Note 3 - Loans and Allowance for Credit Losses

9 Months Ended

Sep. 30, 2026

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

3. LOANS AND ALLOWANCE FOR CREDIT LOSSES

Commercial loans are divided among five segments based primarily on collateral type, risk characteristics, and primary and secondary sources of repayment. These segments are then further stratified based on the commercial loan grade that is assigned using our standard loan grading paradigm. Retail loans are divided into one of two groups based on risk characteristics and source of repayment. Our allowance for credit loss pools are consistent with those used for loan note disclosure purposes.

Our loan portfolio segments as of both September 30, 2026, and December 31, 2025, were as follows:

Commercial Loans

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Commercial and Industrial: Risks to this loan category include industry concentration and the practical limitations associated with monitoring the condition of the collateral which often consists of inventory, accounts receivable, and other non-real estate assets. Equipment and inventory obsolescence can also pose a risk. Declines in general economic conditions and other events can cause cash flows to fall to levels insufficient to service debt.

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Owner Occupied Commercial Real Estate: Risks to this loan category include industry concentration and the inability to monitor the condition of the collateral. Declines in general economic conditions and other events can cause cash flows to fall to levels insufficient to service debt. Also, declines in real estate values and lack of suitable alternative uses for the properties are risks for loans in this category.

■

Non-Owner Occupied Commercial Real Estate: Loans in this category are susceptible to declines in occupancy rates, business failure, and general economic conditions. Also, declines in real estate values and lack of suitable alternative uses for the properties are risks for loans in this category.

■

Multi-Family and Residential Rental: Risks to this loan category include industry concentration and the inability to monitor the condition of the collateral. Loans in this category are susceptible to weakening general economic conditions and increases in unemployment rates, as well as market demand and supply of similar property and the resulting impact on occupancy rates, market rents, cash flow, and income-based real estate values. Also, the lack of suitable alternative uses for the properties is a risk for loans in this category.

■

Vacant Land, Land Development and Residential Construction: Risks common to commercial construction loans are cost overruns, changes in market demand for property, inadequate long-term financing arrangements, and declines in real estate values. Residential construction loans are susceptible to those same risks as well as those associated with residential mortgage loans. Changes in market demand for property could lead to longer marketing times resulting in higher carrying costs, declining values, and higher interest rates.

Retail Loans

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1-4 Family Mortgages: Residential mortgage loans are susceptible to weakening general economic conditions and increases in unemployment rates and declining real estate values.

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Other Consumer Loans: Risks common to these loans include regulatory risks, unemployment, and changes in local economic conditions as well as the inability to monitor collateral consisting of personal property.

Our total loans at September 30, 2026, were $4.95 billion, an increase of $131 million, or 2.7%, compared to December 31, 2025. The components of our loan portfolio disaggregated by class of loan within the loan portfolio segments at September 30, 2026, and December 31, 2025, and the percentage change in loans from the end of 2025 to the end of the third quarter of 2026, are as follows:

											Percent
	September 30, 2026					December 31, 2025					Increase
(Dollars in thousands)	Balance		%			Balance		%			(Decrease)

Commercial:
Commercial and industrial	$	1,499,086		30.3	%	$	1,374,522		28.5	%		9.1	%
Vacant land, land development, and residential construction		112,646		2.3			117,373		2.4			(4.0	)
Real estate – owner occupied		757,329		15.3			778,869		16.2			(2.8	)
Real estate – non-owner occupied		1,159,659		23.4			1,110,674		23.0			4.4
Real estate – multi-family and residential rental		542,058		10.9			537,224		11.2			0.9
Total commercial		4,070,778		82.2			3,918,662		81.3			3.9

Retail:
1-4 family mortgages		763,715		15.4			790,857		16.4			(3.4	)
Other consumer loans		118,449		2.4			112,369		2.3			5.4
Total retail		882,164		17.8			903,226		18.7			(2.3	)

Total loans	$	4,952,942		100.0	%	$	4,821,888		100.0	%		2.7	%

Age analyses of past due loans were as follows:

													Recorded
					Greater								Balance
	30 – 59		60 – 89		Than 89								> 89
	Days		Days		Days		Total				Total		Days and
(Dollars in thousands)	Past Due		Past Due		Past Due		Past Due		Current		Loans		Accruing
September 30, 2026
Commercial:
Commercial and industrial	$	30	$	0	$	0	$	30	$	1,499,056	$	1,499,086	$	0
Vacant land, land development, and residential construction		0		0		0		0		112,646		112,646		0
Real estate – owner occupied		0		134		238		372		756,957		757,329		0
Real estate – non- owner occupied		0		0		0		0		1,159,659		1,159,659		0
Real estate – multi-family and residential rental		0		0		0		0		542,058		542,058		0
Total commercial		30		134		238		402		4,070,376		4,070,778		0

Retail:
1-4 family mortgages		234		485		21		740		762,975		763,715		0
Other consumer loans		267		14		43		324		118,125		118,449		0
Total retail		501		499		64		1,064		881,100		882,164		0

Total past due loans	$	531	$	633	$	302	$	1,466	$	4,951,476	$	4,952,942	$	0

December 31, 2025
Commercial:
Commercial and industrial	$	294	$	0	$	0	$	294	$	1,374,228	$	1,374,522	$	0
Vacant land, land development, and residential construction		67		0		0		67		117,306		117,373		0
Real estate – owner occupied		219		0		29		248		778,621		778,869		0
Real estate – non-owner occupied		0		0		2,732		2,732		1,107,942		1,110,674		0
Real estate – multi-family and residential rental		0		0		0		0		537,224		537,224		0
Total commercial		580		0		2,761		3,341		3,915,321		3,918,662		0

Retail:
1-4 family mortgages		992		409		156		1,557		789,300		790,857		0
Other consumer loans		585		40		5		630		111,739		112,369		0
Total retail		1,577		449		161		2,187		901,039		903,226		0

Total past due loans	$	2,157	$	449	$	2,922	$	5,528	$	4,816,360	$	4,821,888	$	0

Nonaccrual loans were as follows:

	September 30, 2026				December 31, 2025
	Recorded				Recorded
	Principal		Related		Principal		Related
(Dollars in thousands)	Balance		Allowance		Balance		Allowance
With no allowance recorded:
Commercial:
Commercial and industrial	$	154	$	0	$	170	$	0
Vacant land, land development and residential construction		2,117		0		201		0
Real estate – owner occupied		1,281		0		517		0
Real estate – non-owner occupied		0		0		0		0
Real estate – multi-family and residential rental		0		0		0		0
Total commercial		3,552		0		888		0

Retail:
1-4 family mortgages		1,864		0		1,892		0
Other consumer loans		63		0		81		0
Total retail		1,927		0		1,973		0

Total with no allowance recorded	$	5,479	$	0	$	2,861	$	0

With an allowance recorded:
Commercial:
Commercial and industrial	$	2,726	$	2,211	$	1,223	$	1,063
Vacant land, land development and residential construction		0		0		0		0
Real estate – owner occupied		391		193		0		0
Real estate – non-owner occupied		0		0		2,732		2,732
Real estate – multi-family and residential rental		0		0		0		0
Total commercial		3,117		2,404		3,955		3,795

Retail:
1-4 family mortgages		1,102		192		1,054		224
Other consumer loans		43		43		0		0
Total retail		1,145		235		1,054		224

Total with an allowance recorded	$	4,262	$	2,639	$	5,009	$	4,019

Total nonaccrual loans:
Commercial	$	6,669	$	2,404	$	4,843	$	3,795
Retail		3,072		235		3,027		224
Total nonaccrual loans	$	9,741	$	2,639	$	7,870	$	4,019

Nonaccrual loans represent the entire balance of collateral dependent loans. As of September 30, 2026, and December 31, 2025, all collateral dependent loans were secured by real estate, with the exception of those classified as commercial and industrial, which were secured by accounts receivable, inventory, and equipment. Interest income recognized on nonaccrual loans totaled $1.3 million and $0.5 million during the nine months ended September 30, 2026, and 2025, respectively, reflecting the collection of interest at the time of principal pay off.

Credit Quality Indicators. We utilize a comprehensive grading system for our commercial loans. All commercial loans are graded on a ten grade rating system. The rating system utilizes standardized grade paradigms that analyze several critical factors such as cash flow, operating performance, financial condition, collateral, industry condition and management. All commercial loans are graded at inception and reviewed and, if appropriate, re-graded at various intervals thereafter. The primary risk elements with respect to commercial loans are the financial condition of the borrower, sufficiency of collateral, and timeliness of scheduled payments. We have a policy of requesting and reviewing periodic financial statements from commercial loan customers and employ a disciplined and formalized review of the existence of collateral and its value. All commercial loans are graded using the following criteria:

Grade 1.	“Exceptional” Loans with this rating contain very little, if any, risk.

