v3.26.1
Loans and Allowance for Credit Losses
 3 Months Ended
Mar. 31, 2026
Receivables [Abstract]  
Loans and Allowance for Credit Losses Loans and Allowance for Credit Losses
Classes of loans are as follows:

 March 31, 2026December 31,
2025
 (Amounts In Thousands)
Agricultural$122,863 $118,924 
Commercial and financial294,009 295,618 
Real estate:
Construction, 1 to 4 family residential101,568 89,807 
Construction, land development and commercial259,006 248,292 
Mortgage, farmland273,485 276,790 
Mortgage, 1 to 4 family first liens1,255,829 1,261,877 
Mortgage, 1 to 4 family junior liens139,854 143,317 
Mortgage, multi-family495,392 494,282 
Mortgage, commercial567,272 565,177 
Loans to individuals27,308 28,763 
Obligations of state and political subdivisions41,854 41,885 
Gross Loans (ex net unamortized fees and costs)3,578,440 3,564,732 
Net unamortized fees and costs279 291 
Gross Loans3,578,719 3,565,023 
Less allowance for credit losses56,601 58,204 
Loans, net allowance for credit losses$3,522,118 $3,506,819 
Changes in the allowance for credit losses (ACL) on loans for the three months ended March 31, 2026 and 2025 are as follows:
Three Months Ended March 31, 2026
December 31, 2025Charge-offsRecoveriesCredit loss expense (benefit)March 31, 2026
(Amounts In Thousands)
ACL on loans:
Agricultural$418 $(21)$17 $73 $487 
Commercial and financial11,890 (277)322 (1,073)10,862 
Real estate:
Construction, 1 to 4 family residential617 (152)15 281 761 
Construction, land development and commercial3,165 — — 320 3,485 
Mortgage, farmland2,478 (68)1 (481)1,930 
Mortgage, 1 to 4 family first liens20,959 (476)105 386 20,974 
Mortgage, 1 to 4 family junior liens5,639 (200)46 32 5,517 
Mortgage, multi-family2,345 — 133 (120)2,358 
Mortgage, commercial9,855 (101)5 (508)9,251 
Loans to individuals826 (171)123 186 964 
Obligations of state and political subdivisions12 — — — 12 
Total$58,204 $(1,466)$767 $(904)$56,601 
Three Months Ended March 31, 2025
December 31, 2024Charge-offsRecoveriesCredit loss expense (benefit)March 31, 2025
(Amounts In Thousands)
ACL on loans:
Agricultural$674 $(35)$106 $38 $783 
Commercial and financial10,217 (251)248 687 10,901 
Real estate:
Construction, 1 to 4 family residential280 (232)24 250 322 
Construction, land development and commercial2,113 (19)2 49 2,145 
Mortgage, farmland3,252 — 13 204 3,469 
Mortgage, 1 to 4 family first liens18,210 (328)73 684 18,639 
Mortgage, 1 to 4 family junior liens4,719 (57)89 (109)4,642 
Mortgage, multi-family2,828 (200)15 287 2,930 
Mortgage, commercial7,525 (237)9 840 8,137 
Loans to individuals1,109 (374)94 141 970 
Obligations of state and political subdivisions13 — — (1)12 
Total$50,940 $(1,733)$673 $3,070 $52,950 

 
Changes in the allowance for credit losses (ACL) for off-balance sheet credit exposures for the three months ended March 31, 2026 and 2025 were as follows:
Three Months Ended March 31, 2026
December 31, 2025Credit loss (benefit) expense(Charge-offs), net recoveriesMarch 31, 2026
(Amounts In Thousands)
ACL for off-balance sheet credit exposures:
Agricultural$88 $360 $— $448 
Commercial and financial2,376 (617)— 1,759 
Real estate:
Construction, 1 to 4 family residential410 (103)— 307 
Construction, land development and commercial844 175 — 1,019 
Mortgage, farmland71 (24)— 47 
Mortgage, 1 to 4 family first liens122 (53)— 69 
Mortgage, 1 to 4 family junior liens435 68 — 503 
Mortgage, multi-family30 52 — 82 
Mortgage, commercial62 (36)— 26 
Loans to individuals56 (14)— 42 
Obligations of state and political subdivisions7 31 — 38 
Total$4,501 $(161)$— $4,340 
Three Months Ended March 31, 2025
December 31, 2024Credit loss (benefit) expense(Charge-offs), net recoveriesMarch 31, 2025
(Amounts In Thousands)
ACL for off-balance sheet credit exposures:
Agricultural$147 $1 $— $148 
Commercial and financial1,753 566 — 2,319 
Real estate:
Construction, 1 to 4 family residential179 (37)— 142 
Construction, land development and commercial307 22 — 329 
Mortgage, farmland13 29 — 42 
Mortgage, 1 to 4 family first liens120 111 — 231 
Mortgage, 1 to 4 family junior liens292 3 — 295 
Mortgage, multi-family1 23 — 24 
Mortgage, commercial45 78 — 123 
Loans to individuals43 4 — 47 
Obligations of state and political subdivisions— — — — 
Total$2,900 $800 $— $3,700 

Credit loss expense (benefit) for off-balance sheet credit exposures is included in credit loss expense (benefit) on the consolidated statement of income for the three months ended March 31, 2026 and 2025.
Management regularly reviews loans in the portfolio to assess credit quality indicators and to determine appropriate loan classification and grading in accordance with applicable bank regulations. The Company's risk rating methodology assigns risk ratings ranging from substandard to excellent. The Company differentiates its lending portfolios into loans sharing common risk characteristics for which expected credit loss is measured on a pool basis and loans not sharing common risk characteristics for which credit loss is measured individually.

