v3.25.4
Investment Securities
 12 Months Ended
Dec. 31, 2025
Investments, Debt and Equity Securities [Abstract]  
Investment Securities INVESTMENT SECURITIES
  
The following tables summarize the amortized cost and fair value of securities available-for-sale and securities held-for-maturity at December 31, 2025 and 2024 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and the allowance for credit losses on held-to-maturity securities (in thousands):
 December 31, 2025
 Amortized
Cost		Gross  Unrealized
Gains		Gross  Unrealized
Losses		Estimated
Fair Value		Allowance for Credit Losses
Available-for-Sale Securities   
Debt Securities:   
U.S. Treasury securities$9,996 $— $(487)$9,509 $— 
U.S. Government agencies66 — (3)63 — 
Obligations of states and political subdivisions180,395 5 (14,439)165,961 — 
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations67,588 94 (2,985)64,697 — 
Private label mortgage and asset backed securities250,575 61 (21,967)228,669 — 
Corporate debt securities463 48 — 511 — 
 $509,083 $208 $(39,881)$469,410 $— 

 December 31, 2025
 Amortized
Cost		Gross  Unrealized
Gains		Gross  Unrealized
Losses		Estimated
Fair Value		Allowance for Credit Losses
Held to Maturity Securities    
Debt Securities:    
Obligations of states and political subdivisions$192,308 $55 $(13,595)$178,768 $20 
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations11,443 — (1,632)9,811 — 
Private label mortgage and asset backed securities51,397 — (3,282)48,115 25 
Corporate debt securities32,409 59 (1,513)30,955 395 
 $287,557 $114 $(20,022)$267,649 $440 

 December 31, 2024
 Amortized
Cost
Gross  Unrealized
 Gains
Gross  Unrealized
Losses
Estimated
 Fair Value
Allowance for Credit Losses
Available-for-Sale Securities    
Debt Securities:    
U.S. Treasury securities$9,994 $— $(936)$9,058 $— 
U.S. Government agencies70 — (5)65 — 
Obligations of states and political subdivisions183,766 — (19,126)164,640 — 
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations76,732 8 (4,438)72,302 — 
Private label mortgage and asset backed securities265,302 6 (34,753)230,555 — 
Corporate debt securities470 23 — 493 
`$536,334 $37 $(59,258)$477,113 $— 
December 31, 2024
Amortized
Cost		Gross  Unrealized
Gains		Gross  Unrealized
Losses		Estimated
Fair Value		Allowance for Credit Losses
Held to Maturity Securities
Debt Securities:
Obligations of states and political subdivisions192,156 $54 $(17,392)$174,818 $12 
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations11,095 — (2,100)8,995 — 
Private label mortgage and asset backed securities53,066 — (5,633)47,433 8 
Corporate debt securities46,198 — (2,876)43,322 1,136 
$302,515 $54 $(28,001)$274,568 $1,156 
 
Proceeds and gross realized (losses)/gains on investment securities for the years ended December 31, 2025, 2024, and 2023 are shown below (in thousands):
 Years Ended December 31,
202520242023
Available-for-Sale Securities   
Proceeds from sales or calls$500 $64,230 $26,361 
Gross realized gains from sales or calls$— $— $— 
Gross realized losses from sales or calls$(41)$(4,199)$(907)

During the second quarter of 2022, the Company re-designated certain securities previously classified as available-for-sale to the held-to-maturity classification. The securities re-designated consisted of obligations of states and political subdivision securities, U.S. Government sponsored entity and agency securities collateralized by residential mortgage obligations, private label mortgage and asset backed securities, and corporate debt securities with a total carrying value of $306.7 million at April 1, 2022. At the time of re-designation, the securities included $25.3 million of pretax unrealized losses in other comprehensive income; which is being amortized over the remaining life of the securities in a manner consistent with the amortization of a premium or discount. As of December 31, 2025, the balance of pretax unrealized losses in other comprehensive income remaining related to these transferred securities was $16.6 million.

As market interest rates or risks associated with an available-for-sale security’s issuer continue to change and impact the actual or perceived values of investment securities, the Company may determine that selling these securities and using proceeds to purchase securities that fit with the Company’s current risk profile is appropriate and beneficial to the Company.    

Losses recognized in 2025 were a result of called securities. Losses recognized in 2024 and 2023 were incurred in order to strategically reposition the investment securities portfolio based on the current rate environment. The securities sold at a loss were acquired when the rate environment was not as volatile. The securities sold were primarily purchased to serve a purpose in the rate environment in which the securities were purchased. The Company addressed risks in the security portfolio by selling these securities and using the proceeds to fund loan growth and enhance on-balance sheet liquidity.

