| Loans Receivable and Allowance for Credit Losses |
Loans Receivable and Allowance for Credit Losses The table below presents the major types of loans recorded on the consolidated statements of financial condition as of the dates indicated: | | | | | | | | | | | | | June 30,
2026 | | December 31,
2025 | | (Dollars in thousands) | | | | | Construction, land & land development | $ | 325,384 | | | $ | 255,740 | | | Other commercial real estate | 1,475,934 | | | 1,449,044 | | | Owner-occupied commercial real estate | 270,838 | | | 295,346 | | | Commercial industrial & agricultural | 313,056 | | | 299,853 | | | Residential real estate | 355,291 | | | 346,601 | | | Consumer | 2,046 | | | 1,590 | | | Loans receivable | 2,742,549 | | | 2,648,174 | | | Allowance for credit losses | (22,064) | | | (20,893) | | Total loans receivable, net of allowance for credit losses on loans and leases (1) | $ | 2,720,485 | | | $ | 2,627,281 | |
(1)Includes deferred (fees) costs and unamortized (discounts) premiums, net of $(7.4) and $(6.9) million at June 30, 2026 and December 31, 2025, respectively. The following table presents, by loan class, the activity related to the allowance for credit losses for the three months ended June 30, 2026:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Construction, land, & land development | | Other commercial real estate | | Owner- occupied commercial real estate | | Commercial industrial & agricultural | | Residential real estate | | Consumer | | Total | | (Dollars in thousands) | | | | | | | | | | | | | | | Beginning balance | $ | 4,795 | | | $ | 9,160 | | | $ | 1,454 | | | $ | 3,175 | | | $ | 2,521 | | | $ | 16 | | | $ | 21,121 | | Provision (recovery) for credit losses | 726 | | | 290 | | | (73) | | | 12 | | | (12) | | | — | | | 943 | | | Charge-offs | — | | | — | | | — | | | — | | | — | | | (2) | | | (2) | | | Recoveries | 1 | | | — | | | — | | | — | | | — | | | 1 | | | 2 | | | Net recoveries (charge-offs) | 1 | | | — | | | — | | | — | | | — | | | (1) | | | — | | | Ending balance | $ | 5,522 | | | $ | 9,450 | | | $ | 1,381 | | | $ | 3,187 | | | $ | 2,509 | | | $ | 15 | | | $ | 22,064 | |
The following table presents, by loan class, the activity related to the allowance for credit losses for the three months ended June 30, 2025:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Construction, land, & land development | | Other commercial real estate | | Owner- occupied commercial real estate | | Commercial industrial & agricultural | | Residential real estate | | Consumer | | Total | | (Dollars in thousands) | | | | | | | | | | | | | | | Beginning balance | $ | 5,559 | | | $ | 10,294 | | | $ | 1,329 | | | $ | 2,729 | | | $ | 1,774 | | | $ | 8 | | | $ | 21,693 | | Provision (recovery) for credit losses | 203 | | | (698) | | | 57 | | | 209 | | | 295 | | | 1 | | | 67 | | | Charge-offs | — | | | — | | | — | | | — | | | — | | | (3) | | | (3) | | | Recoveries | 1 | | | — | | | — | | | — | | | — | | | 2 | | | 3 | | | Net recoveries (charge-offs) | 1 | | | — | | | — | | | — | | | — | | | (1) | | | — | | | Ending balance | $ | 5,763 | | | $ | 9,596 | | | $ | 1,386 | | | $ | 2,938 | | | $ | 2,069 | | | $ | 8 | | | $ | 21,760 | |
The following table presents, by loan class, the activity related to the allowance for credit losses for the six months ended June 30, 2026:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Construction, land, & land development | | Other commercial real estate | | Owner- occupied commercial real estate | | Commercial industrial & agricultural | | Residential real estate | | Consumer | | Total | | (Dollars in thousands) | | | | | | | | | | | | | | | Beginning balance | $ | 4,182 | | | $ | 9,385 | | | $ | 1,456 | | | $ | 3,349 | | | $ | 2,513 | | | $ | 8 | | | $ | 20,893 | | Provision (recovery) for credit losses | 1,339 | | | 65 | | | (75) | | | (162) | | | (4) | | | 12 | | | 1,175 | | | Charge-offs | — | | | — | | | — | | | — | | | — | | | (8) | | | (8) | | | Recoveries | 1 | | | — | | | — | | | — | | | — | | | 3 | | | 4 | | | Net recoveries (charge-offs) | 1 | | | — | | | — | | | — | | | — | | | (5) | | | (4) | | | Ending balance | $ | 5,522 | | | $ | 9,450 | | | $ | 1,381 | | | $ | 3,187 | | | $ | 2,509 | | | $ | 15 | | | $ | 22,064 | |
