The amortized cost, fair value and related ACL, and corresponding gross unrecognized gains and losses on held-to-maturity ("HTM") debt securities at September 30, 2023 and December 31, 2022 are as follows:


	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value		ACL
(dollars in thousands)
September 30, 2023
Held-to-maturity:
Debt securities:
States and political subdivisions	$	41,930	$	—	$	(9,892)	$	32,038	$	—


Mortgage-backed securities:
Residential - U.S. Government-sponsored enterprises	598,123		—		(98,274)		499,849		—



Total held-to-maturity securities	$	640,053	$	—	$	(108,166)	$	531,887	$	—


	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value		ACL
(dollars in thousands)
December 31, 2022
Held-to-maturity:
Debt securities:
States and political subdivisions	$	41,840	$	—	$	(4,727)	$	37,113	$	—


Mortgage-backed securities:
Residential - U.S. Government-sponsored enterprises	623,043		—		(63,376)		559,667		—



Total held-to-maturity securities	$	664,883	$	—	$	(68,103)	$	596,780	$	—

The amortized cost, fair value and related ACL, and corresponding gross unrealized gains and losses on available-for-sale ("AFS") debt securities at September 30, 2023 and December 31, 2022 are as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		ACL
(dollars in thousands)
September 30, 2023
Available-for-sale:
Debt securities:
States and political subdivisions	$	164,527	$	—	$	(39,550)	$	124,977	$	—
Corporate securities	35,850		—		(5,830)		30,020		—
U.S. Treasury obligations and direct obligations of U.S. Government agencies	23,812		5		(2,325)		21,492		—
Mortgage-backed securities:
Residential - U.S. Government-sponsored enterprises	467,300		—		(88,428)		378,872		—
Residential - Non-government agencies	13,536		—		(1,457)		12,079		—
Commercial - U.S. Government-sponsored enterprises	52,263		—		(9,215)		43,048		—
Commercial - Non-government agencies	15,081		—		(316)		14,765		—
Total available-for-sale securities	$	772,369	$	5	$	(147,121)	$	625,253	$	—


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		ACL
(dollars in thousands)
December 31, 2022
Available-for-sale:
Debt securities:
States and political subdivisions	$	172,427	$	6	$	(36,681)	$	135,752	$	—
Corporate securities	36,206		—		(5,995)		30,211		—
U.S. Treasury obligations and direct obligations of U.S. Government agencies	28,032		—		(2,317)		25,715		—
Mortgage-backed securities:
Residential - U.S. Government-sponsored enterprises	498,989		—		(75,186)		423,803		—
Residential - Non-government agencies	9,829		—		(1,167)		8,662		—
Commercial - U.S. Government-sponsored enterprises	54,346		—		(8,202)		46,144		—
Commercial - Non-government agencies	1,541		—		(34)		1,507		—
Total available-for-sale securities	$	801,370	$	6	$	(129,582)	$	671,794	$	—

During the nine months ended September 30, 2022, the Company transferred 81 investment securities that were classified as AFS to HTM. The investment securities had an amortized cost basis of $762.7 million and a fair market value of $673.2 million. On the date of transfers, these securities had a total net unrealized loss of $89.5 million. There was no impact to net income as a result of the reclassifications. The Company did not transfer any investment securities that were classified as AFS to HTM during the nine months ended September 30, 2023.

During the three and nine months ended September 30, 2023, the Company recorded a total of $2.0 million and $5.7 million in amortization of unrecognized losses on the aforementioned investment securities transferred from AFS to HTM.

Upon adoption of ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” the Company has made a policy election to exclude accrued interest receivable from the amortized cost basis of debt securities and report accrued interest receivable on AFS debt securities together with accrued interest receivable on HTM securities and loans in the consolidated balance sheets. The Company also made the accounting policy election to not measure an estimate of credit losses on accrued interest receivable as the Company writes off any uncollectible accrued interest receivable in a timely manner.

