v3.26.1
Loans and Allowance for Credit Losses
 6 Months Ended
Jun. 30, 2026
Receivables [Abstract]  
Loans and Allowance for Credit Losses Loans and Allowance for Credit Losses
The following table shows a summary of the balances of loans as of the dates indicated (dollars in thousands):
June 30, 2026December 31, 2025
Residential$2,515,400 $2,573,890 
Commercial20,439 15,521 
MPP3,937,921 3,424,935 
Total loans6,473,760 6,014,346 
Less:
Allowance for credit losses9,436 10,435 
Net deferred loan (cost)/fees(6,398)(7,181)
Net loans$6,470,722 $6,011,092 
The residential portfolio includes $165.6 million and $178.6 million of loans measured at fair value on June 30, 2026 and December 31, 2025, respectively.
Activity in the allowance for credit losses for the three months ended June 30, 2026 is summarized as follows (dollars in thousands):
Three Months Ended June 30, 2026
ResidentialCommercialMPPUnallocatedTotal
Beginning balance$8,151 $2 $1,544 $3 $9,700 
Charge-offs(542)— — — (542)
Recoveries12 2 — — 14 
Provision (benefit)183 53 31 (3)264 
Ending balance$7,804 $57 $1,575 $— $9,436 
Activity in the allowance for loan losses for the three months ended June 30, 2025 is summarized as follows (dollars in thousands):
Three Months Ended June 30, 2025
ResidentialCommercialMPPUnallocatedTotal
Beginning balance$11,321 $4 $987 $3 $12,315 
Charge-offs(495)— — — (495)
Recoveries4 3 — — 7 
Provision (benefit)383 (4)170 (1)548 
Ending balance$11,213 $3 $1,157 $2 $12,375 
Activity in the allowance for credit losses for the six months ended June 30, 2026 is summarized as follows (dollars in thousands):
Six Months Ended June 30, 2026
ResidentialCommercialMPPUnallocatedTotal
Beginning balance$8,999 $61 $1,370 $5 $10,435 
Charge-offs(1,017)— — — (1,017)
Recoveries110 113 — — 223 
Provision (benefit)(288)(117)205 (5)(205)
Ending balance$7,804 $57 $1,575 $— $9,436 

Activity in the allowance for credit losses for the six months ended June 30, 2025 is summarized as follows (dollars in thousands):
Six Months Ended June 30, 2025
ResidentialCommercialMPPUnallocatedTotal
Beginning balance$10,468 $32 $684 $6 $11,190 
Charge-offs(806)— — — (806)
Recoveries52 7 — — 59 
Provision (benefit)1,499 (36)473 (4)1,932 
Ending balance$11,213 $3 $1,157 $2 $12,375 

Activity in the allowance for unfunded commitments for the three and six months ended June 30, 2026 and 2025 is summarized as follows (dollars in thousands):
Three Months Ended
June 30,		Six Months Ended
June 30,
2026202520262025
Beginning balance$354 $295 $330 $385 
Charge-offs— — — — 
Recoveries— — — — 
Provision (benefit)(54)35 (30)(55)
Ending balance$300 $330 $300 $330 
Nonaccrual Loans
The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing in the HFI portfolio, excluding those loans carried at fair value, as of June 30, 2026 (dollars in thousands):
June 30, 2026
Nonaccrual
with No
Allowance		Nonaccrual
with
Allowance		Total
Nonaccrual		Over
90 days
Accruing		Total
Residential:
Construction and land development$4,123 $1,208 $5,331 $— $5,331 
Home equity lines of credit11,222 835 12,057 — 12,057 
Closed end, first liens40,485 7,553 48,038 2,353 50,391 
Closed end, second liens2,052 108 2,160 218 2,378 
Commercial145 — 145 — 145 
Total$58,027 $9,704 $67,731 $2,571 $70,302 

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing in the HFI portfolio, excluding those loans carried at fair value, as of December 31, 2025 (dollars in thousands):
December 31, 2025
Nonaccrual
with No
Allowance		Nonaccrual
with
Allowance		Total
Nonaccrual		Over
90 days
Accruing		Total
Residential:
Construction and land development$4,501 $1,248 $5,749 $1,329 $7,078 
Home equity lines of credit10,905 2,763 13,668 588 14,256 
Closed end, first liens40,381 9,423 49,804 4,422 54,226 
Closed end, second liens1,146 410 1,556 — 1,556 
Commercial154 — 154 — 154 
Total$57,087 $13,844 $70,931 $6,339 $77,270 
The Bank has not recognized any material interest income on nonaccrual loans during the three and six months ended June 30, 2026 or 2025.
Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the sale of the collateral and the borrower is experiencing financial difficulty. The allowance is calculated on an individual loan basis of the shortfall between the fair value of the loan’s collateral, which is adjusted for selling costs, and the loan’s amortized cost. If the fair value of the collateral exceeds the loan’s amortized cost, no allowance is necessary.

