On January 19, 2018, the Bank entered into an agreement to invest in qualified affordable housing projects through a limited liability company. At December 31, 2025 and 2024, the balance of the Bank’s investment was $1.2 million and $1.6 million, respectively, and is reflected in other assets on the consolidated balance sheets. The unfunded commitment related to the qualified affordable housing project investment at December 31, 2025 and 2024 was $72,000 and $168,000, respectively, and is reflected in other liabilities on the consolidated balance sheets. The Bank expects to fulfill the commitment as capital calls are made through 2029.

On December 16, 2025, the Bank entered into another agreement to invest in qualified affordable housing projects through a limited liability company.  At December 31, 2025, the balance of the Bank’s investment was $4.0 million and is reflected in other assets on the consolidated balance sheets.  The unfunded commitment related to the qualified affordable housing project investment at December 31, 2025 was $3.3 million and is reflected in other liabilities on the consolidated balance sheets.  The Bank expects to fulfill the commitment as capital calls are made through 2036.

The investments are accounted for using the proportional amortization method. During 2025, 2024 and 2023, the Bank recognized amortization expense of $346,000, $291,000 and $307,000, respectively, which was included in income tax expense on the consolidated statements of income. Additionally, during 2025, 2024 and 2023, the Bank recognized tax credits and other tax benefits from its qualified affordable housing project investment of $416,000, $407,000 and $403,000, respectively, which was included in income tax expense on the consolidated statements of income.