Note 4 - Loans and Allowance for Credit Losses

6 Months Ended

Jun. 30, 2026

NOTE 4 Loans and Allowance for Credit Losses

The following table presents total loans outstanding, by portfolio segment, as of June 30, 2026 and December 31, 2025:

	*June 30,*		*December 31,*
(dollars in thousands)	*2026*		*2025*
Commercial
Commercial and business lending
Commercial and industrial	$	759,959	$	736,833
Commercial real estate − Owner occupied		622,241		427,260
Total commercial and business lending		1,382,200		1,164,093
Investor commercial real estate
Construction, land and development		79,850		246,238
Multifamily		361,875		383,505
Non-owner occupied		893,367		875,862
Total investor commercial real estate		1,335,092		1,505,605
Agricultural
Land		54,202		64,799
Production		53,367		62,500
Total agricultural		107,569		127,299
Total commercial		2,824,861		2,796,997
Consumer
Residential real estate
First lien		828,936		874,737
Construction		31,202		33,703
HELOC		273,124		260,883
Junior lien		31,941		36,844
Total residential real estate		1,165,203		1,206,167
Other consumer		44,180		44,858
Total consumer		1,209,383		1,251,025
Total loans	$	4,034,244	$	4,048,022

Total loans included net deferred loan (costs) fees of ($0.1) million and $0.1 million at June 30, 2026 and December 31, 2025, respectively. Unearned discounts associated with bank acquisitions totaled $36.9 million and $43.7 million as of June 30, 2026 and December 31, 2025, respectively.

Accrued interest receivable on loans is recorded within accrued interest receivable, and totaled $16.4 million at June 30, 2026 and $18.1 million at December 31, 2025.

The Company manages its loan portfolio proactively to effectively identify problem credits and assess trends early, implement effective work-out strategies, and take charge-offs as promptly as practical. In addition, the Company continuously reassesses its underwriting standards in response to credit risk posed by changes in economic conditions. The Company monitors and manages credit risk through the following governance structure:

●

The Credit Risk team, Collection and Special Assets team and the Credit Governance Committee, which is an internal management committee comprised of various executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Collections and Special Assets, Risk, and Commercial and Retail Banking, oversee the Company’s systems and procedures to monitor the credit quality of its loan portfolio, conduct a loan review program, and maintain the integrity of the loan rating system.

●

The Loan Committee is responsible for reviewing and approving all credit requests that exceed individual limits that have not been countersigned by an individual with sufficient assigned authority. This committee has full authority to commit the Bank to any request that fits within its assigned approval authority.

●

The adequacy of the ACL is overseen by the ACL Governance Committee, which is an internal management committee comprised of various Company executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Collections and Special Assets, Risk, and Commercial and Retail Banking. The ACL Governance Committee supports the oversight efforts of the Bank’s Board of Directors.

●

The Bank’s Board of Directors has approval authority and responsibility for all matters regarding loan policy, reviews all loans approved or declined by the Loan Committee, approves lending authority and monitors asset quality and concentration levels.

●

The ACL Governance Committee and Bank Board of Directors have approval authority and oversight responsibility for the ACL adequacy and methodology.

Loans with a carrying value of $2.5 billion as of June 30, 2026 and $2.6 billion as of December 31, 2025, were pledged to secure public deposits, and for other purposes required or permitted by law.

ACL on Loans

The following tables present, by loan portfolio segment, a summary of the changes in the ACL on loans for the three and six months ended June 30, 2026 and 2025:

	*Three months ended June 30, 2026*
Beginning	*Provision for (Recovery*		*Loan*			*Loan*			*Ending*
(dollars in thousands)	*Balance*		of) Credit Losses⁽¹⁾			*Charge-offs*			*Recoveries*		*Balance*
Commercial
Commercial and business lending
Commercial and industrial	$	11,628	$	162		$	(2,188	)	$	875	$	10,477
Commercial real estate − Owner occupied		3,604		2,272			—			11		5,887
Total commercial and business lending		15,232		2,434			(2,188	)		886		16,364
Investor commercial real estate
Construction, land and development		6,741		(3,763	)		—			—		2,978
Multifamily		3,699		720			(500	)		—		3,919
Non-owner occupied		10,929		(349	)		—			—		10,580
Total investor commercial real estate		21,369		(3,392	)		(500	)		—		17,477
Agricultural
Land		852		31			—			—		883
Production		518		100			(50	)		—		568
Total agricultural		1,370		131			(50	)		—		1,451
Total commercial		37,971		(827	)		(2,738	)		886		35,292
Consumer
Residential real estate
First lien		9,122		244			—			—		9,366
Construction		297		69			—			—		366
HELOC		2,130		202			—			—		2,332
Junior lien		407		708			(719	)		1		397
Total residential real estate		11,956		1,223			(719	)		1		12,461
Other consumer		578		35			(33	)		28		608
Total consumer		12,534		1,258			(752	)		29		13,069
Total	$	50,505	$	431		$	(3,490	)	$	915	$	48,361

(1)	The difference in the credit loss expense reported herein compared to the consolidated statements of income is associated with the credit loss expense of $67 thousand related to off-balance sheet credit exposure and ($3) thousand related to HTM investment securities.

