v3.26.1
Allowance for Credit Losses
 6 Months Ended
Jun. 30, 2026
Allowance for Credit Loss [Abstract]  
Allowance for Credit Losses Allowance for Credit Losses
The ACL is maintained at a level considered adequate to provide for estimated expected credit losses within the loan portfolio over the contractual life of an instrument that considers our historical loss experience, current conditions and forecasts of future economic conditions as of the balance sheet date. Management’s periodic evaluation of the adequacy of the ACL is based on known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is subjective as it requires material estimates that may be susceptible to significant revisions as more information becomes available.

Roll-Forward of ACL by Portfolio Segment
The following tables provide the activity of our allowance for credit losses for the three and six months ended June 30, 2026 and June 30, 2025 under the CECL model in accordance with ASC 326:
Three Months Ended June 30, 2026
(dollars in thousands)Beginning BalanceCharge-offsRecoveriesProvision (recovery of provision) for credit lossesEnding balance
Commercial mortgage$3,549 $— $— $882 $4,431 
Home equity lines and loans1,272 — 53 (121)1,204 
Residential mortgage1,063 — — (77)986 
Construction and land development2,230 — — 3 2,233 
Commercial, industrial & other finance receivables4,069 (2,176)242 812 2,947 
Small business loans7,728 (414)9 1,252 8,575 
Consumer— (4)1 3 — 
Leases1,341 (455)162 39 1,087 
Total$21,252 $(3,049)$467 $2,793 $21,463 

Six Months Ended June 30, 2026
(dollars in thousands)Beginning BalanceCharge-offsRecoveriesProvision (recovery of provision) for credit lossesEnding balance
Commercial mortgage$3,676 $(3,867)$— $4,622 $4,431 
Home equity lines and loans1,162 — 54 (12)1,204 
Residential mortgage926 — — 60 986 
Construction and land development2,067 — — 166 2,233 
Commercial, industrial & other finance receivables2,982 (3,181)302 2,844 2,947 
Small business loans9,321 (2,963)71 2,146 8,575 
Consumer— (4)2 2 — 
Leases1,439 (1,200)445 403 1,087 
Total$21,573 $(11,215)$874 $10,231 $21,463 
Three Months Ended June 30, 2025
(dollars in thousands)Beginning BalanceCharge-offsRecoveriesProvision (recovery of provision) for credit lossesEnding balance
Commercial mortgage$3,382 $— $— $29 $3,411 
Home equity lines and loans1,165 — 1 98 1,264 
Residential mortgage1,027 — 2 68 1,097 
Construction and land development1,641 — — (60)1,581 
Commercial, industrial & other finance receivables2,765 (858)11 1,735 3,653 
Small business loans8,611 (2,152)3 1,375 7,837 
Consumer— (7)1 6 — 
Leases2,236 (972)362 382 2,008 
Total$20,827 $(3,989)$380 $3,633 $20,851 


