The following table summarizes the amortized cost and fair value of securities available-for-sale and securities held-to-maturity at September 30, 2023 and December 31, 2022 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses (in thousands):


	September 30, 2023
Available-for-Sale Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
Debt securities:
U.S. Treasury securities	$	9,989	$	—	$	(1,373)	$	—	$	8,616
U.S. Government agencies	103		—		(11)		—		92
Obligations of states and political subdivisions	198,823		—		(32,698)		—		166,125
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	93,303		1		(7,358)		—		85,946
Private label mortgage and asset backed securities	392,514		7		(59,870)		—		332,651

Total available-for-sale	$	694,732	$	8	$	(101,310)	$	—	$	593,430

	September 30, 2023
Held-to-Maturity Securities	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Estimated Fair Value		Allowance for Credit Losses
Debt securities:
Obligations of states and political subdivisions	$	192,056	$	75	$	(27,959)	$	164,172	$	15
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	10,675		—		(2,379)		8,296		—
Private label mortgage and asset backed securities	54,943		—		(8,103)		46,840		12
Corporate debt securities	46,058		—		(5,343)		40,715		254
Total held-to-maturity	$	303,732	$	75	$	(43,784)	$	260,023	$	281


	December 31, 2022
Available-for-Sale Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Debt securities:
U.S. Treasury securities	$	9,990	$	—	$	(1,283)	$	8,707
U.S. Government agencies	107		—		(9)		98
Obligations of states and political subdivisions	201,638		—		(26,653)		174,985
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	117,292		4		(7,803)		109,493
Private label mortgage and asset backed securities	411,441		14		(55,913)		355,542

Total available-for-sale	$	740,468	$	18	$	(91,661)	$	648,825


	December 31, 2022
Held-to-Maturity Securities	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Estimated Fair Value
Debt securities:
Obligations of states and political subdivisions	192,004		67		(23,166)		$	168,905
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	10,430		—		(1,762)		8,668
Private label mortgage and asset backed securities	56,691		—		(5,931)		50,760
Corporate debt securities	45,982		—		(3,066)		42,916
Total held-to-maturity	$	305,107	$	67	$	(33,925)	$	271,249

Proceeds and gross realized gains (losses) from the sales or calls of available-for-sale investment securities for the periods ended September 30, 2023 and 2022 are shown below (in thousands):


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
Available-for-Sale Securities	2023		2022		2023		2022
Proceeds from sales or calls	$	205	$	275	$	12,580	$	235,645
Gross realized gains from sales or calls	—		—		—		5,123
Gross realized losses from sales or calls	(39)		(14)		(296)		(5,900)

The amortized cost and estimated fair value of available-for-sale and held-to maturity investment securities at September 30, 2023 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. Securities not due at a single maturity date are shown separately.


	September 30, 2023				December 31, 2022
Available-for-Sale Securities	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Within one year	$	—	$	—	$	—	$	—
After one year through five years	9,991		8,618		—		—
After five years through ten years	35,063		28,981		45,918		38,383
After ten years	163,756		137,142		165,710		145,309
	208,810		174,741		211,628		183,692
Investment securities not due at a single maturity date:

U.S. Government agencies	103		92		107		98
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	93,303		85,946		117,292		109,493
Private label mortgage and asset backed securities	392,516		332,651		411,441		355,542

Total available-for-sale	$	694,732	$	593,430	$	740,468	$	648,825

















	September 30, 2023				December 31, 2022
Held-to-Maturity Securities	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Within one year	$	—	$	—	$	—	$	—
After one year through five years	5,968		5,343		132		129
After five years through ten years	75,645		66,265		51,424		46,143
After ten years	110,443		92,564		140,448		122,633
	192,056		164,172		192,004		168,905
Investment securities not due at a single maturity date:
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	10,675		8,296		10,430		8,668
Private label mortgage and asset backed securities	54,943		46,840		56,691		50,760
Corporate debt securities	46,058		40,715		45,982		42,916
Total held-to-maturity	$	303,732	$	260,023	$	305,107	$	271,249

At September 30, 2023 there were nine issuers of private label mortgage securities in which the Company had holdings of securities in amounts greater than 10% of shareholders’ equity. Investments with these issuers were in senior tranches and/or were rated “AAA” or higher and there were no credit issues identified.