The amortized cost of collateral dependent loans by class as of June 30, 2026 and December 31, 2025 was as follows (dollars in thousands):
June 30, 2026
Collateral Type
Real EstateOtherAllowance
Allocated
Residential:
Construction and land development$4,123 $— $— 
Home equity lines of credit11,219 — — 
Closed end, first liens42,081 — 71 
Closed end, second liens2,052 — — 
Commercial145 $— — 
Total$59,620 $— $71 
December 31, 2025
Collateral Type
Real EstateOtherAllowance
Allocated
Residential:
Construction and land development$4,501 $— $— 
Home equity lines of credit12,864 — 130 
Closed end, first liens41,844 — 26 
Closed end, second liens1,105 — 9 
Commercial154 $— — 
Total$60,468 $— $165 

Age Analysis of Loans
The following tables detail the age analysis of loans, excluding those loans carried at fair value, at June 30, 2026 and December 31, 2025 (dollars in thousands):
June 30, 2026
30 - 59 Days
Past Due		60 - 89 Days
Past Due		Greater than
90 Days		Total Past
Due		CurrentTotal
Loans
Residential:
Construction and land development$3,404 $1,163 $4,101 $8,668 $111,060 $119,728 
Home equity lines of credit3,680 1,657 8,963 14,300 831,030 845,330 
Closed end, first liens21,507 6,519 37,446 65,472 1,260,687 1,326,159 
Closed end, second liens1,580 557 2,272 4,409 60,584 64,993 
Commercial— 44 145 189 20,250 20,439 
MPP— — — — 3,937,921 3,937,921 
Total$30,171 $9,940 $52,927 $93,038 $6,221,532 $6,314,570 
December 31, 2025
30 - 59 Days
Past Due		60 - 89 Days
Past Due		Greater than
90 Days		Total Past
Due		CurrentTotal
Loans
Residential:
Construction and land development$4,540 $2,135 $5,623 $12,298 $135,250 $147,548 
Home equity lines of credit4,187 916 10,944 16,047 769,936 785,983 
Closed end, first liens21,994 7,568 38,751 68,313 1,329,394 1,397,707 
Closed end, second liens1,857 1,090 1,105 4,052 67,203 71,255 
Commercial55 — 153 208 15,313 15,521 
MPP— — — — 3,424,935 3,424,935 
Total$32,633 $11,709 $56,576 $100,918 $5,742,031 $5,842,949 

