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Investment Securities | 12 Months Ended
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Dec. 31, 2021
Investments Debt And Equity Securities [Abstract] |
Investment Securities | Note 3. Investment Securities The amortized cost, gross unrealized gains and losses, and fair value of the Company’s investment securities as of December 31, 2021, December 31, 2020, and December 31, 2019, were as follows:
(dollars in thousands) |  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Fair Value |
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-Sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt Securities Issued by the U.S. Treasury and Government Agencies |  | $ | 248,858 |  |  | $ | 1,513 |  |  | $ | (284 | ) |  | $ | 250,087 |
Debt Securities Issued by States and Political Subdivisions |  |  | 74,743 |  |  |  | 1,080 |  |  |  | (5 | ) |  |  | 75,818 |
Debt Securities Issued by U.S. Government-Sponsored Enterprises |  |  | 1,758 |  |  |  | 33 |  |  |  | (11 | ) |  |  | 1,780 |
Debt Securities Issued by Corporations |  |  | 384,590 |  |  |  | 2,339 |  |  |  | (3,816 | ) |  |  | 383,113 |
Mortgage-Backed Securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential - Government Agencies |  |  | 1,327,990 |  |  |  | 9,818 |  |  |  | (18,766 | ) |  |  | 1,319,042 |
Residential - U.S. Government-Sponsored Enterprises |  |  | 2,127,781 |  |  |  | 4,792 |  |  |  | (42,247 | ) |  |  | 2,090,326 |
Commercial - Government Agencies |  |  | 155,164 |  |  |  | 1,885 |  |  |  | (1,159 | ) |  |  | 155,890 |
Total Mortgage-Backed Securities |  |  | 3,610,935 |  |  |  | 16,495 |  |  |  | (62,172 | ) |  |  | 3,565,258 |
Total |  | $ | 4,320,884 |  |  | $ | 21,460 |  |  | $ | (66,288 | ) |  | $ | 4,276,056 |
Held-to-Maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt Securities Issued by the U.S. Treasury and Government Agencies |  | $ | 131,495 |  |  | $ | 287 |  |  | $ | (643 | ) |  | $ | 131,139 |
Debt Securities Issued by Corporations |  |  | 20,316 |  |  |  | 76 |  |  |  | (249 | ) |  |  | 20,143 |
Mortgage-Backed Securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential - Government Agencies |  |  | 1,774,394 |  |  |  | 12,139 |  |  |  | (30,621 | ) |  |  | 1,755,912 |
Residential - U.S. Government-Sponsored Enterprises |  |  | 2,286,880 |  |  |  | 15,508 |  |  |  | (32,627 | ) |  |  | 2,269,761 |
Commercial - Government Agencies |  |  | 481,695 |  |  |  | 324 |  |  |  | (12,355 | ) |  |  | 469,664 |
Total Mortgage-Backed Securities |  |  | 4,542,969 |  |  |  | 27,971 |  |  |  | (75,603 | ) |  |  | 4,495,337 |
Total |  | $ | 4,694,780 |  |  | $ | 28,334 |  |  | $ | (76,495 | ) |  | $ | 4,646,619 |
December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-Sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt Securities Issued by the U.S. Treasury and Government Agencies |  | $ | 174,409 |  |  | $ | 427 |  |  | $ | (591 | ) |  | $ | 174,245 |
Debt Securities Issued by States and Political Subdivisions |  |  | 23,540 |  |  |  | 1,301 |  |  |  | (1 | ) |  |  | 24,840 |
Debt Securities Issued by U.S. Government-Sponsored Enterprises |  |  | 985 |  |  |  | 77 |  |  |  | — |  |  |  | 1,062 |
Debt Securities Issued by Corporations |  |  | 220,717 |  |  |  | 4,844 |  |  |  | (956 | ) |  |  | 224,605 |
