Note 5. Investments

Investments in Joint Venture

In December 2015, the Company finalized an agreement with Intertex Property Management, Inc., a California corporation, to enter into a joint venture to form Tesoro Hills, LLC (the “Valencia Hills Project”). Intertex is a managing member of the LLC, with authority to direct operations. The Company is a non-managing member with no authority beyond limited rights granted to the Company by the operating agreement. The Valencia Hills Project is a joint venture that will develop and market property formerly classified by the Company as a foreclosed asset. In January 2016, the Company transferred ownership in the foreclosed asset to the Valencia Hills Project. In addition, the Company reclassified the carrying value of the property from foreclosed assets to an investment in a joint venture. The Company’s initial investment in the joint venture was $900 thousand and represented 100% of the ownership of the joint venture. Under the terms of the operating agreement, the members of the joint venture are entitled to receive their respective capital contributions until the balance is reduced to zero. After these payments are made, the Company is entitled to receive 30% of the profits generated by the operation of the joint venture or disposition of the property. The Company’s ownership percentage in the joint venture was 73% as of December 31, 2025, and December 31, 2024.

The value of the Company’s investment in the joint venture was $875 thousand and $873 thousand, as of December 31, 2025 and 2024, respectively. Management’s impairment analysis of the investment as of December 31, 2025, has determined that the investment is not impaired.

Certificates of Deposit

The Company held an investment in a certificate of deposit with an original maturity greater than three months at December 31, 2025 and 2024.

Details of certificates with original maturities of greater than three months owned by the Company as of December 31, 2025 and 2024, are as follows (dollars in thousands):

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CD 1 was purchased from ACCU and is pledged as a compensating balance under the terms of the ACCU LOC. CD 2 was purchased from KCT and was pledged as a compensating balance under the terms of the KCT Warehouse LOC as of December 31, 2024. Neither CD 2 nor the KCT Warehouse LOC were renewed when they matured. See “Note 10: Credit Facilities and Other Debt” for additional terms and conditions of these credit facilities.

Other Investments

In June 2022, the Company entered into two indexed annuity insurance contracts whereby an insurance company guarantees a fixed rate of return in exchange for holding a deposit from the Company for the contracted period of ten years. The Company recognized $16 thousand and $30 thousand, respectively, in income on these investments during the years ended December 31, 2025 and 2024.

Additional information related to these investments is as follows (dollars in thousands):

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