Loans And Allowance For Credit Losses

6 Months Ended

Jun. 30, 2026

Loans And Allowance For Credit Losses [Abstract]

Note 8 – Loans and allowance for credit losses

The Company’s primary portfolio segments align with the methodology applied in estimating the allowance for credit losses and are reflected in the disclosures as of and for the periods indicated, as set forth below. Management has determined that the classifications presented below are appropriate for identifying and managing risk within the loan portfolio.


Loan Segments:		Loan Classes:
Commercial		Commercial and Industrial Loans
Commercial Real Estate		Commercial Mortgages – Owner Occupied
		Commercial Mortgages – Non-Owner Occupied
		Commercial Construction/Land
Consumer		Consumer Open-End
		Consumer Closed-End
Residential		Residential Mortgages
		Residential Consumer Construction/Land

Commercial and Commercial Real Estate

Commercial loans are primarily underwritten based on the identified cash flows of the borrower, and secondarily on the underlying collateral provided. Borrower cash flows may not meet expectations, and the value of collateral securing these loans can fluctuate. Most commercial loans are secured by the assets being financed or other business assets, such as accounts receivable or inventory, and may include personal guarantees. Short-term loans may be made on an unsecured basis. For loans secured by accounts receivable, the availability of funds for repayment may substantially depend on the borrower’s ability to collect amounts due from its customers.

Commercial real estate loans are viewed primarily as cash flow loans, with the collateral serving as a secondary source of repayment. Commercial real estate lending typically involves higher loan principal amounts, with repayment generally dependent on the successful operation of the property or the business conducted on the property. These loans may be more adversely affected by conditions in the real estate markets or the general economy. The properties securing the Company’s commercial real estate portfolio are diverse but are geographically concentrated almost entirely within the Company’s market area. Management monitors and evaluates commercial real estate loans based on collateral, geography, and risk grade criteria. In general, the Company avoids financing single-purpose projects unless other underwriting factors are present to help mitigate risk. Management also tracks the level of owner-occupied versus non-owner-occupied commercial real estate loans.

Consumer and Residential

Consumer and residential segments consist of residential mortgage loans and personal loans. The consumer loan segment includes home equity lines of credit (HELOCs) and other second mortgages. Home equity loans are typically secured by a subordinate interest in 1–4 family residences, while consumer personal loans may be secured by personal assets such as automobiles or recreational vehicles, or may be unsecured, such as small installment loans and certain lines of credit.

For residential mortgage loans secured by 1–4 family, generally owner-occupied residences, the Company typically establishes a maximum loan-to-value ratio. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be affected by economic conditions in the market area, such as unemployment levels. Repayment can also be impacted by changes in property values. Risk is mitigated by the smaller individual loan amounts and the diversification provided by a large number of borrowers.

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Note 8 – Loans and allowance for credit losses (continued)

A summary of loans, net of deferred costs of $583,000 and $629,000 as of June 30, 2026 and December 31, 2025, respectively, is as follows (dollars in thousands):


	As of	As of
	June 30, 2026	December 31, 2025
Commercial	$ 71,029	$ 66,394
Commercial Real Estate:
Commercial Mortgages-Owner Occupied	168,429	150,085
Commercial Mortgages-Non-Owner Occupied	200,497	215,301
Commercial Construction/Land	35,455	16,339
Consumer:
Consumer Open-End	66,709	63,070
Consumer Closed-End	23,056	25,092
Residential:
Residential Mortgages	104,219	105,927
Residential Consumer Construction/Land	23,287	25,599

Total loans	$ 692,681	$ 667,807

Less allowance for credit losses	6,597	6,450

Net loans	$ 686,084	$ 661,357

The following table presents the amortized cost basis of collateral dependent loans by loan segment (dollars in thousands):


Collateral Dependent Loans	June 30, 2026
	Business/Other Assets	Real Estate
Commercial	$ 2,881	$ -
Commercial Real Estate	-	4,491
Consumer	-	450
Residential	-	1,399
Total	$ 2,881	$ 6,340


Collateral Dependent Loans	December 31, 2025
	Business/Other Assets	Real Estate
Commercial	$ 2,661	$ -
Commercial Real Estate	-	5,434
Consumer	-	566
Residential	-	1,577
Total	$ 2,661	$ 7,577

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Note 8 – Loans and allowance for credit losses (continued)

The following tables present the activity in the allowance for credit losses for the three and six-month periods ended and the distribution of the allowance by segment as of June 30, 2026, and 2025 (dollars in thousands).



