From time to time the Company and its subsidiaries may be exposed to loss contingencies. In the ordinary course of business, those contingencies may include, known but unasserted claims, and legal / regulatory inquiries or examinations. The Company records these loss contingencies as a liability when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. In the opinion of management, the Company maintains a liability that is in an estimated amount sufficient to cover said loss contingencies, if any, at the reporting dates.

On October 21, 2025, the Company entered into a Wind-down and Settlement Agreement (the “Wind-down Agreement”) with a commercial borrower to resolve an existing loan participation agreement. Under the Wind-down Agreement, the Company assumed the risk of future credit losses under the participation agreement, up to a cumulative cap of $7.7 million through June 30, 2026 (the “Loss Cap”). If actual credit losses were below the Loss Cap as of that date, the Company would pay the difference to the borrower by June 30, 2026. As of March 31, 2026, the Company had incurred actual credit losses totaling $7.7 million. As a result, the maximum amount of the Loss Cap was reached, and, therefore, the Company does not expect to incur any additional losses with respect to this loan participation agreement. As part of the Wind-down Agreement, the borrower agreed to irrevocably and unconditionally guarantee the full and timely payment of all amounts due to the Company under the loan participation agreement that exceed the Loss Cap, up to a maximum of $13.9 million. As of June 30, 2026, the outstanding balance of the loan participation agreement had been fully paid off and, therefore, the Company no longer has credit risk associated with this loan participation agreement.

The following table summarizes the changes in the allowance for credit losses for off-balance sheet credit risk exposures for the three and six month periods ended June 30, 2026 and 2025:


(in thousands)	Three Months Ended June 30,				Six Months Ended June 30,

	2026		2025		2026		2025

Balances at beginning of period	$	10,792	$	7,192	$	9,742	$	5,942
(Reversal of) provision for credit losses - off balance sheet exposures	(1,000)		2,500		50		3,750
Balances at end of period	$	9,792	$	9,692	$	9,792	$	9,692