Investment Securities

3 Months Ended

Mar. 31, 2026

(4) Investment Securities

(a) Debt Securities available for sale

The amortized cost and fair value of the debt securities available for sale are as follows:

	March 31, 2026
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value

U.S. government sponsored enterprises	$	14,966	$	-	$	79	$	14,887
State and political subdivisions		9		-		-		9
Mortgage backed securities and collateralized mortgage obligations - residential		221,545		334		16,670		205,209
Corporate bonds		69,973		18		854		69,137
Small Business Administration - guaranteed participation securities		11,496		-		700		10,796
Other		689		19		-		708
Total Securities Available for Sale	$	318,678	$	371	$	18,303	$	300,746

	December 31, 2025
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value

U.S. government sponsored enterprises	$	31,939	$	18	$	185	$	31,772
State and political subdivisions		9		-		-		9
Mortgage backed securities and collateralized mortgage obligations - residential		221,611		543		15,864		206,290
Corporate bonds		59,972		99		139		59,932
Small Business Administration - guaranteed participation securities		12,427		-		717		11,710
Other		689		16		-		705

Total Securities Available for Sale	$	326,647	$	676	$	16,905	$	310,418

The following table categorizes the debt securities included in the available for sale portfolio as of March 31, 2026, based on the securities’ final maturity. Actual maturities may differ because of securities prepayments and the right of certain issuers to call or prepay their obligations without penalty. Debt securities not due at a single maturity date are presented separately:

	March 31, 2026
	Amortized		Fair
(dollars in thousands)	Cost		Value

Due in one year or less	$	10,014	$	9,958
Due after one year through five years		75,623		74,783
Mortgage backed securities and collateralized mortgage obligations - residential		221,545		205,209
Small Business Administration - guaranteed participation securities		11,496		10,796
	$	318,678	$	300,746

Gross unrealized losses on debt securities available for sale and the related fair values aggregated by the length of time that individual securities have been in an unrealized loss position, were as follows:

	March 31, 2026
	Less than				12 months
	12 months				or more				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	Value		Loss		Value		Loss		Value		Loss

U.S. government sponsored enterprises	$	4,997	$	3	$	9,890	$	76	$	14,887	$	79
Mortgage backed securities and collateralized mortgage obligations - residential		13,139		271		167,769		16,399		180,908		16,670
Corporate bonds		66,619		854		-		-		66,619		854
Small Business Administration - guaranteed participation securities		-		-		10,796		700		10,796		700

Total	$	84,755	$	1,128	$	188,455	$	17,175	$	273,210	$	18,303

	December 31, 2025
	Less than				12 months
	12 months				or more				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	Value		Loss		Value		Loss		Value		Loss

U.S. government sponsored enterprises	$	1,998	$	2	$	24,756	$	183	$	26,754	$	185
Mortgage backed securities and collateralized mortgage obligations - residential		-		-		178,551		15,864		178,551		15,864
Corporate bonds		34,842		139		-		-		34,842		139
Small Business Administration - guaranteed participation securities		-		-		11,710		717		11,710		717

Total	$	36,840	$	141	$	215,017	$	16,764	$	251,857	$	16,905

There was no allowance for credit losses recorded for debt securities available for sale during the three months ended March 31, 2026 and 2025. There were no securities on non-accrual status and all securities were performing in accordance with contractual terms.

The proceeds from sales and calls and maturities of debt securities available for sale, gross realized gains and gross realized losses from sales and calls during the three months ended March 31, 2026 and 2025 are as follows:

	Three months ended March 31,
(dollars in thousands)	2026		2025

Proceeds from sales	$	-	$	-
Proceeds from calls/paydowns		17,873		13,723
Proceeds from maturities		15,000		35,000
Gross realized gains		-		-
Gross realized losses		-		-

There were no transfers of debt securities available for sale during the three months ended March 31, 2026 and 2025.