	Allowance for Credit Losses
	As of and For the Three Months Ended June 30, 2026

		Commercial
2026	Commercial	Real Estate	Consumer	Residential	Total
Allowance for Credit Losses:
Beginning Balance, March 31, 2026	$ 678	$ 3,204	$ 736	$ 1,583	$ 6,201
Charge-Offs	(12)	-	(78)	-	(90)
Recoveries	-	-	76	-	76
Provision for (recovery of) credit losses	144	283	53	(70)	410
Ending Balance, June 30, 2026	$ 810	$ 3,487	$ 787	$ 1,513	$ 6,597



	Allowance for Credit Losses
	As of and For the Six Months Ended June 30, 2026

		Commercial
2026	Commercial	Real Estate	Consumer	Residential	Total
Allowance for Credit Losses:
Beginning Balance, December 31, 2025	$ 697	$ 3,262	$ 839	$ 1,652	$ 6,450
Charge-Offs	(12)	-	(300)	-	(312)
Recoveries	53	-	88	-	141
Provision for (recovery of) credit losses	72	225	160	(139)	318
Ending Balance, June 30, 2026	$ 810	$ 3,487	$ 787	$ 1,513	$ 6,597



	Allowance for Credit Losses
	As of and For the Three Months Ended June 30, 2025

			Commercial
2025	Commercial		Real Estate	Consumer	Residential	Total
Allowance for Credit Losses:
Beginning Balance, March 31, 2025	$ 532		$ 3,915	$ 837	$ 1,737	$ 7,021
Charge-Offs	-		-	(160)	-	(160)
Recoveries	1		-	1	-	2
Provision for (recovery of) credit losses	214		(868)	121	(22)	(555)
Ending Balance, June 30, 2025	$ 747	-	$ 3,047	$ 799	$ 1,715	$ 6,308

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Note 8 – Loans and allowance for credit losses (continued)



	Allowance for Credit Losses
	As of and For the Six Months Ended June 30, 2025

		Commercial
2025	Commercial	Real Estate	Consumer	Residential	Total
Allowance for Credit Losses:
Beginning Balance, December 31, 2024	$ 686	$ 3,719	$ 842	$ 1,797	$ 7,044
Charge-Offs	-	-	(212)	(9)	$ (221)
Recoveries	5	1	7	-	$ 13
Provision for (recovery of) credit losses	56	(673)	162	(73)	$ (528)
Ending Balance, June 30, 2025	$ 747	$ 3,047	$ 799	$ 1,715	$ 6,308

In the second quarter of 2025, the Company, in collaboration with its third-party model vendor and as part of ongoing model governance, implemented updates to the quantitative CECL loss models for collectively evaluated loan segments that use discounted cash flow techniques (all segments other than agricultural loans, which uses the weighted-average remaining life method). The principal balance of loans in the agricultural portfolio, which is included within the commercial classification below, was $3,903,000 and $4,381,000 at June 30, 2026 and December 31, 2025, respectively.

The updates (i) revised certain maximum loss-rate parameters and (ii) incorporated additional post-COVID historical loss data into the loss history used to estimate expected credit losses. As a result of these updates, expected loss rates declined across affected segments, most notably in the commercial real estate and consumer segments, contributing to a reduction in the allowance for credit losses as a percentage of loans in those segments. The updated model specifications were first reflected in the second quarter 2025 provision for credit losses and have remained in use through June 30, 2026, with no further specification changes. Economic forecasts are refreshed each quarter as part of the Company’s standard CECL process. Provision activity for the three and six-month periods of 2026 reflected the ongoing application of these models, together with normal portfolio dynamics, updated economic forecasts, and changes in loan composition and balances.

