Loans and Allowance for Credit Losses

6 Months Ended

Jun. 30, 2026

Loans and Allowance For Credit Losses [Abstract]

Loans and Allowance for Credit Losses

6. Loans and Allowance for Credit Losses

The following table presents the Corporation’s loan portfolio by category of loans as of June 30, 2026 and December 31, 2025 (in thousands):

		June 30,				December 31,
		2026				2025
		$				$

Agriculture			324,215				317,957
Business Loans			468,640				394,558
Consumer			76,057				5,703
Home Equity			152,235				141,369
Non-Owner Occupied Commercial Real Estate			186,239				169,584
Residential Real Estate (a)			461,881				484,337

Gross loans prior to deferred costs			1,669,267				1,513,508

Deferred loan costs, net			2,201				2,237
Allowance for credit losses			(18,452	)			(16,886	)
Total net loans			1,653,016				1,498,859

(a)	Real estate loans serviced for others, which are not included in the Consolidated Balance Sheets, totaled $387,947 and $376,287 as of June 30, 2026 and December 31, 2025.

Age Analysis of Past-Due Loans Receivable

The performance and credit quality of the loan portfolio is monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The following table presents the classes of the loan portfolio summarized by the past-due status as of June 30, 2026 and December 31, 2025 (in thousands):

		June 30, 2026
						31-60				61-90				Greater Than
						Days				Days				90 Days				Total				Total
		Current				Past Due				Past Due				Past Due				Past Due				Loans

Agriculture		$	323,923			$	—			$	—			$	292			$	292			$	324,215
Business Loans			461,825				2,060				1,580				3,175				6,815				468,640
Consumer			75,203				284				348				222				854				76,057
Home Equity			151,715				309				—				211				520				152,235
Non-Owner Occupied CRE			186,175				—				—				64				64				186,239
Residential Real Estate			459,280				1,615				683				303				2,601				461,881
Total		$	1,658,121			$	4,268			$	2,611			$	4,267			$	11,146			$	1,669,267

		December 31, 2025
						31-60				61-90				Greater Than
						Days				Days				90 Days				Total				Total
		Current				Past Due				Past Due				Past Due				Past Due				Loans

Agriculture		$	316,116			$	50			$	212			$	1,579			$	1,841			$	317,957
Business Loans			388,462				3,449				2,620				27				6,096				394,558
Consumer			5,661				31				11				—				42				5,703
Home Equity			140,818				394				38				119				551				141,369
Non-Owner Occupied CRE			168,836				—				—				748				748				169,584
Residential Real Estate			482,830				842				65				600				1,507				484,337
Total		$	1,502,723			$	4,766			$	2,946			$	3,073			$	10,785			$	1,513,508

Nonperforming Loans

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due

over 90 days still accruing interest as of June 30, 2026 and December 31, 2025, (in thousands):

		Nonaccrual				Nonaccrual								Loans Past
		with no				with				Total				Due Over 90 Days				Total
June 30, 2026		ACL				ACL				Nonaccrual				Still Accruing				Nonperforming

Agriculture		$	1,200			$	343			$	1,543			$	—			$	1,543
Business Loans			3,985				11				3,996				—				3,996
Consumer Loans			308				157				465				—				465
Home Equity			465				—				465				—				465
Non-Owner Occupied CRE			235				—				235				—				235
Residential Real Estate			2,341				—				2,341				—				2,341
Total		$	8,534			$	511			$	9,045			$	—			$	9,045

		Nonaccrual				Nonaccrual								Loans Past
		with no				with				Total				Due Over 90 Days				Total
December 31, 2025		ACL				ACL				Nonaccrual				Still Accruing				Nonperforming

Agriculture		$	2,598			$	503			$	3,101			$	—			$	3,101
Business Loans			3,267				—				3,267				—				3,267
Consumer Loans			—				—				—				—				—
Home Equity			189				169				358				—				358
Non-Owner Occupied CRE			1,007				—				1,007				—				1,007
Residential Real Estate			1,308				295				1,603				—				1,603
Total		$	8,369			$	967			$	9,336			$	—			$	9,336

The following table presents, by class of loans, the collateral-dependent nonaccrual loans and type of collateral as of June 30, 2026 and December 31, 2025 (in thousands):

