Investment Securities

3 Months Ended

Mar. 31, 2025

Investments, Debt and Equity Securities [Abstract]

Investments Securities

Investment Securities

The following table shows the amortized cost, the estimated fair value and the allowance for credit losses of the held-to-maturity securities and available-for-sale securities at March 31, 2025 and December 31, 2024, by contractual maturity within each type:

	At March 31, 2025
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
Securities Held-to-Maturity
Residential mortgage-backed securities:
After 1 year to 5 years	$	949	$	—	$	(17)	$	—	$	932
After 5 years to 10 years	10,842		—		(344)		—		10,498
Over 10 years	119,098		—		(16,101)		—		102,997
	130,889		—		(16,462)		—		114,427
Total	$	130,889	$	—	$	(16,462)	$	—	$	114,427
Securities Available-for-Sale
Residential mortgage-backed securities:
Within 1 year	$	13	$	—	$	—	$	—	$	13
After 1 year to 5 years	249		—		(5)		—		244
After 5 years to 10 years	10,690		—		(616)		—		10,074
Over 10 years	312,130		521		(32,816)		—		279,835
	323,082		521		(33,437)		—		290,166
Collateralized mortgage obligations:
After 1 year to 5 years	138		—		(3)		—		135
Over 10 years	1,606		—		(111)		—		1,495
	1,744		—		(114)		—		1,630
Corporate bonds:
Within 1 year	7,884		6		(87)		(10)		7,793
After 1 year to 5 years	9,923		42		(175)		(17)		9,773
After 5 years to 10 years	60,000		—		(4,140)		(719)		55,141
	77,807		48		(4,402)		(746)		72,707
Total	$	402,633	$	569	$	(37,953)	$	(746)	$	364,503

	At December 31, 2024
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
Securities Held-to-Maturity
Residential mortgage-backed securities:
After 1 year to 5 years	$	1,114	$	—	$	(24)	$	—	$	1,090
After 5 years to 10 years	10,208		—		(450)		—		9,758
Over 10 years	122,789		—		(18,630)		—		104,159
	134,111		—		(19,104)		—		115,007
Total	$	134,111	$	—	$	(19,104)	$	—	$	115,007
Securities Available-for-Sale
State and political subdivisions:
Within 1 year	$	1,300	$	—	$	(5)	$	—	$	1,295
	1,300		—		(5)		—		1,295
Residential mortgage-backed securities:
Within 1 year	20		—		—		—		20
After 1 year to 5 years	298		—		(6)		—		292
After 5 years to 10 years	11,260		—		(791)		—		10,469
Over 10 years	311,126		119		(38,645)		—		272,600
	322,704		119		(39,442)		—		283,381
Collateralized mortgage obligations:
After 1 year to 5 years	155		—		(4)		—		151
Over 10 years	1,663		—		(129)		—		1,534
	1,818		—		(133)		—		1,685
Corporate bonds:
Within 1 year	5,905		5		(58)		(6)		5,846
After 1 year to 5 years	10,924		16		(303)		(31)		10,606
After 5 years to 10 years	60,000		—		(4,650)		(802)		54,548
	76,829		21		(5,011)		(839)		71,000
Total	$	402,651	$	140	$	(44,591)	$	(839)	$	357,361

Gross unrealized gains and losses on available-for-sale securities are recognized in accumulated other comprehensive income (loss) and changes in the allowance for credit loss are recorded in provision for credit loss expense. Expected maturities may differ from contractual maturities because debt issuers may have the right to call or prepay obligations without call or prepayment penalties and mortgage-backed securities typically prepay at a rate faster than contractually due.

Securities with a carrying value of $419.3 million and $424.8 million at March 31, 2025 and December 31, 2024, respectively, were pledged to secure public funds deposits and contingency funding. There were no pledged securities to secure credit derivatives and interest rate swaps at March 31, 2025 or December 31, 2024.

There were no sales of securities available-for-sale during the three months ended March 31, 2025 or 2024.

At March 31, 2025 and December 31, 2024, there were no reportable investments in any single issuer representing more than 10% of shareholders’ equity.

