
	September 30, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities Available-for-Sale
U.S. Treasuries and government agencies	$	166,000	$	—	$	13,383	$	152,617
Obligations of states and municipalities	713,040		3,986		61,380		655,646
Residential mortgage backed - agency	57,563		793		3,590		54,766
Residential mortgage backed - non-agency	285,808		1,613		9,945		277,476
Commercial mortgage backed - agency	34,848		42		840		34,050
Commercial mortgage backed - non-agency	157,569		—		3,875		153,694
Asset-backed	71,073		229		667		70,635
Other	38,401		428		1,282		37,547
Total	$	1,524,302	$	7,091	$	94,962	$	1,436,431


	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities Available-for-Sale
U.S. Treasuries and government agencies	$	197,026	$	—	$	17,955	$	179,071
Obligations of states and municipalities	535,229		21		72,047		463,203
Residential mortgage backed - agency	47,074		—		4,836		42,238
Residential mortgage backed - non-agency	284,826		17		18,812		266,031
Commercial mortgage backed - agency	36,151		28		1,294		34,885
Commercial mortgage backed - non-agency	183,454		—		6,393		177,061
Asset-backed	79,315		23		1,402		77,936
Other	9,500		—		1,486		8,014
Total	$	1,372,575	$	89	$	124,225	$	1,248,439

At September 30, 2024, and December 31, 2023, AFS securities with amortized costs of $1.2 billion and $826.5 million, respectively, and with estimated fair values of $1.1 billion and $742.5 million, respectively, were pledged to serve as collateral for secured borrowings, derivative exposures, or to secure public deposits as required or permitted by law.

The proceeds from sales, calls, and maturities of debt securities available-for-sale, including principal payments received, and the related gross gains and losses realized, for the nine months ended September 30, 2024, and September 30, 2023, were as follows (in thousands):

The maturities of AFS securities at September 30, 2024, were as follows (in thousands): (Expected maturities of securities not due at a single maturity date are based on average life at estimated prepayment speed. Expected maturities may differ from contractual maturities because borrowers have the right to call or prepay some obligations with or without call or prepayment penalties).


	September 30, 2024
	Amortized Cost
	One Year or Less		One to Five Years		Five to Ten Years		After Ten Years		Total
Securities Available-for-Sale
U.S. Treasuries and government agencies	$	—	$	166,000	$	—	$	—	$	166,000
Obligations of states and municipalities	—		145,926		395,005		172,109		713,040
Residential mortgage backed - agency	490		19,427		28,117		9,529		57,563
Residential mortgage backed - non-agency	47,696		78,607		123,102		36,403		285,808
Commercial mortgage backed - agency	32		25,752		9,064		—		34,848
Commercial mortgage backed - non-agency	91,673		60,771		5,125		—		157,569
Asset-backed	5,551		39,747		25,775		—		71,073
Other	—		2,741		21,263		14,397		38,401
Total	$	145,442	$	538,971	$	607,451	$	232,438	$	1,524,302


	September 30, 2024
	Fair Value
	One Year or Less		One to Five Years		Five to Ten Years		After Ten Years		Total
Securities Available-for-Sale
U.S. Treasuries and government agencies	$	—	$	152,617	$	—	$	—	$	152,617
Obligations of states and municipalities	—		141,900		362,826		150,920		655,646
Residential mortgage backed - agency	513		19,079		24,940		10,234		54,766
Residential mortgage backed - non-agency	47,513		75,542		117,237		37,184		277,476
Commercial mortgage backed - agency	32		25,182		8,836		—		34,050
Commercial mortgage backed - non-agency	90,456		58,876		4,362		—		153,694
Asset-backed	5,528		39,588		25,519		—		70,635
Other	—		2,850		20,355		14,342		37,547
Total	$	144,042	$	515,634	$	564,075	$	212,680	$	1,436,431

The following table shows the gross unrealized losses and fair value of the Company’s securities with unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2024, and December 31, 2023.


	September 30, 2024
	Less Than Twelve Months				More Than Twelve Months
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Total Unrealized Losses
Securities Available-for-Sale
U.S. Treasuries and government agencies	$	—	$	—	$	152,618	$	13,383	$	13,383
Obligations of states and municipalities	14,635		863		456,489		60,517		61,380
Residential mortgage backed - agency	—		—		43,091		3,590		3,590
Residential mortgage backed - non-agency	11,589		55		163,733		9,890		9,945
Commercial mortgage backed - agency	1,361		32		29,576		808		840
Commercial mortgage backed - non-agency	10,798		105		142,896		3,770		3,875
Asset-backed	15,134		19		33,552		648		667
Other	21,808		131		8,349		1,151		1,282
Total	$	75,325	$	1,205	$	1,030,304	$	93,757	$	94,962


	December 31, 2023
	Less Than Twelve Months				More Than Twelve Months
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Total Unrealized Losses
Securities Available-for-Sale
U.S. Treasuries and government agencies	$	—	$	—	$	179,071	$	17,955	$	17,955
Obligations of states and municipalities	501		14		458,113		72,033		72,047
Residential mortgage backed - agency	36		—		42,203		4,836		4,836
Residential mortgage backed - non-agency	632		2		263,184		18,810		18,812
Commercial mortgage backed - agency	—		—		34,080		1,294		1,294
Commercial mortgage backed - non-agency	23,437		254		153,625		6,139		6,393
Asset-backed	3,721		9		56,106		1,393		1,402
Other	—		—		8,014		1,486		1,486
Total	$	28,327	$	279	$	1,194,396	$	123,946	$	124,225

The Company is required to conduct an impairment evaluation on AFS securities to determine whether the Company has the intent to sell the security or it is more likely than not that it will be required to sell the security before recovery. If these situations apply, the guidance requires the Company to reduce the security's amortized cost basis down to its fair value through earnings. The Company also evaluates the unrealized losses on AFS securities to determine if a security's decline in fair value below its amortized cost basis is due to credit factors. The evaluation is based upon factors such as the creditworthiness of the underlying borrowers, performance of the underlying collateral, if applicable, and the level of credit support in the security structure. Management also evaluates other factors and circumstances that may be indicative of a decline in the fair value of the security due to a credit factor.

