Total loans are presented net of unaccreted discounts and net deferred fees totaling $23.5 million and $22.0 million at March 31, 2026 and December 31, 2025, respectively.

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. As mentioned in Note 1, the accrual of interest on loans is discontinued when there is a clear indication that the borrower’s cash flow may not be sufficient to meet payments as they become due, which is generally when a loan is 90 days past due.

For the three months ended March 31, 2026 and 2025, no interest income was recognized on loans placed back on accrual as no loans were transferred out of nonaccrual during both periods.

An age analysis of past due loans, segregated by class of loans, was as follows:


(Dollars in thousands)	30-59 days		60-89 days		Over 90 days		Total past due		Total current		Total loans
March 31, 2026
Real estate loans:
Non-farm non-residential owner occupied	$	4,311	$	2,975	$	3,157	$	10,443	$	561,594	$	572,037
Non-farm non-residential non-owner occupied		5,446		1,622		18,055		25,123		904,475		929,598
Residential		5,872		4,052		3,134		13,058		530,746		543,804
Construction, development & other		—		—		603		603		894,164		894,767
Farmland		—		—		—		—		32,379		32,379
Commercial & industrial		9,527		4,116		10,669		24,312		2,158,552		2,182,864
Consumer		—		—		—		—		2,265		2,265
Municipal and other		90		—		—		90		93,654		93,744
	$	25,246	$	12,765	$	35,618	$	73,629	$	5,177,829	$	5,251,458


December 31, 2025
Real estate loans:
Non-farm non-residential owner occupied	$	5,695	$	816	$	1,914	$	8,425	$	426,290	$	434,715
Non-farm non-residential non-owner occupied		5,094		497		5,602		11,193		699,208		710,401
Residential		5,512		—		2,410		7,922		325,497		333,419
Construction, development & other		—		603		1,847		2,450		820,903		823,353
Farmland		—		—		—		—		26,485		26,485
Commercial & industrial		3,517		558		9,707		13,782		1,892,834		1,906,616
Consumer		—		—		—		—		1,576		1,576
Municipal and other		60		24		—		84		158,102		158,186
	$	19,878	$	2,498	$	21,480	$	43,856	$	4,350,895	$	4,394,751

A loan is considered modified under ASU 2022-02 if the borrower is experiencing financial difficulties and the loan has been modified. Modifications may include interest rate reductions or below market interest rates, restructuring amortization schedules and other actions intended to minimize potential losses.

On an ongoing basis, the performance of modified loans for borrowers experiencing financial difficulty is monitored for subsequent payment default. Payment default is recognized when the borrower is 90 days or more past due. As of March 31, 2026 and December 31, 2025, there were no modified loans in the previous twelve-month period that were in default.

On April 1, 2025, the Bank entered into a $100 million securitization transaction of a revolving commercial real estate loan (the “April Mortgage Loan”) secured by interests in 1-4 family residential dwellings located in the state of Texas.

The Bank created participation interests in the April Mortgage Loan pursuant to a Participation Agreement, dated as of April 1, 2025, by and between the Bank, as initial Participation A-1 holder, the Bank, as initial Participation A-2 holder, and the Bank, as initial Participation A-3 holder. The Bank subsequently sold Participation A-1 to EJF CRT 2025-1 Depositor LLC (the “Depositor”), who subsequently sold Participation A-1 to EJF CRT 2025-1 LLC (the “Issuer”). The Bank retained Participation A-2 and Participation A-3.

The Issuer pledged Participation A-1, representing the Issuer's pro rata economic interest in the April Mortgage Loan, to U.S. Bank Trust Company, National Association (the “Indenture Trustee”), pursuant to an Indenture, dated as of April 1, 2025 (the “Indenture”), by and between the Issuer, the Indenture Trustee, the Bank, as servicer, and U.S. Bank National Association, as securities intermediary, and issued its Asset-Backed Notes, Series 2025-1, consisting of Class A-1 Notes and Class M-1 Notes. The Issuer sold the Class A-1 Notes to the Bank and certain of the Class M-1 Notes to affiliates of the Depositor on April 1, 2025.

On June 3, 2025, the Bank entered into a $150 million securitization transaction of certain commercial real estate loans (the “June Mortgage Loans”) originated by the Bank.

