INVESTMENT SECURITIES

6 Months Ended

Jun. 30, 2025

Investments, Debt and Equity Securities [Abstract]

At June 30, 2025 and December 31, 2024, all investment securities were classified as AFS. The following table summarizes amortized cost and fair value of investment securities, the corresponding amounts of gross unrealized gains and losses recognized in AOCI and the ACL at June 30, 2025 and December 31, 2024:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
June 30, 2025
U.S. Treasury securities	$	20,036	$	—	$	1,395	$	—	$	18,641
U.S. Government Agencies	2,375		76		—		—		2,451

States and political subdivisions	220,481		125		24,655		—		195,951
GSE residential MBSs	195,595		1,559		2,546		—		194,608
GSE commercial MBSs	7,386		119		16		—		7,489
GSE residential CMOs	342,909		3,401		5,561		—		340,749

Non-agency CMOs	42,775		182		1,661		—		41,296


Asset-backed	83,117		269		1,390		—		81,996
Corporate debt	1,941		36		—		—		1,977
Other	215		—		—		—		215
Totals	$	916,830	$	5,767	$	37,224	$	—	$	885,373
December 31, 2024
U.S. Treasury securities	$	20,043	$	—	$	1,980	$	—	$	18,063
U.S. Government Agencies	2,953		100		—		—		3,053

States and political subdivisions	220,418		10		20,400		—		200,028
GSE residential MBSs	155,793		52		4,297		—		151,548
GSE commercial MBSs	8,570		243		21		—		8,792
GSE residential CMOs	331,016		485		6,809		—		324,692

Non-agency CMOs	35,548		202		2,466		—		33,284


Asset-backed	88,450		655		1,002		—		88,103
Corporate debt	1,935		19		—		—		1,954
Other	194		—		—		—		194
Totals	$	864,920	$	1,766	$	36,975	$	—	$	829,711

The following table summarizes investment securities with unrealized losses at June 30, 2025 and December 31, 2024, aggregated by major investment security type and the length of time in a continuous unrealized loss position.


	Less Than 12 Months					12 Months or More					Total
	# of Securities	Fair Value		Unrealized Losses		# of Securities	Fair Value		Unrealized Losses		# of Securities	Fair Value		Unrealized Losses
June 30, 2025
U.S. Treasury securities	—	$	—	$	—	3	$	18,641	$	1,395	3	$	18,641	$	1,395

States and political subdivisions	4	1,019		18		42	184,057		24,637		46	185,076		24,655
GSE residential MBSs	4	16,964		31		12	33,561		2,515		16	50,525		2,546
GSE commercial MBS	2	1,308		16		—	—		—		2	1,308		16
GSE residential CMOs	14	74,438		567		22	103,306		4,994		36	177,744		5,561
Non-agency CMOs	3	16,914		165		4	16,686		1,496		7	33,600		1,661



Asset-backed	6	27,372		181		9	41,646		1,209		15	69,018		1,390

Totals	33	$	138,015	$	978	92	$	397,897	$	36,246	125	$	535,912	$	37,224
December 31, 2024
U.S. Treasury securities	—	$	—	$	—	3	$	18,063	$	1,980	3	$	18,063	$	1,980


States and political subdivisions	13	10,080		131		42	189,448		20,269		55	199,528		20,400
GSE residential MBSs	68	85,836		1,117		15	55,579		3,180		83	141,415		4,297
GSE commercial MBS	3	2,963		21		—	—		—		3	2,963		21
GSE residential CMOs	52	158,439		729		15	56,443		6,080		67	214,882		6,809
Non-agency CMOs	2	8,816		218		4	16,636		2,248		6	25,452		2,466



