Investment securities

3 Months Ended

Mar. 31, 2026

Investment securities

Investment securities

4. Investment securities:

The amortized cost and fair value of investment securities aggregated by investment category at March 31, 2026 and December 31, 2025 are summarized below. There was no allowance for credit losses (“ACL”) recorded for available for sale or held to maturity debt securities at March 31, 2026 and December 31, 2025.


		March 31, 2026
					Gross			Gross
		Amortized			Unrealized			Unrealized			Fair
(Dollars in thousands)		Cost			Gains			Losses			Value
Available for sale:
U.S. Treasury securities		$	19,136		$			$	1,116		$	18,020
State and municipals:
Taxable			65,273			18			7,077			58,214
Tax-exempt			149,342			173			10,347			139,168
Residential mortgage-backed securities:
U.S. government agencies			20,978						360			20,618
U.S. government-sponsored enterprises			159,987			431			15,075			145,343
Commercial mortgage-backed securities:
U.S. government-sponsored enterprises			1,708						19			1,689
Private collateralized mortgage obligations			48,230			594			361			48,463
Asset backed securities			15,647			22			303			15,366
Corporate debt securities			21,264			651			271			21,644
Negotiable certificates of deposit			733			3						736
Total available for sale		$	502,298		$	1,892		$	34,929		$	469,261
Held to maturity:
Tax-exempt state and municipals		$	10,803		$			$	700		$	10,103
Residential mortgage-backed securities:
U.S. government agencies			12,072						2,054			10,018
U.S. government-sponsored enterprises			47,682						6,849			40,833
Total held to maturity		$	70,557		$			$	9,603		$	60,954


		December 31, 2025
					Gross			Gross
		Amortized			Unrealized			Unrealized			Fair
(Dollars in thousands)		Cost			Gains			Losses			Value
Available for sale:
U.S. Treasury securities		$	32,125		$			$	1,127		$	30,998
State and municipals:
Taxable			68,618			22			7,018			61,622
Tax-exempt			132,586			429			7,898			125,117
Residential mortgage-backed securities:
U.S. government agencies			42,801			145			247			42,699
U.S. government-sponsored enterprises			174,223			962			15,105			160,080
Commercial mortgage-backed securities:
U.S. government-sponsored enterprises			1,789						19			1,770
Private collateralized mortgage obligations			48,007			766			289			48,484
Asset backed securities			16,544			23			300			16,267
Corporate debt securities			24,287			829			322			24,794
Negotiable certificates of deposit			727			5						732
Total available for sale		$	541,707		$	3,181		$	32,325		$	512,563
Held to maturity:
Tax-exempt state and municipals		$	10,812		$	4		$	620		$	10,196
Residential mortgage-backed securities:
U.S. government agencies			12,291						1,977			10,314
U.S. government-sponsored enterprises			48,944						6,656			42,288
Total held to maturity		$	72,047		$	4		$	9,253		$	62,798

During the three months ended March 31, 2026, the Company completed a partial repositioning of its investment security portfolio. The Company sold a portion of its available-for-sale residential mortgage-backed securities with an amortized cost of $31.9 million. Proceeds received on the securities sold totaled $32.4 million. The Company realized gross gains of $510 thousand, which is included in noninterest income in the consolidated statements of income and comprehensive income for the three months ended March 31, 2026. There were no gross losses realized upon the sales.

There were no available-for-sale securities sold during the three months ended March 31, 2025.

The following table summarizes the maturity distribution of the fair value, which is the net carrying amount, of the debt securities classified as available for sale at March 31, 2026. Expected maturities will differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.


		Amortized			Fair
(Dollars in thousands)		Cost			Value
Within one year		$	3,161		$	3,165
After one but within five years			60,820			58,203
After five but within ten years			67,828			60,877
After ten years			123,939			115,537
			255,748			237,782
Mortgage-backed and other amortizing securities			246,550			231,479
Total		$	502,298		$	469,261

The maturity distribution of the amortized cost and fair value, of debt securities classified as held to maturity at March 31, 2026, is summarized as follows:


		Amortized			Fair
(Dollars in thousands)		Cost			Value
After one but within five years		$	4,487		$	4,106
After five but within ten years			6,316			5,997
			10,803			10,103
Mortgage-backed securities			59,754			50,851
Total		$	70,557		$	60,954

Securities with a carrying value of $370.6 million at March 31, 2026 were pledged to secure public deposits and certain other deposits as required or permitted by law. At December 31, 2025, securities with a carrying value of $381.8 million were pledged to secure public deposits and certain other deposits as required or permitted by law and pledged to the Discount Window at the Federal Reserve.

Securities and short-term investment activities are conducted with a diverse group of government entities, corporations and state and local municipalities. The counterparty’s creditworthiness and type of collateral is evaluated on a case-by-case basis. At March 31, 2026, there were no significant concentrations of credit risk from any one issuer, with the exception of U.S. government agencies and sponsored enterprises, which exceeded 10.0 percent of stockholders’ equity.

