v3.26.1
Loans
 6 Months Ended
Jun. 30, 2026
Receivables [Abstract]  
Loans

 

(4) Loans:

 

The following table presents total loans at June 30, 2026 and December 31, 2025 by portfolio segment and class of loan:

   

  

June 30, 2026

   December 31, 2025 
Commercial:          
Commercial and industrial  $78,493   $71,872 
Agricultural   69,929    78,695 
Real estate:          
Commercial   524,518    549,247 
Consumer   393,130    398,022 
Agricultural   162,118    169,779 
Construction and land   36,827    39,916 
Consumer:          
Installment   4,910    4,470 
Vehicle   1,682    1,928 
Credit cards   1,282    1,365 
Total loans   1,272,889    1,315,294 
Allowance for credit losses   (14,789)   (14,992)
Loans, net  $1,258,100   $1,300,302 

 

Detailed analysis of the allowance for credit losses by portfolio segment for the three months ended June 30, 2026 follows:

   

Three Months Ended June 30, 2026

 

Commercial

  

Real

Estate

  

Consumer

  

Total

 
                 
Beginning balance, March 31, 2026  $1,048   $13,714   $131   $14,893 
Credit loss expense (benefit)   171    (281)   10    (100)
Recoveries on loans previously charged-off   0    1    8    9 
Less loans charged-off   0    0    (13)   (13)
                     
Ending balance, June 30, 2026  $1,219   $13,434   $136   $14,789 

 

Detailed analysis of the allowance for credit losses by portfolio segment for the six months ended June 30, 2026 follows:

 

 

Six Months Ended June 30, 2026

 

Commercial

  

Real

Estate

  

Consumer

  

Total

 
                 
Balance at beginning of year  $1,037   $13,819   $136   $14,992 
Credit loss expense (benefit)   182    (387)   9    (196)
Recoveries on loans previously charged-off   0    2    15    17 
Less loans charged-off   0    0    (24)   (24)
                     
Balance at June 30, 2026  $1,219   $13,434   $136   $14,789 

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

 

(4) Loans (continued):

 

Detailed analysis of the allowance for credit losses by portfolio segment for the three months ended June 30, 2025 follows:

 

 

Three Months Ended June 30, 2025

 

 

Commercial

  

Real

Estate

  

Consumer

  

Total

 
                 
Beginning balance, March 31, 2025  $1,057   $13,322   $125   $14,504 
Credit loss expense   45    44    14    103 
Recoveries on loans previously charged-off   10    48    13    71 
Less loans charged-off   0    0    (13)   (13)
                     
Ending balance, June 30, 2025  $1,112   $13,414   $139   $14,665 

 

Detailed analysis of the allowance for credit losses by portfolio segment for the six months ended June 30, 2025 follows:

 

Six Months Ended June 30, 2025

 

Commercial

  

Real

Estate

  

Consumer

  

Total

 
                 
Balance at beginning of year  $1,101   $13,201   $142   $14,444 
Credit loss expense (benefit)   (2)   328    8    334 
Recoveries on loans previously charged-off   16    58    26    100 
Less loans charged-off   (3)   (173)   (37)   (213)
                     
Balance at June 30, 2025  $1,112   $13,414   $139   $14,665 

 

Detailed analysis of the allowance for unfunded commitments for the three months ended June 30, 2026 follows:

 

 

Three Months Ended June 30, 2026

 

Commercial

  

Real

Estate

  

Consumer

  

Total

 
                 
Beginning balance, March 31, 2026  $87   $619   $2   $708 
Credit loss expense (benefit)   6    1,177    0    1,183 
                     
Ending balance, June 30, 2026  $93   $1,796   $2   $1,891 

 

Detailed analysis of the allowance for unfunded commitments for the six months ended June 30, 2026 follows:

 

Six Months Ended June 30, 2026 

Commercial

  

Real

Estate

  

Consumer

  

Total

 
                 
Balance at beginning of year  $84   $831   $2   $917 
Credit loss expense (benefit)   9    965    0    974 
                     
Balance at June 30, 2026  $93   $1,796   $2   $1,891 

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

 

(4) Loans (continued):

 

Detailed analysis of the allowance for unfunded commitments for the three months ended June 30, 2025 follows:

 

Three Months Ended June 30, 2025

 

Commercial

  

Real

Estate

  

Consumer

  

Total

 
                 
