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LOANS AND LOANS HELD-FOR-SALE
 6 Months Ended
Jun. 30, 2026
Receivables [Abstract]  
LOANS AND LOANS HELD-FOR-SALE LOANS AND LOANS HELD-FOR-SALE
During the three months ended March 31, 2026, the Company completed the sale (the “Loan Sale Transaction”) of all loans, subsequently reduced to judgments, related to various entities in which James C. Justice II has an interest (such loans, subsequently reduced to judgments, the “Judgments”). The Loan Sale Transaction was completed as an absolute, “as-is, where-is” sale to an unaffiliated third party. The Loan Sale Transaction resulted in changes to total portfolio loans and the allowance for credit losses, due to a release of specific reserves of $18.0 million related to the Judgments, as well as a $15.0 million net recovery associated with the Judgments, in each case related to the Loan Sale Transaction.
The composition of the loan portfolio by dollar amount is shown in the table below at the dates presented:
(Dollars in Thousands)June 30, 2026December 31, 2025
Commercial
Commercial Real Estate$2,143,362 $2,114,314 
Commercial and Industrial262,432 231,921 
Total Commercial Loans 2,405,794 2,346,235 
Consumer
Residential Mortgages814,383 822,141 
Other Consumer25,154 28,416 
Total Consumer Loans839,537 850,557 
Construction489,263 465,613 
Other— 217,155 
Total Portfolio Loans3,734,594 3,879,560 
Loans Held-for-Sale467 339 
Total Loans$3,735,061 $3,879,899 
The Company attempts to limit exposure to credit risk by diversifying the loan portfolio by segment, geography, collateral and industry, while actively monitoring and managing concentrations. When concentrations exist in certain loan segments, management seeks to mitigate this risk through ongoing review of relevant economic indicators, portfolio performance metrics, and internal risk rating trends specific to those segments.
The Company’s loan policy establishes targets for key underwriting criteria, including debt service coverage ratios, loan-to-value ratios, loan terms, amortization periods, and loan-to-cost limits for construction projects. While leverage is an important consideration, management places significant emphasis on cash flow generation and uses borrower stress testing to determine supportable loan amounts.
Unsecured loans present a higher level of risk due to the absence of a defined secondary source of repayment. Accordingly, commercial unsecured lending is generally limited to high quality borrowers with well-established businesses, strong cash flow, and low financial and operating leverage. Repayment capacity for unsecured borrowers is expected to exceed policy guidelines applicable to secured loans. In addition, the Company strengthened underwriting standards for consumer unsecured lending by increasing minimum qualifying Fair Isaac Corporation (“FICO”) score requirements and reducing approved loan amounts for borrowers with lower credit scores, which contributed to a significant reduction in loss rate.
Deferred loan costs, net of fees, included in loan portfolio balances totaled $18.1 million at June 30, 2026 and $14.5 million at December 31, 2025. Discounts on purchased 1-4 family loans included in portfolio balances totaled $62.9 thousand and $73.2 thousand at June 30, 2026 and December 31, 2025, respectively.
As of June 30, 2026, the Company had $467 thousand in loans held-for-sale and $339 thousand as of December 31, 2025.
Loan Restructurings
A loan that is considered a restructured loan may be subject to the individually evaluated loan (“IEL”) analysis if the commitment is $1.0 million or greater and/or based on management’s discretion; otherwise, the restructured loan remains in the appropriate segment in the ACL model. For a discussion with respect to reserve calculations regarding IELs refer to the “Nonrecurring Basis” section in Note 6 - Fair Value Measurements, in the Notes to Consolidated Financial Statements in Item 1. of this Quarterly Report on Form 10-Q.
The following table shows the amortized cost basis as of June 30, 2026 and June 30, 2025 for the loans restructured during the three and six months ended June 30, 2026 and June 30, 2025 to borrowers experiencing financial difficulty, disaggregated by portfolio segment:
Restructured Loans
Three Months Ended June 30, 2026Six Months Ended June 30, 2026
(Dollars in Thousands)Number of ContractsAmortized Cost Basis% of Total Class of Financing ReceivableNumber of ContractsAmortized Cost Basis% of Total Class of Financing Receivable
Accruing Restructured Loans
Commercial Real Estate— $— — %— $— — %
Commercial and Industrial1 253 0.10 %3 1,202 0.46 %
Residential Mortgages— — — %— — — %
Other Consumer— — — %— — — %
Construction1 17,240 3.52 %1 17,240 3.52 %
Other— — — %— — — %
Total Accruing Restructured Loans2 $17,493 0.47 %4 $18,442 0.49 %
Nonaccrual Restructured Loans
Commercial Real Estate— $— — %— $— — %
Commercial and Industrial— — — %— — — %
Residential Mortgages— — — %— — — %
Other Consumer— — — %— — — %
Construction— — — %— — — %
Other— — — %— — — %
Total Nonaccrual Restructured Loans— $— — %— $— — %
Total Restructured Loans2 $17,493 0.47 %4 $18,442 0.49 %
Restructured Loans
Three Months Ended June 30, 2025Six Months Ended June 30, 2025
(Dollars in Thousands)Number of ContractsAmortized Cost Basis% of Total Class of Financing ReceivableNumber of ContractsAmortized Cost Basis% of Total Class of Financing Receivable
