Loans and Allowance for Credit Losses

6 Months Ended

Jun. 30, 2026

NOTE 4 – Loans and Allowance for Credit Losses

The following table summarizes the composition of our loan portfolio. Total gross loans are recorded net of deferred loan fees and costs, which totaled $5.6 million as of June 30, 2026 and December 31, 2025.



Owner occupied RE [Member]	June 30, 2026						December 31, 2025
(dollars in thousands)Commercial [Member]	Amount			% of Total			Amount			% of Total
Commercial
Owner occupied real estate (“RE”)	$	755,419			18.7	%	$	736,979			19.2	%
Non-owner occupied REOwner occupied RE [Member]		967,698			24.0	%		956,812			24.9	%
ConstructionConstruction [Member]		66,105			1.6	%		63,666			1.7	%
Business		713,017			17.7	%		619,667			16.0	%
Total commercial loansConsumer [Member]		2,502,239			62.0	%		2,377,124			61.8	%
Consumer
Real estateReal estate [Member]		1,167,282			29.0	%		1,153,285			30.0	%
Home equityHome equity [Member]		273,017			6.8	%		248,685			6.5	%
ConstructionNon-owner occupied RE [Member]		36,371			0.9	%		24,997			0.6	%
OtherOther [Member]		51,346			1.3	%		41,033			1.1	%
Total consumer loans		1,528,016			38.0	%		1,468,000			38.2	%
Total gross loans, net of deferred fees		4,030,255			100.0	%		3,845,124			100.0	%
Less—allowance for credit losses		(44,232	)					(42,280	)
Total loans, net	$	3,986,023					$	3,802,844

Maturities and Sensitivity of Loans to Changes in Interest Rates

The information in the following tables summarizes the loan maturity distribution by type and related interest rate characteristics based on the contractual maturities of individual loans, including loans which may be subject to renewal at their contractual maturity. Renewal of such loans is subject to review and credit approval, as well as modification of terms upon maturity. Actual repayments of loans may differ from the maturities reflected below, because borrowers have the right to prepay obligations with or without prepayment penalties.



							June 30, 2026
(dollars in thousands)	One year or less		After one but within five years		After five but within fifteen years		After fifteen years		Total
Commercial
Owner occupied RE	$	42,286		359,275		336,375		17,483		755,419
Non-owner occupied RE		144,483		633,640		174,150		15,425		967,698
Construction		23,326		27,401		15,378		-		66,105
Business		162,903		398,046		149,731		2,337		713,017
Total commercial loans		372,998		1,418,362		675,634		35,245		2,502,239
Consumer
Real estate		22,820		110,592		200,666		833,204		1,167,282
Home equity		5,116		32,483		231,425		3,993		273,017
Construction		30,308		2,857		3,206		-		36,371
Other		12,661		33,776		4,234		675		51,346
Total consumer loans		70,905		179,708		439,531		837,872		1,528,016
Total gross loans, net of deferred fees	$	443,903		1,598,070		1,115,165		873,117		4,030,255


					December 31, 2025
(dollars in thousands)	One year or less		After one but within five years		After five but within fifteen years		After fifteen years		Total
Commercial
Owner occupied RE	$	49,286		294,424		374,220		19,049		736,979
Non-owner occupied RE		160,526		588,542		190,475		17,269		956,812
Construction		17,357		27,808		18,501		-		63,666
Business		139,003		349,904		127,474		3,286		619,667
Total commercial loans		366,172		1,260,678		710,670		39,604		2,377,124
Consumer
Real estate		26,591		115,347		218,489		792,858		1,153,285
Home equity		6,073		36,692		201,872		4,048		248,685
Construction		19,053		1,379		4,565		-		24,997
Other		5,548		30,433		4,406		646		41,033
Total consumer loans		57,265		183,851		429,332		797,552		1,468,000
Total gross loans, net of deferred fees	$	423,437		1,444,529		1,140,002		837,156		3,845,124

The following table summarizes loans due after one year (i.e., excluding loans due one year or less), by category and by interest rate type.



