
($ in thousands)	September 30, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale securities:
U.S. Treasury	$	5,294	$	—	$	113	$	5,181
Obligations of U.S. government agencies and sponsored entities	109,409		—		10,829		98,580
Tax-exempt and taxable obligations of states and municipal subdivisions	459,912		562		39,773		420,701
Mortgage-backed securities - residential	312,607		282		26,419		286,470
Mortgage-backed securities - commercial	228,888		2,454		15,377		215,965
Corporate obligations	35,553		—		2,436		33,117
Total available-for-sale	$	1,151,663	$	3,298	$	94,947	$	1,060,014
Held-to-maturity:
U.S. Treasury	$	52,207	$	—	$	1,306	$	50,901
Obligations of U.S. government agencies and sponsored entities	32,946		3		1,003		31,946
Tax-exempt and taxable obligations of states and municipal subdivisions	245,240		8,980		12,028		242,192
Mortgage-backed securities - residential	131,045		—		11,177		119,868
Mortgage-backed securities - commercial	130,890		11		9,408		121,493
Corporate obligations	10,000		—		1,650		8,350
Total held-to-maturity	$	602,328	$	8,994	$	36,572	$	574,750


($ in thousands)	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale securities:
U.S. Treasury	$	16,985	$	—	$	310	$	16,675
Obligations of U.S. government agencies sponsored entities	119,868		1		14,946		104,923
Tax-exempt and taxable obligations of states and municipal subdivisions	486,293		449		48,276		438,466
Mortgage-backed securities - residential	297,735		11		34,430		263,316
Mortgage-backed securities - commercial	198,944		76		20,675		178,345
Corporate obligations	41,347		—		3,750		37,597
Total available-for-sale	$	1,161,172	$	537	$	122,387	$	1,039,322
Held-to-maturity:
U.S. Treasury	$	89,688	$	—	$	2,804	$	86,884
Obligations of U.S. government agencies and sponsored entities	33,659		—		1,803		31,856
Tax-exempt and taxable obligations of states and municipal subdivisions	246,908		9,566		14,697		241,777
Mortgage-backed securities - residential	141,573		—		14,237		127,336
Mortgage-backed securities - commercial	132,711		—		12,334		120,377
Corporate obligations	10,000		—		2,286		7,714
Total held-to-maturity	$	654,539	$	9,566	$	48,161	$	615,944

Quarterly, the Company evaluates if a security has a fair value less than its amortized cost. Once these securities are identified, in order to determine whether a decline in fair value resulted from a credit loss or other factors, the Company performs further analysis as outlined below:

•If the Company determines that a credit loss exists, the credit portion of the allowance will be measured using the discounted cash flow (“DCF”) analysis using the effective interest rate. The amount of credit loss the Company records will be limited to the amount by which the amortized cost exceeds the fair value. The allowance for the calculated credit loss will be monitored going forward for further credit deterioration or improvement.

Accrued interest receivable is excluded from the estimate of credit losses for securities AFS. Accrued interest receivable totaled $4.4 million and $5.2 million at September 30, 2024 and December 31, 2023, respectively and was reported in interest receivable on the accompanying Consolidated Balance Sheet.

At September 30, 2024 and December 31, 2023, the potential credit loss exposure was $216 thousand and $205 thousand, respectively and consisted of tax-exempt and taxable obligations of states and municipal subdivisions and corporate obligations securities. After applying appropriate probability of default (“PD”) and loss given default (“LGD”) assumptions, the total amount of current expected credit losses was deemed immaterial. Therefore, no reserve was recorded at September 30, 2024.

Accrued interest receivable is excluded from the estimate of credit losses for securities held-to-maturity. Accrued interest receivable totaled $2.6 million and $3.4 million at September 30, 2024 and December 31, 2023, respectively and was reported in interest receivable on the accompanying Consolidated Balance Sheet.

At both September 30, 2024 and December 31, 2023, the Company had no securities held-to-maturity that were past due 30 days or more as to principal or interest payments. The Company had no securities held-to-maturity classified as nonaccrual at both September 30, 2024 and December 31, 2023.

The Company monitors the credit quality of the debt securities held-to-maturity through the use of credit ratings. The Company monitors the credit ratings on a quarterly basis. The following table summarizes the amortized cost of debt securities held-to-maturity at September 30, 2024 and December 31, 2023, aggregated by credit quality indicators.


