
	June 30, 2024
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value

Available-for-sale:
U.S. Treasury	$	139,693	$	—	$	(10,918)	$	—	$	128,775
U.S. government agency	57,308		—		(3,319)		—		53,989
Municipal	155,980		—		(21,852)		—		134,128
Mortgage-backed:
Agency residential	191,521		147		(14,946)		—		176,722
Agency commercial	136,367		2		(14,153)		—		122,216
Corporate	57,698		—		(4,473)		—		53,225
Total available-for-sale	$	738,567	$	149	$	(69,661)	$	—	$	669,055

	June 30, 2024
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance for Credit Losses

Held-to-maturity:
U.S. government agency	$	88,460	$	—	$	(9,223)	$	79,237	$	—
Municipal	36,950		38		(601)		36,387		—
Mortgage-backed:
Agency residential	90,992		—		(6,689)		84,303		—
Agency commercial	296,147		—		(42,321)		253,826		—
Total held-to-maturity	$	512,549	$	38	$	(58,834)	$	453,753	$	—


	December 31, 2023
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value

Available-for-sale:
U.S. Treasury	$	159,715	$	—	$	(11,093)	$	—	$	148,622
U.S. government agency	55,359		—		(3,262)		—		52,097
Municipal	229,030		26		(23,499)		—		205,557
Mortgage-backed:
Agency residential	188,641		61		(14,718)		—		173,984
Agency commercial	141,214		3		(14,205)		—		127,012
Corporate	57,665		9		(5,485)		—		52,189
Total available-for-sale	$	831,624	$	99	$	(72,262)	$	—	$	759,461

	December 31, 2023
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance for Credit Losses

Held-to-maturity:
U.S. government agency	$	88,448	$	—	$	(8,292)	$	80,156	$	—
Municipal	38,442		394		(163)		38,673		—
Mortgage-backed:
Agency residential	95,828		—		(5,569)		90,259		—
Agency commercial	298,721		—		(41,313)		257,408		—
Total held-to-maturity	$	521,439	$	394	$	(55,337)	$	466,496	$	—

As of June 30, 2024 and December 31, 2023, the Bank had debt securities with a carrying value of $558.4 million and $419.4 million, respectively, which were pledged to secure public deposits, securities sold under agreements to repurchase, available borrowing capacity, and for other purposes required or permitted by law.

The amortized cost and fair value of debt securities by contractual maturity, as of June 30, 2024, are shown below. 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.


	Available-for-Sale				Held-to-Maturity
(dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value

Due in 1 year or less	$	49,567	$	48,554	$	5,095	$	5,048
Due after 1 year through 5 years	184,436		170,465		49,612		46,628
Due after 5 years through 10 years	154,676		132,777		65,354		59,096
Due after 10 years	22,000		18,321		5,349		4,852

Mortgage-backed:
Agency residential	191,521		176,722		90,992		84,303
Agency commercial	136,367		122,216		296,147		253,826
Total	$	738,567	$	669,055	$	512,549	$	453,753

The following table presents gross unrealized losses and fair value of debt securities available-for-sale that do not have an associated allowance for credit losses as of June 30, 2024 and December 31, 2023, aggregated by category and length of time that individual debt securities have been in a continuous unrealized loss position:


	June 30, 2024
	Investments in a Continuous Unrealized Loss Position
	Less than 12 Months				12 Months or More				Total
(dollars in thousands)	Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value

Available-for-sale:
U.S. Treasury	$	—	$	—	$	(10,918)	$	128,775	$	(10,918)	$	128,775
U.S. government agency	(9)		4,728		(3,310)		49,254		(3,319)		53,982
Municipal	(26)		2,627		(21,826)		130,726		(21,852)		133,353
Mortgage-backed:
Agency residential	(98)		11,311		(14,848)		146,244		(14,946)		157,555
Agency commercial	(4)		389		(14,149)		120,730		(14,153)		121,119
Corporate	—		—		(4,473)		51,231		(4,473)		51,231
Total available-for-sale	$	(137)	$	19,055	$	(69,524)	$	626,960	$	(69,661)	$	646,015


	December 31, 2023
	Investments in a Continuous Unrealized Loss Position
	Less than 12 Months				12 Months or More				Total
(dollars in thousands)	Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value

