Securities

3 Months Ended

Mar. 31, 2025

Investments, Debt and Equity Securities [Abstract]

(3) Securities

The amortized cost and fair market value of available-for-sale securities and the related gross unrealized gains and losses recognized were as follows:


March 31, 2025	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury securities and obligations of U.S. government agencies	$	67,118	$	307	$	(2,441	)	$	64,984
Obligations of states and political subdivisions		350,689		197		(30,672	)		320,214
Mortgage-backed securities in government sponsored entities		288,763		325		(28,141	)		260,947
Total debt securities (1)	$	706,570	$	829	$	(61,254	)	$	646,145


December 31, 2024	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury securities and obligations of U.S. government agencies	$	100,378	$	303	$	(3,294	)	$	97,387
Obligations of states and political subdivisions		351,635		482		(26,998	)		325,119
Mortgage-backed securities in government sponsored entities		258,045		97		(32,581	)		225,561
Total debt securities (1)	$	710,058	$	882	$	(62,873	)	$	648,067

         (1) Excludes accrued interest receivable on securities of $3,738 and $4,351 at March 31, 2025 and December 31, 2024, respectively, that is recorded in other assets on the consolidated balance sheets.

        

The amortized cost and fair value of debt securities at March 31, 2025, by contractual maturity, is shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately.


Available for sale	Amortized Cost		Fair Value
Due in one year or less	$	8,840	$	8,663
Due after one year through five years		83,189		79,209
Due after five years through ten years		46,486		45,737
Due after ten years		279,292		251,589
Mortgage-backed securities		288,763		260,947
Total securities available-for-sale	$	706,570	$	646,145

There were no proceeds from sales of debt securities available-for-sale, gross realized gains or gross realized losses as of March 31, 2025 or March 31, 2024.

Securities are pledged by the Company from time to time to secure public deposits, other deposits and liabilities as required by law. The carrying value of pledged securities was approximately $211,288 and $206,600 as of March 31, 2025 and December 31, 2024, respectively.

The following tables show the fair value and gross unrealized losses, aggregated by investment category, and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2025 and December 31, 2024:


March 31, 2025	12 Months or less					More than 12 months					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Treasury securities and obligations of U.S. government agencies	$	2,524	$	(13	)	$	53,914	$	(2,428	)	$	56,438	$	(2,441	)
Obligations of states and political subdivisions		115,829		(1,840	)		176,930		(28,832	)		292,759		(30,672	)
Mortgage-backed securities in gov’t sponsored entities		11,114		(119	)		185,308		(28,022	)		196,422		(28,141	)
Total	$	129,467	$	(1,972	)	$	416,152	$	(59,282	)	$	545,619	$	(61,254	)


December 31, 2024	12 Months or less					More than 12 months					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Treasury securities and obligations of U.S. government agencies	$	32,388	$	(51	)	$	55,000	$	(3,243	)	$	87,388	$	(3,294	)
Obligations of states and political subdivisions		98,965		(806	)		173,668		(26,192	)		272,633		(26,998	)
Mortgage-backed securities in gov’t sponsored entities		28,322		(329	)		186,173		(32,252	)		214,495		(32,581	)
Total	$	159,675	$	(1,186	)	$	414,841	$	(61,687	)	$	574,516	$	(62,873	)

At March 31, 2025, there were a total of 512 securities in the portfolio with unrealized losses mainly due to higher current market rates when compared to the time of purchase. At December 31, 2024, the Company owned 508 securities that were in an unrealized loss position. The unrealized losses on securities have not been recognized into income because the issuers’ securities are of high credit quality, management has the intent and ability to hold these securities for the foreseeable future, and the decline in fair value is largely due to currently higher market rates when compared to the time of purchase. The fair value is expected to recover as the securities approach their maturity date or reset date. The Company does not intend to sell until recovery and does not believe selling will be required before recovery.

Each quarter, we perform an analysis to determine if any of the unrealized losses on securities available-for-sale are comprised of credit losses as compared to unrealized losses due to market interest rate adjustments. Our assessment includes a review of the unrealized loss for each security issuance held; the financial condition and near-term prospects of the issuer, including external credit ratings and recent downgrades; and our ability and intent to hold the security for a period of time sufficient for a recovery in value. We also consider the extent to which the securities are issued by the federal government or its agencies, and any guarantee of issued amounts by those agencies. The portfolio continues to consist of a mix of fixed and floating-rate, high quality securities, largely rated AA (or better), displaying an overall effective duration of approximately 3.0 years. No credit losses were determined to be present as of March 31, 2025, as there was no credit quality deterioration noted. Therefore, no provision for credit losses on securities was recognized for the first quarter of 2025.

The following table presents the net gains and losses on equity investments recognized in earnings for the three months ended March 31, 2025 and 2024 and the portion of unrealized gains and losses for the period that relates to equity investments held at March 31, 2025 and 2024:


	Three Months Ended March 31,
	2025			2024
Net gains (losses) recognized on equity securities during the period	$	(29	)	$	(141	)
Less: Net gains (losses) realized on the sale of equity securities during the period		—			—
Unrealized gains (losses) recognized on equity securities held at reporting date	$	(29	)	$	(141	)

Equity securities consisting of investments in other financial institutions totaled $2.4 million as of both March 31, 2025 and December 31, 2024.

Stock of the Federal Home Loan Bank of Chicago (“FHLBC”), the Federal Reserve Bank of Cleveland (“FRBC”), United Bankers' Bancorp, Farmer Mac and Norwalk Community Development Corp are considered Other securities. FHLBC stock was recorded at $20.8 million at March 31, 2025 and $18.5 million at December 31, 2024. FRBC stock was recorded at $11.5 million at both March 31, 2025 and December 31, 2024. United Bankers' Bancorp stock was recorded at $225 at March 31, 2025 and December 31, 2024. Farmer Mac stock was recorded at $42 at both March 31, 2025 and December 31, 2024. Norwalk Community Development Corp stock was recorded at $2 at both March 31, 2025 and December 31, 2024. Other securities are carried at cost, classified as restricted securities, and periodically evaluated for impairment based on ultimate recovery of par value.