The below are descriptions of the credit quality indicators:

Excellent – Excellent rated loans are prime quality loans covered by highly liquid collateral with generous margins or supported by superior current financial conditions reflecting substantial net worth, relative to total credit extended, and based on assets of a stable and non-speculative nature whose values can be readily verified. Identified repayment source or cash flow are abundant and assured. Loans are secured with cash, cash equivalents, or collateral with very low loan to values. The borrower would qualify for unsecured debt and guarantors provide excellent secondary support to the relationship. The borrower has a long-term relationship with Hills Bank, maintains high deposit balances and has an established payment history with Hills Bank and an established business in an established industry.

Good – Good rated loans are adequately secured by readily marketable collateral or good financial condition characterized by liquidity, flexibility and sound net worth. Loans are supported by sound primary and secondary payment sources and timely and accurate financial information. The relationship is not quite as strong as a borrower that is assigned an excellent rating but still has a very strong liquidity position, low leverage, and track record of strong performance. These loans have a strong collateral position with limited risk to bank capital. The collateral will not materially lose value in a distressed liquidation. Guarantors provide additional secondary support to mitigate possible bank losses. The borrower has a long-term relationship with Hills bank with an established track record of payments; loans with shorter remaining loan amortization; deposit balances are consistent; loan payments could be made from cash reserves in the interim period; and source of income is coming from a stable industry.

Satisfactory – Satisfactory rated loans are loans to borrowers of average financial means not especially vulnerable to changes in economic or other circumstances, where the major support for the extension is sufficient collateral of a marketable nature, and the primary source of repayment is seen to be clear and adequate. The borrower's financial performance is consistent, ratios and trends are positive, and the primary repayment source can clearly be identified and supported with acceptable financial information. The loan relationship could be vulnerable to changes in economic or industry conditions but have the ability to absorb unexpected issues. The loan collateral coverage is considered acceptable, and guarantors can provide financial support but net worth might not be as liquid as an excellent or good rated relationship. The borrower has an established relationship with Hills Bank. The relationship is making timely loan payments, any operating line is revolving, and deposit balances are positive with limited to no overdrafts. Management and industry are considered stable.

Monitor – Monitor rated loans are identified by management as warranting special attention for a variety of reasons that may bear on ultimate collectability. This may be due to adverse trends, a particular industry, loan structure, or repayment that is dependent on projections, or a one-time occurrence. The relationship liquidity levels are minimal and the borrower’s leverage position is brought into question. The primary repayment source is showing signs of being stressed or is not proven. If the borrower performs as planned, the loan will be repaid. The collateral coverage is still considered acceptable but there might be some concern with the type of real estate securing the debt or highly dependent on chattel assets. Some loans may be better secured than others. Guarantors still provide some support but there is not an abundance of financial strength supporting the guaranty. A monitor credit may be appropriate when the borrower is experiencing rapid growth which is impacting liquidity levels and increasing debt levels. Other attributes to consider would include if the business is a start-up or newly acquired, if the relationship has significant financing relationships with other financial institutions, the quality of financial information being received, management depth of the company, and changes to the business model. The track history with Hills Bank has some deficiencies such as slow payments or some overdrafts.

Special Mention – Special mention rated loans are supported by a marginal payment capacity and are marginally protected by collateral. There are identified weaknesses that if not monitored and corrected may adversely affect the Company’s credit position. A special mention credit would typically have a weakness in one of the general categories (cash flow, collateral position or payment history) but not in all categories. Potential indicators of a special mention would include past due payments, overdrafts, management issues, poor financial performance, industry issues, or the need for additional short-term borrowing. The ability to continue to make payments is in question; there are “red flags” such as past due payments, non-revolving credit lines, overdrafts, and the inability to sell assets. The borrower is experiencing delinquent taxes, legal issues,
etc., obtaining financial information has become a challenge, collateral coverage is marginal at best, and the value and condition could be brought into question. Collateral document deficiencies have been noted and if not addressed, could become material. Guarantors provide minimal support for this relationship. The credit may include an action plan or follow up established in the asset quality process. There is a change in the borrower’s communication pattern. Industry issues may be impacting the relationship. Adverse credit scores or history of payment deficiencies could be noted.