The Bank created participation interests in the June Mortgage Loans pursuant to Participation Agreements, dated as of June 3, 2025, by and between the Bank, as initial Participation A-1 holder, the Bank, as initial Participation A-2 holder, and the Bank, as initial Participation A-3 holder. The Bank subsequently sold Participation A-1 to EJF CRT 2025-2 Depositor LLC (the “Depositor”), who subsequently sold Participation A-1 to EJF CRT 2025-2 LLC (the “Issuer”). The Bank retained participation interests not sold to the Depositor.

The Issuer pledged Participation A-1, representing the Issuer's pro rata economic interest in the June Mortgage Loans, to U.S. Bank Trust Company, National Association (the “Indenture Trustee”), pursuant to an Indenture, dated as of June 3, 2025 (the “Indenture”), by and between the Issuer, the Indenture Trustee, the Bank, as servicer, and U.S. Bank National Association, as securities intermediary, and issued its Asset-Backed Notes, Series 2025-2, consisting of Class A-1 Notes and Class M-1 Notes. The Issuer sold the Class A-1 Notes to the Bank and certain of the Class M-1 Notes to affiliates of the Depositor on June 3, 2025.

The transfer of loans was accounted for as a sale of participation interests for financial reporting purposes. No gains or losses were recognized in connection with the transactions.

Credit Quality Indicators. From a credit risk standpoint, the Company classifies its loans in one of six categories: (i) pass, (ii) special mention, (iii) substandard, (iv) purchased credit deteriorated (“PCD”), (v) doubtful, or (vi) loss.

The classifications of loans reflect a judgment about the risks of default and loss associated with the loan. The Company reviews the ratings on credits monthly. Ratings are adjusted to reflect the degree of risk and loss that is felt to be inherent in each credit as of each monthly reporting period. The Company’s methodology is structured so that specific allocations are increased in accordance with deterioration in credit quality (and a corresponding increase in risk and loss) or decreased in accordance with improvement in credit quality (and a corresponding decrease in risk and loss).

(i) The Company has several pass credit grades that are assigned to loans based on varying levels of credits, ranging from credits that are secured by cash or marketable securities, to watch credits that have all the characteristics of an acceptable credit risk but warrant more than the normal level of supervision.

(ii) Special mention loans are loans that still show sufficient cash flow to service their debt but show a declining financial trend with potential cash flow shortages if trends continue. This category should be treated as a temporary grade. If cash flow deteriorates further to become negative, then a substandard grade should be given. If cash flow trends begin to improve then an upgrade back to pass would be justified. Nonfinancial reasons for rating a credit special mention include management problems, pending litigation, an ineffective loan agreement or other material structure weakness.

(iii) A substandard loan has material weakness in the primary repayment source such as insufficient cash flow from operations to service the debt. However, other weaknesses such as limited paying capacity of the obligor or the collateral pledged could justify a substandard grade. Substandard loans must have a well-defined weakness, or weaknesses that jeopardize the liquidation of the debt.

(iv) Credits purchased from third parties are recorded at their estimated fair value at the acquisition date and are classified as PCD loans if the loans reflect credit deterioration since origination and it is probable at acquisition that the Company will be unable to collect all contractually required payments.

(v) A loan classified as doubtful has all the weaknesses of a substandard loan with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. A doubtful loan has a high probability of total or substantial loss, but because of specific pending events that may strengthen the asset, its classification as loss is deferred. Doubtful borrowers are usually in default, lack adequate liquidity or capital, and lack the resources necessary to remain an operating entity. Because of high probability of loss, non-accrual status is required on doubtful loans.

(vi) Loans classified as loss are considered uncollectible and of such little value that their continuance as banking assets are not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future. With loans classified as loss, the underlying borrowers are often in bankruptcy, have formally suspended debt repayments, or have otherwise ceased normal business operations. Once an asset is classified as loss, there is little prospect of collecting either its principal or interest. When access to collateral, rather than the value of the collateral, is a problem, a less severe classification may be appropriate. However, the Company does not maintain an asset on the balance sheet if realizing its value would require long-term litigation or other lengthy recovery efforts. Losses are to be recorded in the period an obligation becomes uncollectible.

