
	September 30, 2021
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
U.S. Treasury and U.S. government agencies	$	102,149	$	1,377	$	(555)	$	—	$	102,971
Mortgage-backed securities, residential	94,049		1,675		(476)		—		95,248
Collateralized mortgage obligations, residential	199,020		2,731		(851)		—		200,900
Mortgage-backed securities, multifamily	1,935		—		(68)		—		1,867
Collateralized mortgage obligations, multifamily	34,409		798		(204)		—		35,003
Asset-backed securities	53,809		231		(33)		—		54,007

Corporate bonds	38,500		946		(11)		(50)		39,385
Total	$	523,871	$	7,758	$	(2,198)	$	(50)	$	529,381


	December 31, 2020
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
U.S. Treasury and U.S. government agencies	$	63,868	$	1,447	$	(313)	$	—	$	65,002
Mortgage-backed securities, residential	224,978		3,718		(540)		—		228,156
Collateralized mortgage obligations, residential	204,093		4,967		(22)		—		209,038
Mortgage-backed securities, multifamily	1,944		—		—		—		1,944
Collateralized mortgage obligations, multifamily	39,628		1,909		(2)		—		41,535
Asset-backed securities	40,915		—		(225)		—		40,690
Obligations of states and political subdivisions	228,790		5,149		(228)		(1)		233,710
Corporate bonds	35,056		616		—		(1)		35,671
Total	$	839,272	$	17,806	$	(1,330)	$	(2)	$	855,746


	September 30, 2021
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
U.S. government agencies	$	18,820	$	459	$	—	$	—	$	19,279
Mortgage-backed securities, residential	343,866		1,005		(2,870)		—		342,001
Collateralized mortgage obligations, residential	8,488		287		—		—		8,775
Mortgage-backed securities, multifamily	2,724		47		—		—		2,771

Obligations of states and political subdivisions	316,847		198		(5,993)		(15)		311,037
Corporate bonds	3,000		33		—		(168)		2,865
Total	$	693,745	$	2,029	$	(8,863)	$	(183)	$	686,728


	December 31, 2020
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
U.S. government agencies	$	25,565	$	779	$	—	$	—	$	26,344
Mortgage-backed securities, residential	39,276		1,469		(12)		—		40,733
Collateralized mortgage obligations, residential	14,590		532		—		—		15,122
Mortgage-backed securities, multifamily	705		54		—		—		759

Obligations of states and political subdivisions	10,630		280		—		—		10,910

	$	90,766	$	3,114	$	(12)	$	—	$	93,868

The following table lists contractual maturities of investment securities classified as available for sale and held to maturity as of September 30, 2021. Mortgage-backed and asset-backed securities are not shown by maturity because expected maturities may differ from contractual maturities due to underlying loan prepayments of the issuer. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	Available for Sale				Held to Maturity
(in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	17,514	$	17,638	$	16,734	$	16,817
Due after one year through five years	17,898		18,370		40,804		41,219
Due after five years through ten years	76,126		77,101		22,756		22,549
Due after ten years	29,111		29,247		258,373		252,596
	140,649		142,356		338,667		333,181
Mortgage-backed and asset-backed securities	383,222		387,025		355,078		353,547
Total securities	$	523,871	$	529,381	$	693,745	$	686,728

For the three and nine months ended September 30, 2021 and the three months ended September 30, 2020, there were no sales of available for sale securities. There were proceeds from sales of available for sale securities of $94.7 million for the nine months ended September 30, 2020 with gross gains on sales of securities of $569,000 and gross losses on sales of securities of $227,000. Gains or losses on sales of securities are based on the net proceeds and the adjusted carrying amount of the securities sold using the specific identification method. In the second quarter of 2021, the Company recorded a gain on a called security of $9,000.

During the third quarter of 2021, the Company transferred $494.2 million of previously designated available for sale securities to a held to maturity designation at estimated fair value. The reclassification for the period ended September 30, 2021 is permitted as the Company has appropriately determined the ability and intent to hold these securities as an investment until maturity or call. The securities transferred had an unrealized net gain of $3.8 million at the time of transfer, which is reflected, net of taxes, in accumulated other comprehensive income on the consolidated balance sheet. Subsequent amortization will be recognized over the life of the securities. The Company recorded net amortization of $158,000 during the third quarter of 2021.

Securities with a carrying value of approximately $675.5 million and $578.0 million at September 30, 2021 and December 31, 2020, respectively, were pledged to secure public deposits and for other purposes required by applicable laws and regulations.


