Securities

12 Months Ended

Dec. 31, 2024

4.	Securities

The amortized cost, estimated fair value and unrealized gains (losses) of AFS securities are as follows:

(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
As of December 31, 2024
U.S. treasury	$	108,838	$	59	$	(6,107	)	$	102,790
Federal agency		248,348		-		(29,831	)		218,517
State & municipal		95,457		-		(7,967	)		87,490
Mortgage-backed:
Government-sponsored enterprises		435,825		2		(41,528	)		394,299
U.S. government agency securities		76,528		9		(6,471	)		70,066
Collateralized mortgage obligations:
Government-sponsored enterprises		546,685		142		(42,831	)		503,996
U.S. government agency securities		179,136		39		(26,683	)		152,492
Corporate		48,482		-		(3,468	)		45,014
Total AFS securities	$	1,739,299	$	251	$	(164,886	)	$	1,574,664
As of December 31, 2023
U.S. treasury	$	133,302	$	-	$	(8,278	)	$	125,024
Federal agency		248,384		-		(33,644	)		214,740
State & municipal		96,251		11		(9,956	)		86,306
Mortgage-backed:
Government-sponsored enterprises		399,532		7		(44,264	)		355,275
U.S. government securities		74,281		14		(7,302	)		66,993
Collateralized mortgage obligations:
Government-sponsored enterprises		452,715		15		(48,257	)		404,473
U.S. government securities		162,171		-		(25,100	)		137,071
Corporate		48,442		-		(7,466	)		40,976
Total AFS securities	$	1,615,078	$	47	$	(184,267	)	$	1,430,858

There was no allowance for credit losses on AFS securities as of December 31, 2024 and 2023.

During the year ended December 31, 2023, there were $4.5 million of gross realized losses reclassified out of AOCI and into earnings and the Company incurred a $5.0 million loss on the write-off of an AFS corporate debt security from a subordinated debt investment of a financial institution that failed. These losses were reclassified out of AOCI and into earnings in net securities gains (losses) in the consolidated statements of income. During the year ended December 31, 2024, the Company sold the previously written-off security and recognized a gain of $2.3 million into earnings in net securities gains (losses) in the consolidated statements of income. During the year ended December 31, 2022, there were no gains or losses reclassified out of AOCI and into earnings.

The amortized cost, estimated fair value and unrealized gains (losses) of HTM securities are as follows:

(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
As of December 31, 2024
Federal agency	$	100,000	$	-	$	(16,656	)	$	83,344
Mortgage-backed:
Government-sponsored enterprises		208,579		-		(34,349	)		174,230
U.S. government agency securities		15,611		1		(516	)		15,096
Collateralized mortgage obligations:
Government-sponsored enterprises		168,018		-		(11,554	)		156,464
U.S. government agency securities		60,906		-		(11,245	)		49,661
State & municipal		289,807		41		(18,698	)		271,150
Total HTM securities	$	842,921	$	42	$	(93,018	)	$	749,945
As of December 31, 2023
Federal agency	$	100,000	$	-	$	(17,784	)	$	82,216
Mortgage-backed:
Government-sponsored enterprises		228,720		-		(31,613	)		197,107
U.S. government agency securities		17,086		3		(566	)		16,523
Collateralized mortgage obligations:
Government-sponsored enterprises		187,457		57		(12,021	)		175,493
U.S. government agency securities		63,878		-		(10,908	)		52,970
State & municipal		308,126		211		(18,122	)		290,215
Total HTM securities	$	905,267	$	271	$	(91,014	)	$	814,524

At December 31, 2024 and 2023, all of the mortgaged-backed HTM securities were comprised of U.S. government agency and government-sponsored enterprises securities.

The Company recorded no gains from calls on HTM securities for the years ended December 31, 2024 and 2023. Included in net securities gains (losses), the Company recorded gains from calls on HTM securities of approximately $4 thousand for the year ended December 31, 2022.