The following tables summarize the Company’s internal ratings of its loans at March 31, 2026 and December 31, 2025:


(Dollars in thousands)	Pass		Special Mention		Substandard		Purchased Credit Deteriorated		Doubtful		Total
March 31, 2026
Real estate loans:
Non-farm non-residential owner occupied	$	554,608	$	2,655	$	12,299	$	2,475	$	—	$	572,037
Non-farm non-residential non-owner occupied		871,722		21,579		33,347		2,950		—		929,598
Residential		543,507		—		297		—		—		543,804
Construction, development & other		885,961		5,391		3,415		—		—		894,767
Farmland		31,622		—		757		—		—		32,379
Commercial & industrial		2,142,347		30,559		7,851		2,107		—		2,182,864
Consumer		2,233		32		—		—		—		2,265
Municipal and other		93,744		—		—		—		—		93,744
	$	5,125,744	$	60,216	$	57,966	$	7,532	$	—	$	5,251,458


(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
December 31, 2025
Real estate loans:
Non-farm non-residential owner occupied	$	414,506	$	6,725	$	13,484	$	—	$	434,715
Non-farm non-residential non-owner occupied		689,381		4,619		16,401		—		710,401
Residential		333,055		—		364		—		333,419
Construction, development & other		819,938		—		3,415		—		823,353
Farmland		25,719		766		—		—		26,485
Commercial & industrial		1,863,861		34,836		7,919		—		1,906,616
Consumer		1,542		34		—		—		1,576
Municipal and other		158,186		—		—		—		158,186
	$	4,306,188	$	46,980	$	41,583	$	—	$	4,394,751

The following tables summarize the Company's loans by risk grades, loan class and vintage, at March 31, 2026 and December 31, 2025:


	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized
(Dollars in thousands)	2026		2025		2024		2023		2022		Prior Years		Cost Basis		Total
March 31, 2026
Real estate loans:
Non-farm non-residential owner occupied
Pass	$	25,195	$	122,660	$	80,171	$	44,404	$	95,087	$	166,974	$	20,117	$	554,608
Special Mention		—		2,655		—		—		—		—		—		2,655
Substandard		290		1,878		—		—		4,095		6,036		—		12,299
Purchased Credit Deteriorated		—		—		2,475		—		—		—		—		2,475
Total Non-Farm non-residential owner-occupied	$	25,485	$	127,193	$	82,646	$	44,404	$	99,182	$	173,010	$	20,117	$	572,037
Non-farm non-residential non-owner occupied
Pass	$	61,510	$	250,271	$	108,453	$	72,304	$	173,051	$	184,138	$	21,995	$	871,722
Special Mention		—		—		—		—		18,963		2,616		—		21,579
Substandard		—		26,876		90		—		—		6,381		—		33,347
Purchased Credit Deteriorated		2,950		—		—		—		—		—		—		2,950
Total Non-Farm non-residential non owner-occupied	$	64,460	$	277,147	$	108,543	$	72,304	$	192,014	$	193,135	$	21,995	$	929,598
Residential
Pass	$	30,537	$	84,888	$	55,946	$	83,706	$	139,919	$	99,815	$	48,696	$	543,507
Substandard		—		72		—		—		203		22		—		297
Total Residential	$	30,537	$	84,960	$	55,946	$	83,706	$	140,122	$	99,837	$	48,696	$	543,804
Construction, development & other
Pass	$	19,501	$	167,342	$	87,811	$	42,872	$	9,772	$	8,332	$	550,331	$	885,961
Special Mention		—		—		—		—		5,391		—		—		5,391
Substandard		—		3,415		—		—		—		—		—		3,415
Total Construction, development & other	$	19,501	$	170,757	$	87,811	$	42,872	$	15,163	$	8,332	$	550,331	$	894,767
Farmland
Pass	$	7,332	$	2,317	$	3,153	$	8,216	$	8,059	$	1,479	$	1,066	$	31,622
Substandard		—		—		—		—		—		757		—		757
Total Farmland	$	7,332	$	2,317	$	3,153	$	8,216	$	8,059	$	2,236	$	1,066	$	32,379
Commercial & industrial
Pass	$	58,352	$	409,825	$	91,925	$	64,774	$	71,951	$	34,821	$	1,410,699	$	2,142,347
Special Mention		—		1,779		796		8,374		173		—		19,437		30,559
Substandard		—		58		302		2,843		786		362		3,500		7,851
Purchased Credit Deteriorated		—		467		206		—		1,392		—		42		2,107
Total Commercial & industrial	$	58,352	$	412,129	$	93,229	$	75,991	$	74,302	$	35,183	$	1,433,678	$	2,182,864
Consumer
Pass	$	32	$	986	$	153	$	494	$	152	$	416	$	—	$	2,233
Special Mention		—		—		—		32		—		—		—		32
Total Consumer	$	32	$	986	$	153	$	526	$	152	$	416	$	—	$	2,265
Municipal and other
Pass	$	392	$	5,452	$	89	$	18,252	$	2,846	$	309	$	66,404	$	93,744
Total Municipal and other	$	392	$	5,452	$	89	$	18,252	$	2,846	$	309	$	66,404	$	93,744
Total Loans	$	206,091	$	1,080,941	$	431,570	$	346,271	$	531,840	$	512,458	$	2,142,287	$	5,251,458