Substandard – Substandard loans are not adequately supported by the paying capacity of the borrower and may be inadequately collateralized. These loans have a well-defined weakness or weaknesses.  Full repayment of the loan(s) according to the original terms and conditions is in question or not expected. For these loans, it is more probable than not that the Company could sustain some loss if the deficiency(ies) is not corrected. There are identified shortfalls in the primary repayment source such as carry over debt, past due payments, and overdrafts. Obtaining quality and timely financial information is a weakness. The loan is under secured with exposure that could impact bank capital. It appears the liquidation of collateral has become the repayment source. The collateral may be difficult to foreclose or have little to no value. Collateral documentation deficiencies have been noted during the review process. Guarantor(s) provide minimal to no support of the relationship. The borrower’s communication with the Bank continues to decrease and the borrower is not addressing the situation. There is some concern about the borrower’s ability and willingness to repay the loans. Problems may be the result of external issues such as economic or industry related issues.

The following tables present the credit quality indicators and origination years by type of loan in each category as of March 31, 2026 (amounts in thousands):
Agricultural
March 31, 202620262025202420232022PriorRevolving Loans Amortized Cost BasisTotal
Excellent$1,312 $200 $— $55 $149 $700 $6,855 $9,271 
Good2,223 1,859 1,203 1,278 520 1,416 15,752 24,251 
Satisfactory2,820 5,091 3,176 1,223 1,770 4,111 22,100 40,291 
Monitor2,260 2,354 1,922 2,361 1,432 937 17,970 29,236 
Special Mention254 2,371 2,531 891 852 1,362 6,831 15,092 
Substandard— 47 1,853 73 212 566 1,971 4,722 
Total$8,869 $11,922 $10,685 $5,881 $4,935 $9,092 $71,479 $122,863 
Current-period gross write offs$— $2 $— $7 $— $— $12 $21 
Commercial and Financial
March 31, 202620262025202420232022PriorRevolving Loans Amortized Cost BasisTotal
Excellent$43 $763 $361 $895 $66 $287 $4,952 $7,367 
Good1,043 2,744 4,821 10,952 6,974 6,030 43,421 75,985 
Satisfactory9,082 26,119 10,803 17,003 13,974 9,377 40,485 126,843 
Monitor1,961 11,347 4,800 7,834 7,672 4,488 26,480 64,582 
Special Mention1,523 895 1,851 2,022 1,305 899 3,334 11,829 
Substandard298 810 884 1,226 1,679 1,438 1,068 7,403 
Total$13,950 $42,678 $23,520 $39,932 $31,670 $22,519 $119,740 $294,009 
Current-period gross write offs$— $— $26 $133 $— $118 $— $277 
Real Estate: Construction, 1 to 4 Family Residential
March 31, 202620262025202420232022PriorRevolving Loans Amortized Cost BasisTotal
Excellent$— $— $— $— $— $— $— $— 
Good— 551 138 — — — 16,555 17,244 
Satisfactory57 773 185 — 155 — 43,986 45,156 
Monitor— 306 187 — — — 35,273 35,766 
Special Mention— — — — — 92 2,596 2,688 
Substandard— — — 52 — — 662 714 
Total$57 $1,630 $510 $52 $155 $92 $99,072 $101,568 
Current-period gross write offs$— $— $— $147 $— $— $5 $152 
Real Estate: Construction, Land Development and Commercial
March 31, 202620262025202420232022PriorRevolving Loans Amortized Cost BasisTotal
Excellent$— $— $— $— $— $253 $721 $974 
Good356 949 409 — 86 146 19,275 21,221 
Satisfactory4,479 10,869 2,269 3,872 4,381 4,612 52,745 83,227 
Monitor589 1,768 2,611 2,664 4,739 2,045 83,187 97,603 
Special Mention— 8,281 — 10,000 283 1,172 34,331 54,067 
Substandard— — — 410 93 1,411 — 1,914 
Total$5,424 $21,867 $5,289 $16,946 $9,582 $9,639 $190,259 $259,006 
Current-period gross write offs$— $— $— $— $— $— $— $— 
Real Estate: Mortgage, Farmland
March 31, 202620262025202420232022PriorRevolving Loans Amortized Cost BasisTotal
Excellent$423 $853 $361 $1,808 $1,866 $3,944 $651 $9,906 
Good2,510 3,424 4,159 1,904 4,451 24,685 3,804 44,937 
Satisfactory2,219 26,733 8,368 16,004 30,943 57,353 11,719 153,339 
Monitor1,197 4,052 2,266 9,441 6,329 16,815 5,050 45,150 
Special Mention920 1,063 — — 2,305 1,958 571 6,817 
Substandard— 226 — 3,365 2,652 4,714 2,379 13,336 
