Note 3 - Loans

6 Months Ended

Jun. 30, 2026

Loans, Notes, Trade and Other Receivables, Excluding Allowance for Credit Losses [Text Block]

Note 3. Loans

Loans on June 30, 2026 and December 31, 2025 are summarized as follows (in thousands):

	June 30, 2026			December 31, 2025
Real estate loans:
Construction and land development	$	113,289		$	88,424
Secured by 1-4 family residential		522,763			527,283
Other real estate loans		720,120			696,978
Commercial and industrial loans		113,342			117,944
Consumer and other loans		17,884			19,116
Total loans	$	1,487,398		$	1,449,745
Allowance for credit losses		(14,943	)		(14,719	)
Loans, net	$	1,472,455		$	1,435,026

Net deferred loan fees included in the above loan categories were $2.2 million on June 30, 2026 and $1.7 million at December 31, 2025. Net unamortized discounts on loans acquired through business combinations included in the above loan categories totaled $12.5 million on June 30, 2026 and $13.2 million at December 31, 2025. Unamortized premiums on loans purchased from a third-party loan originator are included in the commercial and industrial loan categories and totaled $3.4 million as of June 30, 2026 and $4.1 million as of December 31, 2025. Consumer and other loans included $478 thousand and $543 thousand of demand deposit overdrafts on June 30, 2026 and December 31, 2025, respectively.

Loans acquired in business combinations are recorded in the Consolidated Balance Sheets at fair value at the acquisition date under the acquisition method of accounting. The principal balance of purchased loans is included in the allowance for credit losses calculation. The remaining net discount on purchased loans on June 30, 2026 was $12.5 million. The outstanding principal balance and the carrying amount on June 30, 2026 and December 31, 2025 of loans acquired in business combinations were as follows:

	June 30, 2026		December 31, 2025
	Acquired Loans-		Acquired Loans-
	Non-Purchased		Non-Purchased
(Dollars in thousands)	Credit Deteriorated		Credit Deteriorated
Outstanding principal balance	$	429,719	$	480,625

Carrying amount
Real estate loans:
Construction and land development	$	6,953	$	7,461
Secured by 1-4 family residential		182,615		207,352
Other real estate loans		204,217		223,986
Commercial and industrial loans		21,620		25,428
Consumer and other loans		2,616		3,223
Total acquired loans	$	418,021	$	467,450

Risk characteristics of each loan portfolio class that are considered by the Company include:

•

1-4 family residential mortgage loans carry risks associated with the continued creditworthiness of the borrower and changes in the value of the collateral.

•

Real estate construction and land development loans carry risks that the project may not be finished according to schedule, the project may not be finished according to budget, and the value of the collateral may, at any point in time, be less than the principal amount of the loan. Construction loans also bear the risk that the general contractor, who may or may not be a loan customer, may be unable to finish the construction project as planned because of financial pressure or other factors unrelated to the project.

•

Other real estate loans carry risks associated with the successful operation of a business or a real estate project, in addition to other risks associated with the ownership of real estate, because repayment of these loans may be dependent upon the profitability and cash flows of the business or project.

•

Commercial and industrial loans carry risks associated with the successful operation of a business because repayment of these loans may be dependent upon the profitability and cash flows of the business. In addition, there is risk associated with the value of collateral other than real estate which may depreciate over time and cannot be appraised with as much reliability. Commercial and industrial loans also include purchased loans which could have been originated outside of the Company's market area.

•

Consumer and other loans carry risks associated with the continued creditworthiness of the borrower and the value of the collateral, if any. Consumer loans are typically either unsecured or secured by rapidly depreciating assets such as automobiles. They are also likely to be immediately and adversely affected by job loss, divorce, illness, personal bankruptcy, or other changes in circumstances. Consumer and other loans also include purchased consumer loans which could have been originated outside of the Company's market area. Other loans included in this category include loans to states and political subdivisions.

