2. Investment Securities

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As of June 30, 2026 and December 31, 2025, investment securities consisted predominantly of the following investment categories:

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Debt securities – includes debt securities issued by U.S. government agencies.

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Mortgage-backed securities – includes securities backed by notes or receivables secured by mortgage assets with cash flows based on actual or scheduled payments.

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Collateralized mortgage obligations – includes securities backed by a pool of mortgages with cash flows distributed based on certain rules rather than pass through payments.

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Collateralized loan obligations – includes structured debt securities backed by a pool of loans, consisting of primarily non-investment grade broadly syndicated corporate loans with additional credit enhancement. These are floating rate securities that have an investment grade rating of AA or better.

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Debt securities issued by states and political subdivisions – includes general obligation bonds issued by state and local governments.

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As of June 30, 2026 and December 31, 2025, the Company’s investment securities were classified as either available-for-sale or held-to-maturity. Amortized cost, gross unrealized holding gains and losses and fair value of available-for-sale and held-to-maturity investment securities as of June 30, 2026 and December 31, 2025 were as follows:

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Accrued interest receivable related to available-for-sale investment securities was $5.0 million and $5.5 million as of June 30, 2026 and December 31, 2025, respectively. Accrued interest receivable related to held-to-maturity investment securities was $5.9 million and $6.1 million as June 30, 2026 and December 31, 2025, respectively. Accrued interest receivable is recorded separately from the amortized cost basis of investment securities on the Company’s unaudited interim consolidated balance sheets.

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Proceeds from calls of investment securities were $15.3 million and $0.5 million for the three months ended June 30, 2026 and 2025, respectively. Proceeds from calls of investment securities were $27.9 million and $40.6 million for the six months ended June 30, 2026 and 2025, respectively. There were no sales of investment securities for both the three and six months ended June 30, 2026 and 2025.

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Interest income from taxable investment securities was $28.0 million and $25.7 million for the three months ended June 30, 2026 and 2025, respectively, and $54.8 million and $52.4 million for the six months ended June 30, 2026 and 2025 respectively. Interest income from non-taxable investment securities was $3.0 million and $3.1 million for the three months ended June 30, 2026 and 2025, respectively, and $6.1 million and $6.2 million for the six months ended June 30, 2026 and 2025, respectively.

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The amortized cost and fair value of debt securities issued by government agencies and states and political subdivisions, non-agency mortgage-backed securities and collateralized loan obligations as of June 30, 2026, by contractual maturity, are shown below. Mortgage-backed securities and collateralized mortgage obligations issued by government agencies and government-sponsored enterprises are disclosed separately in the table below as remaining expected maturities will differ from contractual maturities as borrowers have the right to prepay obligations.

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At June 30, 2026, pledged securities totaled $4.0 billion, of which $2.3 billion was pledged to secure borrowing capacity, $1.6 billion was pledged to secure public deposits and $40.3 million was pledged to secure other financial transactions. At December 31, 2025, pledged securities totaled $4.2 billion, of which $2.4 billion was pledged to secure borrowing capacity, $1.8 billion was pledged to secure public deposits and $52.6 million was pledged to secure other financial transactions.

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The Company held no securities of any single issuer, other than debt securities issued by government agencies and government-sponsored enterprises, which were in excess of 10% of stockholders’ equity as of June 30, 2026 and December 31, 2025.

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The following tables present the unrealized gross losses and fair values of securities in the available-for-sale portfolio by length of time that the 153 and 137 individual securities in each category have been in a continuous loss position as of June 30, 2026 and December 31, 2025, respectively. The unrealized losses on available-for-sale investment securities were attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities.

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At June 30, 2026 and December 31, 2025, the Company did not have any available-for-sale securities with the intent to sell and determined it was more likely than not that the Company would not be required to sell the securities prior to recovery of the amortized cost basis. As the Company had the intent and ability to hold the remaining available-for-sale securities in an unrealized loss position as of June 30, 2026 and December 31, 2025, each security with an unrealized loss position in the above tables has been further assessed to determine if a credit loss exists. As of June 30, 2026 and December 31, 2025, the Company did not expect any credit losses in its available-for-sale debt securities and no credit losses were recognized on available-for-sale securities during the three and six months ended June 30, 2026 and for the year ended December 31, 2025.

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As of June 30, 2026 and December 31, 2025, the Company’s investment securities were comprised primarily of debt securities, mortgage-backed securities and collateralized mortgage obligations issued by U.S. government agencies and government-sponsored enterprises, with under 7% of the investment securities comprised of collateralized loan obligations rated AA or better, obligations issued by local state and political subdivisions rated AA or better and non-agency commercial mortgage-backed securities rated AAA. For investment securities issued by the U.S. government, its agencies and government-sponsored enterprises, management has concluded that the long history with no credit losses from these issuers indicates an expectation that nonpayment of the amortized cost basis is zero, and these securities are explicitly or implicitly fully guaranteed by the U.S. government. The U.S. government can print its own currency and its currency is routinely held by central banks and other major financial institutions. The dollar is used in international commerce, and commonly is viewed as a reserve currency, all of which qualitatively indicates that historical credit loss information should be minimally affected by current conditions and reasonable and supportable forecasts. For collateralized loan obligations, debt securities issued by local state and political subdivisions and non-agency commercial mortgage-backed securities, these securities are investment grade and highly rated and carry either sufficient credit enhancement or days cash on hand to support timely payments of principal and interest. As a result, the Company does not expect any future payment defaults and has not recorded an allowance for credit losses for its available-for-sale and held-to-maturity debt securities as of June 30, 2026 or December 31, 2025.