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SECURITIES | 6 Months Ended
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Jun. 30, 2025
Investments, Debt and Equity Securities [Abstract] |
SECURITIES | SECURITIES Equity Securities With Readily Determinable Fair Values The Company held equity securities with readily determinable fair values of $4,526,000 and $4,445,000 at June 30, 2025 and December 31, 2024, respectively. The gross realized and unrealized gains and losses recognized on equity securities with readily determinable fair values in noninterest income in the Company’s consolidated statements of income were as follows:
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
(Dollars in thousands) |  | 2025 |  | 2024 |  | 2025 |  | 2024
Unrealized gains (losses) on equity securities held at the reporting date |  | $ | 14 |  |  | $ | (19) |  |  | $ | 81 |  |  | $ | (66) |
Realized gains (losses) on equity securities sold during the period |  | — |  |  | — |  |  | — |  |  | — |
|  | $ | 14 |  |  | $ | (19) |  |  | $ | 81 |  |  | $ | (66) |
Equity Securities Without Readily Determinable Fair Values The following table summarizes the Company's investments in equity securities without readily determinable fair values:
(Dollars in thousands) | June 30, 2025 |  | December 31, 2024
Equity Securities without readily determinable fair value, at cost | $ | 74,809 |  |  | $ | 71,807 |
Upward adjustments based on observable price changes, cumulative | 10,163 |  |  | 10,163 |
Equity Securities without readily determinable fair value, carrying value | $ | 84,972 |  |  | $ | 81,970 |
Equity securities without readily determinable fair values include Federal Home Loan Bank and other restricted stock, which are reported separately in the Company's consolidated balance sheets. Equity securities without readily determinable fair values also include the Company's investments in the common stock of Trax Group, Inc. and Warehouse Solutions Inc., with carrying amounts of $9,700,000 and $38,088,000, respectively, at June 30, 2025. Both investments have been allocated to our Payments segment and are included in other assets in the Company's consolidated balance sheets. There were no realized or unrealized gains or losses recognized on equity securities without readily determinable fair values during the three and six months ended June 30, 2025 and 2024. Management monitors its equity securities without readily determinable fair values for observable transactions in similar equity instruments as well as indicators of impairment either of which would require it to mark such equity securities to fair value. No such transactions or indicators of impairment were detected during the three and six months ended June 30, 2025. Debt Securities Debt securities have been classified in the financial statements as available for sale or held to maturity. The following table summarizes the amortized cost, fair value, and allowance for credit losses of debt securities and the corresponding amounts of gross unrealized gains and losses of available for sale securities recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses of held to maturity securities:
(Dollars in thousands) |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Allowance for Credit Losses |  | Fair Value
June 30, 2025 |  |  |  |  |
Available for sale securities: |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities, residential |  | $ | 104,322 |  |  | $ | 253 |  |  | $ | (4,666) |  |  | $ | — |  |  | $ | 99,909 |
Asset-backed securities |  | 862 |  |  | 6 |  |  | — |  |  | — |  |  | 868 |
State and municipal |  | 2,872 |  |  | — |  |  | (79) |  |  | — |  |  | 2,793 |
CLO securities |  | 286,224 |  |  | 1,063 |  |  | — |  |  | — |  |  | 287,287 |
Corporate bonds |  | 266 |  |  | — |  |  | (9) |  |  | — |  |  | 257 |
SBA pooled securities |  | 1,211 |  |  | 7 |  |  | (57) |  |  | — |  |  | 1,161 |
Total available for sale securities |  | $ | 395,757 |  |  | $ | 1,329 |  |  | $ | (4,811) |  |  | $ | — |  |  | $ | 392,275 |
(Dollars in thousands) |  | Amortized Cost |  | Gross Unrecognized Gains |  | Gross Unrecognized Losses |  | Fair Value
