v3.26.1
ALLOWANCE FOR CREDIT LOSSES
 12 Months Ended
Dec. 31, 2025
Receivables [Abstract]  
ALLOWANCE FOR CREDIT LOSSES ALLOWANCE FOR CREDIT LOSSES
The following schedules present the activity in the ACL by loan segment for the year ended December 31, 2025 and December 31, 2024:
Real Estate - ResidentialReal Estate - CommercialReal Estate - Construction and LandCommercial and IndustrialCommercial and Industrial - PPPConsumer and OtherTotal
Year Ended
December 31, 2025
Beginning Balance$1,181 $2,096 $507 $9,607 $— $2,121 $15,512 
Charge-offs(983)(450)— (15,424)(1)(2,358)(19,216)
Recoveries27 5 — 497 1 734 1,264 
Provision2,044 171 123 20,755 — 1,343 24,436 
Ending Balance$2,269 $1,822 $630 $15,435 $— $1,840 $21,996 
December 31, 2024
Beginning Balance$1,987 $1,818 $519 $6,579 $— $2,594 $13,497 
Charge-offs(20)(60)— (10,956)— (2,938)(13,974)
Recoveries1 7 — 606 — 321 935 
Provision(787)331 (12)13,378 — 2,144 15,054 
Ending Balance$1,181 $2,096 $507 $9,607 $— $2,121 $15,512 
The Company calculates its ACL by estimating expected credit losses on a collective basis for loans that share similar risk characteristics. Loans that do not share similar risk characteristics with other loans are evaluated for credit losses on an individual basis. The Company uses a combination of modeled and non-modeled approaches that incorporate current and future economic conditions to estimate lifetime expected losses on a collective basis.
The Company’s ACL model utilizes a PD/LGD methodology to measure the expected credit losses on government guaranteed loans and a WARM methodology for the remaining loans. The PD/LGD method estimates losses by utilizing estimated PD, LGD, and individual loan level exposure at default. The WARM model contemplates expected losses at a pool-level, utilizing historical loss information. Portions of government guaranteed loans have a government guarantee for credit losses, therefore, no ACL has been recorded for those loan balances. In order to quantify the credit risk impact of other trends and changes within the loan portfolio, the Company utilizes qualitative adjustments to the modeled estimated loss approaches. These qualitative adjustments include: changes in lending policies, procedures, and strategies; changes in nature and volume of portfolio; staff experience; changes in volume and trends in classified loans, delinquencies, and nonaccrual; concentration risk; trends in underlying collateral value; external factors such as competition, legal, regulatory; changes in quality of the loan review system; and economic conditions. In addition to this, the Company uses reasonable and supportable forecasts that are developed with internal and external data. These are updated quarterly by management and utilize data from the FOMC’s median forecasts of change in national GDP and of national unemployment. The FOMC’s forecast of GDP and unemployment for the next calendar year is used in conjunction with the most recent 4 quarters of historical data from FRED (Federal Reserve Economic Data) to determine changes in certain qualitative factors used in calculating loss rates.
Loans that do not share risk characteristics are evaluated on an individual basis and are excluded from the pooled evaluation. This generally occurs when, based on current information and events, it is probable that the Company will be unable to collect all interest and principal payments due according to the originally contracted, or reasonably modified, terms of the loan agreement.
Individually evaluated loans are evaluated for impairment and a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the rate implicit in the original loan agreement or at the fair value of collateral adjusted for selling costs as appropriate if repayment is expected solely from the collateral.
See Note 1 of the Notes to Consolidated Financial Statements for further discussion of the Company’s ACL methodology.
The Company maintains a separate ACL for its off-balance sheet unfunded loan commitments. The ACL on unfunded loan commitments is based on estimates of probability that these commitments will be drawn upon according to historical utilization experience, expected loss severity and loss rates as determined for pooled funded loans. As of December 31, 2025 and December 31, 2024, the ACL for unfunded commitments recorded in other liabilities was $671 and $516, respectively.
