

(Dollars in thousands)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Estimated Fair Value
AFS investment securities:
March 31, 2022
U.S. Treasury	$	14,930	$	—	$	(940)	$	13,990
Agency	406,654		—		(30,877)		375,777
Corporate debt	612,647		702		(18,284)		595,065
Municipal bonds	445,537		58		(30,311)		415,284
Collateralized mortgage obligations	874,382		1,606		(20,732)		855,256
Mortgage-backed securities	1,040,774		1		(74,052)		966,723
Total AFS investment securities	$	3,394,924	$	2,367	$	(175,196)	$	3,222,095





December 31, 2021
U.S. Treasury	$	57,708	$	614	$	(456)	$	57,866
Agency	440,183		2,081		(10,129)		432,135
Corporate debt	451,621		6,096		(3,856)		453,861
Municipal bonds	1,061,985		32,209		(4,281)		1,089,913
Collateralized mortgage obligations	680,686		2,012		(6,055)		676,643
Mortgage-backed securities	1,586,406		3,220		(26,180)		1,563,446
Total AFS investment securities	$	4,278,589	$	46,232	$	(50,957)	$	4,273,864



(Dollars in thousands)	Amortized Cost		Allowance for Credit Losses		Net Carrying Amount		Gross Unrecognized Gain		Gross Unrecognized Loss		Estimated Fair Value
HTM investment securities:
March 31, 2022
Municipal bonds	$	747,887	$	(41)	$	747,846	$	—	$	(101,757)	$	646,089
Mortgage-backed securities	247,050		—		247,050		96		(8,671)		238,475
Other	1,486		—		1,486		—		—		1,486
Total HTM investment securities	$	996,423	$	(41)	$	996,382	$	96	$	(110,428)	$	886,050





December 31, 2021
Municipal bonds	$	368,344	$	(22)	$	368,322	$	3,834	$	(1,649)	$	370,507
Mortgage-backed securities	$	11,843	$	—	$	11,843	$	564	$	—	$	12,407
Other	1,509		—		1,509		—		—		1,509
Total HTM investment securities	$	381,696	$	(22)	$	381,674	$	4,398	$	(1,649)	$	384,423

The Company reassesses classification of certain investments as part of the ongoing review of the investment securities portfolio. During the first quarter of 2022, the Company transferred approximately $386.8 million of municipal bonds and $255.0 million of mortgage-backed securities with longer durations, both of which the Company intends and has the ability to hold to maturity, from AFS to HTM securities. The transfer of these securities was accounted for at fair value. The municipal bonds had a net carrying amount of $379.9 million with a pre-tax unrealized loss of $6.9 million, and the mortgage-backed securities had a net carrying amount of $238.8 million with a pre-tax unrealized loss of $16.2 million, and both unrealized losses were reflected as discounts on the date of transfer. These discounts, as well as the related unrealized losses in accumulated other comprehensive income, will be amortized into interest income as yield adjustments over the remaining term of the securities. The amortization of the unrealized losses reported in accumulated other comprehensive income will offset the effect on interest income of the amortization of the discounts. No gains or losses were recorded at the time of transfer.

Unrealized gains and losses on AFS investment securities are recognized in stockholders’ equity as accumulated other comprehensive income or loss. At March 31, 2022, the Company had an unrealized loss of $172.8 million, or $123.5 million net of tax in accumulated other comprehensive loss, compared to an unrealized loss of $4.7 million, or $3.3 million net of tax in accumulated other comprehensive loss, at December 31, 2021.

For investment securities transferred from AFS to HTM, the unrealized gains and losses at the date of transfer continue to be reported in stockholders’ equity as accumulated other comprehensive income or loss and are amortized over the remaining lives of the securities with an offsetting entry to interest income as an adjustment of yield. At March 31, 2022, the unrealized loss on investment securities transferred from AFS to HTM that were included in accumulated other comprehensive loss was $20.8 million net of tax.

The table below summarizes the number, fair value, and gross unrealized holding losses of the Company’s AFS investment securities in an unrealized loss position for which an allowance for credit losses has not been recorded as of the dates indicated, aggregated by investment category and length of time in a continuous loss position.