(b) Held to maturity securities

The amortized cost and fair value of the held to maturity securities are as follows:

	March 31, 2026
			Gross		Gross
	Amortized		Unrecognized		Unrecognized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value

Mortgage backed securities and collateralized mortgage obligations - residential	$	4,097	$	81	$	44	$	4,134
Total held to maturity	$	4,097	$	81	$	44	$	4,134

	December 31, 2025
			Gross		Gross
	Amortized		Unrecognized		Unrecognized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value

Mortgage backed securities and collateralized mortgage obligations - residential	$	4,339	$	90	$	40	$	4,389
Total held to maturity	$	4,339	$	90	$	40	$	4,389

The following table categorizes the debt securities included in the held to maturity portfolio as of March 31, 2026, based on the securities’ final maturity. Actual maturities may differ because of securities prepayments and the right of certain issuers to call or prepay their obligations without penalty. Debt securities not due at a single maturity date are presented separately:

	March 31, 2026
(dollars in thousands)	Amortized		Fair
	Cost		Value
Mortgage backed securities and collateralized mortgage obligations - residential	$	4,097	$	4,134
	$	4,097	$	4,134

All held to maturity securities are held at cost on the financial statements.

Gross unrecognized losses on held to maturity securities and the related fair values aggregated by the length of time that individual securities have been in an unrecognized loss position, were as follows:

	March 31, 2026
	Less than				12 months
(dollars in thousands)	12 months				or more				Total
			Gross				Gross				Gross
	Fair		Unrec.		Fair		Unrec.		Fair		Unrec.
	Value		Loss		Value		Loss		Value		Loss
Mortgage backed securities and collateralized mortgage obligations - residential	$	166	$	1	$	1,332	$	43	$	1,498	$	44

Total	$	166	$	1	$	1,332	$	43	$	1,498	$	44

	December 31, 2025
	Less than				12 months
(dollars in thousands)	12 months				or more				Total
			Gross				Gross				Gross
	Fair		Unrec.		Fair		Unrec.		Fair		Unrec.
	Value		Loss		Value		Loss		Value		Loss
Mortgage backed securities and collateralized mortgage obligations - residential	$	123	$	-	$	1,485	$	40	$	1,608	$	40

Total	$	123	$	-	$	1,485	$	40	$	1,608	$	40

There were no sales or transfers of held to maturity securities during the three months ended March 31, 2026 and 2025.

There was no allowance for credit losses recorded for held to maturity securities during the three months ended March 31, 2026 and 2025. There was no credit loss expense recorded for held to maturity securities for the three months ended March 31, 2026 and 2025. There were no securities on non-accrual status and all securities were performing in accordance with contractual terms.

As of March 31, 2026, the Company’s securities portfolio included certain securities, which were in an unrealized loss position, and are discussed below.

U.S. government sponsored enterprises:

In the case of unrealized losses on U.S. government sponsored enterprises, because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the securities are investment grade rated and there were no material underlying credit downgrades during the first quarter of 2026. As of March 31, 2026, three out of three securities were in an unrealized loss position. All securities are performing.

Mortgage-backed securities and collateralized mortgage obligations – residential:

As of March 31, 2026, all mortgage-backed securities and collateralized mortgage obligations held by the Company were issued by U.S. government sponsored entities and agencies, primarily Ginnie Mae, Fannie Mae and Freddie Mac, institutions which the government has affirmed its commitment to support. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the securities are investment grade rated and there were no material underlying credit downgrades during the first quarter of 2026. As of March 31, 2026, 110 out of 122 securities were in an unrealized loss position. All securities are performing.

Small Business Administration (SBA) - guaranteed participation securities:

As of March 31, 2026, all of the SBA securities held by the Company were issued and guaranteed by the U.S. Small Business Administration. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the securities are investment grade rated and there were no material underlying credit downgrades during the first quarter of 2026. As of March 31, 2026, 8 out of 8 securities were in an unrealized loss position. All securities are performing.

Corporate Bonds:

As of March 31, 2026, corporate bonds held by the Company are investment grade quality. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the securities are investment grade rated and there were no material underlying credit downgrades during the first quarter of 2026. As of March 31, 2026, 10 out of 11 securities were in an unrealized loss position. All securities are performing.