	*Six months ended June 30, 2026*
	*Beginning*		*Provision for (Recovery*			*Loan*			*Loan*		*Ending*
(dollars in thousands)	*Balance*		of) Credit Losses⁽¹⁾			*Charge-offs*			*Recoveries*		*Balance*
Commercial
Commercial and business lending
Commercial and industrial	$	16,216	$	1,954		$	(8,753	)	$	1,060	$	10,477
Commercial real estate − Owner occupied		3,097		2,768			—			22		5,887
Total commercial and business lending		19,313		4,722			(8,753	)		1,082		16,364
Investor commercial real estate
Construction, land and development		13,210		(10,232	)		—			—		2,978
Multifamily		4,380		595			(1,056	)		—		3,919
Non-owner occupied		11,006		(426	)		—			—		10,580
Total investor commercial real estate		28,596		(10,063	)		(1,056	)		—		17,477
Agricultural
Land		959		(76	)		—			—		883
Production		623		(199	)		(50	)		194		568
Total agricultural		1,582		(275	)		(50	)		194		1,451
Total commercial		49,491		(5,616	)		(9,859	)		1,276		35,292
Consumer
Residential real estate
First lien		9,358		8			—			—		9,366
Construction		274		92			—			—		366
HELOC		1,787		545			—			—		2,332
Junior lien		395		932			(931	)		1		397
Total residential real estate		11,814		1,577			(931	)		1		12,461
Other consumer		610		85			(146	)		59		608
Total consumer		12,424		1,662			(1,077	)		60		13,069
Total	$	61,915	$	(3,954	)	$	(10,936	)	$	1,336	$	48,361

(1)	The difference in the credit loss expense reported herein compared to the consolidated statements of income is associated with the credit loss expense of ($0.4) million related to off-balance sheet credit exposure and ($8) thousand related to HTM investment securities.

	*Three months ended June 30, 2025*
	*Beginning*		*Provision for (Recovery*			*Loan*			*Loan*		*Ending*
(dollars in thousands)	*Balance*		of) Credit Losses⁽¹⁾			*Charge-offs*			*Recoveries*		*Balance*
Commercial
Commercial and business lending
Commercial and industrial	$	7,960	$	317		$	(79	)	$	128	$	8,326
Commercial real estate − Owner occupied		3,512		301			(6	)		11		3,818
Total commercial and business lending		11,472		618			(85	)		139		12,144
Investor commercial real estate
Construction, land and development		18,369		160			—			—		18,529
Multifamily		4,749		127			—			—		4,876
Non-owner occupied		16,342		(22	)		(3,401	)		—		12,919
Total investor commercial real estate		39,460		265			(3,401	)		—		36,324
Agricultural
Land		603		12			—			—		615
Production		913		94			(384	)		—		623
Total agricultural		1,516		106			(384	)		—		1,238
Total commercial		52,448		989			(3,870	)		139		49,706
Consumer
Residential real estate
First lien		7,042		17			—			—		7,059
Construction		467		(51	)		—			—		416
HELOC		1,180		188			(10	)		—		1,358
Junior lien		439		(63	)		—			—		376
Total residential real estate		9,128		91			(10	)		—		9,209
Other consumer		353		36			(38	)		12		363
Total consumer		9,481		127			(48	)		12		9,572
Total	$	61,929	$	1,116		$	(3,918	)	$	151	$	59,278

(1)

The difference in the credit loss expense reported herein compared to the consolidated statements of income is associated with the credit loss expense of ($1.2) million related to off-balance sheet credit exposure, ($2) thousand related to HTM investment securities, and $78 thousand related to non-mortgage loans transferred to held for sale.