Six Months Ended June 30, 2025
(dollars in thousands)Beginning BalanceCharge-offsRecoveriesProvision (recovery of provision) for credit lossesEnding balance
Commercial mortgage$3,469 $— $— $(58)$3,411 
Home equity lines and loans1,147 — 3 114 1,264 
Residential mortgage1,021 — 2 74 1,097 
Construction and land development923 (738)— 1,396 1,581 
Commercial, industrial & other finance receivables3,098 (2,288)28 2,815 3,653 
Small business loans6,304 (2,429)32 3,930 7,837 
Consumer— (7)2 5 — 
Leases2,476 (1,525)488 569 2,008 
Total$18,438 $(6,987)$555 $8,845 $20,851 
Reconciliation of Provision for Credit Losses
The following table provides a reconciliation of the provision for credit losses on the consolidated statements of income between the funded and unfunded components at the dates indicated:
Three Months Ended
June 30,		Six Months Ended
June 30,
(dollars in thousands)2026202520262025
Provision for credit losses - funded loans$2,793 $3,633 $10,231 $8,845 
Provision for credit losses - unfunded loans175 170 230 170 
Total provision for credit losses$2,968 $3,803 $10,461 $9,015 
Allowance Allocated by Portfolio Segment
The following tables detail the allocation of the ACL and the carrying value for loans and other finance receivables by portfolio segment based on the methodology used to evaluate the loans and other finance receivables at the dates indicated:
June 30, 2026
Allowance for credit lossesCarrying value of loans and leases
(dollars in thousands)Individually evaluated Collectively evaluated TotalIndividually evaluated Collectively evaluated Total
Commercial mortgage$— $4,431 $4,431 $12,235 $899,475 $911,710 
Home equity lines and loans49 1,155 1,204 1,600 111,184 112,784 
Residential mortgage (1)
167 819 986 8,401 207,914 216,315 
Construction and land development297 1,936 2,233 26,456 289,055 315,511 
Commercial, industrial & other finance receivables— 2,947 2,947 6,948 438,646 445,594 
Small business loans2,741 5,834 8,575 24,608 99,992 124,600 
Consumer— — — — 288 288 
Leases, net— 1,087 1,087 — 35,182 35,182 
Total (2)
$3,254 $18,209 $21,463 $80,248 $2,081,736 $2,161,984 
(1) Excludes $13.6 million of loans at fair value.
(2) Excludes deferred fees.


December 31, 2025
Allowance for credit lossesCarrying value of loans and leases
(dollars in thousands)Individually evaluated Collectively evaluated TotalIndividually evaluated Collectively evaluated Total
Commercial mortgage$— $3,676 $3,676 $2,472 $876,968 $879,440 
Home equity lines and loans— 1,162 1,162 2,023 104,979 107,002 
Residential mortgage (1)
122 804 926 9,875 211,864 221,739 
Construction and land development331 1,736 2,067 6,650 323,893 330,543 
Commercial, industrial & other finance receivables— 2,982 2,982 6,770 422,211 428,981 
Small business loans2,986 6,335 9,321 24,781 114,984 139,765 
Consumer— — — — 329 329 
Leases, net— 1,439 1,439 — 45,489 45,489 
Total (2)
$3,439 $18,134 $21,573 $52,571 $2,100,717 $2,153,288 
(1) Excludes $14.4 million of loans at fair value.
(2) Excludes deferred fees.

Credit Quality Indicators
As part of the process of determining the ACL to the different segments of the loan and lease portfolio, Management considers certain credit quality indicators. For the commercial mortgage, construction and commercial and industrial loan segments, periodic reviews of the individual loans are performed by Management. The results of these reviews are reflected in the risk grade assigned to each loan. These internally assigned grades are as follows:

•Pass/Watch – Considered to be satisfactory with no indications of deterioration.
•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 deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.
•Substandard – Loans classified as substandard are inadequately protected by the current net worth and payment capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution 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 liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loan balances classified as doubtful have been reduced by partial charge-offs and are carried at their net realizable values.

The following tables detail the carrying value of loans and other finance receivables by portfolio segment based on year of origination and the credit quality indicators used to determine the allowance for credit losses at the dates indicated:

June 30, 2026Revolving Loans Converted to Term LoansRevolving LoansTotal
Term Loans and Other Finance Receivables
(dollars in thousands)20262025202420232022Prior
Commercial mortgage
Pass/Watch$47,888 $115,954 $142,542 $105,549 $158,258 $307,775 $— $7 $877,973 
Special Mention— — — 10,769 1,442 3,141 — — 15,352 
Substandard— 5,022 1,876 200 5,000 6,287 — — 18,385 
Total$47,888 $120,976 $144,418 $116,518 $164,700 $317,203 $— $7 $911,710 
Year-to-date gross charge-offs$— $— $— $— $(3,867)$— $— $— $(3,867)
Construction and land development
Pass/Watch$30,000 $131,652 $69,926 $8,578 $3,271 $11,911 $— $33,718 $289,056 
Special Mention— — — — — — — — — 
Substandard730 1,430 9,011 1,185 10,887 990 — 2,222 26,455 
Total$30,730 $133,082 $78,937 $9,763 $14,158 $12,901 $— $35,940 $315,511 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $— $— 
Commercial, industrial & other finance receivables
Pass/Watch$42,884 $66,619 $61,302 $13,100 $16,297 $29,346 $— $187,556 $417,104 
Special Mention— — — — 110 3,691 — 8,530 12,331 
Substandard— 650 — 850 — 5,682 — 8,977 16,159 
Total$42,884 $67,269 $61,302 $13,950 $16,407 $38,719 $— $205,063 $445,594 
Year-to-date gross charge-offs$— $(1,797)$(232)$— $— $(125)$— $(1,027)$(3,181)
Small business loans
Pass/Watch$6,657 $20,569 $14,392 $14,474 $15,053 $16,588 $— $8,230 $95,963 
Special Mention— — — 849 — — — — 849 
Substandard— 3,823 1,636 4,824 1,324 12,049 — 4,132 27,788 
Total$6,657 $24,392 $16,028 $20,147 $16,377 $28,637 $— $12,362 $124,600 
Year-to-date gross charge-offs$— $(693)$(995)$(319)$(243)$(227)$— $(486)$(2,963)
Total by risk rating
Pass/Watch$127,429 $334,794 $288,162 $141,701 $192,879 $365,620 $— $229,511 $1,680,096 
Special Mention— — — 11,618 1,552 6,832 — 8,530 28,532 
Substandard730 10,925 12,523 7,059 17,211 25,008 — 15,331 88,787 
Total$128,159 $345,719 $300,685 $160,378 $211,642 $397,460 $— $253,372 $1,797,415 
Total year-to-date gross charge-offs$— $(2,490)$(1,227)$(319)$(4,110)$(352)$— $(1,513)$(10,011)
December 31, 2025Revolving Loans Converted to Term LoansRevolving LoansTotal
Term Loans and Other Finance Receivables
(dollars in thousands)20252024202320222021Prior
Commercial mortgage
Pass/Watch$116,630 $116,852 $102,516 $162,329 $127,627 $227,348 $— $— $853,302 
Special Mention— — 4,487 1,474 — 4,159 — — 10,120 
Substandard— — 1,029 8,074 — 6,915 — — 16,018 
Total$116,630 $116,852 $108,032 $171,877 $127,627 $238,422 $— $— $879,440 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $— $— 
Construction and land development
Pass/Watch$117,778 $118,733 $19,858 $9,212 $3,373 $8,263 $— $29,906 $307,123 
Special Mention— — 6,245 — — — — — 6,245 
Substandard1,430 211 1,185 9,096 1,826 492 — 2,935 17,175 
Total$119,208 $118,944 $27,288 $18,308 $5,199 $8,755 $— $32,841 $330,543 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $(738)$(738)
Commercial, industrial & other finance receivables
Pass/Watch$84,183 $62,904 $16,119 $17,270 $9,224 $21,836 $— $193,356 $404,892 
Special Mention— — — 145 3,857 — — 4,608 8,610 
Substandard— — 850 — 523 5,360 — 8,746 15,479 
Total$84,183 $62,904 $16,969 $17,415 $13,604 $27,196 $— $206,710 $428,981 
Year-to-date gross charge-offs$(739)$(1,487)$(160)$(23)$(1,089)$— $— $(1,290)$(4,788)
Small business loans
Pass/Watch$29,760 $17,403 $17,955 $16,903 $9,448 $8,935 $— $10,713 $111,117 
Special Mention— 477 134 — — — — 140 751 
Substandard2,567 2,127 3,893 874 10,523 4,002 — 3,911 27,897 
Total$32,327 $20,007 $21,982 $17,777 $19,971 $12,937 $— $14,764 $139,765 
Year-to-date gross charge-offs$(1,211)$(433)$(550)$(233)$(692)$(1,057)$— $(813)$(4,989)
Total by risk rating
Pass/Watch$348,351 $315,892 $156,448 $205,714 $149,672 $266,382 $— $233,975 $1,676,434 
Special Mention— 477 10,866 1,619 3,857 4,159 — 4,748 25,726 
Substandard3,997 2,338 6,957 18,044 12,872 16,769 — 15,592 76,569 
Total$352,348 $318,707 $174,271 $225,377 $166,401 $287,310 $— $254,315 $1,778,729 
Total year-to-date gross charge-offs$(1,950)$(1,920)$(710)$(256)$(1,781)$(1,057)$— $(2,841)$(10,515)

