The following table summarizes the amortized cost and fair value of securities available-for-sale and securities held-to-maturity at September 30, 2024 and December 31, 2023 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrealized gains and losses (in thousands):


	September 30, 2024
Available-for-Sale Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Allowance for Credit Losses
Debt securities:
U.S. Treasury securities	$	9,993	$	—	$	(737)	$	9,256	$	—
U.S. Government agencies	71		—		(3)		68		—
Obligations of states and political subdivisions	184,495		—		(15,374)		169,121		—
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	79,261		39		(3,614)		75,686		—
Private label mortgage and asset backed securities	279,688		8		(30,344)		249,352		—
Corporate debt securities	455		26		—		481		—
Total available-for-sale	$	553,963	$	73	$	(50,072)	$	503,964	$	—

	September 30, 2024
Held-to-Maturity Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Allowance for Credit Losses
Debt securities:
Obligations of states and political subdivisions	$	192,143	$	65	$	(10,712)	$	181,496	$	13
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	11,010		—		(1,552)		9,458		—
Private label mortgage and asset backed securities	53,457		—		(4,112)		49,345		18
Corporate debt securities	46,167		—		(3,113)		43,054		826
Total held-to-maturity	$	302,777	$	65	$	(19,489)	$	283,353	$	857


	December 31, 2023
Available-for-Sale Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Allowance for Credit Losses
Debt securities:
U.S. Treasury securities	$	9,990	$	—	$	(1,036)	$	8,954	$	—
U.S. Government agencies	102		—		(7)		95		—
Obligations of states and political subdivisions	198,070		—		(17,848)		180,222		—
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	88,874		3		(5,525)		83,352		—
Private label mortgage and asset backed securities	372,610		10		(48,047)		324,573		—

Total available-for-sale	$	669,646	$	13	$	(72,463)	$	597,196	$	—


	December 31, 2023
Held-to-Maturity Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Allowance for Credit Losses
Debt securities:
Obligations of states and political subdivisions	$	192,070	$	70	$	(14,188)	$	177,952	$	20
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	10,758		—		(1,692)		9,066		—
Private label mortgage and asset backed securities	54,579		—		(5,944)		48,635		11
Corporate debt securities	46,086		—		(4,736)		41,350		1,020
Total held-to-maturity	$	303,493	$	70	$	(26,560)	$	277,003	$	1,051


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
Available-for-Sale Securities	2024		2023		2024		2023
Proceeds from sales or calls	$	32,647	$	205	$	64,229	$	12,580
Gross realized gains from sales or calls	—		—		—		—
Gross realized losses from sales or calls	$	(1,853)	$	(39)	$	(4,199)	$	(296)

The provision for income taxes includes a $548,000 and $12,000 income tax benefit from security sales for the three months ended September 30, 2024 and 2023, respectively. The provision for income taxes includes a $1,241,000 and $87,000 income tax benefit from security sales for the nine months ended September 30, 2024 and 2023, respectively.

The amortized cost and estimated fair value of available-for-sale and held-to maturity investment securities at September 30, 2024 by contractual maturity is shown below (in thousands). Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.


	September 30, 2024				December 31, 2023
Available-for-Sale Securities	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Within one year	$	—	$	—	$	—	$	—
After one year through five years	15,661		14,400		9,992		8,954
After five years through ten years	33,693		30,833		40,264		35,379
After ten years	145,134		133,144		157,804		144,843
	194,488		178,377		208,060		189,176
Investment securities not due at a single maturity date:

U.S. Government agencies	71		68		102		95
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	79,261		75,686		88,874		83,352
Private label mortgage and asset backed securities	279,688		249,352		372,610		324,573
Corporate debt securities	455		481		—		—
Total available-for-sale	$	553,963	$	503,964	$	669,646	$	597,196

















	September 30, 2024				December 31, 2023
Held-to-Maturity Securities	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Within one year	$	—	$	—	$	—	$	—
After one year through five years	24,538		24,081		8,463		8,136
After five years through ten years	59,110		56,146		74,746		68,552
After ten years	108,495		101,269		108,861		101,264
	192,143		181,496		192,070		177,952
Investment securities not due at a single maturity date:
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	11,010		9,458		10,758		9,066
Private label mortgage and asset backed securities	53,457		49,345		54,579		48,635
Corporate debt securities	46,167		43,054		46,086		41,350
Total held-to-maturity	$	302,777	$	283,353	$	303,493	$	277,003

At September 30, 2024 there were two issuers of private label mortgage securities in which the Company had holdings of securities in amounts greater than 10% of shareholders’ equity. Investments with these issuers were in senior tranches and/or were rated “AAA” or higher and there were no credit issues identified.

