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SECURITIES

3 Months Ended

Mar. 31, 2025

Investments, Debt and Equity Securities [Abstract]

SECURITIES

SECURITIES

Debt Securities

The amortized cost and fair values of debt securities, with gross unrealized gains and losses and allowance for credit losses, are as follows:

						March 31, 2025
(dollars in thousands)						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Allowance for Credit Losses						Fair Value
Available-for-sale:
U.S. Treasury						$	109,688					$	—					$	(6,825)					$	—					$	102,863
U.S. government agency						53,611						46						(1,877)						—						51,780
Municipal						149,697						—						(17,359)						—						132,338
Mortgage-backed:
Agency residential						246,356						1,011						(11,151)						—						236,216
Agency commercial						126,448						6						(10,051)						—						116,403
Corporate						68,693						322						(2,480)						—						66,535
Total available-for-sale						$	754,493					$	1,385					$	(49,743)					$	—					$	706,135
						March 31, 2025
(dollars in thousands)						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value						Allowance for Credit Losses
Held-to-maturity:
U.S. government agency						$	88,477					$	—					$	(6,800)					$	81,677					$	—
Municipal						35,199						47						(271)						34,975						—
Mortgage-backed:
Agency residential						83,308						—						(4,417)						78,891						—
Agency commercial						283,414						14						(33,209)						250,219						—
Total held-to-maturity						$	490,398					$	61					$	(44,697)					$	445,762					$	—

						December 31, 2024
(dollars in thousands)						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Allowance for Credit Losses						Fair Value
Available-for-sale:
U.S. Treasury						$	119,690					$	—					$	(8,545)					$	—					$	111,145
U.S. government agency						55,742						—						(2,544)						—						53,198
Municipal						150,163						—						(19,484)						—						130,679
Mortgage-backed:
Agency residential						241,342						253						(14,227)						—						227,368
Agency commercial						128,823						3						(12,145)						—						116,681
Corporate						61,732						156						(2,910)						—						58,978
Total available-for-sale						$	757,492					$	412					$	(59,855)					$	—					$	698,049
						December 31, 2024
(dollars in thousands)						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value						Allowance for Credit Losses
Held-to-maturity:
U.S. government agency						$	88,472					$	—					$	(8,819)					$	79,653					$	—
Municipal						35,862						48						(371)						35,539						—
Mortgage-backed:
Agency residential						85,643						—						(5,796)						79,847						—
Agency commercial						289,881						—						(39,734)						250,147						—
Total held-to-maturity						$	499,858					$	48					$	(54,720)					$	445,186					$	—

As of March 31, 2025 and December 31, 2024, the Bank had debt securities with a carrying value of $429.0 million and $468.8 million, respectively, which were pledged to secure public deposits, securities sold under agreements to repurchase, available borrowing capacity, and for other purposes required or permitted by law.

The amortized cost and fair value of debt securities by contractual maturity, as of March 31, 2025, are shown below. Expected maturities may 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												Held-to-Maturity
(dollars in thousands)			Amortized Cost						Fair Value						Amortized Cost						Fair Value
Due in 1 year or less			$	49,390					$	48,619					$	6,431					$	6,431
Due after 1 year through 5 years			179,558						168,306						52,779						50,793
Due after 5 years through 10 years			128,903						115,347						62,214						57,281
Due after 10 years			23,838						21,244						2,252						2,147
Mortgage-backed:
Agency residential			246,356						236,216						83,308						78,891
Agency commercial			126,448						116,403						283,414						250,219
Total			$	754,493					$	706,135					$	490,398					$	445,762

The following table presents gross unrealized losses and fair value of debt securities available-for-sale that do not have an associated allowance for credit losses as of March 31, 2025 and December 31, 2024, aggregated by category and length of time that individual debt securities have been in a continuous unrealized loss position:

						March 31, 2025
						Investments in a Continuous Unrealized Loss Position
						Less than 12 Months												12 Months or More												Total
(dollars in thousands)						Unrealized Loss						Fair Value						Unrealized Loss						Fair Value						Unrealized Loss						Fair Value
Available-for-sale:
U.S. Treasury						$	—					$	—					$	(6,825)					$	102,863					$	(6,825)					$	102,863
U.S. government agency						(26)						2,969						(1,851)						44,059						(1,877)						47,028
Municipal						(5)						2,162						(17,354)						129,705						(17,359)						131,867
Mortgage-backed:
Agency residential						(935)						40,523						(10,216)						123,996						(11,151)						164,519
Agency commercial						(54)						3,087						(9,997)						111,959						(10,051)						115,046
Corporate						(33)						3,967						(2,447)						39,526						(2,480)						43,493
Total available-for-sale						$	(1,053)					$	52,708					$	(48,690)					$	552,108					$	(49,743)					$	604,816