The following table presents, by loan class, the activity related to the allowance for credit losses for the six months ended June 30, 2025: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Construction, land, & land development | | Other commercial real estate | | Owner- occupied commercial real estate | | Commercial industrial & agricultural | | Residential real estate | | Consumer | | Total | | (Dollars in thousands) | | | | | | | | | | | | | | | Beginning balance | $ | 5,525 | | | $ | 9,208 | | | $ | 1,359 | | | $ | 2,514 | | | $ | 1,788 | | | $ | 7 | | | $ | 20,401 | | Provision (recovery) for credit losses | 237 | | | 388 | | | 27 | | | 424 | | | 281 | | | 24 | | | 1,381 | | | Charge-offs | — | | | — | | | — | | | — | | | — | | | (26) | | | (26) | | | Recoveries | 1 | | | — | | | — | | | — | | | — | | | 3 | | | 4 | | | Net recoveries (charge-offs) | 1 | | | — | | | — | | | — | | | — | | | (23) | | | (22) | | | Ending balance | $ | 5,763 | | | $ | 9,596 | | | $ | 1,386 | | | $ | 2,938 | | | $ | 2,069 | | | $ | 8 | | | $ | 21,760 | |
The following tables present the amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing as of June 30, 2026 and June 30, 2025: | | | | | | | | | | | | | | | | | | | | | | June 30, 2026 | | Nonaccrual with no allowance for credit loss | | Nonaccrual with an allowance for credit loss | | Loans past due over 89 days still accruing | | (Dollars in thousands) | | | | | | | | Construction, land & land development | | $ | — | | | $ | — | | | $ | — | | | Other commercial real estate | | 4,029 | | | — | | | — | | | Owner-occupied commercial real estate | | — | | | 18,178 | | | — | | | Commercial industrial & agricultural | | — | | | — | | | — | | | Residential real estate | | 64 | | | — | | | — | | | Consumer | | — | | | — | | | — | | | Total loans | | $ | 4,093 | | | $ | 18,178 | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | June 30, 2025 | | Nonaccrual with no allowance for credit loss | | Nonaccrual with an allowance for credit loss | | Loans past due over 89 days still accruing | | (Dollars in thousands) | | | | | | | | Construction, land & land development | | $ | — | | | $ | — | | | $ | — | | | Other commercial real estate | | 6,827 | | | — | | | — | | | Owner-occupied commercial real estate | | 17,418 | | | — | | | — | | | Commercial industrial & agricultural | | — | | | — | | | — | | | Residential real estate | | — | | | — | | | — | | | Consumer | | — | | | — | | | — | | | Total loans | | $ | 24,245 | | | $ | — | | | $ | — | |
The Company designates collateral-dependent loans as loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral, and the borrower is experiencing financial difficulty. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the allowance for credit losses. Under Current Expected Credit Losses (CECL), for collateral-dependent loans, the Company has adopted the practical expedient to measure the allowance for credit losses based on the fair value of collateral. The allowance for credit losses is calculated on an individual loan basis based on the shortfall between the fair value of the loan’s collateral, which is adjusted for liquidation costs/discounts if applicable, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required. The following table presents an analysis of collateral-dependent loans of the Company as of June 30, 2026 and December 31, 2025: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2026 | | Residential properties | | Business assets | | Land | | Commercial property | | Other | | Total | | (Dollars in thousands) | | | | | | | | | | | | | | Construction, land & land development | | $ | — | | | $ | — | | | $ | 618 | | | $ | — | | | $ | — | | | $ | 618 | | | Other commercial real estate | | — | | | — | | | — | | | 4,029 | | | — | | | 4,029 | | | Owner-occupied commercial real estate | | — | | | — | | | — | | | 28,924 | | | — | | | 28,924 | | | Commercial, industrial & agricultural | | — | | | — | | | — | | | — | | | — | | | — | | | Residential real estate | | 64 | | | — | | | — | | | — | | | — | | | 64 | | | Consumer | | — | | | — | | | — | | | — | | | — | | | — | | | Total loans | | $ | 64 | | | $ | — | | | $ | 618 | | | $ | 32,953 | | | $ | — | | | $ | 33,635 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2025 | | Residential properties | | Business assets | | Land | | Commercial property | | Other | | Total | | (Dollars in thousands) | | | | | | | | | | | | | | Construction, land & land development | | $ | — | | | $ | — | | | $ | 633 | | | $ | — | | | $ | — | | | $ | 633 | | | Other commercial real estate | | — | | | — | | | — | | | 4,942 | | | — | | | 4,942 | | | Owner-occupied commercial real estate | | — | | | — | | | — | | | 28,137 | | | — | | | 28,137 | | | Commercial, industrial & agricultural | | — | | | — | | | — | | | — | | | — | | | — | | | Residential real estate | | — | | | — | | | — | | | — | | | — | | | — | | | Consumer | | — | | | — | | | — | | | — | | | — | | | — | | | Total loans | | $ | — | | | $ | — | | | $ | 633 | | | $ | 33,079 | | | $ | — | | | $ | 33,712 | |
