INVESTMENT SECURITIES

9 Months Ended

Sep. 30, 2025

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE 3 – INVESTMENT SECURITIES

The amortized cost, gross unrealized gains and losses, and estimated fair values of securities AFS at the dates indicated are summarized as follows:

			Gross		Gross
	Amortized		unrealized		unrealized		Estimated
	cost		gains		losses		fair value
September 30, 2025
U.S. Government Agencies	$	1,738	$	—	$	(7)	$	1,731
Municipal securities		25,219		166		(911)		24,474
Mortgage-backed securities		49,541		315		(2,752)		47,104
Collateralized mortgage obligations		47,862		210		(1,480)		46,592
SBA securities		3,177		6		(53)		3,130
Corporate bonds		71,094		63		(6,414)		64,743
Total	$	198,631	$	760	$	(11,617)	$	187,774

			Gross		Gross
	Amortized		unrealized		unrealized		Estimated
	cost		gains		losses		fair value
December 31, 2024
U.S. Government Agencies	$	1,949	$	—	$	(12)	$	1,937
Municipal securities		23,777		82		(1,334)		22,525
Mortgage-backed securities		51,281		95		(3,893)		47,483
Collateralized mortgage obligations		49,220		147		(2,208)		47,159
SBA securities		4,054		6		(75)		3,985
Corporate bonds		81,232		29		(11,022)		70,239
Total	$	211,513	$	359	$	(18,544)	$	193,328

No allowances for credit losses have been recognized on investment debt securities AFS in an unrealized loss position at both September 30, 2025 and December 31, 2024.

Amortized cost and fair values exclude accrued interest receivable of $1.5 million at September 30, 2025 and $1.3 million at December 31, 2024, which is included in interest receivable and other assets in the condensed consolidated balance sheets.

During both the three and nine months ended September 30, 2025 and 2024, the Company sold no securities AFS.

The amortized cost and estimated fair value of securities AFS at the dates indicated by contractual maturity 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.

	September 30, 2025				December 31, 2024
	Amortized		Estimated		Amortized		Estimated
	cost		fair value		cost		fair value
Securities AFS
Due in one year or less	$	2,059	$	2,058	$	2,002	$	1,993
Due after one through five years		18,242		16,809		37,763		33,467
Due after five years through ten years		88,868		81,798		84,002		74,018
Due after ten years		89,462		87,109		87,746		83,850
Total	$	198,631	$	187,774	$	211,513	$	193,328

At both September 30, 2025 and December 31, 2024, there were no securities pledged.

The estimated fair value and gross unrealized losses for securities AFS aggregated by the length of time that individual securities have been in a continuous unrealized loss position at the dates indicated are as follows:

	Less than 12 months				12 months or more				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	fair value		loss		fair value		loss		fair value		loss
September 30, 2025
U.S. Government Agencies	$	911	$	(3)	$	820	$	(4)	$	1,731	$	(7)
Municipal securities		2,064		(138)		12,087		(773)		14,151		(911)
Mortgage-backed securities		1,582		(19)		25,336		(2,733)		26,918		(2,752)
Collateralized mortgage obligations		12,266		(52)		20,932		(1,428)		33,198		(1,480)
SBA securities		1,734		(12)		852		(41)		2,586		(53)
Corporate bonds		1,739		(11)		62,097		(6,403)		63,836		(6,414)
Total	$	20,296	$	(235)	$	122,124	$	(11,382)	$	142,420	$	(11,617)

	Less than 12 months				12 months or more				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	fair value		loss		fair value		loss		fair value		loss
December 31, 2024
U.S. Government Agencies	$	1,938	$	(12)	$	—	$	—	$	1,938	$	(12)
Municipal securities		5,135		(67)		13,333		(1,267)		18,468		(1,334)
Mortgage-backed securities		16,514		(321)		22,257		(3,572)		38,771		(3,893)
Collateralized mortgage obligations		17,234		(145)		19,012		(2,063)		36,246		(2,208)
SBA securities		2,023		(9)		1,250		(66)		3,273		(75)
Corporate bonds		2,760		(240)		64,118		(10,782)		66,878		(11,022)
Total	$	45,604	$	(794)	$	119,970	$	(17,750)	$	165,574	$	(18,544)

At September 30, 2025, the Company held 337 securities AFS, of which 179 were in an unrealized loss position for more than twelve months and 22 were in an unrealized loss position for less than twelve months. At December 31, 2024, the Company held 352 investment securities, of which 212 were in an unrealized loss position for more than twelve months and 53 were in an unrealized loss position for less than twelve months. The Company anticipates full recovery of amortized cost with respect to these securities at maturity or sooner in the event of a more favorable market interest rate environment.

Allowance for credit losses on investment debt securities available-for-sale

Investment debt securities that were in an unrealized loss position as of September 30, 2025 were evaluated to determine whether the decline in fair value below the amortized cost basis resulted from a credit loss or changes in required yields by investors in these types of securities, among other factors. This assessment first includes a determination of whether the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis less any current-period credit losses. In making this assessment, management considers the nature of the security and any related government guarantees, any changes to the rating of the security by a rating agency, creditworthiness of the issuers/guarantors, the underlying collateral, the financial conditions and prospects of the issuer, and any adverse conditions specifically related to the security, among other factors.

As of September 30, 2025, the Company expects to recover the amortized cost basis of its securities, the Company has no present intent to sell any investment securities with unrealized losses, it is not more likely than not that we will be required to sell securities with unrealized losses before recovery of their amortized cost and the decline in fair value is largely attributed to changes in interest rates and other market conditions. The issuers of these securities continue to make timely principal and interest payments. No allowances for credit losses have been recognized on investment debt securities AFS in an unrealized loss position, as management does not believe any of the securities are impaired due to reasons of credit quality at September 30, 2025.

Equity Securities

The Company recognized a net gain on equity securities of $771,000 and $523,000 for the three and nine months ended September 30, 2025, compared to $1.4 million and $1.7 million for the three and nine months ended September 30, 2024, respectively. Equity securities were $13.3 million and $13.1 million as of September 30, 2025 and December 31, 2024, respectively.