Investment Securities

3 Months Ended

Mar. 31, 2026

Note 2—Investment Securities

The amortized cost, fair values, and unrealized gains and losses of the securities available-for-sale are as follows:

			Gross Unrealized
(Dollars in thousands)	Amortized Cost		Gains		Losses		Fair Value
As of March 31, 2026
U.S. Government-sponsored securities	$	1,944	$	4	$	8	$	1,940
Mortgage-backed securities⁽¹⁾		795,244		4,078		19,694		779,628
Commercial mortgage-backed obligations⁽¹⁾		1,232		19		-		1,251
Collateralized mortgage obligations⁽¹⁾		20,812		-		493		20,319
Municipal securities		66,548		2,262		19		68,791
Corporate securities		29,605		117		46		29,676
Other		310		-		-		310
Total available-for-sale securities	$	915,695	$	6,480	$	20,260	$	901,915

⁽¹⁾All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government.

			Gross Unrealized
(Dollars in thousands)	Amortized Cost		Gains		Losses		Fair Value
As of December 31, 2025
U.S. Government-sponsored securities	$	2,046	$	2	$	10	$	2,038
Mortgage-backed securities⁽¹⁾		834,820		9,140		17,720		826,240
Commercial mortgage-backed obligations⁽¹⁾		1,231		22		-		1,253
Collateralized mortgage obligations⁽¹⁾		21,087		5		362		20,730
Municipal securities		66,142		4,703		-		70,845
Corporate securities		29,567		171		-		29,738
Other		310		-		-		310
Total available-for-sale securities	$	955,203	$	14,043	$	18,092	$	951,154

⁽¹⁾All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government.

The book values, estimated fair values, and unrecognized gains and losses of investments classified as held-to-maturity are as follows:

									Allowance
	Amortized		Gross Unrecognized						for Credit
(Dollars in thousands)	Cost		Gains		Losses		Fair Value		Losses
As of March 31, 2026
Mortgage-backed securities⁽¹⁾	$	577,812	$	48	$	116,105	$	461,755	$	-
Collateralized mortgage obligations⁽¹⁾		60,972		-		10,576		50,396		-
Municipal securities		69,489		927		1,053		69,363		450
Total held-to-maturity securities	$	708,273	$	975	$	127,734	$	581,514	$	450

⁽¹⁾ All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government.

									Allowance
	Amortized		Gross Unrecognized						for Credit
(Dollars in thousands)	Cost		Gains		Losses		Fair Value		Losses
As of December 31, 2025
Mortgage-backed securities⁽¹⁾	$	586,001	$	88	$	115,773	$	470,316	$	-
Collateralized mortgage obligations⁽¹⁾		62,476		-		10,234		52,242		-
Municipal securities		70,164		1,011		997		70,178		450
Total held-to-maturity securities	$	718,641	$	1,099	$	127,004	$	592,736	$	450

⁽¹⁾ All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government.

The allowance for credit losses on held-to-maturity securities is a contra-asset valuation account that is deducted from the amortized cost basis of held-to-maturity securities to present the net amount expected to be collected. Management measures expected credit losses on held-to-maturity securities on a collective basis by major security type with each type sharing similar risk characteristics, and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. With regard to residential mortgage-backed securities issued by the U.S. government, or agencies thereof, it is expected that the securities will not be settled at prices less than the amortized cost basis of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. Accordingly, no allowance for credit losses has been recorded for these securities. With regard to securities issued by States and political subdivisions and other held-to-maturity securities, management considers (i) issuer bond ratings, (ii) historical loss rates for given bond ratings, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, (iv) internal forecasts and (v) whether or not such securities are guaranteed or pre-refunded by the issuers.

The following tables show the gross unrealized losses for available-for-sale securities, for which an allowance for credit losses has not been recorded, that have been in an unrealized loss position for less than 12 months or 12 months or more:

					March 31, 2026
	Less Than 12 Months				12 Months or More				Total
(Dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available-for-Sale Securities
U.S. Government-sponsored securities	$	359	$	1	$	563	$	7	$	922	$	8
Mortgage-backed securities⁽¹⁾		418,622		2,277		67,673		17,417		486,295		19,694
Collateralized mortgage obligations⁽¹⁾		14,911		269		5,408		224		20,319		493
Municipal securities		3,980		19		-		-		3,980		19
Corporate securities		9,689		46		-		-		9,689		46
Total available-for-sale securities	$	447,561	$	2,612	$	73,644	$	17,648	$	521,205	$	20,260

⁽¹⁾All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government.

