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INVESTMENT SECURITIES

9 Months Ended

Sep. 30, 2025

INVESTMENT SECURITIES

INVESTMENT SECURITIES

2. INVESTMENT SECURITIES

Available-for-Sale Debt Securities

The following tables summarize the amortized cost and fair value of AFS debt securities along with the corresponding amounts of related gross unrealized gains and losses recognized in AOCI:


					Gross			Gross
		Amortized			Unrealized			Unrealized			Fair
September 30, 2025 (in thousands)		Cost			Gains			Losses			Value

U.S. Treasury securities and U.S. Government agencies		$	265,913		$	109		$	(2,296)		$	263,726
Private label mortgage-backed security			—			1,452			—			1,452
Mortgage-backed securities - residential			560,809			2,655			(8,011)			555,453
Collateralized mortgage obligations			18,100			24			(656)			17,468
Corporate bonds			1,002			—			—			1,002
Trust preferred security			3,910			160			—			4,070
Total available-for-sale debt securities		$	849,734		$	4,400		$	(10,963)		$	843,171


					Gross			Gross
		Amortized			Unrealized			Unrealized			Fair
December 31, 2024 (in thousands)		Cost			Gains			Losses			Value

U.S. Treasury securities and U.S. Government agencies		$	395,609		$	4		$	(6,527)		$	389,086
Private label mortgage-backed security			121			1,429			—			1,550
Mortgage-backed securities - residential			180,765			193			(12,725)			168,233
Collateralized mortgage obligations			20,127			27			(911)			19,243
Corporate bonds			2,008			1			—			2,009
Trust preferred security			3,863			171			—			4,034
Total available-for-sale debt securities		$	602,493		$	1,825		$	(20,163)		$	584,155

Held-to-Maturity Debt Securities

The following tables summarize the amortized cost and fair value of HTM debt securities along with the corresponding amounts of related gross unrecognized gains and losses:


					Gross			Gross
		Amortized			Unrecognized			Unrecognized			Fair
September 30, 2025 (in thousands)		Cost			Gains			Losses			Value

Mortgage-backed securities - residential		$	14		$	—		$	—		$	14
Collateralized mortgage obligations			5,096			31			(54)			5,073
Total held-to-maturity debt securities		$	5,110		$	31		$	(54)		$	5,087


					Gross			Gross
		Amortized			Unrecognized			Unrecognized			Fair
December 31, 2024 (in thousands)		Cost			Gains			Losses			Value

Mortgage-backed securities - residential		$	23		$	1		$	—		$	24
Collateralized mortgage obligations			5,756			36			(86)			5,706
Corporate bonds			4,999			6			—			5,005
Total held-to-maturity debt securities		$	10,778		$	43		$	(86)		$	10,735

Sales and Calls of Available-for-Sale Debt Securities

During the three and nine months ended September 30, 2025, and 2024, there were no material gains or losses on sales or calls of AFS debt securities.

Debt Securities by Contractual Maturity

The amortized cost and fair value of debt securities by contractual maturity as of September 30, 2025, follows. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are detailed separately.


		Available-for-Sale						Held-to-Maturity
		Debt Securities						Debt Securities
		Amortized			Fair			Amortized			Fair
September 30, 2025 (in thousands)		Cost			Value			Cost			Value

Due in one year or less		$	11,002		$	10,780		$	—		$	—
Due from one year to five years			255,913			253,948			—			—
Due from five years to ten years			—			—			—			—
Due beyond ten years			3,910			4,070			—			—
Private label mortgage-backed security			—			1,452			—			—
Mortgage-backed securities - residential			560,809			555,453			14			14
Collateralized mortgage obligations			18,100			17,468			5,096			5,073
Total debt securities		$	849,734		$	843,171		$	5,110		$	5,087

Unrealized Loss Analysis on Debt Securities

The following tables summarize AFS debt securities in an unrealized loss position for which an ACLS had not been recorded, aggregated by investment category and length of time in a continuous unrealized loss position:


		Less than 12 months						12 months or more						Total
					Unrealized						Unrealized						Unrealized
September 30, 2025 (in thousands)		Fair Value			Losses			Fair Value			Losses			Fair Value			Losses

Available-for-sale debt securities:
U.S. Treasury securities and U.S. Government agencies		$	50,939		$	(30)		$	77,717		$	(2,266)		$	128,656		$	(2,296)
Mortgage-backed securities - residential			87,466			(362)			89,791			(7,649)			177,257			(8,011)
Collateralized mortgage obligations			664			(1)			14,647			(655)			15,311			(656)
Total available-for-sale debt securities		$	139,069		$	(393)		$	182,155		$	(10,570)		$	321,224		$	(10,963)