	March 31, 2022
	Less than 12 Months					12 Months or Longer					Total
(Dollars in thousands)	Number	Fair Value		Gross Unrealized Losses		Number	Fair Value		Gross Unrealized Losses		Number	Fair Value		Gross Unrealized Losses
AFS investment securities:
U.S. Treasury	1	$	13,990	$	(940)	—	$	—	$	—	1	$	13,990	$	(940)
Agency	9	72,300		(6,489)		26	303,476		(24,388)		35	375,776		(30,877)
Corporate debt	44	449,423		(10,400)		3	52,241		(7,884)		47	501,664		(18,284)
Municipal bonds	85	397,687		(30,158)		1	1,444		(153)		86	399,131		(30,311)
Collateralized mortgage obligations	32	320,962		(10,317)		23	165,246		(10,415)		55	486,208		(20,732)
Mortgage-backed securities.	71	880,417		(66,282)		9	86,208		(7,770)		80	966,625		(74,052)
Total AFS investment securities	242	$	2,134,779	$	(124,586)	62	$	608,615	$	(50,610)	304	$	2,743,394	$	(175,196)


	December 31, 2021
	Less than 12 Months					12 Months or Longer					Total
(Dollars in thousands)	Number	Fair Value		Gross Unrealized Losses		Number	Fair Value		Gross Unrealized Losses		Number	Fair Value		Gross Unrealized Losses
AFS investment securities:
U.S. Treasury	3	$	47,235	$	(456)	—	$	—	$	—	3	$	47,235	$	(456)
Agency	19	278,078		(5,634)		16	119,750		(4,495)		35	397,828		(10,129)
Corporate debt	17	166,563		(849)		3	57,274		(3,007)		20	223,837		(3,856)
Municipal bonds	36	277,564		(4,079)		2	6,596		(202)		38	284,160		(4,281)
Collateralized mortgage obligations	26	226,763		(3,738)		15	121,185		(2,317)		41	347,948		(6,055)
Mortgage-backed securities	103	1,306,455		(20,417)		15	173,121		(5,763)		118	1,479,576		(26,180)
Total AFS investment securities	204	$	2,302,658	$	(35,173)	51	$	477,926	$	(15,784)	255	$	2,780,584	$	(50,957)

The Company reviews individual securities classified as AFS to determine whether a decline in fair value below the amortized cost basis is deemed credit related or due to other factors such as changes in interest rates and general market conditions. An ACL on AFS investment securities is recorded when the fair value of the investment is below its amortized cost and the decline in fair value has been deemed, through the Company’s qualitative assessment, to be credit related. Non-credit related declines in fair value of AFS investment securities, which may be attributed to changes in interest rates and other market-related factors, are not recorded through an ACL. Such declines are recorded as an adjustment to accumulated other comprehensive income, net of tax. In the event the Company is required to sell or has the intent to sell an AFS security that has experienced a decline in fair value below its amortized cost, the Company writes the amortized cost of the security down to fair value in the current period.

Credit losses on HTM investment securities are recorded at the time of purchase or acquisition and when the Company has designated securities as HTM. Credit losses on HTM investment securities are representative of current expected credit losses that may be incurred over the life of the investment.

The Company determines credit losses on both AFS and HTM investment securities through the use of a discounted cash flow approach using the security’s effective interest rate. The ACL 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 AFS investment securities is limited to the amount of a security’s unrealized loss. The ACL is established through a charge to provision for credit losses in current period earnings.

At March 31, 2022, the Company had an ACL of $41,000 for HTM investment securities classified as municipal bonds. These securities were transferred from AFS to HTM during the third and fourth quarters of 2021 and first quarter of 2022. The Company had an ACL of $22,000 for HTM investment securities at December 31, 2021. The Company recognized $19,000 and $11,000 of provision for credit losses for HTM investment securities during the three months ended March 31, 2022 and December 31, 2021, respectively. There was no provision for credit losses recognized for HTM investment securities during the three months ended March 31, 2021.

The Company had no ACL for AFS investment securities at March 31, 2022 and December 31, 2021. The Company performed a qualitative assessment of these investments as of March 31, 2022 and determined that the increase in unrealized losses was primarily the result of changes in interest rates with inflationary pressure driven by the Federal Reserve’s policy along with recent geopolitical developments, and does not believe the declines in fair value were credit related. As of March 31, 2022, the Company had not recorded credit losses on certain AFS securities that were in an unrealized loss position due to the high quality of the investments, with investment grade ratings, and many of them issued by U.S. government agencies. No issuers of these securities have, to the Company’s knowledge, experienced credit downgrades. Additionally, the Company continues to receive contractual principal and interest payments in a timely manner. The Company does not intend to sell these securities, and it is more likely than not that the Company will not be required to sell the securities prior to their anticipated recoveries. There was no provision for credit losses recognized for AFS investment securities during the three months ended March 31, 2022, December 31, 2021, or March 31, 2021.

At March 31, 2022 and December 31, 2021, there were no AFS or HTM securities in nonaccrual status. All securities in the portfolio were current with their contractual principal and interest payments. At March 31, 2022 and December 31, 2021, there were no securities purchased with deterioration in credit quality since their origination. At March 31, 2022 and December 31, 2021, there were no collateral dependent AFS or HTM securities.


