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Note 4 - Investment Securities

6 Months Ended

Jun. 30, 2025

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 4. Investment Securities

Immediately after the merger, the Company sold a significant portion of the available-for-sale investments acquired from FLIC with proceeds of $277.5 million, with no gross gains or losses realized upon sale.

All of the Company’s investment securities are classified as available-for-sale as of June 30, 2025 and December 31, 2024. Investment securities available-for-sale are reported at fair value with unrealized gains or losses included in stockholders’ equity, net of tax. Accordingly, the carrying value of such securities reflects their fair value as of June 30, 2025 and December 31, 2024. Fair value is based upon either quoted market prices, or in certain cases where there is limited activity in the market for a particular instrument, assumptions are made to determine their fair value. See Note 7 of the Notes to Consolidated Financial Statements for further discussion.

The following tables present information related to the Company’s portfolio of securities available-for-sale as of June 30, 2025 and December 31, 2024.

																		Allowance
																		for
						Gross				Gross								Investment
		Amortized				Unrealized				Unrealized				Fair				Credit
		Cost				Gains				Losses				Value				Losses
		(dollars in thousands)
June 30, 2025
Investment securities available-for-sale:
Federal agency obligations		$	368,785			$	1,281			$	(10,649	)		$	359,417			$	-
Residential mortgage pass-through securities			677,879				2,612				(52,352	)			628,139				-
Commercial mortgage pass-through securities			30,266				36				(3,730	)			26,572				-
Obligations of U.S. states and political subdivisions			226,834				1,044				(20,752	)			207,126				-
Corporate bonds and notes			5,000				1				(6	)			4,995				-
Asset-backed securities			832				1				(10	)			823				-
Other securities			128				-				-				128				-
Total investment securities available-for-sale		$	1,309,724			$	4,975			$	(87,499	)		$	1,227,200			$	-

December 31, 2024
Investment securities available-for-sale:
Federal agency obligations		$	96,165			$	179			$	(11,674	)		$	84,670			$	-
Residential mortgage pass-through securities			439,445				211				(60,818	)			378,838				-
Commercial mortgage pass-through securities			24,989				-				(4,097	)			20,892				-
Obligations of U.S. states and political subdivisions			141,775				89				(19,460	)			122,404				-
Corporate bonds and notes			5,000				5				(18	)			4,987				-
Asset-backed securities			892				-				(7	)			885				-
Other securities			171				-				-				171				-
Total investment securities available-for-sale		$	708,437			$	484			$	(96,074	)		$	612,847			$	-

Investment securities having a carrying value of approximately $792.7 million and $184.0 million as of June 30, 2025 and December 31, 2024, respectively, were pledged to secure public deposits, borrowings, repurchase agreements, access to unutilized Federal Reserve Discount Window borrowings and Federal Home Loan Bank advances and for other purposes required or permitted by law. As of June 30, 2025 and December 31, 2024, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.

The following table presents information for investments in securities available-for-sale as of June 30, 2025, based on scheduled maturities. Actual maturities can be expected to differ from scheduled maturities due to prepayment or early call options of the issuer. Securities not due at a single maturity date are shown separately.

		June 30, 2025
		Amortized				Fair
		Cost				Value
		(dollars in thousands)
Investment securities available-for-sale:
Due in one year or less		$	5,034			$	5,036
Due after one year through five years			24,943				25,155
Due after five years through ten years			61,846				61,209
Due after ten years			509,628				480,961
Residential mortgage pass-through securities			677,879				628,139
Commercial mortgage pass-through securities			30,266				26,572
Other securities			128				128
Total investment securities available-for-sale		$	1,309,724			$	1,227,200

There were no realized gains or losses on investment securities available for sale during the six months ended June 30, 2025 and June 30, 2024.

The following tables indicate securities in an unrealized loss position for which an allowance for credit losses (“ACL”) has not been recorded, aggregated by investment category and by the length of continuous time individual securities have been in an unrealized loss position as of June 30, 2025 and December 31, 2024.

		June 30, 2025
		Total								Less than 12 Months								12 Months or Longer
		Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
		Value				Losses				Value				Losses				Value				Losses
		(dollars in thousands)
Investment securities available-for-sale:
Federal agency obligations		$	84,641			$	(10,649	)		$	50,658			$	(255	)		$	33,983			$	(10,394	)
Residential mortgage pass-through securities			350,770				(52,352	)			21,050				(377	)			329,720				(51,975	)
Commercial mortgage pass-through securities			21,131				(3,730	)			-				-				21,131				(3,730	)
Obligations of U.S. states and political subdivisions			115,530				(20,752	)			20,316				(925	)			95,214				(19,827	)
Corporate bonds and notes			1,994				(6	)			1,994				(6	)			-				-
Asset-backed securities			562				(10	)			-				-				562				(10	)
Total investment securities available for sale		$	574,628			$	(87,499	)		$	94,018			$	(1,563	)		$	480,610			$	(85,936	)

		December 31, 2024
		Total								Less than 12 Months								12 Months or Longer
		Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
		Value				Losses				Value				Losses				Value				Losses
		(dollars in thousands)
Investment securities available-for-sale:
Federal agency obligations		$	53,467			$	(11,674	)		$	18,471			$	(60	)		$	34,996			$	(11,614	)
Residential mortgage pass-through securities			364,971				(60,818	)			26,809				(604	)			338,162				(60,214	)
Commercial mortgage pass-through securities			20,892				(4,097	)			-				-				20,892				(4,097	)
Obligations of U.S. states and political subdivisions			112,523				(19,460	)			13,281				(322	)			99,242				(19,138	)
Corporate bonds and notes			1,982				(18	)			1,982				(18	)			-				-
Asset-backed securities			885				(7	)			-				-				885				(7	)
Total investment securities available for sale		$	554,720			$	(96,074	)		$	60,543			$	(1,004	)		$	494,177			$	(95,070	)

The Company has elected to exclude accrued interest from the amortized cost of its investment securities available-for-sale. Accrued interest receivable for investment securities available-for-sale totaled $5.5 million and $2.3 million as of June 30, 2025 and December 31, 2024.

The Company evaluates securities in an unrealized loss position for impairment related to credit losses on at least a quarterly basis. Securities in unrealized loss positions are first assessed as to whether we intend to sell, or if it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If one of the criteria is met, the security’s amortized cost basis is written down to fair value through current earnings. For securities that do not meet these criteria, the Company evaluates whether the decline in fair value resulted from credit losses or other factors. If this assessment indicates that a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Unrealized losses on asset backed securities and state and municipal securities have not been recognized into income because the issuers are of high credit quality and we do not intend to sell and it is likely that we will not be required to sell the securities prior to their anticipated recovery. The decline in fair value is largely due to changes in interest rates and other market conditions. The issuers continue to make timely principal and interest payments on the securities. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of applicable taxes. No allowance for credit losses for available-for-sale securities was recorded as of June 30, 2025.

Federal agency obligations, residential mortgage-backed pass-through securities and commercial mortgage-backed pass-through securities are issued by U.S. Government agencies and U.S. Government sponsored enterprises. Although a government guarantee exists on these investments, these entities are not legally backed by the full faith and credit of the federal government, and the current support they receive is subject to a cap as part of the agreement entered into in 2008. Nonetheless, at this time we do not foresee any set of circumstances in which the government would not fund its commitments on these investments as the issuers are an integral part of the U.S. housing market in providing liquidity and stability. Therefore, we concluded that a zero-allowance approach for these investment securities is appropriate.