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 uncollectible. 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 credit loss allowance is conducted monthly. The ultimate recovery of all loans is susceptible to future market factors beyond the Company’s control.

The level of credit loss provision is influenced by growth in the overall loan portfolio, emerging market risk, emerging concentration risk, commercial loan focus and large credit concentration, new industry lending activity, general economic conditions and historical loss analysis. In addition, management gives consideration to changes in the facts and circumstances of watch list credits, which includes the security position of the borrower, in determining the appropriate level of the credit loss provision. Furthermore, management’s overall view on credit quality is a factor in the determination of the provision.

The determination of the appropriate allowance is inherently subjective, as it requires significant estimates by management. The Company has an established process to determine the adequacy of the allowance for credit losses that generally includes consideration of changes in the nature and volume of the loan portfolio and overall portfolio quality, along with current and forecasted economic conditions that may affect borrowers' ability to repay. Consideration is not limited to these factors although they represent the most commonly cited factors. To determine the specific allocation levels for individual credits, management considers the current valuation of collateral and the amounts and timing of expected future cash flows as the primary measures. Management also considers trends in adversely classified loans based upon an ongoing review of those credits. With respect to pools of similar loans, an appropriate level of general allowance is determined by portfolio segment using a probability of default-loss given default ("PD/LGD") model, subject to a floor. A default can be triggered by one of several different asset quality factors, including past due status, nonaccrual status, material modification to a borrower experiencing financial difficulty status or if the loan has had a charge-off. This PD is then combined with a LGD derived from historical charge-off data to construct a loss rate. This loss rate is then supplemented with adjustments for reasonable and supportable forecasts of relevant economic indicators, particularly the unemployment rate forecast from the Federal Open Market Committee's Summary of Economic Projections, as well as portfolio trends based on the risks present for each portfolio segment. These environmental factors include consideration of the following: levels of, and trends in, delinquencies and nonperforming loans; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedure, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations. It is also possible that these factors could include social, political, economic, and terrorist events or activities. All of these factors are susceptible to change, which may be significant. As a result of this detailed process, the allowance results in two forms of allocations, specific and pooled. These two components represent the total allowance for credit losses deemed adequate to cover expected losses within the loan portfolio.

Commercial loans are subject to a dual standardized grading process administered by the credit administration function. These grade assignments are performed independent of each other and a consensus is reached by credit administration and the loan officer. Individual allowances are established in cases where management has identified significant conditions or circumstances related to a specific credit that indicate it should be analyzed on an individual basis. Considerations with respect to allocations for these individually analyzed credits include, but are not limited to, the following: (a) the sufficiency of the customer's cash flow or net worth to repay the loan; (b) the adequacy of the discounted value of collateral relative to the loan balance; (c) whether the loan has been criticized in a regulatory examination; (d) whether the loan is nonperforming; (e) any other reasons the ultimate collectability of the loan may be in question; or (f) any unique loan characteristics that require special monitoring.

Allocations are also applied to categories of loans considered not to be individually analyzed, but for which the rate of loss is expected to be consistent with or greater than historical averages. Such allocations are based on past loss experience and information about specific borrower situations and estimated collateral values. These general pooled loan allocations are performed for portfolio segments of commercial and industrial; commercial real estate, multi-family, and construction; agri-business and agricultural; other commercial loans; and consumer 1-4 family mortgage and other consumer loans. Pooled allocations of the allowance are determined by a historical loss rate based on the calculation of each pool's probability of default-loss given default, subject to a floor. The length of the historical period for each pool is based on the average life of the pool, which is updated at least annually. The historical loss rates are all supplemented with consideration of economic conditions and portfolio trends.

Due to the imprecise nature of estimating the allowance for credit losses, the Company's allowance for credit losses includes an immaterial unallocated component. The unallocated component of the allowance for credit losses incorporates the Company’s judgmental determination of potential expected losses that may not be fully reflected in other allocations. As a practical expedient, the Company has elected to disclose accrued interest separately from loan principal balances on the consolidated balance sheet. Additionally, when a loan is placed on non-accrual, interest payments are reversed through interest income.