The Corporation had no loans with a risk rating of Doubtful included within recorded investment in loans and leases held for investment at June 30, 2026 and December 31, 2025.
In addition to credit quality indicators as shown in the above tables, allowance allocations for home equity lines and loans, residential mortgages, consumer loans and leases are also applied based on their year of origination and performance status at the dates indicated:

June 30, 2026Revolving LoansTotal
Term Loans
(dollars in thousands)20262025202420232022Prior
Home equity lines and loans
Performing$71 $1,048 $650 $123 $470 $3,035 $105,787 $111,184 
Nonperforming— — — — — 433 1,167 1,600 
Total$71 $1,048 $650 $123 $470 $3,468 $106,954 $112,784 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $— 
Residential mortgage (1)
Performing$8,346 $23,443 $6,291 $22,886 $118,813 $28,135 $— $207,914 
Nonperforming— — 722 439 2,263 4,977 — 8,401 
Total$8,346 $23,443 $7,013 $23,325 $121,076 $33,112 $— $216,315 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $— 
Consumer
Performing$— $— $— $18 $6 $181 $83 $288 
Nonperforming— — — — — — — — 
Total$— $— $— $18 $6 $181 $83 $288 
Year-to-date gross charge-offs$— $— $— $— $— $— $(4)$(4)
Leases, net
Performing$4,768 $5,252 $312 $7,288 $13,100 $2,972 $— $33,692 
Nonperforming— 101 — 538 755 96 — 1,490 
Total$4,768 $5,353 $312 $7,826 $13,855 $3,068 $— $35,182 
Year-to-date gross charge-offs$— $(94)$— $(303)$(483)$(320)$— $(1,200)
Total by Payment Performance
Performing$13,185 $29,743 $7,253 $30,315 $132,389 $34,323 $105,870 $353,078 
Nonperforming— 101 722 977 3,018 5,506 1,167 11,491 
Total$13,185 $29,844 $7,975 $31,292 $135,407 $39,829 $107,037 $364,569 
Total year-to-date gross charge-offs$— $(94)$— $(303)$(483)$(320)$(4)$(1,204)
(1) Excludes $13.6 million of loans at fair value.
December 31, 2025Revolving LoansTotal
Term Loans
(dollars in thousands)20252024202320222021Prior
Home equity lines and loans
Performing$1,103 $658 $196 $534 $207 $3,102 $99,179 $104,979 
Nonperforming— — — — 91 342 1,590 2,023 
Total$1,103 $658 $196 $534 $298 $3,444 $100,769 $107,002 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $— 
Residential mortgage (1)
Performing$25,957 $8,080 $26,278 $122,566 $15,775 $13,208 $— $211,864 
Nonperforming— 437 672 3,398 737 4,631 — 9,875 
Total$25,957 $8,517 $26,950 $125,964 $16,512 $17,839 $— $221,739 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $— 
Consumer
Performing$— $5 $22 $12 $— $220 $70 $329 
Nonperforming— — — — — — — — 
Total$— $5 $22 $12 $— $220 $70 $329 
Year-to-date gross charge-offs$— $— $— $— $— $— $(11)$(11)
Leases, net
Performing$6,232 $482 $10,149 $19,369 $6,561 $717 $— $43,510 
Nonperforming— — 518 1,099 342 20 — 1,979 
Total$6,232 $482 $10,667 $20,468 $6,903 $737 $— $45,489 
Year-to-date gross charge-offs$— $— $(90)$(1,472)$(756)$(40)$— $(2,358)
Total by Payment Performance
Performing$33,292 $9,225 $36,645 $142,481 $22,543 $17,247 $99,249 $360,682 
Nonperforming— 437 1,190 4,497 1,170 4,993 1,590 13,877 
Total$33,292 $9,662 $37,835 $146,978 $23,713 $22,240 $100,839 $374,559 
Total year-to-date gross charge-offs$— $— $(90)$(1,472)$(756)$(40)$(11)$(2,369)
(1) Excludes $14.4 million of fair value loans.
Modifications to Borrowers Experiencing Financial Difficulty
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 ACL on loans and leases, a change to the allowance for credit losses is generally not recorded upon modification. However, when principal forgiveness is provided, the amortized cost basis of the asset is written off against the ACL on loans and leases. The amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses.
The following presents, by class, information regarding accruing and nonaccrual modifications to borrowers experiencing financial difficulty during the three and six months ended June 30, 2026 and 2025.
Three Months Ended June 30, 2026Three Months Ended June 30, 2025
(dollars in thousands)NumberAmortized Cost Basis% of Total Class of Financing ReceivableRelated ReserveNumberAmortized Cost Basis% of Total Class of Financing ReceivableRelated Reserve