	Vintage
(Dollars in thousands)	2022		2021		2020		2019		2018		Prior		Total
AFS Investment securities at fair value:
U.S. Treasury
Aaa - Aa3	$	—	$	13,990	$	—	$	—	$	—	$	—	$	13,990


Agency
Aaa - Aa3	—		22,827		282,195		23,967		33,635		6,603		369,227

Baa1 - Baa3	—		—		—		—		—		6,550		6,550
Corporate debt
Aaa - Aa3	39,946		—		—		—		—		—		39,946
A1 - A3	74,565		203,779		62,222		—		—		—		340,566
Baa1 - Baa3	34,267		52,711		92,122		25,664		—		9,789		214,553
Municipal bonds
Aaa - Aa3	—		43,333		222,497		136,748		—		12,706		415,284


Collateralized mortgage obligations
Aaa - Aa3	173,442		260,990		229,588		74,720		14,839		101,677		855,256


Mortgage-backed securities
Aaa - Aa3	19,610		772,190		113,748		58,778		—		2,397		966,723


Total AFS investment securities	341,830		1,369,820		1,002,372		319,877		48,474		139,722		3,222,095
HTM investment securities at amortized cost:
Municipal bonds
Aaa - Aa3	—		116,523		622,498		8,866		—		—		747,887


Mortgage-backed securities
Aaa - Aa3	—		135,396		101,116		—		2,942		7,596		247,050


Other


Baa1 - Baa3	—		—		—		—		582		904		1,486
Total HTM investment securities	—		251,919		723,614		8,866		3,524		8,500		996,423
Total investment securities	$	341,830	$	1,621,739	$	1,725,986	$	328,743	$	51,998	$	148,222	$	4,218,518


	Three Months Ended
	March 31,		December 31,		March 31,
(Dollars in thousands)	2022		2021		2021
Amortized cost of AFS investment securities sold	$	658,505	$	267,114	$	172,320

Gross realized gains	$	13,637	$	4,723	$	4,237
Gross realized losses	(11,503)		(1,138)		(191)
Net realized gains on sales of AFS investment securities	$	2,134	$	3,585	$	4,046


	Due in One Year or Less				Due after One Year through Five Years				Due after Five Years through Ten Years				Due after Ten Years				Total
(Dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
AFS investment securities:
U.S. Treasury	$	—	$	—	$	—	$	—	$	14,930	$	13,990	$	—	$	—	$	14,930	$	13,990
Agency	—		—		271,342		254,013		97,419		88,539		37,893		33,225		406,654		375,777
Corporate debt	—		—		192,589		190,794		405,058		389,354		15,000		14,917		612,647		595,065
Municipal bonds	—		—		—		—		18,061		16,806		427,476		398,478		445,537		415,284
Collateralized mortgage obligations	—		—		36,738		36,544		243,674		231,495		593,970		587,217		874,382		855,256
Mortgage-backed securities	—		—		—		—		612,287		572,033		428,487		394,690		1,040,774		966,723
Total AFS investment securities	—		—		500,669		481,351		1,391,429		1,312,217		1,502,826		1,428,527		3,394,924		3,222,095
HTM investment securities:
Municipal bonds	—		—		—		—		44,774		42,509		703,113		603,580		747,887		646,089
Mortgage-backed securities	—		—		—		—		—		—		247,050		238,475		247,050		238,475
Other	—		—		—		—		—		—		1,486		1,486		1,486		1,486
Total HTM investment securities	—		—		—		—		44,774		42,509		951,649		843,541		996,423		886,050
Total investment securities	$	—	$	—	$	500,669	$	481,351	$	1,436,203	$	1,354,726	$	2,454,475	$	2,272,068	$	4,391,347	$	4,108,145

The Company’s equity securities primarily consist of Federal Home Loan Bank of San Francisco (“FHLB”) and Federal Reserve Bank of San Francisco (“FRB”) stock, which are considered restricted securities and held as a condition of membership of the FHLB and the Board of Governors of the Federal Reserve System. These equity securities without readily determinable fair values are carried at cost less impairment. At March 31, 2022, the Company had $17.3 million in FHLB stock, $74.6 million in FRB stock, and $25.1 million in other stock, all carried at cost. At December 31, 2021, the Company had $17.3 million in FHLB stock, $74.5 million in FRB stock, and $25.7 million in other stock. During the three months ended March 31, 2022, December 31, 2021, and March 31, 2021, the FHLB did not repurchase any of the Company’s excess FHLB stock through its stock repurchase program.