Grade 2.	“Outstanding” Loans with this rating have excellent and stable sources of repayment and conform to bank policy and regulatory requirements.

Grade 3.	“Very Good” Loans with this rating have strong sources of repayment and conform to bank policy and regulatory requirements. These are loans for which repayment risks are acceptable.

Grade 4.	“Good” Loans with this rating have solid sources of repayment and conform to bank policy and regulatory requirements. These are loans for which repayment risks are modest.

Grade 5.	“Acceptable” Loans with this rating exhibit acceptable sources of repayment and conform with most bank policies and all regulatory requirements. These are loans for which repayment risks are satisfactory.

Grade 6.	“Monitor” Loans with this rating are considered to have emerging weaknesses which may include negative current cash flow, high leverage, or operating losses. Generally, if further deterioration is observed, these credits will be downgraded to the criticized asset report.

Grade 7.	“Special Mention” Loans with this rating 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 loan at some future date.

Grade 8.	“Substandard” Loans with this rating are inadequately protected by current sound net worth, paying capacity of the obligor, or of the pledged collateral, if any. A Substandard loan normally has one or more well-defined weaknesses that jeopardize the repayment of the debt. They are characterized by the distinct possibility of loss if the deficiencies are not corrected.

Grade 9.	“Doubtful” Loans with this rating exhibit all the weaknesses inherent in the Substandard classification and where collection or liquidation in full is highly questionable and improbable.

Grade 10.	“Loss” Loans with this rating are considered uncollectable, and of such little value that continuance as an active asset is not warranted.

The primary risk element with respect to each residential real estate loan and consumer loan is the timeliness of scheduled payments. We have a reporting system that monitors past due loans and have adopted policies to pursue creditors’ rights in order to preserve our collateral position. Retail loans that reach 90 days or more past due are generally placed into nonaccrual status and are categorized as nonperforming.

The following table reflects amortized cost basis of loans as of September 30, 2026, and loan charge-offs during the nine months ended September 30, 2026, based on year of origination:

															Revolving		Grand
(Dollars in thousands)	2026		2025		2024		2023		2022		Prior		Term Total		Loans		Total
Commercial:
Commercial and Industrial:
Grades 1 – 4	$	75,469	$	61,636	$	34,844	$	24,063	$	3,963	$	37,092	$	237,067	$	488,592	$	725,659
Grades 5 – 7		122,134		61,288		80,367		13,704		10,111		4,999		292,603		463,230		755,833
Grades 8 – 9		5,913		1,101		0		822		0		117		7,953		9,641		17,594
Total	$	203,516	$	124,025	$	115,211	$	38,589	$	14,074	$	42,208	$	537,623	$	961,463	$	1,499,086
Year-to-date gross write offs	$	0	$	0	$	0	$	8	$	0	$	10	$	18	$	0	$	18

Vacant Land, Land Development and Residential Construction:
Grades 1 – 4	$	26,341	$	9,003	$	891	$	2,257	$	3,624	$	6,597	$	48,713	$	7,606	$	56,319
Grades 5 – 7		9,095		32,486		1,016		1,111		3,926		4,128		51,762		2,448		54,210
Grades 8 – 9		2,117		0		0		0		0		0		2,117		0		2,117
Total	$	37,553	$	41,489	$	1,907	$	3,368	$	7,550	$	10,725	$	102,592	$	10,054	$	112,646
Year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Real Estate – Owner Occupied:
Grades 1 – 4	$	70,377	$	70,704	$	95,233	$	49,596	$	69,883	$	52,504	$	408,297	$	18,702	$	426,999
Grades 5 – 7		108,756		63,947		52,328		46,960		30,455		18,538		320,984		2,163		323,147
Grades 8 – 9		391		477		1,533		3,375		0		1,407		7,183		0		7,183
Total	$	179,524	$	135,128	$	149,094	$	99,931	$	100,338	$	72,449	$	736,464	$	20,865	$	757,329
Year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Real Estate – Non-Owner Occupied:
Grades 1 – 4	$	103,694	$	129,442	$	72,203	$	61,860	$	79,256	$	105,592	$	552,047	$	7,258	$	559,305
Grades 5 – 7		150,480		86,128		122,685		125,109		52,664		55,488		592,554		7,800		600,354
Grades 8 – 9		0		0		0		0		0		0		0		0		0
Total	$	254,174	$	215,570	$	194,888	$	186,969	$	131,920	$	161,080	$	1,144,601	$	15,058	$	1,159,659
Year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Real Estate – Multi-Family and Residential Rental:
Grades 1 – 4	$	51,974	$	39,678	$	9,001	$	12,381	$	9,149	$	41,276	$	163,459	$	5,695	$	169,154
Grades 5 – 7		190,413		105,288		44,938		12,460		14,172		5,633		372,904		0		372,904
Grades 8 – 9		0		0		0		0		0		0		0		0		0
Total	$	242,387	$	144,966	$	53,939	$	24,841	$	23,321	$	46,909	$	536,363	$	5,695	$	542,058
Year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Total Commercial	$	917,154	$	661,178	$	515,039	$	353,698	$	277,203	$	333,371	$	3,057,643	$	1,013,135	$	4,070,778
Total Commercial year-to-date gross write offs	$	0	$	0	$	0	$	8	$	0	$	10	$	18	$	0	$	18

