| Loans, Allowance for Credit Losses - Loans, and Credit Quality |
Loans, Allowance for Credit Losses - Loans, and Credit Quality The loan composition is summarized as follows. | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2026 | | December 31, 2025 | | (in thousands) | Amount | | % of
Total | | Amount | | % of
Total | | Commercial & industrial | $ | 2,350,769 | | | 22 | % | | $ | 1,367,522 | | | 20 | % | | Owner-occupied commercial real estate (“CRE”) | 1,543,772 | | | 14 | | | 939,587 | | | 14 | | | Agricultural | 1,765,864 | | | 16 | | | 1,415,425 | | | 21 | | | CRE investment | 2,329,696 | | | 22 | | | 1,188,351 | | | 17 | | | Construction & land development | 571,280 | | | 5 | | | 326,638 | | | 5 | | | Residential construction | 139,823 | | | 1 | | | 95,268 | | | 1 | | | Residential first mortgage | 1,584,362 | | | 15 | | | 1,193,683 | | | 17 | | | Residential junior mortgage | 474,964 | | | 4 | | | 268,188 | | | 4 | | | Retail & other | 87,634 | | | 1 | | | 41,683 | | | 1 | | Loans | 10,848,164 | | | 100 | % | | 6,836,345 | | | 100 | % | | Less allowance for credit losses - Loans (“ACL-Loans”) | 133,584 | | | | | 68,806 | | | | Loans, net | $ | 10,714,580 | | | | | $ | 6,767,539 | | | | | Allowance for credit losses - Loans to loans | 1.23 | % | | | | 1.01 | % | | |
Accrued interest on loans totaled $43 million and $21 million at June 30, 2026 and December 31, 2025, respectively, and is included in accrued interest receivable and other assets on the consolidated balance sheets. Allowance for Credit Losses - Loans: The majority of the Company’s loans, commitments, and letters of credit have been granted to customers in the Company’s market area. Although the Company has a diversified loan portfolio, the credit risk in the loan portfolio is largely influenced by general economic conditions and trends of the counties and markets in which the debtors operate, and the resulting impact on the operations of borrowers or on the value of underlying collateral, if any. A roll forward of the allowance for credit losses - loans is summarized as follows. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | Year Ended | | (in thousands) | June 30, 2026 | | June 30, 2025 | | June 30, 2026 | | June 30, 2025 | | December 31, 2025 | | Beginning balance | $ | 133,435 | | | $ | 67,480 | | | $ | 68,806 | | | $ | 66,322 | | | $ | 66,322 | | | ACL on acquired PCD loans | — | | | — | | | 19,735 | | | — | | | — | | | ACL on acquired PSL loans | — | | | — | | | 44,377 | | | — | | | — | | | Provision for credit losses - loans | 800 | | | 1,300 | | | 2,150 | | | 2,800 | | | 4,300 | | | Charge-offs | (714) | | | (568) | | | (1,586) | | | (956) | | | (2,263) | | | Recoveries | 63 | | | 196 | | | 102 | | | 242 | | | 447 | | | Net (charge-offs) recoveries | (651) | | | (372) | | | (1,484) | | | (714) | | | (1,816) | | | Ending balance | $ | 133,584 | | | $ | 68,408 | | | $ | 133,584 | | | $ | 68,408 | | | $ | 68,806 | |
The following tables present the balance and activity in the ACL-Loans by portfolio segment. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Six Months Ended June 30, 2026 | | (in thousands) | Commercial
& industrial | | Owner-
occupied
CRE | | Agricultural | | CRE
investment | | Construction & land
development | | Residential
construction | | Residential
first mortgage | | Residential
junior
mortgage | | Retail
& other | | Total | | ACL-Loans | | | | | | | | | | | | | | | | | | | | | Beginning balance | $ | 16,905 | | | $ | 5,289 | | | $ | 9,434 | | | $ | 15,038 | | | $ | 3,611 | | | $ | 1,250 | | | $ | 13,310 | | | $ | 3,351 | | | $ | 618 | | | $ | 68,806 | | | ACL on PCD loans | 8,174 | | | 2,168 | | | 518 | | | 5,300 | | | 2,638 | | | — | | | 204 | | | 49 | | | 684 | | | 19,735 | | | ACL on PSL loans | 21,262 | | | 4,254 | | | 1,739 | | | 7,758 | | | 3,192 | | | 718 | | | 3,920 | | | 1,223 | | | 311 | | | 44,377 | | | Provision | (10,027) | | | 4,787 | | | (563) | | | 1,670 | | | 1,761 | | | (1,147) | | | 248 | | | 4,215 | | | 1,206 | | | 2,150 | | | Charge-offs | (804) | | | (23) | | | — | | | — | | | — | | | — | | | (33) | | | (42) | | | (684) | | | (1,586) | | | Recoveries | 38 | | | — | | | 5 | | | — | | | — | | | — | | | 1 | | | 4 | | | 54 | | | 102 | | | Net (charge-offs) recoveries | (766) | | | (23) | | | 5 | | | — | | | — | | | — | | | (32) | | | (38) | | | (630) | | | (1,484) | | | Ending balance | $ | 35,548 | | | $ | 16,475 | | | $ | 11,133 | | | $ | 29,766 | | | $ | 11,202 | | | $ | 821 | | | $ | 17,650 | | | $ | 8,800 | | | $ | 2,189 | | | $ | 133,584 | | | As % of ACL-Loans | 27 | % | | 12 | % | | 8 | % | | 22 | % | | 8 | % | | 1 | % | | 13 | % | | 7 | % | | 2 | % | | 100 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, 2025 | | (in thousands) | Commercial
