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Investment Securities | 6 Months Ended
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Jun. 30, 2023
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | The amortized cost and the approximate fair values of investment securities are summarized as follows:
June 30, 2023 | Amortized Cost | Allowance for Credit Losses | Net Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value
Available-for-Sale: |  |  |  |  |  |
U.S. Treasury notes | $ | 250.1 |  | $ | — |  | $ | 250.1 |  | $ | — |  | $ | (31.0) |  | $ | 219.1 |
State, county, and municipal securities | 258.1 |  | — |  | 258.1 |  | — |  | (43.2) |  | 214.9 |
Obligations of U.S. government agencies | 186.4 |  | — |  | 186.4 |  | — |  | (14.4) |  | 172.0 |
U.S. agency commercial mortgage-backed securities | 1,212.9 |  | — |  | 1,212.9 |  | 0.2 |  | (110.7) |  | 1,102.4 |
U.S. agency residential mortgage-backed securities | 1,534.5 |  | — |  | 1,534.5 |  | — |  | (159.1) |  | 1,375.4 |
Collateralized mortgage obligations | 1,350.8 |  | — |  | 1,350.8 |  | — |  | (145.6) |  | 1,205.2 |
Private mortgage-backed securities | 253.5 |  | — |  | 253.5 |  | — |  | (36.4) |  | 217.1 |
Collateralized loan obligations | 1,141.8 |  | — |  | 1,141.8 |  | — |  | (17.5) |  | 1,124.3 |
Corporate securities | 261.5 |  | (1.4) |  | 260.1 |  | — |  | (32.6) |  | 227.5 |
Other investments | — |  | — |  |  | — |  | — |  | — |
Total | $ | 6,449.6 |  | $ | (1.4) |  | $ | 6,448.2 |  | $ | 0.2 |  | $ | (590.5) |  | $ | 5,857.9 |
June 30, 2023 | Amortized Cost 1 | Allowance for Credit Losses | Net Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value
Held-to-Maturity: |  |  |  |  |  |
U.S. Treasury notes | $ | 397.8 |  | $ | — |  | $ | 397.8 |  | $ | — |  | $ | (8.9) |  | $ | 388.9 |
State, county, and municipal securities | 180.5 |  | — |  | 180.5 |  | 0.2 |  | (27.0) |  | 153.7 |
Obligations of U.S. government agencies | 353.1 |  | — |  | 353.1 |  | — |  | (48.9) |  | 304.2 |
U.S. agency commercial mortgage-backed securities | 517.8 |  | — |  | 517.8 |  | — |  | (61.4) |  | 456.4 |
U.S. agency residential mortgage-backed securities | 1,311.4 |  | — |  | 1,311.4 |  | — |  | (160.7) |  | 1,150.7 |
Collateralized mortgage obligations | 500.7 |  | — |  | 500.7 |  | 0.2 |  | (78.7) |  | 422.2 |
Corporate securities | 57.1 |  | (0.7) |  | 56.4 |  | — |  | (7.8) |  | 48.6 |
Total | $ | 3,318.4 |  | $ | (0.7) |  | $ | 3,317.7 |  | $ | 0.4 |  | $ | (393.4) |  | $ | 2,924.7 |
(1) Amortized cost presented above includes $12.3 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, and $19.2 million of unamortized losses in state, county, and municipal, obligations of U.S. government agencies and collateralized loan obligations related to the 2022 transfer of securities from available-for-sale to held-to-maturity.
