| Loans and Allowance for Credit Losses on Loans |
Note 4 – Loans and Allowance for Credit Losses on Loans Major classifications of loans were as follows: | | | | | | | | | September 30, 2026 | | December 31, 2025 | Commercial | | $ | 867,362 | | $ | 842,130 | Leases | | | 554,370 | | | 548,256 | Commercial real estate – investor | | | 1,131,857 | | | 1,212,384 | Commercial real estate – owner occupied | | | 684,169 | | | 706,567 | Construction | | | 153,491 | | | 173,630 | Residential real estate – investor | | | 65,679 | | | 70,225 | Residential real estate – owner occupied | | | 247,515 | | | 230,432 | Multifamily | | | 370,431 | | | 339,131 | HELOC | | | 245,938 | | | 235,293 | Powersport | | | 689,229 | | | 696,959 | Other 1 | | | 228,016 | | | 197,124 | Total loans | | | 5,238,057 | | | 5,252,131 | Allowance for credit losses on loans | | | (64,189) | | | (72,301) | Net loans 2 | | $ | 5,173,868 | | $ | 5,179,830 |
1 The “Other” classification includes consumer loans, such as collector cars, manufactured homes, and solar loans, as well as overdrafts in this table and in subsequent tables within Note 4 – Loans and Allowance for Credit Losses on Loans. 2 Excludes accrued interest receivable of $24.0 million and $23.5 million at September 30, 2026, and December 31, 2025, respectively, that is recorded in other assets on the Consolidated Balance Sheets. It is the policy of the Company to review each prospective credit prior to making a loan in order to determine if an adequate level of security or collateral has been obtained. The type of collateral, when required, will vary from liquid assets to real estate. The Company seeks to ensure access to collateral, in the event of borrower default, through adherence to lending laws, the Company’s lending standards and credit monitoring procedures. Although the Bank makes loans primarily within its market area, there are no significant concentrations of loans where the customers’ ability to honor loan terms is dependent upon a single economic sector. The real estate related categories listed above represent 55.3% and 56.5% of the portfolio at September 30, 2026, and December 31, 2025, respectively, and include a mix of owner occupied and non-owner occupied commercial real estate, residential, construction and multifamily loans. The following tables represent the activity in the allowance for credit losses for loans, or the ACL, for the three and nine months ended September 30, 2026 and 2025: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Provision for | | | | | | | | | Beginning | | (Release of) | | | | | | Ending | Allowance for credit losses | | Balance | | Credit Losses 1 | | Charge-offs | | Recoveries | | Balance | Three months ended September 30, 2026 | | | | | | | | | | | | | | | | Commercial | | $ | 14,337 | | $ | 3,902 | | $ | 9,352 | | $ | 181 | | $ | 9,068 | Leases | | | 2,312 | | | 257 | | | 174 | | | 2 | | | 2,397 | Commercial real estate – investor | | | 19,489 | | | (867) | | | - | | | 14 | | | 18,636 | Commercial real estate – owner occupied | | | 4,635 | | | (1,892) | | | - | | | 1 | | | 2,744 | Construction | | | 1,138 | | | (19) | | | - | | | - | | | 1,119 | Residential real estate – investor | | | 566 | | | (36) | | | - | | | 3 | | | 533 | Residential real estate – owner occupied | | | 1,490 | | | 499 | | | - | | | 10 | | | 1,999 | Multifamily | | | 1,503 | | | 13 | | | - | | | - | | | 1,516 | HELOC | | | 3,358 | | | 19 | | | - | | | 10 | | | 3,387 | Powersport | | | 16,816 | | | 4,631 | | | 4,017 | | | 884 | | | 18,314 | Other | | | 4,736 | | | 28 | | | 429 | | | 141 | | | 4,476 | Total | | $ | 70,380 | | $ | 6,535 | | $ | 13,972 | | $ | 1,246 | | $ | 64,189 | | | | | | | | | | | | | | | | |
1 Amount does not include the provision for unfunded commitment liability. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Provision for | | | | | | | | | Beginning | | (Release of) | | | | | | Ending | Allowance for credit losses | | Balance | | Credit Losses 1 | | Charge-offs | | Recoveries | | Balance | Nine months ended September 30, 2026 | | | | | | | | | | | | | | | | Commercial | | $ | 11,183 | | $ | 11,337 | | $ | 13,682 | | $ | 230 | | $ | 9,068 | Leases | | | 2,370 | | | 740 | | | 832 | | | 119 | | | 2,397 | Commercial real estate – investor | | | 21,672 | | | 3,673 | | | 6,752 | | | 43 | | | 18,636 | Commercial real estate – owner occupied | | | 4,583 | | | (1,846) | | | - | | | 7 | | | 2,744 | Construction | | | 1,527 | | | (408) | | | - | | | - | | | 1,119 | Residential real estate – investor | | | 759 | | | (232) | | | - | | | 6 | | | 533 | Residential real estate – owner occupied | | | 1,879 | | | 82 | | | - | | | 38 | | | 1,999 | Multifamily | | | 1,493 | | | 23 | | | - | | | - | | | 1,516 | HELOC | | | 3,628 | | | (271) | | | 2 | | | 32 | | | 3,387 | Powersport | | | 17,449 | | | 10,718 | | | 12,270 | | | 2,417 | | | 18,314 | Other | | | 5,758 | | | (178) | | | 1,398 | | | 294 | | | 4,476 | Total | | $ | 72,301 | | $ | 23,638 | | $ | 34,936 | | $ | 3,186 | | $ | 64,189 | | | | | | | | | | | | | | | | |
