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Securities
 9 Months Ended
Sep. 30, 2021
Cash and Cash Equivalents [Abstract]  
Securities

Note 2 - Securities

Debt securities have been classified in the consolidated balance sheets according to management’s intent. The amortized cost, related gross unrealized gains and losses, allowance for credit losses and the fair value of available-for-sale securities are as follows (in thousands):

 

 

 

September 30, 2021

 

 

 

 

 

 

Gross

 

 

Gross

 

 

 

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

Estimated

 

 

 

Cost Basis

 

 

Holding Gains

 

 

Holding Losses

 

 

Fair Value

 

Securities available-for-sale:

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of states and political subdivisions

 

$

2,568,224

 

 

$

103,646

 

 

$

(6,503

)

 

$

2,665,367

 

Residential mortgage-backed securities

 

 

2,999,369

 

 

 

35,950

 

 

 

(7,170

)

 

 

3,028,149

 

Commercial mortgage-backed securities

 

 

375,614

 

 

 

13,402

 

 

 

—

 

 

 

389,016

 

Corporate bonds and other

 

 

38,167

 

 

 

70

 

 

 

(785

)

 

 

37,452

 

Total securities available-for-sale

 

$

5,981,374

 

 

$

153,068

 

 

$

(14,458

)

 

$

6,119,984

 

 

 

 

 

September 30, 2020

 

 

 

 

 

 

Gross

 

 

Gross

 

 

 

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

Estimated

 

 

 

Cost Basis

 

 

Holding Gains

 

 

Holding Losses

 

 

Fair Value

 

Securities available-for-sale:

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of states and political subdivisions

 

$

2,252,412

 

 

$

119,952

 

 

$

(4,875

)

 

$

2,367,489

 

Residential mortgage-backed securities

 

 

1,454,422

 

 

 

54,744

 

 

 

(112

)

 

 

1,509,054

 

Commercial mortgage-backed securities

 

 

527,392

 

 

 

22,776

 

 

 

—

 

 

 

550,168

 

Corporate bonds and other

 

 

4,398

 

 

 

171

 

 

 

—

 

 

 

4,569

 

Total securities available-for-sale

 

$

4,238,624

 

 

$

197,643

 

 

$

(4,987

)

 

$

4,431,280

 

 

 

 

December 31, 2020

 

 

 

 

 

 

Gross

 

 

Gross

 

 

 

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

Estimated

 

 

 

Cost Basis

 

 

Holding Gains

 

 

Holding Losses

 

 

Fair Value

 

Securities available-for-sale:

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of states and political subdivisions

 

$

2,283,616

 

 

$

143,339

 

 

$

(79

)

 

$

2,426,876

 

Residential mortgage-backed securities

 

 

1,421,922

 

 

 

50,473

 

 

 

(115

)

 

 

1,472,280

 

Commercial mortgage-backed securities

 

 

467,243

 

 

 

22,077

 

 

 

(4

)

 

 

489,316

 

Corporate bonds and other

 

 

4,398

 

 

 

159

 

 

 

—

 

 

 

4,557

 

Total securities available-for-sale

 

$

4,177,179

 

 

$

216,048

 

 

$

(198

)

 

$

4,393,029

 

 

The Company did not hold any securities classified as held-to-maturity at September 30, 2021, September 30, 2020, or December 31, 2020.

The Company invests in mortgage-backed securities that have expected maturities that differ from their contractual maturities. These differences arise because borrowers may have the right to call or prepay obligations with or without a prepayment penalty. These securities include collateralized mortgage obligations (CMOs) and other asset backed securities. The expected maturities of these securities at September 30, 2021 and 2020, and December 31, 2020, were computed by using scheduled amortization of balances and historical prepayment rates.

The amortized cost and estimated fair value of available-for-sale securities at September 30, 2021, by contractual and expected maturity, are shown below (in thousands):

 

 

 

Amortized

 

 

Estimated

 

 

 

Cost Basis

 

 

Fair Value

 

Due within one year

 

$

473,997

 

 

$

478,547

 

Due after one year through five years

 

 

2,934,396

 

 

 

3,023,175

 

Due after five years through ten years

 

 

2,485,328

 

 

 

2,531,243

 

Due after ten years

 

 

87,653

 

 

 

87,019

 

Total

 

$

5,981,374

 

 

$

6,119,984

 

 

The following tables disclose the Company’s investment securities that have been in a continuous unrealized-loss position for less than 12 months and for 12 or more months (in thousands):

 

 

 

Less than 12 Months

 

 

12 Months or Longer

 

 

Total

 