Total$7,269 $36,351 $15,154 $32,522 $48,546 $109,469 $24,174 $273,485 
Current-period gross write offs$— $— $— $— $— $68 $— $68 
Real Estate: Mortgage, 1 to 4 Family First Liens
March 31, 202620262025202420232022PriorRevolving Loans Amortized Cost BasisTotal
Excellent$— $1,472 $— $882 $3,102 $3,260 $217 $8,933 
Good1,265 18,333 6,892 9,074 10,931 30,450 4,491 81,436 
Satisfactory28,939 201,836 57,857 119,848 228,958 349,376 13,665 1,000,479 
Monitor3,978 12,472 4,086 11,646 18,352 47,049 10,666 108,249 
Special Mention— 324 1,096 4,059 5,754 14,342 1,227 26,802 
Substandard— 382 637 5,650 6,230 16,683 348 29,930 
Total$34,182 $234,819 $70,568 $151,159 $273,327 $461,160 $30,614 $1,255,829 
Current-period gross write offs$— $— $19 $152 $259 $46 $— $476 
Real Estate: Mortgage, 1 to 4 Family Junior Liens
March 31, 202620262025202420232022PriorRevolving Loans Amortized Cost BasisTotal
Excellent$— $— $— $— $12 $4 $— $16 
Good— 21 — — 230 595 3,449 4,295 
Satisfactory2,676 9,952 2,343 5,588 8,424 17,180 78,504 124,667 
Monitor25 409 260 168 826 1,355 3,073 6,116 
Special Mention— — 33 198 225 564 1,245 2,265 
Substandard— 32 176 326 130 568 1,263 2,495 
Total$2,701 $10,414 $2,812 $6,280 $9,847 $20,266 $87,534 $139,854 
Current-period gross write offs$— $— $— $38 $101 $61 $— $200 
Real Estate: Mortgage, Multi-Family
March 31, 202620262025202420232022PriorRevolving Loans Amortized Cost BasisTotal
Excellent$— $2,300 $— $— $273 $50,851 $— $53,424 
Good— 2,339 — 9,505 45,872 40,183 12,644 110,543 
Satisfactory9,823 34,544 4,802 12,100 34,030 80,968 28,566 204,833 
Monitor3,645 9,958 12,038 3,492 22,527 21,027 29,131 101,818 
Special Mention— — — 14,354 1,736 3,236 1,626 20,952 
Substandard— — — 2,912 — 910 — 3,822 
Total$13,468 $49,141 $16,840 $42,363 $104,438 $197,175 $71,967 $495,392 
Current-period gross write offs$— $— $— $— $— $— $— $— 
Real Estate: Mortgage, Commercial
March 31, 202620262025202420232022PriorRevolving Loans Amortized Cost BasisTotal
Excellent$— $3,558 $96 $— $— $14,116 $9,224 $26,994 
Good1,000 3,358 5,595 7,970 15,274 55,450 17,075 105,722 
Satisfactory4,510 28,146 17,227 23,311 44,028 73,854 44,121 235,197 
Monitor1,415 27,442 9,934 12,421 16,096 28,365 55,122 150,795 
Special Mention— 10,239 943 11,111 3,786 6,777 — 32,856 
Substandard— 354 686 3,388 1,025 10,255 — 15,708 
Total$6,925 $73,097 $34,481 $58,201 $80,209 $188,817 $125,542 $567,272 
Current-period gross write offs$— $— $— $100 $— $1 $— $101 
Loans to Individuals
March 31, 202620262025202420232022PriorRevolving Loans Amortized Cost BasisTotal
Excellent$— $— $— $— $— $— $— $— 
Good— 40 45 — — — — 85 
Satisfactory1,270 5,058 2,736 2,370 1,416 450 13,259 26,559 
Monitor— 79 46 69 27 11 1 233 
Special Mention— 108 66 89 — 2 2 267 
Substandard— 20 33 16 38 57 — 164 
Total$1,270 $5,305 $2,926 $2,544 $1,481 $520 $13,262 $27,308 
Current-period gross write offs$85 $8 $46 $28 $2 $2 $— $171 
Obligations of State and Political Subdivisions
March 31, 202620262025202420232022PriorRevolving Loans Amortized Cost BasisTotal
Excellent$— $— $— $— $— $2,339 $— $2,339 
Good— — — — — 15,454 2,996 18,450 
Satisfactory596 530 793 1,317 1,445 6,936 1,100 12,717 
Monitor282 555 430 — 694 2,632 2,777 7,370 
Special Mention— — — — 301 416 — 717 
Substandard— — — — — 261 — 261 
Total$878 $1,085 $1,223 $1,317 $2,440 $28,038 $6,873 $41,854 
Current-period gross write offs$— $— $— $— $— $— $— $— 
Totals
March 31, 202620262025202420232022PriorRevolving Loans Amortized Cost BasisTotal
Excellent$1,778 $9,146 $818 $3,640 $5,468 $75,754 $22,620 $119,224 
Good8,397 33,618 23,262 40,683 84,338 174,409 139,462 504,169 
Satisfactory66,471 349,651 110,559 202,636 369,524 604,217 350,250 2,053,308 
Monitor15,352 70,742 38,580 50,096 78,694 124,724 268,730 646,918 
Special Mention2,697 23,281 6,520 42,724 16,547 30,820 51,763 174,352 
Substandard298 1,871 4,269 17,418 12,059 36,863 7,691 80,469 
Total$94,993 $488,309 $184,008 $357,197 $566,630 $1,046,787 $840,516 $3,578,440 
Current-period gross write offs$85 $10 $91 $605 $362 $296 $17 $1,466 


