Note 5 - Renewable Energy Tax Credit Investment

9 Months Ended

Sep. 30, 2026

Notes to Financial Statements

Investment Program, Proportional Amortization Method, Elected [Text Block]

Note 5. Renewable Energy Tax Credit Investment

On June 30, 2026, the Company entered into an agreement to commit up to $50.0 million in capital investments to a renewable energy tax equity fund ("Renewable Energy Investment"). The investment was executed to generate economic return as well as Federal investment tax credits ("ITCs") and other tax benefits.

The Company accounts for this investment using the Proportional Amortization Method ("PAM") under ASC 323-740, Investments – Equity Method and Joint Ventures – Income Taxes. Under PAM, the Company amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits allocated to it in future periods. The net amortization expense and recognized tax credits will be reflected as a component of income tax expense in the Consolidated Statements of Income.

As of September 30, 2026, the balance sheet reflects the following:

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Unfunded Capital Commitments: The Company's unfunded capital commitment liability was $44.0 million, included within Other Liabilities on the Consolidated Statements of Financial Condition, compared to $50.0 million at June 30, 2026. The $6.0 million decrease reflects capital contributions funded during the three months ended September 30, 2026. The remaining balance represents the Company's maximum legally binding obligation to fund future capital calls under the agreement. Capital contributions will be paid in tranches pursuant to capital calls issued as underlying project construction milestones and placed-in-service criteria are satisfied.

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Investment Asset: The Company's equity investment asset was $50.0 million, included within Other Assets on the Consolidated Statements of Financial Condition, unchanged from June 30, 2026. The asset was recognized at the gross commitment amount at inception; capital contributions reduce the unfunded commitment liability and do not change the carrying amount of the investment.

During the three months ended September 30, 2026, the Company funded a capital call of $6.0 million. As of September 30, 2026, none of the underlying renewable energy assets had been placed in service. Accordingly, no tax credits, tax benefits, or proportional amortization expense were recognized in the Consolidated Statements of Income for the three and nine months ended September 30, 2026.

In accordance with ASC 740-270, Income Taxes — Interim Reporting, the Company calculates its quarterly income tax provision using an estimated annual effective tax rate ("AETR"). The Company incorporated the anticipated full-year tax credits and net benefits from this commitment into its estimated AETR calculation for fiscal year 2026.