	*Six months ended June 30, 2025*
	*Beginning*		*Provision for (Recovery*			*Loan*			*Loan*		*Ending*
(dollars in thousands)	*Balance*		of) Credit Losses⁽¹⁾			*Charge-offs*			*Recoveries*		*Balance*
Commercial
Commercial and business lending
Commercial and industrial	$	8,170	$	6		$	(248	)	$	398	$	8,326
Commercial real estate − Owner occupied		3,226		576			(6	)		22		3,818
Total commercial and business lending		11,396		582			(254	)		420		12,144
Investor commercial real estate
Construction, land and development		16,277		2,252			—			—		18,529
Multifamily		4,716		160			—			—		4,876
Non-owner occupied		16,513		(193	)		(3,401	)		—		12,919
Total investor commercial real estate		37,506		2,219			(3,401	)		—		36,324
Agricultural
Land		597		18			—			—		615
Production		631		364			(384	)		12		623
Total agricultural		1,228		382			(384	)		12		1,238
Total commercial		50,130		3,183			(4,039	)		432		49,706
Consumer
Residential real estate
First lien		6,921		192			(54	)		—		7,059
Construction		357		59			—			—		416
HELOC		1,339		279			(260	)		—		1,358
Junior lien		742		(66	)		(300	)		—		376
Total residential real estate		9,359		464			(614	)		—		9,209
Other consumer		440		(124	)		(77	)		124		363
Total consumer		9,799		340			(691	)		124		9,572
Total	$	59,929	$	3,523		$	(4,730	)	$	556	$	59,278

(1)

The difference in the credit loss expense reported herein compared to the consolidated statements of income is associated with the credit loss expense of ($2.7) million related to off-balance sheet credit exposure, ($4) thousand related to HTM investment securities, and $78 thousand related to non-mortgage loans transferred to held for sale.

The ACL on loans at June 30, 2026 was $48.4 million, a decrease of $13.6 million, or 21.9%, from December 31, 2025. The decrease was primarily due to a decrease in nonperforming loans.

Credit Concentrations

The Company focuses on maintaining a well-balanced and diversified loan portfolio. Despite such efforts, it is recognized that credit concentrations may occasionally emerge as a result of economic conditions, changes in local demand, natural loan growth and runoff. To identify credit concentrations effectively, all commercial and industrial and owner occupied real estate loans are assigned Standard Industrial Classification codes, North American Industry Classification System codes and state and county codes. Property type coding is used for investment real estate. There were no industry concentrations exceeding 10% of the Company’s total loan portfolio as of June 30, 2026.

Credit Quality Indicators

The Company’s consumer loan portfolio is primarily comprised of secured loans that are evaluated at origination on a centralized basis against standardized underwriting criteria. The Company generally does not risk rate consumer loans unless a default event such as bankruptcy or extended nonperformance takes place. Credit quality for the consumer loan portfolio is measured by delinquency rates, nonaccrual amounts and actual losses incurred. These loans are rated as either performing or nonperforming.

The Company assigns a risk rating to all commercial loans, except pools of homogeneous loans, and performs detailed internal and external reviews of risk rated loans over a certain threshold to identify credit risks and to assess the overall collectability of the portfolio. These risk ratings are also subject to examination by the Company’s regulators. During the internal reviews, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which the borrowers operate and the estimated fair values of collateral securing the loans. These credit quality indicators are used to assign a risk rating to each individual loan.

The Company’s ratings are aligned to pass and criticized categories. The criticized category includes special mention, substandard, and doubtful risk ratings. The risk ratings are defined as follows:

●

Pass: A pass loan is a credit with no existing or known potential weaknesses deserving of management’s close attention.

●

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the repayment prospects for the loan or in the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

●

Substandard: Loans classified as substandard are not adequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Loans so classified have a well‑defined weakness, or weaknesses that jeopardize the repayment of the debt. Well-defined weaknesses include a borrower’s lack of marketability, inadequate cash flow or collateral support, failure to complete construction on time, or the failure to fulfill expectations. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

●

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

●

Loss: Loans classified as loss are considered uncollectible and charged off immediately.

The following tables set forth the amortized cost basis of loans by credit quality indicator and vintage based on the most recent analysis performed, as of June 30, 2026 and December 31, 2025:

													*Revolving*
(dollars in thousands)	*Term Loans Amortized Cost Basis by Origination Year*												*Loans Amortized*
As of June 30, 2026	*2026 YTD*		*2025*		*2024*		*2023*		*2022*		*Prior*		*Cost Basis*		*Total*
Commercial and industrial
Pass	$	136,672	$	214,306	$	91,015	$	54,282	$	32,209	$	57,764	$	150,141	$	736,389
Special mention		—		2,350		8		19		150		88		—		2,615
Substandard		—		361		685		13,435		809		2,228		1,813		19,331
Doubtful		—		—		1,468		156		—		—		—		1,624
Subtotal	$	136,672	$	217,017	$	93,176	$	67,892	$	33,168	$	60,080	$	151,954	$	759,959
Gross charge-offs	$	—	$	341	$	1,544	$	255	$	—	$	48	$	—	$	2,188
CRE − Owner occupied
Pass	$	88,390	$	49,713	$	137,780	$	107,700	$	67,322	$	153,589	$	2,646	$	607,140
Special mention		—		1,268		448		—		—		1,517		—		3,233
Substandard		—		—		—		1,397		3,696		6,775		—		11,868
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	88,390	$	50,981	$	138,228	$	109,097	$	71,018	$	161,881	$	2,646	$	622,241
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
CRE − Construction, land and development
Pass	$	5,152	$	28,109	$	32,577	$	2,730	$	1,201	$	930	$	9,151	$	79,850
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	5,152	$	28,109	$	32,577	$	2,730	$	1,201	$	930	$	9,151	$	79,850
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
CRE − Multifamily
Pass	$	7,299	$	6,278	$	48,690	$	97,640	$	105,291	$	77,617	$	—	$	342,815
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		5,855		—		—		13,205		—		19,060
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	7,299	$	6,278	$	54,545	$	97,640	$	105,291	$	90,822	$	—	$	361,875
Gross charge-offs	$	—	$	—	$	—	$	500	$	—	$	—	$	—	$	500
CRE − Non-owner occupied
Pass	$	63,652	$	103,969	$	240,271	$	101,347	$	157,824	$	214,401	$	773	$	882,237
Special mention		—		—		—		—		—		1,015		—		1,015
Substandard		—		—		300		4,477		—		5,338		—		10,115
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	63,652	$	103,969	$	240,571	$	105,824	$	157,824	$	220,754	$	773	$	893,367
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Agricultural − Land
Pass	$	209	$	2,905	$	7,670	$	6,442	$	15,203	$	15,146	$	—	$	47,575
Special mention		5,026		—		—		—		—		—		—		5,026
Substandard		720		229		—		—		448		204		—		1,601
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	5,955	$	3,134	$	7,670	$	6,442	$	15,651	$	15,350	$	—	$	54,202
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Agricultural − Production
Pass	$	5,995	$	2,313	$	4,376	$	3,453	$	2,496	$	585	$	29,381	$	48,599
Special mention		—		447		136		648		—		—		2,826		4,057
Substandard		—		29		—		—		—		—		682		711
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	5,995	$	2,789	$	4,512	$	4,101	$	2,496	$	585	$	32,889	$	53,367
Gross charge-offs	$	—	$	—	$	—	$	50	$	—	$	—	$	—	$	50
Residential real estate − First lien
Performing	$	21,757	$	51,267	$	34,377	$	106,512	$	191,512	$	421,174	$	—	$	826,599
Nonperforming		—		—		401		—		—		1,936		—		2,337
Subtotal	$	21,757	$	51,267	$	34,778	$	106,512	$	191,512	$	423,110	$	—	$	828,936
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Residential real estate − Construction
Performing	$	5,855	$	19,541	$	5,806	$	—	$	—	$	—	$	—	$	31,202
Nonperforming		—		—		—		—		—		—		—		—
Subtotal	$	5,855	$	19,541	$	5,806	$	—	$	—	$	—	$	—	$	31,202
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Residential real estate − HELOC
Performing	$	323	$	723	$	2,049	$	3,973	$	4,248	$	7,216	$	254,004	$	272,536
Nonperforming		—		—		—		25		236		327		—		588
Subtotal	$	323	$	723	$	2,049	$	3,998	$	4,484	$	7,543	$	254,004	$	273,124
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Residential real estate − Junior lien
Performing	$	2,358	$	4,176	$	3,904	$	6,928	$	6,049	$	8,130	$	324	$	31,869
Nonperforming		—		—		—		—		—		72		—		72
Subtotal	$	2,358	$	4,176	$	3,904	$	6,928	$	6,049	$	8,202	$	324	$	31,941
Gross charge-offs for the year ended	$	—	$	—	$	565	$	—	$	—	$	154	$	—	$	719
Other consumer
Performing	$	1,530	$	4,848	$	1,726	$	1,884	$	2,384	$	2,851	$	28,683	$	43,906
Nonperforming		—		—		274		—		—		—		—		274
Subtotal	$	1,530	$	4,848	$	2,000	$	1,884	$	2,384	$	2,851	$	28,683	$	44,180
Gross charge-offs	$	—	$	5	$	—	$	4	$	—	$	24	$	—	$	33
Total loans	$	344,938	$	492,832	$	619,816	$	513,048	$	591,078	$	992,108	$	480,424	$	4,034,244
Gross charge-offs	$	—	$	346	$	2,109	$	809	$	—	$	226	$	—	$	3,490

