v3.26.1
LOANS AND ALLOWANCE FOR CREDIT LOSSES
 6 Months Ended
Jun. 30, 2026
Receivables [Abstract]  
LOANS AND ALLOWANCE FOR CREDIT LOSSES
LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loan Portfolio and Credit Quality

The Corporation's primary lending focus is small business and middle market commercial, commercial real estate, public finance and residential real estate, which results in portfolio diversification. The following tables show the composition of the loan portfolio and credit quality characteristics by collateral classification, excluding loans held for sale. 

The following table illustrates the composition of the Corporation’s loan portfolio by loan class as of the dates indicated.
June 30, 2026December 31, 2025
Commercial and industrial loans$4,720,441 $4,478,282 
Agricultural land, production and other loans to farmers323,348 283,125 
Real estate loans:
Construction874,419 804,775 
Commercial real estate, non-owner occupied3,271,620 2,338,666 
Commercial real estate, owner occupied1,368,627 1,237,100 
Residential2,361,480 2,420,310 
Home equity1,118,662 710,980 
Individuals' loans for household and other personal expenditures149,878 155,436 
Public finance and other commercial loans1,342,262 1,363,033 
Loans$15,530,737 $13,791,707 

Credit Quality
As part of the ongoing monitoring of the credit quality of the Corporation's loan portfolio, management tracks certain credit quality indicators including trends related to: (i) the level of criticized commercial loans, (ii) net charge-offs, (iii) nonperforming loans, (iv) covenant failures and (v) the general national and local economic conditions.

The Corporation utilizes a risk grading of pass, special mention, substandard, doubtful and loss to assess the overall credit quality of large commercial loans. All large commercial credit grades are reviewed at a minimum of once a year for pass grade loans. Loans with grades below pass are reviewed more frequently depending on the grade. A description of the general characteristics of these grades is as follows:

•Pass - Loans that are considered to be of acceptable credit quality.

•Special Mention - Loans which possess some credit deficiency or potential weakness, which deserves close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Corporation's credit position at some future date. Special mention assets are not adversely classified and do not expose the Corporation to sufficient risk to warrant adverse classification.

•Substandard - Loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified have a well-defined weakness that jeopardizes the liquidation of the debt. They are characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected.

•Doubtful - Loans that have all of the weaknesses of those classified as Substandard. However, based on existing facts, conditions and values, these weaknesses make full collection of principal highly questionable and improbable.
•Loss – Loans that are considered uncollectible and of such little value that continuing to carry them as an asset is not warranted. Loans will be classified as Loss when it is neither practical nor desirable to defer charging-off or reserving all or a portion of a basically worthless asset, even though partial recovery may be possible at some time in the future.