Accruing Restructured Loans
Commercial Real Estate— $— — %— $— — %
Commercial and Industrial— — — %— — — %
Residential Mortgages— — — %— — — %
Other Consumer— — — %— — — %
Construction— — — %1 4,516 1.02 %
Other— — — %— — — %
Total Accruing Restructured Loans— $— — %1 $4,516 0.12 %
Nonaccrual Restructured Loans
Commercial Real Estate— $— — %— $— — %
Commercial and Industrial2 1,004 0.45 %2 1,004 0.45 %
Residential Mortgages— — — %— — — %
Other Consumer— — — %— — — %
Construction— — — %— — — %
Other4 76,509 32.05 %9 235,542 98.67 %
Total Nonaccrual Restructured Loans6 $77,513 2.07 %11 $236,546 6.31 %
Total Restructured Loans6 $77,513 2.07 %12 $241,062 6.43 %
The Bank closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table shows the performance of loans that were modified during the three and six months ended June 30, 2026 and June 30, 2025:
As of June 30, 2026As of June 30, 2025
Payment Status (Amortized Cost Basis)
(Dollars in Thousands)Current30-89 Days Past Due90+ Days Past DueTotalCurrent30-89 Days Past Due90+ Days Past DueTotal
Accruing Restructured Loans
Commercial Real Estate$— $— $— $— $— $— $— $— 
Commercial and Industrial1,202 — — 1,202 — — — — 
Residential Mortgages— — — — — — — — 
Other Consumer— — — — — — — — 
Construction17,240 — — 17,240 — 4,516 — 4,516 
Other— — — — — — — — 
Total Accruing Restructured Loans$18,442 $— $— $18,442 $— $4,516 $— $4,516 
— — 
Nonaccrual Restructured Loans— — 
Commercial Real Estate$— $— $— $— $— $— $— $— 
Commercial and Industrial— — — — 1,004 — — 1,004 
Residential Mortgages— — — — — — — — 
Other Consumer— — — — — — — — 
Construction— — — — — — — — 
Other— — — — 235,542 — — 235,542 
Total Nonaccrual Restructured Loans$— $— $— $— $236,546 $— $— $236,546 
Total Restructured Loans$18,442 $— $— $18,442 $236,546 $4,516 $— $241,062 
The following tables present the amortized cost of modified loans to borrowers experiencing financial difficulty by portfolio segment and type of modification during the periods presented.
Three Months Ended June 30, 2026
(Dollars in Thousands)Payment Delay/ Extended Fixed RateShort-term ExtensionTotal% of Total Class of Financing Receivable
Commercial and Industrial$253 $— $253 0.10 %
Construction— 17,240 17,240 3.52 %
Total$253 $17,240 $17,493 0.47 %
Six Months Ended June 30, 2026
(Dollars in Thousands)Payment Delay/Extended Fixed RateShort-term ExtensionTotal% of Total Class of Financing Receivable
Commercial and Industrial$254 $948 $1,202 0.46 %
Construction— 17,240 17,240 3.52 %
Total$254 $18,188 $18,442 0.49 %

Three Months Ended June 30, 2025
(Dollars in Thousands)Payment DelayShort-term ExtensionTotal% of Total Class of Financing Receivable
Commercial and Industrial$— $1,004 $1,004 0.45 %
Other— 76,509 76,509 32.05 %
Total$— $77,513 $77,513 2.07 %
Six Months Ended June 30, 2025
(Dollars in Thousands)Payment DelayShort-term ExtensionTotal% of Total Class of Financing Receivable
Commercial and Industrial$— $1,004 $1,004 0.45 %
Construction4,516 — 4,516 1.02 %
Other— 235,542 235,542 98.67 %
Total$4,516 $236,546 $241,062 6.43 %
The following tables describe the effect of loan modifications made to borrowers experiencing financial difficulty during the periods presented:
Three Months Ended June 30, 2026
Weighted-Average Payment DelayWeighted-Average Short-term ExtensionWeighted-Average Interest Rate Reduction
Commercial and Industrial0.59 years— 0.50 %
Construction— 0.08 years— %
Six Months Ended June 30, 2026
Weighted-Average Payment DelayWeighted-Average Short-term ExtensionWeighted-Average Interest Rate Reduction
Commercial and Industrial0.83 years0.41 years0.50 %
Construction— 0.41 years— %

Three Months Ended June 30, 2025
Weighted-Average Payment DelayWeighted-Average Term Extension/Payment Delay
Commercial and Industrial$— 0.07 years
Other— 0.24 years
Six Months Ended June 30, 2025
Weighted-Average Payment DelayWeighted-Average Term Extension/Payment Delay
Commercial and Industrial— 0.07 years
Construction0.32 years— 
Other— 0.86 years
During the second quarter of 2026, one commercial and industrial loan relationship and one construction loan relationship that had previously been modified during the first quarter of 2026 were subsequently modified again. As a result, these relationships are included as current-period loan modifications in the tables above.
As of June 30, 2026 and December 31, 2025, the Bank had approximately $2.1 million and $4.5 million of commitments to lend additional funds on accruing loans that had been restructured. As of June 30, 2026 and December 31, 2025, the Bank had no commitments to lend additional funds on nonperforming loans that had been restructured. In addition, as of June 30, 2026 and December 31, 2025, the Bank had no loan commitments that defaulted during the period and had been modified prior to payment default while the borrower was experiencing financial difficulty at the time of modification.
For purposes of this disclosure, a default is defined as the occurrence, within 12 months of the original loan modification, of either a full or partial charge-off or the loan becoming 90 days or more past due.
As of June 30, 2026 and December 31, 2025, the Company had $0.5 million and $2.0 million, respectively, of residential real estate loans in process of foreclosure. Residential real estate included in OREO totaled $2.1 million at June 30, 2026 and $0.0 at December 31, 2025.