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 March 31, 2022, $223,954,000 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 loss of $(69,974,000) at March 31, 2022 compared to an unrealized gain of $10,835,000 at December 31, 2021. The unrealized (loss)/gain recorded is net of $(20,687,000) and $3,203,000 in tax (benefits) liabilities as accumulated other comprehensive income (loss) within shareholders’ equity at March 31, 2022 and December 31, 2021, respectively.


	March 31, 2022
Available-for-Sale Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Debt securities:
U.S. Treasury securities	$	9,988	$	—	$	(730)	$	9,258
U.S. Government agencies	356		—		(12)		344
Obligations of states and political subdivisions	438,990		1,543		(31,404)		409,129
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	226,466		329		(5,491)		221,304
Private label mortgage and asset backed securities	508,430		308		(32,925)		475,813
Corporate debt securities	47,500		205		(1,797)		45,908
Total available-for-sale	$	1,231,730	$	2,385	$	(72,359)	$	1,161,756


	December 31, 2021
Available-for-Sale Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Debt securities:
U.S. Treasury securities	$	9,988	$	—	$	(63)	$	9,925
U.S. Government agencies	373		6		—		379
Obligations of states and political subdivisions	512,952		16,703		(3,188)		526,467
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	213,471		2,245		(1,277)		214,439
Private label mortgage and asset backed securities	317,089		824		(4,693)		313,220
Corporate debt securities	44,500		595		(317)		44,778
Total available-for-sale	$	1,098,373	$	20,373	$	(9,538)	$	1,109,208

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.


	March 31, 2022
	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:
U.S. Treasury securities	$	9,258	$	(730)	$	—	$	—	$	9,258	$	(730)
U.S. Government agencies	343		(12)		—		—		343		$	(12)
Obligations of states and political subdivisions	366,394		(27,627)		19,762		(3,777)		386,156		(31,404)
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	119,477		(3,945)		45,880		(1,546)		165,357		(5,491)
Private label mortgage and asset backed securities	394,277		(28,751)		49,371		(4,174)		443,648		(32,925)
Corporate debt securities	36,703		(1,797)		—		—		36,703		(1,797)
Total available-for-sale	$	926,452	$	(62,862)	$	115,013	$	(9,497)	$	1,041,465	$	(72,359)


	December 31, 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:
U.S. treasury securities	$	9,925	$	(63)	$	—	$	—	$	9,925	$	(63)

Obligations of states and political subdivisions	$	143,336	$	(2,896)	$	6,336	$	(292)	$	149,672	$	(3,188)
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	91,385		(905)		40,365		(372)		131,750		(1,277)
Private label mortgage and asset backed securities	230,987		(3,661)		28,908		(1,032)		259,895		(4,693)
Corporate debt securities	21,183		(317)		—		—		21,183		(317)
Total available-for-sale	$	496,816	$	(7,842)	$	75,609	$	(1,696)	$	572,425	$	(9,538)

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 March 31, 2022, 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 March 31, 2022 and identified those that had an unrealized loss for at least a consecutive 12 month period, which had an unrealized loss at March 31, 2022 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 three months ended March 31, 2022.

At March 31, 2022, the Company held 114 obligations of states and political subdivision securities of which 83 were in a loss position for less than 12 months and four have been in a loss position for more 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 March 31, 2022.

At March 31, 2022, the Company held 108 U.S. Government sponsored entity and agency securities collateralized by residential mortgage obligations of which 33 were in a loss position for less than 12 months and ten 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 March 31, 2022.

At March 31, 2022, the Company had a total of 100 Private Label Mortgage and Asset Backed Securities (PLMABS). 73 of the PLMABS securities were in a loss position for less than 12 months and 13 have been in loss for more than 12 months at March 31, 2022. 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 March 31, 2022. The Company continues to monitor these securities for indications that declines in value, if any, may be other-than-temporary.

At March 31, 2022, the Company held 13 corporate debt securities of which 11 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 March 31, 2022.