The following table presents the activity in the ACL for unfunded commitments for the year ended December 31, 2025 and December 31, 2024:
For the Year Ended
December 31, 2025December 31, 2024
Balance at beginning of period$516 $839 
Provision for credit losses on unfunded commitments155 (323)
Unfunded commitments charge-offs— — 
Unfunded commitments recoveries— — 
Balance at end of period$671 $516 
The following tables present the principal balance of nonaccrual loans and loans past due over 89 days on accrual by loan segment at December 31, 2025 and December 31, 2024. In the following tables, the principal balance does not include the government guaranteed balance or loans measured at fair value.
December 31, 2025
Nonaccrual with no ACL(1)
Nonaccrual with ACL(1)
Loans Past Due Over
89 Days and Accruing(1)
Real estate - residential
$— $6,164 $— 
Real estate - commercial
2,628 3,888 — 
Real estate - construction and land
— 815 
Commercial and industrial
— 2,467 — 
Consumer and other
— 268 41 
Total
$2,628 $13,602 $41 
December 31, 2024
Nonaccrual with no ACL(1)
Nonaccrual with ACL(1)
Loans Past Due Over
89 Days and Accruing(1)
Real estate - residential
$— $5,818 $— 
Real estate - commercial
2,709 2,052 — 
Commercial and industrial
— 2,696 — 
Consumer and other— — 295 
Total
$2,709 $10,566 $295 
(1) Excludes loans measured at fair value. See Note 6. Fair Value for additional information.
A financial asset is considered collateral dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. Expected credit losses for collateral dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. Significant quarter over quarter changes are reflective of changes in nonaccrual status and not necessarily associated with
credit quality indicators like appraised value. The following tables present the principal balance, including government guaranteed balances, of individually analyzed collateral dependent loans by loan portfolio segment as of December 31, 2025 and December 31, 2024:
December 31, 2025Type of CollateralACL
Real Estate
Real estate - commercial$2,628 $— 
.
December 31, 2024Type of CollateralACL
Real Estate
Real estate - commercial$2,709 $— 
The following table presents the aging of the principal balance of past due loans HFI at amortized cost at December 31, 2025 by loan segment:
30-89 Days
Past Due		Greater Than
89 Days
Past Due
Total
Past Due
Loans Not
Past Due (1)
Total
Loans
Real estate - residential
$4,698 $5,635 $10,333 $355,094 $365,427 
Real estate - commercial
4,100 4,262 8,362 207,409 215,771 
Real estate - construction and land
— 814 814 47,583 48,397 
Commercial and industrial
4,473 919 5,392 176,174 181,566 
Commercial and industrial - PPP
— — — 6 6 
Consumer and other
1,622 69 1,691 84,750 86,441 
Total
$14,893 $11,699 $26,592 $871,016 $897,608 
(1) $1,537 of balances 30-89 days past due and $7,592 of balances greater than 89 days past due are reported as Loans Not Past Due as a result of the government guarantee.
The following table presents the aging of the principal balance of past due loans HFI at amortized cost at December 31, 2024 by loan segment:
30-89 Days
Past Due		Greater Than
89 Days
Past Due
Total
Past Due
Loans Not
Past Due (1)
Total
Loans
Real estate - residential
$1,049 $5,818 $6,867 $324,003 $330,870 
Real estate - commercial
1,857 4,492 6,349 299,372 305,721 
Real estate - construction and land
— — — 32,914 32,914 
Commercial and industrial
3,572 1,561 5,133 221,389 226,522 
Commercial and industrial - PPP
— — — 941 941 
Consumer and other
417 295 712 93,114 93,826 
Total
$6,895 $12,166 $19,061 $971,733 $990,794 
(1) $10,429 of balances 30-89 days past due and $3,407 of balances greater than 89 days past due are reported as Loans Not Past Due as a result of the government guarantee. Of those loans, $135 of commercial and industrial PPP loans were delinquent as of December 31, 2024.