Accrued interest receivable on AFS debt securities totaled $3.1 million as of September 30, 2023 and December 31, 2022. Accrued interest receivable on HTM debt securities totaled $1.2 million and $1.3 million as of September 30, 2023 and December 31, 2022, respectively.

The amortized cost, estimated fair value and weighted average yield of our HTM and AFS debt securities, by contractual maturity, at September 30, 2023 are shown below. Expected maturities may differ from contractual maturities because issuers 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.


(dollars in thousands)	Amortized Cost		Fair Value		Weighted Average Yield (1)
Held-to-maturity:
Debt securities:
Due in one year or less	$	—	$	—	—	%
Due after one year through five years	—		—		—
Due after five years through ten years	—		—		—
Due after ten years	41,930		32,038		2.26
Mortgage-backed securities:
Residential - U.S. Government-sponsored enterprises	598,123		499,849		1.91



Total held-to-maturity securities	$	640,053	$	531,887	1.93	%


(dollars in thousands)	Amortized Cost		Fair Value		Weighted Average Yield (1)
Available-for-sale:
Debt securities:
Due in one year or less	$	4,496	$	4,470	3.15	%
Due after one year through five years	38,959		34,892		2.94
Due after five years through ten years	49,724		43,695		2.99
Due after ten years	131,010		93,432		2.54
Mortgage-backed securities:
Residential - U.S. Government-sponsored enterprises	467,300		378,872		2.01
Residential - Non-government agencies	13,536		12,079		3.86
Commercial - U.S. Government-sponsored enterprises	52,263		43,048		2.29
Commercial - Non-government agencies	15,081		14,765		5.10
Total available-for-sale securities	$	772,369	$	625,253	2.35	%

During the three and nine months ended September 30, 2023, the Company sold two AFS commercial mortgage-backed securities issued by non-government agencies. The investment securities had a cost basis of $1.5 million and were sold at a loss of $0.1 million. In 2022, the Company sold its Class B common stock of Visa, Inc. during the second quarter; the sale is discussed later in this footnote.

Investment securities with carrying values totaling $974.4 million and $607.7 million at September 30, 2023 and December 31, 2022, respectively, were pledged to secure public funds on deposit, Federal Reserve Bank borrowings and other financial transactions.

At September 30, 2023 and December 31, 2022, there were no holdings of investment securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders' equity.

The following tables present HTM investment securities, which were in an unrecognized loss position as of the dates presented, aggregated by major security type and length of time in a continuous unrecognized loss position. There were a total of 83 HTM investment securities which were in an unrecognized loss position, without an ACL, at both September 30, 2023 and December 31, 2022.


	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrecognized Losses		Fair Value		Unrecognized Losses		Fair Value		Unrecognized Losses
September 30, 2023
Held-to-maturity:
Debt securities:
States and political subdivisions	$	—	$	—	$	32,038	$	(9,892)	$	32,038	$	(9,892)


Mortgage-backed securities:
Residential - U.S. Government-sponsored enterprises	17,533		(469)		482,316		(97,805)		499,849		(98,274)



Total	$	17,533	$	(469)	$	514,354	$	(107,697)	$	531,887	$	(108,166)


	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrecognized Losses		Fair Value		Unrecognized Losses		Fair Value		Unrecognized Losses
December 31, 2022
Held-to-maturity:
Debt securities:
States and political subdivisions	$	37,113	$	(4,727)	$	—	$	—	$	37,113	$	(4,727)


Mortgage-backed securities:
Residential - U.S. Government-sponsored enterprises	559,667		(63,376)		—		—		559,667		(63,376)



Total	$	596,780	$	(68,103)	$	—	$	—	$	596,780	$	(68,103)

The following tables summarize AFS investment securities, which were in an unrealized loss position as of the dates presented, aggregated by major security type and length of time in a continuous unrealized loss position. There were a total of 245 and 243 AFS investment securities which were in an unrealized loss position, without an ACL, at September 30, 2023 and December 31, 2022, respectively.