													*Revolving*
(dollars in thousands)	*Term Loans Amortized Cost Basis by Origination Year*												*Loans Amortized*
As of December 31, 2025	*2025*		*2024*		*2023*		*2022*		*2021*		*Prior*		*Cost Basis*		*Total*
Commercial and industrial
Pass	$	242,893	$	131,308	$	67,934	$	43,513	$	21,143	$	51,586	$	145,133	$	703,510
Special mention		316		10		560		—		—		28		—		914
Substandard		35		26		2,701		2,970		1,072		6,459		7,115		20,378
Doubtful		1,218		8,638		1,763		298		114		—		—		12,031
Subtotal	$	244,462	$	139,982	$	72,958	$	46,781	$	22,329	$	58,073	$	152,248	$	736,833
Gross charge-offs	$	—	$	407	$	152	$	10	$	5	$	342	$	—	$	916
CRE − Owner occupied
Pass	$	42,468	$	86,030	$	55,069	$	61,790	$	39,654	$	126,951	$	1,240	$	413,202
Special mention		—		449		—		—		—		1,465		769		2,683
Substandard		—		—		1,402		2,867		2,342		4,764		—		11,375
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	42,468	$	86,479	$	56,471	$	64,657	$	41,996	$	133,180	$	2,009	$	427,260
Gross charge-offs	$	—	$	—	$	6	$	—	$	—	$	—	$	—	$	6
CRE − Construction, land and development
Pass	$	26,108	$	148,261	$	18,056	$	9,738	$	650	$	995	$	8,229	$	212,037
Special mention		—		—		—		178		—		—		—		178
Substandard		—		11,178		—		22,685		—		160		—		34,023
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	26,108	$	159,439	$	18,056	$	32,601	$	650	$	1,155	$	8,229	$	246,238
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
CRE − Multifamily
Pass	$	6,338	$	26,236	$	115,983	$	115,403	$	30,191	$	60,813	$	—	$	354,964
Special mention		—		—		—		—		831		—		—		831
Substandard		—		5,751		3,972		—		—		17,987		—		27,710
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	6,338	$	31,987	$	119,955	$	115,403	$	31,022	$	78,800	$	—	$	383,505
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
CRE − Non-owner occupied
Pass	$	102,426	$	196,932	$	134,443	$	169,100	$	86,273	$	168,082	$	1,015	$	858,271
Special mention		—		—		—		—		—		1,040		—		1,040
Substandard		—		—		5,344		7,489		2,729		989		—		16,551
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	102,426	$	196,932	$	139,787	$	176,589	$	89,002	$	170,111	$	1,015	$	875,862
Gross charge-offs	$	—	$	—	$	—	$	632	$	775	$	1,994	$	—	$	3,401
Agricultural − Land
Pass	$	8,201	$	8,285	$	8,410	$	12,363	$	5,202	$	12,221	$	2,464	$	57,146
Special mention		233		—		—		3,315		—		—		—		3,548
Substandard		—		—		303		3,583		—		219		—		4,105
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	8,434	$	8,285	$	8,713	$	19,261	$	5,202	$	12,440	$	2,464	$	64,799
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Agricultural − Production
Pass	$	4,778	$	6,219	$	4,652	$	3,154	$	370	$	720	$	38,945	$	58,838
Special mention		—		48		112		—		—		—		213		373
Substandard		—		21		553		1,237		29		342		1,107		3,289
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	4,778	$	6,288	$	5,317	$	4,391	$	399	$	1,062	$	40,265	$	62,500
Gross charge-offs	$	—	$	—	$	—	$	384	$	—	$	—	$	—	$	384
Residential real estate − First lien
Performing	$	53,688	$	37,893	$	122,651	$	210,228	$	234,461	$	213,214	$	—	$	872,135
Nonperforming		—		—		499		—		642		1,461		—		2,602
Subtotal	$	53,688	$	37,893	$	123,150	$	210,228	$	235,103	$	214,675	$	—	$	874,737
Gross charge-offs	$	—	$	—	$	—	$	—	$	7	$	48	$	—	$	55
Residential real estate − Construction
Performing	$	18,097	$	10,459	$	—	$	—	$	467	$	—	$	—	$	29,023
Nonperforming		—		—		—		4,680		—		—		—		4,680
Subtotal	$	18,097	$	10,459	$	—	$	4,680	$	467	$	—	$	—	$	33,703
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Residential real estate − HELOC
Performing	$	757	$	2,121	$	3,716	$	5,252	$	975	$	5,649	$	242,285	$	260,755
Nonperforming		—		—		25		50		—		53		—		128
Subtotal	$	757	$	2,121	$	3,741	$	5,302	$	975	$	5,702	$	242,285	$	260,883
Gross charge-offs	$	—	$	100	$	10	$	438	$	—	$	—	$	—	$	548
Residential real estate − Junior lien
Performing	$	4,753	$	4,995	$	8,609	$	7,090	$	3,977	$	4,995	$	50	$	34,469
Nonperforming		—		1,775		—		—		—		600		—		2,375
Subtotal	$	4,753	$	6,770	$	8,609	$	7,090	$	3,977	$	5,595	$	50	$	36,844
Gross charge-offs	$	—	$	—	$	—	$	300	$	—	$	—	$	—	$	300
Other consumer
Performing	$	5,330	$	2,318	$	3,016	$	3,056	$	157	$	3,651	$	26,982	$	44,510
Nonperforming		—		319		—		—		—		29		—		348
Subtotal	$	5,330	$	2,637	$	3,016	$	3,056	$	157	$	3,680	$	26,982	$	44,858
Gross charge-offs	$	—	$	16	$	31	$	22	$	—	$	69	$	—	$	138
Total loans	$	517,639	$	689,272	$	559,773	$	690,039	$	431,279	$	684,473	$	475,547	$	4,048,022
Gross charge-offs	$	—	$	523	$	199	$	1,786	$	787	$	2,453	$	—	$	5,748