Available-for-sale:
U.S. Treasury	$	—	$	—	$	(11,093)	$	148,622	$	(11,093)	$	148,622
U.S. government agency	(2)		168		(3,260)		51,910		(3,262)		52,078
Municipal	(26)		4,749		(23,473)		194,287		(23,499)		199,036
Mortgage-backed:
Agency residential	(163)		9,354		(14,555)		156,785		(14,718)		166,139
Agency commercial	(26)		3,016		(14,179)		123,404		(14,205)		126,420
Corporate	(414)		4,361		(5,071)		45,826		(5,485)		50,187
Total available-for-sale	$	(631)	$	21,648	$	(71,631)	$	720,834	$	(72,262)	$	742,482

As of June 30, 2024, there were 686 debt securities in an unrealized loss position for a period of twelve months or more, and 70 debt securities in an unrealized loss position for a period of less than twelve months.

U.S. Treasury, U.S. government agency, and agency mortgage-backed securities are considered to have no risk of credit loss as they are either explicitly or implicitly guaranteed by the U.S. government. The changes in fair value in these portfolios are considered to be primarily driven by changes in market interest rates and other non-credit risks, such as prepayment and liquidity risks.

Municipal securities include approximately 73% general obligation bonds as of June 30, 2024, which have a very low historical default rate due to issuers generally having taxing authority to service the debt. The remainder of the municipal securities are also of high credit quality with ratings of A1/A+ or better. The Company evaluates credit risk through monitoring credit ratings and reviews of available financial data. The changes in fair value in these portfolios are considered to be primarily driven by changes in market interest rates and other non-credit risks, such as call and liquidity risks. The estimated allowance for credit losses for the municipal debt securities held-to-maturity was deemed insignificant.

Corporate securities include investment grade corporate and bank subordinated debt securities. The Company evaluates credit risk through monitoring credit ratings, reviews of available issuer financial data, and sector trends. During 2024, the changes in fair value in corporate securities were considered to be primarily driven by changes in market interest rates and other non-credit risks, such as call and liquidity risks. An $0.8 million allowance for credit losses was recorded as of June 30, 2023, related to one bank subordinated debt security and reflected heightened potential credit risk following the failures of other banks in early 2023. The related provision for credit losses were $0.2 million and $0.8 million during the three and six months ended June 30, 2023, respectively. This allowance for credit losses was later reversed during the third quarter of 2023 after a merger announcement by the issuer of the bank subordinated debt security.

As of June 30, 2024, the Company did not intend to sell the debt securities that are in an unrealized loss position, and it was more likely than not that the Company would recover the amortized cost prior to being required to sell the debt securities.


	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in thousands)	2024		2023		2024		2023

Proceeds from sales	$	—	$	—	$	66,812	$	145,844
Gross realized gains	—		—		—		—
Gross realized losses	—		—		(3,382)		(1,007)

Equity securities with readily determinable fair values are measured at fair value with changes in fair value recognized in unrealized gains (losses) on equity securities on the consolidated statements of income. The Company has elected to measure equity securities with no readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes for identical or similar securities of the same issuer.


	June 30, 2024
(dollars in thousands)	Readily Determinable Fair Value		No Readily Determinable Fair Value

Initial cost	$	3,124	$	2,948
Cumulative net unrealized gains (losses)	104		(335)
Carrying value	$	3,228	$	2,613


	December 31, 2023
(dollars in thousands)	Readily Determinable Fair Value		No Readily Determinable Fair Value

Initial cost	$	3,143	$	2,840
Cumulative net unrealized gains (losses)	217		(335)
Carrying value	$	3,360	$	2,505

As of June 30, 2024 and December 31, 2023, the cumulative net unrealized losses on equity securities with no readily determinable fair value reflect impairments of $0.2 million and downward adjustments based on observable price changes of an identical investment of $0.2 million. There have been no upward adjustments based on observable price changes to equity securities with no readily determinable fair value.


	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in thousands)	2024		2023		2024		2023

Readily determinable fair value	$	(96)	$	7	$	(112)	$	123
No readily determinable fair value	—		—		—		(138)
Unrealized gains (losses) on equity securities	$	(96)	$	7	$	(112)	$	(15)