The following tables summarize the risk grading of the Corporation’s loan portfolio and gross charge-offs by loan class and by year of origination for the periods indicated. Consumer loans are not risk graded. For the purposes of this disclosure, consumer loans are classified in the following manner: loans that are less than 30 days past due are Pass, loans 30-89 days past due are Special Mention and loans greater than 89 days past due are Substandard.  The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date.
June 30, 2026
Term Loans (amortized cost basis by origination year)
20262025202420232022PriorRevolving loans amortized cost basisRevolving loans converted to termTotal
Commercial and industrial loans
Pass$466,817 $1,182,789 $585,824 $198,497 $114,033 $199,661 $1,667,871 $429 $4,415,921 
Special Mention214 4,037 17,049 18,538 8,018 6,876 84,008 — 138,740 
Substandard4,841 2,868 24,845 3,847 4,725 28,646 51,727 — 121,499 
Doubtful— 27,121 590 — — 11,256 5,314 — 44,281 
Total Commercial and industrial loans471,872 1,216,815 628,308 220,882 126,776 246,439 1,808,920 429 4,720,441 
Current period gross charge-offs— 3,294 633 733 1,807 4,764 — — 11,231 
Agricultural land, production and other loans to farmers
Pass33,420 62,738 24,635 20,446 27,322 73,048 73,820 — 315,429 
Special Mention— 400 — — — — 2,250 — 2,650 
Substandard— 600 2,157 88 16 1,451 957 — 5,269 
Total Agricultural land, production and other loans to farmers33,420 63,738 26,792 20,534 27,338 74,499 77,027 — 323,348 
Real estate loans:
Construction
Pass75,598 344,291 281,794 100,568 16,976 15,514 18,110 — 852,851 
Special Mention— 9,536 — — 35 — — — 9,571 
Substandard— — — — 11,667 330 — — 11,997 
Total Construction75,598 353,827 281,794 100,568 28,678 15,844 18,110 — 874,419 
Commercial real estate, non-owner occupied
Pass226,178 523,756 299,785 323,063 535,571 1,140,422 28,697 — 3,077,472 
Special Mention— 9,128 8,730 39,842 3,808 29,318 60 — 90,886 
Substandard— 54,243 29,788 5,856 5,351 8,024 — — 103,262 
Total Commercial real estate, non-owner occupied226,178 587,127 338,303 368,761 544,730 1,177,764 28,757 — 3,271,620 
Current period gross charge-offs— 3,468 — — — — — — 3,468 
Commercial real estate, owner occupied
Pass144,339 282,324 144,262 125,596 145,183 408,099 46,685 — 1,296,488 
Special Mention395 2,591 3,127 5,440 6,033 11,074 549 — 29,209 
Substandard1,940 3,267 16,169 2,613 9,048 9,600 293 — 42,930 
Total Commercial real estate, owner occupied146,674 288,182 163,558 133,649 160,264 428,773 47,527 — 1,368,627 
Current period gross charge-offs— — — 57 5 211 — — 273 
Residential
Pass169,892 312,355 179,954 363,070 508,030 772,020 3,660 768 2,309,749 
Special Mention— 900 1,141 4,266 7,655 9,320 — 25 23,307 
Substandard— 1,428 1,136 4,962 6,975 10,042 3,193 — 27,736 
Doubtful— — 234 — — 108 346 — 688 
Total Residential169,892 314,683 182,465 372,298 522,660 791,490 7,199 793 2,361,480 
Current period gross charge-offs— 137 22 279 311 279 — — 1,028 
Home equity
Pass1,275 8,396 3,806 4,615 20,353 50,168 1,003,997 8,765 1,101,375 
Special Mention— 38 9 — 183 473 11,454 35 12,192 
Substandard— — — 659 53 701 3,474 208 5,095 
Total Home Equity1,275 8,434 3,815 5,274 20,589 51,342 1,018,925 9,008 1,118,662 
Current period gross charge-offs— — 6 7 24 268 — — 305 
Individuals' loans for household and other personal expenditures
Pass22,454 29,693 13,789 9,634 15,038 5,239 51,820 1,098 148,765 
Special Mention5 259 133 282 67 58 309 — 1,113 
Total Individuals' loans for household and other personal expenditures22,459 29,952 13,922 9,916 15,105 5,297 52,129 1,098 149,878 
Current period gross charge-offs37 335 349 216 85 89 — — 1,111 
Public finance and other commercial loans
Pass25,126 98,321 142,871 55,548 203,497 579,843 236,845 — 1,342,051 
Substandard— — — — — 211 — — 211 
Total Public finance and other commercial loans25,126 98,321 142,871 55,548 203,497 580,054 236,845 — 1,342,262 
Loans$1,172,494 $2,961,079 $1,781,828 $1,287,430 $1,649,637 $3,371,502 $3,295,439 $11,328 $15,530,737 
Total current period gross charge-offs$37 $7,234 $1,010 $1,292 $2,232 $5,611 $— $— $17,416 
December 31, 2025
Term Loans (amortized cost basis by origination year)
20252024202320222021PriorRevolving loans amortized cost basisRevolving loans converted to termTotal
Commercial and industrial loans
Pass$1,518,095 $710,695 $236,596 $115,775 $69,834 $65,800 $1,540,939 $— $4,257,734 
Special Mention9,552 34,613 7,683 3,246 4,041 479 40,986 — 100,600 
Substandard1,587 17,140 2,671 2,980 11,710 19,116 62,556 — 117,760 
Doubtful401 582 — — — — 1,205 — 2,188 
