AFS Securities

9 Months Ended

Sep. 30, 2021

Investments, Debt and Equity Securities [Abstract]

The amortized cost and fair value of AFS securities, with gross unrealized gains and losses, are as follows at:


	September 30, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Treasury	$	192,556	$	36	$	523	$	192,069
States and political subdivisions	124,122		4,665		98		128,689
Auction rate money market preferred	3,200		46		—		3,246
Mortgage-backed securities	59,966		2,064		—		62,030
Collateralized mortgage obligations	97,875		2,892		—		100,767
Corporate	7,650		14		81		7,583
Total	$	485,369	$	9,717	$	702	$	494,384


	December 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
States and political subdivisions	$	137,710	$	5,946	$	—	$	143,656
Auction rate money market preferred	3,200		37		—		3,237
Mortgage-backed securities	85,926		2,726		—		88,652
Collateralized mortgage obligations	97,430		4,553		—		101,983
Corporate	1,700		—		—		1,700
Total	$	325,966	$	13,262	$	—	$	339,228

The amortized cost and fair value of AFS securities by contractual maturity at September 30, 2021 are as follows:


	Maturing								Securities with Variable Monthly Payments or Noncontractual Maturities
	Due in One Year or Less		After One Year But Within Five Years		After Five Years But Within Ten Years		After Ten Years				Total
U.S. Treasury	$	—	$	162,175	$	30,381	$	—	$	—	$	192,556
States and political subdivisions	15,042		60,038		21,498		27,544		—		124,122
Auction rate money market preferred	—		—		—		—		3,200		3,200
Mortgage-backed securities	—		—		—		—		59,966		59,966
Collateralized mortgage obligations	—		—		—		—		97,875		97,875
Corporate	—		—		6,150		1,500		—		7,650
Total amortized cost	$	15,042	$	222,213	$	58,029	$	29,044	$	161,041	$	485,369
Fair value	$	15,154	$	224,172	$	58,858	$	30,157	$	166,043	$	494,384

Expected maturities for government sponsored enterprises and states and political subdivisions may differ from contractual maturities because issuers may have the right to call or prepay obligations.

As the auction rate money market preferred investments have continual call dates, they are not reported by a specific maturity group. Because of their variable monthly payments, mortgage-backed securities and collateralized mortgage obligations are not reported by a specific maturity group.

A summary of the sales activity of AFS securities was as follows for the:


	Three Months Ended September 30				Nine Months Ended September 30
	2021		2020		2021		2020
Proceeds from sales of AFS securities	$	—	$	—	$	—	$	26,855
Realized gains (losses)	$	—	$	—	$	—	$	71
Applicable income tax expense (benefit)	$	—	$	—	$	—	$	15

The following information pertains to AFS securities with gross unrealized losses at September 30, 2021, aggregated by investment category and length of time that individual securities have been in a continuous loss position. There were no AFS securities with gross unrealized losses in a continuous loss position at December 31, 2020.


	September 30, 2021
	Less Than Twelve Months				Twelve Months or More
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Total Unrealized Losses
U.S. Treasury	$	523	$	161,652	$	—	$	—	$	523
States and political subdivisions	98		14,939		—		—		98
Corporate	81		4,369		—		—		81
Total	$	702	$	180,960	$	—	$	—	$	702
Number of securities in an unrealized loss position:			37				—		37

The reduction in unrealized gains on our AFS securities portfolio resulted from the recent increases in intermediate-term and long-term benchmark interest rates.

As of September 30, 2021 and December 31, 2020, we conducted an analysis to determine whether any AFS securities currently in an unrealized loss position should be identified as other-than-temporarily impaired. Such analyses considered, among other factors, the following criteria:

•Has the value of the investment declined more than what is deemed to be reasonable based on a risk and maturity adjusted discount rate?

•Is the investment credit rating below investment grade?

•Is it probable the issuer will be unable to pay the amount when due?

•Is it more likely than not that we will have to sell the security before recovery of its cost basis?

•Has the duration of the investment been extended?

Based on our analysis, which included the criteria outlined above and the fact that we have asserted that we do not have to sell any AFS securities in an unrealized loss position, we do not believe that the values of any AFS securities are other-than-temporarily impaired as of September 30, 2021 or December 31, 2020, with the exception of one municipal bond previously identified.