Credit Quality Indicators

The Bank’s internal risk rating system is in place to grade commercial and commercial real estate loans. Category ratings are reviewed periodically by lenders and the credit review area of the Bank based on the borrower’s individual situation. Additionally, internal and external monitoring and review of credits are conducted on an annual basis.

Below is a summary and definition of the Bank’s risk rating categories:


RATING 1		Excellent
RATING 2		Above Average
RATING 3		Satisfactory
RATING 4		Acceptable / Low Satisfactory
RATING 5		Monitor
RATING 6		Special Mention
RATING 7		Substandard
RATING 8		Doubtful
RATING 9		Loss

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Note 8 – Loans and allowance for credit losses (continued)

We segregate commercial and commercial real estate loans into the above categories based on the following criteria and we review the characteristics of each rating at least annually, generally during the first quarter. The characteristics of these ratings are as follows:

“Pass.” These are loans having risk ratings of 1 through 4. Pass loans are to persons or business entities with an acceptable financial condition, appropriate collateral margins, appropriate cash flow to service the existing loan, and an appropriate leverage ratio. The borrower has paid all obligations as agreed and it is expected that this type of payment history will continue. When necessary, acceptable personal guarantors support the loan.

“Monitor.” These are loans having a risk rating of 5. Monitor loans have currently acceptable risk but may have the potential for a specific defined weakness in the borrower’s operations and the borrower’s ability to generate positive cash flow on a sustained basis. The borrower’s recent payment history may currently or in the future be characterized by late payments. The Bank’s risk exposure is mitigated by collateral supporting the loan. The collateral is considered to be well-margined, well maintained, accessible and readily marketable.

“Special Mention.” These are loans having a risk rating of 6. Special Mention loans have weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Bank’s credit position at some future date. Special Mention loans are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. These loans do warrant more than routine monitoring due to a weakness caused by adverse events.

“Substandard.” These are loans having a risk rating of 7. Substandard loans are considered to have specific and well-defined weaknesses that jeopardize the viability of the Bank’s credit extension. The payment history for the loan has been inconsistent and the expected or projected primary repayment source may be inadequate to service the loan. The estimated net liquidation value of the collateral pledged and/or ability of the personal guarantor(s) to pay the loan may not adequately protect the Bank. There is a distinct possibility that the Bank will sustain some loss if the deficiencies associated with the loan are not corrected in the near term. A substandard loan would not automatically meet our definition of impaired unless the loan is significantly past due and the borrower’s performance and financial condition provides evidence that it is probable that the Bank will be unable to collect all amounts due.

“Doubtful.” These are loans having a risk rating of 8. Doubtful rated loans have all the weaknesses inherent in a loan that is classified substandard but 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. The possibility of loss is extremely high.

“Loss.” These are loans having a risk rating of 9. Loss rated loans are not considered collectible under normal circumstances and there is no realistic expectation for any future payment on the loan. Loss rated loans are fully charged off.

There were no loans classified as doubtful or loss at June 30, 2026 or December 31, 2025.

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Note 8 – Loans and allowance for credit losses (continued)

The table below details the amortized cost of the classes of loans by credit quality indicator and year of origination as of June 30, 2026 (dollars in thousands).


	Term Loans Amortized Cost Basis by Origination Year
	2026	2025	2024	2023	2022	Prior	Revolving Loans Amortized Cost Basis	Revolving Loans Converted to Term	Total
Commercial:
Risk Rating
Pass and monitor	$ 7,910	$ 8,490	$ 4,371	$ 1,606	$ 932	$ 16,771	$ 27,966	$ -	$ 68,046
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	890	38	427	1,483	145	2,983
Total	$ 7,910	$ 8,490	$ 4,371	$ 2,496	$ 970	$ 17,198	$ 29,449	$ 145	$ 71,029

Commercial Real Estate:
Commercial Mort. - Owner Occupied
Risk Rating
Pass and monitor	$ 30,261	$ 20,338	$ 17,613	$ 6,958	$ 17,136	$ 71,061	$ 1,349	$ 50	$ 164,766
Special Mention	-	-	-	-	-	80	-	-	80
Substandard	-	-	-	-	-	3,583	-	-	3,583
Total	$ 30,261	$ 20,338	$ 17,613	$ 6,958	$ 17,136	$ 74,724	$ 1,349	$ 50	$ 168,429