At June 30, 2026, the Company had six loans totaling $33.6 million that were individually evaluated for credit losses, of which four loans totaling $22.3 million were on a nonaccrual basis. At December 31, 2025, the Company had seven loans totaling $33.7 million that were individually evaluated for credit losses, of which three loans totaling $21.6 million were on a nonaccrual basis. There was one individually analyzed loan with an allowance for credit losses in the amount of $178 thousand as of June 30, 2026 and no individually analyzed loans with an allowance for credit losses as of December 31, 2025. The Company uses several credit quality indicators to manage credit risk on an ongoing basis. The Company’s primary credit quality indicator is an internal credit risk rating system. The Company grades loans as “pass,” “special mention,” “substandard,” “doubtful,” or “loss” loans. Loans are reviewed on a regular basis internally, and at least annually by an external loan review group, to ensure loans are graded appropriately. The following are the definitions of the Company’s credit quality indicators. Pass – The loans assigned a “pass” grade are typically paying in accordance with the terms of the original agreement and do not have significant weaknesses that would be an indication of probable future default in the short-term. Management believes there is a low likelihood of loss related to those loans that are considered “pass”. Special Mention – Loans assigned a “special mention” grade have potential 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 institution’s credit position at some future date. This rating requires appropriate remediation plans and monitoring. Substandard – Loans assigned a “substandard” grade are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the possibility that the bank will sustain some loss if the deficiencies are not corrected. Appropriate remedial plans must be implemented, and the credit continuously monitored. Doubtful – Loans assigned a “doubtful” grade have all the weaknesses inherent in one classified 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. An asset is to be graded “doubtful” when significant risk exposure is evident, but the actual amount of the loss is not immediately determinable pending some future event to be resolved within a relatively short time period. Given the high probability of loss, nonaccrual accounting treatment is required. Loss – The loans assigned a “loss” grade are considered uncollectible and identified losses are immediately charged-off. The following table summarizes the total amortized costs of commercial loans disaggregated by year of origination, the current period gross write offs, and risk rating as of June 30, 2026: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Commercial loan risk classification by loan type Term loans by origination year | | | | | | 2026 | | 2025 | | 2024 | | 2023 | | 2022 | | 2021 & prior | | Revolving loans | | Total | | (Dollars in thousands) | | Construction, land & land development | | | | | | | | | | | | | | | | | Pass | $ | 30,131 | | | $ | 89,892 | | | $ | 68,746 | | | $ | 93,528 | | | $ | 41,891 | | | $ | 1,196 | | | $ | — | | | $ | 325,384 | | | Special mention | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Substandard | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Doubtful | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | Total construction, land & land development | 30,131 | | | 89,892 | | | 68,746 | | | 93,528 | | | 41,891 | | | 1,196 | | | — | | | 325,384 | | | Current period gross write offs | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Other commercial real estate | | | | | | | | | | | | | | | | | Pass | 218,354 | | | 129,004 | | | 62,601 | | | 193,778 | | | 591,203 | | | 276,964 | | | — | | | 1,471,904 | | | Special mention | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Substandard | — | | | — | | | — | | | — | | | — | | | 4,030 | | | — | | | 4,030 | | | Doubtful | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Total other commercial