	June 30, 2026				December 31, 2025
	Interest Rate						Interest Rate
(dollars in thousands)	Fixed		Floating or Adjustable		Fixed		Floating or Adjustable
Commercial
Owner occupied RE	$	647,368		65,765	$	630,228		57,465
Non-owner occupied RE		683,524		139,691		682,360		113,926
Construction		12,511		30,268		11,455		34,854
Business		299,411		250,703		285,215		195,449
Total commercial loans		1,642,814		486,427		1,609,258		401,694
Consumer
Real estate		915,575		228,887		963,817		162,877
Home equity		8,498		259,403		8,789		233,823
Construction		6,063		-		5,944		-
Other		8,302		30,383		9,100		26,385
Total consumer loans		938,438		518,673		987,650		423,085
Total gross loans, net of deferred fees	$	2,581,252		1,005,100	$	2,596,908		824,779

Credit Quality Indicators

The Company tracks credit quality based on its internal risk ratings. Upon origination, a loan is assigned an initial risk grade, which is generally based on several factors such as the borrower’s credit score, the loan-to-value ratio, the debt-to-income ratio, etc. After loans are initially graded, they are monitored regularly for credit quality based on many factors, such as payment history, the borrower’s financial status, and changes in collateral value. Loans can be downgraded or upgraded depending on management’s evaluation of these factors. Internal risk-grading policies are consistent throughout each loan type.

A description of the general characteristics of the risk grades is as follows:

Pass— A pass loan ranges from minimal to average credit risk; however, it still has acceptable credit risk.

Watch—A watch loan exhibits above average credit risk due to minor weaknesses and warrants closer scrutiny by management.

Special mention—A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or the institution’s credit position at some future date.

Substandard—A substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness, or weaknesses, which may jeopardize the liquidation of the debt. A substandard loan is characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

Doubtful—A doubtful loan has all of the weaknesses inherent in one classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of the currently existing facts, conditions and values, highly questionable and improbable.

The following table presents loan balances classified by credit quality indicators by year of origination as of June 30, 2026.

Schedule of classified by credit quality indicators by year of origination

																June 30, 2026
(dollars in thousands)	2026		2025			2024			2023		2022		Prior			Revolving			Revolving Converted to Term		Total
Commercial
Owner occupied RE
Pass	$	59,742		99,307			56,797			32,760		169,821		289,389			61			-		707,877
Watch		938		2,036			432			5,531		2,807		12,752			-			-		24,496
Special Mention		-		3,501			-			1,229		12,245		3,404			-			-		20,379
Substandard		-		2,166			-			-		248		253			-			-		2,667
Total Owner occupied RE		60,680		107,010			57,229			39,520		185,121		305,798			61			-		755,419

Non-owner occupied RE
Pass		84,361		74,619			49,444			59,301		272,554		370,525			2,358			-		913,162
Watch		-		-			490			968		21,429		19,904			-			-		42,791
Special Mention		-		-			267			476		-		7,678			-			-		8,421
Substandard		-		-			-			-		1,294		2,030			-			-		3,324
Total Non-owner occupied RE		84,361		74,619			50,201			60,745		295,277		400,137			2,358			-		967,698

Construction
Pass		13,408		29,605			15,762			-		2,911		42			-			-		61,728
Watch		-		-			-			-		2,517		1,860			-			-		4,377
Total Construction		13,408		29,605			15,762			-		5,428		1,902			-			-		66,105

Business
Pass		75,599		108,185			39,260			40,000		89,837		61,212			248,694			1,626		664,413
Watch		-		3,397			638			442		2,132		24,061			7,174			73		37,917
Special Mention		-		58			649			722		652		632			6,255			-		8,968
Substandard		-		546			-			626		-		72			475			-		1,719
Total Business		75,599		112,186			40,547			41,790		92,621		85,977			262,598			1,699		713,017
Current period gross write-offs		-		-			-			-		-		-			(174	)		-		(174	)
Total Commercial loans		234,048		323,420			163,739			142,055		578,447		793,814			265,017			1,699		2,502,239