Commercial Mort. - Non-Owner Occupied
Risk Rating
Pass and monitor	$ 10,531	$ 24,091	$ 33,879	$ 12,176	$ 37,690	$ 73,442	$ 7,780	$ -	$ 199,589
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	-	908	-	-	-	908
Total	$ 10,531	$ 24,091	$ 33,879	$ 12,176	$ 38,598	$ 73,442	$ 7,780	$ -	$ 200,497

Commercial Construction/Land
Risk Rating
Pass and monitor	$ 3,278	$ 11,033	$ 15,224	$ 530	$ 362	$ 4,401	$ 627	$ -	$ 35,455
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	-	-	-	-	-	-
Total	$ 3,278	$ 11,033	$ 15,224	$ 530	$ 362	$ 4,401	$ 627	$ -	$ 35,455

Consumer:
Consumer - Open-End
Risk Rating
Pass and monitor	$ -	$ -	$ -	$ -	$ -	$ -	$ 64,820	$ 1,603	$ 66,423
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	-	-	-	-	286	286
Total	$ -	$ -	$ -	$ -	$ -	$ -	$ 64,820	$ 1,889	$ 66,709

Consumer - Closed-End
Risk Rating
Pass and monitor	$ 1,122	$ 1,905	$ 4,869	$ 2,914	$ 7,244	$ 4,783	$ -	$ -	$ 22,837
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	25	-	100	94	-	-	219
Total	$ 1,122	$ 1,905	$ 4,894	$ 2,914	$ 7,344	$ 4,877	$ -	$ -	$ 23,056

Residential:
Residential Mortgages
Risk Rating
Pass and monitor	$ 8,310	$ 10,163	$ 15,352	$ 13,769	$ 18,612	$ 36,248	$ -	$ -	$ 102,454
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	27	323	1,415	-	-	1,765
Total	$ 8,310	$ 10,163	$ 15,352	$ 13,796	$ 18,935	$ 37,663	$ -	$ -	$ 104,219

Residential Consumer Construction/Land
Risk Rating
Pass and monitor	$ 4,798	$ 13,159	$ 1,623	$ 314	$ 578	$ 2,515	$ 300	$ -	$ 23,287
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	-	-	-	-	-	-
Total	$ 4,798	$ 13,159	$ 1,623	$ 314	$ 578	$ 2,515	$ 300	$ -	$ 23,287

Totals:
Risk Rating
Pass and monitor	$ 66,210	$ 89,179	$ 92,931	$ 38,267	$ 82,554	$ 209,221	$ 102,842	$ 1,653	$ 682,857
Special Mention	-	-	-	-	-	80	-	-	80
Substandard	-	-	25	917	1,369	5,519	1,483	431	9,744
Total	$ 66,210	$ 89,179	$ 92,956	$ 39,184	$ 83,923	$ 214,820	$ 104,325	$ 2,084	$ 692,681

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Note 8 – Loans and allowance for credit losses (continued)

The table below details the amortized cost of the classes of loans by credit quality indicator and year of origination as of December 31, 2025 (dollars in thousands).


	Term Loans Amortized Cost Basis by Origination Year
	2025	2024	2023	2022	2021	Prior	Revolving Loans Amortized Cost Basis	Revolving Loans Converted to Term	Total
Commercial
Risk Rating
Pass	$ 9,761	$ 6,431	$ 2,628	$ 2,565	$ 3,920	$ 14,677	$ 23,694	$ 16	$ 63,692
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	878	8	33	459	1,179	145	2,702
Total	$ 9,761	$ 6,431	$ 3,506	$ 2,573	$ 3,953	$ 15,136	$ 24,873	$ 161	$ 66,394

Commercial Real Estate:
Commercial Mort. - Owner Occupied
Risk Rating
Pass	$ 21,687	$ 19,783	$ 7,408	$ 17,560	$ 43,009	$ 34,709	$ 1,734	$ -	$ 145,890
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	91	-	2,708	1,396	-	-	4,195
Total	$ 21,687	$ 19,783	$ 7,499	$ 17,560	$ 45,717	$ 36,105	$ 1,734	$ -	$ 150,085

