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INVESTMENT SECURITIES
 12 Months Ended
Dec. 31, 2024
Investments, Debt and Equity Securities [Abstract]  
INVESTMENT SECURITIES INVESTMENT SECURITIES
At December 31, 2024 and 2023, all investment securities were classified as AFS. The following table summarizes amortized cost and fair value of AFS securities, and the corresponding amounts of gross unrealized gains and losses recognized in AOCI and the ACL at December 31, 2024 and 2023:
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Allowance for Credit LossesFair Value
December 31, 2024
U.S. Treasury securities$20,043 $— $1,980 $— $18,063 
U.S. government agencies2,953 100 — — 3,053 
States and political subdivisions220,418 10 20,400 — 200,028 
GSE residential MBSs155,793 52 4,297 — 151,548 
GSE commercial MBSs8,570 243 21 — 8,792 
GSE residential CMOs
331,016 485 6,809 — 324,692 
Non-agency CMOs35,548 202 2,466 — 33,284 
Asset-backed88,450 655 1,002 — 88,103 
Corporate bonds1,935 19 — — 1,954 
Other194 — — — 194 
Totals$864,920 $1,766 $36,975 $— $829,711 
December 31, 2023
U.S. Treasury securities$20,057 $— $2,217 $— $17,840 
U.S. government agencies
3,994 157 — — 4,151 
States and political subdivisions221,624 28 18,530 — 203,122 
GSE residential MBSs61,669 — 4,037 — 57,632 
GSE commercial MBSs4,387 356 — — 4,743 
GSE residential CMOs
79,284 18 6,200 — 73,102 
Non-agency CMOs48,162 316 3,809 — 44,669 
Asset-backed109,786 442 2,094 — 108,134 
Other126 — — — 126 
Totals$549,089 $1,317 $36,887 $— $513,519 
The following table summarizes investment securities with unrealized losses at December 31, 2024 and 2023, aggregated by major security type and length of time in a continuous unrealized loss position.
 Less Than 12 Months12 Months or MoreTotal
# of Securities
Fair
Value
Unrealized
Losses
# of Securities
Fair
Value
Unrealized
Losses
# of Securities
Fair
Value
Unrealized
Losses
December 31, 2024
U.S. Treasury securities— $— $— 3 $18,063 $1,980 3 $18,063 $1,980 
States and political subdivisions13 10,080 131 42 189,448 20,269 55 199,528 20,400 
GSE residential MBSs68 85,836 1,117 15 55,579 3,180 83 141,415 4,297 
GSE commercial MBS3 2,963 21 — — — 3 2,963 21 
GSE residential CMOs52 158,439 729 15 56,443 6,080 67 214,882 6,809 
Non-agency CMOs2 8,816 218 4 16,636 2,248 6 25,452 2,466 
Asset-backed4 11,964 17 9 44,130 985 13 56,094 1,002 
Totals
142 $278,098 $2,233 88 $380,299 $34,742 230 $658,397 $36,975 
December 31, 2023
U.S. Treasury securities— $0 $0 3 $17,840 $2,217 3 $17,840 $2,217 
States and political subdivisions4 2,419 53 40 199,933 18,477 44 202,352 18,530 
GSE residential MBSs— — — 15 57632 4037 15 57,632 4037 
GSE residential CMOs4 12,710 186 14 56,765 6,014 18 69,475 6,200 
Non-agency CMOs3 11,531 83 4 16,334 3,726 7 27,865 3,809 
Asset-backed1 865 4 15 74,407 2,090 16 75,272 2,094 
Totals
12 $27,525 $326 91 $422,911 $36,561 103 $450,436 $36,887 

On a quarterly basis, the Company conducts an impairment evaluation on AFS securities to determine whether the Company has the intent to sell the security or it is more likely than not that it will be required to sell the security before recovery. If these situations apply, the guidance requires the Company to reduce the security's amortized cost basis down to its fair value through earnings. The Company also evaluates the unrealized losses on AFS securities to determine if a security's decline in fair value below its amortized cost basis is due to credit factors. The evaluation is based upon factors such as the creditworthiness of the underlying issuers, performance of the underlying collateral, if applicable, and the level of credit support in the security structure. Management also evaluates other factors and circumstances that may be indicative of a decline in the fair value of the security due to a credit factor. This includes, but is not limited to, an evaluation of the type of security, length of time and extent to which the fair value has been less than cost and near-term prospects of the issuer. If this assessment indicates that a credit loss exists, the present value of the expected cash flows of the security is compared to the amortized cost basis of the security. Under the CECL standard, if the present value of the cash flows expected to be collected is less than the amortized cost, an ACL is recorded for the credit loss, which is limited by the amount that the fair value is less than the amortized cost basis. Any additional amount of loss would be due to non-credit factors and is recorded in AOCI, net of taxes. If a credit loss is recognized in earnings, subsequent improvements to the expectation of collectability will be recognized through the ACL. If the fair value of the security increases above its amortized cost, the unrealized gain will be recorded in AOCI, net of taxes, on the consolidated balance sheets.