AFS and HTM securities with amortized costs totaling $1.60 billion at December 31, 2024 and $2.03 billion at December 31, 2023, were pledged to secure public deposits and for other purposes required or permitted by law. Additionally, at December 31, 2024 and 2023, AFS and HTM securities with an amortized cost of $234.2 million and $177.2 million, respectively, were pledged as collateral for securities sold under repurchase agreements.

The following table sets forth information with regard to gains and (losses) on equity securities:

	Years Ended December 31,
(In thousands)	2024		2023		2022
Net gains recognized on equity securities	$	505	$	135	$	(1,135	)
Less: Net gains recognized on equity securities sold during the period		-		-		-
Unrealized gains and recognized on equity securities still held	$	505	$	135	$	(1,135	)

As of December 31, 2024 and 2023 the carrying value of equity securities without readily determinable fair values was $1.0 million. The Company performed a qualitative assessment to determine whether the investments were impaired and identified no areas of concern as of December 31, 2024 and 2023. There were no impairments, or downward or upward adjustments recognized for equity securities without readily determinable fair values during the years ended December 31, 2024 and 2023.

The following table sets forth information with regard to contractual maturities of debt securities at December 31, 2024:

(In thousands)	Amortized Cost		Estimated Fair Value
AFS debt securities:
Within one year	$	39,826	$	39,037
From one to five years		624,817		571,489
From five to ten years		241,998		220,764
After ten years		832,658		743,374
Total AFS debt securities	$	1,739,299	$	1,574,664
HTM debt securities:
Within one year	$	97,329	$	97,221
From one to five years		163,406		153,627
From five to ten years		193,570		168,429
After ten years		388,616		330,668
Total HTM debt securities	$	842,921	$	749,945

Maturities of mortgage-backed, collateralized mortgage obligations and asset-backed securities are stated based on their estimated average lives. Actual maturities may differ from estimated average lives or contractual maturities because, in certain cases, borrowers have the right to call or prepay obligations, with or without call or prepayment penalties.

Except for U.S. government securities and government-sponsored enterprises securities, there were no holdings, when taken in the aggregate, of any single issuer that exceeded 10% of consolidated stockholders’ equity at December 31, 2024, 2023 and 2022.

The following table sets forth information with regard to investment securities with unrealized losses, for which an allowance for credit losses has not been recorded, segregated according to the length of time the securities were in a continuous unrealized loss position:

