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INVESTMENT SECURITIES | 9 Months Ended
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Sep. 30, 2025
Investments, Debt and Equity Securities [Abstract] |
INVESTMENT SECURITIES | INVESTMENT SECURITIES At September 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 September 30, 2025 and December 31, 2024:
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Allowance for Credit Losses |  | Fair Value
September 30, 2025 |  |  |  |  |  |  |  |  |
U.S. Treasury securities | $ | 20,033 |  |  | $ | — |  |  | $ | 1,230 |  |  | $ | — |  |  | $ | 18,803 |
U.S. Government Agencies | 1,966 |  |  | 55 |  |  | — |  |  | — |  |  | 2,021 |
States and political subdivisions | 219,331 |  |  | 243 |  |  | 19,461 |  |  | — |  |  | 200,113 |
GSE residential MBSs | 174,647 |  |  | 2,697 |  |  | 2,216 |  |  | — |  |  | 175,128 |
GSE commercial MBSs | 6,514 |  |  | 102 |  |  | 17 |  |  | — |  |  | 6,599 |
GSE residential CMOs | 359,294 |  |  | 4,045 |  |  | 5,153 |  |  | — |  |  | 358,186 |
Non-agency CMOs | 48,105 |  |  | 156 |  |  | 1,136 |  |  | — |  |  | 47,125 |
Asset-backed | 80,705 |  |  | 419 |  |  | 957 |  |  | — |  |  | 80,167 |
Corporate debt | 1,944 |  |  | 50 |  |  | — |  |  | — |  |  | 1,994 |
Other | 221 |  |  | — |  |  | — |  |  | — |  |  | 221 |
Totals | $ | 912,760 |  |  | $ | 7,767 |  |  | $ | 30,170 |  |  | $ | — |  |  | $ | 890,357 |
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 September 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
September 30, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities | — |  |  | $ | — |  |  | $ | — |  |  | 3 |  |  | $ | 18,803 |  |  | $ | 1,230 |  |  | 3 |  |  | $ | 18,803 |  |  | $ | 1,230 |
States and political subdivisions | 3 |  |  | 10,586 |  |  | 351 |  |  | 42 |  |  | 178,052 |  |  | 19,110 |  |  | 45 |  |  | 188,638 |  |  | 19,461 |
GSE residential MBSs | — |  |  | — |  |  | — |  |  | 8 |  |  | 13,223 |  |  | 2,216 |  |  | 8 |  |  | 13,223 |  |  | 2,216 |
GSE commercial MBS | 2 |  |  | 1,263 |  |  | 17 |  |  | — |  |  | — |  |  | — |  |  | 2 |  |  | 1,263 |  |  | 17 |
GSE residential CMOs | 16 |  |  | 84,689 |  |  | 616 |  |  | 24 |  |  | 108,285 |  |  | 4,537 |  |  | 40 |  |  | 192,974 |  |  | 5,153 |
Non-agency CMOs | 2 |  |  | 7,133 |  |  | 58 |  |  | 5 |  |  | 22,344 |  |  | 1,078 |  |  | 7 |  |  | 29,477 |  |  | 1,136 |
Asset-backed | 4 |  |  | 13,779 |  |  | 121 |  |  | 8 |  |  | 37,488 |  |  | 836 |  |  | 12 |  |  | 51,267 |  |  | 957 |
Totals | 27 |  |  | $ | 117,450 |  |  | $ | 1,163 |  |  | 90 |  |  | $ | 378,195 |  |  | $ | 29,007 |  |  | 117 |  |  | $ | 495,645 |  |  | $ | 30,170 |
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 September 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 September 30, 2025 and December 31, 2024, unrealized losses were due to market uncertainty 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 September 30, 2025. The following table summarizes amortized cost and fair value of investment securities by contractual maturity at September 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 | 42,146 |  |  | 40,281 |
Due after five years through ten years | 50,837 |  |  | 47,843 |
Due after ten years | 150,512 |  |  | 135,028 |
CMOs and MBSs | 588,560 |  |  | 587,038 |
Asset-backed | 80,705 |  |  | 80,167 |
Totals | $ | 912,760 |  |  | $ | 890,357 |
The following table summarizes proceeds from sales of investment securities and gross gains and gross losses for the three and nine months ended September 30, 2025 and 2024:
| Three months ended September 30, |  | Nine months ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Proceeds from sale of investment securities | $ | 41,647 |  |  | $ | 162,669 |  |  | $ | 41,647 |  |  | $ | 162,669 |
Gross gains | 50 |  |  | 271 |  |  | 71 |  |  | 271 |
Gross losses | — |  |  | — |  |  | — |  |  | 17 |
During the three and nine months ended September 30, 2025, the Company recorded gains of $50 thousand and $71 thousand, respectively. These gains were from a gain of $44 thousand on the sale of GSE residential MBS securities with principal balances totaling $41.6 million and mark-to-market activity on an equity security. The Company recorded net gains of $271 thousand and $254 thousand for the three and nine months ended September 30, 2024, respectively, from a security redemption during the third quarter of 2024 resulting in a gain of $181 thousand and mark-to-market activity on an equity security. During the three and nine months ended September 30, 2024, the Company sold investment securities acquired from the Merger with a principal balance of $162.7 million. No gain or loss was recorded as the sale proceeds equaled the fair value of the acquired investment securities recorded on the Merger date. Investment securities with a fair value of $645.0 million and $669.2 million at September 30, 2025 and December 31, 2024, respectively, were pledged to secure public funds and for other purposes as required or permitted by law.

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