Securities

9 Months Ended

Sep. 30, 2025

Debt Securities, Available-for-Sale [Abstract]

NOTE 4. Securities

Amortized costs and fair values of securities available for sale at September 30, 2025 and December 31, 2024 were as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
	September 30, 2025
	(in thousands)
Obligations of U.S. government corporations and agencies	$	7,571	$	24	$	(21	)	$	7,574
U.S. treasury securities		9,999		9		—			10,008
Mortgage-backed securities		83,800		414		(7,051	)		77,163
Collateralized mortgage obligations		22,834		55		(100	)		22,789
Subordinated debt		4,250		8		(413	)		3,845
	$	128,454	$	510	$	(7,585	)	$	121,379


	December 31, 2024
	(in thousands)
Obligations of U.S. government corporations and agencies	$	8,198	$	—	$	(530	)	$	7,668
Mortgage-backed securities		127,061		—		(22,094	)		104,967
Obligations of states and political subdivisions		4,920		—		(275	)		4,645
Subordinated debt		4,750		—		(700	)		4,050
	$	144,929	$	—	$	(23,599	)	$	121,330

The Company has elected to exclude accrued interest receivable, totaling $545 thousand at September 30, 2025, from the amortized cost basis of securities. The deferred tax asset on the securities portfolio at September 30, 2025 and December 31, 2024 was $1.5 million and $5.0 million, respectively, and is included in Other Assets in the Consolidated Balance Sheets.

In March 2025, balance sheet repositioning transactions were executed. The Bank sold available for sale securities with an amortized cost balance of $99.2 million and reinvested $66.0 million into purchases of available for sale securities. The sale of securities resulted in a net realized pre-tax loss of $12.4 million recognized during nine months ended September 30, 2025. There were no sales of available for sale securities during the three months ended September 30, 2025 or the three and nine months ended September 30, 2024.

The following table summarizes amounts related to the sale of available for sale securities:


	For the Nine Months Ended September 30,
	2025
	(in thousands)
Proceeds from sales	$	86,822

Gross realized gains	$	—
Gross realized losses		(12,425	)
Net realized losses on securities	$	(12,425	)

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


	Amortized Cost		Fair Value
	(in thousands)
Due in one year or less	$	9,999	$	10,008
Due after one year through five years		13,492		13,579
Due after five years through ten years		19,569		19,290
Due after ten years		85,394		78,502
	$	128,454	$	121,379

The fair value and gross unrealized losses for securities available for sale, totaled by the length of time that individual securities have been in a continuous gross unrealized loss position, at September 30, 2025 and December 31, 2024 were as follows:


	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	September 30, 2025
	(in thousands)
Obligations of U.S. government corporations and agencies	$	3,787	$	21	$	—	$	—	$	3,787	$	21
U.S. treasury securities		—		—		—		—		—		—
Mortgage-backed securities		—		—		29,921		7,051		29,921		7,051
Collateralized mortgage obligations		15,384		100		—		—		15,384		100
Subordinated debt		—		—		2,837		413		2,837		413
Total	$	19,171	$	121	$	32,758	$	7,464	$	51,929	$	7,585


	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	December 31, 2024
	(in thousands)
Obligations of U.S. government corporations and agencies	$	—	$	—	$	7,668	$	530	$	7,668	$	530
Mortgage-backed securities		—		—		104,967		22,094		104,967		22,094
Obligations of states and political subdivisions		—		—		4,645		275		4,645		275
Subordinated debt		—		—		3,550		700		3,550		700
Total	$	—	$	—	$	120,830	$	23,599	$	120,830	$	23,599

The reference point for determining when securities are in an unrealized loss position is month end. As such, it is possible that a security's market value exceeded its amortized cost on other days during the past twelve-month period.

There were 38 debt securities with a fair value below the amortized cost basis, totaling $51.9 million of aggregate fair value as of September 30, 2025. The Company concluded that a credit loss does not exist in its securities portfolio at September 30, 2025 based on the fact that (1) changes in fair value were caused by non-credit-related factors, primarily fluctuations in interest rates, (2) securities with unrealized losses had generally high credit quality, (3) as of September 30, 2025, the Company intends to hold these investments in debt securities to maturity and it is more-likely-than-not that the Company will not be required to sell these investments before a recovery of its investment, and (4) issuers have continued to make timely payments of principal and interest. Additionally, the Company’s mortgage-backed securities and obligations of U.S. government corporations and agencies are entirely issued by either U.S. government agencies or U.S. government-sponsored enterprises. Collectively, these entities provide a guarantee, which is either explicitly or implicitly supported by the full faith and credit of the U.S. government, that investors in such mortgage-backed securities will receive timely principal and interest payments.

Securities having carrying values of $4.0 million, $3.0 million and $92.4 million at September 30, 2025 were pledged as security for trust accounts, a deposit relationship and for borrowing capacity at the Federal Reserve Bank discount window, respectively.

The composition of restricted investments at September 30, 2025 and December 31, 2024 was as follows:


	September 30, 2025		December 31, 2024
	(in thousands)
Federal Reserve Bank Stock	$	344	$	344
Federal Home Loan Bank Stock		3,302		7,073
Community Bankers’ Bank Stock		140		140
	$	3,786	$	7,557