& industrial | | Owner-
occupied
CRE | | Agricultural | | CRE
investment | | Construction
& land
development | | Residential
construction | | Residential
first
mortgage | | Residential
junior
mortgage | | Retail &
other | |
Total | | ACL-Loans | | | | | | | | | | | | | | | | | | | | | Beginning balance | $ | 16,147 | | | $ | 5,362 | | | $ | 9,957 | | | $ | 14,616 | | | $ | 2,658 | | | $ | 1,234 | | | $ | 12,590 | | | $ | 2,827 | | | $ | 931 | | | $ | 66,322 | | | | | | | | | | | | | | | | | | | | | | | Provision | 2,154 | | | (79) | | | (458) | | | 422 | | | 953 | | | 16 | | | 817 | | | 522 | | | (47) | | | 4,300 | | | Charge-offs | (1,577) | | | (189) | | | (65) | | | — | | | — | | | — | | | (98) | | | (2) | | | (332) | | | (2,263) | | | Recoveries | 181 | | | 195 | | | — | | | — | | | — | | | — | | | 1 | | | 4 | | | 66 | | | 447 | | | Net (charge-offs) recoveries | (1,396) | | | 6 | | | (65) | | | — | | | — | | | — | | | (97) | | | 2 | | | (266) | | | (1,816) | | | Ending balance | $ | 16,905 | | | $ | 5,289 | | | $ | 9,434 | | | $ | 15,038 | | | $ | 3,611 | | | $ | 1,250 | | | $ | 13,310 | | | $ | 3,351 | | | $ | 618 | | | $ | 68,806 | | | As % of ACL-Loans | 24 | % | | 8 | % | | 14 | % | | 22 | % | | 5 | % | | 2 | % | | 19 | % | | 5 | % | | 1 | % | | 100 | % |
The ACL-Loans represents management’s estimate of expected credit losses in the Company’s loan portfolio at the balance sheet date. To assess the appropriateness of the ACL-Loans, management evaluates qualitative and environmental factors, including but not limited to: (i) evaluation of facts and issues related to specific loans; (ii) management’s ongoing review and grading of the loan portfolio; (iii) consideration of historical loan loss and delinquency experience on each portfolio segment; (iv) trends in past due and nonperforming loans; (v) the risk characteristics of the various loan segments; (vi) changes in the size and character of the loan portfolio; (vii) concentrations of loans to specific borrowers or industries; (viii) existing economic conditions; (ix) the fair value of underlying collateral; and (x) other qualitative and quantitative factors which could affect expected credit losses. Assessing these numerous factors involves significant judgment. Management allocates the ACL-Loans by pools of risk within each loan portfolio segment. The allocation methodology consists of the following components. First, a specific reserve is established for individually evaluated credit-deteriorated loans, which management defines as nonaccrual credit relationships over $500,000, collateral dependent loans, purchased credit deteriorated loans, and other loans with evidence of credit deterioration. The specific reserve in the ACL-Loans for these credit deteriorated loans is equal to the aggregate collateral or discounted cash flow shortfall. Next, management uses a DCF model to estimate expected credit losses on segmented loan pools that exhibit similar risk characteristics. The DCF model calculates an expected loss percentage for each loan category by considering probability of default, using life-of-loan analysis periods for all loan segments, and the historical severity of loss, based on the aggregate net lifetime losses incurred per loan category. For each of these loan pools, the Company generates cash flow projections at the instrument level adjusting payment expectations for estimated prepayment speed, curtailments, probability of default, and loss given default. Lastly, additional qualitative adjustments are applied for risk factors that are not considered in the modeling process but are relevant in assessing the expected credit losses