Past Due and Nonaccrual Loans

The Company closely monitors the performance of its loan portfolio. A loan is placed on nonaccrual status when the financial condition of the borrower is deteriorating, payment in full of both principal and interest is not expected as scheduled or principal or interest has been in default for 90 days or more. Exceptions may be made if the asset is secured by collateral sufficient to satisfy both the principal and accrued interest in full and collection is reasonably assured. When one loan to a borrower is placed on nonaccrual status, all other loans to the borrower are re-evaluated to determine if they should also be placed on nonaccrual status. All previously accrued and unpaid interest is reversed at that time. A loan will return to accrual when collection of principal and interest is assured and the borrower has demonstrated timely payments of principal and interest for a reasonable period, generally at least six months.

The following tables present a past due aging analysis of total loans outstanding, by portfolio segment, as of June 30, 2026 and December 31, 2025:

	*June 30, 2026*
							*90 Days*
	*Accruing*		*30 - 59 Days*		*60 - 89 Days*		*or More*				*Total*
(dollars in thousands)	*Current*		*Past Due*		*Past Due*		*Past Due*		*Nonaccrual*		*Loans*
Commercial
Commercial and business lending
Commercial and industrial	$	755,441	$	1,505	$	51	$	—	$	2,962	$	759,959
Commercial real estate − Owner occupied		622,105		—		—		—		136		622,241
Total commercial and business lending		1,377,546		1,505		51		—		3,098		1,382,200
Investor commercial real estate
Construction, land and development		79,850		—		—		—		—		79,850
Multifamily		357,425		3,578		—		—		872		361,875
Non-owner occupied		893,216		—		—		—		151		893,367
Total investor commercial real estate		1,330,491		3,578		—		—		1,023		1,335,092
Agricultural
Land		53,824		229		—		—		149		54,202
Production		53,107		65		195		—		—		53,367
Total agricultural		106,931		294		195		—		149		107,569
Total commercial		2,814,968		5,377		246		—		4,270		2,824,861
Consumer
Residential real estate
First lien		826,107		298		194		436		1,901		828,936
Construction		31,202		—		—		—		—		31,202
HELOC		272,088		440		8		—		588		273,124
Junior lien		31,778		78		13		—		72		31,941
Total residential real estate		1,161,175		816		215		436		2,561		1,165,203
Other consumer		43,789		107		10		—		274		44,180
Total consumer		1,204,964		923		225		436		2,835		1,209,383
Total	$	4,019,932	$	6,300	$	471	$	436	$	7,105	$	4,034,244

	*December 31, 2025*
							*90 Days*
	*Accruing*		*30 - 59 Days*		*60 - 89 Days*		*or More*				*Total*
(dollars in thousands)	*Current*		*Past Due*		*Past Due*		*Past Due*		*Nonaccrual*		*Loans*
Commercial
Commercial and business lending
Commercial and industrial	$	723,436	$	689	$	—	$	—	$	12,708	$	736,833
Commercial real estate − Owner occupied		426,803		—		314		—		143		427,260
Total commercial and business lending		1,150,239		689		314		—		12,851		1,164,093
Investor commercial real estate
Construction, land and development		212,515		—		—		—		33,723		246,238
Multifamily		373,308		—		—		—		10,197		383,505
Non-owner occupied		874,042		163		—		—		1,657		875,862
Total investor commercial real estate		1,459,865		163		—		—		45,577		1,505,605
Agricultural
Land		63,961		674		—		—		164		64,799
Production		62,105		53		—		—		342		62,500
Total agricultural		126,066		727		—		—		506		127,299
Total commercial		2,736,170		1,579		314		—		58,934		2,796,997
Consumer
Residential real estate
First lien		869,291		2,051		794		—		2,601		874,737
Construction		29,023		—		—		—		4,680		33,703
HELOC		260,467		287		—		—		129		260,883
Junior lien		34,362		107		—		—		2,375		36,844
Total residential real estate		1,193,143		2,445		794		—		9,785		1,206,167
Other consumer		44,471		37		4		—		346		44,858
Total consumer		1,237,614		2,482		798		—		10,131		1,251,025
Total	$	3,973,784	$	4,061	$	1,112	$	—	$	69,065	$	4,048,022