real estate | 218,354 | | | 129,004 | | | 62,601 | | | 193,778 | | | 591,203 | | | 280,994 | | | — | | | 1,475,934 | | | Current period gross write offs | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Owner-occupied commercial real estate | | | | | | | | | | | | | | | | | Pass | 9,850 | | | 52,456 | | | 6,798 | | | 43,756 | | | 64,402 | | | 71,970 | | | 3,001 | | | 252,233 | | | Special mention | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Substandard | — | | | — | | | — | | | 18,178 | | | 427 | | | — | | | — | | | 18,605 | | | Doubtful | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Total owner-occupied real estate | 9,850 | | | 52,456 | | | 6,798 | | | 61,934 | | | 64,829 | | | 71,970 | | | 3,001 | | | 270,838 | | | Current period gross write offs | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Commercial, industrial & agricultural | | | | | | | | | | | | | | | | | Pass | 14,513 | | | 43,211 | | | 18,233 | | | 19,759 | | | 26,584 | | | 31,025 | | | 159,731 | | | 313,056 | | | Special mention | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Substandard | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Doubtful | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | Total commercial, industrial, & agriculture | 14,513 | | | 43,211 | | | 18,233 | | | 19,759 | | | 26,584 | | | 31,025 | | | 159,731 | | | 313,056 | | | Current period gross write offs | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Total commercial loans | $ | 272,848 | | | $ | 314,563 | | | $ | 156,378 | | | $ | 368,999 | | | $ | 724,507 | | | $ | 385,185 | | | $ | 162,732 | | | $ | 2,385,212 | |
The following table summarizes the total amortized costs of commercial loans disaggregated by year of origination, the current period gross write offs, and risk rating as of December 31, 2025: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Commercial loan risk classification by loan type Term loans by origination year | | | | | | 2025 | | 2024 | | 2023 | | 2022 | | 2021 | | 2020 & prior | | Revolving loans | | Total | | (Dollars in thousands) | | Construction, land & land development | | | | | | | | | | | | | | | | | Pass | $ | 24,843 | | | $ | 79,194 | | | $ | 100,344 | | | $ | 50,096 | | | $ | 369 | | | $ | 894 | | | $ | — | | | $ | 255,740 | | | Special mention | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Substandard | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Doubtful | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | Total construction, land & land development | 24,843 | | | 79,194 | | | 100,344 | | | 50,096 | | | 369 | | | 894 | | | — | | | 255,740 | | | Current period gross write offs | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Other commercial real estate | | | | | | | | | | | | | | | | | Pass | 125,045 | | | 57,381 | | | 273,505 | | | 635,498 | | | 222,616 | | | 119,090 | | | — | | | 1,433,135 | | | Special mention | — | | | — | | | — | | | — | | | 11,025 | | | — | | | — | | | 11,025 | | | Substandard | — | | | — | | | 675 | | | — | | | 4,209 | | | — | | | — | | | 4,884 | | | Doubtful | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Total other commercial real estate | 125,045 | | | 57,381 | | | 274,180 | | | 635,498 | | | 237,850 | | | 119,090 | | | — | | | 1,449,044 | | | Current period gross write offs | — | | | — | | | — | | | 2,754 | | | — | | | — | | | — | | | 2,754 | | | Owner-occupied commercial real estate | | | | | | | | | | | | | | | | | Pass | 52,664 | | | 10,215 | | | 65,691 | | | 66,005 | | | 31,146 | | | 48,910 | | | 3,347 | | | 277,978 | | | Special mention | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Substandard | — | | | — | | | 17,368 | | | — | | | — | | | — | | | — | | | 17,368 | | | Doubtful | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Total owner-occupied real estate | 52,664 | | | 10,215 | | | 83,059 | | | 66,005 | | | 31,146 | | | 48,910 | | | 3,347 | | | 295,346 | | | Current period gross write offs | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Commercial, industrial & agricultural | | | | | | | | | | | | | | | | | Pass | 58,013 | | | 20,041 | | | 24,225 | | | 38,819 | | | 32,975 | | | 789 | | | 124,991 | | | 299,853 | | | Special mention | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Substandard | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Doubtful | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | Total commercial, industrial, & agriculture | 58,013 | | | 20,041 | | | 24,225 | | | 38,819 | | | 32,975 | | | 789 | | | 124,991 | | | 299,853 | | | Current period gross write offs | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Total commercial loans | $ | 260,565 | | | $ | 166,831 | | | $ | 481,808 | | | $ | 790,418 | | | $ | 302,340 | | | $ | 169,683 | | | $ | 128,338 | | | $ | 2,299,983 | |