Retail:
1-4 Family Mortgages:
Performing	$	81,332	$	55,693	$	36,038	$	76,805	$	249,978	$	248,612	$	748,458	$	12,291	$	760,749
Nonperforming		0		166		220		348		936		1,296		2,966		0		2,966
Total	$	81,332	$	55,859	$	36,258	$	77,153	$	250,914	$	249,908	$	751,424	$	12,291	$	763,715
Year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Other Consumer Loans:
Performing	$	3,617	$	4,351	$	5,315	$	4,320	$	1,689	$	1,456	$	20,748	$	97,595	$	118,343
Nonperforming		0		0		43		0		12		51		106		0		106
Total	$	3,617	$	4,351	$	5,358	$	4,320	$	1,701	$	1,507	$	20,854	$	97,595	$	118,449
Year-to-date gross write offs	$	0	$	8	$	19	$	0	$	1	$	8	$	36	$	7	$	43
Total Retail	$	84,949	$	60,210	$	41,616	$	81,473	$	252,615	$	251,415	$	772,278	$	109,886	$	882,164
Total Retail year-to-date gross write offs	$	0	$	8	$	19	$	0	$	1	$	8	$	36	$	7	$	43

Total	$	1,002,103	$	721,388	$	556,655	$	435,171	$	529,818	$	584,786	$	3,829,921	$	1,123,021	$	4,952,942
Total year-to-date gross write offs	$	0	$	8	$	19	$	8	$	1	$	18	$	54	$	7	$	61

There were lines of credit with principal balances of $5.6 million as of December 31, 2025, that were converted to term loans during the first nine months of 2026.

The following table reflects amortized cost basis of loans as of December 31, 2025, and loan charge-offs during the nine months ended September 30, 2025, based on year of origination:

															Revolving		Grand
(Dollars in thousands)	2025		2024		2023		2022		2021		Prior		Term Total		Loans		Total
Commercial:
Commercial and Industrial:
Grades 1 – 4	$	82,163	$	57,225	$	38,063	$	12,554	$	35,423	$	14,878	$	240,306	$	415,084	$	655,390
Grades 5 – 7		143,638		125,617		46,445		23,137		5,396		3,092		347,325		357,379		704,704
Grades 8 – 9		2,189		0		732		0		0		327		3,248		11,180		14,428
Total	$	227,990	$	182,842	$	85,240	$	35,691	$	40,819	$	18,297	$	590,879	$	783,643	$	1,374,522
Year-to-date gross write offs	$	0	$	4	$	76	$	0	$	0	$	0	$	80	$	7	$	87