within the loan pools. Management utilizes a qualitative factor framework to provide a qualitative estimate of the expected credit losses inherent in the loan portfolio in relation to potential limitations of the quantitative model. Allowance for Credit Losses-Unfunded Commitments: In addition to the ACL-Loans, the Company has established an ACL-Unfunded commitments, classified in accrued interest payable and other liabilities on the consolidated balance sheets. This reserve is maintained at a level that management believes is sufficient to absorb losses arising from unfunded loan commitments, and is determined quarterly based on methodology similar to the methodology for determining the ACL-Loans. The reserve for unfunded commitments was $8.4 million and $3.0 million at June 30, 2026 and December 31, 2025, respectively. Provision for Credit Losses: The provision for credit losses is determined by the Company as the amount to be added to the ACL loss accounts for various types of financial instruments including loans, investment securities, and off-balance sheet credit exposures after net charge-offs have been deducted to bring the ACL to a level that, in management’s judgment, is necessary to absorb expected credit losses over the lives of the respective financial instruments. See Note 5 for additional information regarding the ACL related to investment securities. The following table presents the components of the provision for credit losses. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | Year Ended | | (in thousands) | June 30, 2026 | | June 30, 2025 | | June 30, 2026 | | June 30, 2025 | | December 31, 2025 | | Provision for credit losses on: | | | | | | | | | | | Loans | $ | 800 | | | $ | 1,300 | | | $ | 2,150 | | | $ | 2,800 | | | $ | 4,300 | | | Unfunded commitments | 700 | | | (250) | | | 5,400 | | | (250) | | | (50) | | | | | | | | | | | | | Total | $ | 1,500 | | | $ | 1,050 | | | $ | 7,550 | | | $ | 2,550 | | | $ | 4,250 | |
Collateral Dependent Loans: 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. For collateral dependent loans, expected credit losses are based on the estimated fair value of the collateral at the balance sheet date less estimated selling costs if satisfaction of the loan depends on the sale of the collateral. The following tables present collateral dependent loans by portfolio segment and collateral type, including those loans with and without a related allowance allocation. | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2026 | Collateral Type | | | | | | (in thousands) | Real Estate | Other Business Assets | Total | | Without an Allowance | With an Allowance | Allowance Allocation | | Commercial & industrial | $ | — | | $ | 14,537 | | $ | 14,537 | | | $ | 8,407 | | $ | 6,130 | | $ | 4,210 | | | Owner-occupied CRE | 19,759 | | — | | 19,759 | | | 16,531 | | 3,228 | | 425 | | | Agricultural | 5,919 | | 2,892 | | 8,811 | | | 8,811 | | — | | — | | | CRE investment | 9,136 | | — | | 9,136 | | | 1,667 | | 7,469 | | 661 | | | Construction & land development | — | | — | | — | | | — | | — | | — | | | Residential construction | — | | — | | — | | | — | | — | | — | | | Residential first mortgage | 2,376 | | — | | 2,376 | | | 2,287 | | 89 | | 6 | | | Residential junior mortgage | 278 | | — | | 278 | | | — | | 278 | | 4 | | | Retail & other | — | | — | | — | | | — | | — | | — | | | Total loans | $ | 37,468 | | $ | 17,429 | | $ | 54,897 | | | $ | 37,703 | | $ | 17,194 | | $ | 5,306 | |
| | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2025 | Collateral Type | | | | | | (in thousands) | Real Estate | Other Business Assets | Total | | Without an Allowance | With an Allowance | Allowance Allocation | | Commercial & industrial | $ | — | | $ | 9,111 | | $ | 9,111 | | | $ | 5,986 | | $ | 3,125 | | $ | 322 | | | Owner-occupied CRE | 5,755 | | — | | 5,755 | | | 5,755 | | — | | — | | | Agricultural | 6,784 | | 3,589 | | 10,373 | | | 10,373 | | — | | — | | | CRE investment | 497 | | — | | 497 | | | 497 | | — | | — | | | Construction & land development | — | | — | | — | | | — | | — | | — | | | Residential construction | — | | — | | — | | | — | | — | | — | | | Residential first mortgage | 1,847 | | — | | 1,847 | | | 1,486 | | 361 | | 1 | | | Residential junior mortgage | 166 | | — | | 166 | | | 166 | | — | | — | | | Retail & other | — | | — | | — | | | — | | — | | — | | | Total loans | $ | 15,049 | | $ | 12,700 | | $ | 27,749 | | | $ | 24,263 | | $ | 3,486 | | $ | 323 | |