Total Commercial and industrial loans1,529,635 763,030 246,950 122,001 85,585 85,395 1,645,686 — 4,478,282 
Current period gross charge-offs7,981 1,348 2,434 264 3,685 1,964 — — 17,676 
Agricultural land, production and other loans to farmers
Pass62,959 18,469 20,924 24,465 22,246 42,529 80,039 — 271,631 
Special Mention590 1,636 22 499 — 1,478 1,182 — 5,407 
Substandard600 2,165 16 — — 2,085 1,221 — 6,087 
Total Agricultural land, production and other loans to farmers64,149 22,270 20,962 24,964 22,246 46,092 82,442 — 283,125 
Real estate loans:
Construction
Pass231,041 313,838 100,587 17,515 921 9,954 15,261 — 689,117 
Special Mention41,580 6,104 — — 8,683 — — — 56,367 
Substandard34,176 12,889 641 11,585 — — — — 59,291 
Total Construction306,797 332,831 101,228 29,100 9,604 9,954 15,261 — 804,775 
Current period gross charge-offs— 63 — — 1 — — — 64 
Commercial real estate, non-owner occupied
Pass482,587 259,106 292,161 258,662 367,482 458,340 31,841 — 2,150,179 
Special Mention59,566 36,106 340 3,633 2,308 4,715 100 — 106,768 
Substandard57,489 10,496 5,119 5,171 2,701 662 81 — 81,719 
Total Commercial real estate, non-owner occupied599,642 305,708 297,620 267,466 372,491 463,717 32,022 — 2,338,666 
Current period gross charge-offs— — — 451 — 16 — — 467 
Commercial real estate, owner occupied
Pass332,121 136,005 129,030 141,679 180,180 219,914 33,983 — 1,172,912 
Special Mention883 16,592 1,426 4,922 4,838 1,075 443 — 30,179 
Substandard— 13,510 5,328 5,732 1,061 7,826 260 — 33,717 
Doubtful— 292 — — — — — — 292 
Total Commercial real estate, owner occupied333,004 166,399 135,784 152,333 186,079 228,815 34,686 — 1,237,100 
Current period gross charge-offs— 243 152 — — 4 — — 399 
Residential
Pass310,019 167,128 389,574 613,787 352,662 528,875 7,188 46 2,369,279 
Special Mention345 1,312 6,116 9,565 5,993 4,926 346 — 28,603 
Substandard328 1,411 4,517 7,145 4,840 3,919 268 — 22,428 
Total Residential310,692 169,851 400,207 630,497 363,495 537,720 7,802 46 2,420,310 
Current period gross charge-offs— 114 814 737 102 163 — — 1,930 
Home equity
Pass10,173 3,020 3,431 21,442 42,749 10,194 608,020 1,470 700,499 
Special Mention— 674 — 297 447 59 5,097 329 6,903 
Substandard60 — — 90 304 377 2,637 110 3,578 
Total Home Equity10,233 3,694 3,431 21,829 43,500 10,630 615,754 1,909 710,980 
Current period gross charge-offs— 92 8 653 563 204 — — 1,520 
Individuals' loans for household and other personal expenditures
Pass40,478 16,525 12,010 19,038 5,067 3,961 55,751 1,649 154,479 
Special Mention108 139 174 113 152 16 115 140 957 
Total Individuals' loans for household and other personal expenditures40,586 16,664 12,184 19,151 5,219 3,977 55,866 1,789 155,436 
Current period gross charge-offs307 618 612 396 149 83 — — 2,165 
Public finance and other commercial loans
Pass134,004 144,742 52,795 198,964 185,906 407,974 238,648 — 1,363,033 
Total Public finance and other commercial loans134,004 144,742 52,795 198,964 185,906 407,974 238,648 — 1,363,033 
Loans$3,328,742 $1,925,189 $1,271,161 $1,466,305 $1,274,125 $1,794,274 $2,728,167 $3,744 $13,791,707 
Total current period gross charge-offs$8,288 $2,478 $4,020 $2,501 $4,500 $2,434 $— $— $24,221 
Total past due loans equaled $154.6 million as of June 30, 2026 representing a $23.7 million increase from $130.9 million at December 31, 2025. At June 30, 2026, 30-59 days past due increased $3.1 million from December 31, 2025 as commercial and industrial, commercial real estate, owner occupied, and home equity loan classes increased $8.9 million, $5.9 million, and $4.0 million, respectively. The increase was partially offset by a decrease in the commercial real estate, non-owner occupied and residential loan classes of $13.0 million and $2.3 million, respectively. At June 30, 2026, 60-89 days past due increased $11.4 million from December 31, 2025 as the commercial real estate, non-owner occupied, construction, and home equity loan classes increased $6.2 million, $5.8 million, and $1.8 million, respectively. The increase was partially offset by a decrease in the residential loan class of $2.2 million. At June 30, 2026, 90 days or more past due increased $9.2 million from December 31, 2025 as the commercial real estate, non-owner occupied, commercial real estate, owner occupied and residential loan classes increased $12.9 million, $5.0 million and $3.3 million, respectively. The increase was partially offset by a decrease in the construction loan class of $13.9 million. The tables below show a past due aging of the Corporation’s loan portfolio, by loan class, as of the dates indicated.

