The Company held equity securities with readily determinable fair values of $4,426,000 and $5,191,000 at June 30, 2023 and December 31, 2022, respectively. The gross realized and unrealized gains and losses recognized on equity securities with readily determinable fair values in noninterest income in the Company’s consolidated statements of income were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in thousands)	2023		2022		2023		2022
Unrealized gains (losses) on equity securities held at the reporting date	$	(72)	$	(35)	$	—	$	(454)
Realized gains (losses) on equity securities sold during the period	—		—		18		—
	$	(72)	$	(35)	$	18	$	(454)


(Dollars in thousands)	June 30, 2023		December 31, 2022
Equity Securities without readily determinable fair value, at cost	$	64,282	$	39,019
Upward adjustments based on observable price changes, cumulative	10,163		10,163
Equity Securities without readily determinable fair value, carrying value	$	74,445	$	49,182

Equity securities without readily determinable fair values include Federal Home Loan Bank and other restricted stock, which are reported separately in the Company's consolidated balance sheets. Equity securities without readily determinable fair values also include the Company's investments in the common stock of Trax Group, Inc. and Warehouse Solutions Inc., discussed below, and other investments, which are included in other assets in the Company's consolidated balance sheets.


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in thousands)	2023		2022		2023		2022
Unrealized gains (losses) on equity securities still held at the reporting date	$	—	$	10,163	$	—	$	10,163
Realized gains (losses) on equity securities sold during the period	—		—		—		—
	$	—	$	10,163	$	—	$	10,163

On June 22, 2023, the Company made a $9,700,000 minority investment in Trax Group, Inc. ("Trax"), a leader in transportation spend management solutions. The investment in Trax is accounted for as an equity investment without a readily determinable fair value measured under the measurement alternative and is included in other assets in the Company's consolidated balance sheets.

On October 17, 2019, the Company made a minority equity investment of $8,000,000 in Warehouse Solutions Inc. (“WSI”), purchasing 8% of the common stock of WSI and receiving warrants to purchase an additional 10% of the common stock of WSI upon exercise of the warrants at a later date. WSI provides technology solutions to help reduce supply chain costs for a global client base across multiple industries.

Although the Company held less than 20% of the voting stock of WSI, the investment in common stock was initially accounted for using the equity method as the Company’s representation on WSI’s board of directors, which was disproportionately larger in size than the common stock investment held, demonstrated that it had significant influence over the investee.

On June 10, 2022, the Company entered into two separate agreements with WSI. First, the Company entered into an Affiliate Agreement. The Affiliate Agreement canceled the Company’s outstanding warrants and modified the structure of the existing operating agreement to be consistent with TriumphPay operating as an open loop payments network. By modifying the operating agreement, the Company’s Payments segment operations now have greater ability to operate in the freight shipper audit space. As a result of the Affiliate Agreement, the Company recognized a total loss on impairment of the warrants of $3,224,000, which represented the full book balance of the warrants on the date the Affiliate Agreement was executed. The impairment loss was included in other noninterest income on the Company's consolidated statements of income during the three months ended June 30, 2022.

Separately, the Company also entered into an Amended and Restated Investor Rights Agreement (the “Investor Rights Agreement”). The Investor Rights Agreement eliminated the Company’s representation on WSI’s board of directors making the Company a completely passive investor. The Investor Rights Agreement also provided for the Company’s purchase of an additional 10% of WSI’s common stock for $23,000,000 raising the Company’s ownership of WSI’s common stock to 18%. As a passive investor, the Company no longer holds significant influence over the investee and the investment in WSI’s common stock no longer qualifies for equity method accounting. The investment in WSI’s common stock is now accounted for as an equity investment without a readily determinable fair value measured under the measurement alternative. The measurement alternative requires the Company to remeasure its investment in the common stock of WSI only upon the execution of an orderly and observable transaction in an identical or similar instrument.

The Company's additional investment in WSI under the Investor Rights Agreement qualified as an orderly and observable transaction for an identical investment in WSI, therefore the fair value of the Company's original 8% common stock investment was required to be adjusted from $4,925,000 at March 31, 2022 to $15,088,000, resulting in a gain of $10,163,000 that was recorded in other noninterest income on the Company's consolidated statements of income during the three months ended June 30, 2022. The Company's investment in WSI totaled $38,088,000 at June 30, 2023 and December 31, 2022 and has been allocated to the Payments segment.

Debt securities have been classified in the financial statements as available for sale or held to maturity. The following table summarizes the amortized cost, fair value, and allowance for credit losses of debt securities and the corresponding amounts of gross unrealized gains and losses of available for sale securities recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses of held to maturity securities:


(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
June 30, 2023
Available for sale securities:
Mortgage-backed securities, residential	$	51,069	$	—	$	(5,240)	$	—	$	45,829
Asset-backed securities	1,286		—		(34)		—		1,252
State and municipal	5,283		—		(88)		—		5,195
CLO securities	250,260		481		(1,662)		—		249,079
Corporate bonds	769		—		(9)		—		760
SBA pooled securities	1,773		5		(114)		—		1,664
Total available for sale securities	$	310,440	$	486	$	(7,147)	$	—	$	303,779


(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrecognized Losses		Fair Value
June 30, 2023
Held to maturity securities:
CLO securities	$	6,256	$	284	$	(1,790)	$	4,750
Allowance for credit losses	(2,876)
Total held to maturity securities, net of ACL	$	3,380