Consumer
Real estate
Pass		95,491		129,857			53,364			105,691		239,100		495,721			-			-		1,119,224
Watch		194		99			392			4,169		5,235		15,393			-			-		25,482
Special Mention		-		187			879			2,329		5,087		9,087			-			-		17,569
Substandard		-		-			1,295			1,244		626		1,842			-			-		5,007
Total Real estate		95,685		130,143			55,930			113,433		250,048		522,043			-			-		1,167,282
Current period gross write-offs		-		-			(28	)		-		-		-			-			-		(28	)

Home equity
Pass		-		-			-			-		-		-			258,583			-		258,583
Watch		-		-			-			-		-		-			8,643			-		8,643
Special Mention		-		-			-			-		-		-			5,347			-		5,347
Substandard		-		-			-			-		-		-			444			-		444
Total Home equity		-		-			-			-		-		-			273,017			-		273,017

Construction
Pass		10,503		21,428			1,547			-		-		-			642			-		34,120
Watch		-		194			-			2,057		-		-			-			-		2,251
Total Construction		10,503		21,622			1,547			2,057		-		-			642			-		36,371

Other
Pass		3,131		4,451			540			520		901		1,224			39,367			-		50,134
Watch		-		19			109			24		15		408			230			-		805
Special Mention		-		8			21			4		311		45			18			-		407
Total Other		3,131		4,478			670			548		1,227		1,677			39,615			-		51,346
Current period gross write-offs		-		(4	)		-			-		-		(22	)		(5	)		-		(31	)
Total Consumer loans		109,319		156,243			58,147			116,038		251,275		523,720			313,274			-		1,528,016
Total loans	$	343,367		479,663			221,886			258,093		829,722		1,317,534			578,291			1,699		4,030,255
Total Current period gross write-offs		-		(4	)		(28	)		-		-		(22	)		(179	)		-		(233	)

The following table presents loan balances classified by credit quality indicators by year of origination as of December 31, 2025.


																December 31, 2025
(dollars in thousands)	2025			2024		2023		2022		2021			Prior			Revolving			Revolving Converted to Term		Total
Commercial
Owner occupied RE
Pass	$	109,796			62,028		36,348		187,991		120,627			187,495			100			596		704,981
Watch		2,062			438		5,833		5,734		2,249			9,929			-			-		26,245
Special Mention		2,070			-		-		-		-			3,424			-			-		5,494
Substandard		-			-		-		259		-			-			-			-		259
Total Owner occupied RE		113,928			62,466		42,181		193,984		122,876			200,848			100			596		736,979

Non-owner occupied RE
Pass		75,982			60,413		61,961		302,086		142,876			255,478			760			1,012		900,568
Watch		-			618		1,653		13,553		13,886			9,453			-			-		39,163
Special Mention		-			144		-		-		190			7,586			-			-		7,920
Substandard		-			-		-		2,244		-			6,917			-			-		9,161
Total Non-owner occupied RE		75,982			61,175		63,614		317,883		156,952			279,434			760			1,012		956,812

Construction
Pass		23,211			28,284		-		7,921		53			-			-			-		59,469
Watch		-			-		-		1,766		2,431			-			-			-		4,197
Total Construction		23,211			28,284		-		9,687		2,484			-			-			-		63,666

Business
Pass		109,351			42,578		44,987		100,908		28,743			55,659			210,992			465		593,683
Watch		799			719		1,180		3,006		2,186			4,090			8,675			402		21,057
Special Mention		71			652		-		621		-			664			1,807			-		3,815
Substandard		149			-		627		-		-			74			262			-		1,112
Total Business		110,370			43,949		46,794		104,535		30,929			60,487			221,736			867		619,667
Current period gross write-offs		-			-		-		-		-			(78	)		(213	)		-		(291	)
Total Commercial loans		323,491			195,874		152,589		626,089		313,241			540,769			222,596			2,475		2,377,124