Commercial Mort. - Non-Owner Occupied
Risk Rating
Pass	$ 31,054	$ 41,199	$ 12,425	$ 45,772	$ 24,705	$ 52,485	$ 6,738	$ -	$ 214,378
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	923	-	-	-	-	923
Total	$ 31,054	$ 41,199	$ 12,425	$ 46,695	$ 24,705	$ 52,485	$ 6,738	$ -	$ 215,301

Commercial Construction/Land
Risk Rating
Pass	$ 4,056	$ 6,236	$ 543	$ 369	$ 2,595	$ 1,734	$ 490	$ -	$ 16,023
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	-	316	-	-	-	316
Total	$ 4,056	$ 6,236	$ 543	$ 369	$ 2,911	$ 1,734	$ 490	$ -	$ 16,339

Consumer:
Consumer - Open-End
Risk Rating
Pass	$ -	$ -	$ -	$ -	$ -	$ -	$ 61,048	$ 1,415	$ 62,463
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	-	-	-	-	607	607
Total	$ -	$ -	$ -	$ -	$ -	$ -	$ 61,048	$ 2,022	$ 63,070

Consumer - Closed-End
Risk Rating
Pass	$ 2,205	$ 5,579	$ 3,204	$ 8,256	$ 246	$ 5,359	$ -	$ -	$ 24,849
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	29	-	104	-	110	-	-	243
Total	$ 2,205	$ 5,608	$ 3,204	$ 8,360	$ 246	$ 5,469	$ -	$ -	$ 25,092

Residential:
Residential Mortgages
Risk Rating
Pass	$ 11,007	$ 16,741	$ 17,196	$ 20,278	$ 7,312	$ 31,432	$ -	$ -	$ 103,966
Special Mention	-	-	-	-	-	66	-	-	66

Substandard	-	-	29	493	-	1,373	-	-	1,895
Total	$ 11,007	$ 16,741	$ 17,225	$ 20,771	$ 7,312	$ 32,871	$ -	$ -	$ 105,927

Residential Consumer Construction/Land
Risk Rating
Pass	$ 17,834	$ 2,550	$ 350	$ 1,285	$ 812	$ 2,398	$ 300	$ -	$ 25,529
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	-	-	70	-	-	70
Total	$ 17,834	$ 2,550	$ 350	$ 1,285	$ 812	$ 2,468	$ 300	$ -	$ 25,599

Totals:
Risk Rating
Pass	$ 97,604	$ 98,519	$ 43,753	$ 96,085	$ 82,599	$ 142,795	$ 94,005	$ 1,430	$ 656,790
Special Mention	-	-	-	-	-	66	-	-	66
Substandard	-	29	997	1,528	3,058	3,407	1,180	752	10,951
Total	$ 97,604	$ 98,548	$ 44,750	$ 97,613	$ 85,657	$ 146,268	$ 95,185	$ 2,182	$ 667,807

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Note 8 – Loans and allowance for credit losses (continued)

The following table details the gross charge-offs of loans by year of origination for the six months ended June 30, 2026 and the six months ended June 30, 2025 (dollars in thousands).


Current Period Gross Charge-Offs by Origination Year
Six Months Ended June 30, 2026	2026	2025	2024	2023	2022	Prior	Revolving Loans Amortized Cost Basis	Revolving Loans Converted to Term	Total
Commercial	$ -	$ -	$ -	$ -	$ -	$ -	$ -	$ 12	$ 12
Commercial Real Estate:	-	-	-	-	-	-	-	-	-
Commercial Mortgages-Owner Occupied	-	-	-	-	-	-	-	-	-
Commercial Mortgages-Non-Owner Occupied	-	-	-	-	-	-	-	-	-
Commercial Construction/Land	-	-	-	-	-	-	-	-	-
Consumer:	-	-	-	-	-	-	-	-	-
Consumer Open-End	-	-	-	-	-	-	12	1	13
Consumer Closed-End	-	6	-	-	221	60	-	-	287
Residential:	-	-	-	-	-	-	-	-	-
Residential Mortgages	-	-	-	-	-	-	-	-	-
Residential Consumer Construction/Land	-	-	-	-	-	-	-	-	-
Total	$ -	$ 6	$ -	$ -	$ 221	$ 60	$ 12	$ 13	$ 312