Past Due and Nonaccrual Loans: The following tables present past due loans by portfolio segment. | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2026 | | (in thousands) | 30-89 Days Past
Due (accruing) | | 90 Days & Over or nonaccrual | | Current | | Total | | Commercial & industrial | $ | 722 | | | $ | 18,409 | | | $ | 2,331,638 | | | $ | 2,350,769 | | | Owner-occupied CRE | 2,134 | | | 21,661 | | | 1,519,977 | | | 1,543,772 | | | Agricultural | 107 | | | 9,661 | | | 1,756,096 | | | 1,765,864 | | | CRE investment | — | | | 9,446 | | | 2,320,250 | | | 2,329,696 | | | Construction & land development | 5 | | | 100 | | | 571,175 | | | 571,280 | | | Residential construction | 557 | | | — | | | 139,266 | | | 139,823 | | | Residential first mortgage | 3,663 | | | 10,214 | | | 1,570,485 | | | 1,584,362 | | | Residential junior mortgage | 1,015 | | | 1,862 | | | 472,087 | | | 474,964 | | | Retail & other | 728 | | | 192 | | | 86,714 | | | 87,634 | | | Total loans | $ | 8,931 | | | $ | 71,545 | | | $ | 10,767,688 | | | $ | 10,848,164 | | | Percent of total loans | 0.1 | % | | 0.7 | % | | 99.2 | % | | 100.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2025 | | (in thousands) | 30-89 Days Past
Due (accruing) | | 90 Days & Over or nonaccrual | | Current | | Total | | Commercial & industrial | $ | 541 | | | $ | 10,314 | | | $ | 1,356,667 | | | $ | 1,367,522 | | | Owner-occupied CRE | 3,311 | | | 6,938 | | | 929,338 | | | 939,587 | | | Agricultural | 123 | | | 10,476 | | | 1,404,826 | | | 1,415,425 | | | CRE investment | 250 | | | 497 | | | 1,187,604 | | | 1,188,351 | | | Construction & land development | 29 | | | — | | | 326,609 | | | 326,638 | | | Residential construction | 601 | | | — | | | 94,667 | | | 95,268 | | | Residential first mortgage | 5,305 | | | 3,022 | | | 1,185,356 | | | 1,193,683 | | | Residential junior mortgage | 494 | | | 311 | | | 267,383 | | | 268,188 | | | Retail & other | 453 | | | 121 | | | 41,109 | | | 41,683 | | | Total loans | $ | 11,107 | | | $ | 31,679 | | | $ | 6,793,559 | | | $ | 6,836,345 | | | Percent of total loans | 0.1 | % | | 0.5 | % | | 99.4 | % | | 100.0 | % |
The following table presents nonaccrual loans by portfolio segment. | | | | | | | | | | | | | | | | | | | June 30, 2026 | | December 31, 2025 | | (in thousands) | Nonaccrual Loans | % of Total | | Nonaccrual Loans | % of Total | | Commercial & industrial | $ | 18,409 | | 26 | % | | $ | 10,314 | | 32 | % | | Owner-occupied CRE | 21,661 | | 30 | | | 6,938 | | 22 | | | Agricultural | 9,661 | | 14 | | | 10,476 | | 33 | | | CRE investment | 9,446 | | 13 | | | 497 | | 2 | | | Construction & land development | 100 | | — | | | — | | — | | | Residential construction | — | | — | | | — | | — | | | Residential first mortgage | 10,214 | | 14 | | | 3,022 | | 10 | | | Residential junior mortgage | 1,862 | | 3 | | | 311 | | 1 | | | Retail & other | 192 | | — | | | 121 | | — | | Nonaccrual loans | $ | 71,545 | | 100 | % | | $ | 31,679 | | 100 | % | | Percent of total loans | 0.7 | % | | | 0.5 | % | |
Credit Quality Information: The following tables present total loans by risk categories and year of origination, as well as gross charge-offs by year of origination. Acquired loans have been included based upon the actual origination date. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2026 | Amortized Cost Basis by Origination Year | | | | | (in thousands) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | Revolving | Revolving to Term | TOTAL | | Commercial & industrial | | | | | | | | | | | Grades 1-4 | $ | 238,582 | | $ | 448,744 | | $ | 171,621 | | $ | 155,496 | | $ | 173,209 | | $ | 273,263 | | $ | 660,336 | | $ | — | | $ | 2,121,251 | | | Grade 5 | 6,300 | | 10,281 | | 6,695 | | 14,850 | | 10,944 | | 17,310 | | 56,582 | | — | | 122,962 | | | Grade 6 | — | | 13,799 | | 2,626 | | 1,547 | | 2,755 | | 4,519 | | 4,900 | | — | | 30,146 | | | Grade 7 * | 1,395 | | 1,710 | | 9,013 | | 6,404 | | 18,302 | | 13,588 | | 25,998 | | — | | 76,410 | | | Total | $ | 246,277 | | $ | 474,534 | | $ | 189,955 | | $ | 178,297 | | $ | 205,210 | | $ | 308,680 | | $ | 747,816 | | $ | — | | $ | 2,350,769 | | | Current period gross charge-offs | $ | — | | $ | (29) | | $ | (128) | | $ | (360) | | $ | (105) | | $ | (12) | | $ | (170) | | $ | — | | $ | (804) | | | Owner-occupied CRE | | | | | | | | | | | Grades 1-4 | $ | 122,988 | | $ | 237,431 | | $ | 167,387 | | $ | 138,964 | | $ | 202,434 | | $ | 481,107 | | $ | 16,406 | | $ | — | | $ | 1,366,717 | | | Grade 5 | 354 | | 5,348 | | 8,323 | | 17,029 | | 15,682 | | 50,186 | | 147 | | — | | 97,069 | | | Grade 6 | — | | — | | 180 | | — | | 2,469 | | 5,572 | | 115 | | — | | 8,336 | | | Grade 7 * | 111 | | 913 | | 6,063 | | 12,888 | | 15,443 | | 34,503 | | 1,729 | | — | | 71,650 | | | Total | $ | 123,453 | | $ | 243,692 | | $ | 181,953 | | $ | 168,881 | | $ | 236,028 | | $ | 571,368 | | $ | 18,397 | | $ | — | | $ | 1,543,772 | | | Current period gross charge-offs | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | (23) | | $ | — | | $ | — | | $ | (23) | | | Agricultural | | | | | | | | | | | Grades 1-4 | $ | 83,935 | | $ | 230,580 | | $ | 182,083 | | $ | 125,319 | | $ | 248,322 | | $ | 350,702 | | $ | 372,520 | | $ | — | | $ | 1,593,461 | | | Grade 5 | 13,489 | | 9,900 | | 4,851 | | 6,761 | | 19,304 | | 23,089 | | 49,234 | | — | | 126,628 | | | Grade 6 | 577 | | 139 | | 1,310 | | 101 | | 493 | | 2,984 | | 2,945 | | — | | 8,549 | | | Grade 7 * | 638 | | 4,572 | | 1,229 | | 2,101 | | 1,769 | | 19,385 | | 7,532 | | — | | 37,226 | | | Total | $ | 98,639 | | $ | 245,191 | | $ | 189,473 | | $ | 134,282 | | $ | 269,888 | | $ | 396,160 | | $ | 432,231 | | $ | — | | $ | 1,765,864 | | | Current period gross charge-offs | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | | CRE investment | | | | | | | | | | | Grades 1-4 | $ | 77,769 | | $ | 184,302 | | $ | 197,062 | | $ | 133,777 | | $ | 373,786 | | $ | 1,129,851 | | $ | 47,430 | | $ | — | | $ | 2,143,977 | | | Grade 5 | — | | 911 | | 4,441 | | 19,202 | | 26,204 | | 51,852 | | — | | — | | 102,610 | | | Grade 6 | — | | — | | — | | 20,000 | | 18,246 | | 1,056 | | — | | — | | 39,302 | | | Grade 7 * | — | | 1,153 | | — | | 10,271 | | 13,463 | | 18,920 | | — | | — | | 43,807 | | | Total | $ | 77,769 | | $ | 186,366 | | $ | 201,503 | | $ | 183,250 | | $ | 431,699 | | $ | 1,201,679 | | $ | 47,430 | | $ | — | | $ | 2,329,696 | | | Current period gross charge-offs | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | | Construction & land development | | | | | | | | | | | Grades 1-4 | $ | 43,384 | | $ | 214,382 | | $ | 117,061 | | $ | 44,556 | | $ | 26,257 | | $ | 42,487 | | $ | 3,258 | | $ | — | | $ | 491,385 | | | Grade 5 | — | | 12,675 | | 826 | | 4,395 | | 44,456 | | 1,011 | | 56 | | — | | 63,419 | | | Grade 6 | — | | — | | — | | — | | 162 | | — | | — | | — | | 162 | | | Grade 7 * | — | | — | | — | | 831 | | 15,483 | | — | | — | | — | | 16,314 | | | Total | $ | 43,384 | | $ | 227,057 | | $ | 117,887 | | $ | 49,782 | | $ | 86,358 | | $ | 43,498 | | $ | 3,314 | | $ | — | | $ | 571,280 | | | Current period gross charge-offs | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | | Residential construction | | | | | | | | | | | Grades 1-4 | $ | 27,731 | | $ | 76,626 | | $ | 8,673 | | $ | 2,960 | | $ | 4,523 | | $ | 1,992 | | $ | 10,292 | | $ | — | | $ | 132,797 | | | Grade 5 | 401 | | 163 | | — | | 6,462 | | — | | — | | — | | — | | 7,026 | | | Grade 6 | — | | — | | — | | — | | — | | — | | — | | — | | — | | | Grade 7 * | — | | — | | — | | — | | — | | — | | — | | — | | — | | | Total | $ | 28,132 | | $ | 76,789 | | $ | 8,673 | | $ | 9,422 | | $ | 4,523 | | $ | 1,992 | | $ | 10,292 | | $ | — | | $ | 139,823 | | | Current period gross charge-offs | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | | Residential first mortgage | | | | | | | | | | | Grades 1-4 | $ | 99,690 | | $ | 201,591 | | $ | 129,180 | | $ | 153,436 | | $ | 385,219 | | $ | 578,566 | | $ | 8,797 | | $ | — | | $ | 1,556,479 | | | Grade 5 | 273 | | 1,358 | | 636 | | 1,539 | | 3,517 | | 5,661 | | 242 | | — | | 13,226 | | | Grade 6 | — | | — | | — | | 80 | | 49 | | 624 | | — | | — | | 753 | | | Grade 7 * | — | | 