					December 31, 2025
	Less Than 12 Months				12 Months or More				Total
(Dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available-for-Sale Securities
U.S. Government-sponsored securities	$	461	$	2	$	676	$	8	$	1,137	$	10
Mortgage-backed securities⁽¹⁾		60,935		244		75,647		17,476		136,582		17,720
Collateralized mortgage obligations⁽¹⁾		13,262		230		5,511		132		18,773		362
Total available-for-sale securities	$	74,658	$	476	$	81,834	$	17,616	$	156,492	$	18,092

⁽¹⁾ All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government.

As of March 31, 2026, the Company held 323 available-for-sale securities of which 55 securities were in an unrealized loss position for less than twelve months and 99 securities were in an unrealized loss position for twelve months or more without an allowance for credit losses. Because the decline in fair value is attributable to changes in interest rates and not credit quality and because the Company does not have the intent to sell and it is likely that the Company will not be required to sell the securities prior to their anticipated recovery at maturity, it has been determined that there is no expected credit loss on these securities. Management evaluates the available-for-sale securities in an unrealized loss position, relying primarily on industry analyst reports and observations of market conditions and interest rate fluctuations.

The following tables present the activity in the allowance for credit losses for held-to-maturity securities by major type:

	March 31, 2026
(Dollars in thousands)	Municipal securities		Mortgage-backed securities		Collateralized mortgage obligations		Total
Allowance for credit losses - securities
Beginning balance	$	450	$	-	$	-	$	450
Provision for credit losses		-		-		-		-
Ending balance	$	450	$	-	$	-	$	450

	December 31, 2025
(Dollars in thousands)	Municipal securities		Mortgage-backed securities		Collateralized mortgage obligations		Total
Allowance for credit losses - securities
Beginning balance	$	450	$	-	$	-	$	450
Provision for credit losses		-		-		-		-
Ending balance	$	450	$	-	$	-	$	450

The amortized cost and estimated fair values of investment securities at March 31, 2026 by contractual final maturity are shown in the following table:

	Available-for-Sale				Held-to-Maturity
(Dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Securities maturing in:
One year or less	$	10,659	$	10,673	$	2,108	$	2,107
After one year through five years		20,371		20,417		18,044		17,977
After five years through ten years		44,050		44,698		17,983		17,196
After ten years		840,615		826,127		670,138		544,234
Total	$	915,695	$	901,915	$	708,273	$	581,514

Maturities are based on the final contractual payment dates, and do not reflect the impact of contractual monthly principal payments, prepayments or early redemptions that may occur. Expected maturities of mortgage-backed and CMO securities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

The Company monitors the credit quality of those held-to-maturity securities not issued by the U.S. government or one of its agencies or government sponsored entities, through the use of credit ratings. Credit ratings are reviewed and updated quarterly. Nonrated municipal investments consist primarily of bonds issued by political subdivisions such as housing authorities and reclamation districts. Nonrated municipal investments are monitored through financial covenants and review of repayment history. As of March 31, 2026, there were no past due principal or interest payments associated with held-to-maturity municipal securities. There were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders’ equity.

The following tables summarize the amortized cost of held-to-maturity municipal securities by credit rating as of the dates indicated:

	Held-to-Maturity
	Amortized Cost
(Dollars in thousands)	AAA/AA/A		BBB/BB/B		Not Rated		Total
March 31, 2026

Municipal securities	$	18,414	$	937	$	50,138	$	69,489
Total	$	18,414	$	937	$	50,138	$	69,489

	Held-to-Maturity
	Amortized Cost
(Dollars in thousands)	AAA/AA/A			BBB/BB/B			Not Rated			Total
December 31, 2025

Municipal securities		$	18,562		$	935		$	50,667		$	70,164
Total		$	18,562		$	935		$	50,667		$	70,164

Proceeds from sales and calls of investment securities were as follows:

	For the Three Months Ended March 31,
(Dollars in thousands)	2026		2025
Gross proceeds	$	-	$	160
Gross gains		-		-
Gross losses		-		-

Pledged Securities

At March 31, 2026, investment securities carried at $731.0 million were pledged to secure public deposits, Federal Home Loan Bank (“FHLB”) borrowings, and other government agency deposits as required by law. This amount was $673.8 million at December 31, 2025.