v3.25.4
INVESTMENTS
 12 Months Ended
Dec. 31, 2025
Investments, Debt and Equity Securities [Abstract]  
INVESTMENTS

NOTE 3 – INVESTMENTS

The amortized cost and fair value of available-for-sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows.

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Allowance for Credit Losses

 

 

Fair Value

 

December 31, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government-sponsored entities

 

$

25,960

 

 

$

338

 

 

$

—

 

 

$

—

 

 

$

26,298

 

U.S. Treasury securities

 

 

35,134

 

 

 

116

 

 

—

 

 

—

 

 

 

35,250

 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government-sponsored residential mortgage-backed securities

 

 

763,827

 

 

 

9,598

 

 

 

(1,280

)

 

—

 

 

 

772,145

 

Private label residential mortgage-backed securities

 

 

4,441

 

 

—

 

 

 

(115

)

 

—

 

 

 

4,326

 

Corporate

 

 

92,142

 

 

 

734

 

 

 

(1,078

)

 

—

 

 

 

91,798

 

Small Business Administration loan pools

 

 

80,199

 

 

 

130

 

 

 

(124

)

 

—

 

 

 

80,205

 

State and political subdivisions

 

 

20,767

 

 

 

70

 

 

 

(291

)

 

—

 

 

 

20,546

 

 

 

$

1,022,470

 

 

$

10,986

 

 

$

(2,888

)

 

$

—

 

 

$

1,030,568

 

December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government-sponsored entities

 

$

71,173

 

 

$

68

 

 

$

(6,147

)

 

$

—

 

 

$

65,094

 

U.S. Treasury securities

 

 

86,523

 

 

 

118

 

 

 

(78

)

 

—

 

 

 

86,563

 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government-sponsored residential mortgage-backed securities

 

 

600,558

 

 

 

887

 

 

 

(35,935

)

 

—

 

 

 

565,510

 

Private label residential mortgage-backed securities

 

 

144,971

 

 

—

 

 

 

(20,307

)

 

—

 

 

 

124,664

 

Corporate

 

 

61,947

 

 

 

177

 

 

 

(3,472

)

 

—

 

 

 

58,652

 

Small Business Administration loan pools

 

 

30,212

 

 

 

59

 

 

 

(343

)

 

—

 

 

 

29,928

 

State and political subdivisions

 

 

83,868

 

 

 

27

 

 

 

(9,851

)

 

—

 

 

 

74,044

 

 

 

$

1,079,252

 

 

$

1,336

 

 

$

(76,133

)

 

$

—

 

 

$

1,004,455

 

The December 31, 2024, table has been revised to correct the presentation of securities with an amortized cost of $23,670 and fair value of $23,662. The securities, which are included in small business administration loan pools, were previously included in government-sponsored residential mortgage-backed securities.

The amortized cost and fair value of held-to-maturity securities and the related gross unrealized gains and losses were as follows.

 

 

 

Amortized
Cost

 

 

Gross
Unrecognized
Gains

 

 

Gross
Unrecognized
Losses

 

 

Allowance for Credit Losses

 

 

Fair Value

 

December 31, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held-to-maturity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government-sponsored residential mortgage-backed securities

 

$

3,967

 

 

$

131

 

 

$

—

 

 

$

—

 

 

$

4,098

 

State and political subdivisions

 

 

1,281

 

 

 

30

 

 

—

 

 

—

 

 

$

1,311

 

 

 

$

5,248

 

 

$

161

 

 

$

—

 

 

$

—

 

 

$

5,409

 

December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held-to-maturity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government-sponsored residential mortgage-backed securities

 

$

3,932

 

 

$

3

 

 

$

(26

)

 

$

—

 

 

$

3,909

 

State and political subdivisions

 

 

1,285

 

 

 

26

 

 

 

(6

)

 

—

 

 

 

1,305

 

 

 

$

5,217

 

 

$

29

 

 

$

(32

)

 

$

—

 

 

$

5,214

 

 

The fair value and amortized cost of debt securities at December 31, 2025, by contractual maturity, is shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately.