Vacant Land, Land Development and Residential Construction:
Grades 1 – 4	$	22,242	$	4,849	$	1,703	$	7,676	$	2,410	$	6,752	$	45,632	$	10,283	$	55,915
Grades 5 – 7		37,052		13,281		1,635		2,295		520		5,743		60,526		731		61,257
Grades 8 – 9		0		0		0		0		201		0		201		0		201
Total	$	59,294	$	18,130	$	3,338	$	9,971	$	3,131	$	12,495	$	106,359	$	11,014	$	117,373
Year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Real Estate – Owner Occupied:
Grades 1 – 4	$	135,403	$	137,672	$	51,266	$	77,169	$	66,198	$	18,302	$	486,010	$	7,686	$	493,696
Grades 5 – 7		81,750		59,874		51,642		53,479		20,585		9,085		276,415		1,285		277,700
Grades 8 – 9		0		0		3,502		2,674		0		1,297		7,473		0		7,473
Total	$	217,153	$	197,546	$	106,410	$	133,322	$	86,783	$	28,684	$	769,898	$	8,971	$	778,869
Year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Real Estate – Non-Owner Occupied:
Grades 1 – 4	$	93,669	$	83,447	$	55,500	$	65,525	$	73,727	$	53,148	$	425,016	$	9,709	$	434,725
Grades 5 – 7		145,795		153,731		170,018		77,964		69,335		51,411		668,254		4,963		673,217
Grades 8 – 9		2,732		0		0		0		0		0		2,732		0		2,732
Total	$	242,196	$	237,178	$	225,518	$	143,489	$	143,062	$	104,559	$	1,096,002	$	14,672	$	1,110,674
Year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Real Estate – Multi-Family and Residential Rental:
Grades 1 – 4	$	40,264	$	13,603	$	32,341	$	9,449	$	32,465	$	23,399	$	151,521	$	0	$	151,521
Grades 5 – 7		165,703		55,785		128,190		27,959		1,862		6,204		385,703		0		385,703
Grades 8 – 9		0		0		0		0		0		0		0		0		0
Total	$	205,967	$	69,388	$	160,531	$	37,408	$	34,327	$	29,603	$	537,224	$	0	$	537,224
Year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Total Commercial	$	952,600	$	705,084	$	581,037	$	359,881	$	308,122	$	193,638	$	3,100,362	$	818,300	$	3,918,662
Total Commercial year-to-date gross write offs	$	0	$	4	$	76	$	0	$	0	$	0	$	80	$	7	$	87

Retail:
1-4 Family Mortgages:
Performing	$	62,063	$	52,546	$	102,023	$	280,078	$	181,242	$	107,389	$	785,341	$	2,570	$	787,911
Nonperforming		0		241		451		1,047		347		860		2,946		0		2,946
Total	$	62,063	$	52,787	$	102,474	$	281,125	$	181,589	$	108,249	$	788,287	$	2,570	$	790,857
Year-to-date gross write offs	$	0	$	0	$	85	$	22	$	61	$	3	$	171	$	0	$	171

Other Consumer Loans:
Performing	$	6,574	$	8,299	$	7,056	$	3,358	$	1,274	$	894	$	27,455	$	84,833	$	112,288
Nonperforming		0		0		0		9		5		42		56		25		81
Total	$	6,574	$	8,299	$	7,056	$	3,367	$	1,279	$	936	$	27,511	$	84,858	$	112,369
Year-to-date gross write offs	$	2	$	2	$	6	$	0	$	0	$	0	$	10	$	5	$	15
Total Retail	$	68,637	$	61,086	$	109,530	$	284,492	$	182,868	$	109,185	$	815,798	$	87,428	$	903,226
Total Retail year-to-date gross write offs	$	2	$	2	$	91	$	22	$	61	$	3	$	181	$	5	$	186

Total	$	1,021,237	$	766,170	$	690,567	$	644,373	$	490,990	$	302,823	$	3,916,160	$	905,728	$	4,821,888
Total year-to-date gross write offs	$	2	$	6	$	167	$	22	$	61	$	3	$	261	$	12	$	273

There were lines of credit with principal balances of $0.7 million as of December 31, 2024, that were converted to term loans during 2025.

We use a migration to loss methodology to determine historical loss rates for commercial loans given the comprehensive loan grading process employed by Mercantile for over two decades, while an open pool approach is best suited for retail loans given the smaller dollar size of the segments. A baseline loss rate is produced at each reporting date for each loan portfolio segment using bank-specific loan charge-off and recovery data over a defined historical look-back period. The look-back period represents the number of data periods that will be used to calculate a baseline loss rate for each loan portfolio segment. We determined that the look-back period commencing on January 1, 2011, through the current reporting date was reasonable and appropriate, which was used in the calculation of both the September 30, 2026, and December 31, 2025, allowance for credit losses.