Consumer
Real estate
Pass		136,015			58,846		125,186		254,815		248,173			276,765			-			-		1,099,800
Watch		1,076			1,237		5,045		6,351		7,899			8,092			-			-		29,700
Special Mention		193			489		1,513		5,158		2,434			7,568			-			-		17,355
Substandard		-			1,118		1,034		647		715			2,916			-			-		6,430
Total Real estate		137,284			61,690		132,778		266,971		259,221			295,341			-			-		1,153,285

Home equity
Pass		-			-		-		-		-			-			232,962			-		232,962
Watch		-			-		-		-		-			-			8,730			-		8,730
Special Mention		-			-		-		-		-			-			5,501			-		5,501
Substandard		-			-		-		-		-			-			1,492			-		1,492
Total Home equity		-			-		-		-		-			-			248,685			-		248,685

Construction
Pass		20,031			2,308		-		-		-			-			648			-		22,987
Watch		-			-		2,010		-		-			-			-			-		2,010
Total Construction		20,031			2,308		2,010		-		-			-			648			-		24,997

Other
Pass		5,048			623		586		1,062		340			1,102			31,027			-		39,788
Watch		23			134		34		24		322			109			135			-		781
Special Mention		13			26		5		316		47			38			19			-		464
Total Other		5,084			783		625		1,402		709			1,249			31,181			-		41,033
Current period gross write-offs		(30	)		-		-		-		(20	)		-			(10	)		-		(60	)
Total Consumer loans		162,399			64,781		135,413		268,373		259,930			296,590			280,514			-		1,468,000
Total loans	$	485,890			260,655		288,002		894,462		573,171			837,359			503,110			2,475		3,845,124
Total Current period gross write-offs		(30	)		-		-		-		(20	)		(78	)		(223	)		-		(351	)

The following tables present loan balances by age and payment status.


	June 30, 2026
(dollars in thousands)	Accruing 30-59 days past due		Accruing 60-89 days past due		Accruing 90 days or more past due		Nonaccrual loans		Accruing current		Total
Commercial
Owner occupied RE	$	1,283		-		-		2,667		751,469		755,419
Non-owner occupied RE		964		-		-		2,030		964,704		967,698
Construction		-		-		-		-		66,105		66,105
Business		326		92		-		1,330		711,269		713,017
Consumer
Real estate		282		755		-		4,805		1,161,440		1,167,282
Home equity		242		-		-		354		272,421		273,017
Construction		-		-		-		-		36,371		36,371
Other		21		-		-		-		51,325		51,346
Total loans	$	3,118		847		-		11,186		4,015,104		4,030,255

	December 31, 2025
(dollars in thousands)	Accruing 30-59 days past due		Accruing 60-89 days past due		Accruing 90 days or more past due		Nonaccrual loans		Accruing current		Total
Commercial
Owner occupied RE	$	-		-		-		259		736,720		736,979
Non-owner occupied RE		-		-		-		6,917		949,895		956,812
Construction		-		-		-		-		63,666		63,666
Business		627		-		-		189		618,851		619,667
Consumer
Real estate		4,235		315		-		5,763		1,142,972		1,153,285
Home equity		-		250		-		705		247,730		248,685
Construction		-		-		-		-		24,997		24,997
Other		33		-		-		-		41,000		41,033
Total loans	$	4,895		565		-		13,833		3,825,831		3,845,124

As of June 30, 2026 and December 31, 2025, accruing loans 30 days or more past due represented 0.10% and 0.14% of the Company’s total loan portfolio, respectively. Commercial loans accruing 30 days or more past due were 0.07% and 0.02% of the Company’s total loan portfolio as of June 30, 2026, and December 31, 2025, respectively. Consumer loans accruing 30 days or more past due were 0.03% and 0.12% of total loans as of June 30, 2026, and December 31, 2025, respectively.

The table below summarizes nonaccrual loans by major categories for the periods presented.


