ACCRUED INTEREST AND OTHER ASSETS |
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| ACCRUED INTEREST AND OTHER ASSETS | ACCRUED INTEREST AND OTHER ASSETS The following table presents the detail of our accrued interest receivable and other assets as of the dates indicated:
(1)See Note 5 - Loan Servicing for additional information. (2)See Note 6 - Goodwill and Intangibles for additional information. CRA and other equity investments The Company has several Community Reinvestment Act ("CRA") equity investments, other bank stocks, and other equity investments which totaled $36.1 million and $26.1 million as of September 30, 2026 and December 31, 2025. We may receive recurring interest and dividend income on these investments (included in "Interest and dividend income" in the consolidated statements of income). We may also receive capital gain distributions (included in "Other income" in the consolidated statements of income"). There were no significant gains or losses on these investments during the three and nine months ended September 30, 2026 and 2025. On a quarterly basis, we review our equity investments for impairment. No impairments were recorded during the three and nine months ended September 30, 2026 and 2025. Other Real Estate Owned ("OREO") The balance of OREO increased to $19.8 million at September 30, 2026, compared to $8.8 million at December 31, 2025. One nonperforming construction loan was transferred to OREO in the second quarter of 2026 and has a carrying value of $19.8 million at September 30, 2026. The OREO properties at December 31, 2025 were sold in 2026 and resulted in net gains of $669,000 for the nine months ended September 30, 2026. Low-Income Housing Tax Credit investments ("LIHTC") The Bank invests as a limited partner in LIHTC investments that operate qualified affordable housing projects which generate tax benefits, including federal low-income housing tax credits. These investments are accounted for under the proportional amortization method and totaled $15.2 million and $17.0 million at September 30, 2026 and December 31, 2025. Total unfunded commitments related to these investments totaled $7.3 million at September 30, 2026 and $10.0 million at December 31, 2025 and are included in accrued interest and other liabilities on the consolidated balance sheets. We expect to fulfill these commitments between 2026 and 2041. We recognized tax credits from LIHTC investments totaling $520,000, $520,000, and $456,000 during the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, and $1.6 million and $1.4 million during the nine months ended September 30, 2026 and 2025. The amortization of these investments was included within income tax expense as an offset to such tax credits. We recognized amortization expense of $586,000, $587,000, and $572,000 during the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, and $1.8 million and $1.5 million during the nine months ended September 30, 2026 and 2025. We had no impairment losses during each of the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, or the nine months ended September 30, 2026 and 2025.
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