December 31, 2022 | Amortized Cost | Allowance for Credit Losses | Net Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value
Available-for-Sale: |  |  |  |  |  |
U.S. Treasury notes | $ | 675.1 |  | $ | — |  | $ | 675.1 |  | $ | 2.1 |  | $ | (34.5) |  | $ | 642.7 |
State, county, and municipal securities | 314.3 |  | — |  | 314.3 |  | — |  | (50.6) |  | 263.7 |
Obligations of U.S. government agencies | 216.2 |  | — |  | 216.2 |  | — |  | (17.3) |  | 198.9 |
U.S. agency commercial mortgage-backed securities | 1,468.0 |  | — |  | 1,468.0 |  | 0.2 |  | (117.0) |  | 1,351.2 |
U.S. agency residential mortgage-backed securities | 1,726.0 |  | — |  | 1,726.0 |  | — |  | (167.7) |  | 1,558.3 |
Collateralized mortgage obligations | 1,491.5 |  | — |  | 1,491.5 |  | — |  | (141.3) |  | 1,350.2 |
Private mortgage-backed securities | 264.9 |  | — |  | 264.9 |  | — |  | (36.9) |  | 228.0 |
Collateralized loan obligations | 1,145.2 |  | — |  | 1,145.2 |  | — |  | (33.6) |  | 1,111.6 |
Corporate securities | 272.3 |  | — |  | 272.3 |  | — |  | (30.8) |  | 241.5 |
Other investments | — |  | — |  | — |  | — |  | — |  | — |
Total | $ | 7,573.5 |  | $ | — |  | $ | 7,573.5 |  | $ | 2.3 |  | $ | (629.7) |  | $ | 6,946.1 |
December 31, 2022 | Amortized Cost 1 | Allowance for Credit Losses | Net Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value |
Held-to-Maturity: |  |  |  |  |  |  |
U.S. Treasury notes | $ | 396.6 |  | $ | — |  | $ | 396.6 |  | $ | — |  | $ | (10.2) |  | $ | 386.4 |  |
State, county, and municipal securities | 181.2 |  | (0.1) |  | 181.1 |  | 0.2 |  | (31.6) |  | 149.7 |  |
Obligations of U.S. government agencies | 351.7 |  | — |  | 351.7 |  | — |  | (49.6) |  | 302.1 |  |
U.S. agency commercial mortgage-backed securities | 526.8 |  | — |  | 526.8 |  | — |  | (58.3) |  | 468.5 |  |
U.S. agency residential mortgage-backed securities | 1,391.5 |  | — |  | 1,391.5 |  | — |  | (166.6) |  | 1,224.9 |  |
Collateralized mortgage obligations | 525.8 |  | — |  | 525.8 |  | 0.2 |  | (76.7) |  | 449.3 |  |
Corporate securities | 80.1 |  | (1.8) |  | 78.3 |  | — |  | (7.0) |  | 71.3 |  |
Other investments | — |  | — |  | — |  | — |  | — |  | — |  |
Total | $ | 3,453.7 |  | $ | (1.9) |  | $ | 3,451.8 |  | $ | 0.4 |  | $ | (400.0) |  | $ | 3,052.2 |  |
(1) Amortized cost presented above includes $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. |
The following tables show the gross unrealized losses and fair values of available-for-sale investment securities and the length of time individual investment securities have been in an unrealized loss position as of June 30, 2023 and December 31, 2022.
| Less than 12 Months |  | 12 Months or More |  | Total
June 30, 2023 | Fair Value | Gross Unrealized Losses |  | Fair Value | Gross Unrealized Losses |  | Fair Value | Gross Unrealized Losses
Available-for-Sale: |  |  |  |  |  |  |  |
U.S. Treasury notes | $ | 47.2 |  | $ | (2.3) |  |  | $ | 171.9 |  | $ | (28.7) |  |  | $ | 219.1 |  | $ | (31.0) |
State, county, and municipal securities | 9.0 |  | (0.4) |  |  | 204.0 |  | (42.8) |  |  | 213.0 |  | (43.2) |
Obligations of U.S. government agencies | 60.6 |  | (3.1) |  |  | 111.0 |  | (11.3) |  |  | 171.6 |  | (14.4) |
U.S. agency commercial mortgage-backed securities | 396.0 |  | (23.7) |  |  | 696.8 |  | (87.0) |  |  | 1,092.8 |  | (110.7) |
U.S. agency residential mortgage-backed securities | 272.5 |  | (15.7) |  |  | 1,102.8 |  | (143.4) |  |  | 1,375.3 |  | (159.1) |
Collateralized mortgage obligations | 312.6 |  | (20.9) |  |  | 892.6 |  | (124.7) |  |  | 1,205.2 |  | (145.6) |
Private mortgage-backed securities | — |  | — |  |  | 217.1 |  | (36.4) |  |  | 217.1 |  | (36.4) |
Collateralized loan obligations | — |  | — |  |  | 1,124.3 |  | (17.5) |  |  | 1,124.3 |  | (17.5) |
Corporate securities | 16.3 |  | (0.9) |  |  | 211.2 |  | (31.7) |  |  | 227.5 |  | (32.6) |
Other securities | — |  | — |  |  | — |  | — |  |  | — |  | — |
Total | $ | 1,114.2 |  | $ | (67.0) |  |  | $ | 4,731.7 |  | $ | (523.5) |  |  | $ | 5,845.9 |  | $ | (590.5) |
| Less than 12 Months |  | 12 Months or More |  | Total
December 31, 2022 | Fair Value | Gross Unrealized Losses |  | Fair Value | Gross Unrealized Losses |  | Fair Value | Gross Unrealized Losses
