XML 22 R12.htm IDEA: XBRL DOCUMENT v3.25.3
Investment Securities
 9 Months Ended
Sep. 30, 2025
Investments, Debt and Equity Securities [Abstract]  
Investment Securities

Note 3 - Investment Securities

The amortized cost and estimated fair values of investment securities are summarized below.

AVAILABLE-FOR-SALE:

 

       Gross   Gross     
   Amortized   Unrealized   Unrealized     
(Dollars in thousands)  Cost   Gains   Losses   Fair Value 
September 30, 2025                    
US Treasury securities  $25,696   $9   $(1,832)  $23,873 
Government Sponsored Enterprises   2,500    —    (260)   2,240 
Mortgage-backed securities   268,704    437    (11,835)   257,306 
Small Business Administration pools   9,504    16    (241)   9,279 
Corporate and other securities   7,506    —    (675)   6,831 
Total  $313,910   $462   $(14,843)  $299,529 
                     
       Gross   Gross     
   Amortized   Unrealized   Unrealized     
(Dollars in thousands)  Cost   Gains   Losses   Fair Value 
December 31, 2024                    
US Treasury securities  $15,822   $—   $(2,582)  $13,240 
Government Sponsored Enterprises   2,500    —    (390)   2,110 
Mortgage-backed securities   260,023    40    (15,859)   244,204 
Small Business Administration pools   12,437    15    (373)   12,079 
Corporate and other securities   8,755    —    (806)   7,949 
Total  $299,537   $55   $(20,010)  $279,582 

HELD-TO-MATURITY:

 

(Dollars in thousands)  Amortized Cost
Net of
Allowance
for Credit Losses		   Gross
Unrealized
Gains		   Gross
Unrealized
Losses		   Fair Value 
September 30, 2025                    
Mortgage-backed securities  $96,816   $—   $(5,439)  $91,377 
State and local government   101,988    73    (2,169)   99,892 
Total  $198,805   $73   $(7,608)  $191,270 
                     
(Dollars in thousands)  Amortized Cost
Net of
Allowance
for Credit Loss		   Gross
Unrealized
Gains		   Gross
Unrealized
Losses		   Fair Value 
December 31, 2024                    
Mortgage-backed securities  $105,563    —    (8,645)  $96,918 
State and local government   103,850    —    (4,728)   99,122 
Total  $209,413    —    (13,373)  $196,040 

 

There were no gross realized gains or gross realized losses from the sale of available-for-sale investment securities during the three and nine months ended September 30, 2025 and 2024.

For available-for-sale securities, management evaluates all investments in an unrealized loss position on a quarterly basis, or more frequently when economic or market conditions warrant such evaluation. If the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security, the security is written down to fair value and the entire loss is recorded in earnings.

If either of the above criteria is not met, the Company evaluates whether the decline in fair value is the result of credit losses or other factors. In making the assessment, the Company may consider various factors including the extent to which fair value is less than amortized cost, performance on any underlying collateral, downgrades in the ratings of the security by a rating agency, the failure of the issuer to make scheduled interest or principal payments and adverse conditions specifically related to the security. If the assessment indicates that a credit loss exists, the present value of cash flows expected to be collected are compared to the amortized cost basis of the security and any excess is recorded as an allowance for credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any amount of unrealized loss that has not been recorded through an allowance for credit loss is recognized in other comprehensive income.

Changes in the allowance for credit loss are recorded as provision for (or release of) credit loss expense. Losses are charged against the allowance for credit loss when management believes an available-for-sale security is confirmed to be uncollectible or when either of the criteria regarding intent or requirement to sell is met. At September 30, 2025 and December 31, 2024, there was no allowance for credit loss related to the available-for-sale securities portfolio.

The following tables show gross unrealized losses and fair values of available-for-sale securities for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous loss position, as of September 30, 2025.

 

September 30, 2025  Less than 12 months   12 months or more   Total 
Available-for-sale securities:  Fair   Unrealized   Fair   Unrealized   Fair   Unrealized 
(Dollars in thousands)  Value   Loss   Value   Loss   Value   Loss 
US Treasury securities  $—   $—   $14,012   $1,832   $14,012   $1,832 
Government Sponsored Enterprises   —    —    2,240    260    2,240    260 
Mortgage-backed securities   5,514    9    208,305    11,826    213,819    11,835 
Small Business Administration pools   920    4    6,283    237    7,203    241 
Corporate and other securities   —    —    6,818    675    6,818    675 
Total  $6,434   $13   $237,658   $14,830   $244,092   $14,843 

 

The following table shows gross unrealized losses by fair values of available-for-sale securities, aggregated by investment category and length of time that individual securities have been in a continuous loss position as of December 31, 2024.