($ in thousands)	September 30, 2024
	Amortized Cost		Fair Value
Available-for-sale:
Due less than one year	$	40,601	$	40,444
Due after one year through five years	130,708		126,089
Due after five years through ten years	321,043		288,203
Due greater than ten years	117,816		102,843
Mortgage-backed securities - residential	312,607		286,470
Mortgage-backed securities - commercial	228,888		215,965
Total	$	1,151,663	$	1,060,014

Held-to-maturity:
Due less than one year	$	44,181	$	43,784
Due after one year through five years	30,815		29,515
Due after five years through ten years	61,196		58,841
Due greater than ten years	204,201		201,249
Mortgage-backed securities - residential	131,045		119,868
Mortgage-backed securities - commercial	130,890		121,493
Total	$	602,328	$	574,750

The following table summarizes securities in an unrealized loss position for which an allowance for credit losses has not been recorded at September 30, 2024 and December 31, 2023. The securities are aggregated by major security type and length of time in a continuous unrealized loss position:


($ in thousands)	September 30, 2024
	Losses < 12 Months				Losses 12 Months or >				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Available-for-sale:
U.S. Treasury	$	—	$	—	$	5,181	$	113	$	5,181	$	113
Obligations of U.S. government agencies and sponsored entities	167		1		98,267		10,828		98,434		10,829
Tax-exempt and taxable obligations of state and municipal subdivisions	12,322		1,364		368,468		38,409		380,790		39,773
Mortgage-backed securities - residential	15		—		239,105		26,419		239,120		26,419
Mortgage-backed securities - commercial	466		22		157,632		15,355		158,098		15,377
Corporate obligations	—		—		33,117		2,436		33,117		2,436
Total	$	12,970	$	1,387	$	901,770	$	93,560	$	914,740	$	94,947

Held-to-maturity:
U.S. Treasury	$	—	$	—	$	50,901	$	1,306	$	50,901	$	1,306
Obligations of U.S. government agencies and sponsored entities	—		—		31,166		1,003		31,166		1,003
Tax-exempt and taxable obligations of state and municipal subdivisions	7,297		85		101,870		11,943		109,167		12,028
Mortgage-backed securities - residential	—		—		119,868		11,177		119,868		11,177
Mortgage-backed securities - commercial	—		—		120,560		9,408		120,560		9,408
Corporate obligations	—		—		8,350		1,650		8,350		1,650
Total	$	7,297	$	85	$	432,715	$	36,487	$	440,012	$	36,572


($ in thousands)	December 31, 2023
	Losses < 12 Months				Losses 12 Months or >				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Available-for-sale:
U.S. Treasury	$	—	$	—	$	16,675	$	310	$	16,675	$	310
Obligations of U.S. government agencies and sponsored entities	123		—		104,495		14,946		104,618		14,946
Tax-exempt and taxable obligations of state and municipal subdivisions	20,879		1,479		389,113		46,797		409,992		48,276
Mortgage-backed securities - residential	222		2		262,012		34,428		262,234		34,430
Mortgage-backed securities - commercial	2,896		52		170,256		20,623		173,152		20,675
Corporate obligations	—		—		37,597		3,750		37,597		3,750
Total	$	24,120	$	1,533	$	980,148	$	120,854	$	1,004,268	$	122,387

Held-to-maturity:
U.S. Treasury	$	—	$	—	$	86,884	$	2,804	$	86,884	$	2,804
Obligations of U.S. government agencies and sponsored entities	747		5		31,109		1,798		31,856		1,803
Tax-exempt and taxable obligations of state and municipal subdivisions	10,472		3,949		91,480		10,748		101,952		14,697
Mortgage-backed securities - residential	—		—		127,336		14,237		127,336		14,237
Mortgage-backed securities - commercial	920		2		119,457		12,332		120,377		12,334
Corporate obligations	—		—		7,714		2,286		7,714		2,286
Total	$	12,139	$	3,956	$	463,980	$	44,205	$	476,119	$	48,161

At September 30, 2024 and December 31, 2023, the Company’s securities portfolio consisted of 995 and 1,125 securities, respectively, which were in an unrealized loss position. Securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. The unrealized losses shown above are due to increases in market rates over the yields available at the time of purchase of the underlying securities and not credit quality. As of September 30, 2024 and December 31, 2023, the Company determined that it does not intend to sell and is not currently aware of any circumstances which will require it to sell any of the securities that are in an unrealized loss position prior to recovery of their amortized cost basis. As such, no allowance for credit losses was needed at September 30, 2024 and December 31, 2023.

In the third quarter of 2024, the Company reclassified one of its securities from AFS to Other Securities. The equity security consists of our investment in a market-rate bond mutual fund that invests in high quality fixed income bonds, mainly government agency securities whose proceeds are designed to positively impact community development throughout the United States. The mutual fund focuses exclusively on providing affordable housing to low- and moderate-income borrowers and renters, including Majority Minority Census Tracts. The 2023 financial statements have been reclassified for comparative purposes to conform to the current period financial statement presentation.

During the three months ended September 30, 2024, we recognized unrealized losses of $222 thousand and none during the same period in 2023 in net income on our equity securities. During the nine months ended September 30, 2024, we recognized an unrealized loss of $222 thousand and none for the same period in 2023 in net income on our equity securities. These unrealized gains and losses are recorded in the gain/loss on securities on the Consolidated Statements of Income.