		Less than 12 months						12 months or more						Total
					Unrealized						Unrealized						Unrealized
December 31, 2024 (in thousands)		Fair Value			Losses			Fair Value			Losses			Fair Value			Losses

Available-for-sale debt securities:
U.S. Treasury securities and U.S. Government agencies		$	145,048		$	(212)		$	209,033		$	(6,315)		$	354,081		$	(6,527)
Mortgage-backed securities - residential			52,347			(874)			104,453			(11,851)			156,800			(12,725)
Collateralized mortgage obligations			700			(8)			15,951			(903)			16,651			(911)
Total available-for-sale debt securities		$	198,095		$	(1,094)		$	329,437		$	(19,069)		$	527,532		$	(20,163)

As of September 30, 2025, the Bank’s security portfolio consisted of 198 securities, 93 of which were in an unrealized loss position.

As of December 31, 2024, the Bank’s security portfolio consisted of 182 securities, 114 of which were in an unrealized loss position.

As of September 30, 2025, and December 31, 2024, there were no holdings of debt securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders’ equity.

Mortgage-Backed Securities and Collateralized Mortgage Obligations

As of September 30, 2025, with the exception of the $1.5 million private label MBS, all other MBS’s and CMO’s held by the Bank were issued by U.S. government-sponsored entities and agencies, primarily the FHLMC and FNMA. As of September 30, 2025, and December 31, 2024, there were gross unrealized losses of approximately $9 million and $14 million related to AFS MBS’s and CMO’s. Because these unrealized losses are attributable to changes in interest rates and illiquidity, and not credit quality, and because the Bank does not have the intent to sell these securities, and it is likely that it will not be required to sell the securities before their anticipated recovery, management does not consider these securities to have credit-related impairment that would require a provision adjustment to the ACLS.

There were no HTM debt securities on nonaccrual or past due 90 days or more as of September 30, 2025, and December 31, 2024. All of the Company’s HTM corporate bonds were rated investment grade as of December 31, 2024. There were no HTM debt securities considered collateral dependent as of September 30, 2025, and December 31, 2024.

Accrued interest receivable on AFS debt securities is presented as a component of other assets on the Company’s balance sheet and is excluded from the ACLS, if applicable. Accrued interest on AFS debt securities totaled $4 million and $3 million as of September 30, 2025, and December 31, 2024. Accrued interest receivable on HTM debt securities totaled $13,000 as of September 30, 2025, and $60,000 as of December 31, 2024.

Pledged Debt Securities

Debt securities pledged to secure public deposits, SSUAR, and debt securities held for other purposes, as required or permitted by law, were as follows:


		As of
(in thousands)		September 30, 2025			December 31, 2024

Amortized cost		$	137,382		$	205,160
Fair value			135,151			199,607
Carrying amount			135,151			199,607

Equity Securities

The amortized cost, gross unrealized gains and losses, and fair value of equity securities with readily determinable fair values were as follows:


					Gross			Gross
		Amortized			Unrealized			Unrealized			Fair
September 30, 2025 (in thousands)		Cost			Gains			Losses			Value

Freddie Mac preferred stock		$	—		$	945		$	—		$	945
Total equity securities		$	—		$	945		$	—		$	945


					Gross			Gross
		Amortized			Unrealized			Unrealized			Fair
December 31, 2024 (in thousands)		Cost			Gains			Losses			Value

Freddie Mac preferred stock		$	—		$	693		$	—		$	693
Total equity securities		$	—		$	693		$	—		$	693

For equity securities with readily determinable fair values, the gross realized and unrealized gains and losses recognized in the Company’s consolidated statements of income were as follows:


		Gains (Losses) Recognized on Equity Securities
		Three Months Ended September 30, 2025									Three Months Ended September 30, 2024
(in thousands)		Realized			Unrealized			Total			Realized			Unrealized			Total

Freddie Mac preferred stock		$	—		$	189		$	189		$	—		$	42		$	42
Total equity securities		$	—		$	189		$	189		$	—		$	42		$	42


		Gains (Losses) Recognized on Equity Securities
		Nine Months Ended September 30, 2025									Nine Months Ended September 30, 2024
(in thousands)		Realized			Unrealized			Total			Realized			Unrealized			Total

Freddie Mac preferred stock		$	—		$	252		$	252		$	—		$	65		$	65
Total equity securities		$	—		$	252		$	252		$	—		$	65		$	65