In calculating expected credit losses, the Company includes loans on nonaccrual status and loans 90 days or more past due and still accruing. The following tables present the amortized cost basis on nonaccrual status loans and loans 90 days or more past due and still accruing as of June 30, 2026 and December 31, 2025:

	*As of June 30, 2026*
					*90 Days*
	*Nonaccrual*				*or More*
	*with no Allowance*				*Past Due*
(dollars in thousands)	*for Credit Losses*		*Nonaccrual*		*and Accruing*
Commercial
Commercial and business lending
Commercial and industrial	$	401	$	2,962	$	—
Commercial real estate − Owner occupied		82		136		—
Total commercial and business lending		483		3,098		—
Investor commercial real estate
Construction, land and development		—		—		—
Multifamily		203		872		—
Non-owner occupied		151		151		—
Total investor commercial real estate		354		1,023		—
Agricultural
Land		149		149		—
Production		—		—		—
Total agricultural		149		149		—
Total commercial		986		4,270		—
Consumer
Residential real estate
First lien		1,799		1,901		436
Construction		—		—		—
HELOC		391		588		—
Junior lien		—		72		—
Total residential real estate		2,190		2,561		436
Other consumer		—		274		—
Total consumer		2,190		2,835		436
Total	$	3,176	$	7,105	$	436

	*December 31, 2025*
					*90 Days*
	*Nonaccrual*				*or More*
	*with no Allowance*				*Past Due*
(dollars in thousands)	*for Credit Losses*		*Nonaccrual*		*and Accruing*
Commercial
Commercial and business lending
Commercial and industrial	$	—	$	12,708	$	—
Commercial real estate − Owner occupied		89		143		—
Total commercial and business lending		89		12,851		—
Investor commercial real estate
Construction, land and development		26,475		33,723		—
Multifamily		4,733		10,197		—
Non-owner occupied		1,657		1,657		—
Total investor commercial real estate		32,865		45,577		—
Agricultural
Land		164		164		—
Production		—		342		—
Total agricultural		164		506		—
Total commercial		33,118		58,934		—
Consumer
Residential real estate
First lien		2,298		2,601		—
Construction		4,680		4,680		—
HELOC		—		129		—
Junior lien		2,305		2,375		—
Total residential real estate		9,283		9,785		—
Other consumer		—		346		—
Total consumer		9,283		10,131		—
Total	$	42,401	$	69,065	$	—

Interest income that would have been recognized if loans on nonaccrual status had been current in accordance with their original terms for the three months ended June 30, 2026 and 2025, is estimated to have been $0.4 million and $1.1 million, respectively.

The Company’s policy is to reverse previously recorded interest income when a loan is placed on nonaccrual status. As a result, the Company did not record any interest income on its nonaccrual loans for the three months ended June 30, 2026 or 2025. At June 30, 2026 and December 31, 2025, total accrued interest receivable on loans, which had been excluded from reported amortized cost basis on loans, was $16.4 million and $18.1 million, respectively, and was reported within accrued interest receivable on the consolidated statements of condition. An allowance was not carried on the accrued interest receivable at either date.

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, as of June 30, 2026 and December 31, 2025:

	*As of June 30, 2026*
	*Primary Type of Collateral*
									*Allowance for*
(dollars in thousands)	*Real estate*		*Equipment*		*Other*		*Total*		*Credit Losses*
Commercial
Commercial and business lending
Commercial and industrial	$	—	$	1,624	$	1,284	$	2,908	$	1,890
Commercial real estate − Owner occupied		136		—		—		136		4
Total commercial and business lending		136		1,624		1,284		3,044		1,894
Investor commercial real estate
Construction, land and development		—		—		—		—		—
Multifamily		872		—		—		872		4
Non-owner occupied		151		—		—		151		—
Total investor commercial real estate		1,023		—		—		1,023		4
Agricultural
Land		149		—		—		149		—
Production		—		—		—		—		—
Total agricultural		149		—		—		149		—
Total commercial		1,308		1,624		1,284		4,216		1,898
Consumer
Residential real estate
First lien		1,848		—		—		1,848		15
Construction		—		—		—		—		—
HELOC		391		—		—		391		—
Junior lien		—		—		—		—		—
Total residential real estate		2,239		—		—		2,239		15
Other consumer		—		—		274		274		274
Total consumer		2,239		—		274		2,513		289
Total	$	3,547	$	1,624	$	1,558	$	6,729	$	2,187

