Equity securities carried at fair value totaled $33.9 million and $29.4 million at June 30, 2021 and December 31, 2020, respectively. At June 30, 2021, Valley's equity securities consisted of one publicly traded money market mutual fund, CRA investments both publicly traded and privately held and, to a lesser extent, equity securities without readily determinable fair values.

The fair value of trading securities, consisting of municipal bonds, totaled $21.2 million at June 30, 2021. Net trading gains are included in net gains and losses on securities transactions within non-interest income. Net trading gains totaled $489 thousand and $707 thousand for the three and six months ended June 30, 2021, respectively.


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
June 30, 2021
U.S. Treasury securities	$	50,023	$	987	$	—	$	51,010
U.S. government agency securities	22,695		1,218		(6)		23,907
Obligations of states and political subdivisions:
Obligations of states and state agencies	32,098		614		—		32,712
Municipal bonds	32,440		541		(8)		32,973
Total obligations of states and political subdivisions	64,538		1,155		(8)		65,685
Residential mortgage-backed securities	823,040		24,490		(1,214)		846,316

Corporate and other debt securities	85,441		3,198		(19)		88,620
Total	$	1,045,737	$	31,048	$	(1,247)	$	1,075,538
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	$	1,293,506	$	46,886	$	(919)	$	1,339,473


	Less than Twelve Months				More than Twelve Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
June 30, 2021

U.S. government agency securities	$	—	$	—	$	1,396	$	(6)	$	1,396	$	(6)


Municipal bonds	4,705		(8)		—		—		4,705		(8)

Residential mortgage-backed securities	116,758		(914)		12,726		(300)		129,484		(1,214)

Corporate and other debt securities	1,981		(19)		—		—		1,981		(19)
Total	$	123,444	$	(941)	$	14,122	$	(306)	$	137,566	$	(1,247)
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)

The contractual maturities of available for sale debt securities at June 30, 2021 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.


	June 30, 2021
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	6,769	$	6,824
Due after one year through five years	84,534		86,491
Due after five years through ten years	79,866		82,581
Due after ten years	51,528		53,326
Residential mortgage-backed securities	823,040		846,316
Total	$	1,045,737	$	1,075,538

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 the COVID-19 pandemic.

Available for sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses on a quarterly basis. Valley has evaluated available for sale debt securities that are in an unrealized loss position as of June 30, 2021 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 three and six months ended June 30, 2021 and 2020. There was no allowance for credit losses for available for sale debt securities at June 30, 2021 and December 31, 2020.


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
June 30, 2021
U.S. Treasury securities	$	67,874	$	5,701	$	—	$	73,575
U.S. government agency securities	5,548		265		—		5,813
Obligations of states and political subdivisions:
Obligations of states and state agencies	243,374		5,505		(43)		248,836
Municipal bonds	201,006		4,894		(18)		205,882
Total obligations of states and political subdivisions	444,380		10,399		(61)		454,718
Residential mortgage-backed securities	1,926,900		23,376		(11,668)		1,938,608
Trust preferred securities	37,360		51		(5,986)		31,425
Corporate and other debt securities	51,750		640		(10)		52,380
Total	$	2,533,812	$	40,432	$	(17,725)	$	2,556,519
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	$	2,173,011	$	62,326	$	(7,725)	$	2,227,612


	Less than Twelve Months				More than Twelve Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
June 30, 2021


Obligations of states and political subdivisions:
Obligations of states and state agencies	$	—	$	—	$	5,570	$	(43)	$	5,570	$	(43)
Municipal bonds	1,328		(18)		—		—		1,328		(18)
Total obligations of states and political subdivisions	1,328		(18)		5,570		(43)		6,898		(61)
Residential mortgage-backed securities	983,406		(11,606)		4,608		(62)		988,014		(11,668)
Trust preferred securities	—		—		30,021		(5,986)		30,021		(5,986)
Corporate and other debt securities	7,990		(10)		—		—		7,990		(10)
Total	$	992,724	$	(11,634)	$	40,199	$	(6,091)	$	1,032,923	$	(17,725)
December 31, 2020



Obligations of states and state agencies	$	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)

The contractual maturities of investments in debt securities held to maturity at June 30, 2021 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.


	June 30, 2021
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	27,218	$	27,365
Due after one year through five years	247,844		257,620
Due after five years through ten years	129,112		130,979
Due after ten years	202,738		201,947
Residential mortgage-backed securities	1,926,900		1,938,608
Total	$	2,533,812	$	2,556,519

Valley monitors the credit quality of the held to maturity debt securities through the use of 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 June 30, 2021 and December 31, 2020.


	AAA/AA/A Rated		BBB rated		Non-investment grade rated		Non-rated		Total
	(in thousands)
June 30, 2021
U.S. Treasury securities	$	67,874	$	—	$	—	$	—	$	67,874
U.S. government agency securities	5,548		—		—		—		5,548
Obligations of states and political subdivisions:
Obligations of states and state agencies	210,548		—		5,613		27,213		243,374
Municipal bonds	158,111		—		—		42,895		201,006
Total obligations of states and political subdivisions	368,659		—		5,613		70,108		444,380
Residential mortgage-backed securities	1,926,900		—		—		—		1,926,900
Trust preferred securities	—		—		—		37,360		37,360
Corporate and other debt securities	—		8,000		—		43,750		51,750
Total	$	2,368,981	$	8,000	$	5,613	$	151,218	$	2,533,812
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

Obligations of states and political subdivisions include municipal bonds and revenue bonds issued by various municipal corporations. At June 30, 2021, 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. government agency securities, residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, and collateralized municipal bonds called TEMS.