Tax Credit Investments:

The Company invests in qualified affordable housing projects, as well as solar investment tax credits.

At March 31, 2026 and December 31, 2025, the balance of the investment for qualified affordable housing projects was $29 million and $26.0 million, respectively. Total unfunded commitments related to the investments in qualified affordable housing projects totaled $14.1 million and $13.2 million at March 31, 2026 and December 31, 2025. The Company expects to complete the fulfillment of these commitments during the year ending 2040.

In the first quarters ended March 31, 2026 and March 31, 2025, the Company recognized amortization expense of $537,000 and $473,000, respectively, from its investment in qualified affordable housing projects. This amortization expense was included within income tax expense on the consolidated statements of income.

Additionally, during the first quarters ended March 31, 2026 and March 31, 2025, the Company recognized tax credits and other benefits from its investment in affordable housing tax credits of $661,000 and $564,000, respectively. The qualified affordable housing investment credits are included in the net changes in other assets and liabilities in the cash flows from operating activities in the consolidated statements of cash flows. During the three month periods ended March 31, 2026 and March 31, 2025, the Company did not incur impairment losses related to its investment in affordable housing tax credits.

In the first quarter of 2025, the Company began investing in solar investment tax credits. At March 31, 2026, and  December 31, 2025, the balance of the investment was $2.9 million and $3.3 million, respectively. The solar tax investment was fully funded at March 31, 2026.  The total unfunded commitments related to the investments in solar investment tax credits totaled $1.7 million at December 31, 2025. 

In the first quarter ended March 31, 2026, the Company recognized amortization expense of $569,000 from its investment in solar investment tax credits. This amortization expense was included within income tax expense on the consolidated statements of income. In the three month period ended March 31, 2025, the Company did not recognize amortization expense from its investment in solar investment tax credits. 

Additionally, during the first quarter ended March 31, 2026, the Company recognized tax credits and other benefits from its investment in solar investment tax credits of $730,000. The solar investment tax credits are included in the net changes in other assets and liabilities in the cash flows from operating activities in the consolidated statements of cash flows. In the three month period ended March 31, 2025, the Company did not recognize tax credits and other benefits from its investment in solar investment tax credits. During the first quarters ended March 31, 2026 and March 31, 2025, the Company did not incur impairment losses related to its investment in solar investment tax credits.