The fair value and gross unrealized losses of investment securities with unrealized losses at March 31, 2026 and December 31, 2025, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, are summarized as follows:


		March 31, 2026
		Less than Twelve Months								Twelve Months or Longer								Total
		Total # in a loss					Unrealized			Total # in a loss					Unrealized			Total # in a loss					Unrealized
(Dollars in thousands)		Position			Fair Value		Losses			Position			Fair Value		Losses			Position			Fair Value		Losses
Securities available for sale
U.S. Treasury securities										5		$	18,020		$	1,116		5		$	18,020		$	1,116
State and municipals:
Taxable										62			56,721			7,077		62			56,721			7,077
Tax-exempt		73		$	63,456		$	2,090		82			58,395			8,257		155			121,851			10,347
Residential mortgage-backed securities:
U.S. government agencies		5			20,579			360										5			20,579			360
U.S. government-sponsored enterprises		8			17,634			169		29			66,318			14,906		37			83,952			15,075
Commercial mortgage-backed securities:
U.S. government-sponsored enterprises										1			1,689			19		1			1,689			19
Other		14			23,040			138		11			6,760			223		25			29,800			361
Asset-backed securities		3			4,776			22		2			1,822			281		5			6,598			303
Corporate debt securities		2			1,748			2		5			4,054			269		7			5,802			271
Total		105		$	131,233		$	2,781		197		$	213,779		$	32,148		302		$	345,012		$	34,929

Securities Held to Maturity
Tax-exempt state and municipals		6		$	4,012		$	38		10		$	6,091		$	662		16		$	10,103		$	700
Residential mortgage-backed securities:
U.S. government agencies										3			10,018			2,054		3			10,018			2,054
U.S. government-sponsored enterprises										8			40,833			6,849		8			40,833			6,849
Total		6		$	4,012		$	38		21		$	56,942		$	9,565		27		$	60,954		$	9,603


		December 31, 2025
		Less than Twelve Months								Twelve Months or Longer								Total
		Total # in a loss						Unrealized		Total # in a loss						Unrealized		Total # in a loss						Unrealized
(Dollars in thousands)		Position			Fair Value			Losses		Position			Fair Value			Losses		Position			Fair Value			Losses
Securities available for sale
U.S. Treasury securities										8		$	30,998		$	1,127		8		$	30,998		$	1,127
State and municipals:
Taxable										64			59,002			7,018		64			59,002			7,018
Tax-exempt		37		$	35,137		$	519		87			63,245			7,379		124			98,382			7,898
Residential mortgage-backed securities:
U.S. government agencies		6			28,689			247										6			28,689			247
U.S. government-sponsored enterprises		3			8,989			60		34			71,288			15,045		37			80,277			15,105
Commercial mortgage-backed securities:
U.S. government-sponsored enterprises										1			1,770			19		1			1,770			19
Other		8			14,534			96		11			8,000			193		19			22,534			289
Asset-backed securities		3			4,884			12		2			1,888			288		5			6,772			300
Corporate debt securities		2			1,491			9		8			7,451			313		10			8,942			322
Total		59		$	93,724		$	943		215		$	243,642		$	31,382		274		$	337,366		$	32,325


Securities held to maturity
Tax-exempt state and municipals										11		$	6,641		$	620		11		$	6,641		$	620
Residential mortgage-backed securities:
U.S. government agencies										3			10,314			1,977		3			10,314			1,977
U.S. government-sponsored enterprises										8			42,288			6,656		8			42,288			6,656
Total										22		$	59,243		$	9,253		22		$	59,243		$	9,253

Management considered whether a credit loss existed related to the investments in an unrealized loss position by determining (i) whether the decline in fair value is attributable to adverse conditions specifically related to the financial condition of the security issuer or specific conditions in an industry or geographic area; (ii) whether the credit rating of the issuer of the security has been downgraded; (iii) whether dividend or interest payments have been reduced or have not been made and (iv) an adverse change in the remaining expected cash flows from the security such that the Company will not recover the amortized cost of the security. If the decline is judged to be due to factors related to credit, the credit loss should be recorded as an ACL with an offsetting entry to net income. The portion of the loss related to non-credit factors are recorded in AOCL.

Based on an assessment of the factors identified above, management determined the fair value of all the identified investments being less than the amortized costs is primarily caused by the changes in market rates and not credit quality. All interest payments have been received as scheduled, substantially all debt securities are rated above investment grade, and no material downgrades were sustained. The Company does not intend to sell the investments, and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be at maturity. Based on its assessment, management does not consider the unrealized loss to be credit related, thus no allowance for credit loss was recorded at March 31, 2026 or December 31, 2025.

Equity Securities

Included in equity securities with readily determinable fair values at March 31, 2026, were investments in the common or preferred stock of publicly traded bank holding companies and an investment in a mutual fund comprised of 1-4 family residential mortgage-backed securities collateralized by properties within the Company’s market area. Equity securities with readily determinable fair values are reported at fair value with net unrealized gains and losses recognized in the consolidated statements of income and comprehensive income.

The following table presents unrealized and realized gains recognized in net income on equity securities for the three months ended March 31, 2026, and 2025:


			For the three months ended
			March 31,
(Dollars in thousands)			2026			2025
Net gains recognized on equity securities		$	456		$	71
Less: net gains realized on equity securities sold
Unrealized gains on equity securities		$	456		$	71

Equity Securities without Readily Determinable Fair Values

At March 31, 2026 and December 31, 2025, equity securities without readily determinable fair values consisted primarily of Federal Home Loan Bank (“FHLB”) of Pittsburgh stock totaling $17.9 million and $12.4 million, respectively. Equity securities without readily determinable fair values also included equity interests in two FinTech companies and an equity interest in an insurance agency. The Company evaluates equity securities without readily determinable fair values for impairment quarterly, or more frequently should events or circumstances indicate that their respective carrying values may not be recoverable. Based on the evaluations, management concluded that the equity securities without readily determinable fair values were not impaired at March 31, 2026 and December 31, 2025. There were no adjustments for impairment related to these securities for the three months ended March 31, 2026.