237 | | 689 | | 1,392 | | 3,378 | | 8,208 | | — | | — | | 13,904 | | | Total | $ | 99,963 | | $ | 203,186 | | $ | 130,505 | | $ | 156,447 | | $ | 392,163 | | $ | 593,059 | | $ | 9,039 | | $ | — | | $ | 1,584,362 | | | Current period gross charge-offs | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | (33) | | $ | — | | $ | — | | $ | (33) | | | Residential junior mortgage | | | | | | | | | | | Grades 1-4 | $ | 3,203 | | $ | 15,191 | | $ | 10,846 | | $ | 14,646 | | $ | 17,876 | | $ | 28,002 | | $ | 378,864 | | $ | 3,262 | | $ | 471,890 | | | Grade 5 | — | | — | | 9 | | — | | 449 | | 342 | | — | | — | | 800 | | | Grade 6 | — | | — | | — | | 187 | | — | | — | | — | | — | | 187 | | | Grade 7 * | — | | 133 | | — | | 446 | | 867 | | 319 | | 322 | | — | | 2,087 | | | Total | $ | 3,203 | | $ | 15,324 | | $ | 10,855 | | $ | 15,279 | | $ | 19,192 | | $ | 28,663 | | $ | 379,186 | | $ | 3,262 | | $ | 474,964 | | | Current period gross charge-offs | $ | — | | $ | — | | $ | — | | $ | — | | $ | (42) | | $ | — | | $ | — | | $ | — | | $ | (42) | | | Retail & other | | | | | | | | | | | Grades 1-4 | $ | 10,716 | | $ | 15,308 | | $ | 7,766 | | $ | 6,432 | | $ | 5,527 | | $ | 12,090 | | $ | 29,603 | | $ | — | | $ | 87,442 | | | Grade 5 | — | | — | | — | | — | | — | | — | | — | | — | | — | | | Grade 6 | — | | — | | — | | — | | — | | — | | — | | — | | — | | | Grade 7 * | — | | 63 | | 31 | | 74 | | 22 | | 2 | | — | | — | | 192 | | | Total | $ | 10,716 | | $ | 15,371 | | $ | 7,797 | | $ | 6,506 | | $ | 5,549 | | $ | 12,092 | | $ | 29,603 | | $ | — | | $ | 87,634 | | | Current period gross charge-offs | $ | — | | $ | (13) | | $ | (7) | | $ | (99) | | $ | (6) | | $ | (129) | | $ | (430) | | $ | — | | $ | (684) | | | Total loans | $ | 731,536 | | $ | 1,687,510 | | $ | 1,038,601 | | $ | 902,146 | | $ | 1,650,610 | | $ | 3,157,191 | | $ | 1,677,308 | | $ | 3,262 | | $ | 10,848,164 | |
* The total Grade 7 loans at June 30, 2026 included $25 million of loans covered by government loan program guarantees. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2025 | Amortized Cost Basis by Origination Year | | | | | (in thousands) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Revolving | Revolving to Term | TOTAL | | Commercial & industrial | | | | | | | | | | | Grades 1-4 | $ | 297,093 | | $ | 144,896 | | $ | 92,466 | | $ | 84,058 | | $ | 80,057 | | $ | 77,686 | | $ | 424,640 | | $ | — | | $ | 1,200,896 | | | Grade 5 | 4,152 | | 6,622 | | 14,051 | | 12,515 | | 3,471 | | 6,448 | | 53,059 | | — | | 100,318 | | | Grade 6 | 13,593 | | 896 | | 1,497 | | 2,677 | | 826 | | — | | 13,285 | | — | | 32,774 | | | Grade 7 * | 805 | | 2,580 | | 3,612 | | 4,170 | | 4,901 | | 4,817 | | 12,649 | | — | | 33,534 | | | Total | $ | 315,643 | | $ | 154,994 | | $ | 111,626 | | $ | 103,420 | | $ | 89,255 | | $ | 88,951 | | $ | 503,633 | | $ | — | | $ | 1,367,522 | | | Current period gross charge-offs | $ | (125) | | $ | (103) | | $ | (45) | | $ | (76) | | $ | (524) | | $ | (8) | | $ | (696) | | $ | — | | $ | (1,577) | | | Owner-occupied CRE | | | | | | | | | | | Grades 1-4 | $ | 132,613 | | $ | 84,209 | | $ | 77,111 | | $ | 134,342 | | $ | 113,456 | | $ | 262,006 | | $ | 2,321 | | $ | — | | $ | 806,058 | | | Grade 5 | 1,653 | | 6,496 | | 12,864 | | 14,243 | | 24,479 | | 25,868 | | 49 | | — | | 85,652 | | | Grade 6 | — | | 13,038 | | 1,511 | | 1,311 | | — | | 1,097 | | — | | — | | 16,957 | | | Grade 7 * | — | | 1,676 | | 3,718 | | 1,970 | | 6,523 | | 17,033 | | — | | — | | 30,920 | | | Total | $ | 134,266 | | $ | 105,419 | | $ | 95,204 | | $ | 151,866 | | $ | 144,458 | | $ | 306,004 | | $ | 2,370 | | $ | — | | $ | 939,587 | | | Current period gross charge-offs | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | (189) | | $ | — | | $ | — | | $ | (189) | | | Agricultural | | | | | | | | | | | Grades 1-4 | $ | 178,383 | | $ | 178,254 | | $ | 122,462 | | $ | 233,078 | | $ | 109,828 | | $ | 184,017 | | $ | 290,983 | | $ | — | | $ | 1,297,005 | | | Grade 5 | 9,136 | | 2,956 | | 4,910 | | 10,910 | | 7,110 | | 16,267 | | 26,604 | | — | | 77,893 | | | Grade 6 | 1,197 | | — | | 595 | | 137 | | — | | 5,997 | | 1,632 | | — | | 9,558 | | | Grade 7 * | 937 | | 381 | | 1,278 | | 3,926 | | 6,982 | | 