values of $4,265.1 million and $2,610.8 million, as of September 30, 2022 and December 31, 2021, respectively. All securities sold under repurchase agreements are with clients and mature on the next banking day. The Company retains possession of the underlying securities sold under repurchase agreements. As of September 30, 2022 and December 31, 2021, the Company held $131.9 million and $53.8 million, respectively, in equity securities in a combination of Federal Reserve Bank and Federal Home Loan Bank stocks, which are restricted nonmarketable securities acquired to meet regulatory requirements. These securities are carried at cost.

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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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