Available-for-Sale: |  |  |  |  |  |  |  |
U.S. Treasury notes | $ | 168.8 |  | $ | (4.7) |  |  | $ | 170.4 |  | $ | (29.8) |  |  | $ | 339.2 |  | $ | (34.5) |
State, county, and municipal securities | 104.9 |  | (9.0) |  |  | 146.1 |  | (41.6) |  |  | 251.0 |  | (50.6) |
Obligations of U.S. government agencies | 152.2 |  | (10.1) |  |  | 46.1 |  | (7.2) |  |  | 198.3 |  | (17.3) |
U.S. agency commercial mortgage-backed securities | 1,069.8 |  | (59.9) |  |  | 270.8 |  | (57.0) |  |  | 1,340.6 |  | (116.9) |
U.S. agency residential mortgage-backed securities | 1,213.5 |  | (112.3) |  |  | 344.6 |  | (55.4) |  |  | 1,558.1 |  | (167.7) |
Collateralized mortgage obligations | 1,016.4 |  | (90.1) |  |  | 333.0 |  | (51.3) |  |  | 1,349.4 |  | (141.4) |
Private mortgage-backed securities | 133.1 |  | (19.1) |  |  | 94.9 |  | (17.8) |  |  | 228.0 |  | (36.9) |
Collateralized loan obligations | 1,082.6 |  | (33.1) |  |  | 28.9 |  | (0.5) |  |  | 1,111.5 |  | (33.6) |
Corporate securities | 130.6 |  | (8.3) |  |  | 110.8 |  | (22.5) |  |  | 241.4 |  | (30.8) |
Total | $ | 5,071.9 |  | $ | (346.6) |  |  | $ | 1,545.6 |  | $ | (283.1) |  |  | $ | 6,617.5 |  | $ | (629.7) |
As of June 30, 2023 and December 31, 2022, 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 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 management expects to 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 primarily 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. As of June 30, 2023 and December 31, 2022, the Company had 1,030 and 1,222 individual investment securities, respectively, that were in an unrealized loss position, which was related primarily to fluctuations in current interest rates. As of June 30, 2023, 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 available-for-sale investment securities:
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2023 |  | 2022 |  | 2023 |  | 2022
Beginning balance |  | $ | 2.6 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
(Reversal of) provision for credit losses |  | (1.2) |  |  | — |  |  | 1.4 |  |  | — |
Ending balance |  | $ | 1.4 |  |  | $ | — |  |  | $ | 1.4 |  |  | $ | — |
The following table presents the activity in the allowance for credit losses related to held-to-maturity investment securities:
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2023 |  | 2022 |  | 2023 |  | 2022
Beginning balance |  | $ | 0.7 |  |  | $ | 1.6 |  |  | $ | 1.9 |  |  | $ | — |
(Reversal of) provision for credit loss losses |  | — |  |  | — |  |  | (1.2) |  |  | 1.6 |
Ending balance |  | $ | 0.7 |  |  | $ | 1.6 |  |  | $ | 0.7 |  |  | $ | 1.6 |
The Company had a $1.4 million and no allowance for credit losses for available-for-sale corporate investment securities as of June 30, 2023 and December 31, 2022, respectively. The Company had a $0.7 million and a $1.9 million allowance for credit losses for held-to-maturity corporate and state, county, and municipal investment securities as of June 30, 2023 and December 31, 2022, respectively. On a quarterly basis, the Company refreshes the credit quality indicator 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:
June 30, 2023 | AAA | AA | A | BBB | BB | Not Rated | Total
U.S. Treasury notes | $ | 397.8 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 397.8 |
State, county, and municipal securities | 69.1 |  | 92.6 |  | 10.6 |  | — |  | — |  | 8.2 |  | 180.5 |
Obligations of U.S. government agencies | 353.1 |  | — |  | — |  | — |  | — |  | — |  | 353.1 |
U.S. agency commercial mortgage-backed securities |  |  |  |  |  |  |
FNMA/FHLMC | 361.9 |  | — |  | — |  | — |  | — |  | — |  | 361.9 |
GNMA | 155.9 |  | — |  | — |  | — |  | — |  | — |  | 155.9 |
U.S. agency residential mortgage-backed securities |  |  |  |  |  |  |
FNMA/FHLMC | 1,265.8 |  | — |  | — |  | — |  | — |  | — |  | 1,265.8 |
GNMA | 45.6 |  | — |  | — |  | — |  | — |  | — |  | 45.6 |
Collateralized mortgage obligations |  |  |  |  |  |  |
FNMA/FHLMC | 352.2 |  | — |  | — |  | — |  | — |  | — |  | 352.2 |
GNMA | 148.5 |  | — |  | — |  | — |  | — |  | — |  | 148.5 |
Corporate securities | — |  | — |  | — |  | 52.1 |  | — |  | 5.0 |  | 57.1 |
Total | $ | 3,149.9 |  | $ | 92.6 |  | $ | 10.6 |  | $ | 52.1 |  | $ | — |  | $ | 13.2 |  | $ | 3,318.4 |