The following tables present total loans by risk categories and gross charge-offs by year of origination as of December 31, 2025 (amounts in thousands):
Agricultural
December 31, 202520252024202320222021PriorRevolving Loans Amortized Cost BasisTotal
Excellent$200 $747 $55 $152 $586 $119 $7,912 $9,771 
Good2,062 720 1,200 509 86 732 12,481 17,790 
Satisfactory8,523 3,885 1,769 2,087 1,059 2,674 25,088 45,085 
Monitor2,791 2,486 2,475 674 304 542 17,761 27,033 
Special Mention1,649 2,291 913 1,055 50 709 7,152 13,819 
Substandard375 1,907 127 300 45 261 2,411 5,426 
Total$15,600 $12,036 $6,539 $4,777 $2,130 $5,037 $72,805 $118,924 
Gross write-offs for period$— $— $— $39 $— $— — $39 
Commercial and Financial
December 31, 202520252024202320222021PriorRevolving Loans Amortized Cost BasisTotal
Excellent$797 $411 $940 $74 $45 $269 $4,491 $7,027 
Good4,329 4,205 11,663 7,227 500 4,414 45,404 77,742 
Satisfactory27,723 11,837 18,215 16,050 5,292 7,183 40,023 126,323 
Monitor12,773 5,124 8,179 9,335 1,742 2,707 25,205 65,065 
Special Mention873 2,003 3,052 1,195 77 548 4,244 11,992 
Substandard932 1,209 1,755 1,318 206 1,471 578 7,469 
Total$47,427 $24,789 $43,804 $35,199 $7,862 $16,592 $119,945 $295,618 
Gross write-offs for period$473 $809 $358 $167 $46 $105 $170 $2,128 
Real Estate: Construction, 1 to 4 Family Residential
December 31, 202520252024202320222021PriorRevolving Loans Amortized Cost BasisTotal
Excellent$— $— $— $— $— $— $— $— 
Good— — — — — — 15,239 15,239 
Satisfactory487 68 — 250 — — 39,785 40,590 
Monitor191 644 — 126 — — 30,154 31,115 
Special Mention— — — — 42 51 2,214 2,307 
Substandard61 — 185 — — — 310 556 
Total$739 $712 $185 $376 $42 $51 $87,702 $89,807 
Gross write-offs for period$— $155 $— $— $144 $99 7 $405 
Real Estate: Construction, Land Development and Commercial
December 31, 202520252024202320222021PriorRevolving Loans Amortized Cost BasisTotal
Excellent$— $— $— $— $— $262 $604 $866 
Good1,396 409 — 87 85 101 20,112 22,190 
Satisfactory12,033 4,154 4,028 4,497 2,520 2,909 47,325 77,466 
Monitor1,112 5,009 2,736 5,052 792 1,313 76,480 92,494 
Special Mention284 — — — 1,104 69 51,663 53,120 
Substandard— — 556 167 1,388 45 — 2,156 
Total$14,825 $9,572 $7,320 $9,803 $5,889 $4,699 $196,184 $248,292 
Gross write-offs for period$— $— $19 $4 $— $— $— $23 
Real Estate: Mortgage, Farmland
December 31, 202520252024202320222021PriorRevolving Loans Amortized Cost BasisTotal
Excellent$858 $420 $1,901 $1,883 $— $4,169 $60 $9,291 
Good3,821 4,254 1,935 3,690 10,164 14,529 3,570 41,963 
Satisfactory27,728 8,704 16,915 31,830 17,217 45,142 12,956 160,492 
Monitor3,864 2,197 11,766 7,561 3,300 14,187 4,971 47,846 
Special Mention859 — 1,355 2,778 541 1,919 577 8,029 
Substandard245 — 2,044 1,485 954 2,013 2,428 9,169 
Total$37,375 $15,575 $35,916 $49,227 $32,176 $81,959 $24,562 $276,790 
Gross write-offs for period$— $— $— $— $— $— $— $— 
Real Estate: Mortgage, 1 to 4 Family First Liens
December 31, 202520252024202320222021PriorRevolving Loans Amortized Cost BasisTotal
Excellent$1,881 $— $886 $3,139 $500 $2,852 $218 $9,476 
Good19,026 6,935 8,895 11,233 6,338 26,076 4,531 83,034 
Satisfactory205,374 62,238 127,565 236,384 116,155 245,724 13,859 1,007,299 
Monitor11,865 4,762 10,672 19,082 8,757 39,025 10,358 104,521 
Special Mention457 1,163 5,456 6,732 4,680 10,883 896 30,267 
Substandard307 658 4,829 4,856 4,984 11,196 450 27,280 
Total$238,910 $75,756 $158,303 $281,426 $141,414 $335,756 $30,312 $1,261,877 
Gross write-offs for period$— $153 $322 $279 $104 $69 $20 $947 
Real Estate: Mortgage, 1 to 4 Family Junior Liens
December 31, 202520252024202320222021PriorRevolving Loans Amortized Cost BasisTotal
Excellent$— $— $— $12 $— $4 $143 $159 
Good21 — — 234 — 615 3,788 4,658 
Satisfactory11,913 2,445 5,828 8,851 6,284 11,816 80,500 127,637 
Monitor387 276 180 897 400 1,133 2,939 6,212 
Special Mention— 33 211 277 221 421 1,091 2,254 
Substandard32 179 330 115 29 573 1,139 2,397 
Total$12,353 $2,933 $6,549 $10,386 $6,934 $14,562 $89,600 $143,317 
Gross write-offs for period$— $24 $149 $62 $36 $120 $37 $428 
Real Estate: Mortgage, Multi-Family
December 31, 202520252024202320222021PriorRevolving Loans Amortized Cost BasisTotal
Excellent$2,322 $— $— $275 $30,052 $21,295 $— $53,944 
Good2,349 — 9,570 49,085 2,764 37,997 12,736 114,501 
Satisfactory34,743 4,556 12,277 34,518 23,855 58,389 28,374 196,712 
Monitor11,295 9,816 3,984 22,656 6,410 14,874 29,303 98,338 
Special Mention— — 15,506 1,744 — 3,269 1,633 22,152 
Substandard— — 3,063 1,717 3,855 — — 8,635 
Total$50,709 $14,372 $44,400 $109,995 $66,936 $135,824 $72,046 $494,282 
Gross write-offs for period$— $— $7 $100 $100 $— $— $207 