June 30, 2025 |  |  |  |
Held to maturity securities: |  |  |  |  |  |  |  |
CLO securities |  | $ | 3,181 |  |  | $ | — |  |  | $ | (887) |  |  | $ | 2,294 |
Allowance for credit losses |  | (1,399) |  |  |  |  |  |  |
Total held to maturity securities, net of ACL |  | $ | 1,782 |  |  |  |  |  |  |
(Dollars in thousands) |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Allowance for Credit Losses |  | Fair Value
December 31, 2024 |  |  |  |  |
Available for sale securities: |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities, residential |  | $ | 89,740 |  |  | $ | 89 |  |  | $ | (5,644) |  |  | $ | — |  |  | $ | 84,185 |
Asset-backed securities |  | 907 |  |  | — |  |  | (2) |  |  | — |  |  | 905 |
State and municipal |  | 3,154 |  |  | — |  |  | (91) |  |  | — |  |  | 3,063 |
CLO Securities |  | 290,286 |  |  | 1,627 |  |  | — |  |  | — |  |  | 291,913 |
Corporate bonds |  | 266 |  |  | — |  |  | (4) |  |  | — |  |  | 262 |
SBA pooled securities |  | 1,305 |  |  | 9 |  |  | (81) |  |  | — |  |  | 1,233 |
Total available for sale securities |  | $ | 385,658 |  |  | $ | 1,725 |  |  | $ | (5,822) |  |  | $ | — |  |  | $ | 381,561 |
(Dollars in thousands) |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrecognized Losses |  | Fair Value
December 31, 2024 |  |  |  |
Held to maturity securities: |  |  |  |  |  |  |  |
CLO securities |  | $ | 5,367 |  |  | $ | — |  |  | $ | (2,853) |  |  | $ | 2,514 |
Allowance for credit losses |  | (3,491) |  |  |  |  |  |  |
Total held to maturity securities, net of ACL |  | $ | 1,876 |  |  |  |  |  |  |
The amortized cost and estimated fair value of securities at June 30, 2025, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
|  | Available for Sale Securities |  | Held to Maturity Securities
(Dollars in thousands) |  | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Due in one year or less |  | $ | 191 |  |  | $ | 190 |  |  | $ | — |  |  | $ | — |
Due from one year to five years |  | 2,178 |  |  | 2,151 |  |  | 3,181 |  |  | 2,294 |
Due from five years to ten years |  | 43,368 |  |  | 43,444 |  |  | — |  |  | — |
Due after ten years |  | 243,625 |  |  | 244,552 |  |  | — |  |  | — |
|  | 289,362 |  |  | 290,337 |  |  | 3,181 |  |  | 2,294 |
Mortgage-backed securities, residential |  | 104,322 |  |  | 99,909 |  |  | — |  |  | — |
Asset-backed securities |  | 862 |  |  | 868 |  |  | — |  |  | — |
SBA pooled securities |  | 1,211 |  |  | 1,161 |  |  | — |  |  | — |
|  | $ | 395,757 |  |  | $ | 392,275 |  |  | $ | 3,181 |  |  | $ | 2,294 |
There were no sales of debt securities during the three and six months ended June 30, 2025 and 2024. Debt securities with a carrying amount of approximately $32,416,000 and $25,818,000 at June 30, 2025 and December 31, 2024, respectively, were pledged to secure public deposits, customer repurchase agreements, and for other purposes required or permitted by law. Accrued interest on available for sale securities totaled $3,677,000 and $4,755,000 at June 30, 2025 and December 31, 2024, respectively, and was included in other assets on the Company's consolidated balance sheets. There was no accrued interest related to debt securities reversed against interest income for the three and six months ended June 30, 2025 and 2024. The following table summarizes available for sale debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous loss position:
|  | Less than 12 Months |  | 12 Months or More |  | Total
(Dollars in thousands) |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
June 30, 2025 |  |  |  |  |  |
Available for sale securities: |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities, residential |  | $ | 31,297 |  |  | $ | (565) |  |  | $ | 28,296 |  |  | $ | (4,101) |  |  | $ | 59,593 |  |  | $ | (4,666) |
Asset-backed securities |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
State and municipal |  | — |  |  | — |  |  | 2,358 |  |  | (79) |  |  | 2,358 |  |  | (79) |
CLO securities |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Corporate bonds |  | 257 |  |  | (9) |  |  | — |  |  | — |  |  | 257 |  |  | (9) |
SBA pooled securities |  | — |  |  | — |  |  | 814 |  |  | (57) |  |  | 814 |  |  | (57) |