	June 30, 2026								December 31, 2025
	Nonaccrual		Nonaccrual				Nonaccrual		Nonaccrual
	loans		loans		Total		loans		loans		Total
	with no		with an		nonaccrual		with no		with an		nonaccrual
(dollars in thousands)	allowance		allowance		loans		allowance		allowance		loans
Commercial
Owner occupied RE	$	2,419		248		2,667	$	-		259		259
Non-owner occupied RE		333		1,697		2,030		5,097		1,820		6,917
Business		-		1,330		1,330		-		189		189
Total commercial		2,752		3,275		6,027		5,097		2,268		7,365
Consumer
Real estate		3,113		1,692		4,805		4,122		1,641		5,763
Home equity		104		250		354		705		-		705
Total consumer		3,217		1,942		5,159		4,827		1,641		6,468
Total nonaccrual loans	$	5,969		5,217		11,186	$	9,924		3,909		13,833

The Company did not recognize interest income on nonaccrual loans for the three or six months ended June 30, 2026 and June 30, 2025. Accrued interest reversed during the three months ended June 30, 2026 was approximately $61,000, while accrued interest reversed during the three months ended June 30, 2025 was not material. Accrued interest reversed during the six months ended June 30, 2026 and June 30, 2025 was approximately $179,000 and $47,000, respectively. Foregone interest income on the nonaccrual loans for the three-month period ended June 30, 2026 and 2025 was approximately $220,000 and $126,000, respectively. Foregone interest income on the nonaccrual loans for the six month period ended June 30, 2026 was $288,000 and $200,000 for the six month period ended June 30, 2025.

The table below summarizes information regarding nonperforming assets.

Schedule of nonperforming assets
(dollars in thousands)	June 30, 2026			December 31, 2025
Nonaccrual loans	$	11,186			13,833
Other real estate owned		1,375			275
Total nonperforming assets	$	12,561			14,108
Nonperforming assets as a percentage of:
Total assets		0.27	%		0.32	%
Gross loans		0.31	%		0.37	%
Total loans over 90 days past due	$	5,983			4,499
Loans over 90 days past due and still accruing		-			-

Modifications to Borrowers Experiencing Financial Difficulty

The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. The Company uses a discounted cash flow model to determine the allowance for credit losses. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification.

Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses due to the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification. Loan modifications to borrowers experiencing financial difficulty were not material for the three and six months ended June 30, 2026 and June 30, 2025, respectively.

Allowance for Credit Losses

The Company maintains an allowance for credit losses to provide for expected credit losses. Losses are charged against the allowance when management believes that the principal is uncollectable. Subsequent recoveries, if any, are credited to the allowance. Allocations of the allowance are made for specific loans and for pools of similar types of loans, although the entire allowance is available for any loan that, in management’s judgment, should be charged against the allowance. A provision for credit losses is taken based on management’s ongoing evaluation of the appropriate allowance balance.

A formal evaluation of the adequacy of the ACL is conducted quarterly. This assessment includes procedures to estimate the allowance and test the adequacy and appropriateness of the resulting balance. The level of the allowance is based upon management’s evaluation of historical default and loss experience, current and projected economic conditions, asset quality trends, known and inherent risks in the portfolio, adverse situations that may affect the borrowers’ ability to repay a loan, the estimated value of any underlying collateral, composition of the loan portfolio, industry and peer bank loan quality indications and other pertinent factors, including regulatory recommendations. Management believes the level of the ACL is adequate to absorb all expected future losses inherent in the loan portfolio at the balance sheet date. The allowance is increased through provision for credit losses and decreased by charge-offs, net of recoveries of amounts previously charged-off.

On January 1, 2025, the Company transitioned to the DCF modeling approach to estimate the ACL on loans as it allows for a better estimation of credit losses through customization among the various inputs by loan segmentation.