Real Estate: Mortgage, Commercial
December 31, 202520252024202320222021PriorRevolving Loans Amortized Cost BasisTotal
Excellent$3,575 $96 $— $— $2,057 $12,291 $9,299 $27,318 
Good3,371 5,638 8,027 15,483 2,554 54,471 15,571 105,115 
Satisfactory28,908 15,583 23,469 44,648 17,304 61,412 45,429 236,753 
Monitor27,459 7,848 12,488 13,846 7,028 19,693 54,520 142,882 
Special Mention10,294 946 11,170 6,264 1,215 6,863 — 36,752 
Substandard358 774 3,521 827 2,633 8,244 — 16,357 
Total$73,965 $30,885 $58,675 $81,068 $32,791 $162,974 $124,819 $565,177 
Gross write-offs for period$48 $— $158 $85 $41 $758 $— $1,090 
Loans to Individuals
December 31, 202520252024202320222021PriorRevolving Loans Amortized Cost BasisTotal
Excellent$40 $— $— $— $— $— $— $40 
Good42 50 — — — — 2 94 
Satisfactory5,904 3,283 2,990 1,820 466 127 13,065 27,655 
Monitor83 63 78 42 14 — — 280 
Special Mention121 97 97 — 16 — — 331 
Substandard21 40 15 42 70 — 175 363 
Total$6,211 $3,533 $3,180 $1,904 $566 $127 $13,242 $28,763 
Gross write-offs for period$619 $308 $254 $38 $— $10 $493 $1,722 
Obligations of State and Political Subdivisions
December 31, 202520252024202320222021PriorRevolving Loans Amortized Cost BasisTotal
Excellent$— $— $— $— $— $2,461 $— $2,461 
Good— — — — — 15,300 3,018 18,318 
Satisfactory532 803 1,329 1,506 583 6,916 1,228 12,897 
Monitor555 430 — 708 — 2,693 2,807 7,193 
Special Mention— — — 304 — 437 — 741 
Substandard— — — — — 275 — 275 
Total$1,087 $1,233 $1,329 $2,518 $583 $28,082 $7,053 $41,885 
Gross write-offs for period$— $— $— $— $— $— $— $— 
Totals
December 31, 202520252024202320222021PriorRevolving Loans Amortized Cost BasisTotal
Excellent$9,673 $1,674 $3,782 $5,535 $33,240 $43,722 $22,727 $120,353 
Good36,417 22,211 41,290 87,548 22,491 154,235 136,452 500,644 
Satisfactory363,869 117,556 214,385 382,441 190,735 442,292 347,629 2,058,907 
Monitor72,374 38,655 52,558 79,979 28,747 96,167 254,499 622,979 
Special Mention14,537 6,533 37,760 20,349 7,946 25,169 69,472 181,766 
Substandard2,331 4,767 16,425 10,827 14,164 24,078 7,491 80,083 
Total$499,201 $191,396 $366,200 $586,679 $297,323 $785,663 $838,270 $3,564,732 
Gross write-offs for period$1,140 $1,449 $1,267 $774 $471 $1,161 $727 $6,989 
Past due loans as of March 31, 2026 and December 31, 2025 were as follows:
 30 - 59 Days
Past Due		60 - 89 Days
Past Due		90 Days
or More
Past Due		Total Past
Due		CurrentTotal
Loans
Receivable		Accruing Loans
Past Due 90
Days or More
 (Amounts In Thousands)
March 31, 2026
Agricultural$76 $122 $85 $283 $122,580 $122,863 $— 
Commercial and financial1,380 489 1,549 3,418 290,591 294,009 16 
Real estate:
Construction, 1 to 4 family residential1,651 321 51 2,023 99,545 101,568 — 
Construction, land development and commercial9,978 2,976 283 13,237 245,769 259,006 283 
Mortgage, farmland908 304 660 1,872 271,613 273,485 — 
Mortgage, 1 to 4 family first liens18,824 3,007 5,855 27,686 1,228,143 1,255,829 362 
Mortgage, 1 to 4 family junior liens1,029 81 — 1,110 138,744 139,854 — 
Mortgage, multi-family1,272 — — 1,272 494,120 495,392 — 
Mortgage, commercial3,385 1,998 276 5,659 561,613 567,272 — 
Loans to individuals155 83 — 238 27,070 27,308 — 
Obligations of state and political subdivisions— — — — 41,854 41,854 — 
 $38,658 $9,381 $8,759 $56,798 $3,521,642 $3,578,440 $661 
December 31, 2025       
Agricultural$107 $— $364 $471 $118,453 $118,924 $— 
Commercial and financial1,889 326 1,385 3,600 292,018 295,618 — 
Real estate:   
Construction, 1 to 4 family residential636 — — 636 89,171 89,807 — 
Construction, land development and commercial2,007 — 1,456 3,463 244,829 248,292 1,371 
Mortgage, farmland2,763 3,588 660 7,011 269,779 276,790 — 
Mortgage, 1 to 4 family first liens23,035 3,930 5,231 32,196 1,229,681 1,261,877 1,166 
Mortgage, 1 to 4 family junior liens673 123 90 886 142,431 143,317 — 
Mortgage, multi-family4,277 — 136 4,413 489,869 494,282 — 
Mortgage, commercial10,530 375 356 11,261 553,916 565,177 — 
Loans to individuals355 85 — 440 28,323 28,763 — 
Obligations of state and political subdivisions275 — — 275 41,610 41,885 — 
 $46,547 $8,427 $9,678 $64,652 $3,500,080 $3,564,732 $2,537 
The Company does not have a significant amount of loans that are past due less than 90 days where there are serious doubts as to the ability of the borrowers to comply with the loan repayment terms. The loans 90 days or more past due and still accruing are believed to be adequately collateralized. Loans are placed on nonaccrual status when management believes the collection of future principal and interest is not reasonably assured. As of March 31, 2026 and December 31, 2025, none of the Company's nonaccrual loans were earning interest on a cash basis.