	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized
(Dollars in thousands)	2025		2024		2023		2022		2021		Prior Years		Cost Basis		Total
December 31, 2025
Real estate loans:
Non-farm non-residential owner occupied
Pass	$	100,756	$	64,629	$	23,658	$	64,818	$	81,912	$	63,195	$	15,538	$	414,506
Special Mention		4,013		—		—		—		1,284		1,428		—		6,725
Substandard		1,017		—		87		4,103		4,115		4,162		—		13,484
Total Non-Farm non-residential owner-occupied	$	105,786	$	64,629	$	23,745	$	68,921	$	87,311	$	68,785	$	15,538	$	434,715
Non-farm non-residential non-owner occupied
Pass	$	220,305	$	74,690	$	63,540	$	153,972	$	122,038	$	30,599	$	24,237	$	689,381
Special Mention		—		—		—		1,976		—		2,643		—		4,619
Substandard		9,856		100		—		—		6,161		284		—		16,401
Total Non-Farm non-residential non owner-occupied	$	230,161	$	74,790	$	63,540	$	155,948	$	128,199	$	33,526	$	24,237	$	710,401
Residential
Pass	$	65,081	$	39,057	$	72,387	$	74,976	$	56,620	$	18,219	$	6,715	$	333,055
Substandard		73		82		—		209		—		—		—		364
Total Residential	$	65,154	$	39,139	$	72,387	$	75,185	$	56,620	$	18,219	$	6,715	$	333,419
Construction, development & other
Pass	$	116,531	$	79,226	$	73,153	$	59,248	$	3,624	$	3,724	$	484,432	$	819,938
Substandard		3,415		—		—		—		—		—		—		3,415
Total Construction, development & other	$	119,946	$	79,226	$	73,153	$	59,248	$	3,624	$	3,724	$	484,432	$	823,353
Farmland
Pass	$	2,653	$	3,172	$	7,206	$	6,720	$	210	$	671	$	5,087	$	25,719
Special Mention		—		—		—		—		766		—		—		766
Total Farmland	$	2,653	$	3,172	$	7,206	$	6,720	$	976	$	671	$	5,087	$	26,485
Commercial & industrial
Pass	$	391,690	$	120,852	$	66,291	$	64,184	$	30,736	$	9,585	$	1,180,523	$	1,863,861
Special Mention		914		870		8,526		252		—		97		24,177		34,836
Substandard		70		1,236		2,951		742		249		387		2,284		7,919
Total Commercial & industrial	$	392,674	$	122,958	$	77,768	$	65,178	$	30,985	$	10,069	$	1,206,984	$	1,906,616
Consumer
Pass	$	804	$	102	$	354	$	177	$	10	$	95	$	—	$	1,542
Special Mention		—		—		34		—		—		—		—		34
Total Consumer	$	804	$	102	$	388	$	177	$	10	$	95	$	—	$	1,576
Municipal and other
Pass	$	36,101	$	73	$	19,347	$	3,410	$	560	$	19	$	98,676	$	158,186
Total Municipal and other	$	36,101	$	73	$	19,347	$	3,410	$	560	$	19	$	98,676	$	158,186
Total Loans	$	953,279	$	384,089	$	337,534	$	434,787	$	308,285	$	135,108	$	1,841,669	$	4,394,751

The following tables summarize the Company's gross charge-offs by origination year and loan class for the three months ended March 31, 2026 and the year ended December 31, 2025.