The following table summarizes the total amortized cost of residential real estate and consumer loans disaggregated by year of origination, the current period gross write offs, and risk rating as of June 30, 2026: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Commercial loan risk classification by loan type Term loans by origination year | | | | | | 2026 | | 2025 | | 2024 | | 2023 | | 2022 | | 2021 & prior | | Revolving loans | | Total | | (Dollars in thousands) | | | Residential real estate | | | | | | | | | | | | | | | | | Pass | $ | 24,821 | | | $ | 79,437 | | | $ | 79,840 | | | $ | 55,825 | | | $ | 43,904 | | | $ | 47,753 | | | $ | 23,261 | | | $ | 354,841 | | | Special mention | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Substandard | — | | | — | | | — | | | — | | | — | | | 386 | | | 64 | | | 450 | | | Doubtful | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Total residential real estate | 24,821 | | | 79,437 | | | 79,840 | | | 55,825 | | | 43,904 | | | 48,139 | | | 23,325 | | | 355,291 | | | Current period gross write offs | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Consumer | | | | | | | | | | | | | | | | | Pass | 1,173 | | | 313 | | | 318 | | | 41 | | | — | | | 70 | | | 131 | | | 2,046 | | | Special mention | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Substandard | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Doubtful | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Total consumer | 1,173 | | | 313 | | | 318 | | | 41 | | | — | | | 70 | | | 131 | | | 2,046 | | | Current period gross write offs | 8 | | | — | | | — | | | — | | | — | | | — | | | — | | | 8 | | Total consumer and residential real estate loans | 25,994 | | | 79,750 | | | 80,158 | | | 55,866 | | | 43,904 | | | 48,209 | | | 23,456 | | | 357,337 | | | Total loans | $ | 298,842 | | | $ | 394,313 | | | $ | 236,536 | | | $ | 424,865 | | | $ | 768,411 | | | $ | 433,394 | | | $ | 186,188 | | | $ | 2,742,549 | |
The following table summarizes the total amortized cost of residential real estate and consumer loans disaggregated by year of origination, the current period gross write offs and risk rating as of December 31, 2025: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Commercial loan risk classification by loan type Term loans by origination year | | | | | | 2025 | | 2024 | | 2023 | | 2022 | | 2021 | | 2020 & prior | | Revolving loans | | Total | | (Dollars in thousands) | | | Residential real estate | | | | | | | | | | | | | | | | | Pass | $ | 80,249 | | | $ | 77,707 | | | $ | 72,015 | | | $ | 45,527 | | | $ | 28,279 | | | $ | 24,923 | | | $ | 17,901 | | | $ | 346,601 | | | Special mention | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Substandard | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Doubtful | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Total residential real estate | 80,249 | | | 77,707 | | | 72,015 | | | 45,527 | | | 28,279 | | | 24,923 | | | 17,901 | | | 346,601 | | | Current period gross write offs | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Consumer | | | | | | | | | | | | | | | | | Pass | 841 | | | 388 | | | 138 | | | — | | | — | | | 78 | | | 145 | | | 1,590 | | | Special mention | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Substandard | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Doubtful | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Total consumer | 841 | | | 388 | | | 138 | | | — | | | — | | | 78 | | | 145 | | | 1,590 | | | Current period gross write offs | 47 | | | — | | | — | | | — | | | — | | | — | | | — | | | 47 | | Total consumer and residential real estate loans | 81,090 | | | 78,095 | | | 72,153 | | | 45,527 | | | 28,279 | | | 25,001 | | | 18,046 | | | 348,191 | | | Total loans | $ | 341,655 | | | $ | 244,926 | | | $ | 553,961 | | | $ | 835,945 | | | $ | 330,619 | | | $ | 194,684 | | | $ | 146,384 | | | $ | 2,648,174 | |
