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Securities & Allowance for Securities Credit Losses | 9 Months Ended
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Sep. 30, 2025
Investments, Debt and Equity Securities [Abstract] |
Securities & Allowance for Securities Credit Losses | Securities & Allowance for Securities Credit Losses The Company invests in a variety of debt securities, principally obligations of the U.S. government and federal agencies, mortgage backed securities, state and municipal agencies, and corporations. As of September 30, 2025 and December 31, 2024, all debt securities were classified as held to maturity (“HTM”) or available for sale (“AFS”). Management considers the appropriateness of the accounting treatment applied to the Company’s debt securities portfolio on an ongoing basis. During a prior year, certain AFS bonds were transferred to the HTM portfolio. Bonds selected for transfer included U.S. government and federal agencies, corporate bonds, and state and municipal bonds. The unrealized loss at the time of transfer is being amortized monthly over the remaining lives of the debt securities with an increase to the carrying value of the debt securities and a decrease to the related accumulated other comprehensive loss, which is included in the stockholders’ equity section of the consolidated balance sheets. The following tables summarize the amortized cost, gross unrealized gains and losses, fair value and allowance for credit losses of AFS and HTM debt securities at September 30, 2025 and December 31, 2024 (dollars in thousands):
| September 30, 2025
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized (Losses) |  | Fair Value |  | Allowance for Credit Losses
Securities available for sale: |  |  |  |  |  |  |  |  |
U.S. government and federal agencies | $ | 384,409 |  |  | $ | 625 |  |  | $ | (1,012) |  |  | $ | 384,022 |  |  | $ | — |
Mortgage backed securities | 6,359 |  |  | 1 |  |  | (381) |  |  | 5,979 |  |  | — |
Corporate bonds | 56,828 |  |  | 252 |  |  | (228) |  |  | 56,852 |  |  | — |
State and municipal securities | 102,995 |  |  | 143 |  |  | (2,222) |  |  | 100,916 |  |  | — |
Total securities available for sale | $ | 550,591 |  |  | $ | 1,021 |  |  | $ | (3,843) |  |  | $ | 547,769 |  |  | $ | — |
Securities held to maturity: |  |  |  |  |  |  |  |  |
U.S. government and federal agencies | $ | 115,454 |  |  | $ | 2 |  |  | $ | (5,554) |  |  | $ | 109,902 |  |  | $ | — |
Mortgage backed securities | 1,155 |  |  | — |  |  | (10) |  |  | 1,145 |  |  | — |
Corporate bonds | 50,815 |  |  | 65 |  |  | (632) |  |  | 50,248 |  |  | (104) |
State and municipal securities | 116,489 |  |  | 11 |  |  | (6,656) |  |  | 109,844 |  |  | (29) |
Total securities held to maturity | $ | 283,913 |  |  | $ | 78 |  |  | $ | (12,852) |  |  | $ | 271,139 |  |  | $ | (133) |
Total securities | $ | 834,504 |  |  | $ | 1,099 |  |  | $ | (16,695) |  |  | $ | 818,908 |  |  | $ | (133) |
| December 31, 2024
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized (Losses) |  | Fair Value |  | Allowance for Credit Losses
Securities available for sale: |  |  |  |  |  |  |  |  |
U.S. government and federal agencies | $ | 207,935 |  |  | $ | 29 |  |  | $ | (1,561) |  |  | $ | 206,403 |  |  | $ | — |
Mortgage backed securities | 7,976 |  |  | 1 |  |  | (582) |  |  | 7,395 |  |  | — |
Corporate bonds | 44,707 |  |  | 20 |  |  | (753) |  |  | 43,974 |  |  | — |
State and municipal securities | 104,705 |  |  | 37 |  |  | (4,185) |  |  | 100,557 |  |  | — |
Total securities available for sale | $ | 365,323 |  |  | $ | 87 |  |  | $ | (7,081) |  |  | $ | 358,329 |  |  | $ | — |
Securities held to maturity: |  |  |  |  |  |  |  |  |
U.S. government and federal agencies | $ | 122,452 |  |  | $ | — |  |  | $ | (9,181) |  |  | $ | 113,271 |  |  | $ | — |
Mortgage backed securities | 1,168 |  |  | — |  |  | (51) |  |  | 1,117 |  |  | — |
Corporate bonds | 57,470 |  |  | 43 |  |  | (1,698) |  |  | 55,815 |  |  | (171) |
State and municipal securities | 119,563 |  |  | 5 |  |  | (10,820) |  |  | 108,748 |  |  | (31) |
Total securities held to maturity | $ | 300,653 |  |  | $ | 48 |  |  | $ | (21,750) |  |  | $ | 278,951 |  |  | $ | (202) |