September 30, 2021	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities		Fair Value		Unrealized Losses
Available for Sale
U.S. Treasury and U.S. government agencies	$	15,366	$	132	$	15,548	$	423	8		$	30,914	$	555
Mortgage-backed securities, residential	39,399		433		5,728		43		18		45,127		476
Collateralized mortgage obligations, residential	66,336		851		—		—		15		66,336		851
Mortgage-backed securities, multifamily	1,867		68		—		—		1		1,867		68
Collateralized mortgage obligations, multifamily	7,004		171		1,402		33		4		8,406		204
Asset-backed securities	14,885		33		—		—		3		14,885		33

Corporate bonds	2,957		—		982		11		1		3,939		11
Total	$	147,814	$	1,688	$	23,660	$	510	$	50	$	171,474	$	2,198
Held to Maturity

Mortgage-backed securities, residential	$	293,496	$	2,869	$	108	1		79		$	293,604	$	2,870



Obligations of states and political subdivisions	294,935		5,993		—		—		235		294,935		5,993

Total	$	588,431	$	8,862	$	108	$	1	314		$	588,539	$	8,863


December 31, 2020	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
Available for Sale
U.S. Treasury and U.S. government agencies	$	4,966	$	29	$	17,652	$	284	6	$	22,618	$	313
Mortgage-backed securities, residential	84,137		471		5,656		69		30	89,793		540
Collateralized mortgage obligations, residential	23,858		22		—		—		7	23,858		22
Mortgage-backed securities, multifamily	1,943		—		—		—		1	1,943		—
Collateralized mortgage obligations, multifamily	2,527		2		—		—		1	2,527		2
Asset-backed securities	40,690		225		—		—		6	40,690		225
Obligations of states and political subdivisions	15,901		228		—		—		10	15,901		228

Total	$	174,022	$	977	$	23,308	$	353	61	$	197,330	$	1,330
Held to Maturity

Mortgage-backed securities, residential	$	2,561	$	12	$	—	$	—	4	$	2,561	$	12





Total	$	2,561	$	12	$	—	$	—	4	$	2,561	$	12

For available for sale securities, the Company assesses whether a loss is from credit or other factors and considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency and adverse conditions related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows is less than the amortized cost, a credit loss exists and an allowance is created, limited by the amount that the fair value is less than the amortized cost basis.

For held to maturity securities, management measures expected credit losses on a collective basis by major security type. All of the mortgage-backed securities are issued by U.S. government agencies and are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses and, therefore, the expectation of non-payment is zero. A range of historical losses method is utilized in estimating the net amount expected to be collected for mortgage-backed securities, collateralized mortgage obligations and obligations of states and political subdivisions.

Credit ratings, which are updated monthly, are a key measure for estimating the probability of a bond's default and for monitoring credit quality on an on-going basis. For bonds other than U.S. Treasuries and bonds issued or guaranteed by U.S. government agencies, credit ratings issued by one or more nationally recognized statistical rating organizations are considered in conjunction with an assessment by the Company's management. Investment grade reflects a credit quality of BBB or above.


September 30, 2021	AAA		AA		A		BBB		Not Rated		Total
(in thousands)
U.S. Treasury and U.S. government agencies	$	18,820	$	—	$	—	$	—	$	—	$	18,820
Mortgage-backed securities, residential	343,866		—		—		—		—		343,866
Collateralized mortgage obligations, residential	8,488		—		—		—		—		8,488
Mortgage-backed securities, multifamily	2,724		—		—		—		—		2,724

Obligations of states and political subdivisions	105,609		209,739		1,080		—		419		316,847
Corporate bonds	—		—		—		3,000		—		3,000
Total	$	479,507	$	209,739	$	1,080	$	3,000	$	419	$	693,745


December 31, 2020	AAA		AA		Total
(in thousands)
U.S. Treasury and U.S. government agencies	$	25,565	$	—	$	25,565
Mortgage-backed securities, residential	39,276		—		39,276
Collateralized mortgage obligations, residential	14,590		—		14,590
Mortgage-backed securities, multifamily	705		—		705

Obligations of states and political subdivisions	2,959		7,671		10,630

Total	$	83,095	$	7,671	$	90,766

The Company has an equity securities portfolio which consists of investments in Community Reinvestment funds. The fair value of the equity portfolio was $16.4 million and $14.7 million at September 30, 2021 and December 31, 2020, respectively. For the three and nine months ended September 30, 2021, the Company recorded no sales of equity securities and recorded sales of Community Reinvestment funds totaling $3.0 million for the three and nine months ended September 30, 2020. The Company recorded fair value losses on equity securities of $58,000 and $170,000 for the third quarter of 2021 and 2020, respectively. For the nine months ended September 30, 2021 and 2020, the Company recorded fair value losses of $191,000 and $625,000, respectively. Fair value gain or loss on equity securities are recorded in noninterest income.

As of September 30, 2021, the Company's investments in Community Reinvestment funds include $3.5 million that are primarily invested in community development loans that are guaranteed by the Small Business Administration (“SBA”). Because the funds are primarily guaranteed by the federal government, there are minimal changes in fair value between accounting periods. These funds can be redeemed with 60 days' notice at the net asset value less unpaid management fees with the approval of the fund manager. As of September 30, 2021, the net amortized cost equaled the fair value of the investment. There are no unfunded commitments related to these investments.

The Community Reinvestment funds also include $12.9 million of investment in government guaranteed loans, mortgage-backed securities, small business loans and other instruments supporting affordable housing and economic development as of September 30, 2021. The Company may redeem these funds at the net asset value calculated at the end of the current business day less any unpaid management fees. There are no restrictions on redemptions for the holdings in these investments other than the notice required by the fund manager. There are no unfunded commitments related to these investments.