	Less Than 12 Months							12 Months or Longer							Total
(In thousands)	Fair Value		Unrealized Losses			Number of Positions		Fair Value		Unrealized Losses			Number of Positions		Fair Value		Unrealized Losses			Number of Positions
As of December 31, 2024
AFS securities:
U.S. treasury	$	-	$	-			-	$	92,737	$	(6,107	)		5	$	92,737	$	(6,107	)		5
Federal agency		-		-			-		218,517		(29,831	)		16		218,517		(29,831	)		16
State & municipal		759		(4	)		1		86,731		(7,963	)		66		87,490		(7,967	)		67
Mortgage-backed		95,153		(1,374	)		16		368,589		(46,625	)		152		463,742		(47,999	)		168
Collateralized mortgage obligations		98,494		(1,128	)		14		480,891		(68,386	)		116		579,385		(69,514	)		130
Corporate		1,478		(9	)		1		43,536		(3,459	)		14		45,014		(3,468	)		15
Total securities with unrealized losses	$	195,884	$	(2,515	)		32	$	1,291,001	$	(162,371	)		369	$	1,486,885	$	(164,886	)		401
HTM securities:
Federal agency	$	-	$	-			-	$	83,344	$	(16,656	)		4	$	83,344	$	(16,656	)		4
Mortgage-backed		-		-			-		189,271		(34,865	)		34		189,271		(34,865	)		34
Collateralized mortgage obligations		7,147		(7	)		1		198,978		(22,792	)		52		206,125		(22,799	)		53
State & municipal		9,458		(107	)		12		168,945		(18,591	)		186		178,403		(18,698	)		198
Total securities with unrealized losses	$	16,605	$	(114	)		13	$	640,538	$	(92,904	)		276	$	657,143	$	(93,018	)		289
As of December 31, 2023
AFS securities:
U.S. treasury	$	-	$	-			-	$	125,024	$	(8,278	)		8	$	125,024	$	(8,278	)		8
Federal agency		-		-			-		214,740		(33,644	)		16		214,740		(33,644	)		16
State & municipal		-		-			-		85,528		(9,956	)		66		85,528		(9,956	)		66
Mortgage-backed		53		(1	)		7		421,259		(51,565	)		156		421,312		(51,566	)		163
Collateralized mortgage obligations		1,333		(6	)		2		536,678		(73,351	)		118		538,011		(73,357	)		120
Corporate		1,379		(75	)		1		39,597		(7,391	)		14		40,976		(7,466	)		15
Total securities with unrealized losses	$	2,765	$	(82	)		10	$	1,422,826	$	(184,185	)		378	$	1,425,591	$	(184,267	)		388
HTM securities:
Federal agency	$	-	$	-			-	$	82,216	$	(17,784	)		4	$	82,216	$	(17,784	)		4
Mortgage-backed		12,221		(365	)		1		201,320		(31,814	)		33		213,541		(32,179	)		34
Collateralized mortgage obligations		-		-			-		219,820		(22,929	)		54		219,820		(22,929	)		54
State & municipal		14,422		(127	)		21		171,904		(17,995	)		189		186,326		(18,122	)		210
Total securities with unrealized losses	$	26,643	$	(492	)		22	$	675,260	$	(90,522	)		280	$	701,903	$	(91,014	)		302

The Company does not believe the AFS securities that were in an unrealized loss position as of December 31, 2024 and 2023, which consisted of 401 and 388 individual securities, respectively, represented a credit loss impairment. AFS debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. As of December 31, 2024 and 2023, the majority of the AFS securities in an unrealized loss position consisted of debt securities issued by U.S. government agencies or U.S. government-sponsored enterprises that carry the explicit and/or implicit guarantee of the U.S. government, which are widely recognized as “risk-free” and have a long history of zero credit losses. Total gross unrealized losses were primarily attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. The Company does not intend to sell, nor is it more likely than not that the Company will be required to sell the securities before recovery of its amortized cost basis, which may be at maturity. The Company elected to exclude AIR from the amortized cost basis of debt securities. AIR on AFS debt securities totaled $4.4 million at December 31, 2024 and $3.9 million at December 31, 2023 and is excluded from the estimate of credit losses and reported in the other assets financial statement line.

None of the Bank’s HTM debt securities were past due or on nonaccrual status as of December 31, 2024 and 2023. There was no accrued interest reversed against interest income for the years ended December 31, 2024 and 2023 as all securities remained in accrual status. In addition, there were no collateral-dependent HTM debt securities as of December 31, 2024 and 2023. There was no allowance for credit losses on HTM securities as of December 31, 2024 and 2023. As of December 31, 2024 and 2023, 66% of the Company’s HTM debt securities were issued by U.S. government agencies or U.S. government-sponsored enterprises with bond ratings of A to AAA. These securities carry the explicit and/or implicit guarantee of the U.S. government, which are widely recognized as “risk free,” and have a long history of zero credit losses. Therefore, the Company did not record an allowance for credit losses for these securities as of December 31, 2024 and 2023. The remaining HTM debt securities at December 31, 2024 and 2023 were comprised of state and municipal obligations with bond ratings of A to AAA excluding the $84.7 million of local municipal bonds which are not rated. Based on the Company’s CECL methodology, the expected credit loss on the HTM municipal bond portfolio was deemed immaterial, therefore no allowance for credit loss was recorded as of December 31, 2024 and 2023. AIR on HTM debt securities totaled $4.4 million at December 31, 2024 and $4.7 million at December 31, 2023 and is excluded from the estimate of credit losses and reported in the other assets financial statement line.