The provision for income taxes includes $12,000, $1,241,000, and $268,000 income tax benefit from the reclassification of unrealized net losses on available-for-sale securities to realized net losses on available-for-sale securities for the years ended December 31, 2025, 2024, and 2023, respectively.

The amortized cost and estimated fair value of available-for-sale and held-to-maturity investment securities at December 31, 2025 and 2024 by contractual maturity are shown in the two tables below (in thousands).  Expected maturities will differ from contractual maturities because the issuers of the securities may 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.
December 31, 2025December 31, 2024
Available-for-Sale SecuritiesAmortized 
Cost		Estimated 
Fair Value		Amortized 
Cost		Estimated 
Fair Value
Within one year$— $— $— $— 
After one year through five years33,826 31,506 15,661 14,056 
After five years through ten years20,068 19,038 33,585 29,670 
After ten years136,497 124,926 144,514 129,972 
 190,391 175,470 193,760 173,698 
Investment securities not due at a single maturity date:  
U.S. Government agencies66 63 70 65 
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations67,588 64,697 76,732 72,302 
Private label mortgage and asset backed securities
250,575 228,669 265,302 230,555 
Corporate debt securities
463 511 470 493 
 $509,083 $469,410 $536,334 $477,113 
December 31, 2025December 31, 2024
Held-to-Maturity SecuritiesAmortized 
Cost		Estimated 
Fair Value		Amortized 
Cost		Estimated 
Fair Value
Within one year$— $— $— $— 
After one year through five years29,165 28,722 24,535 23,368 
After five years through ten years63,908 60,643 60,369 54,685 
After ten years99,235 89,403 107,252 96,765 
192,308 178,768 192,156 174,818 
Investment securities not due at a single maturity date:
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations11,443 9,811 11,095 8,995 
Private label mortgage and asset backed securities
51,397 48,115 53,066 47,433 
Corporate debt securities
32,409 30,955 46,198 43,322 
$287,557 $267,649  $302,515  $274,568 

At December 31, 2025, there were no issuers of private label mortgage securities in which the Company had holdings of securities in amounts greater than 10% of shareholders’ equity.
The following tables summarize the Company’s debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands): 
 December 31, 2025
 Less than 12 Months12 Months or MoreTotal
 Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
Available-for-Sale Securities      
Debt Securities:      
U.S. Treasury securities$— $— $9,509 $(487)$9,509 $(487)
U.S. Government agencies— — 63 (3)63 (3)
Obligations of states and political subdivisions1,257 (68)162,730 (14,371)163,987 (14,439)
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations4,071 (21)50,458 (2,964)54,529 (2,985)
Private label residential mortgage and asset backed securities— — 221,568 (21,967)221,568 (21,967)
 $5,328 $(89)$444,328 $(39,792)$449,656 $(39,881)

 December 31, 2025
 Less than 12 Months12 Months or MoreTotal
 Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
Held-to-Maturity Securities      
Debt Securities:      
Obligations of states and political subdivisions$— $— $174,224 $(13,595)$174,224 $(13,595)
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations— — 9,811 (1,632)9,811 (1,632)
Private label residential mortgage and asset backed securities— — 48,115 (3,282)48,115 (3,282)
Corporate debt securities— — 26,036 (1,513)26,036 (1,513)
 $— $— $258,186 $(20,022)$258,186 $(20,022)
 

 December 31, 2024
 Less than 12 Months12 Months or MoreTotal
 Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
Available-for-Sale Securities      
Debt Securities:      
U.S. Treasury securities$— $— $9,058 $(936)$9,058 $(936)
U.S. Government agencies— — 65 (5)65 (5)
Obligations of states and political subdivisions1,853 (152)162,787 (18,974)164,640 (19,126)
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations359 (4)63,401 (4,434)63,760 (4,438)
Private label residential mortgage backed securities— — 226,070 (34,753)226,070 (34,753)
 $2,212 $(156)$461,381 $(59,102)$463,593 $(59,258)
 December 31, 2024
 Less than 12 Months12 Months or MoreTotal
 Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
Held-to-Maturity Securities      
Debt Securities:      
Obligations of states and political subdivisions$110 $(2)$172,229 $(17,390)$172,339 $(17,392)
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations— — 8,995 (2,100)8,995 (2,100)
Private label residential mortgage and asset backed securities— — 47,433 (5,633)47,433 (5,633)
Corporate debt securities— — 43,322 (2,876)43,322 (2,876)
 $110 $(2)$271,979 $(27,999)$272,089 $(28,001)
 
 
As of December 31, 2025, the Company had a total of 118 AFS debt securities in a gross unrealized loss position with no credit impairment, consisting of one U.S. Treasury security and U.S. Government agencies, 39 obligations of states and political subdivisions, 29 U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations, and 49 private label mortgage and asset backed securities.