	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
September 30, 2023
Available-for-sale:
Debt securities:
States and political subdivisions	$	13,958	$	(393)	$	111,019	$	(39,157)	$	124,977	$	(39,550)
Corporate securities	—		—		30,019		(5,830)		30,019		(5,830)
U.S. Treasury obligations and direct obligations of U.S Government agencies	4,236		(110)		16,076		(2,215)		20,312		(2,325)
Mortgage-backed securities:
Residential - U.S. Government-sponsored enterprises	—		—		378,873		(88,428)		378,873		(88,428)
Residential - Non-government agencies	6,706		(487)		5,373		(970)		12,079		(1,457)
Commercial - U.S. Government-sponsored enterprises	—		—		43,048		(9,215)		43,048		(9,215)
Commercial - Non-government agencies	14,765		(316)		—		—		14,765		(316)
Total	$	39,665	$	(1,306)	$	584,408	$	(145,815)	$	624,073	$	(147,121)


	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
December 31, 2022
Available-for-sale:
Debt securities:
States and political subdivisions	$	52,244	$	(4,807)	$	78,389	$	(31,874)	$	130,633	$	(36,681)
Corporate securities	—		—		30,211		(5,995)		30,211		(5,995)
U.S. Treasury obligations and direct obligations of U.S Government agencies	9,651		(245)		15,541		(2,072)		25,192		(2,317)
Mortgage-backed securities:
Residential - U.S. Government-sponsored enterprises	149,624		(13,990)		274,179		(61,196)		423,803		(75,186)
Residential - Non-government agencies	2,890		(334)		5,772		(833)		8,662		(1,167)
Commercial - U.S. Government-sponsored enterprises	25,034		(1,724)		21,110		(6,478)		46,144		(8,202)
Commercial - Non-government agencies	1,506		(34)		—		—		1,506		(34)
Total	$	240,949	$	(21,134)	$	425,202	$	(108,448)	$	666,151	$	(129,582)

Investment securities in an unrecognized or unrealized loss position are evaluated at least on a quarterly basis, and include evaluating the changes in the investment securities' ratings issued by rating agencies and changes in the financial condition of the issuer. For mortgage-related securities, delinquency and loss information with respect to the underlying collateral, changes in levels of subordination for the Company's particular position within the repayment structure, and remaining credit enhancement as compared to projected credit losses of the security are also evaluated.

The Company has evaluated its HTM and AFS investment securities that are in an unrecognized or unrealized loss position and has determined that the unrecognized or unrealized losses on the Company's investment securities are unrelated to credit quality and primarily attributable to changes in interest rates and volatility in the financial markets since purchase. All of the investment securities in an unrecognized or unrealized loss position continue to be rated investment grade by one or more major rating agencies. As of September 30, 2023, the Company does not intend to sell the HTM and AFS securities that are in an unrecognized or unrealized loss position and it is unlikely that the Company will be required to sell these securities before recovery of its amortized cost basis that may be at maturity, therefore the Company has not recorded an ACL on these securities and the unrecognized or unrealized losses on these securities have not been recognized into income.

The Company received these shares in 2008 as part of Visa's initial public offering ("IPO"). These shares were transferable only under limited circumstances until they could be converted into shares of the publicly traded Class A common stock. This conversion will not occur until the resolution of certain litigation, which is indemnified by Visa members. Since its IPO, Visa has funded a litigation reserve to settle these litigation claims. At its discretion, Visa may continue to increase the litigation reserve based upon a change in the conversion ratio of each member bank’s restricted Class B common stock to unrestricted Class A common stock.

Due to the existing transfer restriction and the uncertainty of the outcome of the Visa litigation, the Company determined that the Visa Class B common stock did not have a readily determinable fair value and chose to carry the shares on the Company's consolidated balance sheets at zero cost basis. As a result, the entire net proceeds of $8.5 million were recognized as a pre-tax gain and included in net gain on sales of investment securities in the Company's consolidated statements of income in 2022.