(dollars in thousands)	Commercial and Industrial		Commercial Real Estate and Multifamily Residential		Agri-business and Agricultural		Other Commercial		Consumer 1-4 Family Mortgage		Other Consumer		Unallocated		Total
Three Months Ended June 30, 2026
Beginning balance, April 1	$	28,053	$	30,618	$	3,421	$	815	$	4,185	$	1,797	$	25	$	68,914
Provision for credit losses	672		(53)		(163)		267		129		283		573		1,708
Loans charged-off	(94)		0		0		0		(47)		(290)		0		(431)
Recoveries	121		90		0		0		99		97		0		407
Net loans (charged-off) recovered	27		90		0		0		52		(193)		0		(24)
Ending balance	$	28,752	$	30,655	$	3,258	$	1,082	$	4,366	$	1,887	$	598	$	70,598


(dollars in thousands)	Commercial and Industrial		Commercial Real Estate and Multifamily Residential		Agri-business and Agricultural		Other Commercial		Consumer 1-4 Family Mortgage		Other Consumer		Unallocated		Total
Three Months Ended June 30, 2025
Beginning balance, April 1	$	52,302	$	30,468	$	3,500	$	723	$	3,464	$	1,517	$	459	$	92,433
Provision for credit losses	2,148		588		(201)		(3)		294		233		(59)		3,000
Loans charged-off	(28,616)		0		0		0		(198)		(297)		0		(29,111)
Recoveries	48		26		0		0		30		126		0		230
Net loans (charged-off) recovered	(28,568)		26		0		0		(168)		(171)		0		(28,881)
Ending balance	$	25,882	$	31,082	$	3,299	$	720	$	3,590	$	1,579	$	400	$	66,552


(dollars in thousands)	Commercial and Industrial		Commercial Real Estate and Multifamily Residential		Agri-business and Agricultural		Other Commercial		Consumer 1-4 Family Mortgage		Other Consumer		Unallocated		Total
Six Months Ended June 30, 2026
Beginning balance, January 1	$	28,436	$	30,163	$	3,315	$	1,041	$	3,996	$	1,719	$	325	$	68,995
Provision for credit losses	2,259		376		(57)		41		376		440		273		3,708
Loans charged-off	(2,080)		0		0		0		(112)		(435)		0		(2,627)
Recoveries	137		116		0		0		106		163		0		522
Net loans (charged-off) recovered	(1,943)		116		0		0		(6)		(272)		0		(2,105)
Ending balance	$	28,752	$	30,655	$	3,258	$	1,082	$	4,366	$	1,887	$	598	$	70,598


(dollars in thousands)	Commercial and Industrial		Commercial Real Estate and Multifamily Residential		Agri-business and Agricultural		Other Commercial		Consumer 1-4 Family Mortgage		Other Consumer		Unallocated		Total
Six Months Ended June 30, 2025
Beginning balance, January 1	$	45,539	$	30,865	$	3,541	$	743	$	3,358	$	1,531	$	383	$	85,960
Provision for credit losses	8,889		165		(242)		(23)		418		576		17		9,800
Loans charged-off	(28,626)		0		0		0		(222)		(771)		0		(29,619)
Recoveries	80		52		0		0		36		243		0		411
Net loans (charged-off) recovered	(28,546)		52		0		0		(186)		(528)		0		(29,208)
Ending balance	$	25,882	$	31,082	$	3,299	$	720	$	3,590	$	1,579	$	400	$	66,552

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes commercial loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis for Special Mention, Substandard and Doubtful grade loans and annually on Pass grade loans over $250,000.


(dollars in thousands)	2026		2025		2024		2023		2022		Prior		Term Total		Revolving		Total
Commercial and industrial loans:
Working capital lines of credit loans:
Pass	$	0	$	962	$	2,473	$	0	$	0	$	1,179	$	4,614	$	733,165	$	737,779
Special Mention	0		0		0		0		47		0		47		38,695		38,742
Substandard	0		300		95		1,021		921		254		2,591		36,165		38,756


Total	0		1,262		2,568		1,021		968		1,433		7,252		808,025		815,277
Working capital lines of credit loans:
Current period gross write offs	0		1,975		0		0		0		50		2,025		0		2,025
Non-working capital loans:
Pass	89,561		200,750		81,558		84,941		87,976		34,979		579,765		201,625		781,390
Special Mention	0		4,495		2,108		2,422		8,654		7,718		25,397		6,334		31,731
Substandard	1,515		1,863		319		1,675		1,959		4,812		12,143		818		12,961
Doubtful	0		0		0		0		0		43		43		0		43
Not Rated	43		979		241		545		388		167		2,363		0		2,363
Total	91,119		208,087		84,226		89,583		98,977		47,719		619,711		208,777		828,488
Non-working capital loans:
Current period gross write offs	0		0		0		0		25		0		25		30		55
Commercial real estate and multi-family residential loans:
Construction and land development loans:
Pass	14,986		19,769		26,174		5,260		301		0		66,490		363,565		430,055
Special Mention	0		0		0		0		0		0		0		8,183		8,183