Mortgage-Backed Securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential - Government Agencies |  |  | 1,561,603 |  |  |  | 33,657 |  |  |  | (445 | ) |  |  | 1,594,815 |
Residential - U.S. Government-Sponsored Enterprises |  |  | 1,497,353 |  |  |  | 21,254 |  |  |  | (324 | ) |  |  | 1,518,283 |
Commercial - Government Agencies |  |  | 243,029 |  |  |  | 10,868 |  |  |  | (58 | ) |  |  | 253,839 |
Total Mortgage-Backed Securities |  |  | 3,301,985 |  |  |  | 65,779 |  |  |  | (827 | ) |  |  | 3,366,937 |
Total |  | $ | 3,721,636 |  |  | $ | 72,428 |  |  | $ | (2,375 | ) |  | $ | 3,791,689 |
Held-to-Maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt Securities Issued by the U.S. Treasury and Government Agencies |  | $ | 7,500 |  |  | $ | 8 |  |  | $ | (8 | ) |  | $ | 7,500 |
Debt Securities Issued by States and Political Subdivisions |  |  | 33,763 |  |  |  | 741 |  |  |  | — |  |  |  | 34,504 |
Debt Securities Issued by Corporations |  |  | 12,031 |  |  |  | 251 |  |  |  | — |  |  |  | 12,282 |
Mortgage-Backed Securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential - Government Agencies |  |  | 917,459 |  |  |  | 30,580 |  |  |  | (29 | ) |  |  | 948,010 |
Residential - U.S. Government-Sponsored Enterprises |  |  | 2,099,053 |  |  |  | 51,735 |  |  |  | (291 | ) |  |  | 2,150,497 |
Commercial - Government Agencies |  |  | 192,921 |  |  |  | 3,179 |  |  |  | (200 | ) |  |  | 195,900 |
Total Mortgage-Backed Securities |  |  | 3,209,433 |  |  |  | 85,494 |  |  |  | (520 | ) |  |  | 3,294,407 |
Total |  | $ | 3,262,727 |  |  | $ | 86,494 |  |  | $ | (528 | ) |  | $ | 3,348,693 |
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-Sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt Securities Issued by the U.S. Treasury and Government Agencies |  | $ | 222,365 |  |  | $ | 213 |  |  | $ | (1,447 | ) |  | $ | 221,131 |
Debt Securities Issued by States and Political Subdivisions |  |  | 54,480 |  |  |  | 631 |  |  |  | (14 | ) |  |  | 55,097 |
Debt Securities Issued by U.S. Government-Sponsored Enterprises |  |  | 22,128 |  |  |  | 19 |  |  |  | — |  |  |  | 22,147 |
Debt Securities Issued by Corporations |  |  | 335,553 |  |  |  | 1,401 |  |  |  | (633 | ) |  |  | 336,321 |
Mortgage-Backed Securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential - Government Agencies |  |  | 1,164,466 |  |  |  | 11,627 |  |  |  | (3,267 | ) |  |  | 1,172,826 |
Residential - U.S. Government-Sponsored Enterprises |  |  | 584,272 |  |  |  | 4,363 |  |  |  | (1,874 | ) |  |  | 586,761 |
Commercial - Government Agencies |  |  | 224,372 |  |  |  | 2,889 |  |  |  | (2,541 | ) |  |  | 224,720 |
Total Mortgage-Backed Securities |  |  | 1,973,110 |  |  |  | 18,879 |  |  |  | (7,682 | ) |  |  | 1,984,307 |
Total |  | $ | 2,607,636 |  |  | $ | 21,143 |  |  | $ | (9,776 | ) |  | $ | 2,619,003 |
Held-to-Maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt Securities Issued by the U.S. Treasury and Government Agencies |  | $ | 274,375 |  |  | $ | 1,319 |  |  | $ | (31 | ) |  | $ | 275,663 |
Debt Securities Issued by States and Political Subdivisions |  |  | 54,811 |  |  |  | 1,236 |  |  |  | — |  |  |  | 56,047 |
Debt Securities Issued by Corporations |  |  | 14,975 |  |  |  | — |  |  |  | (138 | ) |  |  | 14,837 |
Mortgage-Backed Securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential - Government Agencies |  |  | 1,067,416 |  |  |  | 13,247 |  |  |  | (5,348 | ) |  |  | 1,075,315 |
