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INVESTMENT SECURITIES

12 Months Ended

Dec. 31, 2024

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE 4 — INVESTMENT SECURITIES

The following tables summarizes the amortized cost and fair value of AFS and HTM debt securities and equity investments and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses recognized in earnings (in thousands):


					Gross			Gross
					Unrealized/			Unrealized/
		Amortized			Unrecognized			Unrecognized
At December 31, 2024		Cost			Gains			Losses			Fair Value
Available-for-Sale Securities:
U.S. Government agency securities		$	67,999		$	—		$	(4,247)		$	63,752
U.S. State and Municipal securities			11,341			—			(1,841)			9,500
Residential MBS			430,968			854			(68,754)			363,068
Commercial MBS			46,094			—			(2,966)			43,128
Asset-backed securities			2,677			—			(40)			2,637
Total securities available-for-sale		$	559,079		$	854		$	(77,848)		$	482,085

Held-to-Maturity Securities:
U.S. Treasury securities		$	29,938		$	—		$	(410)		$	29,528
U.S. State and Municipal securities			15,319			—			(1,686)			13,633
Residential MBS			375,232			—			(58,866)			316,366
Commercial MBS			8,068			—			(876)			7,192
Total securities held-to-maturity		$	428,557		$	—		$	(61,838)		$	366,719

Equity Investments:
CRA Mutual Fund		$	5,503		$	—		$	(394)		$	5,109
Total equity investment securities		$	5,503		$	—		$	(394)		$	5,109


					Gross			Gross
					Unrealized/			Unrealized/
		Amortized			Unrecognized			Unrecognized
At December 31, 2023		Cost			Gains			Losses			Fair Value
Available-for-Sale Securities:
U.S. Government agency securities		$	67,997		$	—		$	(6,222)		$	61,775
U.S. State and Municipal securities			11,496			—			(1,797)			9,699
Residential MBS			419,331			1,198			(68,609)			351,920
Commercial MBS			36,879			71			(2,366)			34,584
Asset-backed securities			3,287			—			(58)			3,229
Total securities available-for-sale		$	538,990		$	1,269		$	(79,052)		$	461,207

Held-to-Maturity Securities:
U.S. Treasury securities		$	29,895		$	—		$	(1,412)		$	28,483
U.S. State and Municipal securities			15,569			—			(1,574)			13,995
Residential MBS			415,306			—			(60,556)			354,750
Commercial MBS			8,090			—			(1,066)			7,024
Total securities held-to-maturity		$	468,860		$	—		$	(64,608)		$	404,252

Equity Investments:
CRA Mutual Fund		$	2,410		$	—		$	(287)		$	2,123
Total equity investment securities		$	2,410		$	—		$	(287)		$	2,123

There were no sales and calls of securities for the years ended December 31, 2024, 2023 and 2022.

The tables below summarize, by contractual maturity, the amortized cost and fair value of debt securities. The tables do not include the effect of principal repayments or scheduled principal amortization. Equity securities, primarily investment in mutual funds, have been excluded from the table. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties (in thousands):


		Held-to-Maturity						Available-for-Sale
At December 31, 2024		Amortized Cost			Fair Value			Amortized Cost			Fair Value
Due within 1 year		$	29,938		$	29,527		$	38,000		$	36,954
After 1 year through 5 years			8,068			7,192			34,009			31,569
After 5 years through 10 years			858			809			18,819			17,168
After 10 years			389,693			329,191			468,251			396,394
Total Securities		$	428,557		$	366,719		$	559,079		$	482,085


		Held-to-Maturity						Available-for-Sale
At December 31, 2023		Amortized Cost			Fair Value			Amortized Cost			Fair Value
Due within 1 year		$	—		$	—		$	—		$	—
After 1 year through 5 years			37,984			35,507			65,822			60,757
After 5 years through 10 years			1,112			1,044			22,163			21,174
After 10 years			429,764			367,701			451,005			379,276
Total Securities		$	468,860		$	404,252		$	538,990		$	461,207

At December 31, 2024, there were $750.3 million of securities pledged to support wholesale funding, and to a lesser extent certain other types of deposits, of which $65.5 million were encumbered. At December 31, 2023, there were $845.7 million

of securities pledged to support wholesale funding, and to a lesser extent certain other types of deposits, of which $60.0 million were encumbered.