Asset-backed	4	11,964		17		9	44,130		985		13	56,094		1,002

Totals	142	$	278,098	$	2,233	88	$	380,299	$	34,742	230	$	658,397	$	36,975

On a quarterly basis, the Company conducts an impairment evaluation on AFS securities to determine whether the Company has the intent to sell the security or it is more likely than not that it will be required to sell the security before recovery. If these situations apply, the guidance requires the Company to reduce the security's amortized cost basis down to its fair value through earnings. The Company also evaluates the unrealized losses on AFS securities to determine if a security's decline in fair value below its amortized cost basis is due to credit factors. The evaluation is based upon factors such as the creditworthiness of the underlying issuers, performance of the underlying collateral, if applicable, and the level of credit support in the security structure. Management also evaluates other factors and circumstances that may be indicative of a decline in the fair value of the security due to a credit factor. This includes, but is not limited to, an evaluation of the type of security, length of time and extent to which the fair value has been less than cost and near-term prospects of the issuer. If this assessment indicates that a credit loss exists, the present value of the expected cash flows of the security is compared to the amortized cost basis of the security. Under the CECL standard, if the present value of the cash flows expected to be collected is less than the amortized cost, an ACL is recorded for the credit loss, which is limited by the amount that the fair value is less than the amortized cost basis. Any additional amount of loss would be due to non-credit factors and is recorded in AOCI, net of taxes. If a credit loss is recognized in earnings, subsequent improvements to the expectation of collectability will be recognized through the ACL. If the fair value of the security increases above its amortized cost, the unrealized gain will be recorded in AOCI, net of taxes, on the unaudited condensed consolidated balance sheets.

The Company did not record an ACL on the AFS securities at June 30, 2025 and December 31, 2024. As of these periods, the Company considers the unrealized losses on the AFS securities to be related to fluctuations in market conditions, primarily interest rates, and not reflective of deterioration in credit. In addition, the Company maintains that it has the intent and ability to hold these AFS securities until the amortized cost is recovered and it is more likely than not that any of AFS securities in an unrealized loss position would not be required to be sold. At June 30, 2025 and December 31, 2024, unrealized losses were due to market uncertainty resulting from inflation and higher interest rates from the time of the security purchase.

U.S. Treasury Securities. The unrealized losses presented in the table above have been caused by an increase in rates from the time these securities were purchased. Management considers the full faith and credit of the U.S. government in determining whether declines in fair value are due to credit factors.

States and Political Subdivisions. The unrealized losses presented in the table above have been caused by a rise in interest rates from the time these securities were purchased. Management evaluates the financial performance of the issuers, including the investment rating, the state of the issuer of the security and other credit support in determining whether declines in fair value are due to credit factors.

GSE Residential CMOs, GSE Residential MBS and GSE Commercial MBS. The unrealized losses presented in the table above have been caused by a widening of spreads and a rise in interest rates from the time these securities were purchased. The contractual terms of these securities do not permit the issuer to settle the securities at a price less than its par value basis.

Non-Agency CMOs. The unrealized losses presented in the table above were caused by a widening of spreads and a rise in interest rates from the time the securities were purchased. Management considers the investment rating and other credit support in its evaluation, including delinquencies and credit enhancements, in determining whether declines in fair value are due to credit factors.

Asset-backed. The unrealized losses presented in the table above were caused by a widening of spreads and a rise in interest rates from the time the securities were purchased. Management considers the investment rating and other credit support in its evaluation, including delinquencies and credit enhancements, in determining whether declines in fair value are due to credit factors.

The Company does not intend to sell the aforementioned investment securities with unrealized losses and it is more likely than not that the Company will not be required to sell them before recovery of their amortized cost basis, which may be maturity. In addition, the unrealized losses are not credit related. Therefore, the Company has concluded that the unrealized losses for these investment securities do not require an ACL at June 30, 2025.

The following table summarizes amortized cost and fair value of investment securities by contractual maturity at June 30, 2025. Expected maturities may differ from contractual maturities if issuers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.


	Amortized Cost		Fair Value
Due in one year or less	$	—	$	—
Due after one year through five years	42,354		40,106
Due after five years through ten years	51,769		48,137
Due after ten years	150,925		130,992
CMOs and MBSs	588,665		584,142
Asset-backed	83,117		81,996

Totals	$	916,830	$	885,373

The following table summarizes proceeds from sales of investment securities and gross gains and gross losses for the three and six months ended June 30, 2025 and 2024:


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Proceeds from sale of investment securities	$	—	$	—	$	—	$	—
Gross gains	8		—		21		—
Gross losses	—		12		—		17

During the three and six months ended June 30, 2025, the Company recorded a gain of $8 thousand and $21 thousand, respectively, compared to losses of $12 thousand and $17 thousand for the three and six months ended June 30, 2024 from mark-to-market activity on an equity security. During the three and six months ended June 30, 2025 and 2024, the Company did not sell any investment securities. Investment securities with a fair value of $706.1 million and $669.2 million at June 30, 2025 and December 31, 2024, respectively, were pledged to secure public funds and for other purposes as required or permitted by law.