Note 2. Investment Securities

The following tables summarize the amortized cost and fair value of securities available-for-sale and securities held-to-maturity at March 31, 2026 and December 31, 2025 and the corresponding amounts of gross unrealized gains and losses, which are recognized in accumulated other comprehensive income (loss) for securities available-for-sale. The Company did not record an allowance for credit losses ("ACL") on its securities available-for-sale or held-to-maturity portfolio as of March 31, 2026 and  December 31, 2025.

Investment securities available-for-sale was comprised of the following:

Investment securities held-to-maturity was comprised of the following:

Investment securities available-for-sale was comprised of the following:

Investment securities held-to-maturity was comprised of the following:

For HTM securities, the Company evaluates the credit risk of its securities on at least a quarterly basis. The primary indicators of credit quality for the Company’s HTM portfolio are security type and credit rating, which is influenced by a number of factors including obligor cash flow, geography, seniority, and others. All of the Company’s HTM securities with credit risk are obligations of states and political subdivisions. For HTM securities that are not rated, the Company evaluates the capital levels of the bond issuers on a quarterly basis. The Company’s HTM securities ACL was immaterial at  March 31, 2026 and December 31, 2025.

The following table presents the amortized cost of HTM securities as of  March 31, 2026 and  December 31, 2025 by security type and credit rating:

As of  March 31, 2026 and  December 31, 2025, the Company had no securities held-to-maturity that were past due 30 days or more as to principal or interest payments. The Company had no securities held-to-maturity classified as non-accrual as of  March 31, 2026 and  December 31, 2025.

The scheduled maturities of securities available-for-sale and held-to-maturity at  March 31, 2026 were as follows:

The scheduled maturities of securities available-for-sale and held-to-maturity at  December 31, 2025 were as follows:

One security with a fair value of $0.4 million was pledged as collateral to secure public funds at March 31, 2026 and December 31, 2025, respectively. 

The following tables summarize the fair value and unrealized loss positions of securities available-for-sale as of March 31, 2026 and December 31, 2025, aggregated by security type and length of time that individual securities have been in a continuous loss position:

The factors considered in evaluating securities for impairment include whether the Bank intends to sell the security, whether it is more likely than not that the Bank will be required to sell the security before recovery of its amortized cost basis, and whether the Bank expects to recover the security’s entire amortized cost basis. These unrealized losses are primarily attributable to current financial market conditions for these types of investments, particularly changes in interest rates, causing bond prices to decline, and are not attributable to credit deterioration. For the subordinated debt securities, the Company evaluates the capital levels of the issuers on a quarterly basis. The following description provides the number of investment positions in an unrealized loss position and approximate duration of that loss position.

At  March 31, 2026, there were ten tax-exempt municipal securities with a fair value totaling $4.5 million and three subordinated debt securities totaling $1.6 million in an unrealized loss position of less than 12 months. At  March 31, 2026, there were twenty-one collateralized mortgage backed securities with fair values totaling $15.4 million, eighteen subordinated debt securities totaling $7.1 million, nineteen tax-exempt municipal securities with a fair value totaling $12.3 million, ten taxable municipal securities with fair values totaling $7.7 million, and five government agency securities with a fair value totaling $0.6 million in an unrealized loss position of more than 12 months.   

The Company periodically invests in New Market Tax Credit (NMTC) opportunities, related primarily to certain community development projects. The Company receives tax credits related to these investments, for which the Company typically acts as a limited partner and therefore does not exert control over the operating or financial policies of the partnerships. These tax credits are subject to recapture by taxing authorities based on compliance features required to be met at the project level. On  January 1, 2024, the Company transitioned from the equity method of accounting and began applying the proportional amortization method of accounting to its qualifying new markets tax credit investments in addition to its low income housing tax credit partnerships already subject to the proportional amortization method. At March 31, 2026 and December 31, 2025, the balance of the investments in new market tax credits was $10.1 million and $10.7 million and the balance of the investments in Low-Income Housing Tax Credits (“LIHTC”) was $6.8 million and $7.0 million. These balances, as well as the nonmarketable securities that do not qualify for equity method accounting in the amount of $7.3 million as of  March 31, 2026 and $7.3 million as of   December 31, 2025, are reflected in the other assets line on the Consolidated Statements of Financial Condition. During the three-month period ended  March 31, 2026 and 2025, the Company recognized amortization expense for the NMTC investments of $0.6 million and $0.5 million, and $0.2 million and $0.2 million for the LIHTC investments, respectively, which was included within the income tax expense line item on the Consolidated Statements of Income and the depreciation, amortization, and accretion, net line item on the Consolidated Statements of Cash Flows. 

The restricted securities line on the Consolidated Statements of Financial Condition consist of the Federal Reserve Bank and Federal Home Loan Bank of Atlanta (“FHLB”) stock in the amount of $5.2 million and $1.5 million respectively, as of March 31, 2026, compared to $5.2 million and $1.6 million, respectively, as of December 31, 2025. We also had $126,800 and $124,000 in Community Bankers Bank stock and Atlantic Community Bankers Bank stock, respectively as of  March 31, 2026 and  December 31, 2025.