Total securities | $ | 665,976 |  |  | $ | 135 |  |  | $ | (28,831) |  |  | $ | 637,280 |  |  | $ | (202) |
There were no holdings of municipal or corporate debt securities that equaled or exceeded 10.0% of stockholders’ equity at September 30, 2025 and December 31, 2024. There were no securities pledged to secure any borrowing source at September 30, 2025 and December 31, 2024. Proceeds from sales, calls, maturities, and paydowns of debt securities available for sale totaled $316.9 million for the nine months ended September 30, 2025 and $81.0 million for the nine months ended September 30, 2024. Proceeds from sales, calls, maturities, and paydowns of debt securities held to maturity totaled $16.5 million and $5.5 million for the nine month periods ended September 30, 2025 and 2024, respectively. During the three and nine months ended September 30, 2025, the Bank had no sales of AFS securities. One AFS security was disposed of through a tender offered by the security’s issuer. The proceeds received approximated the security’s amortized cost, and the transaction did not result in a material gain or loss.4 During the nine months ended September 30, 2024, the Bank sold an AFS bond that was charged off during a prior year for $210 thousand. The proceeds were recorded as a recapture of previously recorded credit losses. Because this sale did not result in a realized gain or loss on sale of securities, it is excluded from the related table below. The proceeds, gross realized gains and losses from sales of debt securities during the three and nine months ended September 30, 2024 were as follows (dollars in thousands):
| Three Months Ended September 30, 2024 |  | Nine Months Ended September 30, 2024
| Available for Sale |  | Held to Maturity |  | Available for Sale |  | Held to Maturity
Proceeds from sales of securities | $ | — |  |  | $ | 953 |  |  | $ | — |  |  | $ | 953 |
Gross losses | $ | — |  |  | $ | (65) |  |  | $ | — |  |  | $ | (65) |
Net losses on sale of a securities | $ | — |  |  | $ | (65) |  |  | $ | — |  |  | $ | (65) |
Income tax benefit attributable to realized net losses on sale of securities | $ | — |  |  | $ | 14 |  |  | $ | — |  |  | $ | 14 |
Management classifies bonds as HTM only when the Company has the ability and intent to hold the bond to maturity, and certain sales or transfers of HTM could call into question management’s ability or intent to hold the remaining HTM bond portfolio to maturity, thereby “tainting” the entire portfolio and triggering a reclassification of the entire portfolio to available for sale. However, there are limited situations, including evidence of deterioration in the issuer’s creditworthiness, in which the Company could sell an HTM bond without tainting the remaining HTM portfolio. During the first nine months of 2025 the Company did not sell any HTM bonds. During the third quarter of 2024, the Company sold two HTM bonds from a single issuer due to significant documented deterioration of the issuer’s creditworthiness evidenced by the downgrading of the issuer’s public credit rating. The sales are included in the tables above. Under these circumstances, the sale did not taint the HTM portfolio. The amortized cost and fair value of debt securities by contractual maturity at September 30, 2025 is as follows (dollars in thousands):
| Available for Sale |  | Held to Maturity
| Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Within one year | $ | 275,515 |  |  | $ | 275,575 |  |  | $ | 72,571 |  |  | $ | 71,977 |
After one year through five years | 253,583 |  |  | 252,073 |  |  | 149,676 |  |  | 143,270 |
After five years through ten years | 16,740 |  |  | 15,740 |  |  | 57,410 |  |  | 52,207 |
Over ten years | 4,753 |  |  | 4,381 |  |  | 4,256 |  |  | 3,685 |
Total | $ | 550,591 |  |  | $ | 547,769 |  |  | $ | 283,913 |  |  | $ | 271,139 |
Expected maturities may differ from contractual maturities if issuers have the right to call or repay obligations with or without prepayment penalties. The following table shows the gross unrealized losses and fair value of the Company’s AFS debt securities with unrealized losses aggregated by investment category and length of time that individual debt securities have been in a continuous unrealized loss position at September 30, 2025 and December 31, 2024 (dollars in thousands):