Modifications to Borrowers Experiencing Financial Difficulty
On occasion, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extensions, interest rate reductions, or payment delays. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. In some cases, the Company provides multiple types of concessions on one loan.
During the three months ended June 30, 2026, there were eleven closed end, first lien loans totaling $3.0 million that were both experiencing financial difficulty and modified during the period. These loans were a combination of term extensions and interest rate reductions and each were on nonaccrual status at time of modification. During the three months ended June 30, 2025, there were six closed end, first lien loans totaling $1.7 million that were both experiencing financial difficulty and modified during the period. These loans were a combination of term extensions and interest rate reductions and each were on nonaccrual status at time of modification.
During the six months ended June 30, 2026, there were $4.7 million in loans that were both experiencing financial difficulty and modified during the period: 16 closed end, first lien loans totaling $4.3 million and one home equity line of credit for $276,000. These loans were a combination of term extensions and interest rate reductions and each were on nonaccrual status at time of modification. During the six months ended June 30, 2025, there were $4.2 million in loans that were both experiencing financial difficulty and modified during the period: 14 closed end, first liens, for $4.0 million and one home equity line of credit for $249,000. These loans were a combination of term extensions and interest rate reductions and each were on nonaccrual status at time of modification.
There were $4.4 million of loans that had modifications to borrowers experiencing financial difficulty within the previous twelve months that became 30 days or more past due during the six months ended June 30, 2026. There were no material modifications to borrowers experiencing financial difficulty within the previous twelve months that became 30 days or more past due during the six months ended June 30, 2025.
Credit Quality Indicators
The Company categorized each loan into credit risk categories based on current financial information, overall debt service coverage, comparison against industry averages, collateral coverage, historical payment experience, and current economic trends. Residential real estate is evaluated for credit risk based on performing or non-performing classification. The Company uses the following definitions for credit risk ratings:
Performing
Residential real estate credits not covered by the non-performing definition below.
Non-performing
Residential real estate loans classified as non-performing are generally loans on nonaccrual status.
Pass
Commercial credits not covered by the definitions below are pass credits, which are not considered to be adversely rated.
Special Mention
Loans classified as special mention, or watch credits, have a potential weakness or weaknesses 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 paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution may sustain some loss if the deficiencies are not corrected.
The following table reflects amortized cost basis of loans and year to date charge-offs (excluding those loans carried at fair value) as of June 30, 2026 based on year of origination (dollars in thousands):
20262025202420232022PriorRevolving
Loans
Amortized
Cost Basis		Total
Construction and land development:
Performing$1,777 $2,424 $3,490 $26,250 $38,262 $42,194 $— $114,397 
Nonperforming— — 174 1,795 2,424 938 — 5,331 
Total1,777 2,424 3,664 28,045 40,686 43,132 — 119,728 
Gross charge-offs— — — 20 40 13 — 73 
Home equity lines of credit:
Performing— — — — — — 833,273 833,273 
Nonperforming— — — — — — 12,057 12,057 
Total— — — — — — 845,330 845,330 
Gross charge-offs— — — 279 13 98 — 390 
First liens, closed end loans:
Performing660 7,515 28,035 64,959 949,436 227,516 — 1,278,121 
Nonperforming— 1,604 2,463 7,399 27,403 9,169 — 48,038 
Total660 9,119 30,498 72,358 976,839 236,685 — 1,326,159 
Gross charge-offs— — 18 101 304 7 — 430 
Second liens, closed end loans:
Performing89 2,812 3,455 10,226 26,714 19,537 — 62,833 
Nonperforming— 41 252 332 468 1,067 — 2,160 
Total89 2,853 3,707 10,558 27,182 20,604 — 64,993 
Gross charge-offs— 36 — 88 — — — 124 
Commercial: Risk Rating
Pass— — — — — 20,250 — 20,250 
Special mention— — — — — 44 — 44 
Substandard— — — — — 145 — 145 
Total— — — — — 20,439 20,439 — 20,439 
Gross charge-offs— — — — — — — — 
MPP: Risk Rating
Pass— — — — — — 3,937,921 3,937,921 
Special mention— — — — — — — — 
Total— — — — — — 3,937,921 3,937,921 
Gross charge-offs— — — — — — — — 
Grand total$2,526 $14,396 $37,869 $110,961 $1,044,707 $320,860 $4,783,251 $6,314,570 
Grand total gross charge-offs$— $36 $18 $488 $357 $118 $— $1,017 
There were no revolving loans converted to term loans during the six months ended June 30, 2026.
The following table reflects amortized cost basis of loans and full year charge-offs as of December 31, 2025 (excluding those loans carried at fair value) based on year of origination (dollars in thousands):

20252024202320222021PriorRevolving
Loans
Amortized
Cost Basis		Total
Construction and land development
Performing$3,640 $6,073 $35,304 $46,608 $33,323 $16,851 $— $141,799 
Nonperforming— 176 1,817 2,490 773 493 — 5,749 
Total3,640 6,249 37,121 49,098 34,096 17,344 — 147,548 
Gross charge-offs— — 43 303 30 22 — 398 
Home equity lines of credit:
Performing— — — — — — 772,315 772,315 
Nonperforming— — — — — — 13,668 13,668 
Total— — — — — — 785,983 785,983 
Gross charge-offs— 2 230 416 21 — — 669 
First liens, closed end loans:
Performing10,612 31,083 73,710 990,798 139,513 102,187 — 1,347,903 
Nonperforming155 2,795 6,834 31,277 3,239 5,504 — 49,804 
Total10,767 33,878 80,544 1,022,075 142,752 107,691 — 1,397,707 
Gross charge-offs— 148 220 1,471 74 6 — 1,919 
Second liens, closed end loans:
Performing3,112 4,229 11,767 29,114 7,812 13,665 — 69,699 
Nonperforming— 252 431 315 232 326 — 1,556 
Total3,112 4,481 12,198 29,429 8,044 13,991 — 71,255 
Gross charge-offs— — 113 4 114 — — 231 
Commercial: Risk Rating
Pass— — — — — 312 15,000 15,312 
Special mention— — — — — 55 — 55 
Substandard— — — — — 154 — 154 
Total— — — — — 521 15,000 15,521 
Gross charge-offs— — — — — — — — 
MPP: Risk Rating
Pass— — — — — — 3,424,935 3,424,935 
Special mention— — — — — — — — 
Total— — — — — — 3,424,935 3,424,935 
Gross charge-offs— — — — — — — — 
Grand total$17,519 $44,608 $129,863 $1,100,602 $184,892 $139,547 $4,225,918 $5,842,949 
Grand total gross charge-offs$— $150 $606 $2,194 $239 $28 $— $3,217 
There were no revolving loans converted to term loans during 2025.