The investment portfolio consists primarily of U.S. Government sponsored entity and agency securities collateralized by residential mortgage obligations, private label mortgage and asset backed securities (PLMABS), corporate debt securities, and obligations of states and political subdivisions securities. As of September 30, 2021, $262,024,000 of these securities were held as collateral for borrowing arrangements, public funds, and for other purposes.

The fair value of the available-for-sale investment portfolio reflected a net unrealized gain of $14,609,000 at September 30, 2021 compared to an unrealized gain of $21,091,000 at December 31, 2020. The unrealized gain/(loss) recorded is net of $4,319,000,000 and $6,235,000 in tax liabilities (benefits) as accumulated other comprehensive income (loss) within shareholders’ equity at September 30, 2021 and December 31, 2020, respectively.


	September 30, 2021
Available-for-Sale Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Debt securities:
U.S. Treasury securities	$	9,988	$	22	$	—	$	10,010
U.S. Government agencies	489		16		—		505
Obligations of states and political subdivisions	494,425		15,844		(2,349)		507,920
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	226,027		2,837		(819)		228,045
Private label mortgage and asset backed securities	255,324		1,184		(2,752)		253,756
Corporate debt securities	59,500		878		(252)		60,126
Total available-for-sale	$	1,045,753	$	20,781	$	(6,172)	$	1,060,362


	December 31, 2020
Available-for-Sale Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Debt securities:

U.S. Government agencies	$	651	$	29	$	—	$	680
Obligations of states and political subdivisions	361,734		18,170		(339)		379,565
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	214,203		3,575		(1,480)		216,298
Private label mortgage and asset backed securities	82,413		1,337		(242)		83,508
Corporate debt securities	30,000		260		(219)		30,041
Total available-for-sale	$	689,001	$	23,371	$	(2,280)	$	710,092


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
Available-for-Sale Securities	2021		2020		2021		2020
Proceeds from sales or calls	$	10,170	$	25,442	$	10,760	$	147,811
Gross realized gains from sales or calls	117		1,035		117		5,539
Gross realized losses from sales or calls	—		(978)		(79)		(1,342)

As market interest rates or risks associated with a security’s issuer continue to change and impact the actual or perceived values of investment securities, the Company may determine that selling these securities and using proceeds to purchase securities that fit with the Company’s current risk profile is appropriate and beneficial to the Company.

The provision for income taxes includes $11,000 and $1,241,000 income tax impact from the reclassification of unrealized net gains on securities to realized net gains on securities for the nine months ended ended September 30, 2021 and 2020, respectively. The provision for income taxes includes $35,000 and $17,000 income tax impact from the reclassification of unrealized net gains on available-for-sale securities to realized net gains on available-for-sale securities for the three months ended September 30, 2021 and 2020, respectively.


	September 30, 2021
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Available-for-Sale Securities	Value		Losses		Value		Losses		Value		Losses
Debt securities:


Obligations of states and political subdivisions	$	126,701	$	(2,349)	$	—	$	—	126,701		(2,349)
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	74,656		(509)		42,022		(310)		116,678		(819)
Private label mortgage and asset backed securities	152,197		(2,438)		12,891		(314)		165,088		(2,752)
Corporate debt securities	27,248		(252)		—		—		27,248		(252)
Total available-for-sale	$	380,802	$	(5,548)	$	54,913	$	(624)	$	435,715	$	(6,172)


	December 31, 2020
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Available-for-Sale Securities	Value		Losses		Value		Losses		Value		Losses
Debt securities:


Obligations of states and political subdivisions	$	36,209	$	(339)	$	—	$	—	$	36,209	$	(339)
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	30,755		(385)		77,337		(1,095)		108,092		(1,480)
Private label mortgage and asset backed securities	25,407		(242)		—		—		25,407		(242)
Corporate debt securities	12,881		(119)		3,900		(100)		16,781		(219)
Total available-for-sale	$	105,252	$	(1,085)	$	81,237	$	(1,195)	$	186,489	$	(2,280)

The Company periodically evaluates each investment security for other-than-temporary impairment, relying primarily on industry analyst reports, observation of market conditions, and interest rate fluctuations. The portion of the impairment that is attributable to a shortage in the present value of expected future cash flows relative to the amortized cost should be recorded as a current period charge to earnings. The discount rate in this analysis is the original yield expected at time of purchase.

As of September 30, 2021, the Company performed an analysis of the investment portfolio to determine whether any of the investments held in the portfolio had an other-than-temporary impairment (OTTI). The Company evaluated all individual available-for-sale investment securities with an unrealized loss at September 30, 2021 and identified those that had an unrealized loss for at least a consecutive 12 month period, which had an unrealized loss at September 30, 2021 greater than 10% of the recorded book value on that date, or which had an unrealized loss of more than $75,000. The Company also analyzed any securities that may have been downgraded by credit rating agencies.

For those investment securities that met the evaluation criteria, management obtained and reviewed the most recently published national credit ratings for those investment securities. There were no OTTI losses recorded during the nine months ended September 30, 2021.

At September 30, 2021, the Company held 129 obligations of states and political subdivision securities of which 25 were in a loss position for less than 12 months. The unrealized losses on the Company’s investments in obligations of states and political subdivision securities were caused by interest rate changes. Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell, and it is more likely than not that it will not be required to sell those investments until a recovery of fair value, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at September 30, 2021.

At September 30, 2021, the Company held 119 U.S. Government sponsored entity and agency securities collateralized by residential mortgage obligations of which 14 were in a loss position for less than 12 months and nine have been in a loss position for more than 12 months. The unrealized losses on the Company’s investments in U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations were caused by interest rate changes. The contractual cash flows of those investments are guaranteed or supported by an agency or sponsored entity of the U.S. Government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost of the Company’s investment. Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company has the ability to hold and does not intend to sell, and it is more likely than not that it will not be required to sell those investments until a recovery of fair value, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at September 30, 2021.

At September 30, 2021, the Company had a total of 63 Private Label Mortgage and Asset Backed Securities (PLMABS). 31 of the PLMABS securities were in a loss position for less than 12 months and four have been in loss for more than 12 months at September 30, 2021. Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company has the ability and intent to hold, and it is more likely than not that it will not be required to sell, those investments until a recovery of fair value, which may be the maturity date, the Company does not consider those investments to be other-than-temporarily impaired at September 30, 2021. The Company continues to monitor these securities for indications that declines in value, if any, may be other-than-temporary.

At September 30, 2021, the Company held 15 corporate debt securities of which eight were in a loss position for less than 12 months. The unrealized loss on the Company’s investments in corporate debt security was caused by interest rate changes. Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell, and it is more likely than not that it will not be required to sell those investments until a recovery of fair value, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at September 30, 2021.

The amortized cost and estimated fair value of available-for-sale investment securities at September 30, 2021 by contractual maturity is shown below (in thousands). Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to call or prepay obligations with or without call or prepayment penalties.


	September 30, 2021
Available-for-Sale Securities	Amortized Cost		Estimated Fair Value
Within one year	$	—	$	—
After one year through five years	3,349		3,659
After five years through ten years	94,640		97,424
After ten years	406,424		416,847
	504,413		517,930
Investment securities not due at a single maturity date:

U.S. Government agencies	489		505
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	226,027		228,045
Private label mortgage and asset backed securities	255,324		253,756
Corporate debt securities	59,500		60,126
Total available-for-sale	$	1,045,753	$	1,060,362