Our historical loss rate is then applied to future loan balances at the instrument level based on remaining contractual life adjusted for amortization, prepayment and default to develop a baseline lifetime loss. Our prepayment speed assumptions are developed at the loan segment level based upon the consideration of all relevant data which we believe could impact anticipated customer behavior, including changes in interest rates, economic conditions, and underlying property valuations. For the commercial portfolio segments, we assumed a 2.0% prepayment speed as of both September 30, 2026, and December 31, 2025, as we deemed there to be no considerable changes from historical experience. For the 1-4 family mortgage and other consumer portfolios, we used a prepayment speed of 11.6% as of September 30, 2026, and 9.5% as of December 31, 2025.

During each reporting period, we also consider the need to adjust the historical loss rates as determined to reflect the extent to which we expect current conditions and reasonable and supportable economic forecasts to differ from the conditions that existed for the period over which the historical loss information was determined. These qualitative adjustments may increase or decrease our estimate of expected future credit losses. As of September 30, 2026, and December 31, 2025, we used a one-year reasonable and supportable economic forecast period, with a six-month straight-line reversion period for all loan segments. The economic forecasts used for our September 30, 2026, allowance calculation reflected a $0.2 million allowance balance reduction. The forecasts used for our December 31, 2025, allowance calculation reflected a $0.3 million allowance balance reduction.

The allowance for PSL and PCD loans acquired from the acquisition of Eastern Michigan Financial Corporation and its wholly owned banking subsidiary, Eastern Michigan Bank, was measured at the loan segment level using proxy expected lifetime loss rates adjusted for qualitative risk factors, including lending management experience, loan review and audit results, asset quality and portfolio trends, loan portfolio growth, industry concentrations, trends in underlying collateral, external factors, and economic conditions not already captured.

Individual loans exhibiting unique risk characteristics, which differentiated the loans from other loans within the loan segments and were evaluated for expected credit losses on an individual basis, totaled $9.7 million and $7.9 million as of September 30, 2026, and December 31, 2025, respectively. Individual allowance allocations totaled $2.6 million and $4.0 million as of September 30, 2026, and December 31, 2025, respectively.

Activity in the allowance for credit losses during the three and nine months ended September 30, 2026, and 2025, were as follows:

(Dollars in thousands)	Commercial and industrial			Commercial vacant land, land development and residential construction		Commercial real estate – owner occupied			Commercial real estate – non-owner occupied			Commercial real estate – multi-family and residential rental			1-4 family mortgages			Other consumer loans			Unallocated			Total

Balance at 6-30-2026	$	13,774		$	546	$	8,048		$	12,404		$	5,057		$	12,699		$	2,806		$	108		$	55,442
Provision for credit losses		827			312		118			592			269			(1,220	)		(212	)		14			700
Charge-offs		(10	)		0		0			0			0			0			(36	)		0			(46	)
Recoveries		156			0		4			0			5			128			26			0			319
Balance at 9-30-2026	$	14,747		$	858	$	8,170		$	12,996		$	5,331		$	11,607		$	2,584		$	122		$	56,415

Balance at 12-31-2025	$	12,576		$	478	$	7,629		$	15,074		$	5,514		$	14,199		$	2,638		$	83		$	58,191
Provision for credit losses		1,659			331		523			(2,306	)		(196	)		(2,888	)		(62	)		39			(2,900	)
Charge-offs		(18	)		0		0			0			0			0			(43	)		0			(61	)
Recoveries		530			49		18			228			13			296			51			0			1,185
Balance at 9-30-2026	$	14,747		$	858	$	8,170		$	12,996		$	5,331		$	11,607		$	2,584		$	122		$	56,415

Balance at 6-30-2025	$	11,771		$	387	$	7,691		$	13,800		$	4,297		$	17,965		$	2,321		$	143		$	58,375
Provision for credit losses		101			17		(770	)		3,632			803			(3,524	)		19			(78	)		200
Charge-offs		(76	)		0		0			0			0			(85	)		(11	)		0			(172	)
Recoveries		542			2		1			0			4			164			13			0			726
Balance at 9-30-2025	$	12,338		$	406	$	6,922		$	17,432		$	5,104		$	14,520		$	2,342		$	65		$	59,129