Residential - U.S. Government-Sponsored Enterprises |  |  | 1,546,479 |  |  |  | 13,871 |  |  |  | (2,478 | ) |  |  | 1,557,872 |
Commercial - Government Agencies |  |  | 84,238 |  |  |  | 317 |  |  |  | (1,407 | ) |  |  | 83,148 |
Total Mortgage-Backed Securities |  |  | 2,698,133 |  |  |  | 27,435 |  |  |  | (9,233 | ) |  |  | 2,716,335 |
Total |  | $ | 3,042,294 |  |  | $ | 29,990 |  |  | $ | (9,402 | ) |  | $ | 3,062,882 |
The Company elected to exclude accrued interest receivable (“AIR”) from the amortized cost basis of debt securities disclosed throughout this footnote. For available-for-sale (“AFS”) debt securities, AIR totaled $8.4 million and $6.6 million as of December 31, 2021, and December 31, 2020, respectively. For held-to-maturity (“HTM”) debt securities, AIR totaled $8.2 million and $6.8 million as of December 31, 2021, and December 31, 2020, respectively. AIR is included in the “accrued interest receivable” line item on the Company’s consolidated statements of condition. The table below presents an analysis of the contractual maturities of the Company’s investment securities as of December 31, 2021. Debt securities issued by government agencies (Small Business Administration securities) and mortgage-backed securities are disclosed separately in the table below as these investment securities may prepay prior to their scheduled contractual maturity dates.
(dollars in thousands) |  | Amortized Cost |  |  | Fair Value |
Available-for-Sale: |  |  |  |  |  |  |  |
Due in One Year or Less |  | $ | 972 |  |  | $ | 978 |
Due After One Year Through Five Years |  |  | 214,558 |  |  |  | 215,275 |
Due After Five Years Through Ten Years |  |  | 347,391 |  |  |  | 345,996 |
Due After Ten Years |  |  | 13,130 |  |  |  | 13,305 |
|  |  | 576,051 |  |  |  | 575,554 |
Debt Securities Issued by Government Agencies |  |  | 133,898 |  |  |  | 135,244 |
Mortgage-Backed Securities: |  |  |  |  |  |  |  |
Residential - Government Agencies |  |  | 1,327,990 |  |  |  | 1,319,042 |
Residential - U.S. Government-Sponsored Enterprises |  |  | 2,127,781 |  |  |  | 2,090,326 |
Commercial - Government Agencies |  |  | 155,164 |  |  |  | 155,890 |
Total Mortgage-Backed Securities |  |  | 3,610,935 |  |  |  | 3,565,258 |
Total |  | $ | 4,320,884 |  |  | $ | 4,276,056 |
Held-to-Maturity: |  |  |  |  |  |  |  |
Due After One Year Through Five Years |  | $ | 16,537 |  |  | $ | 16,391 |
Due After Five Years Through Ten Years |  |  | 123,996 |  |  |  | 123,862 |
Due After Ten Years |  |  | 11,278 |  |  |  | 11,029 |
|  |  | 151,811 |  |  |  | 151,282 |
Mortgage-Backed Securities: |  |  |  |  |  |  |  |
Residential - Government Agencies |  |  | 1,774,394 |  |  |  | 1,755,912 |
Residential - U.S. Government-Sponsored Enterprises |  |  | 2,286,880 |  |  |  | 2,269,761 |
Commercial - Government Agencies |  |  | 481,695 |  |  |  | 469,664 |
Total Mortgage-Backed Securities |  |  | 4,542,969 |  |  |  | 4,495,337 |
Total |  | $ | 4,694,780 |  |  | $ | 4,646,619 |
Investment securities with carrying values of $2.9 billion and $3.6 billion as of December 31, 2021, and December 31, 2020, respectively, were pledged to secure deposits of governmental entities and securities sold under agreements to repurchase. The table below presents the gains and losses from the sales of investment securities for the years ended December 31, 2021, December 31, 2020, and December 31, 2019.