Beginning balance, March 31, 2025  $86   $1,169   $2   $1,257 
Credit loss expense (benefit)   7    (223)   0    (216)
                     
Ending balance, June 30, 2025  $93   $946   $2   $1,041 

 

Detailed analysis of the allowance for unfunded commitments for the six months ended June 30, 2025 follows:

 

Six Months Ended June 30, 2025

 

Commercial

  

Real

Estate

  

Consumer

  

Total

 
                 
Balance at beginning of year  $96   $889   $2   $987 
Credit loss expense (benefit)   (3)   57    0    54 
                     
Balance at June 30, 2025  $93   $946   $2   $1,041 

 

The Bank has no commitments to loan additional funds to the borrowers of collateral dependent or non-accrual loans.

 

Certain purchased loans as later discussed in Note 4 are not considered impaired or non-accrual loans if the expected cash flows as of June 30, 2026 and December 31, 2025 exceed the carrying amount and accretion income is being recorded.

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

 

(4) Loans (continued):

 

The Company regularly evaluates various attributes of loans to determine the appropriateness of the allowance for credit losses. The Company generally monitors credit quality indicators for all non-consumer loans using the following internally prepared ratings:

 

●‘Pass’ ratings are assigned to loans with adequate collateral and debt service ability such that collectability of the contractual loan payments is highly probable.
●‘Watch’ loans are credits that are fundamentally sound but warrant close attention by management. Borrowers in this category may have acceptable asset quality but may face challenges due to market conditions, economic conditions, management changes, or other forces that could adversely affect operations. Factors contributing to adverse conditions are expected to be temporary.
●‘Special Mention’ ratings are assigned to loans where management has some concern that the collateral or debt service ability may not be adequate, though the collectability of the contractual loan payments is still probable.
●‘Substandard’ ratings are assigned to loans that do not have adequate collateral and/or debt service ability such that collectability of the contractual loan payments is no longer probable.
●‘Doubtful’ ratings are assigned to loans that do not have adequate collateral and/or debt service ability, and collectability of the contractual loan payments is unlikely.

 

As of June 30, 2026 and December 31, 2025, accrued interest on loans of $8,204 and $7,648, respectively, were excluded from CECL evaluation. Accrued interest on loans is recorded within accrued interest receivable on the consolidated balance sheet.

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

 

(4) Loans (continued):

 

The following table presents the credit risk profile of the Company’s loan portfolio (excluding loans in process and deferred loan fees) based on rating category and year of origination as of June 30, 2026.

   

 

Year 1

  

Year 2

  

Year 3

  

Year 4

  

Year 5

  

Prior

   Revolving Loans  

Total

 

June 30,

 

2026

  

2025

  

2024

  

2023

  

2022

  

Prior

   Revolving Loans  

Total

 
Commercial:                                        
Commercial and industrial                                        
Pass  $29,028   $11,012   $7,554   $3,697   $2,518   $2,285   $18,819   $74,913 
Watch   98    201    136    152    186    0    1,534    2,307 
Special Mention   36    0    45    210    10    71    715    1,087 
Substandard   0    0    0    18    6    162    0    186 
Doubtful   0    0    0    0    0    0    0    0 
Total Commercial and industrial  $29,162   $11,213   $7,735   $4,077   $2,720   $2,518   $21,068   $78,493 
Agricultural:                                        
Pass  $2,388   $3,289   $1,182   $1,486   $2,632   $1,693   $49,891   $62,561 
Watch   558    419    156    0    54    385    3,929    5,501 
Special Mention   0    130    124    736    23    69    385    1,467 
Substandard   0    9    110    214    0    20    47    400 
Doubtful   0    0    0    0    0    0    0    0 
Total Agricultural  $2,946   $3,847   $1,572   $2,436   $2,709   $2,167   $54,252   $69,929 
Real Estate:                                        
Commercial                                        
Pass  $26,785   $77,713   $44,460   $43,561   $99,314   $152,469   $7,892   $452,194 
Watch   184    617    5,823    5,992    17,911    23,138    6,730    60,395 
Special Mention   0    0    2,257    105    1,112    4,248    0    7,722 
Substandard   0    240    554    714    0    2,699    0    4,207 
Doubtful   0    0    0    0    0    0    0    0 
Total Commercial  $26,969   $78,570   $53,094   $50,372   $118,337   $182,554   $14,622   $524,518 
Consumer                                        
Pass  $29,365   $53,812   $32,752   $45,793   $69,506   $101,736   $29,740   $362,704 
Watch   471    408    8,537    3,735    2,402    11,186    784    27,523 
Special Mention   0    217    911    93    62    669    270    2,222 
Substandard   0    0    100    0    159    422    0    681 
Doubtful   0    0    0    0    0    0    0    0 
Total Consumer  $29,836   $54,437   $42,300   $49,621   $72,129   $114,013   $30,794   $393,130 

