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Note 3 - Investment Securities

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

NOTE 3 - INVESTMENT SECURITIES

The following table summarizes the amortized cost and fair value of available for sale (“AFS”) securities and held to maturity (“HTM”) securities at December 31, 2024 and 2023, and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive loss:

						Gross				Gross
		Amortized				Unrealized				Unrealized				Fair
December 31, 2024		Cost				Gains				Losses				Value
Available for sale		(dollars in thousands)
Government agency securities		$	21,592			$	—			$	(550	)		$	21,042
SBA agency securities			27,231				—				(467	)			26,764
Mortgage-backed securities: residential			62,351				—				(6,674	)			55,677
Collateralized mortgage obligations: residential			117,936				178				(12,638	)			105,476
Collateralized mortgage obligations: commercial			94,284				175				(2,803	)			91,656
Commercial paper			78,687				1				(3	)			78,685
Corporate debt securities			34,733				43				(2,961	)			31,815
Municipal tax-exempt securities			12,602				—				(3,527	)			9,075
Total		$	449,416			$	397			$	(29,623	)		$	420,190
Held to maturity
Municipal taxable securities		$	500			$	1			$	—			$	501
Municipal tax-exempt securities			4,691				—				(244	)			4,447
Total		$	5,191			$	1			$	(244	)		$	4,948

						Gross				Gross
		Amortized				Unrealized				Unrealized				Fair
December 31, 2023		Cost				Gains				Losses				Value
Available for sale		(dollars in thousands)
Government agency securities		$	8,705			$	—			$	(544	)		$	8,161
SBA agency securities			13,289				144				(216	)			13,217
Mortgage-backed securities: residential			40,507				—				(5,855	)			34,652
Collateralized mortgage obligations: residential			94,071				454				(12,198	)			82,327
Collateralized mortgage obligations: commercial			69,941				22				(2,664	)			67,299
Commercial paper			73,121				—				(16	)			73,105
Corporate debt securities			34,800				—				(4,109	)			30,691
Municipal tax-exempt securities			12,636				—				(3,127	)			9,509
Total		$	347,070			$	620			$	(28,729	)		$	318,961
Held to maturity
Municipal taxable securities		$	501			$	3			$	—			$	504
Municipal tax-exempt securities			4,708				—				(115	)			4,593
Total		$	5,209			$	3			$	(115	)		$	5,097

There were no sales of investment securities during the years ended December 31, 2024, 2023, and 2022.

At December 31, 2024, we pledged investment securities with a fair value of $23.4 million for certificates of deposit from the state of California. One security with a fair value of $48,000 and $61,000 was pledged to secure a local agency deposit at December 31, 2024 and 2023.

Accrued interest receivable for investment securities at December 31, 2024 and 2023 totaled $1.6 million and $962,000.

The amortized cost and fair value of the investment securities portfolio as of December 31, 2024 and 2023 are shown by expected maturity below. Mortgage-backed securities are classified in accordance with their estimated average life. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

		Less than One Year								More than One Year to Five Years								More than Five Years to Ten Years								More than Ten Years								Total
		Amortized								Amortized								Amortized								Amortized								Amortized
		Cost				Fair Value				Cost				Fair Value				Cost				Fair Value				Cost				Fair Value				Cost				Fair Value
December 31, 2024		(dollars in thousands)
Government agency securities		$	90			$	88			$	11,644			$	11,304			$	9,858			$	9,650			$	—			$	—			$	21,592			$	21,042
SBA agency securities			—				—				5,934				5,721				21,297				21,043				—				—				27,231				26,764
Mortgage-backed securities: residential			—				—				8,892				8,099				53,459				47,578				—				—				62,351				55,677
Collateralized mortgage obligations: residential			5,126				5,235				55,015				52,867				57,795				47,374				—				—				117,936				105,476
Collateralized mortgage obligations: commercial			705				704				38,811				38,527				54,768				52,425				—				—				94,284				91,656
Commercial paper			78,687				78,685				—				—				—				—				—				—				78,687				78,685
Corporate debt securities			2,000				1,989				11,886				11,706				18,233				16,250				2,614				1,870				34,733				31,815
Municipal tax-exempt securities			—				—				—				—				—				—				12,602				9,075				12,602				9,075
Total available for sale		$	86,608			$	86,701			$	132,182			$	128,224			$	215,410			$	194,320			$	15,216			$	10,945			$	449,416			$	420,190
Municipal taxable securities		$	500			$	501			$	—			$	—			$	—			$	—			$	—			$	—			$	500			$	501
Municipal tax-exempt securities			—				—				360				347				2,985				2,795				1,346				1,305				4,691				4,447
Total held to maturity		$	500			$	501			$	360			$	347			$	2,985			$	2,795			$	1,346			$	1,305			$	5,191			$	4,948
December 31, 2023
Government agency securities		$	—			$	—			$	8,705			$	8,161			$	—			$	—			$	—			$	—			$	8,705			$	8,161
SBA agency securities			—				—				2,292				2,095				10,997				11,122				—				—				13,289				13,217
Mortgage-backed securities: residential			—				—				11,023				9,986				19,762				16,965				9,722				7,701				40,507				34,652
Collateralized mortgage obligations: residential			18				17				36,876				35,758				57,177				46,552				—				—				94,071				82,327
Collateralized mortgage obligations: commercial			3,014				3,018				20,296				18,481				46,631				45,800				—				—				69,941				67,299
Commercial paper			73,121				73,105				—				—				—				—				—				—				73,121				73,105
Corporate debt securities			—				—				12,912				12,491				19,249				16,232				2,639				1,968				34,800				30,691
Municipal tax-exempt securities			—				—				—				—				—				—				12,636				9,509				12,636				9,509
Total available for sale		$	76,153			$	76,140			$	92,104			$	86,972			$	153,816			$	136,671			$	24,997			$	19,178			$	347,070			$	318,961
Municipal taxable securities		$	—			$	—			$	501			$	504			$	—			$	—			$	—			$	—			$	501			$	504
Municipal tax-exempt securities			—				—				—				—				2,952				2,873				1,756				1,720				4,708				4,593
Total held to maturity		$	—			$	—			$	501			$	504			$	2,952			$	2,873			$	1,756			$	1,720			$	5,209			$	5,097