December 31, 2022 | AAA | AA | A | BBB | BB | Not Rated | Total
U.S. Treasury notes | $ | 396.6 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 396.6 |
State, county, and municipal securities | 68.3 |  | 92.8 |  | 11.5 |  | — |  | — |  | 8.6 |  | 181.2 |
Obligations of U.S. government agencies | 351.7 |  | — |  | — |  | — |  | — |  | — |  | 351.7 |
U.S. agency commercial mortgage-backed securities |  |  |  |  |  |  |
FNMA/FHLMC | 364.9 |  | — |  | — |  | — |  | — |  | — |  | 364.9 |
GNMA | 161.9 |  | — |  | — |  | — |  | — |  | — |  | 161.9 |
U.S. agency residential mortgage-backed securities |  |  |  |  |  |  |
FNMA/FHLMC | 1,342.9 |  | — |  | — |  | — |  | — |  | — |  | 1,342.9 |
GNMA | 48.6 |  | — |  | — |  | — |  | — |  | — |  | 48.6 |
Collateralized mortgage obligations |  |  |  |  |  |  |
FNMA/FHLMC | 525.8 |  | — |  | — |  | — |  | — |  | — |  | 525.8 |
Corporate securities | — |  | — |  | — |  | 65.1 |  | 10.0 |  | 5.0 |  | 80.1 |
Other securities | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total | $ | 3,260.7 |  | $ | 92.8 |  | $ | 11.5 |  | $ | 65.1 |  | $ | 10.0 |  | $ | 13.6 |  | $ | 3,453.7 |
As of June 30, 2023 and December 31, 2022, the Company had $38.1 million and $38.9 million, respectively, of accrued interest receivable from investment securities on the consolidated balance sheets. Accrued interest receivable is presented as a separate line item on the consolidated balance sheets and the Company does not include accrued interest receivable in the carrying amount of financial assets held at the amortized cost basis or in the related allowance for credit losses calculation. As of June 30, 2023 and December 31, 2022, 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 June 30, 2023 and December 31, 2022, there were no collateral-dependent available-for-sale or held-to-maturity securities. There were no material gross realized gains and no material gross realized losses during the three months ended June 30, 2023. During the six months ended June 30, 2023, there were no material gross realized gains and $23.5 million in gross realized losses on the disposition of available-for-sale investment securities, as a result of the sale of $853.0 million in carrying value of investment securities. For the three and the six month periods ended June 30, 2022, there were no material gross realized gains and no material gross realized losses on the disposition of available-for-sale investment securities. 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
June 30, 2023 | Amortized Cost | Estimated Fair Value |  | Amortized Cost | Estimated Fair Value
Within one year | $ | 0.5 |  | $ | 0.5 |  |  | $ | 308.1 |  | $ | 301.7 |
After one year but within five years | 814.4 |  | 761.3 |  |  | 346.6 |  | 322.9 |
After five years but within ten years | 1,655.7 |  | 1,472.1 |  |  | 654.3 |  | 567.9 |
After ten years | 3,979.0 |  | 3,624.0 |  |  | 2,009.4 |  | 1,732.2 |
Total | $ | 6,449.6 |  | $ | 5,857.9 |  |  | $ | 3,318.4 |  | $ | 2,924.7 |
As of June 30, 2023, the Company held investment securities callable within one year having amortized costs and estimated fair values of $1,593.8 million and $1,521.2 million, respectively. These investment securities are primarily included in the “after ten years” category in the table above. As of June 30, 2023, the Company had no callable structured notes. As of June 30, 2023 and December 31, 2022, the Company has amortized costs of $7,227.8 million and $4,998.9 million, respectively, for investment securities pledged to secure public deposits and securities sold under repurchase agreements that had estimated fair values of $6,455.1 million and $4,432.0 million, as of June 30, 2023 and December 31, 2022, 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 June 30, 2023 and December 31, 2022, the Company held $210.4 million and $198.6 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 https://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 https://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 https://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 https://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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