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Investment Securities

9 Months Ended

Sep. 30, 2025

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Note 3 – Investment Securities

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

						As of September 30, 2025
(dollars in thousands)						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Allowance for Credit Losses						Estimated Fair Value
U.S. agency securities						$	432,607					$	—					$	(20,394)					$	—					$	412,213
Residential mortgage-backed securities						644,193						108						(64,701)						—						579,600
Commercial mortgage-backed securities						74,372						129						(2,783)						—						71,718
Municipal bonds						8,472						—						(532)						—						7,940
Corporate bonds						2,000						—						(59)						—						1,941
Total available-for-sale securities						$	1,161,644					$	237					$	(88,469)					$	—					$	1,073,412
						As of December 31, 2024
(dollars in thousands)						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Allowance for Credit Losses						Estimated Fair Value
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 September 30, 2025
(dollars in thousands)						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Estimated Fair Value
Residential mortgage-backed securities						$	558,842					$	—					$	(62,442)					$	496,400
Commercial mortgage-backed securities						86,359						—						(10,414)						75,945
Municipal bonds						106,936						—						(8,109)						98,827
Corporate bonds						121,480						25						(6,015)						115,490
Total						873,617						$	25					$	(86,980)					$	786,662
Less: Allowance for credit losses						(1,199)
Total held-to-maturity securities, net of ACL						$	872,418
						As of December 31, 2024
(dollars in thousands)						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Estimated Fair Value
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 September 30, 2025 and December 31, 2024, the Company held $28.3 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 September 30, 2025 and December 31, 2024, the Company had $40.0 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 $5.9 million and $6.6 million as of September 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.

						As of September 30, 2025
												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
Investment securities available-for-sale:
U.S. agency securities						58						$	—					$	—					$	412,213					$	(20,394)					$	412,213					$	(20,394)
Residential mortgage-backed securities						142						—						—						569,707						(64,701)						569,707						(64,701)
Commercial mortgage-backed securities						12						—						—						43,430						(2,783)						43,430						(2,783)
Municipal bonds						1						—						—						7,940						(532)						7,940						(532)
Corporate bonds						1						—						—						1,941						(59)						1,941						(59)
Total						214						$	—					$	—					$	1,035,231					$	(88,469)					$	1,035,231					$	(88,469)
Investment securities held-to-maturity:
Residential mortgage-backed securities						136						$	—					$	—					$	496,400					$	(62,442)					$	496,400					$	(62,442)
Commercial mortgage-backed securities						16						4,266						(520)						71,679						(9,894)						75,945						(10,414)
Municipal bonds						33						—						—						97,827						(8,109)						97,827						(8,109)
Corporate bonds						27						1,950						(54)						105,718						(5,961)						107,668						(6,015)
Total						212						$	6,216					$	(574)					$	771,624					$	(86,406)					$	777,840					$	(86,980)

						As of December 31, 2024
												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
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 September 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 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 September 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 September 30, 2025
(dollars in thousands)						Amortized Cost						Estimated Fair Value
Investment securities available-for-sale:
Within one year						$	122,508					$	121,617
One to five years						237,049						224,915
Five to ten years						64,715						59,124
Beyond ten years						18,807						16,438
Residential mortgage-backed securities						644,193						579,600
Commercial mortgage-backed securities						74,372						71,718
Less: allowance for credit losses						—						—
Total investment securities available-for-sale						1,161,644						1,073,412
Investment securities held-to-maturity:
Within one year						—						—
One to five years						77,630						75,376
Five to ten years						99,613						92,629
Beyond ten years						51,173						46,312
Residential mortgage-backed securities:						558,842						496,400
Commercial mortgage-backed securities						86,359						75,945
Less: allowance for credit losses						(1,199)						—
Total investment securities held-to-maturity						872,418						786,662
Total						$	2,034,062					$	1,860,074

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

						For the Three Months Ended September 30,												For the Nine Months Ended September 30,
(dollars in thousands)						2025						2024						2025						2024
Proceeds from sales and calls						$	84,157					$	4,542					$	197,117					$	31,644
Gross realized gains from sales and calls						3						3						12						10
Gross realized losses from sales and calls						1,985						—						3,844						—

As of September 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 $597.0 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 September 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.

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The entire disclosure for investments in certain debt and equity securities.

+ References

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-Topic 940
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-Publisher FASB
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-Name Regulation S-K (SK)
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-Section 1403
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