Allowance for Credit Losses on Available-for-Sale Debt Securities

Each reporting period, the Company assesses each AFS debt security that is in an unrealized loss position to determine whether the decline in fair value below the amortized cost basis results from a credit loss or other factors. The Company did not record an ACL on any available for sale securities at December 31, 2025. The Company considers the unrealized losses across the classes of major security-type to be related to fluctuations in market conditions, primarily interest rates, and not reflective of a deterioration in credit value. In addition, as of December 31, 2025, the Company determined that it is not more likely than not that the Company would be required to sell securities.

The gross unrealized losses presented in the preceding tables were primarily attributable to interest rate increases and liquidity and were mainly comprised of the following:

•Obligations of States and Political Subdivisions: The unrealized losses on investments in obligations of states and political subdivisions are caused by increases in required yields by investors in these types of securities. It is expected that the securities would not be settled at a price less than the amortized cost of the investment.
•U.S. Treasury and Government Sponsored Entities and Agencies Collateralized by Residential Mortgage Obligations: The unrealized losses on the Company’s investments in U.S. treasuries and government sponsored entities and agencies collateralized by residential mortgage obligations were caused by interest rate changes. The contractual cash flows of those investments are guaranteed or supported by an agency or sponsored entity of the U.S. Government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost of the Company’s investment.
•Private Label Mortgage and Asset Backed Securities: The Company has invested exclusively in AA and AAA tranches of various private label mortgage and asset backed securities. Each purchase is subject to a credit and structure review prior to their purchase. Ratings are reviewed on a quarterly basis in addition to other metrics provided through third-party services. Following review of the financial metrics and ratings, management concluded that the unrealized loss position of the private label mortgage and asset backed securities related exclusively to the fluctuation in market conditions and were not reflective of any credit concerns with the tranches comprising the Company’s investments.

No allowance for credit losses have been recognized on AFS debt securities in an unrealized loss position, as management does not believe that any of the securities are impaired due to credit risk factors as of December 31, 2025 and December 31, 2024.

Allowance for Credit Losses on Held-to-Maturity Debt Securities

The Company separately evaluates its HTM debt securities for any credit losses based on probability of default and loss given default utilizing historical industry data based on investment category, while also considering reasonable and supportable
forecasts. The probability of default and loss given default are incorporated into the present value of expected cash flows and compared against amortized cost.

The allowance for credit losses on HTM securities was $440,000 as of December 31, 2025 compared to $1,156,000 as of December 31, 2024. The allowance for credit losses on HTM securities is driven by economic scenarios, estimated probabilities of default and loss given default. Economic scenarios are updated quarterly. The credit to the allowance for loan losses for the year ended December 31, 2025 was due to improvements in the expected probability of default and loss given default for the Company’s corporate bonds. The provision for credit losses for the year ended December 31, 2024 was driven solely from the impact of the economic scenarios. There were no changes to the weightings of the economic scenarios.

The following table shows the summary of activities for the allowance for credit losses related to held-to-maturity debt securities for the twelve months ended December 31, 2025 and 2024 (in thousands):
For the Twelve Months Ended
December 31,
Debt Securities Held-to-Maturity20252024
Beginning ACL balance$1,156 $1,051 
(Credit) provision to credit losses(716)105 
Total Ending ACL balance$440 $1,156 

The Company monitors credit quality of debt securities held-to-maturity through the use of credit ratings. The Company monitors the credit ratings on a quarterly basis. For non-rated investment securities, management receives quarterly performance updates to monitor for any credit concerns. There were no HTM securities on nonaccrual or past due over 89 days and still on accrual. The following table summarizes the amortized cost of debt securities held-to-maturity at the dates indicated, aggregated by credit quality indicator. U.S. Government sponsored agencies are not included in the below tables as credit ratings are not applicable (in thousands).
 
December 31, 2025December 31, 2024
Debt Securities Held-to-MaturityAAA/AA/ABBBUnratedAAA/AA/ABBB/BB/BUnrated
Obligations of states and political subdivisions$192,308 $— $— $192,156 $— $— 
Private label mortgage and asset backed securities38,666 — 12,731 51,427 — 1,639 
Corporate debt securities— 18,373 14,036 — 30,218 15,990 
Total debt securities held-to-maturity$230,974 $18,373 $26,767 $243,583 $30,218 $17,629 
Investment securities with amortized costs totaling $458,405,000 and $476,966,000 and fair values totaling $420,524,000 and $435,571,000 were pledged as collateral for borrowing arrangements, public funds and for other purposes at December 31, 2025 and 2024, respectively.