 

 

Available-for-Sale

 

 

Held-to-Maturity

 

 

 

Amortized
Cost

 

 

Fair
Value

 

 

Amortized
Cost

 

 

Fair
Value

 

Within one year

 

$

43,009

 

 

$

43,093

 

 

$

—

 

 

$

—

 

One to five years

 

 

43,813

 

 

 

44,357

 

 

 

—

 

 

 

—

 

Five to ten years

 

 

80,723

 

 

 

80,168

 

 

 

170

 

 

 

170

 

After ten years

 

 

6,458

 

 

 

6,274

 

 

 

1,111

 

 

 

1,141

 

SBA loan pools

 

 

80,199

 

 

 

80,205

 

 

 

—

 

 

 

—

 

Mortgage-backed securities

 

 

768,268

 

 

 

776,471

 

 

 

3,967

 

 

 

4,098

 

Total debt securities

 

$

1,022,470

 

 

$

1,030,568

 

 

$

5,248

 

 

$

5,409

 

The following table shows the carrying value and fair value of securities pledged as collateral, to secure public deposits, borrowings from the Federal Reserve Bank and retail purchase obligations at December 31, 2025, and December 31, 2024.

 

 

 

December 31, 2025

 

 

December 31, 2024

 

 

 

Book Value

 

 

Fair Value

 

 

Book Value

 

 

Fair Value

 

Public fund deposits

 

$

785,200

 

 

$

793,014

 

 

$

732,935

 

 

$

690,855

 

Federal Home Loan Bank pledging

 

 

—

 

 

 

—

 

 

 

104,888

 

 

 

90,406

 

Federal Reserve Bank borrowings

 

 

2,002

 

 

 

2,042

 

 

 

10,481

 

 

 

10,358

 

Retail repurchase agreements

 

 

40,898

 

 

 

41,481

 

 

 

49,021

 

 

 

45,249

 

Total securities pledged

 

$

828,100

 

 

$

836,537

 

 

$

897,325

 

 

$

836,868

 

The following tables show gross unrealized losses and fair value aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2025, and 2024.

 

 

 

Less Than 12 Months

 

 

12 Months or More

 

 

Total

 

 

 

Fair
Value

 

 

Unrealized
Loss

 

 

Fair
Value

 

 

Unrealized
Loss

 

 

Fair
Value

 

 

Unrealized
Loss

 

December 31, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government-sponsored entities

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

U.S. Treasury securities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government-sponsored residential mortgage-backed securities

 

 

129,917

 

 

 

(519

)

 

 

28,089

 

 

 

(761

)

 

 

158,006

 

 

 

(1,280

)

Private label residential mortgage-backed securities

 

 

—

 

 

 

—

 

 

 

4,326

 

 

 

(115

)

 

 

4,326

 

 

 

(115

)

Corporate

 

 

11,837

 

 

 

(73

)

 

 

24,225

 

 

 

(1,005

)

 

 

36,062

 

 

 

(1,078

)

Small Business Administration loan pools

 

 

23,308

 

 

 

(52

)

 

 

8,629

 

 

 

(72

)

 

 

31,937

 

 

 

(124

)

State and political subdivisions

 

 

2,807

 

 

 

(109

)

 

 

9,460

 

 

 

(182

)

 

 

12,267

 

 

 

(291

)

Total

 

$

167,869

 

 

$

(753

)

 

$

74,729

 

 

$

(2,135

)

 

$

242,598

 

 

$

(2,888

)

December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government-sponsored entities

 

$

15,084

 

 

$

(62

)

 

$

32,195

 

 

$

(6,085

)

 

$

47,279

 

 

$

(6,147

)

U.S. Treasury securities

 

 

2,940

 

 

 

(1

)

 

 

19,943

 

 

 

(77

)

 

 

22,883

 

 

 

(78

)

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government-sponsored residential mortgage-backed securities

 

 

148,954

 

 

 

(1,533

)

 

 

268,364

 

 

 

(34,402

)

 

 

417,318

 

 

 

(35,935

)

Private label residential mortgage-backed securities

 

 

—

 

 

 

—

 

 

 

124,664

 

 

 

(20,307

)

 

 

124,664

 

 

 

(20,307

)

Corporate

 

 

1,765

 

 

 

(34

)

 

 

47,022

 

 

 

(3,438

)

 

 

48,787

 

 

 

(3,472

)

Small Business Administration loan pools

 

 

23,812

 

 

 

(70

)

 

 

2,284

 

 

 