June 30, 2026
Current30-59 Days
Past Due		60-89 Days
Past Due		90 Days or More Past DueTotalLoans > 90 Days or More Past Due
and Accruing
Commercial and industrial loans$4,693,372 $16,064 $1,107 $9,898 $4,720,441 $3,444 
Agricultural land, production and other loans to farmers322,235 — 138 975 323,348 976 
Real estate loans:
Construction858,706 34 5,765 9,914 874,419 130 
Commercial real estate, non-owner occupied3,245,491 6,149 6,549 13,431 3,271,620 4,745 
Commercial real estate, owner occupied1,348,570 10,223 2,403 7,431 1,368,627 410 
Residential2,314,948 14,907 7,372 24,253 2,361,480 9 
Home equity1,101,834 8,759 3,219 4,850 1,118,662 24 
Individuals' loans for household and other personal expenditures148,767 654 457 — 149,878 — 
Public finance and other commercial loans1,342,262 — — — 1,342,262 — 
Loans$15,376,185 $56,790 $27,010 $70,752 $15,530,737 $9,738 

December 31, 2025
Current30-59 Days
Past Due		60-89 Days
Past Due		90 Days or More Past DueTotalLoans > 90 Days or More Past Due
and Accruing
Commercial and industrial loans$4,459,842 $7,194 $1,160 $10,086 $4,478,282 $313 
Agricultural land, production and other loans to farmers282,411 480 — 234 283,125 — 
Real estate loans:
Construction780,999 — — 23,776 804,775 1,295 
Commercial real estate, non-owner occupied2,318,624 19,125 345 572 2,338,666 — 
Commercial real estate, owner occupied1,227,448 4,295 2,880 2,477 1,237,100 — 
Residential2,372,637 17,182 9,536 20,955 2,420,310 434 
Home equity701,360 4,717 1,427 3,476 710,980 — 
Individuals' loans for household and other personal expenditures154,479 738 219 — 155,436 — 
Public finance and other commercial loans1,363,033 — — — 1,363,033 — 
Loans$13,660,833 $53,731 $15,567 $61,576 $13,791,707 $2,042 

Loans are reclassified to a nonaccruing status when, in management’s judgment, the collateral value and financial condition of the borrower do not justify accruing interest. At the time the accrual is discontinued, all unpaid accrued interest is reversed against earnings. Interest income accrued in prior years, if any, is charged to the allowance for credit losses. Payments subsequently received on nonaccrual loans are applied to principal. A loan is returned to accrual status when principal and interest are no longer past due and collectability is probable, typically after a minimum of six consecutive months of performance.
The following table summarizes the Corporation’s nonaccrual loans by loan class as of the dates indicated. At June 30, 2026, nonaccrual loans totaled $118.2 million, an increase of $46.4 million from December 31, 2025, primarily attributable to the placement of two commercial lending relationships, totaling $41.8 million, on nonaccrual status during the second quarter of 2026.

June 30, 2026December 31, 2025
Nonaccrual LoansNonaccrual Loans with no Allowance for Credit LossesNonaccrual LoansNonaccrual Loans with no Allowance for Credit Losses
Commercial and industrial loans$51,072 $575 $10,548 $2,174 
Agricultural land, production and other loans to farmers192 — 250 — 
Real estate loans:
Construction9,775 9,775 22,481 22,482 
Commercial real estate, non-owner occupied8,857 — 837 — 
Commercial real estate, owner occupied8,415 6,288 3,705 3,188 
Residential33,205 155 29,774 — 
Home equity6,581 560 4,158 — 
Individuals' loans for household and other personal expenditures18 — 20 — 
Public finance and other commercial loans88 — — — 
Loans$118,203 $17,353 $71,773 $27,844 

Interest income on nonaccrual loans is recognized only to the extent that cash payments are received in excess of principal due. There was no interest income recognized on nonaccrual loans for the three and six months ended June 30, 2026 or 2025.

Determining fair value for collateral dependent loans requires obtaining a current independent appraisal of the collateral and applying a discount factor, which includes selling costs, if applicable, to the value. The fair value of real estate is generally based on appraisals by qualified licensed appraisers. The appraisers typically determine the value of the real estate by utilizing an income or market valuation approach. If an appraisal is not available, the fair value may be determined by using a cash flow analysis. Fair value on other collateral such as business assets is typically ascertained by assessing, either singularly or some combination of, asset appraisals, accounts receivable aging reports, inventory listings, and/or customer financial statements. Both appraised values and values based on borrower’s financial information are discounted as considered appropriate based on the age and quality of the information and current market conditions.

The tables below present the amortized cost basis of collateral dependent loans by loan class and their respective collateral type, which are individually evaluated to determine expected credit losses. The total collateral dependent loan balance increased $19.9 million from December 31, 2025, primarily related to increases of $24.5 million and $5.1 million in the commercial and industrial and commercial real estate, owner occupied loan classes, respectively. The increase was partially offset by a decrease of $12.4 million in the construction loan class. The total related allowance balance increased $10.1 million from December 31, 2025, primarily related to an increase of $10.9 million in the commercial and industrial loan class. The increase was partially offset by a decrease of $2.1 million in the commercial real estate, non-owner occupied loan class.
June 30, 2026
Commercial Real EstateResidential Real EstateBusiness Assets and OtherTotal Allowance on Collateral Dependent Loans
Commercial and industrial loans$— $— $62,589 $62,589 $24,080 
Real estate loans:
Construction— 10,060 — 10,060 167 
Commercial real estate, non-owner occupied16,479 — — 16,479 1,819 
Commercial real estate, owner occupied10,626 — — 10,626 934 
Residential— 1,864 — 1,864 318 
Home equity— 696 — 696 17 
Loans$27,105 $12,620 $62,589 $102,314 $27,335 


December 31, 2025
Commercial Real EstateResidential Real EstateBusiness Assets and OtherTotalAllowance on Collateral Dependent Loans
Commercial and industrial loans$— $— $38,063 $38,063 $13,157 
Real estate loans:
Construction— 22,482 — 22,482 — 
Commercial real estate, non-owner occupied15,161 — — 15,161 3,938 
Commercial real estate, owner occupied5,511 — — 5,511 — 
Residential— 1,023 — 1,023 166 
Home equity— 145 — 145 19 
Loans$20,672 $23,650 $38,063 $82,385 $17,280 
In certain situations, the Corporation may modify the terms of a loan to a debtor experiencing financial difficulty. The modifications may include principal forgiveness, interest rate reductions, payment delays, term extensions or combinations of these modifications. The following tables present the amortized cost basis of loans at June 30, 2026 and 2025 that were both experiencing financial difficulty and modified during the three and six months ended June 30, 2026 and 2025, by class and by type of modification. For the three and six months ended June 30, 2026 and 2025, the tables below exclude loan modifications considered insignificant. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below.

