The Company purchased $15.8 million in residential loans and $11.9 million in consumer loans during the three months ended March 31, 2026. The Company purchased $108.2 million in residential loans and $8.7 million in consumer loans during the twelve months ended December 31, 2025.

The Company uses the discounted cash flow ("DCF") methodology in determining the allowance for credit losses (“ACL”), which projects future losses, based on historical and peer loss data. Qualitative adjustments to the DCF methodology include and consider changes in national, regional, and local economic and business conditions, an assessment of the lending environment, including underwriting standards, and other factors affecting credit quality. There were no significant changes to the Company’s ACL methodology for the quarter ended March 31, 2026.

The calculation of the allowance for credit losses does not include any accrued interest receivable. The Company’s policy is to write off any interest not collected after 90 days past due, or earlier, when the ability to collect principal and interest according to the contractual terms is in doubt. During the three months ended March 31, 2026, the Company wrote off $257 thousand in accrued interest receivable for loans, compared to $422 thousand for the three months ended March 31, 2025. Accrued interest receivable related to loans, at March 31, 2026 and December 31, 2025, was $6.4 million and $6.7 million, respectively. The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loan receivables by the length of time a recorded payment is past due. The following table presents the segments of the loan portfolio, summarized by the past due status as of March 31, 2026:


	30-59 Days Past Due		60-89 Days Past Due		90 Days Or More Past Due		Total Past Due		Current		Total Loans Receivable		Loans Receivable >90 Days and Accruing
	(In thousands)
Commercial real estate	$	1,838	$	—	$	15,674	$	17,512	$	1,305,835	$	1,323,347	$	—
Commercial and industrial		82		—		361		443		80,230		80,673		—
Construction		—		—		—		—		210,862		210,862		—
Residential first-lien mortgage		1,305		—		443		1,748		168,805		170,553		—
Home equity/consumer		—		—		—		—		36,192		36,192		—
Total	$	3,225	$	—	$	16,478	$	19,703	$	1,801,924	$	1,821,627	$	—

The following table presents the segments of the loan portfolio summarized by the past due status as of December 31, 2025:


	30-59 Days Past Due		60-89 Days Past Due		90 Days Or More Past Due		Total Past Due		Current		Total Loans Receivable		Loans Receivable >90 Days and Accruing
	(In thousands)
Commercial real estate	$	7,523	$	—	$	15,229	$	22,752	$	1,320,779	$	1,343,531	$	—
Commercial and industrial		15		273		302		590		75,967		76,557		—
Construction		—		—		—		—		209,483		209,483		—
Residential first-lien mortgage		370		—		18		388		163,425		163,813		—
Home equity/consumer		180		—		—		180		25,179		25,359		—
Total	$	8,088	$	273	$	15,549	$	23,910	$	1,794,833	$	1,818,743	$	—

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation and current economic trends, among other factors. The Company evaluates risk ratings on an ongoing basis and assigns one of the following ratings: pass, special mention, substandard and doubtful. The Company engages a third party to review its assessment on a semiannual basis. The Company classifies residential and consumer loans as either performing or nonperforming based on payment status.

The following table summarizes total loans by year of origination, internally assigned credit grades and risk characteristics as of March 31, 2026. Gross charge-offs are included for the three months ended March 31, 2026.


	2026		2025		2024		2023		2022		Prior		Revolving Loans		Total
	(Dollars in thousands)
Commercial real estate
Pass	$	14,191	$	58,134	$	122,506	$	159,861	$	290,331	$	647,860	$	5,758	$	1,298,641
Special mention		—		—		—		—		1,065		8,278		—		9,343
Substandard		—		—		—		—		—		15,363		—		15,363
Total commercial real estate		14,191		58,134		122,506		159,861		291,396		671,501		5,758		1,323,347
Current period gross charge-offs												14				14
Commercial and industrial
Pass		1,323		7,886		3,251		6,133		15,005		20,230		25,673		79,501
Special mention		—		—		—		—		—		500		—		500
Substandard		—		—		—		—		—		672		—		672
Total commercial and industrial		1,323		7,886		3,251		6,133		15,005		21,402		25,673		80,673
Current period gross charge-offs																—
Construction
Pass		6,427		5,000		1,108		—		1,360		52,370		144,597		210,862
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Total construction		6,427		5,000		1,108		—		1,360		52,370		144,597		210,862
Current period gross charge-offs																—
Residential first-lien mortgage
Performing		3,821		34,871		54,628		19,617		7,032		50,141		—		170,110
Nonperforming		—		—		—		—		—		443		—		443
Total residential first-lien mortgage		3,821		34,871		54,628		19,617		7,032		50,584		—		170,553
Home equity/consumer
Performing		11,990		8,910		1,030		1,674		1,239		288		11,061		36,192
Nonperforming		—		—		—		—		—		—		—		—
Total home equity/consumer		11,990		8,910		1,030		1,674		1,239		288		11,061		36,192
Total
Pass		37,752		114,801		182,523		187,285		314,967		770,889		187,089		1,795,306
Special mention		—		—		—		—		1,065		8,778		—		9,843
Substandard		—		—		—		—		—		16,478		—		16,478
Total loans	$	37,752	$	114,801	$	182,523	$	187,285	$	316,032	$	796,145	$	187,089	$	1,821,627

The following table summarizes total loans by year of origination, internally assigned credit grades and risk characteristics as of December 31, 2025. Gross charge-offs are included for the year ended December 31, 2025.


