Securities

9 Months Ended

Sep. 30, 2024

Securities

Securities

4) Securities

The amortized cost and estimated fair value of securities were as follows at the dates indicated:

			Gross		Gross		Allowance		Estimated
	Amortized		Unrealized		Unrealized		for Credit		Fair
September 30, 2024	Cost		Gains		(Losses)		Losses		Value
	(Dollars in thousands)
Securities available-for-sale:
U.S. Treasury	$	185,602	$	—	$	(1,440)	$	—	$	184,162
Agency mortgage-backed securities		56,373		—		(2,923)		—		53,450
Total	$	241,975	$	—	$	(4,363)	$	—	$	237,612
			Gross		Gross		Estimated		Allowance
	Amortized		Unrecognized		Unrecognized		Fair		for Credit
September 30, 2024	Cost		Gains		(Losses)		Value		Losses
	(Dollars in thousands)
Securities held-to-maturity:
Agency mortgage-backed securities	$	573,621	$	381	$	(72,377)	$	501,625	$	—
Municipals - exempt from Federal tax		30,584		3		(679)		29,908		(12)
Total	$	604,205	$	384	$	(73,056)	$	531,533	$	(12)

			Gross		Gross		Allowance		Estimated
	Amortized		Unrealized		Unrealized		for Credit		Fair
December 31, 2023	Cost		Gains		(Losses)		Losses		Value
	(Dollars in thousands)
Securities available-for-sale:
U.S. Treasury	$	387,990	$	—	$	(5,621)	$	—	$	382,369
Agency mortgage-backed securities		64,580		—		(4,313)		—		60,267
Total	$	452,570	$	—	$	(9,934)	$	—	$	442,636
			Gross		Gross		Estimated		Allowance
	Amortized		Unrecognized		Unrecognized		Fair		for Credit
December 31, 2023	Cost		Gains		(Losses)		Value		Losses
	(Dollars in thousands)
Securities held-to-maturity:
Agency mortgage-backed securities	$	618,374	$	282	$	(86,011)	$	532,645	$	—
Municipals - exempt from Federal tax		32,203		3		(724)		31,482		(12)
Total	$	650,577	$	285	$	(86,735)	$	564,127	$	(12)

Securities with unrealized/unrecognized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized/unrecognized loss position are as follows at the dates indicated:

	Less Than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
September 30, 2024	Value		(Losses)		Value		(Losses)		Value		(Losses)
	(Dollars in thousands)
Securities available-for-sale:
U.S. Treasury	$	—	$	—	$	184,162	$	(1,440)	$	184,162	$	(1,440)
Agency mortgage-backed securities		—		—		53,450		(2,923)		53,450		(2,923)
Total	$	—	$	—	$	237,612	$	(4,363)	$	237,612	$	(4,363)
Securities held-to-maturity:
Agency mortgage-backed securities	$	—	$	—	$	490,099	$	(72,377)	$	490,099	$	(72,377)
Municipals — exempt from Federal tax		4,288		(40)		20,521		(639)		24,809		(679)
Total	$	4,288	$	(40)	$	510,620	$	(73,016)	$	514,908	$	(73,056)

	Less Than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2023	Value		(Losses)		Value		(Losses)		Value		(Losses)
	(Dollars in thousands)
Securities available-for-sale:
U.S. Treasury	$	4,926	$	(40)	$	377,443	$	(5,581)	$	382,369	$	(5,621)
Agency mortgage-backed securities		—		—		60,267		(4,313)		60,267		(4,313)
Total	$	4,926	$	(40)	$	437,710	$	(9,894)	$	442,636	$	(9,934)
Securities held-to-maturity:
Agency mortgage-backed securities	$	—	$	—	$	520,615	$	(86,011)	$	520,615	$	(86,011)
Municipals — exempt from Federal tax		9,790		(176)		13,151		(548)		22,941		(724)
Total	$	9,790	$	(176)	$	533,766	$	(86,559)	$	543,556	$	(86,735)

The Company conducts a regular assessment of its investment securities to determine whether securities are experiencing credit losses. Factors for consideration include the nature of the securities, credit ratings or financial condition of the issuer, the extent of the unrealized loss, expected cash flows, market conditions and the Company’s ability to hold the securities through the anticipated recovery period.

At the dates and during the periods covered by these financial statements, there were no holdings of securities of any one issuer, other than the U.S. Government and its sponsored entities, in an amount greater than 10% of shareholders’ equity. At September 30, 2024, the Company held 396 securities (130 available-for-sale and 266 held-to-maturity), of which 375 had fair value below amortized cost. The unrealized/unrecognized losses were due to higher interest rates at period end compared to when the securities were purchased. The issuers are of high credit quality and all principal amounts are expected to be paid when securities mature. The fair value is expected to recover as the securities approach their maturity date and/or market rates decline. The Company does not believe that it is more likely than not that the Company will be required to sell a security in an unrealized loss position prior to recovery in value.

The amortized cost and estimated fair values of securities as of September 30, 2024 are shown by contractual maturity below. The expected maturities will differ from contractual maturities if borrowers have the right to call or pre-pay obligations with or without call or pre-payment penalties. Securities not due at a single maturity date are shown separately.

	Available-for-sale
	Amortized		Estimated
	Cost		Fair Value
	(Dollars in thousands)
Due three months or less	$	8,981	$	8,972
Due after three months through one year		176,621		175,190
Agency mortgage-backed securities		56,373		53,450
Total	$	241,975	$	237,612
	Held-to-maturity
	Amortized		Estimated
	Cost (1)		Fair Value
	(Dollars in thousands)
Due after three months through one year	$	1,805	$	1,799
Due after one through five years		7,395		7,307
Due after five through ten years		21,384		20,802
Agency mortgage-backed securities		573,621		501,625
Total	$	604,205	$	531,533

(1) Gross of the allowance for credit losses of ($12,000) at September 30, 2024.

Securities with amortized cost of $777,327,000 and $1,041,608,000 as of September 30, 2024 and December 31, 2023, respectively, were pledged to secure the Bank’s lines of credit and for other purposes as required or permitted by law or contract. The decrease in pledged securities at September 30, 2024 was due to securities maturities.

The allowance for credit losses on the Company’s held-to-maturity debt securities is presented as a reduction to the amortized cost basis of held-to-maturity securities on the Company’s Consolidated Balance Sheet. The table below presents a roll-forward by major security type for the nine months ended September 30, 2024 of the allowance for credit losses on debt securities held-to-maturity at period end:

		Municipals
		(Dollars in thousands)
Beginning balance January 1, 2024	$	12
Provision for credit losses		—
Ending balance September 30, 2024	$	12

The bond ratings for the Company’s municipal investment securities at September 30, 2024 were consistent with the ratings at December 31, 2023.