Six Months Ended June 30, 2025	2025	2024	2023	2022	2021	Prior	Revolving Loans Amortized Cost Basis	Revolving Loans Converted to Term	Total
Commercial	$ -	$ -	$ -	$ -	$ -	$ -	$ -	$ -	$ -
Commercial Real Estate:	-	-	-	-	-	-	-	-	-
Commercial Mortgages-Owner Occupied	-	-	-	-	-	-	-	-	-
Commercial Mortgages-Non-Owner Occupied	-	-	-	-	-	-	-	-	-
Commercial Construction/Land	-	-	-	-	-	-	-	-	-
Consumer:	-	-	-	-	-	-	-	-	-
Consumer Open-End	-	-	-	48	-	5	-	-	53
Consumer Closed-End	-	-	44	96	19	-	-	-	159
Residential:	-	-	-	-	-	-	-	-	-
Residential Mortgages	-	-	-	-	-	9	-	-	9
Residential Consumer Construction/Land	-	-	-	-	-	-	-	-	-

Total	$ -	$ -	$ 44	$ 144	$ 19	$ 14	$ -	$ -	$ 221

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Note 8 – Loans and allowance for credit losses (continued)

The following tables present loans on nonaccrual status by class as of June 30, 2026 and December 31, 2025 (dollars in thousands):


	June 30, 2026
	Nonaccrual Loans
	With No Allowance	With an Allowance	Total
Commercial	$ 326	$ 72	$ 398
Commercial Real Estate:
Commercial Mortgages-Owner Occupied	-	-	-
Commercial Mortgages-Non-Owner Occupied	-	-	-
Commercial Construction/Land	-	-	-
Consumer
Consumer Open-End	130	-	130
Consumer Closed-End	87	-	87
Residential:
Residential Mortgages	476	-	476
Residential Consumer Construction/Land	-	-	-
Total	$ 1,019	$ 72	$ 1,091


	December 31, 2025
	Nonaccrual Loans
	With No Allowance	With an Allowance	Total
Commercial	$ 387	$ 72	$ 459
Commercial Real Estate:
Commercial Mortgages-Owner Occupied	30	-	30
Commercial Mortgages-Non-Owner Occupied	-	-	-
Commercial Construction/Land	316	-	316
Consumer
Consumer Open-End	255	-	255
Consumer Closed-End	80	-	80
Residential:
Residential Mortgages	494	-	494
Residential Consumer Construction/Land	70	-	70
Total	$ 1,632	$ 72	$ 1,704

Interest income on nonaccrual loans is recognized only when received in cash. The Company did not record any interest income on nonaccrual loans during the three and six months ended June 30, 2026 or 2025. The Company also reversed all previously accrued but unpaid interest on nonaccrual loans during the three and six months ended June 30, 2026 and 2025. If interest on these loans had been accrued, such income cumulatively would have approximated $92,000 and $81,000 as of June 30, 2026 and December 31, 2025, respectively.

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Note 8 – Loans and allowance for credit losses (continued)

The following tables present an aging analysis of the loan portfolio by class and past due as of June 30, 2026 and December 31, 2025 (dollars in thousands):


Age Analysis of Past Due Loans as of June 30, 2026
														Recorded
														Investment
2026		30-59 Days		60-89 Days		Greater than		Total Past				Total		> 90 Days &
		Past Due		Past Due		90 Days		Due		Current		Loans		Accruing
Commercial	$	-	$	67	$	398		465	$	70,564	$	71,029	$	-
Commercial Real Estate:
Commercial Mortgages-Owner Occupied		45		-		-		45		168,384		168,429		-
Commercial Mortgages-Non-Owner Occupied		-		-		-		-		200,497		200,497		-
Commercial Construction/Land		-		-		-		-		35,455		35,455		-
Consumer:
Consumer Open-End		64		-		130		194		66,515		66,709		-
Consumer Closed-End		25		-		87		112		22,944		23,056		-
Residential:
Residential Mortgages		273		-		114		387		103,832		104,219		-
Residential Consumer Construction/Land		30		-		-		30		23,257		23,287		-
Total	$	437	$	67	$	729	$	1,233	$	691,448	$	692,681	$	-