	2025		2024		2023		2021		2020		Prior		Revolving Loans		Total
	(Dollars in thousands)
Commercial real estate
Pass	$	63,586	$	128,257	$	161,317	$	299,041	$	129,951	$	529,896	$	5,962	$	1,318,010
Special mention		—		—		—		—		—		9,429		—		9,429
Substandard		—		—		—		—		—		16,092		—		16,092
Total commercial real estate		63,586		128,257		161,317		299,041		129,951		555,417		5,962		1,343,531
Current period gross charge-offs		—		—		—		—		—		10,181		—		10,181
Commercial and industrial
Pass		8,251		1,077		6,197		8,958		11,074		15,706		23,532		74,795
Special mention		—		—		—		—		—		505		—		505
Substandard		—		—		—		—		—		1,257		—		1,257
Total commercial and industrial		8,251		1,077		6,197		8,958		11,074		17,468		23,532		76,557
Current period gross charge-offs		—		—		—		—		—		99		—		99
Construction
Pass		5,000		17,070		—		9,290		55,582		—		122,541		209,483
Total construction		5,000		17,070		—		9,290		55,582		—		122,541		209,483

Residential first-lien mortgage
Performing		28,071		58,909		17,605		6,408		5,903		46,825		—		163,721
Nonperforming		—		—		—		—		—		92		—		92
Total residential first-lien mortgage		28,071		58,909		17,605		6,408		5,903		46,917		—		163,813
Home equity/consumer
Performing		9,726		1,045		899		1,203		1,050		442		10,989		25,354
Nonperforming		—		—		—		—		—		5		—		5
Total home equity/consumer		9,726		1,045		899		1,203		1,050		447		10,989		25,359
Total
Pass		114,634		206,358		186,018		324,900		203,560		592,869		163,024		1,791,363
Special mention		—		—		—		—		—		9,934		—		9,934
Substandard		—		—		—		—		—		17,446		—		17,446
Total loans	$	114,634	$	206,358	$	186,018	$	324,900	$	203,560	$	620,249	$	163,024	$	1,818,743

The following table presents the allowance for credit losses on loans receivable at and for the three months ended March 31, 2026:


	Commercial real estate			Commercial and industrial		Construction			Residential first-lien mortgage			Home equity/ consumer		Total
	(In thousands)
Allowance for credit losses:
Beginning balance	$	16,848		$	900	$	376		$	2,004		$	197		20,325
Provision (reversal)1		(399	)		1		(12	)		(4	)		124		(290	)
Charge-offs		(14	)		—		—			—			—		(14	)
Recoveries		2			10		—			—			—		12
Total	$	16,437		$	911	$	364		$	2,000		$	321	$	20,033

The reversal of credit losses on the Consolidated Statement of Income is $156 thousand comprising of a decrease of $290 thousand to the allowance for credit losses on loans and a $134 thousand increase to the reserve for unfunded liabilities.

The following table presents the allowance for credit losses on loans receivable at and for the three months ended March 31, 2025:


	Commercial real estate		Commercial and industrial			Construction			Residential first-lien mortgage		Home equity/ consumer		Total
	(In thousands)
Allowance for credit losses:
Beginning balance	$	20,821	$	1,173		$	609		$	893	$	161	$	23,657
Provision (reversal)1		149		(118	)		(209	)		395		8		225
Charge-offs		—		(84	)		—			—		—		(84	)
Recoveries		11		133			—			—		—		144
Total	$	20,981	$	1,104		$	400		$	1,288	$	169	$	23,942

The provision for credit losses on the Consolidated Statement of Income is $268 thousand comprising of an increase of $225 thousand to the allowance for credit losses on loans and a $43 thousand increase to the reserve for unfunded liabilities.

As of March 31, 2026, the Company had nine loans totaling $16.5 million that were individually analyzed for potential credit loss. Eight of the loans aggregating $16.1 million were individually evaluated collateral dependent loans and one loan for $361 thousand used present value of future cash flows to determine if a write down was needed. As of December 31, 2025, the Company had nine loans totaling $16.6 million that were individually analyzed for potential credit loss. Eight of the loans aggregating $16.2 million were individually evaluated collateral dependent loans and one loan for $394 thousand used present value of future cash flows to determine if a write down was needed.

Occasionally, the Company will modify the contractual terms of loans to a borrower experiencing financial difficulties as a way to mitigate loss, proactively work with borrowers in financial difficulty, or to comply with regulations regarding the treatment of certain bankruptcy filing and discharge situations. Typically, such concessions may consist of a reduction in interest rate to a below market rate, taking into account the credit quality of the note, extension of additional credit base on receipt of adequate collateral, or a deferment or reduction of payments (principal or interest) which materially alters the Company’s position or significantly extends the note’s maturity date, such that the present value of cash flows to be received is materially less than those contractually established at the loan’s origination. When principal forgiveness is provided, the amount forgiven is charged off against the allowance for credit losses on loans. There were no modifications to borrowers with financial difficulties and no previously modified loans that defaulted during the three months ended March 31, 2026, and the twelve-months ended December 31, 2025.