The following presents the amortized cost, fair value, and ACL of debt securities and the corresponding amounts of gross unrealized or unrecognized gains and losses as of the date noted (dollars in thousands):


September 30, 2025	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance for Credit Losses
Debt securities available-for-sale:
Government National Mortgage Association (GNMA) MBS – residential	$	9,903	$	—	$	(34)	$	9,869	$	—
Federal National Mortgage Association (FNMA) MBS – residential	14,872		—		(47)		14,825		—
Government CMO and MBS – commercial	24,632		—		(149)		24,483		—
Total debt securities available-for-sale	$	49,407	$	—	$	(230)	$	49,177	$	—


September 30, 2025	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value		Allowance for Credit Losses
Debt securities held-to-maturity:
U.S. Treasury debt	$	247	$	1	$	—	$	248	$	—

Corporate bonds	24,579		103		(1,669)		23,013		(71)
GNMA MBS – residential	27,164		6		(2,468)		24,702		—
FNMA MBS – residential	24,639		155		(407)		24,387		—
Government CMO and MBS – commercial	7,678		18		(300)		7,396		—
Corporate CMO and MBS	13,969		26		(152)		13,843		—
Total debt securities held-to-maturity	$	98,276	$	309	$	(4,996)	$	93,589	$	(71)


December 31, 2024	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value		Allowance for Credit Losses
Debt securities held-to-maturity:
U.S. Treasury debt	$	246	$	—	$	(4)	$	242	$	—

Corporate bonds	23,578		—		(2,801)		20,777		(71)
GNMA MBS – residential	31,361		—		(3,383)		27,978		—
FNMA MBS – residential	12,011		—		(689)		11,322		—
Government CMO and MBS – commercial	5,075		5		(483)		4,597		—
Corporate CMO and MBS	3,524		—		(279)		3,245		—
Total debt securities held-to-maturity	$	75,795	$	5	$	(7,639)	$	68,161	$	(71)

Net accretion of premiums and amortization of discounts related to debt securities during the three and nine month periods ended September 30, 2025 and 2024 was immaterial, and is included in Net interest income in the Consolidated Statements of Income.

As of September 30, 2025, the amortized cost and estimated fair value of debt securities have contractual maturity dates shown in the table below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Debt securities not due at a single maturity date are shown separately.


	September 30, 2025
	Available-for-Sale				Held-to-Maturity
(dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	—	$	—	$	—	$	—
Due between one year and five years	—		—		4,244		4,293
Due between five years and ten years	—		—		19,420		17,810
Due after ten years	—		—		1,162		1,158
CMO and MBS securities	49,407		49,177		73,450		70,328
Total	$	49,407	$	49,177	$	98,276	$	93,589

In 2022, the Company committed $6.0 million in total to two bank technology funds. Additionally, in the third quarter of 2025, the Company committed $3.0 million to a sale-leaseback fund. During the nine months ended September 30, 2025, the Company made $1.8 million of contributions to the fund partnerships and received $0.1 million of returns on investment. During the year ended December 31, 2024, the Company made $0.5 million of contributions to the partnerships and received $0.3 million of returns on investment. As of September 30, 2025 and December 31, 2024, the Company held a balance of $4.3 million and $2.5 million, respectively, which is included in Other assets in the accompanying Condensed Consolidated Balance Sheets. The Company may be obligated to invest up to an additional $4.7 million in future contributions.

In 2014, the Company began investing in a small business investment company (SBIC) fund administered by the Small Business Administration (SBA). The Company made no contributions to the SBIC fund during the nine months ended September 30, 2025. During the year ended December 31, 2024, the Company made $0.2 million of contributions to the SBIC fund. As of September 30, 2025 and December 31, 2024, the Company held a balance of $2.4 million in the SBIC fund, which is included in Other assets in the accompanying Condensed Consolidated Balance Sheets. The Company may be obligated to invest up to an additional $0.6 million in future SBIC investments.

As of September 30, 2025 and December 31, 2024, AFS and HTM securities with carrying values of $30.2 million and $34.9 million, respectively, were pledged to secure various public deposits and credit facilities of the Company.

As of September 30, 2025 and December 31, 2024, there were no holdings of debt securities of any one issuer, other than the U.S. Government sponsored entities and agencies, in an amount greater than 10% of shareholders’ equity.

The Company did not sell any debt securities during the nine months ended September 30, 2025 or 2024. The Company did not transfer securities between debt securities AFS and HTM during the nine months ended September 30, 2025 or 2024.

The following presents AFS debt securities that were in an unrealized loss position, based on the length of time the individual debt securities have been in an unrealized loss position.


	September 30, 2025
		Less than 12 Months				12 Months or More				Total
(dollars in thousands)	Number of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Debt securities available-for-sale:
GNMA MBS – residential	2	$	9,869	$	(34)	$	—	$	—	$	9,869	$	(34)
FNMA MBS – residential	3	14,825		(47)		—		—		14,825		(47)
Government CMO and MBS – commercial	5	24,483		(149)		—		—		24,483		(149)
Total debt securities available-for-sale	10	$	49,177	$	(230)	$	—	$	—	$	49,177	$	(230)

Management measures expected credit losses on debt securities on a collective basis by major security type. The majority of our investment portfolio consists of securities issued by U.S. government entities and agencies and we consider the risk of credit loss to be zero and, therefore, we do not record an ACL. The Company's non-government backed debt securities include private label CMO and MBS and corporate bonds. Refer to Note 1 – Organization and Summary of Significant Accounting Policies for additional information on the Company’s methodology on estimating credit losses.

As of September 30, 2025, accrued interest receivable on AFS debt securities and HTM debt securities was $0.1 million and $0.5 million, respectively. As of December 31, 2024, accrued interest receivable on HTM debt securities was $0.3 million. Accrued interest receivable for debt securities is excluded from the estimate of credit losses.

As of September 30, 2025, no ACL has been recognized on AFS debt securities in an unrealized loss position as management does not believe any of the debt securities are impaired due to reasons of credit quality. The Company’s AFS portfolio is comprised of mortgage-backed securities issued by U.S. government entities and agencies, which we consider the risk of credit loss to be zero. Total gross unrealized losses were attributable to changes in interest rates, relative to when the debt securities were purchased, and not due to the credit quality of the debt securities. The Company does not intend to sell the AFS debt securities that were in an unrealized loss position and it is likely that the Company will not be required to sell the AFS debt securities before recovery of their amortized cost basis, which may be at maturity.

The ACL on HTM debt securities is estimated using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The ACL on HTM debt securities was $71 thousand as of September 30, 2025 and December 31, 2024, respectively.


	Three Months Ended September 30,
	2025				2024
(dollars in thousands)	Corporate Bonds		Corporate CMO		Corporate Bonds		Corporate CMO
Allowance for credit losses:
Beginning balance	$	71	$	—	$	71	$	—

Provision for credit losses	—		—		—		—
Securities charged-off (recoveries)	—		—		—		—
Total ending allowance balance	$	71	$	—	$	71	$	—


	Nine Months Ended September 30,
	2025				2024
(dollars in thousands)	Corporate Bonds		Corporate CMO		Corporate Bonds		Corporate CMO
Allowance for credit losses:
Beginning balance	$	71	$	—	$	71	$	—

Provision for credit losses	—		—		—		—
Securities charged-off (recoveries)	—		—		—		—
Total ending allowance balance	$	71	$	—	$	71	$	—

The Company monitors the credit quality of debt securities on a quarterly basis. As of September 30, 2025 and December 31, 2024, there were no debt securities past due or on non-accrual.