| SECURITIES |
NOTE 2 — SECURITIES Debt Securities There was no allowance for credit losses for debt securities available-for-sale recorded as of the years ended December 31, 2025 and 2024; therefore, it is not present in the table below. The amortized cost, related estimated fair value, and unrealized gains and losses for debt securities classified as Available-For-Sale, along with the cumulative basis adjustments for fair value hedges, were as follows at December 31, 2025 and 2024: | | | | | | | | | | | | | | | | | | Debt Securities Available-for-Sale | (Dollars in thousands) | | | | | Gross | | Gross | | | | | | | | | Amortized | | Unrealized | | Unrealized | | Basis | | Fair | December 31, 2025: | | Cost | | Gains | | Losses | | Adjustment | | Value | U.S. Treasury securities | | $ | 7,941 | | $ | — | | $ | (405) | | $ | — | | $ | 7,536 | Obligations of U.S. Government Agencies and Sponsored Agencies: | | | | | | | | | | | | | | | | Mortgage-backed | | | 185,140 | | | 919 | | | (10,748) | | | 940 | | | 176,251 | Other | | | 3,271 | | | 40 | | | (17) | | | — | | | 3,294 | Other mortgage backed securities | | | 37,572 | | | 45 | | | (1,186) | | | — | | | 36,431 | Obligations of state and political subdivisions | | | 82,919 | | | 30 | | | (9,017) | | | 993 | | | 74,925 | Asset-backed securities | | | 63,644 | | | 211 | | | (362) | | | — | | | 63,493 | Corporate debt securities | | | 34,418 | | | 383 | | | (2,505) | | | — | | | 32,296 | Total | | $ | 414,905 | | $ | 1,628 | | $ | (24,240) | | $ | 1,933 | | $ | 394,226 |
| | | | | | | | | | | | | | | | | | Debt Securities Available-for-Sale | (Dollars in thousands) | | | | | Gross | | Gross | | | | | | | | | Amortized | | Unrealized | | Unrealized | | Basis | | Fair | December 31, 2024: | | Cost | | Gains | | Losses | | Adjustment | | Value | U.S. Treasury securities | | $ | 7,911 | | $ | — | | $ | (760) | | $ | — | | $ | 7,151 | Obligations of U.S. Government Agencies and Sponsored Agencies: | | | | | | | | | | | | | | | | Mortgage-backed | | | 150,999 | | | 170 | | | (14,583) | | | 122 | | | 136,708 | Other | | | 5,080 | | | 78 | | | (36) | | | — | | | 5,122 | Other mortgage backed securities | | | 48,336 | | | 65 | | | (2,128) | | | — | | | 46,273 | Obligations of state and political subdivisions | | | 93,809 | | | 19 | | | (10,718) | | | 375 | | | 83,485 | Asset-backed securities | | | 74,006 | | | 263 | | | (402) | | | — | | | 73,867 | Corporate debt securities | | | 41,139 | | | 204 | | | (3,661) | | | — | | | 37,682 | Total | | $ | 421,280 | | $ | 799 | | $ | (32,288) | | $ | 497 | | $ | 390,288 |
Debt securities available-for-sale with an aggregate fair value of $214,422,000 at December 31, 2025 and $251,961,000 at December 31, 2024, were pledged to secure public funds, trust funds, securities sold under agreements to repurchase and the Federal Discount Window aggregating $170,661,000 at December 31, 2025 and $192,671,000 at December 31, 2024. The amortized cost and fair value of securities, by contractual maturity, are shown below at December 31, 2025. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. | | | | | | | (Dollars in thousands) | | Available-for-Sale | | | Amortized | | | | | | Cost | | Fair Value | 1 year or less | | $ | 4,394 | | $ | 4,386 | Over 1 year through 5 years | | | 24,656 | | | 24,046 | Over 5 years through 10 years | | | 57,165 | | | 53,194 | Over 10 years | | | 105,978 | | | 99,918 | Mortgage-backed securities | | | 222,712 | | | 212,682 | Total | | $ | 414,905 | | $ | 394,226 |
At December 31, 2025 and 2024, the Corporation had holdings of securities from the following issuers in excess of ten percent of consolidated stockholders’ equity (excluding holdings of the U.S. Government and U.S. Government Agencies and Corporations). | | | | | (Dollars in thousands) | | | | | | | Fair | | December 31, 2025: | | Value | | Issuer | | | | | Sallie Mae Bank | | $ | 23,354 | | Velocity Commercial Capital | | | 19,551 | | Nelnet Student Loan Trust | | | 13,169 | |
| | | | | (Dollars in thousands) | | | | | | | Fair | | December 31, 2024: | | Value | | Issuer | | | | | Sallie Mae Bank | | $ | 26,187 | | Velocity Commercial Capital | | | 23,334 | | Nelnet Student Loan Trust | | | 15,008 | | Navient Student Loan Trust | | | 10,726 | |