Total	14,986		19,769		26,174		5,260		301		0		66,490		371,748		438,238
Construction and land development loans:
Current period gross write offs	0		0		0		0		0		0		0		0		0
Owner occupied loans:
Pass	85,674		136,355		98,157		88,723		112,728		217,352		738,989		28,469		767,458
Special Mention	0		2,951		569		1,642		14,711		12,764		32,637		0		32,637
Substandard	0		840		407		263		0		2,958		4,468		0		4,468


Total	85,674		140,146		99,133		90,628		127,439		233,074		776,094		28,469		804,563
Owner occupied loans:
Current period gross write offs	0		0		0		0		0		0		0		0		0
Nonowner occupied loans:
Pass	106,086		163,674		102,736		105,574		123,063		206,840		807,973		115,637		923,610


(dollars in thousands)	2026	2025	2024	2023	2022	Prior	Term Total	Revolving	Total
Nonowner occupied loans (continued):
Special Mention	0	0	0	11,128	57	0	11,185	0	11,185
Substandard	0	0	0	0	0	0	0	1,958	1,958


Total	106,086	163,674	102,736	116,702	123,120	206,840	819,158	117,595	936,753
Nonowner occupied loans:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Multifamily loans:
Pass	110,343	130,829	5,393	120,379	19,750	40,704	427,398	149,902	577,300
Special Mention	0	0	0	0	282	0	282	0	282



Total	110,343	130,829	5,393	120,379	20,032	40,704	427,680	149,902	577,582
Multifamily loans:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Agri-business and agricultural loans:
Loans secured by farmland:
Pass	42,170	26,621	11,365	14,481	33,639	36,189	164,465	13,967	178,432
Special Mention	0	1,971	109	184	0	145	2,409	0	2,409
Substandard	0	0	0	0	0	42	42	0	42


Total	42,170	28,592	11,474	14,665	33,639	36,376	166,916	13,967	180,883
Loans secured by farmland:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Loans for agricultural production:
Pass	3,413	3,801	11,421	5,235	17,222	12,469	53,561	95,366	148,927
Special Mention	301	0	0	1,112	244	0	1,657	8,040	9,697



Total	3,714	3,801	11,421	6,347	17,466	12,469	55,218	103,406	158,624
Loans for agricultural production:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Other commercial loans:
Pass	3,069	9,957	1,015	12,701	24,060	13,697	64,499	56,321	120,820




Total	3,069	9,957	1,015	12,701	24,060	13,697	64,499	56,321	120,820
Other commercial loans:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans:
Pass	19,488	13,586	9,196	5,547	6,460	13,172	67,449	5,816	73,265
Special Mention	0	187	0	210	151	0	548	0	548


(dollars in thousands)	2026		2025		2024		2023		2022		Prior		Term Total		Revolving		Total
Closed end first mortgage loans (continued):
Substandard	0		240		117		220		423		621		1,621		0		1,621

Not Rated	31,802		34,939		22,392		45,712		39,406		52,730		226,981		0		226,981
Total	51,290		48,952		31,705		51,689		46,440		66,523		296,599		5,816		302,415
Closed end first mortgage loans:
Current period gross write offs	0		0		0		0		0		0		0		0		0
Open end and junior lien loans:
Pass	194		916		464		506		0		177		2,257		10,504		12,761

Substandard	0		1,694		0		115		70		24		1,903		603		2,506

Not Rated	27,780		19,841		9,540		7,519		7,518		1,936		74,134		196,017		270,151
Total	27,974		22,451		10,004		8,140		7,588		2,137		78,294		207,124		285,418
Open end and junior lien loans:
Current period gross write offs	0		0		38		0		0		8		46		66		112
Residential construction loans:




Not Rated	2,042		4,770		1,658		545		1,530		2,274		12,819		0		12,819
Total	2,042		4,770		1,658		545		1,530		2,274		12,819		0		12,819
Residential construction loans:
Current period gross write offs	0		0		0		0		0		0		0		0		0
Other consumer loans:
Pass	1		353		0		922		87		7		1,370		41,011		42,381