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

 

(4) Loans (continued):

 

June 30, 

2026

  

2025

  

2024

  

2023

  

2022

  

Prior

   Revolving Loans  

Total

 
Real Estate Continued):                                        
Agricultural                                        
Pass  $8,014   $13,694   $10,800   $13,039   $27,657   $69,284   $12,316   $154,804 
Watch   0    122    118    0    0    1,878    0    2,118 
Special Mention   368    500    0    1,368    0    1,825    0    4,061 
Substandard   0    0    0    0    0    1,135    0    1,135 
Doubtful   0    0    0    0    0    0    0    0 
Total Agricultural  $8,382   $14,316   $10,918   $14,407   $27,657   $74,122   $12,316   $162,118 
Construction and land:                                        
Pass  $9,526   $19,123   $1,724   $1,949   $612   $3,535   $207   $36,676 
Watch   0    0    0    0    151    0    0    151 
Special Mention   0    0    0    0    0    0    0    0 
Substandard   0    0    0    0    0    0    0    0 
Doubtful   0    0    0    0    0    0    0    0 
Total Construction and land  $9,526   $19,123   $1,724   $1,949   $763   $3,535   $207   $36,827 
Consumer:                                        
Installment                                        
Pass  $1,703   $1,454   $401   $317   $302   $609   $119   $4,905 
Watch   0    0    0    0    0    0    0    0 
Special Mention   0    0    0    0    0    0    0    0 
Substandard   0    0    0    0    5    0    0    5 
Doubtful   0    0    0    0    0    0    0    0 
Total Consumer  $1,703   $1,454   $401   $317   $307   $609   $119   $4,910 
Vehicle                                        
Pass  $417   $390   $510   $205   $141   $19   $0   $1,682 
Watch   0    0    0    0    0    0    0    0 
Special Mention   0    0    0    0    0    0    0    0 
Substandard   0    0    0    0    0    0    0    0 
Doubtful   0    0    0    0    0    0    0    0 
Total Vehicle  $417   $390   $510   $205   $141   $19   $0   $1,682 
Credit cards                                        
Pass  $0   $0   $0   $0   $0   $0   $1,282   $1,282 
Watch   0    0    0    0    0    0    0    0 
Special Mention   0    0    0    0    0    0    0    0 
Substandard   0    0    0    0    0    0    0    0 
Doubtful   0    0    0    0    0    0    0    0 
Total Credit Cards  $0   $0   $0   $0   $0   $0   $1,282   $1,282 
Total Loans                                        
Pass  $107,226   $180,487   $99,383   $110,047   $202,682   $331,630   $120,266   $1,151,721 
Watch   1,311    1,767    14,770    9,879    20,704    36,587    12,977    97,995 
Special Mention   404    847    3,337    2,512    1,207    6,882    1,370    16,559 
Substandard   0    249    764    946    170    4,438    47    6,614 
Doubtful   0    0    0    0    0    0    0    0 
Total  $108,941   $183,350   $118,254   $123,384   $224,763   $379,537   $134,660   $1,272,889 

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

 

(4) Loans (continued):

 

The following table presents the credit risk profile of the Company’s loan portfolio (excluding loans in process and deferred loan fees) based on rating category and year of origination as of December 31, 2025:

 

December 31, 

2025

  

2024

  

2023

  

2022

  

2021

  