There were no proceeds from sales of Debt Securities Available-For-Sale during 2025 and 2024. Therefore, there were no gains or losses realized during these periods. The summary below shows the gross unrealized losses and fair value of the Corporation’s debt securities, aggregated by investment category, of which individual securities have been in a continuous unrealized loss position for less than 12 months or 12 months or more as of December 31, 2025 and 2024: December 31, 2025 | | | | | | | | | | | | | | | | | | | (Dollars in thousands) | | Less Than 12 Months | | 12 Months or More | | Total | | | Fair | | Unrealized | | Fair | | Unrealized | | Fair | | Unrealized | Available-for-Sale: | | Value | | Loss | | Value | | Loss | | Value | | Loss | U.S. Treasury securities | | $ | — | | $ | — | | $ | 7,536 | | $ | (405) | | $ | 7,536 | | $ | (405) | Obligations of U.S. Government Agencies and Sponsored Agencies: | | | | | | | | | | | | | | | | | | | Mortgage-backed | | | — | | | — | | | 80,318 | | | (10,748) | | | 80,318 | | | (10,748) | Other | | | — | | | — | | | 1,223 | | | (17) | | | 1,223 | | | (17) | Other mortgage-backed debt securities | | | 2,428 | | | (42) | | | 27,130 | | | (1,144) | | | 29,558 | | | (1,186) | Obligations of state and political subdivisions | | | — | | | — | | | 71,413 | | | (9,017) | | | 71,413 | | | (9,017) | Asset-backed securities | | | 14,527 | | | (36) | | | 18,971 | | | (326) | | | 33,498 | | | (362) | Corporate debt securities | | | 500 | | | (1) | | | 24,197 | | | (2,504) | | | 24,697 | | | (2,505) | Total | | $ | 17,455 | | $ | (79) | | $ | 230,788 | | $ | (24,161) | | $ | 248,243 | | $ | (24,240) |
December 31, 2024 | | | | | | | | | | | | | | | | | | | (Dollars in thousands) | | Less Than 12 Months | | 12 Months or More | | Total | | | Fair | | Unrealized | | Fair | | Unrealized | | Fair | | Unrealized | Available-for-Sale: | | Value | | Loss | | Value | | Loss | | Value | | Loss | U.S. Treasury securities | | $ | — | | $ | — | | $ | 7,151 | | $ | (760) | | $ | 7,151 | | $ | (760) | Obligations of U.S. Government Agencies and Sponsored Agencies: | | | | | | | | | | | | | | | | | | | Mortgage-backed | | | 20,726 | | | (575) | | | 81,217 | | | (14,008) | | | 101,943 | | | (14,583) | Other | | | — | | | — | | | 1,927 | | | (36) | | | 1,927 | | | (36) | Other mortgage-backed debt securities | | | 21,700 | | | (560) | | | 19,001 | | | (1,568) | | | 40,701 | | | (2,128) | Obligations of state and political subdivisions | | | 243 | | | (7) | | | 79,684 | | | (10,711) | | | 79,927 | | | (10,718) | Asset-backed securities | | | 7,791 | | | (33) | | | 16,280 | | | (369) | | | 24,071 | | | (402) | Corporate debt securities | | | 7,209 | | | (1,178) | | | 25,594 | | | (2,483) | | | 32,803 | | | (3,661) | Total | | $ | 57,669 | | $ | (2,353) | | $ | 230,854 | | $ | (29,935) | | $ | 288,523 | | $ | (32,288) |
There were 144 individual debt securities in an unrealized loss position as of December 31, 2025, with a combined decline in value representing 4.98% of the debt securities portfolio. There were 167 individual debt securities in an unrealized loss position as of December 31, 2024, with their combined decline in value representing 7.36% of the debt securities portfolio. All debt securities available for sale in an unrealized loss position, as of December 31, 2025, continue to perform as scheduled and the Corporation does not believe that there is a credit loss or that a provision for credit losses is necessary. Also, as part of the Corporation’s evaluation of its intent and ability to hold debt securities for a period of time sufficient to allow for any anticipated recovery in the market, the Corporation considers its investment strategies, cash flow needs, liquidity position, capital adequacy and interest rate risk position. The Corporation does not currently intend to sell the debt securities within the portfolio and it is not more-likely-than-not that the Corporation will be required to sell the debt securities. Management continues to monitor all of our debt securities with a high degree of scrutiny. There can be no assurance that the Corporation will not conclude in future periods that conditions existing at that time indicate some or all of its debt securities may be sold or would require a charge to earnings as a provision for credit losses in such periods. Equity Securities At December 31, 2025 and 2024, the Corporation had $1,810,000 and $1,587,000, respectively, in equity securities recorded at fair value. The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during 2025 and 2024: | | | | | | | (Dollars in thousands) | | | | | | | | | December 31, 2025 | | December 31, 2024 | Net gains (losses) from market value fluctuations recognized during the period on equity securities | | $ | 224 | | $ | 105 | Less: Net gains recognized during the period on equity securities sold during the period | | | — | | | — | Net gains (losses) recognized during the reporting period on equity securities still held at the reporting date | | $ | 224 | | $ | 105 |
The Corporation monitors the equity securities portfolio monthly with particular attention given to securities in a continuous loss position of at least ten percent for over twelve months. Based on the factors described above, management did not consider any equity securities to be impaired at December 31, 2025 or 2024.
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