						December 31, 2024
						Investments in a Continuous Unrealized Loss Position
						Less than 12 Months												12 Months or More												Total
(dollars in thousands)						Unrealized Loss						Fair Value						Unrealized Loss						Fair Value						Unrealized Loss						Fair Value
Available-for-sale:
U.S. Treasury						$	—					$	—					$	(8,545)					$	111,145					$	(8,545)					$	111,145
U.S. government agency						(141)						7,594						(2,403)						45,604						(2,544)						53,198
Municipal						(8)						2,634						(19,476)						127,776						(19,484)						130,410
Mortgage-backed:
Agency residential						(2,041)						81,055						(12,186)						129,178						(14,227)						210,233
Agency commercial						(125)						3,327						(12,020)						112,118						(12,145)						115,445
Corporate						(4)						1,996						(2,906)						43,064						(2,910)						45,060
Total available-for-sale						$	(2,319)					$	96,606					$	(57,536)					$	568,885					$	(59,855)					$	665,491

As of March 31, 2025, there were 600 debt securities in an unrealized loss position for a period of twelve months or more, and 63 debt securities in an unrealized loss position for a period of less than twelve months.

U.S. Treasury, U.S. government agency, and agency mortgage-backed securities are considered to have no risk of credit loss as they are either explicitly or implicitly guaranteed by the U.S. government. The changes in fair value in these portfolios are considered to be primarily driven by changes in market interest rates and other non-credit risks, such as prepayment and liquidity risks.

Municipal securities include general obligation bonds which have a very low historical default rate due to issuers generally having taxing authority to service the debt and represent approximately 72% of the total fair value of our municipal securities portfolio as of March 31, 2025. The remainder of the municipal securities are also of high credit quality with ratings of Aa3/AA- or better. The Company evaluates credit risk through monitoring credit ratings and reviews of available financial data. The changes in fair value in these portfolios are considered to be primarily driven by changes in market interest rates and other non-credit risks, such as call and liquidity risks. The estimated allowance for credit losses for the municipal debt securities held-to-maturity was deemed insignificant.

Corporate securities include investment grade corporate and bank subordinated debt securities. The Company evaluates credit risk through monitoring credit ratings, reviews of available issuer financial data, and sector trends. The changes in fair value in corporate securities were considered to be primarily driven by changes in market interest rates and other non-credit risks, such as call and liquidity risks.

As of March 31, 2025, the Company did not intend to sell the debt securities that are in an unrealized loss position, and it was more likely than not that the Company would recover the amortized cost prior to being required to sell the debt securities.

Accrued interest on debt securities is excluded from the estimate of credit losses and totaled $5.0 million and $5.1 million as of March 31, 2025 and December 31, 2024, respectively.

Sales of debt securities were as follows during the three months ended March 31:

									Three Months Ended March 31,
(dollars in thousands)															2025						2024
Proceeds from sales															$	—					$	66,812
Gross realized gains															—						—
Gross realized losses															—						(3,382)

Equity Securities

Equity securities with readily determinable fair values are measured at fair value with changes in fair value recognized in unrealized gains (losses) on equity securities on the consolidated statements of income. The Company has elected to measure equity securities with no readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes for identical or similar securities of the same issuer.

The initial cost and carrying values of equity securities, with cumulative net unrealized gains and losses were as follows:

						March 31, 2025
(dollars in thousands)						Readily Determinable Fair Value						No Readily Determinable Fair Value
Initial cost						$	3,124					$	2,998
Cumulative net unrealized gains (losses)						199						(369)
Carrying value						$	3,323					$	2,629

						December 31, 2024
(dollars in thousands)						Readily Determinable Fair Value						No Readily Determinable Fair Value
Initial cost						$	3,124					$	2,998
Cumulative net unrealized gains (losses)						191						(369)
Carrying value						$	3,315					$	2,629

As of March 31, 2025 and December 31, 2024, the cumulative net unrealized losses on equity securities with no readily determinable fair value reflect impairments of $0.2 million and downward adjustments based on observable price changes of an identical investment of $0.2 million. There have been no upward adjustments based on observable price changes to equity securities with no readily determinable fair value.

Unrealized gains (losses) on equity securities were as follows during the three months ended March 31, 2025 and 2024:

									Three Months Ended March 31,
(dollars in thousands)															2025						2024
Readily determinable fair value															$	8					$	(16)
No readily determinable fair value															—						—
Unrealized gains (losses) on equity securities															$	8					$	(16)

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- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References

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-Topic 940
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-Section 1403
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