Modifications to Borrowers Experiencing Financial Difficulty
For the year ended December 31, 2025 and the year ended December 31, 2024, there were no loan modifications to borrowers experiencing financial difficulty and no loan modifications that subsequently defaulted during the period.
Credit Quality Indicators
Internal risk-rating grades are assigned to loans by lending, credit administration or loan review personnel, based on an analysis of the financial and collateral strength and other credit attributes underlying each loan. Management analyzes the resulting ratings, as well as other statistics and factors such as delinquency, to track the migration performance of the portfolio balances. This analysis is performed at least annually. The Bank uses the following definitions for its risk ratings:
Pass – Loans properly approved, documented, collateralized, and performing which do not reflect an abnormal credit risk.
Special Mention – These credits have potential weaknesses that may, if not checked or corrected, weaken the asset, or inadequately protect the Company’s position at some future date. These assets pose elevated risk, but their weakness does not yet justify a “Substandard” classification.
Substandard – These loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.
Doubtful – These loans have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable.

The table below sets forth principal balance for the commercial loan portfolio disaggregated by loan segment based on internally assigned risk ratings at December 31, 2025 and gross write offs for the year ended December 31, 2025:
RevolvingRevolving
LoansLoans
Term Loans Amortized Cost Basis by Origination YearAmortizedConverted
20252024202320222021PriorCost Basisto TermTotal
Real estate - commercial
Risk Rating
Pass$21,998 $39,871 $39,799 $33,762 $24,573 $35,268 $2,480 $— $197,751 
Special mention— 79 394 1,436 111 297 15 — 2,332 
Substandard— 5,111 3,183 4,426 759 2,209 — — 15,688 
Doubtful— — — — — — — — — 
Total real estate - commercial loans, at amortized cost, gross21,998 45,061 43,376 39,624 25,443 37,774 2,495 — 215,771 
Gross write offs— — 130 235 — 85 — — 450 
RevolvingRevolving
LoansLoans
Term Loans Amortized Cost Basis by Origination YearAmortizedConverted
20252024202320222021PriorCost Basisto TermTotal
Real estate - construction and land
Risk Rating
Pass7,977 5,266 8,849 10,487 1,049 — — — 33,628 
Special mention— 1,069 — — — — — — 1,069 
Substandard— — 13,700 — — — — — 13,700 
Doubtful— — — — — — — — — 
Total real estate - construction and land loans, at amortized cost, gross7,977 6,335 22,549 10,487 1,049 — — — 48,397 
Gross write offs— — — — — — — — — 
Commercial and industrial
Risk Rating
Pass44,674 40,705 24,250 22,538 3,418 19,740 11,362 — 166,687 
Special mention386 702 1,330 950 98 1,150 79 — 4,695 
Substandard41 1,155 3,369 2,114 353 2,939 40 — 10,011 
Doubtful13 — 22 45 8 85 — — 173 
Total commercial and industrial loans, at amortized cost, gross45,114 42,562 28,971 25,647 3,877 23,914 11,481 — 181,566 
Gross write offs350 3,441 5,185 2,722 404 3,289 33 — 15,424 
Commercial and industrial - PPP
Risk Rating
Pass— — — — — 6 — — 6 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total commercial and industrial - PPP loans, at amortized cost, gross— — — — — 6 — — 6 
Gross write offs— — — — — 1 — — 1 
The table below sets forth principal balance for the commercial loan portfolio disaggregated by loan segment based on internally assigned risk ratings at December 31, 2024 and gross write offs for the year ended December 31, 2024:
RevolvingRevolving
LoansLoans
Term Loans Amortized Cost Basis by Origination YearAmortizedConverted
2024202320222021PriorCost Basisto TermTotal
Real estate - commercial