| September 30, 2025
| Less Than Twelve Months |  | Over Twelve Months |  | Total
| Gross Unrealized Loss |  | Fair Value |  | Gross Unrealized Loss |  | Fair Value |  | Gross Unrealized Loss |  | Fair Value
Securities available for sale: |  |  |  |  |  |  |  |  |  |  |
U.S. government and federal agencies | $ | (71) |  |  | $ | 92,081 |  |  | $ | (941) |  |  | $ | 15,476 |  |  | $ | (1,012) |  |  | $ | 107,557 |
Mortgage backed securities | — |  |  | — |  |  | (381) |  |  | 5,934 |  |  | (381) |  |  | 5,934 |
Corporate bonds | (15) |  |  | 4,008 |  |  | (213) |  |  | 12,582 |  |  | (228) |  |  | 16,590 |
State and municipal securities | (13) |  |  | 4,064 |  |  | (2,209) |  |  | 64,169 |  |  | (2,222) |  |  | 68,233 |
Total securities available for sale | $ | (99) |  |  | $ | 100,153 |  |  | $ | (3,744) |  |  | $ | 98,161 |  |  | $ | (3,843) |  |  | $ | 198,314 |
| December 31, 2024
| Less Than Twelve Months |  | Over Twelve Months |  | Total
| Gross Unrealized Loss |  | Fair Value |  | Gross Unrealized Loss |  | Fair Value |  | Gross Unrealized Loss |  | Fair Value
Securities available for sale: |  |  |  |  |  |  |  |  |  |  |
U.S. government and federal agencies | $ | (29) |  |  | $ | 141,169 |  |  | $ | (1,532) |  |  | $ | 22,348 |  |  | $ | (1,561) |  |  | $ | 163,517 |
Mortgage backed securities | — |  |  | 26 |  |  | (582) |  |  | 7,338 |  |  | (582) |  |  | 7,364 |
Corporate bonds | (90) |  |  | 6,365 |  |  | (663) |  |  | 30,677 |  |  | (753) |  |  | 37,042 |
State and municipal securities | (77) |  |  | 9,121 |  |  | (4,108) |  |  | 79,790 |  |  | (4,185) |  |  | 88,911 |
Total securities available for sale | $ | (196) |  |  | $ | 156,681 |  |  | $ | (6,885) |  |  | $ | 140,153 |  |  | $ | (7,081) |  |  | $ | 296,834 |
In the AFS portfolio at September 30, 2025, 29 out of 69 debt securities of the U.S. government and federal agencies, 10 out of 16 mortgage backed securities, 36 out of 116 corporate bonds, and 215 out of 308 state and municipal securities were in an unrealized loss position. All of the Company’s investment portfolio was evaluated under the monitoring process described in Note 1 of the audited consolidated financial statements for the year ended December 31, 2024, contained within the Form 10-K, and all investments were deemed investment grade. All of the unrealized losses are attributed to changes in market interest rates, and are not a result of deterioration of creditworthiness among any of the issuers. Of the total AFS and HTM portfolio at September 30, 2025 and December 31, 2024, 643 and 776 debt securities had unrealized losses with aggregate impairment of 2.0% and 4.3%, respectively, of the Company’s amortized cost basis. These unrealized losses related principally to interest rate movements and not the creditworthiness of the issuer. In analyzing an issuer’s financial condition, management considers whether the debt securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and industry analysts’ reports. Credit loss allowances for the AFS and HTM portfolios are described in the following sections. Allowance for Credit Losses—AFS Securities Management evaluates debt securities to determine whether the unrealized loss is due to credit-related factors or non-credit-related factors. This analysis occurs on a quarterly basis. Consideration is given to the extent to which fair value is less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for full recovery of its amortized cost. If the assessment reveals 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. If the present value of future cash flows expected to be collected is less than the amortized cost, an allowance for the credit loss is recorded. The loss is limited by the amount that the amortized cost exceeds fair value. As of the reporting date, the Company did not intend to sell any of the AFS debt securities, did not expect to be required to sell these debt securities, and expected to recover the entire amortized cost basis of all of the debt securities. The Company did not record