Substandard	0		62		23		205		91		58		439		0		439

Not Rated	10,474		15,344		12,769		10,865		5,553		6,288		61,293		13,632		74,925
Total	10,475		15,759		12,792		11,992		5,731		6,353		63,102		54,643		117,745
Other consumer loans:
Current period gross write offs	4		67		53		100		12		0		236		199		435

Total Loans	$	548,942	$	798,049	$	400,299	$	529,652	$	507,291	$	669,599	$	3,453,832	$	2,125,793	$	5,579,625

Total period gross write offs	$	4	$	2,042	$	91	$	100	$	37	$	58	$	2,332	$	295	$	2,627


(dollars in thousands)	2025		2024		2023		2022		2021		Prior		Term Total		Revolving		Total
Commercial and industrial loans:
Working capital lines of credit loans:
Pass	$	5,863	$	1,405	$	19	$	63	$	1,066	$	334	$	8,750	$	633,270	$	642,020
Special Mention	0		0		0		0		0		0		0		38,014		38,014
Substandard	300		0		2,057		924		211		230		3,722		27,759		31,481


Total	6,163		1,405		2,076		987		1,277		564		12,472		699,043		711,515
Working capital lines of credit loans:
Current period gross write offs	0		0		0		28,607		0		12		28,619		45		28,664
Non-working capital loans:
Pass	210,230		109,036		101,984		114,735		32,420		20,755		589,160		204,275		793,435
Special Mention	5,819		2,671		154		8,359		7,024		5,060		29,087		7,493		36,580
Substandard	314		327		1,998		1,543		105		3,913		8,200		391		8,591
Doubtful	0		0		0		0		0		74		74		0		74
Not Rated	939		322		767		558		107		173		2,866		0		2,866
Total	217,302		112,356		104,903		125,195		39,656		29,975		629,387		212,159		841,546
Non-working capital loans:
Current period gross write offs	1		2		0		0		0		0		3		201		204
Commercial real estate and multi-family residential loans:
Construction and land development loans:
Pass	20,946		25,430		11,990		20,692		720		0		79,778		414,386		494,164
Special Mention	1,242		0		0		0		0		0		1,242		0		1,242



Total	22,188		25,430		11,990		20,692		720		0		81,020		414,386		495,406
Construction and land development loans:
Current period gross write offs	0		0		0		0		0		0		0		0		0
Owner occupied loans:
Pass	151,944		106,040		89,724		118,976		128,712		143,199		738,595		31,378		769,973
Special Mention	3,083		163		1,810		14,683		0		13,069		32,808		550		33,358
Substandard	0		306		284		0		1,520		1,442		3,552		0		3,552


Total	155,027		106,509		91,818		133,659		130,232		157,710		774,955		31,928		806,883
Owner occupied loans:
Current period gross write offs	0		0		0		0		0		0		0		0		0
Nonowner occupied loans:
Pass	184,183		114,323		108,411		128,867		93,880		154,390		784,054		125,655		909,709


(dollars in thousands)	2025	2024	2023	2022	2021	Prior	Term Total	Revolving	Total
Nonowner occupied loans (continued):
Special Mention	0	0	11,321	59	0	0	11,380	0	11,380
Substandard	0	0	0	0	0	0	0	1,957	1,957


Total	184,183	114,323	119,732	128,926	93,880	154,390	795,434	127,612	923,046
Nonowner occupied loans:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Multifamily loans:
Pass	191,399	21,552	63,810	21,472	8,485	32,995	339,713	97,877	437,590
Special Mention	0	0	0	291	0	0	291	0	291



Total	191,399	21,552	63,810	21,763	8,485	32,995	340,004	97,877	437,881
Multifamily loans:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Agri-business and agricultural loans:
Loans secured by farmland:
Pass	28,600	13,595	15,258	31,324	19,915	30,669	139,361	13,202	152,563
Special Mention	1,987	118	193	0	25	148	2,471	0	2,471
Substandard	0	0	0	0	0	49	49	0	49


Total	30,587	13,713	15,451	31,324	19,940	30,866	141,881	13,202	155,083
Loans secured by farmland:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Loans for agricultural production:
Pass	5,560	13,158	21,355	18,848	21,215	12,502	92,638	151,443	244,081
Special Mention	0	0	654	258	0	1	913	6,891	7,804



