SECURITIES

9 Months Ended

Sep. 30, 2025

NOTE 3 – SECURITIES

The following table summarizes the amortized cost and fair value of securities AFS and securities HTM at September 30, 2025 and December 31, 2024, 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 Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
September 30, 2025
U.S. Government securities	$	104,771	$	494	$	(419	)	$	104,846
U.S. Government sponsored entity securities		6,336		—		(296	)		6,040
Agency mortgage-backed securities, residential		155,863		591		(6,575	)		149,879
Total securities	$	266,970	$	1,085	$	(7,290	)	$	260,765

December 31, 2024
U.S. Government securities	$	169,203	$	210	$	(1,383	)	$	168,030
U.S. Government sponsored entity securities		6,406		—		(518	)		5,888
Agency mortgage-backed securities, residential		105,961		—		(11,759	)		94,202
Total securities	$	281,570	$	210	$	(13,660	)	$	268,120

Securities Held to Maturity	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Estimated Fair Value		Allowance for Credit Losses
September 30, 2025
Obligations of states and political subdivisions	$	6,475	$	-	$	(452	)	$	6,023	$	(1	)
Total securities	$	6,475	$	-	$	(452	)	$	6,023	$	(1	)

December 31, 2024
Obligations of states and political subdivisions	$	7,050	$	1	$	(631	)	$	6,420	$	(1	)
Total securities	$	7,050	$	1	$	(631	)	$	6,420	$	(1	)

The amortized cost and estimated fair value of debt securities at September 30, 2025, 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
Debt Securities:	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value

Due in one year or less	$	61,836	$	61,637	$	826	$	824
Due in over one to five years		49,271		49,249		2,701		2,610
Due in over five to ten years		—		—		968		846
Due after ten years		—		—		1,980		1,743
Agency mortgage-backed securities, residential		155,863		149,879		—		—
Total debt securities	$	266,970	$	260,765	$	6,475	$	6,023

During the three and nine months ended September 30, 2025, proceeds from the sale of debt securities totaled $9,808 with gross losses of $1,219 recognized. There were no sales of securities during the three and nine months ended September 30, 2024.

Debt securities with a carrying value of approximately $206,502 at September 30, 2025 and $223,484 at December 31, 2024, 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 has not been recorded at September 30, 2025 and December 31, 2024, aggregated by major security type and length of time in a continuous unrealized loss position:

September 30, 2025	Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Securities Available for Sale
U.S. Government securities	$	—	$	—		$	25,041	$	(419	)	$	25,041	$	(419	)
U.S. Government sponsored entity securities		—		—			6,040		(296	)		6,040		(296	)
Agency mortgage-backed securities,
residential		10,825		(154	)		75,757		(6,421	)		86,582		(6,575	)
Total available for sale	$	10,825	$	(154	)	$	106,838	$	(7,136	)	$	117,663	$	(7,290	)

December 31, 2024	Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Securities Available for Sale
U.S. Government securities	$	31,418	$	(329	)	$	26,802	$	(1,054	)	$	58,220	$	(1,383	)
U.S Government sponsored entity securities		—		—			5,889		(518	)		5,889		(518	)
Agency mortgage-backed securities,
residential		4,694		(130	)		89,467		(11,629	)		94,161		(11,759	)
Total available for sale	$	36,112	$	(459	)	$	122,158	$	(13,201	)	$	158,270	$	(13,660	)

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 September 30, 2025, the Company had 84 AFS debt securities in an unrealized position without an ACL, of which 5 were from U.S. Government securities, 3 were from U.S. Government sponsored entity securities, and 76 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 September 30, 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 September 30, 2025.

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

Held to Maturity Debt Securities	Nine months ended September 30, 2025		Nine months ended September 30, 2024
Allowance for credit losses:
Beginning balance	$	1	$	2
Provision for (recovery of) credit loss expense		—		—
Allowance for credit losses ending balance	$	1	$	2

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 September 30, 2025, there were no past due principal and interest payments related to HTM securities. During the third quarter of 2025, the cumulative loss rate remained at 0.02%, resulting in no change to provision expense during the three and nine months ended September 30, 2025. During the third quarter of 2024, the cumulative loss rate remained at 0.02%, resulting in no change to provision expense during the three and nine months ended September 30, 2024.