                         
December 31, 2024  Less than 12 months   12 months or more   Total 
Available-for-sale securities:  Fair   Unrealized   Fair   Unrealized   Fair   Unrealized 
(Dollars in thousands)  Value   Loss   Value   Loss   Value   Loss 
US Treasury securities  $—   $—   $13,240   $2,582   $13,240   $2,582 
Government Sponsored Enterprises   —    —    2,110    390    2,110    390 
Mortgage-backed securities   14,310    150    216,452    15,709    230,762    15,859 
Small Business Administration pools   1,279    2    8,554    371    9,833    373 
Corporate and other securities   1,488    263    6,449    543    7,937    806 
Total  $17,077   $415   $246,805   $19,595   $263,882   $20,010 

 

The following table shows a roll forward of the allowance for credit losses on held to maturity securities for the three and nine months ended September 30, 2025 and 2024.

 

   Three Months 
   Ended 
(Dollars in thousands)  September 30, 2025 
Allowance for Credit Losses on Held-to-Maturity Securities:     
State and local government     
Beginning balance, June 30, 2025  $19 
Provision for credit losses   — 
Ending balance, September 30, 2025  $19 
      
   Three Months 
   Ended 
(Dollars in thousands)  September 30, 2024 
Allowance for Credit Losses on Held-to-Maturity Securities:     
State and local government     
Beginning balance, June 30, 2024  $27 
Release of credit losses   (3)
Ending balance, September 30, 2024  $24 

 

   Nine Months 
   Ended 
(Dollars in thousands)  September 30, 2025 
Allowance for Credit Losses on Held-to-Maturity Securities:     
State and local government     
Beginning balance, December 31, 2024  $23 
Release of credit losses   (4)
Ending balance, September 30, 2025  $19 
      
   Nine Months 
   Ended 
(Dollars in thousands)  September 30, 2024 
Allowance for Credit Losses on Held-to-Maturity Securities:     
State and local government     
Beginning balance, December 31, 2023  $30 
Release of credit losses   (6)
Ending balance, September 30, 2024  $24 

 

At September 30, 2025, the Company had no securities held-to-maturity that were past due 30 days or more as to principal or interest payments. The Company had no securities held-to-maturity classified as non-accrual at September 30, 2025.

Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type. The held-to-maturity portfolio consists of mortgage-backed and municipal securities. Securities are generally rated BBB- or higher. Securities are analyzed individually to establish an allowance for credit losses on held-to-maturity securities.

The estimate of expected credit losses is primarily based on the ratings assigned to the securities by debt rating agencies and the average of the annual historical loss rates associated with those ratings. The Company then multiplies those loss rates, as adjusted for any modifications to reflect current conditions and reasonable and supportable forecasts as considered necessary, by the remaining lives of each individual security to arrive at a lifetime expected loss amount. Management classifies the held-to-maturity portfolio into the following major security types: mortgage-backed securities or state and local governments.

All the mortgage-backed securities (“MBS”) held by the Company are issued by government-sponsored corporations. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. As a result, no allowance for credit losses was recorded on held-to-maturity MBS as of September 30, 2025 and December 31, 2024. The state and local governments securities held by the Company are highly rated by major rating agencies.

The Company monitors the credit quality of the debt securities held to maturity through the use of credit ratings (Moody’s) on a quarterly basis. In the event that Moody’s does not provide a rating, the comparable S&P rating is used and converted to a Moody’s rating. The following table summarizes the amortized cost of debt securities held to maturity at September 30, 2025 and December 31, 2024, aggregated by credit quality indicators.

 

   As of   As of 
(Dollars in thousands)  September 30, 2025   December 31, 2024 
Rating:          
Aaa  $143,608   $149,064 
Aa1/Aa2/Aa3   50,168    55,318 
A1/A2   5,048    5,055 
Less: Allowance for Credit Losses on Held-to-Maturity Securities   19    23 
Total  $198,805   $209,413 

 

The following tables show the amortized cost and fair value of investment securities at September 30, 2025 by expected maturity. Expected maturities differ from contractual maturities because borrowers may have the right to call or prepay the obligations with or without prepayment penalties. Mortgage-backed securities are included in the year corresponding with the remaining expected life.

 

   Available-for-sale 
September 30, 2025  Amortized   Fair 
(Dollars in thousands)  Cost   Value 
Due in one year or less  $12,362   $12,347 
Due after one year through five years   13,361    13,146 
Due after five years through ten years   29,390    26,559 
Due after ten years   258,797    247,477 
Total  $313,910   $299,529 
           
   Held-To-Maturity 
September 30, 2025  Amortized   Fair 
(Dollars in thousands)  Cost   Value 
Due in one year or less  $7,121   $7,098 
Due after one year through five years   56,864    56,109 
Due after five years through ten years   60,679    59,486 
Due after ten years   74,160    68,596 
Allowance for Credit Losses on Held-to-Maturity Securities   (19)   (19)
Total  $198,805   $191,270