There were no revolving loans converted to term loans during 2026 and 2025. The following table presents an aging analysis of the loan portfolio, by loan class, at June 30, 2026 and December 31, 2025: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2026 | | (Dollars in thousands) | Construction, land, & land development | | Other commercial real estate | | Owner- occupied commercial real estate | | Commercial industrial & agricultural | | Residential real estate | | Consumer | | Total | | Current | $ | 325,384 | | | $ | 1,471,904 | | | $ | 252,660 | | | $ | 313,056 | | | $ | 355,227 | | | $ | 2,046 | | | $ | 2,720,277 | | | 30-59 days past due | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 60-89 days past due | — | | | — | | | — | | | — | | | — | | | — | | | — | | 90 days or more past due and still accruing | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Nonaccrual loans | — | | | 4,030 | | | 18,178 | | | — | | | 64 | | | — | | | 22,272 | | | Total | $ | 325,384 | | | $ | 1,475,934 | | | $ | 270,838 | | | $ | 313,056 | | | $ | 355,291 | | | $ | 2,046 | | | $ | 2,742,549 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2025 | | (Dollars in thousands) | Construction, land, & land development | | Other commercial real estate | | Owner- occupied commercial real estate | | Commercial industrial & agricultural | | Residential real estate | | Consumer | | Total | | Current | $ | 255,740 | | | $ | 1,444,835 | | | $ | 277,978 | | | $ | 299,853 | | | $ | 346,601 | | | $ | 1,590 | | | $ | 2,626,597 | | | 30-59 days past due | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 60-89 days past due | — | | | — | | | — | | | — | | | — | | | — | | | — | | 90 days or more past due and still accruing | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Nonaccrual loans | — | | | 4,209 | | | 17,368 | | | — | | | — | | | — | | | 21,577 | | | Total | $ | 255,740 | | | $ | 1,449,044 | | | $ | 295,346 | | | $ | 299,853 | | | $ | 346,601 | | | $ | 1,590 | | | $ | 2,648,174 | |
Occasionally, the Company modifies loans to borrowers in financial distress by providing concessions in the form of principal forgiveness, an other-than-insignificant payment delay, a term extension, and/or an interest rate reduction. If principal forgiveness is provided, the amount of forgiveness is charged off against the allowance for credit losses. The following tables present the amortized cost of loans as of June 30, 2026 and June 30, 2025 that were both experiencing financial difficulty and modified during the periods noted by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below: During the Three Month Period ending June 30, 2026:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Modification type: | | Principal forgiveness | | Payment delay | | Term extension | | Interest rate reduction | | Total | | Total class of financing receivable | | June 30, 2026 | | | | | | (Dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Owner-occupied commercial real estate | | $ | — | | | $ | 28,924 | | | $ | — | | | $ | — | | | $ | 28,924 | | | 10.7 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total loans | | $ | — | | | $ | 28,924 | | | $ | — | | | $ | — | | | $ | 28,924 | | | 1.1 | % |
During the Three Month Period ending June 30, 2025: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Modification type: | | Principal forgiveness | | Payment delay | | Term extension | | Interest rate reduction | | Total | | Total class of financing receivable | | June 30, 2025 | | | | | | (Dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Owner-occupied commercial real estate | | $ | — | | | $ | — | | | $ | — | | | $ | 10,801 | | | $ | 10,801 | | | 3.8 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total loans | | $ | — | | | $ | — | | | $ | — | | | $ | 10,801 | | | $ | 10,801 | | | 0.4 | % |
During the Six Month Period ending June 30, 2026:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Modification type: | | Principal forgiveness | | Payment delay | | Term extension | | Interest rate reduction | | Total | | Total class of financing receivable | | June 30, 2026 | | | | | | (Dollars in thousands) | | | | | | Construction, land & land development | | $ | — | | | $ | — | | | $ | 618 | | | $ | — | | | $ | 618 | | | 0.2 | % | | Other commercial real estate | | — | | | — | | | — | | | 4,029 | | | 4,029 | | | 0.3 | % | | Owner-occupied commercial real estate | | — | | | 28,924 | | | — | | | — | | | 28,924 | | | 10.7 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total loans | | $ | — | | | $ | 28,924 | | | $ | 618 | | | $ | 4,029 | | | $ | 33,571 | | | 1.2 | % |
