Equity securities carried at fair value totaled $29.4 million and $41.4 million at December 31, 2020 and 2019, respectively. At December 31, 2020, Valley's equity securities consisted of one publicly traded money market mutual fund, CRA investments both public traded and privately held and, to a lesser extent, equity securities without readily determinable fair values.


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
December 31, 2020
U.S. Treasury securities	$	50,031	$	1,362	$	—	$	51,393
U.S. government agency securities	25,067		1,103		(13)		26,157
Obligations of states and political subdivisions:
Obligations of states and state agencies	40,861		970		(32)		41,799
Municipal bonds	37,489		731		(69)		38,151
Total obligations of states and political subdivisions	78,350		1,701		(101)		79,950
Residential mortgage-backed securities	1,050,369		40,426		(773)		1,090,022
Corporate and other debt securities	89,689		2,294		(32)		91,951
Total investment securities available for sale	$	1,293,506	$	46,886	$	(919)	$	1,339,473
December 31, 2019
U.S. Treasury securities	$	50,952	$	12	$	(21)	$	50,943
U.S. government agency securities	28,982		280		(19)		29,243
Obligations of states and political subdivisions:
Obligations of states and state agencies	78,116		540		(83)		78,573
Municipal bonds	90,662		902		(86)		91,478
Total obligations of states and political subdivisions	168,778		1,442		(169)		170,051
Residential mortgage-backed securities	1,248,814		11,234		(5,262)		1,254,786
Corporate and other debt securities	61,261		628		(111)		61,778
Total investment securities available for sale	$	1,558,787	$	13,596	$	(5,582)	$	1,566,801


	Less than Twelve Months				More than Twelve Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
December 31, 2020

U.S. government agency securities	$	—	$	—	$	1,479	$	(13)	$	1,479	$	(13)
Obligations of states and political subdivisions:
Obligations of states and state agencies	—		—		1,010		(32)		1,010		(32)
Municipal bonds	6,777		(69)		—		—		6,777		(69)
Total obligations of states and political subdivisions	6,777		(69)		1,010		(32)		7,787		(101)
Residential mortgage-backed securities	41,418		(500)		27,911		(273)		69,329		(773)

Corporate and other debt securities	12,517		(32)		—		—		12,517		(32)
Total	$	60,712	$	(601)	$	30,400	$	(318)	$	91,112	$	(919)
December 31, 2019
U.S. Treasury securities	$	25,019	$	(21)	$	—	$	—	$	25,019	$	(21)
U.S. government agency securities	—		—		1,783		(19)		1,783		(19)
Obligations of states and political subdivisions:
Obligations of states and state agencies	18,540		(21)		8,755		(62)		27,295		(83)
Municipal bonds	—		—		13,177		(86)		13,177		(86)
Total obligations of states and political subdivisions	18,540		(21)		21,932		(148)		40,472		(169)
Residential mortgage-backed securities	240,412		(1,194)		282,798		(4,068)		523,210		(5,262)

Corporate and other debt securities	5,139		(111)		—		—		5,139		(111)

Total	$	289,110	$	(1,347)	$	306,513	$	(4,235)	$	595,623	$	(5,582)

The contractual maturities of available for sale debt securities at December 31, 2020 are set forth in the following table. Maturities may differ from contractual maturities in residential mortgage-backed securities because the mortgages underlying the securities may be prepaid without any penalties. Therefore, residential mortgage-backed securities are not included in the maturity categories in the following summary.


	December 31, 2020
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	14,553	$	14,555
Due after one year through five years	82,656		85,179
Due after five years through ten years	92,674		94,629
Due after ten years	53,254		55,088
Residential mortgage-backed securities	1,050,369		1,090,022

Total investment securities available for sale	$	1,293,506	$	1,339,473

Valley's available for sale debt securities portfolio includes corporate bonds and revenue bonds, among other securities. These types of securities may pose a higher risk of future impairment charges by Valley as a result of the unpredictable nature of the U.S. economy and its potential negative effect on the future performance of the security issuers, including due to the economic effects of COVID-19 pandemic.

