3. SECURITIES AND OTHER INVESTMENTS

Available for Sale

The amortized cost, gross unrealized gains and losses, and estimated fair values of AFS securities as of December 31, are as follows (dollars in thousands):

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⁽¹⁾ Other bonds include asset-backed securities.

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The amortized cost, gross unrealized gains and losses, and estimated fair values of AFS securities as of December 31, are as follows (dollars in thousands):

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⁽¹⁾ Other bonds include asset-backed securities.

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The following table shows the gross unrealized losses and fair value of the Company’s AFS securities with unrealized losses, which are aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position for the following periods ended (dollars in thousands).

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⁽¹⁾ Other bonds include asset-backed securities.

⁽²⁾ Comprised of 703 and 726 individual securities as of December 31, 2025 and December 31, 2024, respectively.

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The Company has evaluated AFS securities in an unrealized loss position for credit related impairment at December 31, 2025 and 2024 and concluded no impairment existed based on several factors which included: (1) the majority of these 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 cost basis 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.

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Additionally, the majority of the Company’s MBS are issued by the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and the Government National Mortgage Association and do not have credit risk given the implicit and explicit government guarantees associated with these agencies. In addition, the non-agency mortgage-backed and asset-backed securities generally received a 20% simplified supervisory formula approach rating. The Company’s AFS investment portfolio is generally highly-rated or agency backed. At December 31, 2025 and 2024, all AFS securities were current with no securities past due or on non-accrual, and no ACL was held against the Company’s AFS securities portfolio.

The following table presents the amortized cost and estimated fair value of AFS securities as of December 31, by contractual maturity (dollars 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.

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Refer to Note 10 "Commitments and Contingencies" in this Form 10-K for information regarding the estimated fair value of AFS securities that were pledged to secure public deposits, repurchase agreements, and for other purposes as permitted or required by law as of December 31, 2025 and 2024.

Accrued interest receivable on AFS securities totaled $15.0 million and $10.1 million at December 31, 2025 and 2024 respectively, and is included in “Other assets” on the Company’s Consolidated Balance Sheets. For the years ended December 31, 2025, 2024, and 2023, accrued interest receivable write-offs were not material to the Company’s consolidated financial statements.

Held to Maturity

The carrying value, gross unrealized gains and losses, and estimated fair values of HTM securities as of December 31, are as follows (dollars in thousands):

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⁽¹⁾ Other bonds include asset-backed securities.

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The carrying value, gross unrealized gains and losses, and estimated fair values of HTM securities as of December 31, are as follows (dollars in thousands):

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⁽¹⁾ Other bonds include asset-backed securities.

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The following table presents the amortized cost of HTM securities as of December 31, by security type and credit rating (dollars in thousands):

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⁽¹⁾ Generally considered not to have credit risk given the government guarantees associated with these agencies.

⁽²⁾ Non-agency mortgage-backed and asset-backed securities have limited credit risk, supported by most receiving a 20% simplified supervisory formula approach rating.

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The following table presents the amortized cost and estimated fair value of HTM securities as of December 31, by contractual maturity (dollars 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.

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Refer to Note 10 “Commitments and Contingencies” in this Form 10-K for information regarding the estimated fair value of HTM securities that were pledged to secure public deposits as permitted or required by law as of December 31, 2025 and 2024.

Accrued interest receivable on HTM securities totaled $9.9 million and $8.4 million at December 31, 2025 and 2024, respectively, and is included in “Other assets” on the Company’s Consolidated Balance Sheets. For the years ended December 31, 2025, 2024, and 2023, accrued interest receivable write-offs were not material to the Company’s consolidated financial statements.

The Company’s HTM investment portfolio primarily consists of highly rated municipal securities and agency mortgage-backed securities. At December 31, 2025 and 2024, the Company’s HTM securities were all current, with no securities past due or on non-accrual. The Company’s HTM securities ACL was immaterial at December 31, 2025 and 2024.

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Restricted Stock, at cost

The FHLB required the Bank to maintain stock in an amount equal to 4.75% of outstanding borrowings and a specific percentage of the member’s total assets at December 31, 2025 and 2024. The FRB requires the Company to maintain stock with a par value equal to 6% of its outstanding capital. At December 31, 2025 and 2024, restricted stock consists of FRB stock in the amount of $141.2 million and $82.9 million, respectively, and FHLB stock in the amount of $49.0 million and $20.1 million, respectively.

Tax Equity Investments

For the years ended December 31, 2025, 2024, and 2023, the Company recognized amortization of $10.8 million, $8.8 million, and $4.8 million, respectively, and tax credits and tax savings of $14.2 million, $10.3 million, and $5.7 million, respectively, associated with these investments within “Income tax expense” on the Company’s Consolidated Statements of Income. The carrying value of the Company’s investments in these tax equity investments was $136.5 million and $88.7 million at December 31, 2025 and 2024, respectively. At December 31, 2025 and 2024, the Company’s recorded liability totaled $91.5 million and $55.6 million, respectively, for the related unfunded commitments, which is expected to be paid throughout the years 2026 through 2043.

Realized Gains and Losses

The following table presents the gross realized gains and losses on and the proceeds from the sale of securities during the years ended December 31, (dollars in thousands):

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⁽¹⁾ Includes gains (losses) on sales and calls of securities