The DCF methodology is applied on a segment-by-segment basis at the loan level with a one-year reasonable and supportable forecast period, followed by a one-year reversion to the long-term average. The Company considers economic forecasts of national gross domestic product (“GDP”) and unemployment rates as reported by Fannie Mae to inform the model for loss estimation. Historical loss rates used in the quantitative model were derived using both the Bank’s and peer bank data obtained from publicly-available sources (i.e., federal call reports) encompassing an economic cycle. The peer group utilized by the Bank is comprised of financial institutions of relatively similar size (i.e., $1-$15 billion of total assets) and in similar markets. In addition, the DCF methodology considers the weighted average life of the portfolio, impacting the reaction time and the exposure to potential loss based on changes in the interest rate environment. Management also considers qualitative adjustments when estimating loan losses to take into account the model’s quantitative limitations. Qualitative adjustments to quantitative loss factors, either negative or positive, may include changes in lending policies; international, national, regional, and local conditions; volume and terms of loans; experience and depth of management; volume and severity of past due loans; effects of changes in lending policy; concentrations of credit; and loan review results. The Company enhanced its qualitative factor framework to better address risks that are not reflected in the quantitative loss factors.

The following tables summarize the activity related to the allowance for credit losses for the three and six months ended June 30, 2026 and June 30, 2025.



										Three months ended June 30, 2026
	Commercial												Consumer
(dollars in thousands)	Owner occupied RE			Non- owner occupied RE			Construction			Business			Real Estate			Home Equity		Construction			Other			Total
Balance, beginning of period	$	3,460			5,882			982			13,427			16,314			2,452		353			508			43,378
Provision for (reversal of) credit losses for loans		(101	)		(129	)		(108	)		820			310			61		(10	)		107			950
Loan charge-offs		-			-			-			(100	)		(28	)		-		-			(27	)		(155	)
Loan recoveries		-			-			-			56			-			3		-			-			59
Net loan recoveries (charge-offs)		-			-			-			(44	)		(28	)		3		-			(27	)		(96	)
Balance, end of period	$	3,359			5,753			874			14,203			16,596			2,516		343			588			44,232
Net charge-offs to average loans (annualized)																									0.01	%
Allowance for credit losses to gross loans																									1.10	%
Allowance for credit losses to nonperforming loans																									395.41	%



								Three months ended June 30, 2025
	Commercial										Consumer
(dollars in thousands)	Owner occupied RE		Non- owner occupied RE		Construction			Business			Real Estate		Home Equity		Construction			Other			Total
Balance, beginning of period	$	3,934		7,333		582			11,131			15,193		1,549		487			478			40,687
Provision for (reversal of) credit losses for loans		69		84		(120	)		213			340		96		(32	)		-			650
Loan charge-offs		-		-		-			(63	)		-		-		-			(5	)		(68	)
Loan recoveries		-		-		-			12			-		4		-			-			16
Net loan recoveries (charge-offs)		-		-		-			(51	)		-		4		-			(5	)		(52	)
Balance, end of period	$	4,003		7,417		462			11,293			15,533		1,649		455			473			41,285
Net charge-offs to average loans (annualized)																						0.01	%
Allowance for credit losses to gross loans																						1.10	%
Allowance for credit losses to nonperforming loans																						362.35	%



									Six months ended June 30, 2026
	Commercial											Consumer
(dollars in thousands)	Owner occupied RE			Non- owner occupied RE			Construction		Business			Real Estate			Home Equity		Construction			Other			Total
Balance, beginning of period	$	3,911			6,773			611		12,148			15,866			1,827		569			575			42,280
Provision for (reversal of) credit losses for loans		(552	)		(1,031	)		263		2,160			758			684		(226	)		44			2,100
Loan charge-offs		-			-			-		(174	)		(28	)		-		-			(31	)		(233	)
Loan recoveries		-			11			-		69			-			5		-			-			85
Net loan recoveries (charge-offs)		-			11			-		(105	)		(28	)		5		-			(31	)		(148	)
Balance, end of period	$	3,359			5,753			874		14,203			16,596			2,516		343			588			44,232
Net charge-offs to average loans (annualized)																								0.01	%
Allowance for credit losses to gross loans																								1.10	%
Allowance for credit losses to nonperforming loans																								395.41	%


