Note 4. Investments

Available for Sale (AFS) Securities

The amortized cost and estimated fair value of AFS securities as of March 31, 2026 and December 31, 2025 are as follows:



(Dollars in thousands)			Gross		Gross
	Amortized		unrealized		unrealized		Fair
March 31, 2026	cost		gains		losses		Value
U.S. Treasury	$	35,802	$	—	$	(2,713)	$	33,089
Municipal		153,992		—		(17,185)		136,807
Corporate		11,690		—		(765)		10,925
Agency MBS & CMO		133,388		122		(6,276)		127,234
Non-Agency MBS & CMO		104,004		295		(2,069)		102,230
Asset-backed		26,445		95		(342)		26,198
Total	$	465,321	$	512	$	(29,350)	$	436,483



(Dollars in thousands)			Gross		Gross
	Amortized		unrealized		unrealized		Fair
December 31, 2025	cost		gains		losses		value
U.S. Treasury	$	35,880	$	—	$	(2,617)	$	33,263
Municipal		154,301		—		(16,462)		137,839
Corporate		15,536		—		(861)		14,675
Agency MBS & CMO		135,308		136		(5,584)		129,860
Non-Agency MBS & CMO		112,860		477		(1,669)		111,668
Asset-backed		27,519		78		(316)		27,281
Total	$	481,404	$	691	$	(27,509)	$	454,586

At March 31, 2026 and December 31, 2025, the fair value of debt securities pledged to secure public deposits, trust deposits, FHLB borrowing commitments and Federal Reserve Bank discount window availability totaled $343.4 million and $353.5 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 March 31, 2026, 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	$	994	$	991
Due after one year through five years		58,130		54,364
Due after five years through ten years		84,780		74,365
Due after ten years		57,580		51,101
		201,484		180,821
MBS, CMO & ABS		263,837		255,662
Total	$	465,321	$	436,483

Credit Impairment:

The debt securities portfolio contained 464 securities in an unrealized loss position having a fair value of $393.9 million, with $29.4 million in unrealized losses at March 31, 2026, an increase of $1.8 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 March 31, 2026 and December 31, 2025, 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 March 31, 2026 and December 31, 2025:



	March 31, 2026
	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	$	—	$	—	—	$	33,089	$	(2,713)	13	$	33,089	$	(2,713)	13
Municipal		880		(124)	2		135,927		(17,061)	164		136,807		(17,185)	166
Corporate		991		(2)	1		9,934		(763)	20		10,925		(765)	21
Agency MBS & CMO		35,483		(710)	23		80,663		(5,566)	157		116,146		(6,276)	180
Non-Agency MBS & CMO		54,212		(776)	16		25,433		(1,293)	32		79,645		(2,069)	48
Asset-backed		2,447		(13)	4		14,858		(329)	32		17,305		(342)	36
Total unrealized losses	$	94,013	$	(1,625)	46	$	299,904	$	(27,725)	418	$	393,917	$	(29,350)	464



	December 31, 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	$	—	$	—	—	$	33,263	$	(2,617)	13	$	33,263	$	(2,617)	13
Municipal		1,683		(192)	4		136,156		(16,270)	162		137,839		(16,462)	166
Corporate		986		(6)	1		13,389		(855)	26		14,375		(861)	27
Agency MBS & CMO		776		(2)	10		118,183		(5,582)	170		118,959		(5,584)	180
Non-Agency MBS & CMO		1,870		(3)	3		74,365		(1,666)	40		76,235		(1,669)	43
Asset-backed		2,768		(18)	5		15,538		(298)	32		18,306		(316)	37
Total unrealized losses	$	8,083	$	(221)	23	$	390,894	$	(27,288)	443	$	398,977	$	(27,509)	466