During the Six Month Period ending June 30, 2025: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Modification type: | | Principal forgiveness | | Payment delay | | Term extension | | Interest rate reduction | | Total | | Total class of financing receivable | | June 30, 2025 | | | | | | (Dollars in thousands) | | | | | | Construction, land & land development | | $ | — | | | $ | — | | | $ | 4,855 | | | $ | — | | | $ | 4,855 | | | 1.5 | % | | Other commercial real estate | | — | | | — | | | — | | | 5,206 | | | 5,206 | | | 0.3 | % | | Owner-occupied commercial real estate | | — | | | — | | | — | | | 10,801 | | | 10,801 | | | 3.8 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total loans | | $ | — | | | $ | — | | | $ | 4,855 | | | $ | 16,007 | | | $ | 20,862 | | | 0.8 | % |
The Company has committed to lend additional amounts totaling $0 to the borrowers included in the previous tables. The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of such loans that have been modified in the last 12 months:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Payment Performance: | | Current | | 30 - 59 days past due | | 60 - 89 days past due | | Greater than 89 days past due | | Total past due | | June 30, 2026 | | | | | | (Dollars in thousands) | | | | Construction, land & land development | | $ | 618 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | Other commercial real estate | | 4,029 | | | — | | | — | | | — | | | — | | | Owner-occupied real estate | | 28,924 | | | — | | | — | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total loans | | $ | 33,571 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Payment Performance: | | Current | | 30 - 59 days past due | | 60 - 89 days past due | | Greater than 89 days past due | | Total past due | | June 30, 2025 | | | | | | (Dollars in thousands) | | | | Construction, land & land development | | $ | 647 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | Other commercial real estate | | 5,206 | | | — | | | — | | | — | | | — | | | Owner-occupied real estate | | 28,220 | | | — | | | — | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total loans | | $ | 34,073 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
The following table describes the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the three months ended June 30, 2026: | | | | | | | | | | | | | | | | | | | | | | | | | | | | Modification type: | | Principal forgiveness | | Payment delay (months) | | Weighted average term extension (months) | | Weighted average interest rate reduction | | June 30, 2026 | | | | (Dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | Owner-occupied real estate | | $ | — | | | 12 | | — | | | — | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total loans | | $ | — | | | 12 | | — | | | — | % |
The following table describes the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the three months ended June 30, 2025: | | | | | | | | | | | | | | | | | | | | | | | | | | | | Modification type: | | Principal forgiveness | | Payment delay (months) | | Weighted average term extension (months) | | Weighted average interest rate reduction | | June 30, 2025 | | | | (Dollars in thousands) | | | | | | | | | | | | | Other commercial real estate | | $ | — | | | — | | | — | | | (1.0) | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total loans | | $ | — | | | — | | | — | | | (1.0) | % |
The following table describes the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the six months ended June 30, 2026: | | | | | | | | | | | | | | | | | | | | | | | | | | | | Modification type: | | Principal forgiveness | | Payment delay (months) | | Weighted average term extension (months) | | Weighted average interest rate reduction | | June 30, 2026 | | | | (Dollars in thousands) | | | | Construction, land & land development | | $ | — | | | — | | | 9 | | — | % | | Other commercial real estate | | — | | | — | | | — | | | 0.3 | % | | Owner-occupied real estate | | — | | | 12 | | — | | | — | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total loans | | $ | — | | | 12 | | 9 | | 0.3 | % |
The following table describes the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the six months ended June 30, 2025: | | | | | | | | | | | | | | | | | | | | | | | | | | | | Modification type: | | Principal forgiveness | | Payment delay (months) | | Weighted average term extension (months) | | Weighted average interest rate reduction | | June 30, 2025 | | | | (Dollars in thousands) | | | | Construction, land & land development | | $ | — | | | — | | | 16 | | — | % | | | | | | | | | | | Owner-occupied real estate | | — | | | 15 | | — | | | (1.0) | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total loans | | $ | — | | | 15 | | 16 | | (1.0) | % |