Risk Rating
Pass$58,597 $67,244 $67,994 $46,851 $52,733 $2,430 $— $295,849 
Special mention153 919 2,890 538 489 15 — 5,004 
Substandard— 2,971 857 99 941 — — 4,868 
Doubtful— — — — — — — — 
Total real estate - commercial loans, at amortized cost, gross58,750 71,134 71,741 47,488 54,163 2,445 — 305,721 
Gross write offs— — 60 — — — — 60 
Real estate - construction and land
Risk Rating
Pass1,947 18,261 9,891 2,815 — — — 32,914 
Special mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Total real estate - construction and land loans, at amortized cost, gross1,947 18,261 9,891 2,815 — — — 32,914 
Gross write offs— — — — — — — — 
Commercial and industrial
Risk Rating
Pass84,402 40,301 32,982 10,715 36,641 8,778 — 213,819 
Special mention189 1,991 3,003 682 3,696 — — 9,561 
Substandard31 1,464 725 — 626 116 — 2,962 
Doubtful— 93 — 7 80 — — 180 
Total commercial and industrial loans, at amortized cost, gross84,622 43,849 36,710 11,404 41,043 8,894 — 226,522 
Gross write offs— 3,286 3,210 361 4,099 — — 10,956 
RevolvingRevolving
LoansLoans
Term Loans Amortized Cost Basis by Origination YearAmortizedConverted
2024202320222021PriorCost Basisto TermTotal
Commercial and industrial - PPP
Risk Rating
Pass— — — 135 302 — — 437 
Special mention— — — — 504 — — 504 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Total commercial and industrial - PPP loans, at amortized cost, gross— — — 135 806 — — 941 
Gross write offs— — — — — — — — 
The Company considers the performance of the loan portfolio to determine its impact on the ACL. For residential and consumer loan classes, the Company evaluates credit quality based on the aging status of the loan by payment activity. The following table presents the principal balance at December 31, 2025 of residential and consumer loans based on payment activity as well as gross write offs for the year ended December 31, 2025.
RevolvingRevolving
LoansLoans
Term Loans Amortized Cost Basis by Origination YearAmortizedConverted
20252024202320222021PriorCost Basisto TermTotal
Real estate - residential
Payment Performance
Performing$9,162 $31,950 $24,494 $67,942 $21,372 $15,775 $188,568 $— $359,263 
Nonperforming— 150 550 716 867 2,512 1,369 — 6,164 
Total real estate - residential loans, at amortized cost, gross9,162 32,100 25,044 68,658 22,239 18,287 189,937 — 365,427 
Gross write offs— — — 141 — — 842 — 983 
RevolvingRevolving
LoansLoans
Term Loans Amortized Cost Basis by Origination YearAmortizedConverted
20252024202320222021PriorCost Basisto TermTotal
Consumer and other
Payment Performance
Performing12,047 50,220 17,921 4,220 171 49 1,504 — 86,132 
Nonperforming— 240 20 49 — — — — 309 
Total consumer and other loans, at amortized cost, gross12,047 50,460 17,941 4,269 171 49 1,504 — 86,441 
Gross write offs233 680 251 1,088 23 9 74 — 2,358 
The following table presents the principal balance at December 31, 2024 of residential and consumer loans based on payment activity as well as gross write offs for the year ended December 31, 2024.
RevolvingRevolving
LoansLoans
Term Loans Amortized Cost Basis by Origination YearAmortizedConverted
2024202320222021PriorCost Basisto TermTotal
Real estate - residential
Payment Performance
Performing$29,086 $26,473 $65,598 $32,235 $26,395 $145,265 $— $325,052 
Nonperforming— — 3,565 293 — 1,960 — 5,818 
Total real estate - residential loans, at amortized cost, gross29,086 26,473 69,163 32,528 26,395 147,225 — 330,870 
Gross write offs— — — — 20 — — 20 
Consumer and other
Payment Performance
Performing59,591 21,860 9,840 603 53 1,584 — 93,531 
Nonperforming84 — 186 — — 25 — 295 
Total consumer and other loans, at amortized cost, gross59,675 21,860 10,026 603 53 1,609 — 93,826 
Gross write offs— 236 2,351 35 316 — — 2,938