June 30, 2026
		Real Estate				Other				None				Total
Agriculture		$	1,151			$	392			$	—			$	1,543
Business Loans			3,365				631				—				3,996
Consumer Loans			—				465				—				465
Home Equity			465				—				—				465
Non-Owner Occupied CRE			235				—				—				235
Residential Real Estate			2,341				—				—				2,341
Total		$	7,557			$	1,488			$	—			$	9,045

December 31, 2025
		Real Estate				Other				None				Total
Agriculture		$	2,634			$	467			$	—			$	3,101
Business Loans			2,744				523				—				3,267
Consumer Loans			—				—				—				—
Home Equity			358				—				—				358
Non-Owner Occupied CRE			1,007				—				—				1,007
Residential Real Estate			1,603				—				—				1,603
Total		$	8,346			$	990			$	—			$	9,336

Credit Quality Indicators

The Corporation grades commercial credits differently than consumer credits. The following tables represent all of the Corporation’s commercial credit exposures by internally assigned grades as of June 30, 2026 and December 31, 2025. The grading analysis estimates the capability of the borrower to repay the contractual obligations under the loan agreements as scheduled or at all. The Corporation's internal commercial credit risk grading system is based on experiences with similarly graded loans.

The Corporation's internally assigned grades for commercial credits are as follows:

·

Pass – loans which are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral.

·

Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem, if not corrected.

·

Substandard – loans that have a well-defined weakness based on objective evidence and characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected.

·

Doubtful – loans classified as doubtful have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.

·

Loss – loans classified as a loss are considered uncollectible, or of such value that continuance as an asset is not warranted.

Based on the most recent analysis performed, the following table presents the recorded investment by internal risk rating system for Commercial Credit exposures as of June 30, 2026 (in thousands):

																										Revolving				Revolving
		Term Loans Amortized Cost Basis by Origination Year																								Loans				Loans
																										Amortized				Converted
June 30, 2026		2026				2025				2024				2023				2022				Prior				Cost Basis				to Term				Total
Agriculture
Risk Rating
Pass		$	21,011			$	67,979			$	20,479			$	42,066			$	32,501			$	90,669			$	28,178			$	—			$	302,883
Special Mention			—				—				—				232				22				1,915				256				—				2,425
Substandard			—				3,222				987				2,006				1,418				8,718				2,556				—				18,907
Doubtful			—				—				—				—				—				—				—				—				—
Total		$	21,011			$	71,201			$	21,466			$	44,304			$	33,941			$	101,302			$	30,990			$	—			$	324,215

Agriculture
Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—

Business Loans
Risk Rating
Pass		$	72,192			$	78,172			$	45,875			$	49,234			$	65,425			$	101,860			$	44,369			$	—			$	457,127
Special Mention			—				—				—				—				630				1,457				123				—				2,210
Substandard			96				—				—				2,811				5,057				1,339				—				—				9,303
Doubtful			—				—				—				—				—				—				—				—				—
Total		$	72,288			$	78,172			$	45,875			$	52,045			$	71,112			$	104,656			$	44,492			$	—			$	468,640

Business Loans
Current period gross charge-offs		$	—			$	—			$	—			$	—			$	347			$	4			$	—			$	—			$	351

Non-Owner Occupied CRE
Risk Rating
Pass		$	19,706			$	33,128			$	7,487			$	31,090			$	37,675			$	43,806			$	10,604			$	—			$	183,496
Special Mention			—				—				—				—				—				1,965				—				—				1,965
Substandard			—				—				—				362				—				416				—				—				778
Doubtful			—				—				—				—				—				—				—				—				—
Total		$	19,706			$	33,128			$	7,487			$	31,452			$	37,675			$	46,187			$	10,604			$	—			$	186,239

Non-Owner Occupied CRE
Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—

Total
Risk Rating
Pass		$	112,909			$	179,279			$	73,841			$	122,390			$	135,601			$	236,335			$	83,151			$	—			$	943,506
Special Mention			—				—				—				232				652				5,337				379				—				6,600
Substandard			96				3,222				987				5,179				6,475				10,473				2,556				—				28,988
Doubtful			—				—				—				—				—				—				—				—				—
Total		$	113,005			$	182,501			$	74,828			$	127,801			$	142,728			$	252,145			$	86,086			$	—			$	979,094