12,412 | | 5,053 | | — | | 30,969 | | | Total | $ | 189,653 | | $ | 181,591 | | $ | 129,245 | | $ | 248,051 | | $ | 123,920 | | $ | 218,693 | | $ | 324,272 | | $ | — | | $ | 1,415,425 | | | Current period gross charge-offs | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | (65) | | $ | — | | $ | (65) | | | CRE investment | | | | | | | | | | | Grades 1-4 | $ | 107,033 | | $ | 115,996 | | $ | 40,985 | | $ | 233,167 | | $ | 193,969 | | $ | 438,694 | | $ | 12,801 | | $ | — | | $ | 1,142,645 | | | Grade 5 | — | | 3,608 | | 1,177 | | 4,694 | | 12,622 | | 19,183 | | — | | — | | 41,284 | | | Grade 6 | — | | — | | — | | 3,204 | | — | | — | | — | | — | | 3,204 | | | Grade 7 * | — | | — | | 552 | | — | | — | | 666 | | — | | — | | 1,218 | | | Total | $ | 107,033 | | $ | 119,604 | | $ | 42,714 | | $ | 241,065 | | $ | 206,591 | | $ | 458,543 | | $ | 12,801 | | $ | — | | $ | 1,188,351 | | | Current period gross charge-offs | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | | Construction & land development | | | | | | | | | | | Grades 1-4 | $ | 90,203 | | $ | 125,309 | | $ | 26,359 | | $ | 25,189 | | $ | 42,103 | | $ | 11,642 | | $ | 2,205 | | $ | — | | $ | 323,010 | | | Grade 5 | — | | 375 | | 39 | | 1,943 | | 215 | | 830 | | — | | — | | 3,402 | | | Grade 6 | — | | — | | — | | 166 | | — | | — | | — | | — | | 166 | | | Grade 7 * | — | | — | | — | | 60 | | — | | — | | — | | — | | 60 | | | Total | $ | 90,203 | | $ | 125,684 | | $ | 26,398 | | $ | 27,358 | | $ | 42,318 | | $ | 12,472 | | $ | 2,205 | | $ | — | | $ | 326,638 | | | Current period gross charge-offs | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | | Residential construction | | | | | | | | | | | Grades 1-4 | $ | 77,376 | | $ | 12,131 | | $ | 872 | | $ | 2,917 | | $ | 1,572 | | $ | 400 | | $ | — | | $ | — | | $ | 95,268 | | | Grade 5 | — | | — | | — | | — | | — | | — | | — | | — | | — | | | Grade 6 | — | | — | | — | | — | | — | | — | | — | | — | | — | | | Grade 7 * | — | | — | | — | | — | | — | | — | | — | | — | | — | | | Total | $ | 77,376 | | $ | 12,131 | | $ | 872 | | $ | 2,917 | | $ | 1,572 | | $ | 400 | | $ | — | | $ | — | | $ | 95,268 | | | Current period gross charge-offs | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | | Residential first mortgage | | | | | | | | | | | Grades 1-4 | $ | 164,721 | | $ | 118,575 | | $ | 139,900 | | $ | 310,381 | | $ | 194,581 | | $ | 253,195 | | $ | 824 | | $ | — | | $ | 1,182,177 | | | Grade 5 | 449 | | 1,184 | | 1,348 | | 986 | | 564 | | 1,642 | | — | | — | | 6,173 | | | Grade 6 | — | | — | | — | | — | | — | | — | | — | | — | | — | | | Grade 7 * | — | | 399 | | 378 | | 1,421 | | 1,316 | | 1,819 | | — | | — | | 5,333 | | | Total | $ | 165,170 | | $ | 120,158 | | $ | 141,626 | | $ | 312,788 | | $ | 196,461 | | $ | 256,656 | | $ | 824 | | $ | — | | $ | 1,193,683 | | | Current period gross charge-offs | $ | — | | $ | (85) | | $ | — | | $ | — | | $ | — | | $ | (13) | | $ | — | | $ | — | | $ | (98) | | | Residential junior mortgage | | | | | | | | | | | Grades 1-4 | $ | 9,258 | | $ | 5,317 | | $ | 6,072 | | $ | 3,531 | | $ | 2,539 | | $ | 6,869 | | $ | 229,989 | | $ | 3,664 | | $ | 267,239 | | | Grade 5 | — | | 12 | | — | | 454 | | — | | — | | 171 | | — | | 637 | | | Grade 6 | — | | — | | — | | — | | — | | — | | — | | — | | — | | | Grade 7 * | — | | — | | — | | 48 | | — | | — | | 264 | | — | | 312 | | | Total | $ | 9,258 | | $ | 5,329 | | $ | 6,072 | | $ | 4,033 | | $ | 2,539 | | $ | 6,869 | | $ | 230,424 | | $ | 3,664 | | $ | 268,188 | | | Current period gross charge-offs | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | (2) | | $ | — | | $ | — | | $ | (2) | | | Retail & other | | | | | | | | | | | Grades 1-4 | $ | 6,696 | | $ | 3,821 | | $ | 2,930 | | $ | 3,485 | | $ | 1,798 | | $ | 3,997 | | $ | 18,832 | | $ | — | | $ | 41,559 | | | Grade 5 | — | | — | | — | | — | | — | | — | | — | | — | | — | | | Grade 6 | — | | — | | — | | — | | — | | — | | — | | — | | — | | | Grade 7 * | 60 | | 4 | | 53 | | — | | 7 | | — | | — | | — | | 124 | | | Total | $ | 6,756 | | $ | 3,825 | | $ | 2,983 | | $ | 3,485 | | $ | 1,805 | | $ | 3,997 | | $ | 18,832 | | $ | — | | $ | 41,683 | | | Current period gross charge-offs | $ | — | | $ | (13) | | $ | (11) | | $ | — | | $ | — | | $ | (14) | | $ | (294) | | $ | — | | $ | (332) | | | Total loans | $ | 1,095,358 | | $ | 828,735 | | $ | 556,740 | | $ | 1,094,983 | | $ | 808,919 | | $ | 1,352,585 | | $ | 1,095,361 | | $ | 3,664 | | $ | 6,836,345 | |