At December 31, 2024 and 2023, 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. At December 31, 2024 and 2023, all Residential and Commercial MBS held by the Company were issued by U.S. government-sponsored entities and agencies.

The following tables present debt securities with unrealized/unrecognized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows (in thousands):


		Less than 12 Months						12 Months or More						Total
					Unrealized/						Unrealized/						Unrealized/
		Estimated			Unrecognized			Estimated			Unrecognized			Estimated			Unrecognized
At December 31, 2024		Fair Value			Losses			Fair Value			Losses			Fair Value			Losses
Available-for-Sale Securities:
U.S. Government agency securities		$	—		$	—		$	63,752		$	(4,247)		$	63,752		$	(4,247)
U.S. State and Municipal securities			—			—			9,500			(1,841)			9,500			(1,841)
Residential MBS			46,859			(1,104)			258,763			(67,650)			305,622			(68,754)
Commercial MBS			19,624			(410)			23,504			(2,556)			43,128			(2,966)
Asset-backed securities			—			—			2,637			(40)			2,637			(40)
Total securities available-for-sale		$	66,483		$	(1,514)		$	358,156		$	(76,334)		$	424,639		$	(77,848)

Held-to-Maturity Securities:
U.S. Treasury securities		$	—		$	—		$	29,528		$	(410)		$	29,528		$	(410)
U.S. State and Municipal securities			—			—			13,633			(1,686)			13,633			(1,686)
Residential MBS			—			—			316,366			(58,866)			316,366			(58,866)
Commercial MBS			—			—			7,192			(876)			7,192			(876)
Total securities held-to-maturity		$	—		$	—		$	366,719		$	(61,838)		$	366,719		$	(61,838)


		Less than 12 Months						12 Months or More						Total
					Unrealized/						Unrealized/						Unrealized/
		Estimated			Unrecognized			Estimated			Unrecognized			Estimated			Unrecognized
At December 31, 2023		Fair Value			Losses			Fair Value			Losses			Fair Value			Losses
Available-for-Sale Securities:
U.S. Government agency securities		$	—		$	—		$	61,775		$	(6,222)		$	61,775		$	(6,222)
U.S. State and Municipal securities			—			—			9,699			(1,797)			9,699			(1,797)
Residential MBS			—			—			292,970			(68,609)			292,970			(68,609)
Commercial MBS			10,873			(198)			13,322			(2,168)			24,195			(2,366)
Asset-backed securities			—			—			3,229			(58)			3,229			(58)
Total securities available-for-sale		$	10,873		$	(198)		$	380,995		$	(78,854)		$	391,868		$	(79,052)

Held-to-Maturity Securities:
U.S. Treasury securities		$	—		$	—		$	28,483		$	(1,412)		$	28,483		$	(1,412)
U.S. State and Municipal securities			—			—			13,995			(1,574)			13,995			(1,574)
Residential MBS			—			—			354,750			(60,556)			354,750			(60,556)
Commercial MBS			—			—			7,024			(1,066)			7,024			(1,066)
Total securities held-to-maturity		$	—		$	—		$	404,252		$	(64,608)		$	404,252		$	(64,608)

Except for U.S. State and Municipal securities, the Company has a zero loss expectation for its HTM securities portfolio, and therefore has no ACL related to these securities. Obligations of U.S. State and Municipal securities were rated investment grade at December 31, 2024 and December 31, 2023 and the associated ACL was immaterial.

AFS securities in unrealized loss positions are evaluated for impairment related to credit losses on a quarterly basis. The unrealized losses on AFS securities are primarily due to the changes in market interest rates subsequent to purchase. In addition, the Company does not intend, nor would it be required to sell, these investments until there is a full recovery of the unrealized loss, which may be at maturity. As a result, no ACL was recognized during the years ended December 31, 2024 and 2023.

Prior to the adoption of ASC 326 on January 1, 2023, the Company evaluated these securities for OTTI. The Company did not consider these securities to be OTTI at December 31, 2022 since the decline in market value was attributable to changes in interest rates and not to changes in credit quality. In addition, the Company did not intend to sell and did not believe that it is more likely than not that it would be required to sell these investments until there is a full recovery of the unrealized loss, which may be at maturity. As a result, no impairment loss was recognized during the year ended December 31, 2022.