Total	5,560	13,158	22,009	19,106	21,215	12,503	93,551	158,334	251,885
Loans for agricultural production:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Other commercial loans:
Pass	11,178	1,199	13,637	24,506	2,504	11,665	64,689	30,722	95,411
Special Mention	0	0	0	0	0	1,754	1,754	0	1,754



Total	11,178	1,199	13,637	24,506	2,504	13,419	66,443	30,722	97,165
Other commercial loans:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans:
Pass	14,058	9,978	6,465	6,793	10,248	5,525	53,067	2,427	55,494


(dollars in thousands)	2025		2024		2023		2022		2021		Prior		Term Total		Revolving		Total
Closed end first mortgage loans (continued):
Special Mention	189		119		215		156		61		0		740		0		740
Substandard	55		305		232		436		0		755		1,783		0		1,783

Not Rated	36,511		23,578		50,011		42,657		24,998		31,020		208,775		0		208,775
Total	50,813		33,980		56,923		50,042		35,307		37,300		264,365		2,427		266,792
Closed end first mortgage loans:
Current period gross write offs	0		0		0		0		0		24		24		0		24
Open end and junior lien loans:
Pass	665		487		684		0		190		4		2,030		8,477		10,507
Special Mention	286		0		0		0		0		0		286		0		286
Substandard	1,728		38		99		0		3		0		1,868		317		2,185

Not Rated	28,327		13,016		9,566		10,347		1,849		1,138		64,243		176,160		240,403
Total	31,006		13,541		10,349		10,347		2,042		1,142		68,427		184,954		253,381
Open end and junior lien loans:
Current period gross write offs	0		0		0		29		2		22		53		149		202
Residential construction loans:




Not Rated	6,684		6,852		575		1,680		1,189		1,798		18,778		0		18,778
Total	6,684		6,852		575		1,680		1,189		1,798		18,778		0		18,778
Residential construction loans:
Current period gross write offs	0		0		0		0		0		0		0		0		0
Other consumer loans:
Pass	384		0		939		120		22		0		1,465		37,683		39,148

Substandard	0		35		273		91		6		11		416		0		416

Not Rated	19,055		15,982		13,837		7,631		4,301		3,349		64,155		12,269		76,424
Total	19,439		16,017		15,049		7,842		4,329		3,360		66,036		49,952		115,988
Other consumer loans:
Current period gross write offs	4		187		306		161		58		0		716		604		1,320

Total loans	$	931,529	$	480,035	$	528,322	$	576,069	$	360,776	$	476,022	$	3,352,753	$	2,022,596	$	5,375,349

Total current period gross write offs	$	5	$	189	$	306	$	28,797	$	60	$	58	$	29,415	$	999	$	30,414

The Company does not record interest on nonaccrual loans until principal is recovered. For all loan classes, a loan is generally placed on nonaccrual status when principal or interest becomes 90 days past due unless it is well secured and in the process of collection, or earlier when concern exists as to the ultimate collectability of principal or interest. Interest accrued but not received is reversed against earnings. Cash interest received on these loans is applied to the principal balance until the principal is recovered or until the loan returns to accrual status. Loans may be returned to accrual status when all the principal and interest amounts contractually due are brought current, remain current for a prescribed period, and future payments are reasonably assured.


(dollars in thousands)	Loans Not Past Due		30-89 Days Past Due		Greater than 89 Days Past Due and Accruing		Total Accruing		Total Nonaccrual		Nonaccrual With No Allowance For Credit Loss		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	811,155	$	0	$	0	$	811,155	$	4,122	$	502	$	815,277
Non-working capital loans	820,681		209		0		820,890		7,598		178		828,488
Commercial real estate and multi-family residential loans:
Construction and land development loans	438,238		0		0		438,238		0		0		438,238
Owner occupied loans	801,323		1,369		0		802,692		1,871		170		804,563
Nonowner occupied loans	934,795		0		0		934,795		1,958		0		936,753
Multifamily loans	577,582		0		0		577,582		0		0		577,582
Agri-business and agricultural loans:
Loans secured by farmland	180,841		0		0		180,841		42		0		180,883
Loans for agricultural production	158,624		0		0		158,624		0		0		158,624
Other commercial loans	120,820		0		0		120,820		0		0		120,820
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans	300,628		337		6		300,971		1,444		498		302,415
Open end and junior lien loans	282,287		625		0		282,912		2,506		398		285,418
Residential construction loans	12,819		0		0		12,819		0		0		12,819
Other consumer loans	116,823		483		0		117,306		439		58		117,745
Total	$	5,556,616	$	3,023	$	6	$	5,559,645	$	19,980	$	1,804	$	5,579,625

