
	September 30, 2022
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
U.S. Treasury and U.S. government agencies	$	387,049	$	116	$	(29,316)	$	—	$	357,849
Mortgage-backed securities, residential	360,191		4		(45,850)		—		314,345
Collateralized mortgage obligations, residential	177,032		—		(15,808)		—		161,224
Mortgage-backed securities, multifamily	1,006		—		(221)		—		785
Collateralized mortgage obligations, multifamily	51,711		—		(4,987)		—		46,724
Asset-backed securities	59,131		—		(1,588)		—		57,543
Obligations of states and political subdivisions	23,024		—		(1,504)		(1)		21,519
Corporate bonds	124,443		—		(6,255)		(4,164)		114,024
Total	$	1,183,587	$	120	$	(105,529)	$	(4,165)	$	1,074,013


	December 31, 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	$	202,961	$	1,215	$	(789)	$	—	$	203,387
Mortgage-backed securities, residential	238,456		1,250		(1,731)		—		237,975
Collateralized mortgage obligations, residential	191,086		1,693		(1,488)		—		191,291
Mortgage-backed securities, multifamily	1,816		—		(75)		—		1,741
Collateralized mortgage obligations, multifamily	32,254		511		(246)		—		32,519
Asset-backed securities	52,518		153		(87)		—		52,584

Corporate bonds	49,598		959		(15)		(83)		50,459
Total	$	768,689	$	5,781	$	(4,431)	$	(83)	$	769,956


	September 30, 2022
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
U.S. government agencies	$	16,296	$	13	$	(733)	$	—	$	15,576
Mortgage-backed securities, residential	357,453		5		(61,970)		—		295,488
Collateralized mortgage obligations, residential	13,328		—		(2,380)		—		10,948
Mortgage-backed securities, multifamily	5,117		—		(768)		—		4,349

Obligations of states and political subdivisions	539,905		2		(115,168)		(17)		424,722
Corporate bonds	3,000		—		(383)		(135)		2,482
Total	$	935,099	$	20	$	(181,402)	$	(152)	$	753,565


	December 31, 2021
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
U.S. government agencies	$	18,672	$	293	$	—	$	—	$	18,965
Mortgage-backed securities, residential	370,247		718		(5,989)		—		364,976
Collateralized mortgage obligations, residential	13,921		168		—		—		14,089
Mortgage-backed securities, multifamily	2,710		26		(2)		—		2,734

Obligations of states and political subdivisions	416,587		810		(5,800)		(21)		411,576
Corporate bonds	3,000		31		—		(160)		2,871
Total	$	825,137	$	2,046	$	(11,791)	$	(181)	$	815,211

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 was 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 (loss) on the consolidated balance sheets. Subsequent amortization will be recognized over the life of the securities. The Company recorded amortization, net of tax, of $137,000 and $420,000 during the three and nine months ended September 30, 2022, respectively. Amortization, net of tax, of $116,000 was recorded during both the three and nine months ended September 30, 2021.

The following table lists contractual maturities of investment securities classified as available for sale and held to maturity as of September 30, 2022. 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	$	36,294	$	35,718	$	75,152	$	74,792
Due after one year through five years	241,367		224,953		33,556		31,625
Due after five years through ten years	189,407		171,408		70,529		58,896
Due after ten years	67,448		61,313		379,964		277,467
	534,516		493,392		559,201		442,780
Mortgage-backed and asset-backed securities	649,071		580,621		375,898		310,785
Total	$	1,183,587	$	1,074,013	$	935,099	$	753,565

During the three and nine months ended September 30, 2022 and during the third quarter of 2021, there were no sales of available for sale securities. During the nine months ended September 30, 2021, the Company sold $4.4 million of available for sale securities recording a gain of $9,000. 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.


September 30, 2022	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	$	303,011	$	25,348	$	28,189	$	3,968	66	$	331,200	$	29,316
Mortgage-backed securities, residential	254,502		34,557		58,564		11,293		136	313,066		45,850
Collateralized mortgage obligations, residential	100,681		7,502		60,543		8,306		107	161,224		15,808
Mortgage-backed securities, multifamily	—		—		785		221		1	785		221
Collateralized mortgage obligations, multifamily	40,474		3,270		6,249		1,717		20	46,723		4,987
Asset-backed securities	44,227		1,049		13,317		539		18	57,544		1,588
Obligations of states and political subdivisions	20,594		1,504		—		—		47	20,594		1,504
Corporate bonds	109,103		5,725		4,922		530		50	114,025		6,255
Total	$	872,592	$	78,955	$	172,569	$	26,574	445	$	1,045,161	$	105,529
Held to Maturity
U.S. government agencies	$	14,214	$	733	$	—	$	—	4	$	14,214	$	733
Mortgage-backed securities, residential	80,909		12,964		214,223		49,006		182	295,132		61,970
Collateralized mortgage obligations, residential	10,947		2,380		—		—		12	10,947		2,380
Mortgage-backed securities, multifamily	4,349		768		—		—		4	4,349		768