Prior

   Revolving Loans  

Total

 
Commercial:                                        
Commercial and industrial                                        
Pass  $20,312   $9,686   $4,745   $4,996   $1,318   $8,336   $19,746   $69,139 
Watch   205    178    210    0    0    0    942    1,535 
Special Mention   0    126    258    14    5    0    547    950 
Substandard   0    0    22    6    195    25    0    248 
Doubtful   0    0    0    0    0    0    0    0 
Total Commercial and industrial  $20,517   $9,990   $5,235   $5,016   $1,518   $8,361   $21,235   $71,872 
Agricultural:                                        
Pass  $4,621   $1,578   $1,687   $4,066   $3,105   $216   $57,806   $73,079 
Watch   9    144    222    67    129    376    2,126    3,073 
Special Mention   130    124    750    0    52    0    1,183    2,239 
Substandard   0    110    107    1    0    0    86    304 
Doubtful   0    0    0    0    0    0    0    0 
Total Agricultural  $4,760   $1,956   $2,766   $4,134   $3,286   $592   $61,201   $78,695 
Real Estate:                                        
Commercial                                        
Pass  $81,399   $49,772   $52,788   $109,941   $59,516   $116,804   $8,107   $478,327 
Watch   647    5,862    5,021    15,297    6,324    18,764    6,891    58,806 
Special Mention   0    2,294    111    1,127    2,082    1,943    0    7,557 
Substandard   0    246    1,213    0    2,952    146    0    4,557 
Doubtful   0    0    0    0    0    0    0    0 
Total Commercial  $82,046   $58,174   $59,133   $126,365   $70,874   $137,657   $14,998   $549,247 
Consumer                                        
Pass  $61,513   $40,060   $51,021   $75,474   $44,368   $71,370   $29,661   $373,467 
Watch   99    8,743    3,626    2,071    3,458    3,883    557    22,437 
Special Mention   0    0    95    63    68    696    269    1,191 
Substandard   0    100    0    325    91    393    18    927 
Doubtful   0    0    0    0    0    0    0    0 
Total Consumer  $61,612   $48,903   $54,742   $77,933   $47,985   $76,342   $30,505   $398,022 

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

 

(4) Loans (continued):

 

December 31, 

2025

  

2024

  

2023

  

2022

  

2021

  

Prior

   Revolving Loans  

Total

 
Real Estate Continued):                                        
Agricultural                                        
Pass  $14,104   $11,333   $12,862   $28,975   $24,335   $48,689   $20,087   $160,385 
Watch   124    199    1,389    1,057    294    2,543    466    6,072 
Special Mention   507    0    0    0    0    1,360    320    2,187 
Substandard   0    0    0    0    0    1,135    0    1,135 
Doubtful   0    0    0    0    0    0    0    0 
Total Agricultural  $14,735   $11,532   $14,251   $30,032   $24,629   $53,727   $20,873   $169,779 
Construction and land:                                        
Pass  $20,462   $12,330   $1,949   $673   $525   $3,322   $412   $39,673 
Watch   0    0    0    243    0    0    0    243 
Special Mention   0    0    0    0    0    0    0    0 
Substandard   0    0    0    0    0    0    0    0 
Doubtful   0    0    0    0    0    0    0    0 
Total Construction and land  $20,462   $12,330   $1,949   $916   $525   $3,322   $412   $39,916 
Consumer:                                        
Installment                                        
Pass  $2,206   $628   $494   $352   $283   $457   $37   $4,457 
Watch   0    0    0    0    0    0    0    0 
Special Mention   0    0    0    0    0    0    0    0 
Substandard   0    0    0    13    0    0    0    13 
Doubtful   0    0    0    0    0    0    0    0 
Total Consumer  $2,206   $628   $494   $365   $283   $457   $37   $4,470 
Vehicle                                        
Pass  $613   $656   $357   $264   $36   $2   $0   $1,928 
Watch   0    0    0    0    0    0    0    0 
Special Mention   0    0    0    0    0    0    0    0 
Substandard   0    0    0    0    0    0    0    0 
Doubtful   0    0    0    0    0    0    0    0 
Total Vehicle  $613   $656   $357   $264   $36   $2   $0   $1,928 
Credit cards                                        
Pass  $1,365   $0   $0   $0   $0   $0   $0   $1,365 
Watch   0    0    0    0    0    0    0    0 
Special Mention   0    0    0    0    0    0    0    0 
Substandard   0    0    0    0    0    0    0    0 
Doubtful   0    0    0    0    0    0    0    0 
Total Credit Cards  $1,365   $0   $0   $0   $0   $0   $0   $1,365 
Total Loans                                        
Pass  $206,595   $126,043   $125,903   $224,741   $133,486   $249,196   $135,856   $1,201,820 
Watch   1,084    15,126    10,468    18,735    10,205    25,566    10,982    92,166 
Special Mention   637    2,544    1,214    1,204    2,207    3,999    2,319    14,124 
Substandard   0    456    1,342    345    3,238    1,699    104    7,184 
Doubtful   0    0    0    0    0    0    0    0 
Total  $208,316   $144,169   $138,927   $245,025   $149,136   $280,460   $149,261   $1,315,294 