Balance at 12-31-2024	$	11,165		$	367	$	7,671		$	10,919		$	3,667		$	18,702		$	1,936		$	27		$	54,454
Provision for credit losses		660			35		(753	)		6,513			1,425			(4,327	)		309			38			3,900
Charge-offs		(87	)		0		0			0			0			(171	)		(15	)		0			(273	)
Recoveries		600			4		4			0			12			316			112			0			1,048
Balance at 9-30-2025	$	12,338		$	406	$	6,922		$	17,432		$	5,104		$	14,520		$	2,342		$	65		$	59,129

The following table presents the period-end amortized cost basis of modifications to borrowers experiencing financial difficulty by type of modification made during the three months ended September 30, 2026:

	Interest Rate				Principal		Payment
(Dollars in thousands)	Reduction		Term Extension		Forgiveness		Delay
Commercial:
Commercial and industrial	$	0	$	7,223	$	0	$	0
Vacant land, land development and residential construction		0		0		0		0
Real estate – owner occupied		0		0		0		0
Real estate – non-owner occupied		0		0		0		0
Real estate – multi-family and residential rental		0		0		0		0
Total commercial	$	0	$	7,223	$	0	$	0

Retail:
1-4 family mortgages		0		0		0		102
Other consumer loans		0		0		0		0
Total retail	$	0	$	0	$	0	$	102

Total loans	$	0	$	7,223	$	0	$	102

The following table presents the period-end amortized cost basis of modifications to borrowers experiencing financial difficulty by type of modification made during the nine months ended September 30, 2026:

	Interest Rate				Principal		Payment
(Dollars in thousands)	Reduction		Term Extension		Forgiveness		Delay
Commercial:
Commercial and industrial	$	0	$	13,130	$	0	$	0
Vacant land, land development and residential construction		0		2,117		0		0
Real estate – owner occupied		0		0		0		0
Real estate – non-owner occupied		0		0		0		0
Real estate – multi-family and residential rental		0		0		0		0
Total commercial	$	0	$	15,247	$	0	$	0

Retail:
1-4 family mortgages		0		0		0		102
Other consumer loans		0		0		0		0
Total retail	$	0	$	0	$	0	$	102

Total loans	$	0	$	15,247	$	0	$	102

	Interest Rate				Principal		Payment
(Dollars in thousands)	Reduction		Term Extension		Forgiveness		Delay
Commercial:
Commercial and industrial	$	0	$	9,590	$	0	$	0
Vacant land, land development and residential construction		0		0		0		0
Real estate – owner occupied		0		0		0		0
Real estate – non-owner occupied		0		0		0		0
Real estate – multi-family and residential rental		0		0		0		0
Total commercial	$	0	$	9,590	$	0	$	0

Retail:
1-4 family mortgages		0		0		0		0
Other consumer loans		0		0		0		0
Total retail	$	0	$	0	$	0	$	0

Total loans	$	0	$	9,590	$	0	$	0

	Interest Rate				Principal		Payment
(Dollars in thousands)	Reduction		Term Extension		Forgiveness		Delay
Commercial:
Commercial and industrial	$	0	$	9,596	$	0	$	0
Vacant land, land development and residential construction		0		0		0		0
Real estate – owner occupied		0		0		0		0
Real estate – non-owner occupied		0		0		0		0
Real estate – multi-family and residential rental		0		0		0		0
Total commercial	$	0	$	9,596	$	0	$	0

Retail:
1-4 family mortgages		0		0		0		0
Other consumer loans		0		0		0		0
Total retail	$	0	$	0	$	0	$	0

Total loans	$	0	$	9,596	$	0	$	0

The following table presents the amortized cost basis of loans that have been modified in the past twelve months to borrowers experiencing financial difficulty by payment status and loan segment as of September 30, 2026:

			30 – 89 Days		90 + Days
(Dollars in thousands)	Current		Past Due		Past Due		Total
Commercial:
Commercial and industrial	$	13,130	$	0	$	0	$	13,130
Vacant land, land development and residential construction		2,117		0		0		2,117
Real estate – owner occupied		227		0		0		227
Real estate – non-owner occupied		0		0		0		0
Real estate – multi-family and residential rental		0		0		0		0
Total commercial	$	15,474	$	0	$	0	$	15,474

Retail:
1-4 family mortgages		102		0		0		102
Other consumer loans		0		0		0		0
Total retail	$	102	$	0	$	0	$	102

Total loans	$	15,576	$	0	$	0	$	15,576