Available for sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses on a quarterly basis. See Note 1 for further information regarding Valley's accounting policy. Valley has evaluated available for sale debt securities that are in an unrealized loss position as of December 31, 2020 included in the table above and has determined that the declines in fair value are mainly attributable to market volatility, not credit quality or other factors. Based on a comparison of the present value of expected cash flows to the amortized cost, management recognized no impairment during the year ended December 31, 2020 and, as a result, there was no allowance for credit losses for available for sale debt securities at December 31, 2020.

During 2019, Valley recognized a $2.9 million impairment charge on one special revenue bond classified as available for sale (within the obligations of states and state agencies in the tables above). The impairment was due to severe credit deterioration disclosed by the issuer in the second quarter 2019, as well as the issuer's default on its contractual payment. At December 31, 2020, the non-accruing impaired security had an adjusted amortized cost and fair value of $680 thousand and $815 thousand, respectively. At December 31, 2020, the revenue bonds, included in the obligations of states and political subdivisions, are a mix of municipal bonds with investment grade ratings or non-rated revenue bonds mostly secured by Ginnie Mae securities that are commonly referred to as Tax Exempt Mortgage Securities (TEMS) and paying in accordance with their contractual terms.


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
December 31, 2020
U.S. Treasury securities	$	68,126	$	7,358	$	—	$	75,484
U.S. government agency securities	6,222		291		—		6,513
Obligations of states and political subdivisions:
Obligations of states and state agencies	262,762		8,060		(105)		270,717
Municipal bonds	207,497		6,292		—		213,789
Total obligations of states and political subdivisions	470,259		14,352		(105)		484,506
Residential mortgage-backed securities	1,550,306		39,603		(254)		1,589,655
Trust preferred securities	37,348		50		(7,365)		30,033
Corporate and other debt securities	40,750		672		(1)		41,421
Total investment securities held to maturity	$	2,173,011	$	62,326	$	(7,725)	$	2,227,612
December 31, 2019
U.S. Treasury securities	$	138,352	$	5,761	$	—	$	144,113
U.S. government agency securities	7,345		58		(41)		7,362
Obligations of states and political subdivisions:
Obligations of states and state agencies	297,454		7,745		(529)		304,670
Municipal bonds	203,251		5,696		(10)		208,937
Total obligations of states and political subdivisions	500,705		13,441		(539)		513,607
Residential mortgage-backed securities	1,620,119		14,803		(5,350)		1,629,572
Trust preferred securities	37,324		39		(5,981)		31,382
Corporate and other debt securities	32,250		454		(20)		32,684
Total investment securities held to maturity	$	2,336,095	$	34,556	$	(11,931)	$	2,358,720


	Less than Twelve Months				More than Twelve Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
December 31, 2020



Obligations of states and political subdivisions	$	5,546	$	(105)	$	—	$	—	$	5,546	$	(105)


Residential mortgage-backed securities	21,599		(245)		2,470		(9)		24,069		(254)
Trust preferred securities	—		—		28,630		(7,365)		28,630		(7,365)
Corporate and other debt securities	10,749		(1)		—		—		10,749		(1)
Total	$	37,894	$	(351)	$	31,100	$	(7,374)	$	68,994	$	(7,725)
December 31, 2019

U.S. government agency securities	$	5,183	$	(41)	$	—	$	—	$	5,183	$	(41)
Obligations of states and political subdivisions:
Obligations of states and state agencies	11,178		(55)		32,397		(474)		43,575		(529)
Municipal bonds	—		—		798		(10)		798		(10)
Total obligations of states and political subdivisions	11,178		(55)		33,195		(484)		44,373		(539)
Residential mortgage-backed securities	307,885		(1,387)		254,915		(3,963)		562,800		(5,350)
Trust preferred securities	—		—		29,990		(5,981)		29,990		(5,981)
Corporate and other debt securities	—		—		4,980		(20)		4,980		(20)
Total	$	324,246	$	(1,483)	$	323,080	$	(10,448)	$	647,326	$	(11,931)

The contractual maturities of investments in debt securities held to maturity at December 31, 2020 are set forth in the table below. Maturities may differ from contractual maturities in residential mortgage-backed securities because the mortgages underlying the securities may be prepaid without any penalties. Therefore, residential mortgage-backed securities are not included in the maturity categories in the following summary.