The following table presents the amortized cost basis of loans that had a payment default during the twelve months ended June 30, 2026 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty. A default on a modified loan is defined as being past due 90 days or being out of compliance with the modification agreement.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Modification type: | | Principal forgiveness | | Payment delay (months) | | Weighted average term extension (months) | | Weighted average interest rate reduction | | June 30, 2026 | | | | (Dollars in thousands) | | | | | | | | | | | | | Other commercial real estate | | $ | — | | | $ | — | | | $ | — | | | $ | 4,029 | | | Owner-occupied real estate | | — | | | 18,178 | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total loans | | $ | — | | | $ | 18,178 | | | $ | — | | | $ | 4,029 | |
The Company had no loans that had a payment default during the twelve months ended June 30, 2025 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty. A default on a modified loan is defined as being past due 90 days or being out of compliance with the modification agreement. Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The Company may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis in accordance with U.S. generally accepted accounting principles. These include assets that are measured at the lower of cost or market value that were recognized at fair value less costs to sell, if applicable, at the end of the period. Assets measured at fair value on a nonrecurring basis are included in table below as of June 30, 2026.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2026 | | (Dollars in thousands) | | Total | | Level 1 | | Level 2 | | Level 3 | | Collateral dependent loans, net | | $ | 33,635 | | | $ | — | | | $ | — | | | $ | 33,635 | | | Total assets at fair value on a nonrecurring basis | | $ | 33,635 | | | $ | — | | | $ | — | | | $ | 33,635 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2026 | | Fair value | | Valuation
technique | | Unobservable
input | | Range | | Collateral dependent loans, net | | $ | 33,635 | | | Third party appraisal or
broker's price opinion | | Management discount
for costs to sell | | 10% |
The Company may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis in accordance with U.S. generally accepted accounting principles. These include assets that are measured at the lower of cost or market value that were recognized at fair value less costs to sell, if applicable, at the end of the period. Assets measured at fair value on a nonrecurring basis are included in table below as of June 30, 2025.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2025 | | (Dollars in thousands) | | Total | | Level 1 | | Level 2 | | Level 3 | | Collateral dependent loans, net | | $ | 40,900 | | | $ | — | | | $ | — | | | $ | 40,900 | | | Total assets at fair value on a nonrecurring basis | | $ | 40,900 | | | $ | — | | | $ | — | | | $ | 40,900 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2025 | | Fair value | | Valuation
technique | | Unobservable
input | | Range | | Collateral dependent loans, net | | $ | 40,900 | | | Third party appraisal or
broker's price opinion | | Management discount
for costs to sell | | 10% |
There were two loans to borrowers experiencing financial difficulty in the twelve months prior to December 31, 2025 that had an event of default and three loans modified in the twelve months prior to June 30, 2026 that had an event of default. An event of default on a modified loan is defined as being past due 90 days or being out of compliance with the modification agreement. Officers and directors of the Company were indebted to the Company for loans made in the ordinary course of business. The following is an analysis of the loans to officers and directors for the six months ended June 30, 2026 and year ended December 31, 2025:
| | | | | | | | | | | | | June 30,
2026 | | December 31,
2025 | | (Dollars in thousands) | | | | | Balance, beginning of year | $ | 34,210 | | | $ | 53,091 | | | Originations | 30 | | | 1,925 | | | Payments received | (3,025) | | | (20,806) | | | Balance, end of year | $ | 31,215 | | | $ | 34,210 | |
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