Three Months Ended June 30, 2026
Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Term ExtensionCombination Payment Delay & Term Extension% of Total Class of Financing Receivable
Commercial and industrial loans$2,950 $— 0.06 %
Real estate loans:
Commercial real estate, owner occupied2,922 — 0.21 %
Home equity— 374 0.03 %
Total$5,872 $374 


Three Months Ended June 30, 2025
Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Payment DelayTerm ExtensionInterest Rate ReductionCombination Payment Delay & Term ExtensionCombination Interest Rate Reduction, Term Extension, & Payment Delay% of Total Class of Financing Receivable
Commercial and industrial loans$— $3,691 $— $— $— 0.08 %
Real estate loans:
Commercial real estate, non-owner occupied— 14,112 38,244 6,008 — 2.69 %
Residential459 — — — 1,286 0.07 %
Total$459 $17,803 $38,244 $6,008 $1,286 

Six Months Ended June 30, 2026
Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Payment DelayTerm ExtensionCombination Payment Delay & Term ExtensionCombination Interest Rate Reduction & Term ExtensionCombination Interest Rate Reduction, Term Extension, & Payment Delay% of Total Class of Financing Receivable
Commercial and industrial loans$7,217 $8,647 $14,540 $— $— 0.64 %
Real estate loans:
Construction— 1,892 — — — 0.22 %
Commercial real estate, non-owner occupied5,092 1,560 — 962 — 0.23 %
Commercial real estate, owner occupied— 2,922 — — — 0.21 %
Residential282 — — — 357 0.03 %
Home Equity— — 374 — — 0.03 %
Total$12,591 $15,021 $14,914 $962 $357 

Six Months Ended June 30, 2025
Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Payment DelayTerm ExtensionInterest Rate ReductionCombination Payment Delay & Term ExtensionCombination Interest Rate Reduction, Term Extension, & Payment Delay% of Total Class of Financing Receivable
Commercial and industrial loans$— $7,504 $— $— $— 0.17 %
Real estate loans:
Commercial real estate, non-owner occupied— 14,112 38,244 6,008 — 2.69 %
Residential725 — — — 1,286 0.08 %
Total$725 $21,616 $38,244 $6,008 $1,286 
The following tables present the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the three and six months ended June 30, 2026 and 2025.

Three Months Ended June 30, 2026
Financial Effect of Loan Modifications
Term ExtensionCombination Payment Delay & Term Extension
Commercial and industrial loans
Extended loans by a weighted average of 75 months.
Real estate loans:
Commercial real estate, owner occupied
Extended loans by a weighted average of 12 months.
Home equity
Provided payment deferrals with weighted average delayed amounts of $63 and extended loans by a weighted average of 60 months.


Three Months Ended June 30, 2025
Financial Effect of Loan Modifications
Payment DelayTerm ExtensionInterest Rate ReductionCombination Interest Rate Reduction & Term ExtensionCombination Interest Rate Reduction, Term Extension & Payment Delay
Commercial and industrial loans
Extended loans by a weighted average of 4 months.
Real estate loans:
Commercial real estate, non-owner occupied
Extended loans by a weighted average of 6 months.
Reduced the weighted average contractual interest rate from 7.58% to 6.93%.
Reduced the weighted average contractual interest rate from 14.00% to 7.00% and extended loans by a weighted average of 16 months.
Residential
Provided payment deferrals with weighted average delayed amounts of $36.
Reduced the weighted average contractual interest rate from 4.50% to 2.50%, extended loans by a weighted average of 68 months, and provided payment deferrals with weighted average delayed amounts of $8.
Six Months Ended June 30, 2026
Financial Effect of Loan Modifications
Payment DelayTerm ExtensionCombination Payment Delay & Term ExtensionCombination Interest Rate Reduction & Term ExtensionCombination Interest Rate Reduction, Term Extension & Payment Delay
Commercial and industrial loans
Provided payment deferrals with weighted average delayed amounts of $374.
Extended loans by a weighted average of 30 months.
Provided payment deferrals with weighted average delayed amounts of $909 and extended loans by a weighted average of 6 months.
Real estate loans:
Construction
Extended loans by a weighted average of 12 months.
Commercial real estate, non-owner occupied
Provided payment deferrals with weighted average delayed amounts of $67.
Extended loans by a weighted average of 6 months.
Reduced the weighted average contractual interest rate from 7.16% to 5.86% and extended loans by a weighted average of 60 months.
Commercial real estate, owner occupied
Extended loans by a weighted average of 12 months.
Residential
Provided payment deferrals with weighted average delayed amounts of $19.
Reduced the weighted average contractual interest rate from 6.75% to 2.00%, extended loans by a weighted average of 120 months, and provided payment deferrals with weighted average delayed amounts of $13.
Home equity
Provided payment deferrals with weighted average delayed amounts of $63 and extended loans by a weighted average of 60 months.