Based on the most recent analysis performed, the following table presents the recorded investment by internal risk rating system for Commercial Credit exposures as of December 31, 2025 (in thousands):

																										Revolving				Revolving
		Term Loans Amortized Cost Basis by Origination Year																								Loans				Loans
																										Amortized				Converted
December 31, 2025		2025				2024				2023				2022				2021				Prior				Cost Basis				to Term				Total
Agriculture
Risk Rating
Pass		$	57,538			$	24,033			$	41,437			$	31,048			$	39,917			$	61,578			$	29,209			$	—			$	284,760
Special Mention			496				495				3,677				2,891				4				3,001				896				—				11,460
Substandard			3,278				854				2,795				2,596				7,364				2,664				2,186				—				21,737
Doubtful			—				—				—				—				—				—				—				—				—
Total		$	61,312			$	25,382			$	47,909			$	36,535			$	47,285			$	67,243			$	32,291			$	—			$	317,957

Agriculture
Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—

Business Loans
Risk Rating
Pass		$	86,999			$	45,954			$	40,947			$	64,396			$	42,648			$	50,764			$	49,020			$	—			$	380,728
Special Mention			—				—				—				984				175				1,067				183				—				2,409
Substandard			—				—				2,815				6,978				87				461				1,080				—				11,421
Doubtful			—				—				—				—				—				—				—				—				—
Total		$	86,999			$	45,954			$	43,762			$	72,358			$	42,910			$	52,292			$	50,283			$	—			$	394,558

Business Loans
Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—

Non-Owner Occupied CRE
Risk Rating
Pass		$	26,560			$	10,839			$	33,024			$	36,021			$	26,833			$	28,860			$	3,487			$	—			$	165,624
Special Mention			—				—				—				—				1,321				688				—				—				2,009
Substandard			—				—				369				—				—				1,194				388				—				1,951
Doubtful			—				—				—				—				—				—				—				—				—
Total		$	26,560			$	10,839			$	33,393			$	36,021			$	28,154			$	30,742			$	3,875			$	—			$	169,584

Non-Owner Occupied CRE
Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—

Total
Risk Rating
Pass		$	171,097			$	80,826			$	115,408			$	131,465			$	109,398			$	141,202			$	81,716			$	—			$	831,112
Special Mention			496				495				3,677				3,875				1,500				4,756				1,079				—				15,878
Substandard			3,278				854				5,979				9,574				7,451				4,319				3,654				—				35,109
Doubtful			—				—				—				—				—				—				—				—				—
Total		$	174,871			$	82,175			$	125,064			$	144,914			$	118,349			$	150,277			$	86,449			$	—			$	882,099

For consumer loans, the Corporation evaluates credit quality based on whether the loan is considered performing or non-performing. Non-performing loans consist of those loans greater than 90 days delinquent and nonaccrual loans.

The following table presents the balances of consumer loans by classes of the loan portfolio based on payment performance as of June 30, 2026 (in thousands):

																										Revolving				Revolving
		Term Loans Amortized Cost Basis by Origination Year																								Loans				Loans
																										Amortized				Converted
		2026				2025				2024				2023				2022				Prior				Cost Basis				to Term				Total
Consumer
Payment Performance
Performing		$	2,564			$	28,481			$	19,352			$	11,695			$	6,191			$	5,687			$	1,622			$	—			$	75,592
Nonperforming			—				129				63				69				107				97				—				—				465
Total		$	2,564			$	28,610			$	19,415			$	11,764			$	6,298			$	5,784			$	1,622			$	—			$	76,057

Consumer
Current period gross charge-offs		$	—			$	—			$	29			$	5			$	1			$	14			$	—			$	—			$	49

Home equity
Payment Performance
Performing		$	356			$	2,089			$	995			$	4,356			$	9,853			$	1,930			$	131,516				675			$	151,770
Nonperforming			—				—				—				47				113				105				200				—				465
Total		$	356			$	2,089			$	995			$	4,403			$	9,966			$	2,035			$	131,716			$	675			$	152,235