Accruing Modifications to Borrowers Experiencing Financial Difficulty:
Commercial mortgage3$4,228 0.5 %$— —$— — %$— 
Construction and land development13,500 1.1 %80 29,096 3.2 %— 
Commercial, industrial & other finance receivables12,303 0.5 %42 2850 0.2 %— 
Small business loans2315 0.3 %53 1461 0.3 %— 
    Total7$10,346 $175 5$10,407 $— 
Nonaccrual Modifications to Borrowers Experiencing Financial Difficulty:
Commercial mortgage10$10,501 1.2 %$— —$— — %$— 
Residential mortgage—— — %— 2911 0.4 %— 
Commercial, industrial & other finance receivables2882 0.2 %— —— — %— 
Leases
—— — %— 18845 1.5 %— 
    Total12$11,383 $— 20$1,756 $— 
Six Months Ended June 30, 2026Six Months Ended June 30, 2025
(dollars in thousands)NumberAmortized Cost Basis% of Total Class of Financing ReceivableRelated ReserveNumberAmortized Cost Basis% of Total Class of Financing ReceivableRelated Reserve
Accruing Modifications to Borrowers Experiencing Financial Difficulty:
Commercial mortgage3$4,228 0.5 %$— 1 $959 0.1 %$— 
Construction and land development13,500 1.1 %80 4 10,492 3.7 %— 
Commercial, industrial & other finance receivables12,303 0.5 %42 3 1,927 0.5 %— 
Small business loans31,136 0.9 %207 4 2,409 1.7 %— 
    Total8$11,167 $329 12 $15,787 $— 
Nonaccrual Modifications to Borrowers Experiencing Financial Difficulty:
Commercial mortgage11$13,410 1.5 %$— — $— — %$— 
Residential mortgage1224 0.1 %— 2 911 0.4 %— 
Construction and land development412,116 3.8 %97 1 2,971 1.0 %402 
Commercial, industrial & other finance receivables2882 0.2 %— — — — %— 
Small business loans1270 0.2 %131 1 551 0.4 %434 
Leases9230 0.7 %4 18 845 1.5 %— 
    Total28$27,132 $232 22 $5,278 $836 
The following presents, by class, information regarding accruing and nonaccrual modifications to borrowers experiencing financial difficulty during the three and six months ended June 30, 2026 and 2025.
Three Months Ended
June 30, 2026		Three Months Ended June 30, 2025
NumberFinancial EffectNumberFinancial Effect
Accruing Modifications to Borrowers Experiencing Financial Difficulty:
Commercial mortgage3Extend maturity date—
Construction and land development1Extend maturity date2Extend maturity date
Commercial, industrial & other finance receivables1Extend maturity date2Extend maturity date
Small business loans2Short-term P&I deferment1Extend maturity date
    Total75
Nonaccrual Modifications to Borrowers Experiencing Financial Difficulty:
Commercial mortgage10Extend maturity date, interest only payments, interest rate adjustment—
Residential mortgage—2Extend maturity date
Commercial, industrial & other finance receivables2Interest rate adjustment—
Leases—18Extend maturity date
    Total1220
Six Months Ended June 30, 2026Six Months Ended
June 30, 2025
NumberFinancial EffectNumberFinancial Effect
Accruing Modifications to Borrowers Experiencing Financial Difficulty:
Commercial mortgage3Extend maturity date 1Extend maturity date and allow additional lender funding
Construction and land development1Extend maturity date 4Extend maturity date
Commercial, industrial & other finance receivables1Extend maturity date3Extend maturity date
Small business loans3Extend maturity date and short-term interest only4Extend maturity date
    Total812
Nonaccrual Modifications to Borrowers Experiencing Financial Difficulty:
Commercial mortgage11Extend maturity date, interest only payments, interest rate adjustment—
Residential mortgage1Extend maturity date2Extend maturity date
Construction and land development4Extend maturity date1Extend maturity date
Commercial, industrial & other finance receivables2Interest rate adjustment—
Small business loans1Short-term P&I deferment1Extend maturity date
Leases9Extend maturity date18Extend maturity date
    Total2822
There were 19 and 25 modifications granted to borrowers experiencing financial difficulty during the three months ended June 30, 2026 and June 30, 2025, respectively. There were 36 and 34 modifications granted to borrowers experiencing financial difficulty during the six months ended June 30, 2026 and June 30, 2025, respectively.

