v3.26.1
Securities
6 Months Ended
Jun. 30, 2026
Securities  
Securities

Note 3. Securities

Available-for-sale securities (“AFS”), which include any security for which the Company has no immediate plan to sell, but which may be sold in the future, are carried at fair value. Realized gains and losses, based on specifically identified amortized cost of the individual security, are included in other income. Unrealized gains and losses are recorded, net of

related income tax effects, in accumulated other comprehensive loss. Premiums and discounts are amortized and accreted, respectively, to interest income using the constant effective yield method over the estimated life of the security. Prepayments are anticipated for mortgage-backed and Small Business Administration (“SBA”) securities. Premiums on callable securities are amortized to their earliest call date.

Held-to-maturity securities (“HTM”), which include any security for which the Company has both the positive intent and ability to hold until maturity, are carried at historical cost adjusted for amortization of premiums and accretion of discounts. Premiums and discounts are amortized and accreted, respectively, to interest income using the constant effective yield method over the security’s estimated life. Prepayments are anticipated for mortgage-backed and SBA securities. Premiums on callable securities are amortized to their earliest call date.

The amortized cost, gross unrealized gains and losses and fair value of securities AFS and HTM are summarized as follows (in thousands):

June 30, 2026

  ​ ​ ​

  ​ ​ ​

Gross

  ​ ​ ​

Gross

  ​ ​ ​

Amortized

Unrealized

Unrealized

Fair

Available-for-sale:

Cost

Gains

Losses

Value

U.S. Treasury

$

31,420

$

$

(2,192)

$

29,228

U.S. Government-sponsored enterprises (GSEs)

18,552

76

(135)

18,493

Municipal securities

 

38,876

 

471

 

(191)

 

39,156

Other debt securities

 

20,755

 

233

 

(712)

 

20,276

Mortgage-backed securities (GSEs)

 

467,452

 

1,249

 

(15,789)

 

452,912

Total

$

577,055

$

2,029

$

(19,019)

$

560,065

June 30, 2026

  ​ ​ ​

  ​ ​ ​

Gross

  ​ ​ ​

Gross

  ​ ​ ​

Amortized

Unrealized

Unrealized

Fair

Held-to-maturity:

Cost

Gains

Losses

Value

U.S. Government-sponsored enterprises (GSEs)

$

46,235

$

$

(5,519)

$

40,716

Municipal securities

 

49,990

 

 

(4,930)

 

45,060

Mortgage-backed securities (GSEs)

 

23,623

 

 

(2,853)

 

20,770

Total

$

119,848

$

$

(13,302)

$

106,546

December 31, 2025

  ​ ​ ​

  ​ ​ ​

Gross

  ​ ​ ​

Gross

  ​ ​ ​

Amortized

Unrealized

Unrealized

Fair

Available-for-sale:

Cost

Gains

Losses

Value

U.S. Treasury

$

31,688

$

$

(2,059)

$

29,629

U.S. Government-sponsored enterprises (GSEs)

19,012

127

(75)

19,064

Municipal securities

 

35,376

 

542

 

(253)

 

35,665

Other debt securities

 

21,673

 

219

 

(892)

 

21,000

Mortgage-backed securities (GSEs)

 

443,759

 

2,990

 

(12,225)

 

434,524

Total

$

551,508

$

3,878

$

(15,504)

$

539,882

December 31, 2025

  ​ ​ ​

  ​ ​ ​

Gross

  ​ ​ ​

Gross

  ​ ​ ​

Amortized

Unrealized

Unrealized

Fair

Held-to-maturity:

Cost

Gains

Losses

Value

U.S. Government-sponsored enterprises (GSEs)

$

46,864

$

$

(5,017)

$

41,847

Municipal securities

 

50,516

 

 

(4,945)

 

45,571

Mortgage-backed securities (GSEs)

 

24,741

 

 

(2,743)

 

21,998

Total

$

122,121

$

$

(12,705)

$

109,416

At June 30, 2026, and December 31, 2025, securities with a carrying value totaling approximately $341.4 million and $315.1 million, respectively, were pledged to secure public funds and securities sold under agreements to repurchase.

For the three and six months ended June 30, 2026, the Company recorded gross realized gains of $54 thousand and $62 thousand and gross realized losses of $0 and $7 thousand. For the three and six months ended June 30, 2025, there were no gross realized gains and $4 thousand in gross realized losses related to the sale of investment securities.  