an ACL on the AFS debt securities at September 30, 2025 and December 31, 2024. The Company has evaluated these debt securities for credit-related impairment at the reporting date and concluded that no impairment existed. In analyzing an issuer’s financial condition, management considers whether the debt securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, industry analysts’ reports, and correlations between fair value changes and interest rate changes among instruments that are not credit sensitive. All AFS debt securities were current with no debt securities past due or on non-accrual as of September 30, 2025 and December 31, 2024. The Company considers the unrealized losses on the debt securities as of September 30, 2025 and December 31, 2024 to be related to fluctuations in market conditions, primarily interest rates, and is not reflective of deterioration in credit. At September 30, 2025, there was no allowance for credit losses, and there were no provisions, write offs, or recoveries on AFS debt securities recorded during the nine months ended September 30, 2025. The table below presents a rollforward by major security type of the allowance for credit losses on AFS debt securities for the nine months ended September 30, 2024 (dollars in thousands):
| September 30, 2024
For the nine months ended | U.S. Government and Federal Agencies |  | Mortgage Backed Securities |  | Corporate Bonds |  | State and Municipal Securities |  | Total AFS Securities
Allowance for credit losses: |  |  |  |  |  |  |  |  |
Beginning balance, December 31, 2023 | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Provision for (recapture of) credit losses | — |  |  | — |  |  | (210) |  |  | — |  |  | (210) |
Write offs charged against the allowance | — |  |  | — |  |  | — |  |  | — |  |  | — |
Recoveries of amounts previously written off | — |  |  | — |  |  | 210 |  |  | — |  |  | 210 |
Ending balance, September 30, 2024 | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
At September 30, 2024, there was no allowance for credit losses on AFS debt securities recorded. During the nine months ended September 30, 2024, the Bank received proceeds totaling $210 thousand for a bond that was fully charged off during 2023, and recorded a recovery of the credit loss. Credit Quality Indicators and Allowance for Credit Losses - HTM Securities The Company evaluates the credit risk of its HTM debt securities on a quarterly basis. The Company estimates expected credit losses on HTM debt securities using an instrument-level process described in Note 1 of the audited consolidated financial statements for the year ended December 31, 2024. The primary indicators of credit quality for the Company’s HTM portfolio are security type, time remaining to maturity, and credit rating. Credit ratings may be influenced by a number of factors including obligor cash flows, geography, seniority and others. The HTM portfolio includes debt securities issued by the U.S. Treasury and agencies of the federal government, and mortgage-backed securities issued by government agencies. These types of investments carry implicit or explicit backing of the U.S. Treasury, and therefore are deemed to carry no credit risk for purposes of the ACL evaluation. The following table presents the amortized cost of HTM debt securities as of September 30, 2025 and December 31, 2024 by security type and credit rating (dollars in thousands):
| September 30, 2025
| U.S. Government and Federal Agencies |  | Mortgage Backed Securities |  | Corporate Bonds |  | State and Municipal Securities |  | Total HTM Securities
AAA / AA / A | $ | 115,454 |  |  | $ | 1,155 |  |  | $ | 17,947 |  |  | $ | 116,489 |  |  | $ | 251,045 |
BBB / BB / B | — |  |  | — |  |  | 32,868 |  |  | — |  |  | 32,868 |
Total | $ | 115,454 |  |  | $ | 1,155 |  |  | $ | 50,815 |  |  | $ | 116,489 |  |  | $ | 283,913 |
| December 31, 2024
| U.S. Government and Federal Agencies |  | Mortgage Backed Securities |  | Corporate Bonds |  | State and Municipal Securities |  | Total HTM Securities
AAA / AA / A | $ | 122,452 |  |  | $ | 1,168 |  |  | $ | 18,046 |  |  | $ | 119,563 |  |  | $ | 261,229 |
BBB / BB / B | — |  |  | — |  |  | 39,424 |  |  | — |  |  | 39,424 |
