The Company’s estimate of the allowance for credit losses (“ACL”) reflects losses expected over the remaining contractual life of the assets, adjusted for expected prepayments when appropriate. The contractual term does not consider possible extensions, renewals or modifications. The following tables present the activity in the ACL by class of loans for the six months ended June 30, 2025, for the year ended December 31, 2024 and for the six months ended June 30, 2024:


For the Six Months Ended June 30, 2025	Commercial and industrial			Construction and development			Commercial real estate			Farmland			1-4 family residential			Multi-family residential			Consumer			Agricultural		Overdrafts			Total
Allowance for credit losses:
Beginning balance	$	2,973		$	2,738		$	11,718		$	1,830		$	7,656		$	528		$	844		$	—	$	3		$	28,290
(Reversal of) provision for credit losses		(144	)		(1	)		(225	)		(100	)		(67	)		(17	)		27			135		92			(300	)
Loans charged-off		(271	)		—			—			—			(2	)		—			(91	)		—		(112	)		(476	)
Recoveries		25			—			—			—			—			—			23			—		24			72
Ending balance	$	2,583		$	2,737		$	11,493		$	1,730		$	7,587		$	511		$	803		$	135	$	7		$	27,586


For the Year Ended December 31, 2024	Commercial and industrial			Construction and development			Commercial real estate			Farmland			1-4 family residential		Multi-family residential		Consumer			Agricultural			Overdrafts			Total
Allowance for credit losses:
Beginning balance	$	3,719		$	3,623		$	12,257		$	2,231		$	7,470	$	521	$	945		$	152		$	2		$	30,920
(Reversal of) provision for credit losses		(524	)		(885	)		(539	)		(401	)		186		7		(80	)		(155	)		191			(2,200	)
Loans charged-off		(630	)		—			—			—			—		—		(106	)		—			(242	)		(978	)
Recoveries		408			—			—			—			—		—		85			3			52			548
Ending balance	$	2,973		$	2,738		$	11,718		$	1,830		$	7,656	$	528	$	844		$	—		$	3		$	28,290


For the Six Months Ended June 30, 2024	Commercial and industrial			Construction and development			Commercial real estate			Farmland			1-4 family residential			Multi-family residential		Consumer			Agricultural			Overdrafts			Total
Allowance for credit losses:
Beginning balance	$	3,719		$	3,623		$	12,257		$	2,231		$	7,470		$	521	$	945		$	152		$	2			30,920
(Reversal of) provision for credit losses		(477	)		(717	)		(78	)		(154	)		(69	)		19		(41	)		(12	)		79			(1,450	)
Loans charged-off		(230	)		—			—			—			—			—		(85	)		—			(110	)		(425	)
Recoveries		174			—			—			—			—			—		29			2			32			237
Ending balance	$	3,186		$	2,906		$	12,179		$	2,077		$	7,401		$	540	$	848		$	142		$	3		$	29,282

We recorded no provision for credit losses during the second quarter of 2025, compared to a $300 reversal made year-to-date in 2025 and a total reversal of provision for credit losses in 2024 of $2,200. Although gross loan balances increased slightly by $33.3 million during the second quarter of 2025, minor reductions were made to certain qualitative factor adjustments already in place primarily due to more stabilized economic outlooks, reduced risk in our real estate portfolio and reduction in overall loan volume during the period, all of which contributed to management's assessment for no provision during the second quarter of 2025.

The Company uses the weighted-average remaining maturity ("WARM") method as the basis for the estimation of expected credit losses. The WARM method uses a historical average annual charge-off rate containing loss content over a historical lookback period and is used as a foundation for estimating the credit loss reserve for the remaining outstanding balances of loans in a segment at the balance sheet date. The average annual charge-off rate is applied to the contractual term, further adjusted for estimated prepayments, to determine the unadjusted historical charge-off rate. The calculation of the unadjusted historical charge-off rate is then adjusted, using qualitative factors, for current conditions and for reasonable and supportable forecast periods. Qualitative loss factors are based on the Company’s judgment of company, market, industry or business specific data, differences in loan-specific risk characteristics such as underwriting standards, portfolio mix, risk grades, delinquency level, or term. These qualitative factors serve to compensate for additional areas of uncertainty inherent in the portfolio that are not reflected in our historic loss factors. Additionally, we have adjusted for changes in expected environmental and economic conditions, such as changes in unemployment rates, property values, and other relevant factors over the next 12 to 24 months. Management adjusted the historical loss experience for these expectations. No reversion adjustments were necessary, as the starting point for the Company’s estimate was a cumulative loss rate covering the expected contractual term of the portfolio.