The following table summarizes the Company’s AFS debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):


	September 30, 2023
	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	$	—	$	—	$	8,616	$	(1,373)	$	8,616	$	(1,373)
U.S. Government agencies	—		—		92		(11)		92		(11)
Obligations of states and political subdivisions	—		—		166,125		(32,698)		166,125		(32,698)
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	546		(21)		85,400		(7,337)		85,946		(7,358)
Private label mortgage and asset backed securities	44		(2)		332,607		(59,868)		332,651		(59,870)

Total available-for-sale	$	590	$	(23)	$	592,840	$	(101,287)	$	593,430	$	(101,310)


	December 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	$	—	$	—	$	8,707	$	(1,283)	$	8,707	$	(1,283)
U.S. Government agencies	—		—		98		(9)		98		(9)
Obligations of states and political subdivisions	90,808		(12,208)		84,177		(14,445)		174,985		(26,653)
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	20,825		(1,058)		88,520		(6,745)		109,345		(7,803)
Private label mortgage and asset backed securities	126,284		(14,529)		229,152		(41,384)		355,436		(55,913)
Total available-for-sale	$	237,917	$	(27,795)	$	410,654	$	(63,866)	$	648,571	$	(91,661)

As of September 30, 2023, the Company had a total of 193 AFS debt securities in a gross unrealized loss position with no credit impairment, consisting of 6 U.S. Treasury securities and U.S. Government agencies, 43 obligations of states and political subdivisions, 61 U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations, and 83 private label mortgage and asset backed securities.

Each reporting period, the Company assesses each AFS debt security that is in an unrealized loss position to determine whether the decline in fair value below the amortized cost basis results from a credit loss or other factors. The Company did not record an ACL on any available for sale securities at September 30, 2023 or upon adoption of ASU 2016-13 on January 1, 2023. As of both dates, the Company considers the unrealized losses across the classes of major security-type to be related to fluctuations in market conditions, primarily interest rates, and not reflective of a deterioration in credit value. As of September 30, 2023, the Company determined that it is not more likely than not that there is an intention to sell securities or that the Company would be required to sell securities.

•Obligations of States and Political Subdivisions: The unrealized losses on investments in obligations of states and political subdivisions are caused by increases in required yields by investors in these types of securities. It is expected that the securities would not be settled at a price less than the amortized cost of the investment.

•U.S. Treasury and Government Sponsored Entities and Agencies Collateralized by Residential Mortgage Obligations: The unrealized losses on the Company’s investments in U.S. treasuries and 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.

•Private Label Mortgage and Asset Backed Securities: The Company has invested exclusively in AA and AAA tranches of various private label mortgage and asset backed securities. Each purchase is subject to a credit and structure review prior to their purchase. Ratings are reviewed on a quarterly basis in addition to other metrics provided through third-party services. Following review of the financial metrics and ratings, management concluded that the unrealized loss position of the private label mortgage and asset backed securities related exclusively to the fluctuation in market conditions and were not reflective of any credit concerns with the tranches comprising the Company’s investments.

No allowance for credit losses have been recognized on AFS debt securities in an unrealized loss position, as management does not believe that any of the securities are impaired due to credit risk factors as of September 30, 2023 and December 31, 2022.

The Company separately evaluates its HTM debt securities for any credit losses based on probability of default and loss given default utilizing historical industry data based on investment category, while also considering reasonable and supportable forecasts. The probability of default and loss given default are incorporated into the present value of expected cash flows and compared against amortized cost. The Company recorded an ACL on January 1, 2023 for held-to-maturity debt securities within the corporate bond and private label mortgage securities of $545,000 and $231,000, respectively.

The Company monitors credit quality of debt securities held-to-maturity through the use of credit ratings. The Company monitors the credit ratings on a quarterly basis. For non-rated investment securities, management receives quarterly performance updates to monitor for any credit concerns. There were no HTM securities on nonaccrual or past due over 89 days and still on accrual. The following table summarizes the amortized cost of debt securities held-to-maturity at the dates indicated, aggregated by credit quality indicator. U.S. Government sponsored agencies are not included in the below tables as credit ratings are not applicable.


	September 30, 2023
Debt Securities Held-to-Maturity	AAA/AA/A		BBB		Unrated
Obligations of states and political subdivisions	$	192,056	$	—	$	—

Private label mortgage and asset backed securities	46,411		—		8,532
Corporate debt securities	—		30,163		15,895
Total debt securities held-to-maturity	$	238,467	$	30,163	$	24,427