Note 4. Investments

Available for Sale (AFS) Securities

The amortized cost and estimated fair value of AFS securities as of June 30, 2025 and December 31, 2024 are as follows:



(Dollars in thousands)			Gross		Gross
	Amortized		unrealized		unrealized		Fair
June 30, 2025	cost		gains		losses		Value
U.S. Treasury	$	36,037	$	—	$	(3,175)	$	32,862
Municipal		154,914		—		(20,812)		134,102
Corporate		25,378		—		(1,875)		23,503
Agency MBS & CMO		142,114		23		(7,161)		134,976
Non-Agency MBS & CMO		130,390		121		(3,616)		126,895
Asset-backed		29,381		49		(509)		28,921
Total	$	518,214	$	193	$	(37,148)	$	481,259



(Dollars in thousands)			Gross		Gross
	Amortized		unrealized		unrealized		Fair
December 31, 2024	cost		gains		losses		value
U.S. Treasury	$	36,192	$	—	$	(4,395)	$	31,797
Municipal		156,528		37		(22,973)		133,592
Corporate		26,356		1		(2,133)		24,224
Agency MBS & CMO		149,003		15		(10,276)		138,742
Non-Agency MBS & CMO		154,554		45		(5,429)		149,170
Asset-backed		31,420		163		(504)		31,079
Total	$	554,053	$	261	$	(45,710)	$	508,604

At June 30, 2025 and December 31, 2024, the fair value of debt securities pledged to secure public deposits, trust deposits, FHLB borrowing commitments and Federal Reserve Bank discount window availability totaled $361.5 million and $151.7 million, respectively. The Bank has no investment in a single obligor that exceeds 10% of shareholders’ equity, except for securities issued by the U.S. Treasury and U.S. government sponsored entities.

The amortized cost and estimated fair value of debt securities at June 30, 2025, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because of prepayment or call options embedded in the securities. Securities not due at a single maturity date are presented separately.



(Dollars in thousands)	Amortized ‎cost		Fair ‎value
Due in one year or less	$	—	$	—
Due after one year through five years		45,209		42,091
Due after five years through ten years		92,414		81,949
Due after ten years		78,706		66,427
		216,329		190,467
MBS, CMO & ABS		301,885		290,792
	$	518,214	$	481,259

Credit Impairment:

The debt securities portfolio contained 518 securities, having a fair value of $453.9 million, with $37.1 million in unrealized losses at June 30, 2025, an improvement of $8.6 million from the prior year-end.

AFS securities in an unrealized loss position are evaluated for credit impairment at least quarterly. For these securities, the Bank considers: (1) the extent to which the fair value is less than amortized cost; (2) adverse conditions specifically related to the security, industry or geographic area; (3) the payment structure of the debt security and the likelihood of the issuer being able to make payments that increase in the future; (4) failure of the issuer of the security to make scheduled interest or principal payments; and (5) any changes to the rating of the security by a rating agency. In addition, the Bank considers whether it intends to sell these securities or whether it will be forced to sell these securities before the earlier of

amortized cost recovery or maturity. The Bank does not have the intent to sell and does not believe it will more likely than not be required to sell any of these securities prior to a recovery of their fair value to amortized cost. The unrealized losses identified on debt securities and subject to evaluation at June 30, 2025 and December 31, 2024, were determined not to be attributable to credit related factors; therefore, the Bank does not have an allowance for credit loss for these investments.

The following table summarizes debt securities in the AFS portfolio in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by investment category, length of time that individual securities have been in continuous unrealized loss position and the number of securities in each category as of June 30, 2025 and December 31, 2024:



	June 30, 2025
	Less than 12 months					12 months or more					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Dollars in thousands)	Value		Losses		Count	Value		Losses		Count	Value		Losses		Count

U.S. Treasury	$	—	$	—	—	$	32,862	$	(3,175)	13	$	32,862	$	(3,175)	13
Municipal		784		(88)	2		133,318		(20,724)	163		134,102		(20,812)	165
Corporate		486		(14)	1		23,017		(1,861)	49		23,503		(1,875)	50
Agency MBS & CMO		54,668		(1,042)	19		78,652		(6,119)	171		133,320		(7,161)	190
Non-Agency MBS & CMO		68,428		(1,918)	17		38,169		(1,698)	39		106,597		(3,616)	56
Asset-backed		4,738		(15)	9		18,794		(494)	35		23,532		(509)	44
Total unrealized losses	$	129,104	$	(3,077)	48	$	324,812	$	(34,071)	470	$	453,916	$	(37,148)	518



	December 31, 2024
	Less than 12 months					12 months or more					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Dollars in thousands)	Value		Losses		Count	Value		Losses		Count	Value		Losses		Count

U.S. Treasury	$	—	$	—	—	$	31,797	$	(4,395)	13	$	31,797	$	(4,395)	13
Municipal		—		—	—		132,550		(22,973)	164		132,550		(22,973)	164
Corporate		—		—	—		23,237		(2,133)	50		23,237		(2,133)	50
Agency MBS & CMO		54,388		(2,250)	15		82,110		(8,026)	183		136,498		(10,276)	198
Non-Agency MBS & CMO		79,422		(2,974)	26		53,615		(2,455)	50		133,037		(5,429)	76
Asset-backed		733		(1)	3		19,061		(503)	34		19,794		(504)	37
Total unrealized losses	$	134,543	$	(5,225)	44	$	342,370	$	(40,485)	494	$	476,913	$	(45,710)	538