The ACL is measured on a collective segment basis when similar risk characteristics exist. Our loan portfolio is segmented first by regulatory call report code, and second, by internally identified risk grades for our commercial loan segments and by delinquency status for our consumer loan segments. We also have separate segments for our internally originated SBA loans and for our SBA loans acquired from Westbound Bank. Consistent forecasts of the loss drivers are used across the loan segments. For loans that do not share general risk characteristics with segments, we estimate a specific reserve on an individual basis. A reserve is recorded when the carrying amount of the loan exceeds the discounted estimated cash flows using the loan's initial effective interest rate or the fair value of collateral for collateral-dependent loans.

Assets are graded “pass” when the relationship exhibits acceptable credit risk and indicates repayment ability, tolerable collateral coverage and reasonable performance history. Lending relationships exhibiting potentially significant credit risk and marginal repayment ability and/or asset protection are graded “special mention.” Assets classified as “substandard” are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness that jeopardizes the liquidation of the debt. Substandard graded loans are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Assets graded “doubtful” are substandard graded loans that have added characteristics that make collection or liquidation in full improbable. Loans that are on nonaccrual status are generally classified as substandard.

In general, the loans in our portfolio have low historical credit losses. The Company closely monitors economic conditions and loan performance trends to manage and evaluate the exposure to credit risk. Key factors tracked by the Company and utilized in evaluating the credit quality of the loan portfolio include trends in delinquency ratios, the level of nonperforming assets, borrower’s repayment capacity, and collateral coverage.

The following table summarizes the credit exposure in the Company’s loan portfolio, by year of origination, as of June 30, 2025:


June 30, 2025	2025		2024		2023			2022			2021			Prior			Revolving Loans Amortized Cost		Total
Commercial and industrial:
Pass	$	13,795	$	30,643	$	21,505		$	40,524		$	24,791		$	22,660		$	55,112	$	209,030
Special mention		—		21		—			—			38			361			35		455
Substandard		—		33		—			638			—			75			10		756
Nonaccrual		—		13		35			200			—			8			7		263
Total commercial and industrial loans	$	13,795	$	30,710	$	21,540		$	41,362		$	24,829		$	23,104		$	55,164	$	210,504

Charge-offs	$	—	$	—	$	(25	)	$	(91	)	$	(27	)	$	(128	)	$	—	$	(271	)
Recoveries		—		—		—			24			—			1			—		25
Current period net	$	—	$	—	$	(25	)	$	(67	)	$	(27	)	$	(127	)	$	—	$	(246	)

Construction and development:
Pass	$	48,951	$	82,198	$	21,152		$	29,742		$	32,993		$	29,248		$	1,198	$	245,482
Special mention		—		—		—			—			—			—			—		—
Substandard		—		—		—			—			—			—			—		—
Nonaccrual		—		—		—			3,690			—			—			—		3,690
Total construction and development loans	$	48,951	$	82,198	$	21,152		$	33,432		$	32,993		$	29,248		$	1,198	$	249,172

Charge-offs	$	—	$	—	$	—		$	—		$	—		$	—		$	—	$	—
Recoveries		—		—		—			—			—			—			—		—
Current period net	$	—	$	—	$	—		$	—		$	—		$	—		$	—	$	—

Commercial real estate:
Pass	$	55,156	$	65,397	$	43,546		$	292,157		$	115,934		$	241,843		$	19,121	$	833,154
Special mention		—		—		—			31,694			9,209			555			—		41,458
Substandard		—		—		—			—			—			1,284			—		1,284
Nonaccrual		—		—		—			—			—			216			—		216
Total commercial real estate loans	$	55,156	$	65,397	$	43,546		$	323,851		$	125,143		$	243,898		$	19,121	$	876,112

Charge-offs	$	—	$	—	$	—		$	—		$	—		$	—		$	—	$	—
Recoveries		—		—		—			—			—			—			—		—
Current period net	$	—	$	—	$	—		$	—		$	—		$	—		$	—	$	—


June 30, 2025	2025		2024		2023		2022		2021		Prior			Revolving Loans Amortized Cost		Total
Farmland:
Pass	$	7,100	$	6,457	$	13,333	$	31,337	$	36,300	$	19,564		$	3,917	$	118,008
Special mention		—		—		—		—		—		1,767			—		1,767
Substandard		—		—		—		—		42		117			—		159
Nonaccrual		—		—		1,687		—		—		494			—		2,181
Total farmland loans	$	7,100	$	6,457	$	15,020	$	31,337	$	36,342	$	21,942		$	3,917	$	122,115

Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—		$	—	$	—
Recoveries		—		—		—		—		—		—			—		—
Current period net	$	—	$	—	$	—	$	—	$	—	$	—		$	—	$	—

1-4 family residential:
Pass	$	41,657	$	66,969	$	57,730	$	125,855	$	97,192	$	128,233		$	23,501	$	541,137
Special mention		—		—		—		—		—		—			—		—
Substandard		—		—		—		—		—		—			—		—
Nonaccrual		—		26		363		496		—		2,537			146		3,568
Total 1-4 family residential loans	$	41,657	$	66,995	$	58,093	$	126,351	$	97,192	$	130,770		$	23,647	$	544,705

Charge-offs	$	—	$	—	$	—	$	—	$	—	$	(2	)	$	—	$	(2	)
Recoveries		—		—		—		—		—		—			—		—
Current period net	$	—	$	—	$	—	$	—	$	—	$	(2	)	$	—	$	(2	)

Multi-family residential:
Pass	$	26,399	$	999	$	1,740	$	30,156	$	14,022	$	3,751		$	67	$	77,134
Special mention		—		—		—		—		—		—			—		—
Substandard		—		—		—		—		—		—			—		—
Nonaccrual		—		—		—		—		—		—			—		—
Total multi-family residential loans	$	26,399	$	999	$	1,740	$	30,156	$	14,022	$	3,751		$	67	$	77,134

Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—		$	—	$	—
Recoveries		—		—		—		—		—		—			—		—
Current period net	$	—	$	—	$	—	$	—	$	—	$	—		$	—	$	—


June 30, 2025	2025			2024			2023			2022			2021			Prior			Revolving Loans Amortized Cost		Total
Consumer and overdrafts:
Pass	$	12,811		$	13,800		$	8,368		$	4,349		$	2,129		$	2,445		$	3,884	$	47,786
Special mention		4			10			26			15			3			—			—		58
Substandard		—			—			—			—			—			—			—		—
Nonaccrual		6			22			159			120			3			54			—		364
Total consumer loans and overdrafts	$	12,821		$	13,832		$	8,553		$	4,484		$	2,135		$	2,499		$	3,884	$	48,208

Charge-offs	$	(112	)	$	(3	)	$	(81	)	$	—		$	—		$	(7	)	$	—	$	(203	)
Recoveries		23			—			15			4			—			5			—		47
Current period net	$	(89	)	$	(3	)	$	(66	)	$	4		$	—		$	(2	)	$	—	$	(156	)

Agricultural:
Pass	$	1,911		$	1,870		$	798		$	866		$	578		$	836		$	6,593	$	13,452
Special mention		—			1			—			—			—			—			—		1
Substandard		—			—			—			—			—			11			—		11
Nonaccrual		—			—			—			21			—			6			—		27
Total agricultural loans	$	1,911		$	1,871		$	798		$	887		$	578		$	853		$	6,593	$	13,491

Charge-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—	$	—
Recoveries		—			—			—			—			—			—			—		—
Current period net	$	—		$	—		$	—		$	—		$	—		$	—		$	—	$	—

Total loans:
Pass	$	207,780		$	268,333		$	168,172		$	554,986		$	323,939		$	448,580		$	113,393	$	2,085,183
Special mention		4			32			26			31,709			9,250			2,683			35		43,739
Substandard		—			33			—			638			42			1,487			10		2,210
Nonaccrual		6			61			2,244			4,527			3			3,315			153		10,309
Total loans	$	207,790		$	268,459		$	170,442		$	591,860		$	333,234		$	456,065		$	113,591	$	2,141,441

Charge-offs	$	(112	)	$	(3	)	$	(106	)	$	(91	)	$	(27	)	$	(137	)	$	—	$	(476	)
Recoveries		23			—			15			28			—			6			—		72
Total current period net charge-offs	$	(89	)	$	(3	)	$	(91	)	$	(63	)	$	(27	)	$	(131	)	$	—	$	(404	)

The following table summarizes the credit exposure in the Company’s loan portfolio, by year of origination, as of December 31, 2024:


December 31, 2024	2024		2023			2022			2021			2020			Prior			Revolving Loans Amortized Cost			Total
Commercial and industrial:
Pass	$	40,229	$	28,317		$	50,065		$	28,856		$	9,837		$	15,639		$	80,106		$	253,049
Special mention		26		—			—			57			—			453			36			572
Substandard		36		137			167			—			136			59			10			545
Nonaccrual		17		42			410			27			—			40			—			536
Total commercial and industrial loans	$	40,308	$	28,496		$	50,642		$	28,940		$	9,973		$	16,191		$	80,152		$	254,702