	Gross Charge-offs by Origination Year													Revolving Loans Amortized
(Dollars in thousands)	2026		2025		2024		2023		2022			Prior Years		Cost Basis		Total
March 31, 2026
Municipal and other	$	—	$	—	$	—	$	—	$	(26	)	$	—	$	—	$	(26	)
Total Charge-Offs	$	—	$	—	$	—	$	—	$	(26	)	$	—	$	—	$	(26	)


	Gross Charge-offs by Origination Year																Revolving Loans Amortized
(Dollars in thousands)	2025		2024			2023			2022			2021		Prior Years			Cost Basis			Total
December 31, 2025
Real estate loans:
Commercial & industrial	$	—	$	(72	)	$	(43	)	$	(1,785	)	$	—	$	(385	)	$	(1,819	)	$	(4,104	)
Municipal and other		—		—			(4	)		(30	)		—		(10	)		—			(44	)
Total Charge-Offs	$	—	$	(72	)	$	(47	)	$	(1,815	)	$	—	$	(395	)	$	(1,819	)	$	(4,148	)

The allowance for credit losses on loans is a contra-asset valuation account, calculated in accordance with ASC 326, that is deducted from the amortized cost basis of loans to present the net amount expected to be collected. The amount of the allowance represents management's best estimate of current expected credit losses on loans considering available information, from internal and external sources, relevant to assessing collectability over the loans' contractual terms, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals and modifications unless (i) management has a reasonable expectation that a loan to an individual borrower that is experiencing financial difficulty will be modified or (ii) such extension or renewal options are not unconditionally cancellable by us and, in such cases, the borrower is likely to meet applicable conditions and likely to request extension or renewal. Relevant available information includes historical credit loss experience, current conditions and reasonable and supportable forecasts, including U.S. Unemployment, GDP and Case-Shiller U.S National Home Price Index. While historical credit loss experience provides the basis for the estimation of expected credit losses, adjustments to historical loss information may be made for differences in current portfolio-specific risk characteristics, environmental conditions or other relevant factors. The allowance for credit losses is measured on a collective basis for portfolios of loans when similar risk characteristics exist.

Credit loss expense related to loans reflects the totality of actions taken on all loans for a particular period including any necessary increases or decreases in the allowance related to changes in credit loss expectations associated with specific loans or pools of loans. Portions of the allowance may be allocated for specific credits; however, the entire allowance is available for any credit that, in management’s judgment, should be charged off. While management utilizes its best judgment and information available, the ultimate appropriateness of the allowance is dependent upon a variety of factors beyond our control, including the performance of our loan portfolio, the economy, changes in interest rates and the view of the regulatory authorities toward loan classifications.

In calculating the allowance for credit losses, most loans are segmented into pools based upon similar characteristics and risk profiles. Common characteristics and risk profiles include the type/purpose of loan, underlying collateral, geographical similarity and historical/expected credit loss patterns. In developing these loan pools for the purposes of modeling expected credit losses, we also analyzed the degree of correlation in how loans within each portfolio respond when subjected to varying economic conditions and scenarios as well as other portfolio stress factors. For modeling purposes, we use loan call report codes to identify the pools of loans with similar risk characteristics. Loans that do not share risk characteristics are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation. We periodically reassess each pool to ensure the loans within the pool continue to share similar characteristics and risk profiles and to determine whether further segmentation is necessary.

We have elected to use the discounted cash flow (“DCF”) method for estimating accumulated credit losses for all loans except for consumer loans and leases. The DCF method allows for an effective incorporation of reasonable and supportable forecasts that can be applied in a consistent and objective manner. The method also aligns well with other calculations outside the accumulated credit loss estimations which mitigate model risk in other areas such as fair value or exit price notion calculations, interest rate risk calculations, profitability analysis, asset-liability management, and other forms of cash flow analysis. We have elected to use the weighted-average remaining maturity (“WARM”) method for consumer loans and leases. The long-term average loss rate is calculated and applied on a quarterly basis for the remaining life of the pool. Adjustments for economic expectations are made in the qualitative portion of the calculation. The long-term average loss rate is derived using peer data derived from the call report.

There may be certain financial assets for which the expectation of credit loss is zero after evaluating historical loss information, making necessary adjustments for current conditions and reasonable and supportable forecasts, and considering any collateral or guarantee arrangements that are not free-standing contracts. A loan that is fully secured by cash or cash equivalents, such as certificates of deposit issued by the lending institution, would likely have zero credit loss expectations. Similarly, the guaranteed portion of an SBA loan or security purchased on the secondary market through the SBA’s fiscal and transfer agent would likely have zero credit loss expectations because these financial assets are unconditionally guaranteed by the U.S. government. Currently, the Company deducts the SBA guaranteed portion of financial assets from the individual asset balance.