The following tables provide a summary of loan classes and an aging of past due loans as of June 30, 2026 and December 31, 2025 (in thousands):

	June 30, 2026
	30-59 Days Past Due		60-89 Days Past Due		> 90 Days Past Due		Total Past Due		Current		Total Loans		Non-accrual Loans		90 Days or More Past Due and Accruing
Real estate loans:
Construction and land development	$	—	$	—	$	18	$	18	$	113,271	$	113,289	$	41	$	—
Secured by 1-4 family residential		1,020		915		1,047		2,982		519,781		522,763		2,367		—
Other real estate loans		166		146		—		312		719,808		720,120		—		—
Commercial and industrial		313		301		1,660		2,274		111,068		113,342		2,329		—
Consumer and other loans		42		1		—		43		17,841		17,884		—		—
Total	$	1,541	$	1,363	$	2,725	$	5,629	$	1,481,769	$	1,487,398	$	4,737	$	—

	December 31, 2025
	30-59 Days Past Due		60-89 Days Past Due		> 90 Days Past Due		Total Past Due		Current		Total Loans		Non-accrual Loans		90 Days or More Past Due and Accruing
Real estate loans:
Construction and land development	$	30	$	—	$	45	$	75	$	88,349	$	88,424	$	45	$	—
Secured by 1-4 family residential		2,034		857		939		3,830		523,453		527,283		1,994		—
Other real estate loans		—		—		—		—		696,978		696,978		—		—
Commercial and industrial		646		520		1,324		2,490		115,454		117,944		2,615		—
Consumer and other loans		12		23		—		35		19,081		19,116		—		—
Total	$	2,722	$	1,400	$	2,308	$	6,430	$	1,443,315	$	1,449,745	$	4,654	$	—

Credit Quality Indicators

As part of the ongoing monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to the risk grading of specified classes of loans. The Company utilizes a risk grading matrix to assign a rating to each of its loans. The loan ratings are summarized into the following categories: pass, special mention, substandard, doubtful, and loss. Pass rated loans include all risk rated credits other than those included in special mention, substandard, or doubtful. Loans classified as loss are charged-off. Loan officers assign risk grades to loans at origination and as renewals arise. The Bank’s Credit Administration department reviews risk grades for accuracy on a quarterly basis and as credit issues arise. In addition, a certain amount of loans are reviewed each year through the Company’s internal and external loan review process. A description of the general characteristics of the loan grading categories is as follows:

Pass – Loans classified as pass exhibit acceptable operating trends, balance sheet trends, and liquidity. Sufficient cash flow exists to service the loan. All obligations have been paid by the borrower as agreed.

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 the Bank’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. 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 Bank 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. The Company considers all doubtful loans to be impaired and places the loan on non-accrual status.

Loss – Loans classified as loss are considered uncollectable and of such little value that their continuance as bankable assets is not warranted.

The following table presents the Company's recorded investment in loans by credit quality indicators by year of origination as of June 30, 2026 and December 31, 2025 and charge offs by year of origination for the six months ended June 30, 2026 and the year ended December 31, 2025 (in thousands).

	June 30, 2026
	Term Loans by Year of Origination
	2026		2025		2024		2023		2022		Prior		Revolving		Total
Construction and land development
Pass	$	13,792	$	6,990	$	560	$	3,598	$	1,762	$	6,964	$	79,582	$	113,248
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		41		—		41
Doubtful		—		—		—		—		—		—		—		—
Total construction and land development	$	13,792	$	6,990	$	560	$	3,598	$	1,762	$	7,005	$	79,582	$	113,289

Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Secured by 1-4 family residential
Pass	$	21,532	$	30,823	$	25,869	$	58,007	$	95,461	$	210,252	$	78,390	$	520,334
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		494		318		331		1,286		—		2,429
Doubtful		—		—		—		—		—		—		—		—
Total secured by 1-4 family residential	$	21,532	$	30,823	$	26,363	$	58,325	$	95,792	$	211,538	$	78,390	$	522,763

Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	29	$	—	$	29

Other real estate loans
Pass	$	71,835	$	69,913	$	53,780	$	90,333	$	124,039	$	275,181	$	32,737	$	717,818
Special Mention		—		310		—		—		—		1,992		—		2,302
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total other real estate loans	$	71,835	$	70,223	$	53,780	$	90,333	$	124,039	$	277,173	$	32,737	$	720,120

Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial and industrial
Pass	$	8,000	$	10,836	$	13,616	$	11,687	$	13,054	$	20,238	$	33,037	$	110,468
Special Mention		—		384		—		—		—		—		—		384
Substandard		—		—		639		1,052		270		—		—		1,961
Doubtful		—		—		—		—		—		529		—		529
Total commercial and industrial	$	8,000	$	11,220	$	14,255	$	12,739	$	13,324	$	20,767	$	33,037	$	113,342

Current period gross write-offs	$	—	$	—	$	—	$	263	$	302	$	131	$	—	$	696

Consumer and other loans
Pass	$	2,643	$	3,404	$	1,461	$	1,954	$	3,809	$	2,153	$	2,459	$	17,883
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		1		—		1
Doubtful		—		—		—		—		—		—		—		—
Total consumer and other loans	$	2,643	$	3,404	$	1,461	$	1,954	$	3,809	$	2,154	$	2,459	$	17,884

Current period gross write-offs	$	191	$	44	$	1	$	14	$	—	$	—	$	—	$	250

	December 31, 2025
	Term Loans by Year of Origination
	2025		2024		2023		2022		2021		Prior		Revolving		Total
Construction and land development
Pass	$	7,661	$	674	$	3,505	$	1,999	$	3,578	$	4,079	$	66,883	$	88,379
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		45		—		45
Doubtful		—		—		—		—		—		—		—		—
Total construction and land development	$	7,661	$	674	$	3,505	$	1,999	$	3,578	$	4,124	$	66,883	$	88,424

Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	22	$	—	$	22

Secured by 1-4 family residential
Pass	$	37,248	$	29,544	$	61,183	$	100,324	$	91,044	$	135,178	$	70,577	$	525,098
Special Mention		—		119		—		—		—		—		—		119
Substandard		—		—		29		210		343		1,484		—		2,066
Doubtful		—		—		—		—		—		—		—		—
Total secured by 1-4 family residential	$	37,248	$	29,663	$	61,212	$	100,534	$	91,387	$	136,662	$	70,577	$	527,283

Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	59	$	—	$	59

Other real estate loans
Pass	$	67,088	$	59,352	$	95,653	$	130,268	$	105,813	$	201,768	$	32,327	$	692,269
Special Mention		—		313		—		—		—		4,146		—		4,459
Substandard		—		—		—		—		—		250		—		250
Doubtful		—		—		—		—		—		—		—		—
Total other real estate loans	$	67,088	$	59,665	$	95,653	$	130,268	$	105,813	$	206,164	$	32,327	$	696,978

Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	7	$	—	$	7

Commercial and industrial
Pass	$	11,592	$	16,531	$	13,637	$	14,373	$	13,054	$	11,088	$	33,469	$	113,744
Special Mention		—		400		—		1,072		—		—		—		1,472
Substandard		—		—		751		1,062		386		—		—		2,199
Doubtful		—		—		—		—		—		529		—		529
Total commercial and industrial	$	11,592	$	16,931	$	14,388	$	16,507	$	13,440	$	11,617	$	33,469	$	117,944

Current period gross write-offs	$	—	$	671	$	701	$	1,930	$	481	$	438	$	—	$	4,221

Consumer and other loans
Pass	$	4,974	$	2,155	$	2,405	$	4,252	$	91	$	2,671	$	2,568	$	19,116
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total consumer and other loans	$	4,974	$	2,155	$	2,405	$	4,252	$	91	$	2,671	$	2,568	$	19,116

Current period gross write-offs	$	469	$	10	$	12	$	—	$	—	$	5	$	—	$	496