Six Months Ended June 30, 2025
Financial Effect of Loan Modifications
Payment DelayTerm ExtensionInterest Rate ReductionCombination Interest Rate Reduction & Term ExtensionCombination Interest Rate Reduction, Term Extension & Payment Delay
Commercial and industrial loans
Extended loans by a weighted average of 4 months.
Real estate loans:
Commercial real estate, non-owner occupied
Extended loans by a weighted average of 6 months.
Reduced the weighted average contractual interest rate from 7.58% to 6.93%.
Reduced the weighted average contractual interest rate from 14.00% to 7.00%. Extended loans by a weighted average of 16 months.
Residential
Provided payment deferrals with weighted average delayed amounts of $25.
Reduced the weighted average contractual interest rate from 4.50% to 2.50%, extended loans by a weighted average of 68 months, and provided payment deferrals with weighted average delayed amounts of $8.
The Corporation closely monitors the performance of financial difficulty loan modifications to understand the effectiveness of its efforts. The following tables present the performance of financial difficulty loan modifications in the twelve months following modification.

June 30, 2026
Current30-59 Days Past Due90+ Days Past DueTotal
Commercial and industrial loans$32,911 $— $359 $33,270 
Real estate loans:
Construction1,892 — — 1,892 
Commercial real estate, non-owner occupied4,044 5,093 8,656 17,793 
Commercial real estate, owner occupied2,922 — — 2,922 
Residential1,872 — — 1,872 
Home equity374 — — 374 
Total$44,015 $5,093 $9,015 $58,123 

June 30, 2025
Current30-59 Days Past Due60-89 Days Past Due90+ Days Past DueTotal
Commercial and industrial loans$14,186 $2,831 $448 $501 $17,966 
Agricultural land, production and other loans to farmers2,194 — — — 2,194 
Real estate loans:
Construction6,425 — — — 6,425 
Commercial real estate, non-owner occupied58,364 — — — 58,364 
Commercial real estate, owner occupied2,153 — — 3,573 5,726 
Residential3,717 576 412 702 5,407 
Home equity138 — — — 138 
Total$87,177 $3,407 $860 $4,776 $96,220 

During the six months ended June 30, 2026 and 2025, there were payment defaults of $9.0 million and $4.8 million, respectively, on loans to borrowers whose loans were modified due to financial difficulties within the previous twelve months. The payment defaults did not materially impact the allowance for credit losses on loans.

Upon the Corporation's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is charged-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.

Purchased Credit-Deteriorated Loans

The Corporation acquired First Savings on February 1, 2026 and performed an evaluation of the acquired loan portfolio, identifying loans that had more-than-insignificant deterioration in credit quality since origination at the acquisition date. The carrying amount of those loans is shown in the table below:
First Savings
Purchase price of PCD loans at acquisition$14,869 
CECL Day 1 PCD ACL - loans7,067 
Par value of acquired PCD loans at acquisition$21,936 

Allowance for Credit Losses on Loans

The Allowance for Credit Losses on Loans ("ACL - Loans") is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on loans over the contractual term. The ACL - Loans is adjusted by the provision for credit losses, which is reported in earnings, and reduced by charge-offs for loans, net of recoveries. Provision for credit losses on 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. Loans are charged-off against the allowance when the uncollectibility of the loan is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

The allowance represents the Corporation’s best estimate of current expected credit losses on loans using relevant available information from internal and external sources, related to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. The Current Expected Credit Losses ("CECL") calculation is performed and evaluated quarterly and losses are estimated over the expected life of the loan. The level of the ACL - Loans is believed to be adequate to absorb all expected future losses inherent in the loan portfolio at the measurement date.
In calculating the ACL - Loans, the loan portfolio was pooled into twelve loan segments with similar risk characteristics. Common characteristics include the type or purpose of the loan, underlying collateral and historical/expected credit loss patterns. In developing the loan segments, the Corporation 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.

The expected credit losses are measured over the life of each loan segment utilizing the Probability of Default / Loss Given Default methodology combined with economic forecast models to estimate the current expected credit loss inherent in the loan portfolio. This approach is also leveraged to estimate the expected credit losses associated with unfunded loan commitments incorporating expected utilization rates.

