Investment securities

6 Months Ended

Jun. 30, 2026

Investment securities

Investment securities

4. Investment securities:

The amortized cost and fair value of investment securities aggregated by investment category at June 30, 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 June 30, 2026 and December 31, 2025.


		June 30, 2026
					Gross			Gross
		Amortized			Unrealized			Unrealized			Fair
(Dollars in thousands)		Cost			Gains			Losses			Value
Available for sale:
U.S. Treasury securities		$	19,123		$			$	1,120		$	18,003
State and municipals:
Taxable			64,588			13			7,348			57,253
Tax-exempt			149,271			1,038			7,480			142,829
Residential mortgage-backed securities:
U.S. government agencies			20,476						456			20,020
U.S. government-sponsored enterprises			153,258			149			15,460			137,947
Commercial mortgage-backed securities:
U.S. government-sponsored enterprises			1,679						21			1,658
Private collateralized mortgage obligations			48,018			512			484			48,046
Asset backed securities			14,862			34			306			14,590
Corporate debt securities			16,734			475			153			17,056
Negotiable certificates of deposit			741			1						742
Total available for sale		$	488,750		$	2,222		$	32,828		$	458,144
Held to maturity:
Tax-exempt state and municipals		$	10,794		$	1		$	587		$	10,208
Residential mortgage-backed securities:
U.S. government agencies			11,593						2,011			9,582
U.S. government-sponsored enterprises			46,336						6,815			39,521
Total held to maturity		$	68,723		$	1		$	9,413		$	59,311


		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

The Company did not sell any investments from its securities portfolio during the quarter ended June 30, 2026. During the first quarter of 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 six months ended June 30, 2026. There were no gross losses realized upon the sales.

There were no available-for-sale securities sold during the three months and six months ended June 30, 2025.

The following table summarizes the maturity distribution of the amortized cost and fair value, which is the net carrying amount, of the debt securities classified as available for sale at June 30, 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		$	3,135		$	3,131
After one but within five years			63,816			60,773
After five but within ten years			61,730			54,916
After ten years			121,776			117,063
			250,457			235,883
Mortgage-backed and other amortizing securities			238,293			222,261
Total		$	488,750		$	458,144

The maturity distribution of the amortized cost and fair value of debt securities classified as held to maturity at June 30, 2026, is summarized as follows:


		Amortized			Fair
(Dollars in thousands)		Cost			Value
After one but within five years		$	6,186		$	5,852
After five but within ten years			4,608			4,356
			10,794			10,208
Mortgage-backed securities			57,929			49,103
Total		$	68,723		$	59,311

Securities with a carrying value of $372.3 million and $381.8 million at June 30, 2026 and December 31, 2025, respectively, 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 June 30, 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 June 30, 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:


		June 30, 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		$	18,003		$	1,120		5		$	18,003		$	1,120
State and municipals:
Taxable										61			55,979			7,348		61			55,979			7,348
Tax-exempt		30		$	26,044		$	352		82			59,346			7,128		112			85,390			7,480
Residential mortgage-backed securities:
U.S. government agencies		5			20,020			456										5			20,020			456
U.S. government-sponsored enterprises		28			57,863			528		28			60,672			14,932		56			118,535			15,460
Commercial mortgage-backed securities:
U.S. government-sponsored enterprises										1			1,658			21		1			1,658			21
Private collateralized mortgage obligations		20			23,581			167		9			8,966			317		29			32,547			484
Asset-backed securities		3			4,704			18		2			1,813			288		5			6,517			306
Corporate debt securities		2			1,738			13		2			2,190			140		4			3,928			153
Total		88		$	133,950		$	1,534		190		$	208,627		$	31,294		278		$	342,577		$	32,828

Securities Held to Maturity
Tax-exempt state and municipals		2		$	1,467		$	9		10		$	6,166		$	578		12		$	7,633		$	587
Residential mortgage-backed securities:
U.S. government agencies										3			9,582			2,011		3			9,582			2,011
U.S. government-sponsored enterprises										8			39,521			6,815		8			39,521			6,815
Total		2		$	1,467		$	9		21		$	55,269		$	9,404		23		$	56,736		$	9,413


		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
Private collateralized mortgage obligations		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 have been announced. Because 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, the Company does not consider the unrealized loss to be credit related, thus no allowance for credit loss expense was recorded at June 30, 2026 or December 31, 2025.

Equity Securities

Included in equity securities with readily determinable fair values at June 30, 2026, were investments in the common 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 and losses recognized in net income on equity securities for the three and six months ended June 30, 2026, and 2025:


			For the three months ended						For the six months ended
			June 30,						June 30,
(Dollars in thousands)			2026			2025			2026			2025
Net gains (losses) recognized on equity securities		$	33		$	(7)		$	489		$	64
Less: net gains realized on equity securities sold			104						104
Unrealized (losses) gains on equity securities		$	(71)		$	(7)		$	385		$	64

Equity Securities without Readily Determinable Fair Values

At June 30, 2026 and December 31, 2025, equity securities without readily determinable fair values consisted primarily of Federal Home Loan Bank (“FHLB”) of Pittsburgh stock totaling $14.3 million and $12.4 million, respectively. Equity securities without readily determinable fair values also included an equity interest in a FinTech company, an investment in a FinTech fund and an equity interest in an insurance agency. Equity securities without readily determinable fair values are included in other assets in the consolidated balance sheets. 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 June 30, 2026 and December 31, 2025. There were no adjustments for impairment related to these securities during the three and six months ended June 30, 2026.