Charge-offs	$	—	$	(7	)	$	(96	)	$	(38	)	$	(249	)	$	(6	)	$	(234	)	$	(630	)
Recoveries		—		15			—			—			217			176			—			408
Current period net	$	—	$	8		$	(96	)	$	(38	)	$	(32	)	$	170		$	(234	)	$	(222	)

Construction and development:
Pass	$	80,512	$	34,301		$	40,399		$	35,409		$	6,222		$	16,857		$	1,208		$	214,908
Special mention		—		—			3,709			—			—			—			—			3,709
Substandard		—		—			—			—			—			—			—			—
Nonaccrual		—		—			—			—			—			—			—			—
Total construction and development loans	$	80,512	$	34,301		$	44,108		$	35,409		$	6,222		$	16,857		$	1,208		$	218,617

Charge-offs	$	—	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Recoveries		—		—			—			—			—			—			—			—
Current period net	$	—	$	—		$	—		$	—		$	—		$	—		$	—		$	—

Commercial real estate:
Pass	$	58,453	$	48,300		$	328,088		$	120,214		$	76,684		$	198,433		$	11,921		$	842,093
Special mention		—		—			13,429			9,377			—			—			—			22,806
Substandard		—		—			—			—			—			1,558			—			1,558
Nonaccrual		—		—			—			—			209			18			—			227
Total commercial real estate loans	$	58,453	$	48,300		$	341,517		$	129,591		$	76,893		$	200,009		$	11,921		$	866,684

Charge-offs	$	—	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Recoveries		—		—			—			—			—			—			—			—
Current period net	$	—	$	—		$	—		$	—		$	—		$	—		$	—		$	—


December 31, 2024	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost		Total
Farmland:
Pass	$	12,779	$	21,451	$	39,694	$	42,108	$	7,357	$	16,747	$	4,740	$	144,876
Special mention		—		1,687		—		—		—		—		—		1,687
Substandard		—		—		—		86		99		22		—		207
Nonaccrual		—		—		—		—		—		421		—		421
Total farmland loans	$	12,779	$	23,138	$	39,694	$	42,194	$	7,456	$	17,190	$	4,740	$	147,191

Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Recoveries		—		—		—		—		—		—		—		—
Current period net	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

1-4 family residential:
Pass	$	66,808	$	61,249	$	133,197	$	106,297	$	35,825	$	101,662	$	20,557	$	525,595
Special mention		29		—		—		—		—		1,094		—		1,123
Substandard		—		—		—		—		—		—		—		—
Nonaccrual		—		338		—		—		228		1,567		155		2,288
Total 1-4 family residential loans	$	66,837	$	61,587	$	133,197	$	106,297	$	36,053	$	104,323	$	20,712	$	529,006

Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Recoveries		—		—		—		—		—		—		—		—
Current period net	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Multi-family residential:
Pass	$	1,010	$	1,759	$	30,389	$	14,340	$	1,324	$	2,665	$	51	$	51,538
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Nonaccrual		—		—		—		—		—		—		—		—
Total multi-family residential loans	$	1,010	$	1,759	$	30,389	$	14,340	$	1,324	$	2,665	$	51	$	51,538

Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Recoveries		—		—		—		—		—		—		—		—
Current period net	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—


December 31, 2024	2024			2023			2022			2021			2020			Prior			Revolving Loans Amortized Cost			Total
Consumer and overdrafts:
Pass	$	21,519		$	12,431		$	6,955		$	3,009		$	1,192		$	2,120		$	4,210		$	51,436
Special mention		14			4			—			—			—			—			—			18
Substandard		—			—			—			—			—			—			—			—
Nonaccrual		12			80			86			7			18			16			—			219
Total consumer loans and overdrafts	$	21,545		$	12,515		$	7,041		$	3,016		$	1,210		$	2,136		$	4,210		$	51,673

Charge-offs	$	(252	)	$	(44	)	$	(43	)	$	—		$	—		$	(9	)	$	—		$	(348	)
Recoveries		52			—			—			14			3			17			51			137
Current period net	$	(200	)	$	(44	)	$	(43	)	$	14		$	3		$	8		$	51		$	(211	)

