Investment Securities

9 Months Ended

Sep. 30, 2025

NOTE 2 – INVESTMENT SECURITIES

The Company did not hold securities classified as trading or held-to-maturity at September 30, 2025 or December 31, 2024. The amortized cost and estimated fair value of available-for-sale investment securities at September 30, 2025 and December 31, 2024 consisted of the following:


	September 30, 2025
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale securities
U.S. Treasury securities and obligations of U.S. government agencies	$	10,477	$	–	$	(23)	$	10,454
Commercial mortgage-backed securities		4,478		–		(31)		4,447
Residential mortgage-backed securities		154,615		88		(687)		154,016
U.S. states and political subdivisions		4,708		66		(103)		4,671
Total available-for-sale securities	$	174,278	$	154	$	(844)	$	173,588

	December 31, 2024
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale securities
U.S. agencies	$	578	$	–	$	(40)	$	538
Commercial mortgage-backed securities		3,161		–		(298)		2,863
Residential mortgage-backed securities		360,713		–		(72,252)		288,461
U.S. states and political subdivisions		4,703		57		(66)		4,694
Total available-for-sale securities	$	369,155	$	57	$	(72,656)	$	296,556

Net unrealized losses on available-for-sale investment securities totaling ($492,000) were recorded as accumulated other comprehensive loss, net of tax of $198,000, within shareholders' equity at September 30, 2025. Net unrealized losses on available-for-sale investment securities totaling $51.3 million were recorded as accumulated other comprehensive income, net of tax of $21.3 million, within shareholders' equity at December 31, 2024.

During the three and nine months ended September 30, 2025, the Company sold $274.7 million in available-for-sale securities and recognized a loss of $62.4 million on the sale of the securities. The Company then purchased $163.2 million in available-for-sale securities with an average purchase yield of 4.54% and a duration of 2.8 years. In comparison, during the three and nine months ended September 30, 2024, there were no sales or calls of investment securities and no gains realized or losses recognized. There were no transfers between investment categories during the three and nine months ended September 30, 2025 or September 30, 2024.

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Investment securities with unrealized losses at September 30, 2025 and December 31, 2024 are summarized and classified according to the duration of the loss period as follows: (in thousands)


	Less than 12 Months				12 Months or More				Total
September 30, 2025	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

U.S. Treasury securities and obligations of U.S. government agencies	$	–	$	–	$	455	$	(23)	$	455	$	(23)
Commercial mortgage-backed securities		3,445		(21)		1,002		(10)		4,447		(31)
Residential mortgage-backed securities		94,817		(474)		1,793		(213)		96,610		(687)
U.S. states and political subdivisions		2,606		(103)		–		–		2,606		(103)
Total available-for-sale	$	100,868	$	(598)	$	3,250	$	(246)	$	104,118	$	(844)


	Less than 12 Months				12 Months or More				Total
December 31, 2024	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

U.S. agencies	$	–	$	–	$	538	$	(40)	$	538	$	(40)
Commercial mortgage-backed securities		1,691		(54)		1,172		(244)		2,863		(298)
Residential mortgage-backed securities		2,460		(46)		286,001		(72,206)		288,461		(72,252)
U.S. states and political subdivisions		2,637		(66)		–		–		2,637		(66)
Total available-for-sale	$	6,788	$	(166)	$	287,711	$	(72,490)	$	294,499	$	(72,656)

At September 30, 2025, the Company held 3 securities available-for-sale, which were in a loss position for greater than 12 months. Management believes the unrealized losses on the Company’s investment securities were caused by interest rate changes. The contractual cash flows of those investments are guaranteed or supported by an agency or sponsored entity of the U.S. Government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost of the Company’s investment. As of September 30, 2025, the Company did not intend to sell and does not believe it will be required to sell securities in an unrealized loss position prior to the recovery of their amortized cost basis. No credit impairment was recorded for those securities in an unrealized loss position for the three and nine months ended September 30, 2025 or September 30, 2024, and there was no allowance for credit losses on securities available-for-sale recorded as of September 30, 2025 or December 31, 2024.

The amortized cost and estimated fair value of available-for-sale investment securities at September 30, 2025 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to call or prepay obligations with or without call or prepayment penalties.


	Available-for-sale
	Amortized Cost		Fair Value
Due in one year or less	$	9,999	$	9,998
Due after one year through five years		–		–
Due after five years through 10 years		478		456
Due after 10 years		4,708		4,671
		15,185		15,125
Investment securities not due at a single maturity date: mortgage-backed securities		159,093		158,463
	$	174,278	$	173,588

Investment securities with fair values of $8.9 million and $15.5 million were pledged at September 30, 2025 and December 31, 2024, respectively, toward certain letters of credit. No investment securities were pledged to secure public deposits at September 30, 2025 or December 31, 2024.