|  | $ | 31,554 |  |  | $ | (574) |  |  | $ | 31,468 |  |  | $ | (4,237) |  |  | $ | 63,022 |  |  | $ | (4,811) |
|  | Less than 12 Months |  | 12 Months or More |  | Total
(Dollars in thousands) |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
December 31, 2024 |  |  |  |  |  |
Available for sale securities: |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities, residential |  | $ | 32,124 |  |  | $ | (641) |  |  | $ | 35,340 |  |  | $ | (5,003) |  |  | $ | 67,464 |  |  | $ | (5,644) |
Asset-backed securities |  | — |  |  | — |  |  | 905 |  |  | (2) |  |  | 905 |  |  | (2) |
State and municipal |  | 355 |  |  | (5) |  |  | 2,356 |  |  | (86) |  |  | 2,711 |  |  | (91) |
CLO Securities |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Corporate bonds |  | 262 |  |  | (4) |  |  | — |  |  | — |  |  | 262 |  |  | (4) |
SBA pooled securities |  | — |  |  | — |  |  | 876 |  |  | (81) |  |  | 876 |  |  | (81) |
|  | $ | 32,741 |  |  | $ | (650) |  |  | $ | 39,477 |  |  | $ | (5,172) |  |  | $ | 72,218 |  |  | $ | (5,822) |
Management evaluates available for sale debt securities in unrealized loss positions to determine whether the impairment is due to credit-related factors or noncredit-related factors. Consideration is given to (1) the extent to which the fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value. At June 30, 2025, the Company had 78 available for sale debt securities in an unrealized loss position without an allowance for credit losses. Management does not have the intent to sell any of these securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline. Accordingly, as of June 30, 2025, management believes that the unrealized losses detailed in the previous table are due to noncredit-related factors, including changes in interest rates and other market conditions, and therefore the Company carried no allowance for credit losses on available for sale debt securities at June 30, 2025. The following table presents the activity in the allowance for credit losses for held to maturity debt securities:
(Dollars in thousands) |  | Three Months Ended June 30, |  | Six Months Ended June 30,
Held to Maturity CLO Securities |  | 2025 |  | 2024 |  | 2025 |  | 2024
Allowance for credit losses: |  |  |  |  |  |  |  |
Beginning balance |  | $ | 1,476 |  |  | $ | 3,135 |  |  | $ | 3,491 |  |  | $ | 3,190 |
Credit loss expense |  | (97) |  |  | 27 |  |  | 48 |  |  | (28) |
Charge-offs |  | — |  |  | — |  |  | (2,160) |  |  | — |
Recoveries |  | 20 |  |  | — |  |  | 20 |  |  | — |
Allowance for credit losses ending balance |  | $ | 1,399 |  |  | $ | 3,162 |  |  | $ | 1,399 |  |  | $ | 3,162 |
The Company’s held to maturity securities are investments in the unrated subordinated notes of collateralized loan obligation funds. These securities are the junior-most in securitization capital structures, and are subject to suspension of distributions if the credit of the underlying loan portfolios deteriorates materially. The ACL on held to maturity securities is estimated at each measurement date on a collective basis by major security type. At June 30, 2025 and December 31, 2024, the Company’s held to maturity securities consisted of investments in the subordinated notes of collateralized loan obligation (“CLO”) funds. Expected credit losses for these securities are estimated using a discounted cash flow methodology which considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Ultimately, the realized cash flows on CLO securities such as these will be driven by a variety of factors, including credit performance of the underlying loan portfolio, adjustments to the portfolio by the asset manager, and the timing of a potential call. During the three months ended March 31, 2025, the Company charged off one of it's three investments in these CLO funds as it was deemed to be an uncollectible investment. The charge-off was fully reserved in a prior period. At June 30, 2025 and December 31, 2024, $1,913,000 and $4,073,000, respectively, of the Company’s held to maturity securities were classified as nonaccrual.

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