* The total Grade 7 loans at December 31, 2025 included $15 million of loans covered by government loan program guarantees. An internal loan review function rates loans using a grading system based on different risk categories. Loans with a Substandard grade are considered to have a greater risk of loss and may be assigned allocations for loss based on specific review of the weaknesses observed in the individual credits. Such loans are monitored by the loan review function to help ensure early identification of any deterioration. A description of the loan risk categories used by the Company follows. Grades 1-4, Pass: Credits exhibit adequate cash flows, appropriate management and financial ratios within industry norms and/or are supported by sufficient collateral. Some credits in these rating categories may require a need for monitoring but elements of concern are not severe enough to warrant an elevated rating. Grade 5, Watch: Credits with this rating are adequately secured and performing but are monitored due to the presence of various short-term weaknesses which may include unexpected, short-term adverse financial performance, managerial problems, potential impact of a decline in the entire industry or local economy and delinquency issues. Loans to individuals or loans supported by guarantors with marginal net worth or collateral may be included in this rating category. Grade 6, Special Mention: Credits with this rating have potential weaknesses that, without the Company’s attention and correction may result in deterioration of repayment prospects. These assets are considered Criticized Assets. Potential weaknesses may include adverse financial trends for the borrower or industry, repeated lack of compliance with Company requests, increasing debt to net worth, serious management conditions and decreasing cash flow. Grade 7, Substandard: Assets with this rating are characterized by the distinct possibility the Company will sustain some loss if deficiencies are not corrected. All foreclosures, liquidations, and nonaccrual loans are considered to be categorized in this rating, regardless of collateral sufficiency. Modifications to Borrowers Experiencing Financial Difficulty: The following table presents the amortized cost of loans that were made to borrowers experiencing financial difficulty and were modified during the six months ended June 30, 2025, aggregated by portfolio segment and type of modification. There were no loans to borrowers experiencing financial difficulty that were modified during the six months ended June 30, 2026. | | | | | | | | | | | | | | | | | | | | | | (in thousands) | Payment Delay | Term Extension | Interest Rate Reduction | Term Extension & Interest Rate Reduction | Total | % of Total Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Six Months Ended June 30, 2025 | | | | | | | | Commercial & industrial | $ | 2,382 | | $ | — | | $ | — | | $ | — | | $ | 2,382 | | 0.17 | % | | Owner-occupied CRE | — | | — | | — | | — | | — | | — | % | | Agricultural | — | | — | | — | | — | | — | | — | % | | CRE investment | — | | — | | — | | — | | — | | — | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | $ | 2,382 | | $ | — | | $ | — | | $ | — | | $ | 2,382 | | 0.03 | % |
The loans presented in the table above have had more than insignificant payment delays (which the Company has defined as payment delays in excess of three months). These modified loans are closely monitored by the Company to understand the effectiveness of its modification efforts, and such loans generally remain in nonaccrual status pending a sustained period of performance in accordance with the modified terms. As of June 30, 2026 and December 31, 2025, there were no loans made to borrowers experiencing financial difficulty that were modified during the current period and subsequently defaulted, and there were no commitments to lend additional funds to such debtors.
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