Management qualitatively adjusts model results for risk factors that are not considered within our modeling processes but are nonetheless relevant in assessing the expected credit losses within our loan pools. These qualitative factors (“Q-Factor”) and other qualitative adjustments may increase or decrease management's estimate of expected credit losses by a calculated percentage or amount based upon the estimated level of risk. The various risks that may be considered in making Q-Factor and other qualitative adjustments include, among other things, the impact of (i) changes in lending policies and procedures, including changes in underwriting standards and practices for collections, write-offs, and recoveries, (ii) actual and expected changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the loan pools, (iii) changes in the nature and volume of the loan pools and in the terms of the underlying loans, (iv) changes in the experience, ability, and depth of our lending management and staff, (v) changes in volume and severity of past due financial assets, the volume of non-accrual assets, and the volume and severity of adversely classified or graded assets, (vi) changes in the quality of our credit review function, (vii) changes in the value of the underlying collateral for loans that are non-collateral dependent, (viii) the existence, growth, and effect of any concentrations of credit and (ix) other factors such as the regulatory, legal and technological environments; competition; and events such as natural disasters or health pandemics.

In some cases, management may determine that an individual loan exhibits unique risk characteristics which differentiate the loan from other loans within our loan pools. In such cases, the loans are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation. Specific allocations of the allowance for credit losses are determined by analyzing the borrower’s ability to repay amounts owed, collateral deficiencies, the relative risk grade of the loan and economic conditions affecting the borrower’s industry, among other things. A loan is considered to be collateral dependent when, based upon management's assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. We reevaluate the fair value of collateral supporting collateral dependent loans on a quarterly basis. In such cases, expected credit losses are based on the fair value of the collateral at the measurement date, adjusted for estimated selling costs if satisfaction of the loan depends on the sale of the collateral. The fair value of real estate collateral supporting collateral dependent loans is evaluated using a methodology that is consistent with the Uniform Standards of Professional Appraisal Practice. The fair value of collateral supporting collateral dependent construction loans is based on an “as is” valuation.

The following tables detail the activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2026 and 2025:


(Dollars in thousands)	Beginning Balance		Initial Allowance on Acquired Loans		Provision for Credit Losses on Loans			Charge-offs			Recoveries		Ending Balance
Three Months Ended March 31, 2026
Real estate loans:
Non-farm non-residential owner occupied	$	2,337	$	794	$	455		$	—		$	—	$	3,586
Non-farm non-residential non-owner occupied		4,843		1,868		(462	)		—			—		6,249
Residential		2,008		1,489		126			—			—		3,623
Construction, development & other		6,955		487		(381	)		—			—		7,061
Farmland		116		21		32			—			—		169
Commercial & industrial		26,673		2,121		1,140			—			31		29,965
Consumer		6		5		1			—			—		12
Municipal and other		1,011		1		(196	)		(26	)		—		790
	$	43,949	$	6,786	$	715		$	(26	)	$	31	$	51,455

Management believes the allowance for credit losses is adequate to cover expected credit losses on loans at March 31, 2026 and 2025.

A loan is considered to be collateral dependent when, based upon management's assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. Collateral dependent loans are secured by real estate assets, accounts receivable, inventory and equipment. For a collateral dependent loan, the Company's evaluation process includes a valuation by appraisal or other collateral analysis adjusted for selling costs. The valuation is compared to the remaining outstanding principal balance of the loan and any loss is included in the allowance for credit losses on loans as a specific valuation.

As discussed in Note 20 – Business Combinations, the Company acquired loans with fair values of $805.2 million as part of the acquisition of Keystone Bancshares, Inc. and its subsidiary Keystone Bank, SSB. Of the total $812.8 million acquired, $804.6 million were PSL loans which were determined to have no evidence of deteriorated credit quality and are accounted for under ASC Topics

310-10 and 310-20. The remaining $8.2 million were PCD loans which exhibited deteriorated credit quality since origination under ASC 310-30.

The accretable discount is accreted into income using the interest method over the life of the loans. At March 31, 2026, unaccreted discounts on PCD loans totaled approximately $700,000 and were included in net loans in the accompanying consolidated balance sheets.

At March 31, 2026, the allowance for credit losses related to PCD loans disclosed above was approximately $1.0 million.

Determining the fair value of PCD loans at acquisition required the Company to estimate cash flows expected to result from those loans and to discount those cash flows at appropriate rates of interest. For such loans, the excess of cash flows expected to be collected over the estimated fair value is recognized as interest income over the remaining lives of the loans and is called the accretable yield. The difference between contractually required payments and the cash flows expected to be collected reflects the impact of estimated loan losses and is called the nonaccretable difference. In accordance with GAAP, there was no carry-over of previously established allowance for credit losses from the acquired loans.