(dollars in thousands) |  | 2021 |  |  | 2020 |  |  | 2019 |
Gross Gains on Sales of Investment Securities |  | $ | 3,825 |  |  | $ | 14,257 |  |  | $ | 7,810 |
Gross Losses on Sales of Investment Securities |  |  | (5,122 | ) |  |  | (4,325 | ) |  |  | (11,796 | )
Net Gains (Losses) on Sales of Investment Securities |  | $ | (1,297 | ) |  | $ | 9,932 |  |  | $ | (3,986 | )
The losses on sales of investment securities during the years ended December 31, 2021, December 31, 2020, and December 31, 2019, were due to fees paid to the counterparties of the Company’s prior Visa Class B share sale transactions, which are expensed as incurred. The following table summarizes the Company’s AFS debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by major security type and length of time in a continuous unrealized loss position:
|  | Less Than 12 Months |  |  | 12 Months or Longer |  |  | Total |
(dollars in thousands) |  | Fair Value |  |  | Gross Unrealized Losses |  |  | Fair Value |  |  | Gross Unrealized Losses |  |  | Fair Value |  |  | Gross Unrealized Losses |
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-Sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt Securities Issued by the U.S. Treasury and Government Agencies |  | $ | 51,455 |  |  | $ | (195 | ) |  | $ | 9,995 |  |  | $ | (89 | ) |  | $ | 61,450 |  |  | $ | (284 | )
Debt Securities Issued by States and Political Subdivisions |  |  | 643 |  |  |  | (5 | ) |  |  | — |  |  |  | — |  |  |  | 643 |  |  |  | (5 | )
Debt Securities Issued by U.S. Government- Sponsored Enterprises |  |  | 814 |  |  |  | (10 | ) |  |  | 49 |  |  |  | (1 | ) |  |  | 863 |  |  |  | (11 | )
Debt Securities Issued by Corporations |  |  | 249,629 |  |  |  | (2,846 | ) |  |  | 64,029 |  |  |  | (970 | ) |  |  | 313,658 |  |  |  | (3,816 | )
Mortgage-Backed Securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential - Government Agencies |  |  | 810,157 |  |  |  | (17,131 | ) |  |  | 41,471 |  |  |  | (1,635 | ) |  |  | 851,628 |  |  |  | (18,766 | )
Residential - U.S. Government-Sponsored Enterprises |  |  | 1,670,500 |  |  |  | (35,711 | ) |  |  | 180,205 |  |  |  | (6,536 | ) |  |  | 1,850,705 |  |  |  | (42,247 | )
Commercial - Government Agencies |  |  | 25,664 |  |  |  | (223 | ) |  |  | 21,810 |  |  |  | (936 | ) |  |  | 47,474 |  |  |  | (1,159 | )
Total Mortgage-Backed Securities |  |  | 2,506,321 |  |  |  | (53,065 | ) |  |  | 243,486 |  |  |  | (9,107 | ) |  |  | 2,749,807 |  |  |  | (62,172 | )
Total |  | $ | 2,808,862 |  |  | $ | (56,121 | ) |  | $ | 317,559 |  |  | $ | (10,167 | ) |  | $ | 3,126,421 |  |  | $ | (66,288 | )
December 31, 2020 ¹ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-Sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt Securities Issued by the U.S. Treasury and Government Agencies |  | $ | 21,338 |  |  | $ | (42 | ) |  | $ | 87,070 |  |  | $ | (549 | ) |  | $ | 108,408 |  |  | $ | (591 | )
Debt Securities Issued by States and Political Subdivisions |  |  | — |  |  |  | — |  |  |  | 26 |  |  |  | (1 | ) |  |  | 26 |  |  |  | (1 | )
Debt Securities Issued by Corporations |  |  | 65,000 |  |  |  | (853 | ) |  |  | 50,000 |  |  |  | (103 | ) |  |  | 115,000 |  |  |  | (956 | )
Mortgage-Backed Securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential - Government Agencies |  |  | 113,538 |  |  |  | (222 | ) |  |  | 28,063 |  |  |  | (223 | ) |  |  | 141,601 |  |  |  | (445 | )
Residential - U.S. Government-Sponsored Enterprises |  |  | 94,002 |  |  |  | (324 | ) |  |  | — |  |  |  | — |  |  |  | 94,002 |  |  |  | (324 | )
Commercial - Government Agencies |  |  | 25,075 |  |  |  | (58 | ) |  |  | — |  |  |  | — |  |  |  | 25,075 |  |  |  | (58 | )
Total Mortgage-Backed Securities |  |  | 232,615 |  |  |  | (604 | ) |  |  | 28,063 |  |  |  | (223 | ) |  |  | 260,678 |  |  |  | (827 | )
Total |  | $ | 318,953 |  |  | $ | (1,499 | ) |  | $ | 165,159 |  |  | $ | (876 | ) |  | $ | 484,112 |  |  | $ | (2,375 | )
