v3.26.1
Allowance for Credit Losses
3 Months Ended
Mar. 31, 2026
Allowance for Credit Losses  
Allowance for Credit Losses

NOTE 4: Allowance for Credit Losses

The Corporation conducts an analysis of the collectability of the loan portfolio on a regular basis and uses this analysis to assess the sufficiency of the allowance for credit losses on loans and to determine the necessary provision for credit losses. The Corporation segmented the loan portfolio into three loan portfolios based on common risk characteristics. The Commercial portfolio consists of commercial real estate loans, commercial business loans, commercial and consumer real estate construction loans, land acquisition and development loans, and builder lines. The Consumer portfolio consists of residential mortgage loans, equity lines, and other consumer loans. The Consumer Finance portfolio consists of automobile and marine and recreational vehicle (RV) loans.

The following table shows the allowance for credit losses activity by loan portfolio for the three months ended March 31, 2026 and 2025.

Consumer

(Dollars in thousands)

Commercial

Consumer

Finance

Total

Balance at December 31, 2025

$

13,239

$

4,179

$

22,259

$

39,677

Provision charged to operations

146

4

3,300

3,450

Loans charged off

(65)

(4,626)

(4,691)

Recoveries of loans previously charged off

26

35

1,168

1,229

Balance at March 31, 2026

$

13,411

$

4,153

$

22,101

$

39,665

Consumer

(Dollars in thousands)

Commercial

Consumer

Finance

Total

Balance at December 31, 2024

$

13,347

$

4,032

$

22,708

$

40,087

Provision charged to operations

69

81

2,900

3,050

Loans charged off

(61)

(4,073)

(4,134)

Recoveries of loans previously charged off

9

34

997

1,040

Balance at March 31, 2025

$

13,425

$

4,086

$

22,532

$

40,043

The following table presents a breakdown of the provision for credit losses for the periods indicated.

Three Months Ended March 31, 

(Dollars in thousands)

  ​ ​ ​

2026

  ​ ​ ​

2025

  ​ ​

Provision for credit losses:

Provision for loans

$

3,450

$

3,050

Provision for unfunded commitments

 

150

 

(50)

Total

$

3,600

$

3,000

The following table details the recorded balance of the classes of loans within the commercial and consumer loan portfolios by loan rating, which is reviewed on a quarterly basis, and year of origination as of March 31, 2026:

Revolving

Revolving

Term Loans Recorded Balance by Origination Year

Loans

Loans

Recorded

Converted

(Dollars in thousands)

  ​ ​ ​

2026

2025

2024

2023

2022

Prior

Balance

to Term1

Total

Commercial real estate:

Loan Rating

Pass

$

29,748

$

72,456

$

114,721

$

130,789

$

160,904

$

361,830

$

$

125

$

870,573

Special Mention

70

70

Total

$

29,748

$

72,456

$

114,721

$

130,789

$

160,904

$

361,900

$

$

125

$

870,643

Commercial business:

Loan Rating

Pass

$

6,536

$

8,790

$

7,213

$

9,434

$

12,853

$

34,694

$

38,838

$

160

$

118,518

Special Mention

107

107

Substandard Nonaccrual

2

2

Total

$

6,536

$

8,790

$

7,213

$

9,434

$

12,853

$

34,803

$

38,838

$

160

0

$

118,627

Construction - commercial real estate:

Loan Rating

Pass

$

3,424

$

7,885

$

47,184

$

13,582

$

3,187

$

$

$

$

75,262

Total

$

3,424

$

7,885

$

47,184

$

13,582

$

3,187

$

$

$

$

75,262

Land acquisition and development:

Loan Rating

Pass

$

16,040

$

23,716

$

37,595

$

$

371

$

4,753

$

$

$

82,475

Total

$

16,040

$

23,716

$

37,595

$

$

371

$

4,753

$

$

$

82,475

Builder lines:

Loan Rating

Pass

$

4,976

$

19,435

$

4,978

$

446

$

1,018

$

205

$

$

$

31,058

Total

$

4,976

$

19,435

$

4,978

$

446

$

1,018

$

205

$

$

$

31,058

Construction - consumer real estate:

Loan Rating

Pass

$

2,934

$

27,061

$

2,545

$

$

$

$

$

$

32,540

Total

$

2,934

$

27,061

$

2,545

$

$

$

$

$

$

32,540

Residential mortgage:

Loan Rating

Pass

$

11,717

$

41,452

$

55,529

$

43,281

$

68,735

$

94,199

$

$

$

314,913

Special Mention

161

21

82

343

607

Substandard

60

60

Substandard Nonaccrual

97

800

104

96

1,097

Total

$

11,717

$

41,452

$

55,787

$

44,102

$

68,921

$

94,698

$

$

$

316,677

Equity lines:

Loan Rating

Pass

$

$

$

$

$

$

490

$

75,535

$

801

$

76,826

Special Mention

94

94

Total

$

$

$

$

$

$

490

$

75,535

$

895

$

76,920

Other consumer:

Loan Rating

Pass

$

1,952

$

4,111

$

2,103

$

1,108

$

580

$

308

$

42

$

$

10,204

Total

$

1,952

$

4,111

$

2,103

$

1,108

$

580

$

308

$

42

$

$

10,204

Total:

Loan Rating

Pass

$

77,327

$

204,906

$

271,868

$

198,640

$

247,648

$

496,479

$

114,415

$

1,086

$

1,612,369

Special Mention

161

21

82

520

94

878

Substandard

60

60

Substandard Nonaccrual

97

800

104

98

1,099

Total

$

77,327

$

204,906

$

272,126

$

199,461

$

247,834

$

497,157

$

114,415

$

1,180

$

1,614,406

1Commercial business and equity lines include $119,000 and $169,000, respectively, of revolving loans converted to term during the three months ended March 31, 2026.

The following table details the recorded balance of the classes of loans within the commercial and consumer loan portfolios by loan rating, which is reviewed on a quarterly basis, and year of origination as of December 31, 2025:

Revolving

Revolving

Term Loans Recorded Balance by Origination Year

Loans

Loans

Recorded

Converted

(Dollars in thousands)

  ​ ​ ​

2025

2024

2023

2022

2021

Prior

Balance

to Term1

Total

Commercial real estate:

Loan Rating

Pass

$

72,184

$

110,069

$

120,853

$

162,934

$

120,074

$

249,017

$

$

229

$

835,360

Special Mention

72

72

Total

$

72,184

$

110,069

$

120,853

$

162,934

$

120,074

$

249,089

$

$

229

$

835,432

Commercial business:

Loan Rating

Pass

$

9,557

$

7,623

$

10,169

$

13,091

$

11,841

$

26,507

$

36,875

$

47

$

115,710

Total

$

9,557

$

7,623

$

10,169

$

13,091

$

11,841

$

26,507

$

36,875

$

47

$

115,710

Construction - commercial real estate:

Loan Rating

Pass

$

10,384

$

54,141

$

31,892

$

3,187

$

$

$

$

$

99,604

Total

$

10,384

$

54,141

$

31,892

$

3,187

$

$

$

$

$

99,604

Land acquisition and development:

Loan Rating

Pass

$

18,966

$

41,178

$

$

371

$

$

5,733

$

$

$

66,248

Total

$

18,966

$

41,178

$

$

371

$

$

5,733

$

$

$

66,248

Builder lines:

Loan Rating

Pass

$

27,069

$

8,855

$

826

$

784

$

$

404

$

$

$

37,938

Total

$

27,069

$

8,855

$

826

$

784

$

$

404

$

$

$

37,938

Construction - consumer real estate:

Loan Rating

Pass

$

24,158

$

5,130

$

$

$

$

$

$

$

29,288

Total

$

24,158

$

5,130

$

$

$

$

$

$

$

29,288

Residential mortgage:

Loan Rating

Pass

$

44,390

$

57,382

$

46,606

$

71,350

$

33,087

$

64,871

$

$

$

317,686

Special Mention

22

84

202

347

655

Substandard

60

60

Substandard Nonaccrual

113

833

189

1,135

Total

$

44,390

$

57,495

$

47,461

$

71,623

$

33,289

$

65,278

$

$

$

319,536

Equity lines:

Loan Rating

Pass

$

$

$

$

$

$

493

$

75,165

$

701

$

76,359

Special Mention

101

101

Total

$

$

$

$

$

$

493

$

75,165

$

802

$

76,460

Other consumer:

Loan Rating

Pass

$

5,157

$

2,512

$

1,318

$

670

$

82

$

300

$

46

$

$

10,085

Total

$

5,157

$

2,512

$

1,318

$

670

$

82

$

300

$

46

$

$

10,085

Total:

Loan Rating

Pass

$

211,865

$

286,890

$

211,664

$

252,387

$

165,084

$

347,325

$

112,086

$

977

$

1,588,278

Special Mention

22

84

202

419

101

828

Substandard

60

60

Substandard Nonaccrual

113

833

189

1,135

Total

$

211,865

$

287,003

$

212,519

$

252,660

$

165,286

$

347,804

$

112,086

$

1,078

$

1,590,301

1Commercial real estate and equity lines include $128,000 and $516,000, respectively, of revolving loans converted to term during the year ended December 31, 2025.

The following table details the recorded balance of the classes of loans within the consumer finance loan portfolio by credit rating at the time of origination and year of origination as of March 31, 2026:

Revolving

Term Loans Recorded Balance by Origination Year

Loans

Revolving

Converted

(Dollars in thousands)

  ​ ​ ​

2026

2025

2024

2023

2022

Prior

Loans

to Term

Total

Consumer finance - automobiles:

Credit rating1

Very good

$

6,915

$

20,282

$

13,090

$

5,417

$

3,803

$

955

$

$

$

50,462

Good

14,165

42,919

25,800

14,942

15,416

4,252

117,494

Fairly good

12,399

45,770

27,028

20,605

19,898

8,241

133,941

Fair

7,193

28,267

17,053

12,529

11,958

6,974

83,974

Marginal

1,330

6,710

3,392

2,460

2,789

2,921

19,602

Total

$

42,002

$

143,948

$

86,363

$

55,953

$

53,864

$

23,343

$

$

$

405,473

Consumer finance - marine and recreational vehicles:

Credit rating1

Very good

$

$

1,302

$

5,893

$

4,695

$

10,246

$

14,396

$

$

$

36,532

Good

1,426

3,755

5,391

5,301

2,364

18,237

Fairly good

164

171

69

404

Total

$

$

2,728

$

9,648

$

10,250

$

15,718

$

16,829

$

$

$

55,173

Total:

Credit rating1

Very good

$

6,915

$

21,584

$

18,983

$

10,112

$

14,049

$

15,351

$

$

$

86,994

Good

14,165

44,345

29,555

20,333

20,717

6,616

135,731

Fairly good

12,399

45,770

27,028

20,769

20,069

8,310

134,345

Fair

7,193

28,267

17,053

12,529

11,958

6,974

83,974

Marginal

1,330

6,710

3,392

2,460

2,789

2,921

19,602

Total

$

42,002

$

146,676

$

96,011

$

66,203

$

69,582

$

40,172

$

$

$

460,646

1Credit ratings with a FICO score greater than 739 are considered Very Good, FICO scores ranging from 670-739 are considered Good, FICO scores ranging from 625-669 are considered Fairly Good, FICO scores ranging from 580-624 are considered Fair and FICO scores less than 580 are considered Marginal.