Obligations of states and political subdivisions	197,570		46,268		199,669		68,900		383	397,239		115,168
Corporate bonds	2,616		383		—		—		1	2,616		383
Total	$	310,605	$	63,496	$	413,892	$	117,906	586	$	724,497	$	181,402


December 31, 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	$	76,106	$	322	$	14,670	$	467	15	$	90,776	$	789
Mortgage-backed securities, residential	176,990		1,465		14,582		266		45	191,572		1,731
Collateralized mortgage obligations, residential	86,749		1,429		5,000		59		18	91,749		1,488
Mortgage-backed securities, multifamily	—		—		1,741		75		1	1,741		75
Collateralized mortgage obligations, multifamily	9,083		210		1,072		36		4	10,155		246
Asset-backed securities	14,688		87		—		—		3	14,688		87

Corporate bonds	15,325		(5)		980		20		8	16,305		15
Total	$	378,941	$	3,508	$	38,045	$	923	94	$	416,986	$	4,431
Held to Maturity

Mortgage-backed securities, residential	$	340,474	$	5,882	$	2,376	$	107	96	$	342,850	$	5,989


Collateralized mortgage obligations, multifamily	2,051		2		—		—		1	2,051		2
Obligations of states and political subdivisions	307,827		5,800		—		—		239	307,827		5,800

Total	$	650,352	$	11,684	$	2,376	$	107	336	$	652,728	$	11,791

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.

The gross unrealized losses reported for residential mortgage-backed securities relate to investment securities issued by U.S. government sponsored entities such as Federal National Mortgage Association and Federal Home Loan Mortgage Corporation and U.S. government agencies such as Government National Mortgage Association. The total gross unrealized losses, shown in the tables above, were primarily attributable to changes in interest rates and levels of market liquidity, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities.

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, 2022	AAA		AA		A		BBB		Not Rated		Total
(in thousands)
U.S. government agencies	$	16,296	$	—	$	—	$	—	$	—	$	16,296
Mortgage-backed securities, residential	357,453		—		—		—		—		357,453
Collateralized mortgage obligations, residential	13,328		—		—		—		—		13,328
Mortgage-backed securities, multifamily	5,117		—		—		—		—		5,117

Obligations of states and political subdivisions	164,350		314,959		1,032		—		59,564		539,905
Corporate bonds	—		—		—		3,000		—		3,000
Total	$	556,544	$	314,959	$	1,032	$	3,000	$	59,564	$	935,099


December 31, 2021	AAA		AA		A		BBB		Not Rated		Total
(in thousands)
U.S. government agencies	$	18,672	$	—	$	—	$	—	$	—	$	18,672
Mortgage-backed securities, residential	370,247		—		—		—		—		370,247
Collateralized mortgage obligations, residential	13,921		—		—		—		—		13,921
Mortgage-backed securities, multifamily	2,710		—		—		—		—		2,710

Obligations of states and political subdivisions	143,777		270,909		1,068		—		833		416,587
Corporate bonds	—		—		—		3,000		—		3,000
Total	$	549,327	$	270,909	$	1,068	$	3,000	$	833	$	825,137

The Company has an equity securities portfolio, which primarily consists of investments in Community Reinvestment funds. The fair value of the equity portfolio was $17.2 million and $17.4 million at September 30, 2022 and December 31, 2021, respectively. For the nine months ended September 30, 2022, the Company recorded no sales of equity securities or Community Reinvestment funds. The Company recorded fair value losses on equity securities of $464,000 for the third quarter of 2022 and fair value losses of $58,000 for the third quarter of 2021. For the nine months ended September 30, 2022 and 2021, the Company recorded fair value losses on equity securities of $1.3 million and $191,000, respectively. Fair value gain or loss on equity securities are recorded in noninterest income.

As of September 30, 2022, the Company's investments in Community Reinvestment funds include $7.8 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, 2022, the net amortized cost equaled the fair value of the investment. There are no unfunded commitments related to these investments.