A group was pictured last month dressed in Ku Klux Klan clothing outside a mosque in Ards.
Superintendent Brian Kee said: “Police conducted a number of planned searches at addresses in the Newtownards area this morning (Thursday 8 November).
“A number of items were seized and have been taken away for further examination.
“The 33-year-old man was arrested on suspicion of displaying written material to stir up hatred or arouse fear, and on suspicion of possession of a Class C controlled drug.
“The 36-year-old man was arrested on suspicion of displaying written material to stir up hatred or arouse fear.
“Both men have since been released on bail pending further enquiries.
“There are no further details at this time.”