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SECURITIES

9 Months Ended

Sep. 30, 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:

						September 30, 2025
(dollars in thousands)						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Allowance for Credit Losses						Fair Value
Available-for-sale:
U.S. Treasury						$	99,759					$	—					$	(4,946)					$	—					$	94,813
U.S. government agency						51,930						147						(1,334)						—						50,743
Municipal						149,723						165						(13,436)						—						136,452
Mortgage-backed:
Agency residential						324,957						3,099						(8,410)						—						319,646
Agency commercial						133,797						53						(8,143)						—						125,707
Corporate						67,565						642						(1,838)						—						66,369
Total available-for-sale						$	827,731					$	4,106					$	(38,107)					$	—					$	793,730
						September 30, 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						$	88,489					$	—					$	(5,340)					$	83,149					$	—
Municipal						30,599						389						(83)						30,905						—
Mortgage-backed:
Agency residential						78,233						11						(3,030)						75,214						—
Agency commercial						269,244						23						(27,042)						242,225						—
Total held-to-maturity						$	466,565					$	423					$	(35,495)					$	431,493					$	—

						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 September 30, 2025 and December 31, 2024, the Bank had debt securities with a carrying value of $515.6 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 September 30, 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			$	36,083					$	35,875					$	7,998					$	7,895
Due after 1 year through 5 years			181,704						172,003						54,356						52,911
Due after 5 years through 10 years			127,320						118,397						54,797						51,375
Due after 10 years			23,870						22,102						1,937						1,873
Mortgage-backed:
Agency residential			324,957						319,646						78,233						75,214
Agency commercial			133,797						125,707						269,244						242,225
Total			$	827,731					$	793,730					$	466,565					$	431,493

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 September 30, 2025 and December 31, 2024, aggregated by category and length of time that individual debt securities have been in a continuous unrealized loss position:

						September 30, 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						$	—					$	—					$	(4,946)					$	94,813					$	(4,946)					$	94,813
U.S. government agency						(20)						2,953						(1,314)						40,068						(1,334)						43,021
Municipal						(42)						2,010						(13,394)						127,231						(13,436)						129,241
Mortgage-backed:
Agency residential						(170)						20,124						(8,240)						124,013						(8,410)						144,137
Agency commercial						(158)						14,114						(7,985)						105,305						(8,143)						119,419
Corporate						(14)						3,804						(1,824)						27,152						(1,838)						30,956
Total available-for-sale						$	(404)					$	43,005					$	(37,703)					$	518,582					$	(38,107)					$	561,587

						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 September 30, 2025, there were 564 debt securities in an unrealized loss position for a period of twelve months or more, and 28 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 76% of the total fair value of our municipal securities portfolio as of September 30, 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 municipal securities were 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 September 30, 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 $5.3 million and $5.1 million as of September 30, 2025 and December 31, 2024, respectively.

Sales of debt securities were as follows during the three and nine months ended September 30:

			Three Months Ended September 30,												Nine Months Ended September 30,
(dollars in thousands)			2025						2024						2025						2024
Proceeds from sales			$	1,276					$	—					$	1,276					$	66,812
Gross realized gains			—						—						—						—
Gross realized losses			(49)						—						(49)						(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:

						September 30, 2025
(dollars in thousands)						Readily Determinable Fair Value						No Readily Determinable Fair Value
Initial cost						$	3,124					$	2,978
Cumulative net unrealized gains (losses)						155						(369)
Carrying value						$	3,279					$	2,609

						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 September 30, 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 and nine months ended September 30, 2025 and 2024:

			Three Months Ended September 30,												Nine Months Ended September 30,
(dollars in thousands)			2025						2024						2025						2024
Readily determinable fair value			$	(67)					$	136					$	(36)					$	24
No readily determinable fair value			—						—						—						—
Unrealized gains (losses) on equity securities			$	(67)					$	136					$	(36)					$	24

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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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-Name Regulation S-K (SK)
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-Section 1403
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