Home equity
Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—

Residential Real Estate
Payment Performance
Performing		$	13,350			$	27,193			$	34,562			$	88,212			$	124,495			$	171,728			$	—			$	—			$	459,540
Nonperforming			—				—				62				—				705				1,574				—				—				2,341
Total		$	13,350			$	27,193			$	34,624			$	88,212			$	125,200			$	173,302			$	—			$	—			$	461,881

Residential Real Estate
Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—

Total
Payment Performance
Performing		$	16,270			$	57,763			$	54,909			$	104,263			$	140,539			$	179,345			$	133,138			$	675			$	686,902
Nonperforming			—				129				125				116				925				1,776				200				—				3,271
Total		$	16,270			$	57,892			$	55,034			$	104,379			$	141,464			$	181,121			$	133,338			$	675			$	690,173

The following table presents the balances of consumer loans by classes of the loan portfolio based on payment performance as of December 31, 2025 (in thousands):

																										Revolving				Revolving
		Term Loans Amortized Cost Basis by Origination Year																								Loans				Loans
																										Amortized				Converted
		2025				2024				2023				2022				2021				Prior				Cost Basis				to Term				Total
Consumer
Payment Performance
Performing		$	2,757			$	901			$	337			$	122			$	14			$	—			$	1,572			$	—			$	5,703
Nonperforming			—				—				—				—				—				—				—				—				—
Total		$	2,757			$	901			$	337			$	122			$	14			$	—			$	1,572			$	—			$	5,703

Consumer
Current period gross charge-offs		$	7			$	31			$	15			$	6			$	—			$	10			$	—			$	—			$	69

Home equity																			—
Payment Performance
Performing		$	2,480			$	1,518			$	5,327			$	11,796			$	755			$	1,237			$	117,665				233			$	141,011
Nonperforming			—				—				52				117				—				189				—				—				358
Total		$	2,480			$	1,518			$	5,379			$	11,913			$	755			$	1,426			$	117,665			$	233			$	141,369

Home equity
Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	3			$	—			$	—			$	3

Residential Real Estate																			—
Payment Performance
Performing		$	36,611			$	41,145			$	93,055			$	130,643			$	90,881			$	90,399			$	—			$	—			$	482,734
Nonperforming			—				—				—				569				530				504				—				—				1,603
Total		$	36,611			$	41,145			$	93,055			$	131,212			$	91,411			$	90,903			$	—			$	—			$	484,337

Residential Real Estate
Current period gross charge-offs		$	—			$	—			$	84			$	—			$	—			$	—			$	—			$	—			$	84

Total
Payment Performance
Performing		$	41,848			$	43,564			$	98,719			$	142,561			$	91,650			$	91,636			$	119,237			$	233			$	629,448
Nonperforming			—				—				52				686				530				693				—				—				1,961
Total		$	41,848			$	43,564			$	98,771			$	143,247			$	92,180			$	92,329			$	119,237			$	233			$	631,409

Allowance for Credit Losses

The following table presents the activity in the allowance for credit losses (ACL) by portfolio segment for the three months ended June 30, 2026 and June 30, 2025 (in thousands):

		Beginning												Provisions				Ending
		Balance				Charge-offs				Recoveries				(Reductions)				Balance
June 30, 2026		$				$				$				$				$
Allowance for credit losses:
Agriculture			5,303				—				—				(101	)			5,202
Business Loans			3,259				(351	)			68				(244	)			2,732
Consumer Loans			1,604				(6	)			8				394				2,000
Home Equity			3,112				—				—				(15	)			3,097
Non-Owner Occupied CRE			831				—				—				24				855
Residential Real Estate			4,872				—				—				(306	)			4,566

Total		$	18,981			$	(357	)		$	76			$	(248	)		$	18,452

Agriculture – Loans made to individuals or operating companies within the Agricultural industry. These loans are generally secured by a first lien mortgage on agricultural land. The primary source of repayment is the income and assets of the borrower. The condition of the agriculture industry as well as the condition of the national economy is an important indicator of risk for this segment.