(273

)

 

 

26,096

 

 

 

(343

)

State and political subdivisions

 

 

7,948

 

 

 

(89

)

 

 

62,119

 

 

 

(9,762

)

 

 

70,067

 

 

 

(9,851

)

Total

 

$

200,503

 

 

$

(1,789

)

 

$

556,591

 

 

$

(74,344

)

 

$

757,094

 

 

$

(76,133

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less Than 12 Months

 

 

12 Months or More

 

 

Total

 

 

 

Fair
Value

 

 

Unrecognized
Loss

 

 

Fair
Value

 

 

Unrecognized
Loss

 

 

Fair
Value

 

 

Unrecognized
Loss

 

December 31, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held-to-maturity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage-backed (issued by government-sponsored entities)

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

State and political subdivisions

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held-to-maturity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage-backed (issued by government-sponsored entities)

 

$

853

 

 

$

(26

)

 

$

—

 

 

$

—

 

 

$

853

 

 

$

(26

)

State and political subdivisions

 

 

167

 

 

 

(6

)

 

 

—

 

 

 

—

 

 

 

167

 

 

 

(6

)

Total

 

$

1,020

 

 

$

(32

)

 

$

—

 

 

$

—

 

 

$

1,020

 

 

$

(32

)

The tables above present unrealized losses on available-for-sale securities since the date of purchase, independent of the impact associated with changes in cost basis upon transfer from the available-for-sale designation to the held-to-maturity designation. As of December 31, 2025, the Company held 76 available-for-sale securities in an unrealized loss position. There were no held-to-maturity securities in an unrecognized loss position.

Unrealized losses on securities have not been recognized into income because the security issuers are of high credit quality, management does not intend to sell and it is more likely than not that the Company will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates. The fair value is expected to recover as the securities approach maturity.

The Company's available-for-sale and held-to-maturity investments that carry some form of credit risk are the investments in private label residential mortgage-backed securities, corporate securities and state and political subdivisions securities.

The Company's private label residential mortgage-backed exposure consists of one security held by the Company and is senior in the capital structure, carry substantial credit enhancement and is 20% risk weighted by the Simplified Supervisory Formula Approach ("SSFA"). At December 31, 2025, the Company does not anticipate any credit losses in the private label residential mortgage-backed securities portfolio.

The Company's corporate debt exposure consists of 40 separate positions in U.S. financial institutions, all of which the Company has determined to be investment grade either by a Nationally Recognized Statistical Ratings Organization ("NRSRO") or by internal review. Substantially all of the positions are subordinated debt issued by bank holding companies. The Company periodically reviews financial data of the issuers to ensure their continued investment grade status. At December 31, 2025, the Company does not anticipate any credit losses in the corporate debt securities portfolio.

The Company's portfolio of state and political subdivisions securities is comprised of 61 positions of which 65% of the positions are rated "A" or better by a NRSRO, and 44% of the overall portfolio is made up of general obligation bonds. The Company periodically reviews financial data of the entities and regularly monitors credit ratings changes of the entities. At December 31, 2025, the Company does not anticipate any credit losses in the state and political subdivisions securities portfolio.

The proceeds from sales and the associated gains and losses on available-for-sale securities reclassified from other comprehensive income to income are listed below.

 

 

2025

 

 

2024

 

 

2023

 

Proceeds

 

$

436,331

 

 

$

16,133

 

 

$

490,108

 

Gross gains

 

 

—

 

 

 

31

 

 

 

—

 

Gross losses

 

 

53,293

 

 

 

298

 

 

 

52,013

 

Income tax expense (benefit) on net realized gains (losses)

 

 

(13,126

)

 

 

(65

)

 

 

(12,740

)

The Company also invests in several other investments, including investments in stocks and partnerships, which are included in other assets. The following table shows the various investment balances and method of accounting at December 31, 2025 and 2024.

