NOTE 3 – SECURITIES

Equity Securities

The Company held equity securities with fair values of $3,434,000 and $3,424,000 as of March 31, 2026 and December 31, 2025, respectively. There were no sales of equity securities during the three-month periods ended March 31, 2026 and 2025. Consistent with ASC 321, Equity Securities, these securities are carried at fair value with the changes in fair value recognized in the condensed consolidated statements of income. Accordingly, the Company recognized a loss of $22,000 during the three-month period ended March 31, 2026, as compared to a gain of $59,000 during the same period of 2025.

Debt Securities

Debt securities have been classified in the financial statements as available for sale. The amortized cost and estimated fair values of debt securities as of March 31, 2026 are as follows:

The following table details the gross unrealized losses and fair values of debt securities aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2026.

For available-for-sale debt securities in an unrealized loss position, management evaluates whether the decline in fair value is a reflection of credit deterioration or other factors. In performing this evaluation, management considers the extent which fair value has fallen below amortized cost, changes in ratings by rating agencies, and other information indicating a deterioration in repayment capacity of either the underlying issuer or the borrowers providing repayment capacity in a securitization. If management’s evaluation indicates that a credit loss exists then a present value of the expected cash flows is calculated and compared to the amortized cost basis of the security in question and, to the degree that the amortized cost basis exceeds the present value, an allowance for credit loss (“ACL”) is established, with the caveat that the maximum amount of the reserve on any individual security is the difference between the fair value and amortized cost balance of the security in question. Any unrealized loss that has not been recorded through an ACL is recognized in other comprehensive income. Accrued interest receivable on available-for-sale securities was $4,796,000 and $5,197,000 as of March 31, 2026 and December 31, 2025, respectively, and is not included in the tables within this footnote.

The unrealized losses are due primarily to rising market yields and not due to credit deterioration. As such, no ACL on available-for-sale securities has been established as of March 31, 2026 and December 31, 2025. The Company does not intend to sell the securities and it is not likely that the Company will be required to sell the securities before the earlier of the forecasted recovery or the maturity of the underlying investment security.

The amortized cost and estimated fair value of debt securities as of March 31, 2026, segregated by contractual maturity or call date, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

The amortized cost and estimated fair values of debt securities as of December 31, 2025 are as follows:

The following tables detail the gross unrealized losses and fair values of debt securities aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2025.

There were no sales of available-for-sale securities during the three-months ended March 31, 2026 and 2025. The Company recognized a loss of $5,000 on called securities during the three-month period ended March 31, 2026, as compared to no gains or losses on called securities during the comparable 2025 period.

Debt securities carried at $341,857,000 and $349,507,000 as of March 31, 2026 and December 31, 2025, respectively, were pledged to secure deposits of public funds.