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

 

(4) Loans (continued):

 

The following table presents the amortized cost basis of loans on non-accrual status and loans past due over 89 days still accruing as of June 30, 2026:

  

2026  Non-accrual   Non-accrual With No ACL   Loans Past Due Over 89 Days and Still Accruing 
2026 

Non-accrual

  

Non-accrual
With No ACL

   Loans Past Due
Over 89 Days and
Still Accruing		 
             
Commercial:               
Commercial  $162   $0   $6 
Agricultural   86    9    302 
Real estate:               
Commercial real estate   3,581    268    887 
Agricultural real estate   0    0    0 
Consumer real estate   66    66    815 
Consumer:               
Installment   0    0    0 
                
Total  $3,895   $343   $2,010 

 

The following table presents the amortized cost basis of loans on non-accrual status and loans past due over 89 days still accruing as of December 31, 2025:

 

2025 

Non-accrual

  

Non-accrual
With No ACL

   Loans Past Due
Over 89 Days and
Still Accruing		 
             
Commercial:               
Commercial  $195   $0   $31 
Agricultural   0    0    302 
Real estate:               
Commercial real estate   4,095    3    246 
Agricultural real estate   0    0    0 
Consumer real estate   211    214    573 
Consumer:               
Installment   0    0    6 
                
Total  $4,501   $217   $1,158 

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

 

(4) Loans (continued):

 

Loan aging information by class of loan at June 30, 2026 and December 31, 2025:

   

March 31, 2026 

Loans Past Due 30-59 Days

  

Loans Past Due 60-89 Days

  

Loans Past Due 90+ Days

  

Total Past Due

 
June 30, 2026 

Loans Past Due

30-59 Days

  

Loans Past Due

60-89 Days

  

Loans Past Due

90+ Days

  

Total

Past Due

 
                 
Commercial:                    
Commercial  $140   $27   $6   $                 173 
Agricultural   203    48    331    582 
Real estate:                    
Commercial real estate   2,502    455    4,228    7,185 
Agricultural real estate   1,257    0    0    1,257 
Consumer real estate   2,005    1,183    815    4,003 
Construction & Land real estate   8    0    0    8 
Consumer:                    
Consumer other   24    6    0    30 
Consumer vehicle   5    10    0    15 
                     
Totals  $6,144   $1,729   $5,380   $13,253 

 

December 31, 2025 

Loans Past Due

30-59 Days

  

Loans Past Due

60-89 Days

  

Loans Past Due

90+ Days

  

Total

Past Due

 
                 
Commercial:                    
Commercial  $0   $25   $31   $             56 
Agricultural   37    0    303    340 
Real estate:                    
Commercial real estate   2,317    382    4,341    7,040 
Agricultural real estate   0    0    0    0 
Consumer real estate   2,513    825    572    3,910 
Consumer:                    
Installment   11    15    6    32 
                     
Totals  $4,878   $1,247   $5,253   $11,378 

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

 

(4) Loans (continued):

 

The following table represents collateral dependent loans. A loan is considered to be collateral dependent when the borrower is experiencing financial difficulty, and the repayment is expected to be provided substantially through the operation or sale of collateral. The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of June 30, 2026:

   

2026    

      Total 
2026 

Commercial

  

Real

Estate

  

Vehicle

  

Total

 
                 
Commercial and industrial  $199   $0   $0   $199 
Agriculture   401    0    0    401 
Commercial real estate   0    4,207    0    4,207 
Agricultural real estate   0    1,135    0    1,135 
Consumer real estate   0    681    0    681 
Consumer other   0    0    5    5 
Consumer vehicle   0    0    0    0 
                     
Totals  $600   $6,023   $5   $6,628 

 

The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of December 31, 2025:

 

2025    

     

Total

 
2025 

Commercial

  

Real

Estate

  

Vehicle

  

Total

 
                 
Commercial and industrial  $261   $0   $0   $261 
Agricultural   304    0    0    304 
Commercial real estate   0    4,557    0    4,557 
Agricultural real estate   0    1,135    0    1,135 
Consumer real estate   100    832    0    932 
Consumer other   0    0    13    13 
Consumer vehicle   0    0    0    0 
                     
Totals  $665   $6,524   $13   $7,202 

 

The Company had no loans modified to borrowers experiencing financial difficulty as of June 30, 2026 and December 31, 2025.

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)