SECURITIES

6 Months Ended

Jun. 30, 2026

NOTE 3 – SECURITIES

The following table summarizes the amortized cost and fair value of securities AFS and securities HTM at June 30, 2026 and December 31, 2025 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses:


Securities Available for Sale		Amortized		Gross Unrealized		Gross Unrealized			Estimated
		Cost		Gains		Losses			Fair Value
June 30, 2026
U.S. Government securities	$	83,959	$	112	$	(232	)	$	83,839
U.S. Government sponsored entity securities		5,336		-		(228	)		5,108
Agency mortgage-backed securities, residential		165,690		146		(4,547	)		161,289
Total securities	$	254,985	$	258	$	(5,007	)	$	250,236

December 31, 2025
U.S. Government securities	$	86,442	$	575	$	(238	)	$	86,779
U.S. Government sponsored entity securities		5,336		-		(212	)		5,124
Agency mortgage-backed securities, residential		164,525		768		(3,290	)		162,003
Total securities	$	256,303	$	1,343	$	(3,740	)	$	253,906


Securities Held to Maturity		Amortized		Gross Unrecognized		Gross Unrecognized			Estimated		Allowance for
		Cost		Gains		Losses			Fair Value		Credit Losses
June 30, 2026
Obligations of states and political subdivisions	$	5,405	$	-	$	(371	)	$	5,034	$	(1	)
Total securities	$	5,405	$	-	$	(371	)	$	5,034	$	(1	)

December 31, 2025
Obligations of states and political subdivisions	$	5,453	$	-	$	(379	)	$	5,074	$	(1	)
Total securities	$	5,453	$	-	$	(379	)	$	5,074	$	(1	)

The amortized cost and estimated fair value of debt securities at June 30, 2026, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay the debt obligations prior to their contractual maturities. Securities not due at a single maturity are shown separately.


	Available for Sale				Held to Maturity
		Amortized		Estimated		Amortized		Estimated
Debt Securities:		Cost		Fair Value		Cost		Fair Value

Due in one year or less	$	54,578	$	54,378	$	631	$	625
Due in over one to five years		34,717		34,569		2,620		2,503
Due in over five to ten years		-		-		325		272
Due after ten years		-		-		1,829		1,634
Agency mortgage-backed securities, residential		165,690		161,289		-		-
Total debt securities	$	254,985	$	250,236	$	5,405	$	5,034

There were no sales of debt securities during the three and six months ended June 30, 2026 and 2025.

Debt securities with a carrying value of approximately $175,647 at June 30, 2026 and $195,245 at December 31, 2025, respectively, were pledged to secure public deposits, repurchase agreements, and for other purposes required or permitted by law.

The following table summarizes debt securities AFS in an unrealized loss position for which an ACL losses has not been recorded at June 30, 2026 and December 31, 2025, aggregated by major security type and length of time in a continuous unrealized loss position:


June 30, 2026	Less Than 12 Months					12 Months or More					Total
				Unrealized					Unrealized					Unrealized
		Fair Value		Loss			Fair Value		Loss			Fair Value		Loss
Securities Available for Sale
U.S. Government securities	$	54,457	$	(123	)	$	11,898	$	(109	)	$	66,355	$	(232	)
U.S. Government sponsored entity securities		-		-			5,108		(228	)		5,108		(228	)
Agency mortgage-backed securities, residential		87,311		(1,294	)		41,059		(3,253	)		128,370		(4,547	)
Total available for sale	$	141,768	$	(1,417	)	$	58,065	$	(3,590	)	$	199,833	$	(5,007	)


December 31, 2025	Less Than 12 Months					12 Months or More					Total
				Unrealized					Unrealized					Unrealized
		Fair Value		Loss			Fair Value		Loss			Fair Value		Loss
Securities Available for Sale
U.S. Government securities	$	-	$	-		$	16,755	$	(238	)	$	16,755	$	(238	)
U.S. Government sponsored entity securities		-		-			5,124		(212	)		5,124		(212	)
Agency mortgage-backed securities, residential		35,475		(154	)		46,121		(3,136	)		81,596		(3,290	)
Total available for sale	$	35,475	$	(154	)	$	68,000	$	(3,586	)	$	103,475	$	(3,740	)

Management evaluates AFS debt securities in unrealized positions to determine whether impairment is due to credit-related factors. Consideration is given to (1) the extent to which the fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value.

At June 30, the Company had 68 AFS debt securities in an unrealized position without an ACL, of which 10 were from U.S. Government securities, 2 were from U.S. Government sponsored entity securities, and 56 were from Agency mortgage-backed residential securities. Comparatively at December 31, 2025, the Company had 53 AFS debt securities in an unrealized position without an ACL, of which 3 were from U.S. Government securities, 2 were from U.S. Government sponsored entity securities, and 48 were from Agency mortgage-backed residential securities. Management does not have the intent to sell any of these securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline. Accordingly, as of June 30, 2026 and December 31, 2025, management believes that the unrealized losses detailed in the previous table are due to noncredit-related factors, including changes in interest rates and other market conditions, and, therefore, the Company carried no ACL on AFS debt securities at June 30, 2026 and December 31, 2025.

The following table presents the activity in the ACL for HTM debt securities:


		Six months ended		Six months ended
Held to Maturity Debt Securities		June 30, 2026		June 30, 2025
Allowance for credit losses:
Beginning balance	$	1	$	1
Provision for (recovery of) credit loss expense		-		-
Allowance for credit losses ending balance	$	1	$	1

The Company’s HTM securities consist of obligations of states and political subdivisions. The ACL on HTM securities is estimated at each measurement date on a collective basis by major security type. Risk factors such as issuer bond ratings, historical loss rates, financial condition of issuer, and timely principal and interest payments of issuer were evaluated to determine if a credit reserve was required within the portfolio. At June 30, 2026, there were no past due principal and interest payments related to HTM securities. During the second quarter of 2026 and 2025, the cumulative loss rate remained at 0.02%, resulting in no change to provision expense during the three and six months ended June 30, 2026 and 2025.

The Company’s equity securities portfolio is comprised of common stock with readily determinable fair values. At December 31, 2025, this portfolio consisted of 954 shares of Visa Inc. (“Visa”) Class B-1 common stock that were not marketable and carried at a $0 cost basis. On April 13, 2026, Visa announced the commencement of a public offering to permit the exchange of Class B-1 common stock for a combination of shares of Class B-3 common stock and Class C common stock. On May 8, 2026, the public exchange offer closed, and in exchange for its 954 shares of Visa Class B-1 common stock, the Company received 238 shares of Visa Class B-3 common stock and 274 shares of Visa Class C common stock. As a result of the exchange offer, the Company marked its Class C common stock to fair value and recorded a $377 gain in net income based on the conversion privilege of Class C common stock and the closing price of Visa Class A common stock. The $377 gain included $1 in fractional shares that were converted to cash proceeds, which resulted in a carrying value of $376 in the Company’s equity securities portfolio at June 30, 2026. The Company’s Visa Class B-3 common stock will be carried at a $0 cost basis. As a result of the Visa exchange offer, net gains recognized during both the three and six months ended June 30, 2026 on equity securities still held at June 30, 2026 were $377, compared to no gains during the same periods in 2025. There were no gains recognized on the sale of equity securities during the three and six months ended June 30, 2026 and 2025.