Note 2—Investment Securities

The amortized cost, fair values, and unrealized gains and losses of the securities available-for-sale are as follows:

⁽¹⁾ All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government.

⁽¹⁾ All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government.

The book values, estimated fair values, and unrecognized gains and losses of investments classified as held-to-maturity are as follows:

																		Allowance
		Amortized				Gross Unrecognized												for Credit
(Dollars in thousands)		Cost				Gains				Losses				Fair Value				Losses
As of June 30, 2026
Mortgage-backed securities(1)		$	567,079			$	36			$	117,068			$	450,047			$	-
Collateralized mortgage obligations(1)			59,669				-				10,575				49,094				-
Municipal securities			69,716				745				958				69,503				450
Total held-to-maturity securities		$	696,464			$	781			$	128,601			$	568,644			$	450

⁽¹⁾ All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government.

																		Allowance
		Amortized				Gross Unrecognized												for Credit
(Dollars in thousands)		Cost				Gains				Losses				Fair Value				Losses
As of December 31, 2025
Mortgage-backed securities(1)		$	586,001			$	88			$	115,773			$	470,316			$	-
Collateralized mortgage obligations(1)			62,476				-				10,234				52,242				-
Municipal securities			70,164				1,011				997				70,178				450
Total held-to-maturity securities		$	718,641			$	1,099			$	127,004			$	592,736			$	450

⁽¹⁾ All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government.

The allowance for credit losses on held-to-maturity securities is a contra-asset valuation account that is deducted from the amortized cost basis of held-to-maturity securities to present the net amount expected to be collected. Management measures expected credit losses on held-to-maturity securities on a collective basis by major security type with each type sharing similar risk characteristics, and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. With regard to residential mortgage-backed securities issued by the U.S. government, or agencies thereof, it is expected that the securities will not be settled at prices less than the amortized cost basis of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. Accordingly, no allowance for credit losses has been recorded for these securities. With regard to municipal securities issued by States and political subdivisions and other held-to-maturity securities, management considers (i) issuer bond ratings, (ii) historical loss rates for given bond ratings, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, (iv) internal forecasts and (v) whether or not such securities are guaranteed or pre-refunded by the issuers.

The following tables show the gross unrealized losses for available-for-sale securities, for which an allowance for credit losses has not been recorded, that have been in an unrealized loss position for less than 12 months or 12 months or more:

		June 30, 2026
		Less Than 12 Months								12 Months or More								Total
(Dollars in thousands)		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
Available-for-Sale Securities
U.S. Government-sponsored securities		$	284			$	1			$	840			$	9			$	1,124			$	10
Mortgage-backed securities(1)			415,344				4,328				65,133				17,518				480,477				21,846
Collateralized mortgage obligations(1)			14,503				369				5,343				277				19,846				646
Corporate securities			4,720				54				-				-				4,720				54
Total available-for-sale securities		$	434,851			$	4,752			$	71,316			$	17,804			$	506,167			$	22,556

⁽¹⁾ All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government.

		December 31, 2025
		Less Than 12 Months								12 Months or More								Total
(Dollars in thousands)		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
Available-for-Sale Securities
U.S. Government-sponsored securities		$	461			$	2			$	676			$	8			$	1,137			$	10
Mortgage-backed securities(1)			60,935				244				75,647				17,476				136,582				17,720
Collateralized mortgage obligations(1)			13,262				230				5,511				132				18,773				362
Total available-for-sale securities		$	74,658			$	476			$	81,834			$	17,616			$	156,492			$	18,092

⁽¹⁾ All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government.

As of June 30, 2026, the Company held 327 available-for-sale securities of which 51 securities were in an unrealized loss position for less than twelve months and 102 securities were in an unrealized loss position for twelve months or more without an allowance for credit losses. Because the decline in fair value is attributable to changes in interest rates and not credit quality and because the Company does not have the intent to sell and it is likely that the Company will not be required to sell the securities prior to their anticipated recovery at maturity, it has been determined that there is no expected credit loss on these securities. Management evaluates the available-for-sale securities in an unrealized loss position, relying primarily on industry analyst reports and observations of market conditions and interest rate fluctuations.

The following tables present the activity in the allowance for credit losses for held-to-maturity securities by major type:

The amortized cost and estimated fair values of investment securities at June 30, 2026 by contractual final maturity are shown in the following table:

Maturities are based on the final contractual payment dates, and do not reflect the impact of contractual monthly principal payments, prepayments or early redemptions that may occur. Expected maturities of mortgage-backed and CMO securities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

The Company monitors the credit quality of those held-to-maturity securities not issued by the U.S. government or one of its agencies or government sponsored entities, through the use of credit ratings. Credit ratings are reviewed and updated quarterly. Nonrated municipal investments consist primarily of

bonds issued by political subdivisions such as housing authorities and reclamation districts. Nonrated municipal investments are monitored through financial covenants and review of repayment history. As of June 30, 2026, there were no past due principal or interest payments associated with held-to-maturity municipal securities. There were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders’ equity.

The following tables summarize the amortized cost of held-to-maturity municipal securities by credit rating as of the dates indicated:

Proceeds from sales and calls of investment securities were as follows:

Pledged Securities

At June 30, 2026, investment securities carried at $715.0 million were pledged to secure public deposits, Federal Home Loan Bank (“FHLB”) borrowings, and other government agency deposits as required by law. This amount was $673.8 million at December 31, 2025.