The Company did not record an ACL on the AFS securities at December 31, 2024 and 2023. As of these periods, the Company considers the unrealized losses on the AFS securities to be related to fluctuations in market conditions, primarily interest rates, and not reflective of deterioration in credit. In addition, the Company maintains that it has the intent and ability to hold these AFS securities until the amortized cost is recovered and it is more likely than not that any of AFS securities in an unrealized loss position would not be required to be sold. At December 31, 2024 and 2023, unrealized losses were higher than prior periods due to market uncertainty resulting from inflation and higher interest rates from the time of the security purchase.
U.S. Treasury Securities. The unrealized losses presented in the table above have been caused by an increase in rates from the time these securities were purchased. Management considers the full faith and credit of the U.S. government in determining whether declines in fair value are due to credit factors.
States and Political Subdivisions. The unrealized losses presented in the table above have been caused by a rise in interest rates from the time these securities were purchased. Management evaluates the financial performance of the issuers, including the investment rating, the state of the issuer of the security and other credit support in determining whether declines in fair value are due to credit factors.
GSE Residential CMOs, GSE Residential MBS and GSE Commercial MBS. The unrealized losses presented in the table above have been caused by a widening of spreads and a rise in interest rates from the time these securities were purchased. The contractual terms of these securities do not permit the issuer to settle the securities at a price less than its par value basis.
Non-agency CMOs. The unrealized losses presented in the table above were caused by a widening of spreads and a rise in interest rates from the time the securities were purchased. Management considers the investment rating and other credit support in its evaluation, including delinquencies and credit enhancements, in determining whether declines in fair value are due to credit factors.
Asset-backed. The unrealized losses presented in the table above were caused by a widening of spreads and a rise in the interest rates from the time the securities were purchased. Management considers the investment rating and other credit support, in its evaluation, including delinquencies and credit enhancements, in determining whether declines in fair value are due to credit factors.
The Company does not intend to sell the aforementioned investment securities with unrealized losses and it is more likely than not that the Company will not be required to sell them before recovery of their amortized cost basis, which may be maturity. In addition, the unrealized losses are not credit related. Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at December 31, 2024.
The following table summarizes amortized cost and fair value of investment securities by contractual maturity at December 31, 2024. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.
Amortized CostFair Value
Due in one year or less$— $— 
Due after one year through five years42,402 39,164 
Due after five years through ten years51,758 46,721 
Due after ten years151,383 137,407 
CMOs and MBSs530,927 518,316 
Asset-backed88,450 88,103 
$864,920 $829,711 
The following table summarizes proceeds from sales of investment securities and gross gains and gross losses for the years ended December 31, 2024, 2023 and 2022.
202420232022
Proceeds from sale of investment securities$162,669 $22,006 $31,330 
Gross gains271 8 35 
Gross losses22 55 25 
During the year ended December 31, 2024, the Company recorded net investment security gains of $249 thousand from a security redemption resulting in a gain of $181 thousand and mark-to-market activity on an equity security. The Company recorded net investment security losses of $47 thousand and net investment security gains of $10 thousand for years ended December 31, 2023 and 2022, respectively. During 2024, the portfolio was restructured to align the interest rate risk and credit profile for the combined balance sheet from the Merger. The Company sold investment securities with a principal balance of $162.7 million in proximity to the Merger date for no gain or loss as the fair value of the investment securities approximated the book value. During 2023, the Company sold nine securities with a principal balance of $22.0 million for a net loss of $44 thousand and during 2022, the Company recorded a loss of $171 thousand on a call of a non-agency CMO. Investment securities with a fair value of $669.2 million and $439.7 million at December 31, 2024 and 2023, respectively, were pledged to secure public funds and for other purposes as required or permitted by law.