	December 31, 2020
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	28,174	$	28,290
Due after one year through five years	234,392		246,981
Due after five years through ten years	150,859		154,904
Due after ten years	209,280		207,782
Residential mortgage-backed securities	1,550,306		1,589,655
Total investment securities held to maturity	$	2,173,011	$	2,227,612

Valley monitors the credit quality of the held to maturity debt securities utilizing the most current credit ratings from external rating agencies. The following table summarizes the amortized cost of held to maturity debt securities by external credit rating at December 31, 2020 and 2019.


	AAA/AA/A Rated		BBB rated		Non-investment grade rated		Non-rated		Total
	(in thousands)
December 31, 2020
U.S. Treasury securities	$	68,126	$	—	$	—	$	—	$	68,126
U.S. government agency securities	6,222		—		—		—		6,222
Obligations of states and political subdivisions:
Obligations of states and state agencies	228,286		—		5,650		28,826		262,762
Municipal bonds	166,408		—		—		41,089		207,497
Total obligations of states and political subdivisions	394,694		—		5,650		69,915		470,259
Residential mortgage-backed securities	1,550,306		—		—		—		1,550,306
Trust preferred securities	—		—		—		37,348		37,348
Corporate and other debt securities	—		5,000		—		35,750		40,750
Total investment securities held to maturity	$	2,019,348	$	5,000	$	5,650	$	143,013	$	2,173,011
December 31, 2019
U.S. Treasury securities	$	138,352	$	—	$	—	$	—	$	138,352
U.S. government agency securities	7,345		—		—		—		7,345
Obligations of states and political subdivisions:
Obligations of states and state agencies	248,533		5,722		—		43,199		297,454
Municipal bonds	202,642		—		—		609		203,251
Total obligations of states and political subdivisions	451,175		5,722		—		43,808		500,705
Residential mortgage-backed securities	1,620,119		—		—		—		1,620,119
Trust preferred securities	—		—		—		37,324		37,324
Corporate and other debt securities	—		5,000		—		27,250		32,250
Total investment securities held to maturity	$	2,216,991	$	10,722	$	—	$	108,382	$	2,336,095

Obligations of states and political subdivisions include municipal bonds and revenue bonds issued by various municipal corporations. At December 31, 2020, most of the obligations of states and political subdivisions were rated investment grade and a large portion of the "non-rated" category included TEMS securities secured by Ginnie Mae securities. Trust preferred securities consist of non-rated single-issuer securities, issued by bank holding companies. Corporate bonds consist of debt primarily issued by banks.

Valley has a zero loss expectation for certain securities within the held to maturity portfolio, and therefore it is not required to estimate an allowance for credit losses related to these securities under the CECL standard. After an evaluation of qualitative factors, Valley identified the following securities types which it believes qualify for this exclusion: U.S. Treasury securities, U.S. agency securities, residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, and collateralized municipal bonds called TEMS. To measure the expected credit losses on held to maturity debt securities that have loss expectations, Valley estimates the expected credit losses using a discounted cash flow model developed by a third-party. See Note 1 for further details.

At December 31, 2020, held to maturity debt securities were carried net of allowance for credit losses totaling $1.4 million. Valley recorded a provision for credit losses of $635 thousand during the year December 31, 2020. There were no net charge-offs of debt securities in the respective periods.


	2020		2019		2018
	(in thousands)
Sales transactions:
Gross gains	$	665	$	—	$	1,769
Gross losses	(9)		—		(3,881)
	$	656	$	—	$	(2,112)
Maturities and other securities transactions:
Gross gains	$	34	$	67	$	42
Gross losses	(166)		(217)		(272)
	$	(132)	$	(150)	$	(230)
Net gains (losses) on securities transactions	$	524	$	(150)	$	(2,342)

Net gains on sales transactions for the year ended December 31, 2020 (as presented in the table above) primarily related to the sales of $30 million of certain available for sale municipal securities. Net losses on sales transactions in 2018 primarily related to the sales of equity securities previously classified as available for sale, certain municipal securities acquired from USAB and all of Valley's private label mortgage-backed securities classified as available for sale, including securities that were previously impaired.