The Corporation sub-segmented certain commercial portfolios by risk level and certain consumer portfolios by delinquency status where appropriate. The Corporation utilized a four-quarter reasonable and supportable economic forecast period followed by a six-quarter, straight-line reversion period to the historical macroeconomic mean for the remaining life of the loans. Econometric modeling was performed using historical default rates and a selection of economic forecast scenarios published by Moody’s to develop a range of estimated credit losses for which to
determine the best credit loss estimate within. Macroeconomic factors utilized in the modeling process include the national unemployment rate, BBB US corporate index, commercial real estate price index and the home price index.

The Corporation qualitatively adjusts model results for risk factors that are not inherently considered in the quantitative modeling process, but are nonetheless relevant in assessing the expected credit losses within the loan portfolio. These adjustments may increase or decrease the estimate of expected credit losses based upon the assessed level of risk for each qualitative factor. The various risks that may be considered in making qualitative adjustments include, among other things, the impact of (i) changes in the nature and volume of the loan portfolio, (ii) changes in the existence, growth and effect of any concentrations in credit, (iii) changes in lending policies and procedures, including changes in underwriting standards and practices for collections, charge-offs, and recoveries, (iv) changes in the quality of the credit review function, (v) changes in the experience, ability and depth of lending, investment, collection and other relevant management staff, (vi) changes in the volume and severity of past due financial assets, the volume of the nonaccrual assets, and the volume and severity of adversely classified or graded assets, (vii) the value of underlying collateral for loans that are not collateral dependent, and (viii) other environmental factors such as regulatory, legal and technological considerations, as well as competition and changes in the economic and business conditions that affect the collectability of financial assets.

In some cases, management may determine that an individual loan exhibits unique risk characteristics which differentiate the loan from other loans within the loan segments. In such cases, the loans are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation. Specific reserve 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. 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 collateral supporting collateral dependent loans is evaluated on a quarterly basis.

The risk characteristics of the Corporation’s portfolio segments are as follows:

Commercial
Commercial lending is primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the tangible assets being financed such as equipment or real estate or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee. Other loans may be unsecured, secured but under-collateralized or otherwise made on the basis of the enterprise value of an organization. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

Commercial real estate
Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. The Corporation monitors commercial real estate loans based on collateral and risk grade criteria, as well as the levels of owner-occupied versus non-owner occupied loans.

Construction
Construction loans are underwritten utilizing a combination of tools and techniques including feasibility and market studies, independent appraisals and appraisal reviews, absorption and interest rate sensitivity analysis as well as the financial analysis of the developer and all guarantors. Construction loans are monitored by either in house or third party inspectors limiting advances to a percentage of costs or stabilized project value. These loans frequently involve the disbursement of significant funds with the repayment dependent upon the successful completion and, where necessary, the future stabilization of the project. The predominant inherent risk of this portfolio is associated with the borrower's ability to successfully complete a project on time, within budget and stabilize the project as originally projected.

Consumer and Residential
With respect to residential loans that are secured by 1-4 family residences, which are typically owner occupied, the Corporation generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Home equity loans are secured by a subordinate interest in 1-4 family residences, and consumer loans are secured by consumer assets such as automobiles or recreational vehicles. Some consumer loans, such as small installment loans and certain lines of credit, are unsecured. Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers and can also be impacted by changes in property values. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.
The ACL - Loans increased $46.0 million from December 31, 2025 to $241.6 million at June 30, 2026. Net charge-offs totaled $3.9 million and $14.2 million during the three and six months ended June 30, 2026, respectively. Provision expense of $33.0 million and $37.9 million was recorded during the three and six months ended June 30, 2026, respectively. The following tables summarize changes in the allowance for credit losses by loan segment for the three and six months ended June 30, 2026 and 2025.

Three Months Ended June 30, 2026
CommercialCommercial Real EstateConstructionConsumer & ResidentialTotal
Allowance for credit losses - loans
Balances, March 31, 2026$106,894 $56,721 $6,346 $42,559 $212,520 
Provision for credit losses - loans31,220 1,772 (1,813)1,821 33,000 
Recoveries on loans1,269 5 1 1,057 2,332 
Loans charged off(1,358)(3,547)— (1,332)(6,237)
Balances, June 30, 2026$138,025 $54,951 $4,534 $44,105 $241,615 

Three Months Ended June 30, 2025
CommercialCommercial Real EstateConstructionConsumer & ResidentialTotal
Allowance for credit losses - loans
Balances, March 31, 2025$99,982 $46,336 $11,541 $34,172 $192,031 
Provision for credit losses - loans(406)(83)(2,735)8,824 5,600 
Recoveries on loans1,514 98 — 324 1,936 
Loans charged off(2,106)(74)(63)(2,008)(4,251)
Balances, June 30, 2025$98,984 $46,277 $8,743 $41,312 $195,316 