This includes, but is not limited to, an evaluation of the type of security, length of time and extent to which the fair value has been less than cost, and near-term prospects of the issuer. If this assessment indicates that a credit loss exists, the present value of the expected cash flows of the security is compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost, an allowance for credit losses (“ACL”) is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis under the current expected credit loss (“CECL”) standard, and declines due to non-credit factors are recorded in accumulated other comprehensive income (“AOCI”), net of taxes. If a credit loss is recognized in earnings, subsequent improvements to the expectation of collectability will be recognized through the ACL. If the fair value of the security increases above its amortized cost, the unrealized gain will be recorded in accumulated other comprehensive income, net of taxes, in the consolidated statements of financial condition. Prior to implementation of the CECL standard, unrealized losses caused by a credit event would require the direct write-down of the AFS security through the other-than-temporary impairment approach.

The Company did not record an ACL on the AFS securities as of September 30, 2024, or December 31, 2023. The Company considers the unrealized losses on the AFS securities to be related to fluctuations in market conditions, primarily interest rates, and not reflective of deterioration in credit. The Company had 383 securities in an unrealized loss position as of September 30, 2024. The Company has evaluated AFS securities in an unrealized loss position for credit-related impairment at September 30, 2024, and concluded no impairment existed based on a combination of factors, which included: (1) the securities are of high credit quality, (2) unrealized losses are primarily the result of market volatility and increases in market interest rates, (3) the contractual terms of the investments do not permit the issuer(s) to settle the securities at a price less than the par value of each investment, (4) issuers continue to make timely principal and interest payments, and (5) the Company does not intend to sell any of the investments and the accounting standard of “more likely than not” has not been met for the Company to be required to sell any of the investments before recovery of its amortized cost basis. As such, there was no ACL on AFS securities at September 30, 2024.

At September 30, 2024, the unrealized losses associated with 11 U.S. Treasuries and Government Agency securities, 14 Residential Mortgage Backed – Agency securities, and 14 Commercial Mortgage Backed – Agency securities were generally driven by changes in interest rates and not due to credit losses given the explicit or implicit guarantees provided

At September 30, 2024, the unrealized losses associated with 212 State and Municipal securities were primarily caused by changes in interest rates and not the credit quality of the securities. These securities are investment grade and were generally underwritten in accordance with our own investment standards prior to the decision to purchase, without relying on a bond insurer’s guarantee in making the investment decision. These securities will continue to be monitored as part of our ongoing impairment analysis but are expected to perform, even if the rating agencies reduce the credit rating of the bond insurers. As a result, we expect to recover the entire amortized cost basis of these securities. Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at September 30, 2024.

At September 30, 2024, the unrealized losses associated with 69 Residential Mortgage Backed – Non-Agency securities and 30 Commercial Mortgage Backed – Non-Agency securities were generally driven by changes in interest rates, credit spreads, and projected collateral losses. We assess for credit impairment by estimating the present value of expected cash flows. The key assumptions for determining expected cash flows include default rates, loss severities, and/or prepayment rates. Based on our assessment of the expected credit losses and the credit enhancement level of the securities, we expect to recover the entire amortized cost of these securities. Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at September 30, 2024.

At September 30, 2024, the unrealized losses associated with 21 Asset-Backed securities were generally driven by changes in interest rates, credit spreads, and projected collateral losses. We assess for credit impairment by estimating the present value of expected cash flows. The key assumptions for determining expected cash flows include default rates, loss severities, and/or prepayment rates. Based on our assessment of the expected credit losses and the credit enhancement level of the securities, we expect to recover the entire amortized cost of these securities. Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at September 30, 2024.

At September 30, 2024, the unrealized losses associated with 12 securities were primarily driven by interest rates and not the credit quality of the securities. These investments were underwritten in accordance with our own investment standards prior to the decision to purchase, without relying on a bond insurer’s guarantee in making the investment decision. Based on our assessment of the expected credit losses, we expect to recover the entire amortized cost basis of the securities. Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at September 30, 2024.

The Company’s investment in Federal Home Loan Bank (“FHLB”) stock totaled $16.8 million and $5.9 million at September 30, 2024, and December 31, 2023, respectively. FHLB stock is generally viewed as a long-term investment and as a restricted investment security, which is carried at cost, because there is no market for the stock other than the FHLB or member institutions. Therefore, when evaluating FHLB stock for impairment, its value is based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. The Company does not consider this investment to be impaired at September 30, 2024, and no impairment has been recognized. FHLB stock is included in a separate line item, Restricted stock, at cost on the Consolidated Balance Sheets and is not part of the Company’s AFS securities portfolio. The Company’s Restricted stock line item on the Consolidated Balance Sheets also includes an investment in Community Bankers’ Bank, totaling $111 thousand at September 30, 2024, and $50 thousand at December 31, 2023, which is carried at cost and is not impaired at September 30, 2024.