The following table presents the aging of the amortized cost basis in past due loans as of December 31, 2025 by class of loans and loans past due 90 days or more and still accruing by class of loan:


(dollars in thousands)	Loans Not Past Due		30-89 Days Past Due		Greater than 89 Days Past Due and Accruing		Total Accruing		Total Nonaccrual		Nonaccrual With No Allowance For Credit Loss		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	706,317	$	0	$	0	$	706,317	$	5,198	$	1,434	$	711,515
Non-working capital loans	834,134		0		0		834,134		7,412		86		841,546
Commercial real estate and multi-family residential loans:
Construction and land development loans	495,406		0		0		495,406		0		0		495,406
Owner occupied loans	804,986		0		0		804,986		1,897		170		806,883
Nonowner occupied loans	921,089		0		0		921,089		1,957		0		923,046
Multifamily loans	437,881		0		0		437,881		0		0		437,881
Agri-business and agricultural loans:
Loans secured by farmland	155,035		0		0		155,035		48		0		155,083
Loans for agricultural production	251,885		0		0		251,885		0		0		251,885
Other commercial loans	97,165		0		0		97,165		0		0		97,165
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans	263,385		1,617		7		265,009		1,783		690		266,792
Open end and junior lien loans	251,009		186		0		251,195		2,186		405		253,381
Residential construction loans	18,778		0		0		18,778		0		0		18,778
Other consumer loans	115,046		526		0		115,572		416		6		115,988
Total	$	5,352,116	$	2,329	$	7	$	5,354,452	$	20,897	$	2,791	$	5,375,349

When management determines that foreclosure is probable, expected credit losses for collateral dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. A loan is considered collateral dependent when the borrower is experiencing financial difficulty and the loan is expected to be repaid substantially through the operation or sale of the collateral. The class of loan represents the primary collateral type associated with the loan. Significant quarter over quarter changes are reflective of changes in nonaccrual status and not necessarily associated with credit quality indicators like appraisal value.


	June 30, 2026
(dollars in thousands)	Real Estate		General Business Assets		Other		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	1,301	$	34,340	$	442	$	36,083
Non-working capital loans	324		18,318		350		18,992
Commercial real estate and multi-family residential loans:
Owner occupied loans	470		1,701		0		2,171
Nonowner occupied loans	1,958		0		0		1,958
Agri-business and agricultural loans:
Loans secured by farmland	0		42		0		42
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	1,390		0		0		1,390
Open end and junior lien loans	2,506		0		0		2,506

Other consumer loans	0		0		439		439
Total	$	7,949	$	54,401	$	1,231	$	63,581


	December 31, 2025
(dollars in thousands)	Real Estate		General Business Assets		Other		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	2,388	$	23,827	$	673	$	26,888
Non-working capital loans	464		3,715		49		4,228
Commercial real estate and multi-family residential loans:
Owner occupied loans	476		1,726		0		2,202
Nonowner occupied loans	1,958		0		0		1,958
Agri-business and agricultural loans:
Loans secured by farmland	0		49		0		49
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	1,725		0		0		1,725
Open end and junior lien loans	2,186		0		0		2,186
Other consumer loans	0		0		416		416
Total	$	9,197	$	29,317	$	1,138	$	39,652

The allowance for credit losses incorporates an estimate of lifetime expected credit losses using historical loss information. The Company uses a probability of default/loss given default model to determine an estimate which is recorded for each asset upon origination. Occasionally, the Company has reason to modify certain terms of loans for borrowers experiencing financial distress by providing the following forms of relief: forgiveness of loan principal, extension of repayment terms, interest rate reduction or an other than insignificant payment delay. The Company can make any or all of these types of concessions as part of such modifications. Since an estimate for historical losses is already included as a component of the allowance for credit losses, a change to the allowance for credit losses is generally not recorded at the time of such modifications unless the loan is individually analyzed and the modification changes the specific reserve allocation. In the event forgiveness of principal is provided, the amount of the forgiveness is charged off against the allowance for credit losses.