The following table details the recorded balance of the classes of loans within the consumer finance loan portfolio by credit rating at the time of origination and year of origination as of December 31, 2025:

Revolving

Term Loans Recorded Balance by Origination Year

Loans

Revolving

Converted

(Dollars in thousands)

  ​ ​ ​

2025

2024

2023

2022

2021

Prior

Loans

to Term

Total

Consumer finance - automobiles:

Credit rating1

Very good

$

22,600

$

14,758

$

6,212

$

4,543

$

1,123

$

111

$

$

$

49,347

Good

46,079

28,573

17,066

17,449

4,853

519

114,539

Fairly good

48,871

29,704

23,209

23,345

9,043

1,397

135,569

Fair

29,774

18,942

14,528

14,266

7,011

1,815

86,336

Marginal

6,960

3,751

2,893

3,243

2,626

1,048

20,521

Total

$

154,284

$

95,728

$

63,908

$

62,846

$

24,656

$

4,890

$

$

$

406,312

Consumer finance - marine and recreational vehicles:

Credit rating1

Very good

$

1,339

$

6,231

$

4,999

$

10,700

$

6,473

$

8,789

$

$

$

38,531

Good

1,442

3,937

5,533

5,604

1,066

1,441

19,023

Fairly good

165

173

32

39

409

Total

$

2,781

$

10,168

$

10,697

$

16,477

$

7,571

$

10,269

$

$

$

57,963

Total:

Credit rating1

Very good

$

23,939

$

20,989

$

11,211

$

15,243

$

7,596

$

8,900

$

$

$

87,878

Good

47,521

32,510

22,599

23,053

5,919

1,960

133,562

Fairly good

48,871

29,704

23,374

23,518

9,075

1,436

135,978

Fair

29,774

18,942

14,528

14,266

7,011

1,815

86,336

Marginal

6,960

3,751

2,893

3,243

2,626

1,048

20,521

Total

$

157,065

$

105,896

$

74,605

$

79,323

$

32,227

$

15,159

$

$

$

464,275

1Credit ratings with a FICO score greater than 739 are considered Very Good, FICO scores ranging from 670-739 are considered Good, FICO scores ranging from 625-669 are considered Fairly Good, FICO scores ranging from 580-624 are considered Fair and FICO scores less than 580 are considered Marginal.

The following table details the current period gross charge-offs of loans by year of origination for the three months ended March 31, 2026.

Revolving

Current Period Gross Charge-offs by Origination Year

Loans

Revolving

Converted

(Dollars in thousands)

  ​ ​ ​

2026

2025

2024

2023

2022

Prior

Loans

to Term

Total

Equity lines

$

$

$

$

5

$

$

6

$

$

$

11

Other consumer1

42

5

7

54

Consumer finance - automobiles

556

968

1,248

1,242

482

4,496

Consumer finance - marine and recreational vehicles

28

26

64

12

130

Total

$

42

$

561

$

1,003

$

1,279

$

1,306

$

500

$

$

$

4,691

1Gross charge-offs of other consumer loans for the three months ended March 31, 2026 included $217,000 of demand deposit overdrafts that originated in 2026.

The following table details the current period gross charge-offs of loans by year of origination for the three months ended March 31, 2025.

Revolving

Current Period Gross Charge-offs by Origination Year

Loans

Revolving

Converted

(Dollars in thousands)

  ​ ​ ​

2025

2024

2023

2022

2021

Prior

Loans

to Term

Total

Residential mortgage

$

6

$

$

$

$

$

$

$

$

6

Other consumer1

45

10

55

Consumer finance - automobiles

593

1,004

1,616

587

196

3,996

Consumer finance - marine and recreational vehicles

13

52

10

2

77

Total

$

51

$

603

$

1,017

$

1,668

$

597

$

198

$

$

$

4,134

1Gross charge-offs of other consumer loans for the three months ended March 31, 2025 included $45,000 of demand deposit overdrafts that originated in 2025.

As of March 31, 2026 and December 31, 2025, the Corporation had no collateral dependent loans for which repayment was expected to be derived substantially through the operation or sale of the collateral and where the borrower is experiencing financial difficulty.