There were no loans that had payment defaults during the six months ended June 30, 2026, and 2025, respectively. There were $195 thousand in commitments to lend additional funds to the borrowers experiencing financial difficulty that had modifications during the six months ended June 30, 2026 and $2.3 million in commitments to lend additional funds to such borrowers during the six months ended June 30, 2025.

The following presents, by class of loans, the amortized cost and performance status of accruing and nonaccrual modified loans to borrowers experiencing financial difficulty that have been modified in the last 12 months as of June 30, 2026 and 2025.
June 30, 2026
Current30-59 days past due60-89 days past due90+ days past due and still accruingNonaccrual loans and leasesTotal
(dollars in thousands)
Commercial mortgage$4,228 $— $— $— $14,793 $19,021 
Residential mortgage526 — — — 595 1,121 
Construction and land development3,500 — — — 12,116 15,616 
Commercial, industrial & other finance receivables2,303 — — — 1,732 4,035 
Small business loans1,443 — — — 2,125 3,568 
Leases— — — — 230 230 
    Total$12,000 $— $— $— $31,591 $43,591 

June 30, 2025
Current30-59 days past due60-89 days past due90+ days past due and still accruingNonaccrual loans and leasesTotal
(dollars in thousands)
Commercial mortgage$959 $— $— $— $— $959 
Residential mortgage— — — — 911 911 
Construction and land development10,492 — — — 2,971 13,463 
Commercial, industrial & other finance receivables1,927 — — — — 1,927 
Small business loans2,409 — — — 551 2,960 
Leases— — — — 845 845 
    Total$15,787 $— $— $— $5,278 $21,065