	*As of December 31, 2025*
	*Primary Type of Collateral*
									*Allowance for*
(dollars in thousands)	*Real estate*		*Equipment*		*Other*		*Total*		*Credit Losses*
Commercial
Commercial and business lending
Commercial and industrial	$	651	$	—	$	—	$	651	$	43
Commercial real estate − Owner occupied		142		—		—		142		4
Total commercial and business lending		793		—		—		793		47
Investor commercial real estate
Construction, land and development		33,723		—		—		33,723		5,635
Multifamily		10,197		—		—		10,197		865
Non-owner occupied		1,657		—		—		1,657		—
Total investor commercial real estate		45,577		—		—		45,577		6,500
Agricultural
Land		164		—		—		164		—
Production		—		—		342		342		42
Total agricultural		164		—		342		506		42
Total commercial		46,534		—		342		46,876		6,589
Consumer
Residential real estate
First lien		2,528		—		—		2,528		229
Construction		4,680		—		—		4,680		—
HELOC		—		—		—		—		—
Junior lien		2,304		—		—		2,304		—
Total residential real estate		9,512		—		—		9,512		229
Other consumer		—		—		319		319		319
Total consumer		9,512		—		319		9,831		548
Total	$	56,046	$	—	$	661	$	56,707	$	7,137

Collateral dependent loans are loans for which the repayment is expected to be provided substantially by the underlying collateral when there are no other available and reliable sources of repayment.

Loan Modifications to Borrowers Experiencing Financial Difficulty

Effective January 1, 2023, the Company evaluates all loan modifications in accordance with ASU 2022-02. Under ASU 2022-02, a loan is evaluated to consider whether the loan, as modified, represents a new loan or is a continuation of an existing loan.

In cases where a borrower experiences financial difficulty, the Company may make certain concessions for which the terms of the loan are modified. Loans experiencing financial difficulty can include modifications allowing an interest rate reduction below current market rates, a forgiveness of principal balance, an extension of the loan term, an other than significant payment delay, or some combination of these or similar types of modifications.

The following table presents the amortized cost basis of loans as of June 30, 2026, by class of type of modification, that were experiencing financial difficulty during the three and six months ended June 30, 2026. 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 the class of financing receivable as of June 30, 2026 is also presented below.

	*Three months ended June 30, 2026*
									*Combination Term*		*Combination Term*
	*Interest Rate*		*Principal*		*Term*		*Payment*		*Extension and*		*Extension and Interest*		*Total %*
(dollars in thousands)	*Reduction*		*Forgiveness*		*Extension*		*Delay*		*Principal Forgiveness*		*Rate Reduction*		*of Portfolio*
Commercial and industrial	$	—	$	—	$	—	$	796	$	—	$	—		0.1	%

	*Six months ended June 30, 2026*
									*Combination Term*		*Combination Term*
	*Interest Rate*		*Principal*		*Term*		*Payment*		*Extension and*		*Extension and Interest*		*Total %*
(dollars in thousands)	*Reduction*		*Forgiveness*		*Extension*		*Delay*		*Principal Forgiveness*		*Rate Reduction*		*of Portfolio*
Commercial and industrial	$	—	$	—	$	—	$	796	$	—	$	—		0.1	%

The following table presents the amortized cost basis of loans as of June 30, 2025, by class of type of modification, that were experiencing financial difficulty during the three and six months ended June 30, 2025. 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 the class of financing receivable as of June 30, 2025 is also presented below.

Three months ended June 30, 2025

Combination Term

Interest Rate

Principal

Term

Payment

Extension and

Extension and Interest

Total %

(dollars in thousands)

Reduction

Forgiveness

Extension

Delay

Principal Forgiveness

Rate Reduction

of Portfolio

Agricultural − Land

—

1,457

—

2.2

	Six months ended June 30, 2025
									Combination Term		Combination Term
	*Interest Rate*		*Principal*		*Term*		*Payment*		*Extension and*		*Extension and Interest*		*Total %*
(dollars in thousands)	*Reduction*		*Forgiveness*		*Extension*		*Delay*		*Principal Forgiveness*		*Rate Reduction*		*of Portfolio*
Agricultural − Land	$	—	$	—	$	—	$	1,457	$	—	$	—		2.2	%

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of modification efforts and relevant factors are considered while assessing the adequacy of the ACL. For the three months ended June 30, 2026 and 2025, there were no modified loans to borrowers experiencing financial difficulty that were past due or for which the borrower subsequently defaulted.