Agricultural:
Pass	$	2,644		$	993		$	1,225		$	673		$	367		$	597		$	5,104		$	11,603
Special mention		—			—			—			—			—			—			—			—
Substandard		—			—			—			—			—			85			—			85
Nonaccrual		—			—			21			—			—			17			—			38
Total agricultural loans	$	2,644		$	993		$	1,246		$	673		$	367		$	699		$	5,104		$	11,726

Charge-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Recoveries		—			—			—			—			—			3			—			3
Current period net	$	—		$	—		$	—		$	—		$	—		$	3		$	—		$	3

Total loans:
Pass	$	283,954		$	208,801		$	630,012		$	350,906		$	138,808		$	354,720		$	127,897		$	2,095,098
Special mention		69			1,691			17,138			9,434			—			1,547			36			29,915
Substandard		36			137			167			86			235			1,724			10			2,395
Nonaccrual		29			460			517			34			455			2,079			155			3,729
Total loans	$	284,088		$	211,089		$	647,834		$	360,460		$	139,498		$	360,070		$	128,098		$	2,131,137

Charge-offs	$	(252	)	$	(51	)	$	(139	)	$	(38	)	$	(249	)	$	(15	)	$	(234	)	$	(978	)
Recoveries		52			15			—			14			220			196			51			548
Total current period net (charge-offs) recoveries	$	(200	)	$	(36	)	$	(139	)	$	(24	)	$	(29	)	$	181		$	(183	)	$	(430	)

There were no loans classified in the “doubtful” or “loss” risk rating categories as of June 30, 2025 or December 31, 2024.

The following tables summarize the payment status of loans in the Company’s total loan portfolio, including an aging of delinquent loans and loans 90 days or more past due continuing to accrue interest as of:


June 30, 2025	30 to 59 Days Past Due		60 to 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial and industrial	$	1,029	$	97	$	90	$	1,216	$	209,288	$	210,504	$	—
Real estate:
Construction and development		793		121		3,690		4,604		244,568		249,172		—
Commercial real estate		279		—		201		480		875,632		876,112		—
Farmland		408		—		1,893		2,301		119,814		122,115		—
1-4 family residential		5,149		83		1,838		7,070		537,635		544,705		—
Multi-family residential		—		—		—		—		77,134		77,134		—
Consumer		145		123		172		440		47,442		47,882		—
Agricultural		—		—		21		21		13,470		13,491		—
Overdrafts		—		—		—		—		326		326		—
Total	$	7,803	$	424	$	7,905	$	16,132	$	2,125,309	$	2,141,441	$	—


December 31, 2024	30 to 59 Days Past Due		60 to 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial and industrial	$	465	$	231	$	436	$	1,132	$	253,570	$	254,702	$	—
Real estate:
Construction and development		778		—		—		778		217,839		218,617		—
Commercial real estate		659		18		209		886		865,798		866,684		—
Farmland		307		90		140		537		146,654		147,191		—
1-4 family residential		3,587		1,261		1,214		6,062		522,944		529,006		—
Multi-family residential		—		—		—		—		51,538		51,538		—
Consumer		280		61		174		515		50,879		51,394		—
Agricultural		150		—		21		171		11,555		11,726		—
Overdrafts		—		—		—		—		279		279		—
Total	$	6,226	$	1,661	$	2,194	$	10,081	$	2,121,056	$	2,131,137	$	—

There were no commitments to lend additional funds to borrowers whose loans were classified as nonaccrual. Nonaccrual loans had reserves for credit losses applied under their pooled segments, and there were no nonaccrual loans for which there was no related allowance at June 30, 2025 and December 31, 2024.

The following tables provide an age analysis of loans made to borrowers experiencing financial difficulty that were modified during the last twelve months and continued to experience financial difficulty as of June 30, 2025 and December 31, 2024.


June 30, 2025	Current		30 to 89 Days Past Due		90 Days or Greater Past Due		Nonaccrual
Commercial and industrial	$	56	$	15	$	—	$	—
Real estate:
Construction and development		11		—		—		—
1-4 family residential		—		—		—		134
Agricultural		1		—		—		—
Overdrafts		4		—		—		—
Total loans	$	72	$	15	$	—	$	134


December 31, 2024	Current		30 to 89 Days Past Due		90 Days or Greater Past Due		Nonaccrual
Commercial and industrial	$	113	$	—	$	—	$	—
Construction and development		12		—		—		—
Total loans	$	125	$	—	$	—	$	—

As of June 30, 2025, the Company did not have any loans made to borrowers experiencing financial difficulty that were modified during the six months ended June 30, 2025 and 2024 that subsequently defaulted.