The following table shows the fair value of securities that were in an unrealized loss position for which an allowance for credit losses has not been recorded at March 31, 2025 and December 31, 2024, by the length of time those securities were in a continuous loss position.

	Less than Twelve Months				Twelve Months or Longer				Total
(Dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
At March 31, 2025
Securities Held-to-Maturity
Residential mortgage-backed securities	$	2,585	$	(18)	$	111,842	$	(16,444)	$	114,427	$	(16,462)
Total	$	2,585	$	(18)	$	111,842	$	(16,444)	$	114,427	$	(16,462)
Securities Available-for-Sale
Residential mortgage-backed securities	$	35,342	$	(323)	$	205,109	$	(33,114)	$	240,451	$	(33,437)
Collateralized mortgage obligations	—		—		1,630		(114)		1,630		(114)
Corporate bonds	994		(1)		—		—		994		(1)
Total	$	36,336	$	(324)	$	206,739	$	(33,228)	$	243,075	$	(33,552)
At December 31, 2024
Securities Held-to-Maturity
Residential mortgage-backed securities	$	2,566	$	(50)	$	112,441	$	(19,054)	$	115,007	$	(19,104)
Total	$	2,566	$	(50)	$	112,441	$	(19,054)	$	115,007	$	(19,104)
Securities Available-for-Sale
Residential mortgage-backed securities	$	65,044	$	(905)	$	205,071	$	(38,537)	$	270,115	$	(39,442)
Collateralized mortgage obligations	—		—		1,685		(133)		1,685		(133)
Total	$	65,044	$	(905)	$	206,756	$	(38,670)	$	271,800	$	(39,575)

At March 31, 2025, the fair value of held-to-maturity securities in an unrealized loss position for which an allowance for credit losses has not been recorded was $114.4 million, including unrealized losses of $16.5 million. These holdings were comprised of 90 federal agency mortgage-backed securities, which are U.S. government entities and agencies and 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. The Corporation did not recognize any credit losses on held-to-maturity debt securities for the three months ended March 31, 2025.

At March 31, 2025, the fair value of available-for-sale securities in an unrealized loss position for which an allowance for credit losses has not been recorded was $243.1 million, including unrealized losses of $33.6 million. These holdings were comprised of: (1) 108 federal agency mortgage-backed securities, which are U.S. government entities and agencies and 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; (2) two collateralized mortgage obligation bonds, and (3) two investment grade corporate bonds. The Corporation does not intend to sell the securities in an unrealized loss position and is unlikely to be required to sell these securities before a recovery of fair value, which may be maturity. The Corporation concluded that the negative fair value of these securities was not indicative of a credit loss. Accrued interest receivable on available-for-sale debt securities totaled $1.2 million at March 31, 2025 and is included within Accrued interest receivable and other assets on the condensed consolidated balance sheet. This amount is excluded from the estimate of expected credit losses.

The table below presents a rollforward by major security type for the three months ended March 31, 2025 and March 31, 2024 of the allowance for credit losses on securities available-for-sale.

(Dollars in thousands)	Corporate Bonds
Three months ended March 31, 2025
Securities Available-for-Sale
Beginning balance	$	(839)
Change in securities for which a previous expected credit loss was recognized	93
Ending balance	$	(746)
Three months ended March 31, 2024
Securities Available-for-Sale
Beginning balance	$	(731)
Change in securities for which a previous expected credit loss was recognized	(86)
Ending balance	$	(817)

At March 31, 2025, the fair value of available-for-sale securities in an unrealized loss position for which an allowance for credit losses has been recorded was $132.5 million, including unrealized losses of $10.3 million, and allowance for credit losses of $746 thousand. These holdings were comprised of 27 investment grade corporate bonds, all of which fluctuate in value based on changes in market conditions. For these securities, fluctuations were primarily due to changes in the interest rate environment. The Corporation does not intend to sell these securities, and it is not likely that it will be required to sell the securities before their anticipated recovery. The underlying issuers continue to make timely principal and interest payments on the securities.

The Corporation recognized a $36 thousand net loss on equity securities during the three months ended March 31, 2024 in other noninterest income. There were no sales of equity securities during the three months ended March 31, 2025 or 2024.