Investment Securities

9 Months Ended

Sep. 30, 2026

Investments, Debt and Equity Securities [Abstract]

Note 3 – Investment Securities

The table below summarizes the Company's investment in AFS securities by major security type.


	As of September 30, 2026
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

U.S. agency securities	$	298,330	$	1	$	(20,301)	$	278,030
Residential mortgage-backed securities	549,831		28		(73,459)		476,400
Commercial mortgage-backed securities	58,543		—		(4,934)		53,609
Municipal bonds	83,289		—		(1,275)		82,014
Corporate bonds	2,000		—		(23)		1,977
Total available-for-sale securities	$	991,993	$	29	$	(99,992)	$	892,030

	As of December 31, 2025
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

U.S. agency securities	$	355,249	$	—	$	(17,541)	$	337,708
Residential mortgage-backed securities	620,540		152		(58,188)		562,504
Commercial mortgage-backed securities	68,931		117		(2,503)		66,545
Municipal bonds	8,426		—		(380)		8,046
Corporate bonds	2,000		—		(33)		1,967
Total available-for-sale securities	$	1,055,146	$	269	$	(78,645)	$	976,770

The table below summarizes the Company's investment in HTM securities by major security type.


	As of September 30, 2026
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value


Residential mortgage-backed securities	$	501,554	$	—	$	(81,959)	$	419,595
Commercial mortgage-backed securities	83,924		—		(13,350)		70,574
Municipal bonds	106,692		—		(13,942)		92,750
Corporate bonds	105,688		17		(4,170)		101,535
Total	797,858		$	17	$	(113,421)	$	684,454
Less: Allowance for credit losses	(409)
Total held-to-maturity securities, net of ACL	$	797,449

	As of December 31, 2025
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value


Residential mortgage-backed securities	$	544,402	$	—	$	(58,836)	$	485,566
Commercial mortgage-backed securities	85,760		—		(9,787)		75,973
Municipal bonds	106,875		—		(6,933)		99,942
Corporate bonds	118,773		8		(5,315)		113,466
Total	855,810		$	8	$	(80,871)	$	774,947
Less: Allowance for credit losses	(1,030)
Total held-to-maturity securities, net of ACL	$	854,780

In addition, as of September 30, 2026 and December 31, 2025, the Company held $27.9 million and $28.3 million, respectively, in non-marketable equity securities in a combination of Federal Reserve System ("Federal Reserve Board", "Federal Reserve" or "FRB") and FHLB stocks, which are required to be held for regulatory purposes. These securities cannot be disposed of other than through redemption by the issuer and, if redeemed, would be redeemed at the original cost. The securities are carried at cost, classified as restricted securities, and periodically evaluated for impairment based on ultimate recovery of par value.

As of September 30, 2026 and December 31, 2025, the Company had $33.6 million and $38.5 million, respectively, of unamortized unrealized losses outstanding following the transfer of investment securities from AFS to HTM in 2022. These unrealized losses are included in accumulated other comprehensive loss and are amortized through interest income as a yield adjustment over the remaining term of the securities.

Accrued interest receivable on investment securities was $5.9 million and $5.5 million as of September 30, 2026 and December 31, 2025, respectively. The accrued interest on investment securities is excluded from the amortized cost of the securities and is reported in other assets in the Consolidated Balance Sheets.

The table below summarizes, by length of time, the Company's AFS securities that have been in a continuous unrealized loss position and HTM securities that have been in a continuous unrecognized loss position.


	As of September 30, 2026
		Less than 12 Months				12 Months or Greater				Total
(dollars in thousands)	Number of Securities	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
Investment securities available-for-sale:

U.S. agency securities	42	$	—	$	—	$	276,727	$	(20,301)	$	276,727	$	(20,301)
Residential mortgage-backed securities	142	21,926		(596)		452,981		(72,863)		474,907		(73,459)
Commercial mortgage-backed securities	11	27,130		(1,828)		26,479		(3,106)		53,609		(4,934)
Municipal bonds	2	74,538		(463)		7,476		(812)		82,014		(1,275)
Corporate bonds	1	—		—		1,977		(23)		1,977		(23)
Total	198	$	123,594	$	(2,887)	$	765,640	$	(97,105)	$	889,234	$	(99,992)

Investment securities held-to-maturity:


Residential mortgage-backed securities	130	$	—	$	—	$	419,595	$	(81,959)	$	419,595	$	(81,959)
Commercial mortgage-backed securities	16	—		—		70,574		(13,350)		70,574		(13,350)
Municipal bonds	34	991		(9)		91,759		(13,933)		92,750		(13,942)
Corporate bonds	23	12,346		(70)		84,757		(4,100)		97,103		(4,170)
Total	203	$	13,337	$	(79)	$	666,685	$	(113,342)	$	680,022	$	(113,421)


	As of December 31, 2025
		Less than 12 Months				12 Months or Greater				Total
(dollars in thousands)	Number of Securities	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
Investment securities available-for-sale:

U.S. agency securities	52	$	—	$	—	$	337,708	$	(17,541)	$	337,708	$	(17,541)
Residential mortgage-backed securities	139	—		—		546,514		(58,188)		546,514		(58,188)
Commercial mortgage-backed securities	10	—		—		37,329		(2,503)		37,329		(2,503)
Municipal bonds	1	—		—		8,046		(380)		8,046		(380)
Corporate bonds	1	—		—		1,967		(33)		1,967		(33)
Total	203	$	—	$	—	$	931,564	$	(78,645)	$	931,564	$	(78,645)

Investment securities held-to-maturity:


Residential mortgage-backed securities	136	$	—	$	—	$	485,567	$	(58,836)	$	485,567	$	(58,836)
Commercial mortgage-backed securities	16	4,271		(503)		71,702		(9,284)		75,973		(9,787)
Municipal bonds	33	—		—		98,942		(6,933)		98,942		(6,933)
Corporate bonds	27	1,922		(18)		106,638		(5,297)		108,560		(5,315)
Total	212	$	6,193	$	(521)	$	762,849	$	(80,350)	$	769,042	$	(80,871)

As of September 30, 2026, unrealized losses were generally attributable to changes in market interest rates and interest spread relationships subsequent to the dates the securities were originally purchased, and were considered to be temporary, and not due to credit quality concerns on the investment securities. The fair values of these AFS securities are expected to recover as the securities approach their respective maturity dates.

The Company measures its AFS and HTM securities portfolios for credit losses as part of its ACL analysis. For further information on provision for credit losses on AFS and HTM securities, see the "Allowance for Credit Losses" discussion in "Note 1 – Summary of Significant Accounting Policies". As of September 30, 2026 and December 31, 2025, the Company had no allowance for credit losses outstanding on its AFS securities and $409 thousand and $1.0 million, respectively, on its HTM securities, which primarily comprise allowances for corporate bonds.

The table below summarizes the Company's investment in AFS securities and HTM securities by contractual maturity. Expected maturities for mortgage-backed securities ("MBS") will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	As of September 30, 2026
(dollars in thousands)	Amortized Cost		Estimated Fair Value
Investment securities available-for-sale:
Within one year	$	53,179	$	52,464
One to five years	295,611		278,894
Five to ten years	17,143		15,793
Beyond ten years	17,686		14,870
Residential mortgage-backed securities	549,831		476,400
Commercial mortgage-backed securities	58,543		53,609


Less: allowance for credit losses	—		—
Total investment securities available-for-sale	991,993		892,030

Investment securities held-to-maturity:
Within one year	26,080		25,856
One to five years	59,778		56,555
Five to ten years	76,456		69,691
Beyond ten years	50,066		42,183
Residential mortgage-backed securities:	501,554		419,595
Commercial mortgage-backed securities	83,924		70,574


Less: allowance for credit losses	(409)		—
Total investment securities held-to-maturity	797,449		684,454
Total	$	1,789,442	$	1,576,484

The table below displays information about the sales and calls of our investment securities.


	Three Months Ended September 30,				For the Nine Months Ended September 30,
(dollars in thousands)	2026		2025		2026		2025
Proceeds from sales and calls	$	1,556	$	84,157	$	13,668	$	197,117
Gross realized gains from sales and calls	63		3		332		12
Gross realized losses from sales and calls	42		1,985		42		3,844

As of September 30, 2026 and December 31, 2025, the book value of securities pledged as collateral for certain government deposits, securities sold under agreements to repurchase and certain lines of credit with correspondent banks was $21.1 million and $519.6 million, respectively.

As of September 30, 2026 and December 31, 2025, there were no holdings of securities of any one issuer, other than the U.S. agency securities, which exceeded ten percent of shareholders' equity.