 

 

December 31, 2025

 

 

December 31, 2024

 

Investments in equity securities

 

 

 

 

 

 

Accounted for at fair value through net income

 

$

1,182

 

 

$

1,009

 

Accounted for at amortized cost assessed for impairment

 

 

2,362

 

 

 

1,982

 

Total investments in stocks

 

 

3,544

 

 

 

2,991

 

Investments in partnerships

 

 

 

 

 

 

Accounted for at equity method

 

 

3,037

 

 

 

2,500

 

Accounted for at hypothetical liquidation book value

 

 

1,306

 

 

 

1,961

 

Accounted for at proportional amortization

 

 

26,299

 

 

 

23,498

 

Total investments in partnerships

 

 

30,642

 

 

 

27,959

 

Total other investments

 

$

34,186

 

 

$

30,950

 

 

The unrealized gain/(loss) for investments accounted for at fair value that were still held at the reporting period were $159, $197 and $104 at December 31, 2025, 2024, and 2023.

 

The Company invests in certain qualified affordable housing projects, solar tax credits, and historic tax credits which are designated as being accounted for under proportional amortization. These investment balances are reflected in the other assets line in the consolidated balance sheets. Total unfunded commitments accounted for using the proportional amortization method totaled $10,208, $12,067 and $19,315 at December 31, 2025, 2024, and 2023. The Company expects to fulfill these commitments during the years 2026 through 2040.

The following table discloses the financial statement impact of tax credit investments at December 31, 2025, 2024 and 2023.

 

 

Income Tax Credits Recognized During Period (a)

 

 

Other Income Tax Benefits (a)

 

 

Total Tax Benefits

 

 

Investment Amortization Included in Income Tax Expense

 

December 31, 2025

 

 

 

 

 

 

 

 

 

 

 

 

Investments and tax credit structures:

 

 

 

 

 

 

 

 

 

 

 

 

Included in proportional amortization

 

$

(6,554

)

 

$

(1,323

)

 

$

(7,878

)

 

$

7,230

 

Not included in proportional amortization

 

$

—

 

 

$

174

 

 

$

174

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Reported in income tax expense on consolidated statements of income and reported in net change in other assets on consolidated statements of cash flows.

 

 

 

 

Income Tax Credits Recognized During Period (a)

 

 

Other Income Tax Benefits (a)

 

 

Total Tax Benefits

 

 

Investment Amortization Included in Income Tax Expense

 

December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

Investments and tax credit structures:

 

 

 

 

 

 

 

 

 

 

 

 

Included in proportional amortization

 

$

(10,757

)

 

$

(844

)

 

$

(11,601

)

 

$

9,299

 

Not included in proportional amortization

 

$

8

 

 

$

210

 

 

$

218

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Reported in income tax expense on consolidated statements of income and reported in net change in other assets on consolidated statements of cash flows.

 

 

 

 

 

Income Tax Credits Recognized During Period (a)

 

 

Other Income Tax Benefits (a)

 

 

Total Tax Benefits

 

 

Investment Amortization Included in Income Tax Expense

 

December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

Investments and tax credit structures:

 

 

 

 

 

 

 

 

 

 

 

 

Included in proportional amortization

 

$

(11,734

)

 

$

(1,615

)

 

$

(13,349

)

 

$

11,865

 

Not included in proportional amortization

 

$

(3,745

)

 

$

(664

)

 

$

(4,409

)

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Reported in income tax expense on consolidated statements of income and reported in net change in other assets on consolidated statements of cash flows.

 

 

The investments and tax credit structures that are included in proportional amortization are low income housing tax credits, historic tax credits and solar tax credits. The amortization plus the total tax benefits for these investments are recorded in the income tax expense line in the consolidated statements of income and change in other assets in the consolidated statements of cash flows. Any cash distributions received on these investments are recorded to the other non-interest income line in the consolidated statements of income and net redemptions or purchases of correspondent and miscellaneous other stock line in the consolidated statements of cash flows. The investments and tax credit structures not included in proportional amortization have the losses reported in other non-interest expense and gains/losses from regular distributions and distributions from liquidation are reported in other non-interest income consolidated statements of income. Net redemptions or purchases of these investment and tax credit structures is reported in net redemptions (purchases) of correspondent and miscellaneous other stock in the consolidated statements of cash flows. The amortization expense for the year ended December 31, 2025, and 2024 is included in the table above in the investment amortization included in income tax expense. Additionally, during the years ended December 31, 2025, 2024, and 2023 the Company recognized tax credits from its investment in affordable housing tax credits of $1,994, $1,793 and $1,327.

Contingent contributions for investment tax credit structures not subject to proportional amortization were zero for both years ended December 31, 2025, and 2024.