Certain nonaccrual loan information by loan type at March 31, 2026 and December 31, 2025, was as follows:

 March 31, 2026December 31, 2025
 Total Non-accrual
loans		Nonaccrual with no ACLTotal Non-
accrual
loans		Nonaccrual with no ACL
 (Amounts In Thousands)(Amounts In Thousands)
Agricultural$132 $47 $364 $364 
Commercial and financial1,841 1,841 2,624 2,624 
Real estate: 
Construction, 1 to 4 family residential422 422 — — 
Construction, land development and commercial198 198 551 551 
Mortgage, farmland2,535 1,918 660 660 
Mortgage, 1 to 4 family first liens11,038 11,038 9,560 9,560 
Mortgage, 1 to 4 family junior liens154 154 251 251 
Mortgage, multi-family43 43 1,790 1,790 
Mortgage, commercial1,946 1,946 1,813 1,813 
 $18,309 $17,607 $17,613 $17,613 
The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification.

Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification.

In some cases, the Company will modify a certain loan by providing multiple types of concessions. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.

The following table shows the amortized cost basis at the end of the reporting period of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted (numbers in thousands):
Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Three Months Ended March 31, 2026Three Months Ended March 31, 2025
Amortized Cost Basis% of Total Class of Financing ReceivableAmortized Cost Basis % of Total Class of Financing Receivable
Loan Type
Agricultural (1)Interest Rate Reduction$1,745 1.42%$— —%
Commercial and financialTerm extension1,360 0.46666 0.22
Construction, 1 to 4 family residentialTerm extension421 0.41377 0.41
Construction, land development and commercialTerm extension— —196 0.07
Mortgage, farmlandTerm extension300 0.11— —
Mortgage, 1 to 4 family first liens (2)Principal and interest reduction178 0.01— —
Mortgage, commercial Term extension262 0.05— —
$4,266 $1,239 

(1)Interest rate concession reduced interest rate by 2.00%. Modification reduced monthly payment amounts for the borrower.
(2)Modification reduced monthly payment amounts for the borrower.

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty:

Three Months Ended March 31, 2026Three Months Ended March 31, 2025
Loan TypeAdded Weighted Average Life (Years)Added Weighted Average Life (Years)
Commercial and financial4.41.0
Construction, 1 to 4 family residential0.31.0
Construction land development and commercial0.00.9
Mortgage, Farmland 5.50.0
Mortgage, commercial0.30.0

Upon the Company's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.

There were no financing receivables that had a payment default during the period and were modified in the 12 months before default to borrowers experiencing financial difficulty as of March 31, 2026 and for the three months ending March 31, 2025.