Six Months Ended June 30, 2026
CommercialCommercial Real EstateConstructionConsumer & ResidentialTotal
Allowance for credit losses - loans
Balances, December 31, 2025$104,435 $45,541 $5,470 $40,151 $195,597 
Provision for credit losses - loans38,384 4,346 (2,141)(2,689)37,900 
CECL Day 1 PSL ACL - loans2,293 5,357 562 7,000 15,212 
CECL Day 1 PCD ACL - loans2,488 3,368 641 570 7,067 
Recoveries on loans1,656 80 2 1,517 3,255 
Loans charged off(11,231)(3,741)— (2,444)(17,416)
Balances, June 30, 2026$138,025 $54,951 $4,534 $44,105 $241,615 

Six Months Ended June 30, 2025
CommercialCommercial Real EstateConstructionConsumer & ResidentialTotal
Allowance for credit losses - loans
Balances, December 31, 2024$94,757 $51,099 $9,784 $37,117 $192,757 
Provision for credit losses - loans8,748 (4,450)(978)6,480 9,800 
Recoveries on loans2,452 103 — 637 3,192 
Loans charged off(6,973)(475)(63)(2,922)(10,433)
Balances, June 30, 2025$98,984 $46,277 $8,743 $41,312 $195,316 

Off-Balance Sheet Arrangements, Commitments And Contingencies

In the normal course of business, the Corporation has entered into off-balance sheet financial instruments which include commitments to extend credit and standby letters of credit. Commitments to extend credit are usually the result of lines of credit granted to existing borrowers under agreements that the total outstanding indebtedness will not exceed a specific amount during the term of the indebtedness. Typical borrowers are commercial customers that use lines of credit to supplement their treasury management functions, and thus their total outstanding indebtedness may fluctuate during any time period based on the seasonality of their business and the resultant timing for their cash flows. Other typical lines of credit are related to home equity loans granted to customers. Commitments to extend credit generally have fixed expiration dates or other termination clauses that may require a fee.
Standby letters of credit are generally issued on behalf of an applicant (the Corporation’s customer) to a specifically named beneficiary and are the result of a particular business arrangement that exists between the applicant and the beneficiary. Standby letters of credit have fixed expiration dates and are usually for terms of two years or less unless terminated beforehand due to criteria specified in the standby letter of credit. The standby letter of credit would permit the beneficiary to obtain payment from the Corporation under certain prescribed circumstances. Subsequently, the Corporation would seek reimbursement from the applicant pursuant to the terms of the standby letter of credit.

The Corporation typically follows the same credit policies and underwriting practices when making these commitments as it does for on-balance sheet instruments. Each customer’s creditworthiness is typically evaluated on a case-by-case basis, and the amount of collateral obtained, if any, is based on management’s credit evaluation of the customer. Collateral held varies but may include cash, real estate, marketable securities, accounts receivable, inventory, equipment and personal property. The contractual amounts of these commitments are not reflected in the consolidated financial statements and only amounts drawn upon would be reflected in the future. Since many of the commitments are expected to expire without being drawn upon, the contractual amounts do not necessarily represent future cash requirements. However, should the commitments be drawn upon and should the Corporation’s customers default on their resulting obligation to the Corporation, the maximum exposure to credit loss, without consideration of collateral, is represented by the contractual amount of those commitments.

Financial instruments with off-balance sheet risk were as follows:
June 30, 2026December 31, 2025
Amounts of commitments:
Loan commitments to extend credit$5,971,657 $5,586,510 
Standby letters of credit$93,827 $73,997 

The Corporation maintains an accrual for credit losses on off-balance sheet commitments using the CECL methodology. There was no additional allowance for credit losses associated with off-balance sheet commitments during the three months ended June 30, 2026. The First Savings acquisition added $0.5 million of Day 1 allowance for credit losses associated with off-balance sheet commitments during the six months ended June 30, 2026. There was no provision for credit losses on unfunded commitments during the three and six months ended June 30, 2025. This reserve level remains appropriate and is reported in "Other liabilities" as of June 30, 2026 and December 31, 2025 in the Consolidated Condensed Balance Sheets.
Three Months EndedSix Months Ended
June 30, 2026June 30, 2025June 30, 2026June 30, 2025
Balance, beginning of period$18,500 $18,000 $18,000 $18,000 
Day 1 allowance for credit losses - unfunded commitments— — 500 — 
Balance, end of period$18,500 $18,000 $18,500 $18,000 

Loans Held for Sale
Loans held for sale at June 30, 2026 and December 31, 2025, were $77.9 million and $20.1 million, respectively. The increase in the loans held for sale balance is due to the First Savings acquisition. In March 2026, management approved a plan to sell a pool of performing residential mortgage loans with a principal balance totaling $357.0 million. At the time of the decision, all loans included in the pool were current and performing in accordance with their contractual terms. As a result of the decision to sell, the loan pool was reclassified from held for investment to held for sale and the Corporation recognized a $29.8 million loss during the first quarter. During the second quarter of 2026, the Corporation sold $271.1 million of mortgage loans and transferred $47.1 million of mortgage loans back to held for investment, as those loans were no longer expected to be sold.