(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
December 31, 2022
Available for sale securities:
Mortgage-backed securities, residential	$	55,329	$	235	$	(4,931)	$	—	$	50,633
Asset-backed securities	6,389		—		(58)		—		6,331
State and municipal	13,553		1		(116)		—		13,438
CLO Securities	185,068		161		(4,218)		—		181,011
Corporate bonds	1,270		1		(8)		—		1,263
SBA pooled securities	1,910		29		(111)		—		1,828
Total available for sale securities	$	263,519	$	427	$	(9,442)	$	—	$	254,504


(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrecognized Losses		Fair Value
December 31, 2022
Held to maturity securities:
CLO securities	$	6,521	$	458	$	(1,503)	$	5,476
Allowance for credit losses	(2,444)
Total held to maturity securities, net of ACL	$	4,077

The amortized cost and estimated fair value of securities at June 30, 2023, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	Available for Sale Securities				Held to Maturity Securities
(Dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	1,224	$	1,220	$	—	$	—
Due from one year to five years	2,213		2,175		1,913		2,106
Due from five years to ten years	73,022		72,397		4,343		2,644
Due after ten years	179,853		179,242		—		—
	256,312		255,034		6,256		4,750
Mortgage-backed securities, residential	51,069		45,829		—		—
Asset-backed securities	1,286		1,252		—		—
SBA pooled securities	1,773		1,664		—		—
	$	310,440	$	303,779	$	6,256	$	4,750


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in thousands)	2023		2022		2023		2022
Proceeds	$	4,000	$	40,163	$	4,000	$	40,163
Gross gains	—		2,512		—		2,512
Gross losses	—		—		—		—
Net gains and losses from calls of securities	—		2		—		2

Debt securities with a carrying amount of approximately $35,749,000 and $93,813,000 at June 30, 2023 and December 31, 2022, respectively, were pledged to secure public deposits, customer repurchase agreements, and for other purposes required or permitted by law.

Accrued interest on available for sale securities totaled $4,299,000 and $2,593,000 at June 30, 2023 and December 31, 2022, respectively, and was included in other assets on the Company's consolidated balance sheets. There was no accrued interest related to debt securities reversed against interest income for the three and six months ended June 30, 2023 and 2022.

The following table summarizes available for sale debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous loss position:


	Less than 12 Months				12 Months or More				Total
(Dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
June 30, 2023
Available for sale securities:
Mortgage-backed securities, residential	$	18,822	$	(574)	$	26,886	$	(4,666)	$	45,708	$	(5,240)
Asset-backed securities	—		—		1,252		(34)		1,252		(34)
State and municipal	4,134		(57)		471		(31)		4,605		(88)
CLO securities	23,028		(49)		107,197		(1,613)		130,225		(1,662)
Corporate bonds	759		(9)		—		—		759		(9)
SBA pooled securities	223		(3)		1,133		(111)		1,356		(114)
	$	46,966	$	(692)	$	136,939	$	(6,455)	$	183,905	$	(7,147)


	Less than 12 Months				12 Months or More				Total
(Dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
December 31, 2022
Available for sale securities:
Mortgage-backed securities, residential	$	26,030	$	(1,507)	$	15,828	$	(3,424)	$	41,858	$	(4,931)
Asset-backed securities	1,337		(52)		4,994		(6)		6,331		(58)
State and municipal	12,680		(116)		—		—		12,680		(116)
CLO Securities	151,572		(3,407)		19,439		(811)		171,011		(4,218)
Corporate bonds	261		(8)		—		—		261		(8)
SBA pooled securities	1,262		(111)		—		—		1,262		(111)
	$	193,142	$	(5,201)	$	40,261	$	(4,241)	$	233,403	$	(9,442)

Management evaluates available for sale debt securities in unrealized loss positions to determine whether the impairment is due to credit-related factors or noncredit-related factors. Consideration is given to (1) the extent to which the fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value.

At June 30, 2023, the Company had 137 available for sale debt securities in an unrealized loss position without an allowance for credit losses. Management does not have the intent to sell any of these securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. 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. Accordingly, as of June 30, 2023, management believes that the unrealized losses detailed in the previous table are due to noncredit-related factors, including changes in interest rates and other market conditions, and therefore the Company carried no allowance for credit losses on available for sale debt securities at June 30, 2023.


(Dollars in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
Held to Maturity CLO Securities	2023		2022		2023		2022
Allowance for credit losses:
Beginning balance	$	2,585	$	2,455	$	2,444	$	2,082
Credit loss expense	291		(100)		432		273
Allowance for credit losses ending balance	$	2,876	$	2,355	$	2,876	$	2,355

The Company’s held to maturity securities are investments in the unrated subordinated notes of collateralized loan obligation funds. These securities are the junior-most in securitization capital structures, and are subject to suspension of distributions if the credit of the underlying loan portfolios deteriorates materially. The ACL on held to maturity securities is estimated at each measurement date on a collective basis by major security type. At June 30, 2023 and December 31, 2022, the Company’s held to maturity securities consisted of three investments in the subordinated notes of collateralized loan obligation (“CLO”) funds. Expected credit losses for these securities are estimated using a discounted cash flow methodology which considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Ultimately, the realized cash flows on CLO securities such as these will be driven by a variety of factors, including credit performance of the underlying loan portfolio, adjustments to the portfolio by the asset manager, and the timing of a potential call. At June 30, 2023, $4,778,000 of the Company’s held to maturity securities were classified as nonaccrual.