Total | $ | 122,452 |  |  | $ | 1,168 |  |  | $ | 57,470 |  |  | $ | 119,563 |  |  | $ | 300,653 |
The following tables summarize the change in the allowance for credit losses on HTM debt securities for the three and nine months ended September 30, 2025 and 2024 (dollars in thousands):
| September 30, 2025
For the three months ended | U.S. Government and Federal Agencies |  | Mortgage Backed Securities |  | Corporate Bonds |  | State and Municipal Securities |  | Total HTM Securities
Allowance for credit losses: |  |  |  |  |  |  |  |  |
Beginning balance, June 30, 2025 | $ | — |  |  | $ | — |  |  | $ | 114 |  |  | $ | 30 |  |  | $ | 144 |
Provision for (recapture of) credit losses | — |  |  | — |  |  | (10) |  |  | (1) |  |  | (11) |
Write offs charged against the allowance | — |  |  | — |  |  | — |  |  | — |  |  | — |
Recoveries of amounts previously written off | — |  |  | — |  |  | — |  |  | — |  |  | — |
Ending balance, September 30, 2025 | $ | — |  |  | $ | — |  |  | $ | 104 |  |  | $ | 29 |  |  | $ | 133 |
| September 30, 2024
For the three months ended | U.S. Government and Federal Agencies |  | Mortgage Backed Securities |  | Corporate Bonds |  | State and Municipal Securities |  | Total HTM Securities
Allowance for credit losses: |  |  |  |  |  |  |  |  |
Beginning balance, June 30, 2024 | $ | — |  |  | $ | — |  |  | $ | 215 |  |  | $ | 33 |  |  | $ | 248 |
Provision for (recapture of) credit losses | — |  |  | — |  |  | 15 |  |  | (2) |  |  | 13 |
Write offs charged against the allowance | — |  |  | — |  |  | — |  |  | — |  |  | — |
Recoveries of amounts previously written off | — |  |  | — |  |  | — |  |  | — |  |  | — |
Ending balance, September 30, 2024 | $ | — |  |  | $ | — |  |  | $ | 230 |  |  | $ | 31 |  |  | $ | 261 |
| September 30, 2025
For the nine months ended | U.S. Government and Federal Agencies |  | Mortgage Backed Securities |  | Corporate Bonds |  | State and Municipal Securities |  | Total HTM Securities
Allowance for credit losses: |  |  |  |  |  |  |  |  |
Beginning balance, December 31, 2024 | $ | — |  |  | $ | — |  |  | $ | 171 |  |  | $ | 31 |  |  | $ | 202 |
Provision for (recapture of) credit losses | — |  |  | — |  |  | (67) |  |  | (2) |  |  | (69) |
Write offs charged against the allowance | — |  |  | — |  |  | — |  |  | — |  |  | — |
Recoveries of amounts previously written off | — |  |  | — |  |  | — |  |  | — |  |  | — |
Ending balance, September 30, 2025 | $ | — |  |  | $ | — |  |  | $ | 104 |  |  | $ | 29 |  |  | $ | 133 |
| September 30, 2024
For the nine months ended | U.S. Government and Federal Agencies |  | Mortgage Backed Securities |  | Corporate Bonds |  | State and Municipal Securities |  | Total HTM Securities
Allowance for credit losses: |  |  |  |  |  |  |  |  |
Beginning balance, December 31, 2023 | $ | — |  |  | $ | — |  |  | $ | 322 |  |  | $ | 26 |  |  | $ | 348 |
Provision for credit losses | — |  |  | — |  |  | (92) |  |  | 5 |  |  | (87) |
Write offs charged against the allowance | — |  |  | — |  |  | — |  |  | — |  |  | — |
Recoveries of amounts previously written off | — |  |  | — |  |  | — |  |  | — |  |  | — |
Ending balance, September 30, 2024 | $ | — |  |  | $ | — |  |  | $ | 230 |  |  | $ | 31 |  |  | $ | 261 |
At September 30, 2025 and December 31, 2024, the Company had no HTM debt securities that were 30 days or more past due as to principal and interest payments. The Company had no debt securities held to maturity classified as non-accrual as of September 30, 2025 and December 31, 2024. Equity Securities The Company reported a fair value gain of $5 thousand in its equity security holding during the three month period ended September 30, 2025 and fair value gain of $18 thousand for the three month period ended September 30, 2024. The Company reported a fair value gain of $14 thousand in its equity security holding during the nine month period ended September 30, 2025 and fair value gain of $11 thousand for the nine month period ended September 30, 2024. The gains were reflected in the “other income” component of noninterest income on the consolidated statements of income.

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