Age Analysis of Past Due Loans as of December 31, 2025
														Recorded
														Investment
2025		30-59 Days		60-89 Days		Greater than		Total Past				Total		> 90 Days &
		Past Due		Past Due		90 Days		Due		Current		Loans		Accruing
Commercial	$	118	$	13		446	$	577	$	65,817	$	66,394	$	-
Commercial Real Estate:
Commercial Mortgages-Owner Occupied		47		-		30		77		150,008		150,085		-
Commercial Mortgages-Non-Owner Occupied		-		-		-		-		215,301		215,301		-
Commercial Construction/Land		-		-		-		-		16,339		16,339		-
Consumer:
Consumer Open-End		217		132		75		424		62,646		63,070		-
Consumer Closed-End		42		93		80		215		24,877		25,092		-
Residential:
Residential Mortgages		1,698		183		29		1,910		104,017		105,927		-
Residential Consumer Construction/Land		-		-		70		70		25,529		25,599		-
Total	$	2,122	$	421	$	730	$	3,273	$	664,534	$	667,807	$	-

‎

Note 8 – Loans and allowance for credit losses (continued)

Occasionally, the Bank modifies loans for borrowers experiencing financial difficulties by providing principal forgiveness, term extensions, interest rate reductions, or payment deferrals. Because the effect of most modifications is already included in the allowance for credit losses due to the measurement methodologies used in its estimate, the allowance is typically not adjusted upon modification. When principal forgiveness is provided, the amount forgiven is charged against the allowance for credit losses.

There were no loan modifications for borrowers experiencing financial difficulty during the three and six months ended June 30, 2026 or June 30, 2025. As of June 30, 2026, no previously modified loans had defaulted within the past twelve months.

Allowance on Unfunded Commitments

The Company maintains an allowance for credit losses on off-balance sheet credit exposures, including unfunded loan commitments, letters of credit, and other commitments to extend credit, to the extent that such commitments are not unconditionally cancellable by the Company. The allowance for credit losses on unfunded commitments is recorded as a liability and is adjusted through a provision for (or recovery of) credit losses in the Consolidated Statements of Income.

The estimate of the allowance for credit losses on unfunded commitments includes consideration of the likelihood that funding will occur, which is based on historical funding experience derived from internal data, as well as an estimate of expected credit losses on commitments expected to be funded over their estimated lives. The Company applies the same loss rates used in estimating the allowance for credit losses on loans to the portion of commitments expected to be funded.

The allowance for credit losses on unfunded commitments was $559,000 at June 30, 2026 and $673,000 at December 31, 2025, and is included in other liabilities in the Consolidated Balance Sheets.

The following table presents the balance and activity in the ACL for unfunded commitments for the three and six months ended June 30, 2026 and 2025 (dollars in thousands):


Allowance for Credit Losses on Unfunded Commitments	(in thousands)
Balance, March 31, 2026	$ 619
(Recovery of) credit losses	(60)
Balance June 30, 2026	$ 559

Balance, December 31, 2025	$ 673
(Recovery of) credit losses	(114)
Balance June 30, 2026	$ 559

Allowance for Credit Losses on Unfunded Commitments	(in thousands)
Balance, March 31, 2025	$ 652
Provision for credit losses	27
Balance June 30, 2025	$ 679

Balance, December 31, 2024	$ 543
Provision for credit losses	136
Balance June 30, 2025	$ 679

Other Real Estate Owned

At June 30, 2026 and December 31, 2025, the Company had no consumer mortgage loans secured by residential real estate for which foreclosure proceedings were in process. The Bank had no Other Real Estate Owned (“OREO”) at June 30, 2026 or December 31, 2025.