The amortized cost and estimated fair value of securities at June 30, 2026, by contractual maturity for non-mortgage-backed securities are shown below (in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

June 30, 2026

  ​ ​ ​

Amortized

  ​ ​ ​

Fair

Available-for-sale:

Cost

Value

Due in one year or less

$

530

$

527

Due from one year to five years

 

43,774

 

41,398

Due from five years to ten years

 

35,289

 

34,858

Due after ten years

 

30,010

 

30,370

 

109,603

 

107,153

Mortgage-backed securities

 

467,452

 

452,912

Total

$

577,055

$

560,065

Held-to-maturity:

Due in one year or less

$

$

Due from one year to five years

 

23,859

 

21,900

Due from five years to ten years

 

44,074

 

38,478

Due after ten years

 

28,292

 

25,398

 

96,225

 

85,776

Mortgage-backed securities

 

23,623

 

20,770

Total

$

119,848

$

106,546

The following tables present the gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities AFS and HTM have been in a continuous unrealized loss position (in thousands):

June 30, 2026

Less than 12 Months

12 Months or Greater

Total

  ​ ​ ​

  ​ ​ ​

Gross

Number

  ​ ​ ​

  ​ ​ ​

Gross

Number

  ​ ​ ​

  ​ ​ ​

Gross

Number

Fair

Unrealized

of

Fair

Unrealized

of

Fair

Unrealized

of

Available-for-sale:

Value

Losses

Securities

Value

Losses

Securities

Value

Losses

Securities

U.S. Treasury

$

$

$

29,228

$

(2,192)

4

$

29,228

$

(2,192)

4

U.S. Government-sponsored enterprises (GSEs)

6,399

(72)

3

4,480

(63)

3

10,879

(135)

6

Municipal securities

 

8,236

 

(71)

8

 

7,229

 

(120)

6

 

15,465

 

(191)

14

Other debt securities

 

 

 

11,788

 

(712)

9

 

11,788

 

(712)

9

Mortgage-backed securities (GSEs)

 

228,598

 

(3,914)

106

 

110,015

 

(11,875)

55

 

338,613

 

(15,789)

161

Total

$

243,233

$

(4,057)

117

$

162,740

$

(14,962)

77

$

405,973

$

(19,019)

194

June 30, 2026

Less than 12 Months

12 Months or Greater

Total

  ​ ​ ​

  ​ ​ ​

Gross

Number

  ​ ​ ​

  ​ ​ ​

Gross

Number

  ​ ​ ​

  ​ ​ ​

Gross

Number

Fair

Unrealized

of

Fair

Unrealized

of

Fair

Unrealized

of

Held-to-maturity:

Value

Losses

Securities

Value

Losses

Securities

Value

Losses

Securities

U.S. Government-sponsored enterprises (GSEs)

$

$

$

40,716

$

(5,519)

13

$

40,716

$

(5,519)

13

Municipal securities

 

3,436

 

(275)

4

 

41,624

 

(4,655)

33

 

45,060

 

(4,930)

37

Mortgage-backed securities (GSEs)

 

 

 

20,770

 

(2,853)

5

 

20,770

 

(2,853)

5

Total

$

3,436

$

(275)

4

$

103,110

$

(13,027)

51

$

106,546

$

(13,302)

55

December 31, 2025

Less than 12 Months

12 Months or Greater

Total

  ​ ​ ​

  ​ ​ ​

Gross

Number

  ​ ​ ​

  ​ ​ ​

Gross

Number

  ​ ​ ​

  ​ ​ ​

Gross

Number

Fair

Unrealized

of

Fair

Unrealized

of

Fair

Unrealized

of

Available-for-sale:

Value

Losses

Securities

Value

Losses

Securities

Value

Losses

Securities

U.S. Treasury

$

$

$

29,629

$

(2,059)

4

$

29,629

$

(2,059)

4

U.S. Government-sponsored enterprises (GSEs)

4,986

(1)

2

5,366

(74)

3

10,352

(75)

5

Municipal securities

 

6,184

 

(113)

4

 

9,110

 

(140)

12

 

15,294

 

(253)

16

Other debt securities

 

 

 

12,608

 

(892)

11

 

12,608

 

(892)

