Tax Credit Investments:

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

At June 30, 2026 and December 31, 2025, the balance of the investment for qualified affordable housing projects was $34.5 million and $26.0 million, respectively. Total unfunded commitments related to the investments in qualified affordable housing projects totaled $18.5 million and $13.2 million at June 30, 2026 and December 31, 2025. The Company expects to complete the fulfillment of these commitments during the year ending 2041.

In the second quarters ended June 30, 2026 and June 30, 2025, the Company recognized amortization expense of $650,000 and $492,000, respectively, from its investment in qualified affordable housing projects. In the six month period ended June 30, 2026 and 2025, the Company recognized amortization expense of $1.2 million and $965,000, 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 second quarters ended June 30, 2026 and June 30, 2025, the Company recognized tax credits and other benefits from its investment in affordable housing tax credits of $794,000 and $589,000, respectively. In the six months ended June 30, 2026 and 2025, the Company recognized tax credits and other benefits from its investment in affordable housing tax credits of $1.5 million and $1.2 million, 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 six month period ended June 30, 2026 and 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 June 30, 2026, and  December 31, 2025, the balance of the investment was $17.3 million and $3.3 million, respectively. The total unfunded commitments related to the investments in solar investment tax credits totaled $15.0 million at June 30, 2026 and $1.7 million at December 31, 2025. 

In the second quarter ended June 30, 2026 and 2025, the Company recognized amortization expense of $565,000 and $2.4 million from its investment in solar investment tax credits, respectively. In the six months ended June 30, 2026 and 2025, the Company recognized amortization expense of $1.1 million and $2.4 million from its investment in solar investment tax credits, respectively. This amortization expense was included within income tax expense on the consolidated statements of income.

Additionally, during the second quarter ended June 30, 2026 and 2025, the Company recognized tax credits and other benefits from its investment in solar investment tax credits of $730,000 and $2.6 million, respectively. In the six months ended June 30, 2026 and 2025, the Company recognized tax credits and other benefits from its investment in solar investment tax credits of $1.5 million and $2.6 million. 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. During the six months ended June 30, 2026 and 2025, the Company did not incur impairment losses related to its investment in solar investment tax credits.