Investment Securities

6 Months Ended

Jun. 30, 2025

Investments, Debt and Equity Securities [Abstract]

Note 3 – Investment Securities

The table below summarizes the Company's investment in AFS securities by major security type.


	As of June 30, 2025
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value

U.S. agency securities	$	515,001	$	—	$	(26,233)	$	—	$	488,768
Residential mortgage-backed securities	670,486		52		(70,382)		—		600,156
Commercial mortgage-backed securities	75,175		—		(3,312)		—		71,863
Municipal bonds	8,517		—		(672)		—		7,845
Corporate bonds	2,000		—		(143)		—		1,857
Total available-for-sale securities	$	1,271,179	$	52	$	(100,742)	$	—	$	1,170,489

	As of December 31, 2024

U.S. treasury bonds	$	24,988	$	—	$	(212)	$	—	$	24,776
U.S. agency securities	600,277		—		(41,742)		—		558,535
Residential mortgage-backed securities	719,815		36		(94,535)		—		625,316
Commercial mortgage-backed securities	53,248		—		(4,303)		—		48,945
Municipal bonds	8,607		—		(593)		—		8,014
Corporate bonds	2,000		—		(160)		(22)		1,818
Total available-for-sale securities	$	1,408,935	$	36	$	(141,545)	$	(22)	$	1,267,404

The table below summarizes the Company's investment in HTM securities by major security type.


	As of June 30, 2025
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value


Residential mortgage-backed securities	$	575,668	$	—	$	(70,717)	$	504,951
Commercial mortgage-backed securities	87,025		—		(10,382)		76,643
Municipal bonds	113,945		—		(10,529)		103,416
Corporate bonds	121,446		7		(7,327)		114,126
Total	898,084		$	7	$	(98,955)	$	799,136
Less: allowance for credit losses	(1,229)
Total held-to-maturity securities, net of ACL	$	896,855

	As of December 31, 2024


Residential mortgage-backed securities	$	605,904	$	—	$	(85,941)	$	519,963
Commercial mortgage-backed securities	88,575		—		(13,069)		75,506
Municipal bonds	114,060		—		(11,389)		102,671
Corporate bonds	131,414		—		(9,172)		122,242
Total	939,953		$	—	$	(119,571)	$	820,382
Less: allowance for credit losses	(1,306)
Total held-to-maturity securities, net of ACL	$	938,647

In addition, as of June 30, 2025 and December 31, 2024, the Company held $30.6 million and $51.8 million in non-marketable equity securities, respectively, in a combination of Federal Reserve System ("Federal Reserve Board", "Federal Reserve" or "FRB") and FHLB stocks, which are required to be held for regulatory purposes. These securities cannot be disposed of other than through redemption by the issuer and, if redeemed, would be redeemed at the original cost. The securities are carried at cost, classified as restricted securities, and periodically evaluated for impairment based on ultimate recovery of par value.

As of June 30, 2025 and December 31, 2024, the Company had $41.6 million and $44.8 million, respectively, of unamortized unrealized losses outstanding following the transfer of investment securities from AFS to HTM in 2022. These unrealized losses are included in accumulated other comprehensive loss and are amortized through interest income as a yield adjustment over the remaining term of the securities.

Accrued interest receivable on investment securities totaled $6.2 million and $6.6 million as of June 30, 2025 and December 31, 2024, respectively. The accrued interest on investment securities is excluded from the amortized cost of the securities and is reported in other assets in the Consolidated Balance Sheets.

The table below summarizes, by length of time, the Company's AFS securities that have been in a continuous unrealized loss position and HTM securities that have been in a continuous unrecognized loss position.


		Less than 12 Months				12 Months or Greater				Total
(dollars in thousands)	Number of Securities	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
As of June 30, 2025
Investment securities available-for-sale:

U.S. agency securities	64	$	—	$	—	$	488,768	$	(26,233)	$	488,768	$	(26,233)
Residential mortgage-backed securities	146	6,004		(15)		589,751		(70,367)		595,755		(70,382)
Commercial mortgage-backed securities	13	28,057		(140)		43,806		(3,172)		71,863		(3,312)
Municipal bonds	1	—		—		7,845		(672)		7,845		(672)
Corporate bonds	1	—		—		1,857		(143)		1,857		(143)
Total	225	$	34,061	$	(155)	$	1,132,027	$	(100,587)	$	1,166,088	$	(100,742)

Investment securities held-to-maturity:


Residential mortgage-backed securities	137	$	—	$	—	$	504,949	$	(70,717)	$	504,949	$	(70,717)
Commercial mortgage-backed securities	15	—		—		71,844		(10,382)		71,844		(10,382)
Municipal bonds	33	—		—		95,466		(10,529)		95,466		(10,529)
Corporate bonds	29	1,942		(62)		111,184		(7,265)		113,126		(7,327)
Total	214	$	1,942	$	(62)	$	783,443	$	(98,893)	$	785,385	$	(98,955)


		Less than 12 Months				12 Months or Greater				Total
(dollars in thousands)	Number of Securities	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
As of December 31, 2024
Investment securities available-for-sale:
U.S. treasury bonds	1	$	—	$	—	$	24,776	$	(212)	$	24,776	$	(212)
U.S. agency securities	71	2,300		(8)		556,235		(41,734)		558,535		(41,742)
Residential mortgage-backed securities	148	7,530		(128)		616,392		(94,407)		623,922		(94,535)
Commercial mortgage-backed securities	13	—		—		48,945		(4,303)		48,945		(4,303)
Municipal bonds	1	—		—		8,014		(593)		8,014		(593)
Corporate bonds	1	—		—		1,818		(160)		1,818		(160)
Total	235	$	9,830	$	(136)	$	1,256,180	$	(141,409)	$	1,266,010	$	(141,545)

Investment securities held-to-maturity:


Residential mortgage-backed securities	140	$	—	$	—	$	519,963	$	(85,941)	$	519,963	$	(85,941)
Commercial mortgage-backed securities	16	—		—		75,506		(13,069)		75,506		(13,069)
Municipal bonds	36	4,026		(75)		98,645		(11,314)		102,671		(11,389)
Corporate bonds	30	1,928		(77)		110,280		(9,095)		112,208		(9,172)
Total	222	$	5,954	$	(152)	$	804,394	$	(119,419)	$	810,348	$	(119,571)

As of June 30, 2025, unrealized losses were generally attributable to changes in market interest rates and interest spread relationships subsequent to the dates the securities were originally purchased, and were considered to be temporary, and not due to credit quality concerns on the investment securities. The fair values of these securities are expected to recover as the securities approach their respective maturity dates. The Company does not intend to sell and it is likely that it will not be required to sell the securities prior to their anticipated recovery.

The Company measures its AFS and HTM securities portfolios for current expected credit losses as part of its ACL analysis. For further information on provision for credit losses on AFS and HTM securities, see the Allowance for Credit Losses discussion in "Note 1 – Summary of Significant Accounting Policies". As of June 30, 2025 and December 31, 2024, the Company had an allowance for credit losses outstanding of zero and $22 thousand, respectively, on its AFS securities and $1.2 million and $1.3 million, respectively, on its HTM securities, each of which primarily comprise allowances for corporate bonds.

The table below summarizes the Company's investment in AFS securities and HTM securities by contractual maturity. Expected maturities for mortgage-backed securities ("MBS") will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	As of June 30, 2025
(dollars in thousands)	Amortized Cost		Estimated Fair Value
Investment securities available-for-sale:
Within one year	$	132,348	$	131,057
One to five years	309,296		292,354
Five to ten years	64,840		58,623
Beyond ten years	19,034		16,436
Residential mortgage-backed securities	670,486		600,156
Commercial mortgage-backed securities	75,175		71,863


Less: allowance for credit losses	—		—
Total investment securities available-for-sale	1,271,179		1,170,489

Investment securities held-to-maturity:
Within one year	6,950		6,950
One to five years	70,009		68,381
Five to ten years	106,476		96,479
Beyond ten years	51,956		45,732
Residential mortgage-backed securities:	575,668		504,951
Commercial mortgage-backed securities	87,025		76,643


Less: allowance for credit losses	(1,229)		—
Total investment securities held-to-maturity	896,855		799,136
Total	$	2,168,034	$	1,969,625

The table below displays information about the sales and calls of our investment securities.


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(dollars in thousands)	2025		2024		2025		2024
Proceeds from sales and calls	$	62,909	$	50	$	112,961	$	27,102
Gross realized gains from sales and calls	3		3		8		7
Gross realized losses from sales and calls	1,857		—		1,858		—

As of June 30, 2025 and December 31, 2024, the book value of securities pledged as collateral for certain government deposits, securities sold under agreements to repurchase and certain lines of credit with correspondent banks was $620.6 million and $369.1 million, respectively, which were well in excess of required amounts in order to operationally provide significant reserve amounts for new business.

As of June 30, 2025 and December 31, 2024, there were no holdings of securities of any one issuer, other than the U.S. Government and U.S. agency securities, which exceeded ten percent of shareholders’ equity.