The securities that were in an unrealized loss position at December 31, 2024, and December 31, 2023, were evaluated to determine whether the decline in fair value below the amortized cost basis resulted from a credit loss or other factors. For a discussion of the factors and criteria the Company uses in analyzing securities for impairment related to credit losses, see Note 2 Summary of Significant Accounting Policies - Allowance for Credit Losses on Available for Sale Securities and Held to Maturity Securities. At December 31, 2024 and 2023, there was no ACL on the HTM securities portfolio.

We concluded that the unrealized losses were primarily attributed to yield curve movement, together with widened liquidity spreads and credit spreads. All SBA agency securities, mortgage-backed securities, and collateralized mortgage obligations are issued by government or government sponsored entities and have the support of the U.S. federal government. The issuers have not, to our knowledge, established any cause for default on these securities. We expect to recover the amortized cost basis of our securities and have no present intent to sell and will not be required to sell securities that have declined below their cost before their anticipated recovery. As of December 31, 2024, all of our HTM securities were rated “AA-” or above. Accordingly, no ACL was recorded as of December 31, 2024 and December 31, 2023, against HTM or AFS securities, and there was no provision for credit losses recognized for the year ended December 31, 2024 and 2023.

The following tables show the related fair value and the gross unrealized losses of the Company's investment securities, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2024, and December 31, 2023:

		Less than Twelve Months												Twelve Months or More												Total
		Fair Value				Unrealized Losses				# of Issuances				Fair Value				Unrealized Losses				# of Issuances				Fair Value				Unrealized Losses				# of Issuances
December 31, 2024		(dollars in thousands)
Government agency securities		$	14,620			$	(219	)			3			$	6,422			$	(331	)			4			$	21,042			$	(550	)			7
SBA agency securities			24,971				(273	)			7				1,793				(194	)			4				26,764				(467	)			11
Mortgage-backed securities: residential			25,479				(578	)			5				30,198				(6,096	)			15				55,677				(6,674	)			20
Collateralized mortgage obligations: residential			36,166				(649	)			8				55,255				(11,989	)			24				91,421				(12,638	)			32
Collateralized mortgage obligations: commercial			35,753				(367	)			7				30,114				(2,436	)			18				65,867				(2,803	)			25
Commercial paper			48,874				(3	)			3				—				—				—				48,874				(3	)			3
Corporate debt securities			—				—				—				26,035				(2,961	)			30				26,035				(2,961	)			30
Municipal tax-exempt securities			—				—				—				9,075				(3,527	)			11				9,075				(3,527	)			11
Total available for sale		$	185,863			$	(2,089	)			33			$	158,892			$	(27,534	)			106			$	344,755			$	(29,623	)			139
Municipal tax-exempt securities		$	—			$	—				—			$	4,447			$	(244	)			10			$	4,447			$	(244	)			10
Total held to maturity		$	—			$	—				—			$	4,447			$	(244	)			10			$	4,447			$	(244	)			10

		Less than Twelve Months												Twelve Months or More												Total
		Fair Value				Unrealized Losses				No. of Issuances				Fair Value				Unrealized Losses				No. of Issuances				Fair Value				Unrealized Losses				No. of Issuances
December 31, 2023		(dollars in thousands)
Government agency securities		$	4,238			$	(72	)			1			$	3,923			$	(472	)			3			$	8,161			$	(544	)			4
SBA agency securities			5,102				(18	)			1				2,094				(198	)			4				7,196				(216	)			5
Mortgage-backed securities: residential			—				—				—				34,652				(5,855	)			15				34,652				(5,855	)			15
Collateralized mortgage obligations: residential			2,597				(37	)			1				60,275				(12,161	)			23				62,872				(12,198	)			24
Collateralized mortgage obligations: commercial			18,463				(70	)			5				35,077				(2,594	)			19				53,540				(2,664	)			24
Commercial paper			53,211				(16	)			6				—				—				—				53,211				(16	)			6
Corporate debt securities			—				—				—				30,691				(4,109	)			32				30,691				(4,109	)			32
Municipal tax-exempt securities			—				—				—				9,509				(3,127	)			11				9,509				(3,127	)			11
Total available for sale		$	83,611			$	(213	)			14			$	176,221			$	(28,516	)			107			$	259,832			$	(28,729	)			121
Municipal tax-exempt securities		$	1,397			$	(19	)			3			$	3,196			$	(96	)			7			$	4,593			$	(115	)			10
Total held to maturity		$	1,397			$	(19	)			3			$	3,196			$	(96	)			7			$	4,593			$	(115	)			10

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