The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the performance of loans that have been modified in the last 12 months (numbers in thousands):
March 31, 2026 Payment Status (Amortized Cost Basis)
Current30-89 Days Past Due90+ Days Past Due
Loan Type
Mortgage, 1 to 4 family first liens$172 $— $178 
Agricultural1,745 — — 
Mortgage, commercial754 
Mortgage, farmland300 — — 
Construction, 1 to 4 family residential— 421 — 
Commercial and financial1,957 146 — 
$4,928 $567 $178 
March 31, 2025 Payment Status (Amortized Cost Basis)
Current30-89 Days Past Due90+ Days Past Due
Loan Type
Agricultural$2,617 $— $— 
Mortgage, commercial784 — — 
Construction, 1 to 4 family residential378 — — 
Construction, land development and commercial1,745 — — 
Commercial and financial1,295 — — 
$6,819 $— $— 

The following tables present the amortized cost basis of collateral dependent loans, by the primary collateral type, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans:

Primary Type of Collateral
Real EstateEquipmentTotalACL Allocation
(Amounts In Thousands)
March 31, 2026
Agricultural$1,877 $— $1,877 $85 
Commercial and financial4,148 — 4,148 — 
Real estate:
Construction, 1 to 4 family residential421 — 421 — 
Construction, land development and commercial1,601 — 1,601 — 
Mortgage, farmland5,229 — 5,229 21 
Mortgage, 1 to 4 family first liens11,211 — 11,211 — 
Mortgage, 1 to 4 family junior liens154 — 154 — 
Mortgage, multi-family1,970 — 1,970 — 
Mortgage, commercial4,149 — 4,149 83 
Loans to individuals— — — — 
$30,760 $— $30,760 $189 
Primary Type of Collateral
Real EstateEquipmentTotalACL Allocation
(Amounts In Thousands)
December 31, 2025
Agricultural$2,135 $135 $2,270 $— 
Commercial and financial3,810 — 3,810 — 
Real estate:
Construction, 1 to 4 family residential51 — 51 — 
Construction, land development and commercial3,294 — 3,294 — 
Mortgage, farmland3,125 — 3,125 — 
Mortgage, 1 to 4 family first liens10,900 — 10,900 — 
Mortgage, 1 to 4 family junior liens251 — 251 — 
Mortgage, multi-family3,765 — 3,765 — 
Mortgage, commercial3,799 — 3,799 — 
Loans to individuals175 — 175 175 
$31,305 $135 $31,440 $175 
Collateral-dependent loans include any loan that has been placed on nonaccrual status, accruing loans past due 90 days or more and loans made to borrowers with financial difficulties. Collateral-dependent loans also include loans that, based on management’s evaluation of current information and events, the Company expects to be unable to collect in full according to the contractual terms of the original loan agreement. Collateral-dependent loans were 0.89% of loans held for investment as of March 31, 2026 and 0.88% as of December 31, 2025. There were no significant changes noted in the extent to which collateral secures collateral-dependent loans.

The Company regularly reviews a substantial portion of the loans in the portfolio and assesses whether the loans share common risk characteristics for which expected credit loss is measured on a pool basis or if the loans do not share common risk characteristics and therefore expected credit loss is measured on an individual loan basis.  If the loans are assessed for credit losses on an individual basis, the Company determines if a specific allowance is appropriate.  In addition, the Company's management also reviews and, where determined necessary, provides allowances for particular loans based upon (1) reviews of specific borrowers and (2) management’s assessment of areas that management considers are of higher credit risk, including loans that have been restructured or modified to a borrower experiencing financial difficulties.  Loans that are determined not to be collateral-dependent and for which there are no specific allowances are classified into one or more risk categories and expected credit loss is measured on a pool basis. See Note 1 for further discussion of the allowance for credit losses for loans held for investment.

Specific allowances for credit losses on loans assessed individually are established if the loan balances exceed the net present value of the relevant future cash flows or the fair value of the relevant collateral based on updated appraisals and/or updated collateral analysis for the properties if the loan is collateral dependent.  The Company may recognize a charge off or record a specific allowance related to an individually analyzed loan if there is a collateral shortfall or it is unlikely the borrower can make all principal and interest payments as contractually due.

For loans that are collateral-dependent, losses are evaluated based on the portion of a loan that exceeds the fair market value of the collateral.  In general, this is the amount that the carrying value of the loan exceeds the related appraised value less estimated costs to sell the collateral.  Generally, it is the Company’s policy not to rely on appraisals that are older than one year prior to the date the credit loss is being measured.  The most recent appraisal values may be adjusted if, in the Company’s judgment, experience and other market data indicate that the property’s value, use, condition, exit market or other variables affecting its value may have changed since the appraisal was performed. The charge off or loss adjustment supported by an appraisal is considered the minimum charge off.  Any adjustments made to the appraised value are to provide an additional charge off or specific reserve based on the applicable facts and circumstances.  In instances where there is an estimated decline in value, a specific reserve may be provided or a charge off taken pending confirmation of the amount of the loss from an updated appraisal.  Upon receipt of the new appraisals, an additional specific reserve may be provided or charge off taken based on the appraised value of the collateral.  On average, appraisals are obtained within one month of order.
The Company has not experienced any significant time lapses in recognizing the required provisions for collateral dependent loans, nor has the Company delayed appropriate charge-offs. When an updated appraisal value has been obtained, the Company has used the appraisal amount in helping to determine the appropriate charge-off or required reserve. The Company also evaluates any changes in the financial condition of the borrower and guarantors (if applicable), economic conditions, and the Company’s loss experience with the type of property in question.  Any information utilized in addition to the appraisal is intended to identify additional charge-offs or provisions, not to override the appraised value.