COMMITMENTS AND CONTINGENT LIABILITIES

6 Months Ended

Jun. 30, 2026

COMMITMENTS AND CONTINGENT LIABILITIES

COMMITMENTS AND CONTINGENT LIABILITIES

8.COMMITMENTS AND CONTINGENT LIABILITIES

Commitments to Extend Credit

The Company is party to financial instruments with OBS credit risk in the normal course of business. These financial instruments primarily consist of commitments to extend credit and standby letters of credit. The contractual or notional amounts of these instruments represent the Company’s potential future obligations. The creditworthiness of counterparties is evaluated on a case-by-case basis in accordance with the Company’s credit policies. Depending on the results of the credit evaluation, collateral may be required and can include business assets of commercial borrowers, as well as personal property and real estate of individual borrowers or guarantors.

The Company also extends binding commitments to current and prospective borrowers. Such commitments generally provide for financing during a specified period of time and may be subject to specified terms and conditions. The Company’s risk under these commitments is limited by the contractual provisions of the agreements. For example, the Company may not be obligated to advance funds if the borrower’s financial condition deteriorates or if the borrower fails to comply with applicable covenants or other contractual requirements.

Approved but unfunded loan commitments expose the Company to credit, liquidity, and interest rate risk. Borrowers may draw on available commitments and require funding, while increases in market interest rates above committed rates may adversely affect the profitability of such commitments. However, because a portion of commitments is expected to expire without being drawn, the total contractual amount outstanding does not necessarily represent the Company's future funding obligations.

The following table presents the Company’s lending-related commitments, excluding Mortgage Banking loan commitments:


(in thousands)		June 30, 2026			December 31, 2025

Unused warehouse lines of credit		$	552,804		$	436,909
Unused home equity lines of credit			502,995			487,822
Unused loan commitments - other			1,194,705			1,203,211
Standby letters of credit			13,040			10,385
Total commitments		$	2,263,544		$	2,138,327

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a borrower to a third party. The credit risk associated with these instruments is substantially the same as that involved in extending loans and other commitments to extend credit. Standby letters of credit also expose the Company to liquidity risk, as funding may be required upon demand by the beneficiary. The Company does not consider this liquidity risk to be material.

The following tables present a roll-forward of the ACLC:


			ACLC Roll-forward
			Three Months Ended June 30,
			2026															2025
			Beginning						Charge-						Ending			Beginning						Charge-						Ending
(in thousands)			Balance			Provision			offs			Recoveries			Balance			Balance			Provision			offs			Recoveries			Balance

Unused Loan Commitments
Warehouse lines of credit			$	62		$	26		$	—		$	—		$	88		$	105		$	(13)		$	—		$	—		$	92
Home equity lines of credit				223			33			—			—			256			199			(4)			—			—			195
Construction lines of credit				679			—			—			—			679			737			(34)			—			—			703
RCS lines of credit				250			50			—			—			300			190			30			—			—			220
Loan commitments - other				316			(69)			—			—			247			279			11			—			—			290

Total			$	1,530		$	40		$	—		$	—		$	1,570		$	1,510		$	(10)		$	—		$	—		$	1,500


			ACLC Roll-forward
			Six Months Ended June 30,
			2026															2025
			Beginning						Charge-						Ending			Beginning						Charge-						Ending
(in thousands)			Balance			Provision			offs			Recoveries			Balance			Balance			Provision			offs			Recoveries			Balance

Unused Loan Commitments
Warehouse lines of credit			$	73		$	15		$	—		$	—		$	88		$	79		$	13		$	—		$	—		$	92
Home equity lines of credit				189			67			—			—			256			183			12			—			—			195
Construction lines of credit				585			94			—			—			679			677			26			—			—			703
RCS lines of credit				230			70			—			—			300			300			(80)			—			—			220
Loan commitments - other				373			(126)			—			—			247			251			39			—			—			290

Total			$	1,450		$	120		$	—		$	—		$	1,570		$	1,490		$	10		$	—		$	—		$	1,500