September 30, 2021

 

Fair Value

 

 

Unrealized
Loss

 

 

Fair Value

 

 

Unrealized
Loss

 

 

Fair Value

 

 

Unrealized
Loss

 

Obligations of states and political subdivisions

 

$

570,916

 

 

$

6,036

 

 

$

18,711

 

 

$

467

 

 

$

589,627

 

 

$

6,503

 

Residential mortgage-backed securities

 

 

1,208,129

 

 

 

7,166

 

 

 

2,051

 

 

 

4

 

 

 

1,210,180

 

 

 

7,170

 

Corporate bonds and other

 

 

32,985

 

 

 

785

 

 

 

—

 

 

 

—

 

 

 

32,985

 

 

 

785

 

Total

 

$

1,812,030

 

 

$

13,987

 

 

$

20,762

 

 

$

471

 

 

$

1,832,792

 

 

$

14,458

 

 

 

 

Less than 12 Months

 

 

12 Months or Longer

 

 

Total

 

September 30, 2020

 

Fair Value

 

 

Unrealized
Loss

 

 

Fair Value

 

 

Unrealized
Loss

 

 

Fair Value

 

 

Unrealized
Loss

 

Obligations of states and political subdivisions

 

$

395,729

 

 

$

4,875

 

 

$

—

 

 

$

—

 

 

$

395,729

 

 

$

4,875

 

Residential mortgage-backed securities

 

 

49,559

 

 

 

76

 

 

 

4,916

 

 

 

36

 

 

 

54,475

 

 

 

112

 

Total

 

$

445,288

 

 

$

4,951

 

 

$

4,916

 

 

$

36

 

 

$

450,204

 

 

$

4,987

 

 

 

 

 

Less than 12 Months

 

 

12 Months or Longer

 

 

Total

 

December 31, 2020

 

Fair Value

 

 

Unrealized
Loss

 

 

Fair Value

 

 

Unrealized
Loss

 

 

Fair Value

 

 

Unrealized
Loss

 

Obligations of state and political subdivisions

 

$

25,214

 

 

$

79

 

 

$

—

 

 

$

—

 

 

$

25,214

 

 

$

79

 

Residential mortgage-backed securities

 

 

36,017

 

 

 

96

 

 

 

3,156

 

 

 

19

 

 

 

39,173

 

 

 

115

 

Commercial mortgage-backed securities

 

 

16,218

 

 

 

4

 

 

 

—

 

 

 

—

 

 

 

16,218

 

 

 

4

 

Total

 

$

77,449

 

 

$

179

 

 

$

3,156

 

 

$

19

 

 

$

80,605

 

 

$

198

 

 

The number of investments in an unrealized loss position totaled 181 at September 30, 2021. Any unrealized losses in the obligations of state and political subdivisions, residential and commercial mortgage-backed and asset-backed investment securities at September 30, 2021 and 2020, and December 31, 2020, are due to changes in interest rates and not credit-related events. As such, no allowance for credit losses is required on these securities at September 30, 2021 and 2020, and December 31, 2020. Unrealized losses on investment securities are expected to recover over time as these securities approach maturity. Our mortgage related securities are backed by GNMA, FNMA and FHLMC or are collateralized by securities backed by these agencies. At September 30, 2021, 74.96% of our available-for-sale securities that are obligations of states and political subdivisions were issued within the State of Texas, of which 54.16% are guaranteed by the Texas Permanent School Fund.

At September 30, 2021, $3,262,605,000 of the Company’s securities were pledged as collateral for public or trust fund deposits, repurchase agreements, a borrowing line with the Federal Reserve Bank of Dallas and for other purposes required or permitted by law.

During the three-months ended September 30, 2021, there were no sales of investment securities that were classified as available-for-sale. During the three-months ended September 30, 2020, sales of investment securities that were classified as available-for-sale totaled $10,084,000. Gross realized gains from security calls and sales during the third quarters of 2021 and 2020 totaled $1,000 and $36,000, respectively. There were no gross realized losses from security calls and sales during the third quarter of 2021 or 2020 .

During the nine-months ended September 30, 2021 and 2020, sales of investment securities that were classified as available-for-sale totaled $10,631,000 and $263,042,000, respectively. Gross realized gains from security calls and sales during the nine-months ended September 30, 2021 and 2020 totaled $814,000 and $3,614,000, respectively. There were no gross realized losses from security calls and sales during the nine-months ended September 30, 2021. Gross realized losses from security calls and sales during the nine-months ended September 30, 2020 totaled $4,000.

The specific identification method was used to determine cost in order to compute the realized gains and losses.