¹ The fair value and gross unrealized losses as of December 31, 2020, have been updated to properly reflect the length of time they were in a continuous unrealized loss position. The Company does not believe that the AFS debt securities that were in an unrealized loss position as of December 31, 2021, which were comprised of 231 individual securities, represent a credit loss impairment. The gross unrealized loss positions were primarily related to mortgage-backed securities issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government, are widely recognized as “risk free,” and have a long history of zero credit loss. Total gross unrealized losses were primarily attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. The Company do not intend to sell the investment securities that were in an unrealized loss position and it is not more likely than not that the Company will be required to sell the investment securities before recovery of their amortized cost basis, which may be at maturity. Substantially all of the Company’s HTM debt securities are issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government, are widely recognized as “risk free,” and have a long history of zero credit loss. Therefore, the Company did not record an allowance for credit losses for these securities as of December 31, 2021. Interest income from taxable and non-taxable investment securities for the years ended December 31, 2021, December 31, 2020, and December 31, 2019, were as follows:
|  | Year Ended December 31, |
(dollars in thousands) |  | 2021 |  |  | 2020 |  |  | 2019 |
Taxable |  | $ | 125,529 |  |  | $ | 125,291 |  |  | $ | 137,204 |
Non-Taxable |  |  | 976 |  |  |  | 2,058 |  |  |  | 6,586 |
Total Interest Income from Investment Securities |  | $ | 126,505 |  |  | $ | 127,349 |  |  | $ | 143,790 |
As of December 31, 2021, and December 31, 2020, the carrying value of the Company’s Federal Home Loan Bank of Des Moines (“FHLB Des Moines”) stock and Federal Reserve Bank stock was as follows:
|  | December 31, |
(dollars in thousands) |  | 2021 |  |  | 2020 |
Federal Home Loan Bank of Des Moines Stock |  | $ | 10,000 |  |  | $ | 12,000 |
Federal Reserve Bank Stock |  |  | 26,624 |  |  |  | 21,340 |
Total |  | $ | 36,624 |  |  | $ | 33,340 |
These securities can only be redeemed or sold at their par value and only to the respective issuing government-supported institution or to another member institution. The Company records these non-marketable equity securities as a component of other assets and periodically evaluates these securities for impairment. Management considers these non-marketable equity securities to be long-term investments. Accordingly, when evaluating these securities for impairment, management considers the ultimate recoverability of the par value rather than recognizing temporary declines in value. Visa Class B Restricted Shares In 2008, the Company received Visa Class B restricted shares as part of Visa’s initial public offering. These shares are transferable only under limited circumstances until they can be converted into the publicly traded Class A common shares. This conversion will not occur until the settlement of certain litigation which is indemnified by Visa members, including the Company. Visa funded an escrow account from its initial public offering to settle these litigation claims. Should this escrow account not be sufficient to cover these litigation claims, Visa is entitled to fund additional amounts to the escrow account by reducing each member bank’s Class B conversion ratio to unrestricted Class A shares. In December 2021, Visa announced a reduction of the conversion rate from 1.6228 to 1.6181 effective December 29, 2021. See Note 17 Derivative Financial Instruments for more information. During the second quarter of 2020, the Company sold its remaining 80,214 Visa Class B Shares and recorded a $14.2 million gain on sale. As a result of this sale, the Company no longer owns any Visa Class B shares.

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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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