Equity securities carried at fair value totaled $36.1 million and $29.4 million at September 30, 2021 and December 31, 2020, respectively. At September 30, 2021, Valley's equity securities consisted of one publicly traded mutual fund, CRA investments and to a lesser extent, equity investments related to the development of new financial technologies. Our CRA and other equity investments are a mixture of both publicly traded entities and privately held entities without readily determinable fair market values.

The fair value of trading securities, consisting of municipal bonds, totaled $4.8 million at September 30, 2021. We had no trading debt securities at December 31, 2020. Net trading gains and losses are included in net gains and losses on securities transactions within non-interest income. We recorded net trading losses of $2 thousand and net trading gains of $705 thousand for three and nine months ended September 30, 2021, respectively.


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
September 30, 2021

U.S. government agency securities	$	20,408	$	1,041	$	(7)	$	21,442
Obligations of states and political subdivisions:
Obligations of states and state agencies	29,752		239		(39)		29,952
Municipal bonds	53,186		440		(429)		53,197
Total obligations of states and political subdivisions	82,938		679		(468)		83,149
Residential mortgage-backed securities	973,543		21,761		(2,476)		992,828

Corporate and other debt securities	107,901		3,262		(305)		110,858
Total	$	1,184,790	$	26,743	$	(3,256)	$	1,208,277
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)
September 30, 2021

U.S. government agency securities	$	—	$	—	$	1,355	$	(7)	$	1,355	$	(7)
Obligations of states and political subdivisions:
Obligations of states and state agencies	10,344		(39)		—		—		10,344		(39)
Municipal bonds	25,100		(429)		—		—		25,100		(429)
Total obligations of states and political subdivisions	35,444		(468)		—		—		35,444		(468)
Residential mortgage-backed securities	264,495		(2,138)		12,058		(338)		276,553		(2,476)

Corporate and other debt securities	19,175		(305)		—		—		19,175		(305)
Total	$	319,114	$	(2,911)	$	13,413	$	(345)	$	332,527	$	(3,256)
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 September 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.


	September 30, 2021
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	10,183	$	10,294
Due after one year through five years	31,000		31,750
Due after five years through ten years	84,781		87,587
Due after ten years	85,283		85,818
Residential mortgage-backed securities	973,543		992,828
Total	$	1,184,790	$	1,208,277

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 September 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 nine months ended September 30, 2021 and 2020. There was no allowance for credit losses for available for sale debt securities at September 30, 2021 and December 31, 2020.


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
September 30, 2021
U.S. Treasury securities	$	67,716	$	5,182	$	—	$	72,898
U.S. government agency securities	4,817		198		—		5,015
Obligations of states and political subdivisions:
Obligations of states and state agencies	161,929		3,866		(293)		165,502
Municipal bonds	191,477		4,066		(142)		195,401
Total obligations of states and political subdivisions	353,406		7,932		(435)		360,903
Residential mortgage-backed securities	2,072,700		21,898		(18,001)		2,076,597
Trust preferred securities	37,014		4		(5,511)		31,507
Corporate and other debt securities	48,750		650		(9)		49,391
Total	$	2,584,403	$	35,864	$	(23,956)	$	2,596,311
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)
September 30, 2021


Obligations of states and political subdivisions:
Obligations of states and state agencies	$	10,541	$	(218)	$	5,519	$	(75)	$	16,060	$	(293)
Municipal bonds	14,917		(142)		—		—		14,917		(142)
Total obligations of states and political subdivisions	25,458		(360)		5,519		(75)		30,977		(435)
Residential mortgage-backed securities	1,292,965		(17,978)		2,546		(23)		1,295,511		(18,001)
Trust preferred securities	—		—		30,503		(5,511)		30,503		(5,511)
Corporate and other debt securities	6,991		(9)		—		—		6,991		(9)
Total	$	1,325,414	$	(18,347)	$	38,568	$	(5,609)	$	1,363,982	$	(23,956)
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 September 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.


	September 30, 2021
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	22,683	$	22,845
Due after one year through five years	231,112		239,893
Due after five years through ten years	66,064		67,333
Due after ten years	191,844		189,643
Residential mortgage-backed securities	2,072,700		2,076,597
Total	$	2,584,403	$	2,596,311

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 September 30, 2021 and December 31, 2020.


	AAA/AA/A Rated		BBB rated		Non-investment grade rated		Non-rated		Total
	(in thousands)
September 30, 2021
U.S. Treasury securities	$	67,716	$	—	$	—	$	—	$	67,716
U.S. government agency securities	4,817		—		—		—		4,817
Obligations of states and political subdivisions:
Obligations of states and state agencies	135,122		—		5,595		21,212		161,929
Municipal bonds	150,468		—		—		41,009		191,477
Total obligations of states and political subdivisions	285,590		—		5,595		62,221		353,406
Residential mortgage-backed securities	2,072,700		—		—		—		2,072,700
Trust preferred securities	—		—		—		37,014		37,014
Corporate and other debt securities	2,000		6,000		—		40,750		48,750
Total	$	2,432,823	$	6,000	$	5,595	$	139,985	$	2,584,403
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	$	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 September 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.