Business Loans —Loans made to operating companies or manufacturers for the purpose of production, operating capacity, accounts receivable, inventory or equipment financing. The primary source of repayment for these loans is cash flow from the operations of the company. The condition of the national economy is an important indicator of risk, but there are also more specific risks depending on the industry of the company. This segment also includes loans made to finance construction of buildings or other structures, as well as to finance the Acquisition and development of raw land for various purposes. While the risk of these loans is generally confined to the construction period, if there are problems, the project may not be completed, and as such, may not provide sufficient cash flow on its own to service the debt or have sufficient value in a liquidation to cover the outstanding principal. The condition of the national economy is an important indicator of risk, but there are also more specific risks depending on the type of project and the experience and resources of the developer.

Consumer - Loans made to individuals that may be secured by assets other than 1-4 family residences, as well as unsecured loans. This segment includes personal loans and lines of credit that may be secured or unsecured. The primary source of repayment for these loans is the income and assets of the borrower. The condition of the national economy, in particular the unemployment rate, is an important indicator of risk for this segment. The value of the collateral, if there is any, is less likely to be a source of repayment due to less certain collateral values.

Home Equity– This segment generally includes lines of credit and term loans secured by the equity in the borrower’s residence. The primary source of repayment for these facilities is the income and assets of the borrower. The condition of the national economy, in particular the unemployment rate, is an important indicator of risk for this segment. The state of the national housing market can also have a significant impact on this segment because low demand and/or declining home values can limit the ability of borrowers to sell a property and satisfy the debt.

Non-Owner Occupied CRE - Loans secured by commercial purpose real estate for various purposes such as hotels, retail, multifamily and health care. The primary sources of repayment for these loans are the operations of the individual projects and global cash flows of the debtors. The condition of the national economy is an important indicator of risk, but there are also more specific risks depending on the collateral type and the business prospects of the lessee.

Residential Real Estate—Loans secured by first liens on 1-4 family residential mortgages. The primary source of repayment for these loans is the income and assets of the borrower. The condition of the national economy, in particular the unemployment rate, is an important indicator of risk for this segment. The state of the national housing market can also have a significant impact on this segment because low demand and/or declining home values can limit the ability of borrowers to sell a property and satisfy the debt.

The following table presents the balance in the allowance for credit losses and the recorded investment in loans receivable by portfolio segment based on the estimation method as of June 30, 2026:

		Agriculture				Business Loans				Consumer Loans				Home Equity				Non-Owner Occupied CRE				Residential Real Estate				Total
		$				$				$				$				$				$				$
Allowance for credit losses:
Ending balance: individually evaluated			178				—				39				—				—				—				217
Ending balance: collectively evaluated			5,024				2,732				1,961				3,097				855				4,566				18,235

Loans receivable:
Ending balance			324,215				468,640				76,057				152,235				186,239				461,881				1,669,267
Ending balance: individually evaluated			1,543				3,996				465				465				235				2,341				9,045
Ending balance: collectively evaluated			322,672				464,644				75,592				151,770				186,004				459,540				1,660,222

The following table presents the balance in the allowance for credit losses and the recorded investment in loans receivable by portfolio segment based on estimation method as of December 31, 2025:

		Agriculture				Business Loans				Consumer				Home Equity				Non-Owner Occupied CRE				Residential Real Estate				Total
		$				$				$				$				$				$				$
Allowance for credit losses:
Ending balance: individually evaluated			107				—				—				53				—				28				188
Ending balance: collectively evaluated			4,245				3,248				365				2,732				1,342				4,765				16,697

Loans receivable:
Ending balance			317,957				394,558				5,703				141,369				169,584				484,337				1,513,508
Ending balance: individually evaluated			3,101				3,267				—				358				1,007				1,603				9,336
Ending balance: collectively evaluated			314,856				391,292				5,703				141,010				168,577				482,734				1,504,172

Modifications to Borrowers Experiencing Financial Difficulty

The Corporation may grant a modification to borrowers in financial distress by providing a temporary reduction in interest rate, or an extension of a loan’s stated maturity date. Loan modifications are intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral.

The Corporation identifies loans for potential restructure primarily through direct communication with the borrower and evaluation of the borrower's financial statements, revenue projections, tax returns, and credit reports. Even if the borrower is not presently in default, management will consider the likelihood that cash flow shortages, adverse economic conditions, and negative trends may result in a payment default in the near future. There were no modifications of loans to borrowers experiencing financial difficulty that resulted in a concession for the quarter ended June 30, 2026 or for the quarter ended June 30, 2025.