The following table summarizes the Company’s AFS debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):


	September 30, 2024
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Available-for-Sale Securities	Value		Losses		Value		Losses		Value		Losses
Debt securities:
U.S. Treasury securities	$	—	$	—	$	9,256	$	(737)	$	9,256	$	(737)
U.S. Government agencies	—		—		68		(3)		68		(3)
Obligations of states and political subdivisions	1,901		(109)		167,221		(15,265)		169,122		(15,374)
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	2,459		(2)		68,551		(3,612)		71,010		(3,614)
Private label mortgage and asset backed securities	—		—		245,037		(30,344)		245,037		(30,344)

Total available-for-sale	$	4,360	$	(111)	$	490,133	$	(49,961)	$	494,493	$	(50,072)


	December 31, 2023
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Available-for-Sale Securities	Value		Losses		Value		Losses		Value		Losses
Debt securities:
U.S. Treasury securities	$	—	$	—	$	8,954	$	(1,036)	$	8,954	$	(1,036)
U.S. Government agencies	—		—		95		(7)		95		(7)
Obligations of states and political subdivisions	—		—		180,222		(17,848)		180,222		(17,848)
U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations	392		(3)		82,760		(5,522)		83,152		(5,525)
Private label mortgage and asset backed securities	—		—		323,655		(48,047)		323,655		(48,047)
Total available-for-sale	$	392	$	(3)	$	595,686	$	(72,460)	$	596,078	$	(72,463)

As of September 30, 2024, the Company had a total of 138 AFS debt securities in a gross unrealized loss position with no credit impairment, consisting of 6 U.S. Treasury securities and U.S. Government agencies, 42 obligations of states and political subdivisions, 31 U.S. Government sponsored entities and agencies collateralized by residential mortgage obligations, and 59 private label mortgage and asset backed securities.

Each reporting period, the Company assesses each AFS debt security that is in an unrealized loss position to determine whether the decline in fair value below the amortized cost basis results from a credit loss or other factors. The Company did not record an ACL on any available for sale securities at September 30, 2024. As of that date, the Company considers the unrealized losses across the classes of major security-type to be related to fluctuations in market conditions, primarily interest rates, and not reflective of a deterioration in credit value. As of September 30, 2024, the Company determined that it is not more likely than not that there is an intention to sell securities or that the Company would be required to sell securities.

•Obligations of States and Political Subdivisions: The unrealized losses on investments in obligations of states and political subdivisions are caused by increases in required yields by investors in these types of securities. It is expected that the securities would not be settled at a price less than the amortized cost of the investment.

•U.S. Treasury and Government Sponsored Entities and Agencies Collateralized by Residential Mortgage Obligations: The unrealized losses on the Company’s investments in U.S. treasuries and government sponsored entities and agencies collateralized by residential mortgage obligations were caused by interest rate changes. The contractual cash flows of those investments are guaranteed or supported by an agency or sponsored entity of the U.S. Government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost of the Company’s investment.

•Private Label Mortgage and Asset Backed Securities: The Company has invested exclusively in AA and AAA tranches of various private label mortgage and asset backed securities. Each purchase is subject to a credit and structure review prior to their purchase. Ratings are reviewed on a quarterly basis in addition to other metrics provided through third-party services. Following review of the financial metrics and ratings, management concluded that the unrealized loss position of the private label mortgage and asset backed securities related exclusively to the fluctuation in market conditions and were not reflective of any credit concerns with the tranches comprising the Company’s investments.

The Company separately evaluates its HTM debt securities for any credit losses based on probability of default and loss given default utilizing historical industry data based on investment category, while also considering reasonable and supportable forecasts. The probability of default and loss given default are incorporated into the present value of expected cash flows and compared against amortized cost.

The allowance for credit losses on HTM securities was $857,000 at September 30, 2024. The allowance for credit losses on HTM securities is driven by economic scenarios, estimated probabilities of default and loss given default. Economic scenarios are updated quarterly.


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,

Debt Securities Held-to-Maturity	2024		2023		2024		2023
Beginning ACL balance	$	1,076	$	456	$	1,051	$	—
Impact of adoption of ASU 2016-13	—		—		—		776
Credit to credit losses	(219)		(175)		(194)		(495)
Total Ending ACL balance	$	857	$	281	$	857	$	281

During the three and nine month period ended September 30, 2024, the credit to credit losses for held-to-maturity securities was primarily driven by changes in economic scenarios. Management believes that the allowance for credit losses for held-to-maturity securities at September 30, 2024 appropriately reflected expected credit losses at that date.

The Company monitors credit quality of debt securities held-to-maturity through the use of credit ratings. The Company monitors the credit ratings on a quarterly basis. For non-rated investment securities, management receives quarterly performance updates to monitor for any credit concerns. There were no HTM securities on nonaccrual or past due over 89 days and still on accrual. The following table summarizes the amortized cost of debt securities held-to-maturity at the dates indicated, aggregated by credit quality indicator. U.S. Government sponsored agencies are not included in the below tables as credit ratings are not applicable.


	September 30, 2024
Debt Securities Held-to-Maturity (in thousands)	AAA/AA/A		BBB		Unrated
Obligations of states and political subdivisions	$	192,143	$	—	$	—

Private label mortgage and asset backed securities	51,697		—		1,760
Corporate debt securities	—		30,201		15,966
Total debt securities held-to-maturity	$	243,840	$	30,201	$	17,726