										Six months ended June 30, 2025
	Commercial												Consumer
(dollars in thousands)	Owner occupied RE			Non- owner occupied RE			Construction			Business			Real Estate		Home Equity			Construction		Other			Total
Balance, beginning of period	$	5,482			10,219			940			7,745			12,359		2,655			115		399			39,914
Provision for (reversal of) credit losses for loans		(1,479	)		(2,802	)		(478	)		3,615			3,174		(1,014	)		340		44			1,400
Loan charge-offs		-			-			-			(141	)		-		-			-		(5	)		(146	)
Loan recoveries		-			-			-			74			-		8			-		35			117
Net loan recoveries (charge-offs)		-			-			-			(67	)		-		8			-		30			(29	)
Balance, end of period	$	4,003			7,417			462			11,293			15,533		1,649			455		473			41,285
Net charge-offs to average loans (annualized)																								0.00	%
Allowance for credit losses to gross loans																								1.10	%
Allowance for credit losses to nonperforming loans																								362.35	%

There was a provision for credit losses of $950,000 and $650,000 for the three months ended June 30, 2026 and June 30, 2025, respectively. In addition, the provision for credit losses was $2.1 million and $1.4 million for the six months ended June 30, 2026 and June 30, 2025, respectively.

Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral, and where the borrower is experiencing financial difficulty. The Company reviews individually evaluated loans for designation as collateral dependent loans, as well as other loans that management of the Company designates as having higher risk. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the allowance for credit losses.

Under CECL, for collateral dependent loans, the Company has adopted the practical expedient to measure the allowance for credit losses based on the fair value of collateral. The allowance for credit losses is calculated on an individual loan basis based on the shortfall between the fair value of the loan’s collateral, which is adjusted for liquidation costs/discounts, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required.

The following tables present an analysis of collateral-dependent loans of the Company as of June 30, 2026 and December 31, 2025.

			June 30, 2026
	Real		Business
(dollars in thousands)	estate		assets		Total
Commercial
Owner occupied RE	$	3,184		248		3,432
Non-owner occupied RE		2,029		-		2,029
Business		158		1,173		1,331
Total commercial		5,371		1,421		6,792
Consumer
Real estate		5,334		-		5,334
Home equity		354		-		354
Total consumer		5,688		-		5,688
Total collateral dependent loans	$	11,059		1,421		12,480

			December 31, 2025
	Real		Business
(dollars in thousands)	estate		assets		Total
Commercial
Owner occupied RE	$	-		259		259
Non-owner occupied RE		6,917		-		6,917
Business		165		24		189
Total commercial		7,082		283		7,365
Consumer
Real estate		5,763		-		5,763
Home equity		705		-		705
Total consumer		6,468		-		6,468
Total collateral dependent loans	$	13,550		283		13,833

Allowance for Credit Losses - Unfunded Loan Commitments

The allowance for credit losses for unfunded loan commitments was $2.2 million and $2.0 million at June 30, 2026 and December 31, 2025, respectively, and is separately classified on the balance sheet within other liabilities. The following table presents the balance and activity in the ACL for unfunded loan commitments for the three and six months ended June 30, 2026 and June 30, 2025.


	Three months ended
(dollars in thousands)	June 30, 2026			June 30, 2025
Balance, beginning of period	$	2,106			1,456
Provision for credit losses		75			50
Balance, end of period	$	2,181			1,506
Total unfunded loan commitments	$	926,485			791,253
Reserve for unfunded commitments to total unfunded loan commitments		0.24	%		0.19	%

	Six months ended
(dollars in thousands)	June 30, 2026			June 30, 2025
Balance, beginning of period	$	1,956			1,456
Provision for credit losses		225			50
Balance, end of period	$	2,181			1,506
Total unfunded loan commitments	$	926,485			791,253
Reserve for unfunded commitments to total unfunded loan commitments		0.24	%		0.19	%