11

Mortgage-backed securities (GSEs)

 

111,336

 

(713)

42

 

133,449

 

(11,512)

66

 

244,785

 

(12,225)

108

Total

$

122,506

$

(827)

48

$

190,162

$

(14,677)

96

$

312,668

$

(15,504)

144

December 31, 2025

Less than 12 Months

12 Months or Greater

Total

  ​ ​ ​

  ​ ​ ​

Gross

Number

  ​ ​ ​

  ​ ​ ​

Gross

Number

  ​ ​ ​

  ​ ​ ​

Gross

Number

Fair

Unrealized

of

Fair

Unrealized

of

Fair

Unrealized

of

Held-to-maturity:

Value

Losses

Securities

Value

Losses

Securities

Value

Losses

Securities

U.S. Government-sponsored enterprises (GSEs)

$

$

$

41,847

$

(5,017)

13

$

41,847

$

(5,017)

13

Municipal securities

 

3,493

 

(259)

4

 

42,078

 

(4,686)

33

 

45,571

 

(4,945)

37

Mortgage-backed securities (GSEs)

 

 

 

21,998

 

(2,743)

5

 

21,998

 

(2,743)

5

Total

$

3,493

$

(259)

4

$

105,923

$

(12,446)

51

$

109,416

$

(12,705)

55

For any securities classified as AFS that are in an unrealized loss position at the balance sheet date, the Company assesses whether it intends to sell the security, or more likely than not will be required to sell the security before recovery of its amortized cost basis which would require a write-down to fair value through net income. Because the Company currently does not intend to sell those AFS securities that have an unrealized loss at June 30, 2026, and it is not likely that they will be required to sell the securities before recovery of their amortized cost bases, which may be maturity, the Company has determined that no write-down is necessary. In addition, the Company evaluates whether any portion of the decline in fair

value of AFS securities is the result of credit deterioration, which would require the recognition of an allowance for credit losses.  The unrealized losses associated with available-for-sale securities at June 30, 2026, are driven by changes in interest rates and are not due to the credit quality of the securities, and accordingly, no allowance for credit losses is considered necessary related to available-for-sale securities at June 30, 2026.  Management evaluates the financial performance of the issuers on a quarterly basis to determine if it is probable that the issuers can make all contractual principal and interest payments.

The unrealized losses in the Company’s HTM portfolio were caused by changes in the interest rate environment.  The Company has a zero-loss expectation for its U.S. Government-sponsored enterprises (GSEs) and mortgage-backed securities (GSEs), and accordingly, no allowance for credit losses is estimated for these securities.  The HTM municipal securities are primarily general obligation bonds, which have a very low historical default rate due to issuers generally having unlimited taxing authority to service the debt.  All debt securities in an unrealized loss position as of June 30, 2026, continue to perform as scheduled and we do not believe an allowance for credit losses is necessary.

The Company utilizes bond credit ratings assigned by third party ratings agencies to monitor the credit quality of debt securities held-to-maturity.  At June 30, 2026, all rated debt securities classified as held-to-maturity were rated AA- or higher by at least one rating agency. Updated credit ratings are obtained as they become available from the ratings agencies.

Allowance for Credit Losses (“ACL”)

There were no past due or nonaccrual AFS or HTM securities at June 30, 2026, or December 31, 2025.  Accrued interest receivable is excluded from the estimate of credit losses and based on the analysis of the underlying risk characteristics of its AFS and HTM portfolios, including credit ratings and other qualitative factors, there was no provision for credit losses related to AFS or HTM securities recorded during the three and six months ended June 30, 2026, and 2025, respectively, because the ACL was deemed immaterial.  

Other Investments:

Our other investments consist of restricted non-marketable equity securities that have no readily determinable market value. Accordingly, when evaluating these securities for impairment, management considers the ultimate recoverability of the par value rather than recognizing temporary declines in value.  As of June 30, 2026, the Company determined that there was no impairment on its other investment securities.

The following is the amortized cost and carrying value of other investments (in thousands):

June 30, 

December 31, 

  ​ ​ ​

2026

  ​ ​ ​

2025

Federal Reserve Bank stock

$

11,009

 

$

10,981

Federal Home Loan Bank stock

 

6,170

 

5,110

First National Bankers Bank stock

 

350

 

350

Total

$

17,529

$

16,441