1 Amount does not include the provision for unfunded commitment liability. | | | | | | | | | | | | | | | | | | | | | | | Allowance | | Provision for | | | | | | | | | Beginning | | Established for | | (Release of) | | | | | | Ending | Allowance for credit losses | | Balance | | PCD Loans | | Credit Losses 1 | | Charge-offs | | Recoveries | | Balance | Three months ended September 30, 2025 | | | | | | | | | | | | | | | | | | | Commercial | | $ | 7,185 | | $ | 37 | | $ | 3,505 | | $ | 452 | | $ | 67 | | $ | 10,342 | Leases | | | 2,280 | | | - | | | 971 | | | 848 | | | - | | | 2,403 | Commercial real estate – investor | | | 16,922 | | | 1,954 | | | 2,086 | | | - | | | 15 | | | 20,977 | Commercial real estate – owner occupied | | | 7,748 | | | - | | | 682 | | | - | | | 2 | | | 8,432 | Construction | | | 2,879 | | | - | | | (1,412) | | | - | | | 46 | | | 1,513 | Residential real estate – investor | | | 565 | | | - | | | 200 | | | - | | | 2 | | | 767 | Residential real estate – owner occupied | | | 1,926 | | | 309 | | | (337) | | | - | | | 7 | | | 1,905 | Multifamily | | | 1,707 | | | - | | | 204 | | | 181 | | | - | | | 1,730 | HELOC | | | 1,770 | | | 128 | | | 1,750 | | | - | | | 19 | | | 3,667 | Powersport | | | - | | | 10,431 | | | 9,555 | | | 3,685 | | | 705 | | | 17,006 | Other | | | 8 | | | 4,681 | | | 2,411 | | | 880 | | | 75 | | | 6,295 | Total | | $ | 42,990 | | $ | 17,540 | | $ | 19,615 | | $ | 6,046 | | $ | 938 | | $ | 75,037 |
1 Amount does not include the provision for unfunded commitment liability. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Allowance | | Provision for | | | | | | | | | Beginning | | Established for | | (Release of) | | | | | | Ending | Allowance for credit losses | | Balance | | PCD Loans | | Credit Losses 1 | | Charge-offs | | Recoveries | | Balance | Nine months ended September 30, 2025 | | | | | | | | | | | | | | | | | | | Commercial | | $ | 7,813 | | $ | 37 | | $ | 7,384 | | $ | 5,023 | | $ | 131 | | $ | 10,342 | Leases | | | 2,136 | | | - | | | 1,205 | | | 955 | | | 17 | | | 2,403 | Commercial real estate – investor | | | 14,528 | | | 1,954 | | | 4,452 | | | - | | | 43 | | | 20,977 | Commercial real estate – owner occupied | | | 10,036 | | | - | | | (1,568) | | | 47 | | | 11 | | | 8,432 | Construction | | | 3,581 | | | - | | | (1,630) | | | 834 | | | 396 | | | 1,513 | Residential real estate – investor | | | 553 | | | - | | | 208 | | | - | | | 6 | | | 767 | Residential real estate – owner occupied | | | 1,509 | | | 309 | | | 42 | | | - | | | 45 | | | 1,905 | Multifamily | | | 1,876 | | | - | | | 35 | | | 181 | | | - | | | 1,730 | HELOC | | | 1,578 | | | 128 | | | 1,920 | | | - | | | 41 | | | 3,667 | Powersport | | | - | | | 10,431 | | | 9,555 | | | 3,685 | | | 705 | | | 17,006 | Other | | | 9 | | | 4,681 | | | 2,521 | | | 1,082 | | | 166 | | | 6,295 | Total | | $ | 43,619 | | $ | 17,540 | | $ | 24,124 | | $ | 11,807 | | $ | 1,561 | | $ | 75,037 |
1 Amount does not include the provision for unfunded commitment liability. At September 30, 2026, our allowance for credit losses (“ACL”) on loans totaled $64.2 million, and our ACL on unfunded commitments, included in other liabilities, totaled $2.2 million. During the first nine months of 2026, we recorded net provision for credit losses on loans and unfunded commitments of $23.8 million. The provision was mostly driven by increased commercial, commercial real estate, and powersport charge-offs. Charge-offs for the nine-month period ending September 30, 2026 were largely comprised of a $6.8 million charge-off in the commercial real estate-investor portfolio on two relationships; one is a downtown Chicago office building that was restructured to accommodate lower rents based on office market demand; the second is an office property outside Chicago experiencing a declining occupancy rate. In addition, a commercial charge-off of $13.7 million was recorded related to the warehouse and distribution business, and elevated powersport net charge-offs totaling $9.9 million. The ACL on loans excludes an allowance for unfunded commitments of $2.2 million as of September 30, 2026, $2.1 million as of December 31, 2025, and $2.3 million as of September 30, 2025, which is recorded within other liabilities on the Consolidated Balance Sheets. Generally, the Bank considers a loan to be collateral dependent when, based on current information and events, it is probable that foreclosure could be initiated. Additionally, the Bank will review all loans meeting the criteria for individual analysis, to determine if repayment or satisfaction of the loan is expected through the sale of collateral. This will generally be the case for credits with high loan-to-value ratios. Exceptions to this policy would include loans with guarantors or sponsors that have the means and willingness to support the obligation. Non-accruing loans with an outstanding balance of $500,000 or more are assessed on an individual loan level basis. When a financial asset is deemed collateral-dependent, the level of credit loss is measured by the difference between amortized cost of the financial asset and the fair value of collateral adjusted for estimated cost to sell. The Company had $28.0 million and $40.9 million of collateral dependent loans secured by real estate or business assets as of September 30, 2026, and December 31, 2025, respectively. The following tables present the collateral dependent loans and the related ACL allocated by classification of loans as of September 30, 2026, and December 31, 2025: | | | | | | | | | | | | | | | | | | | | | | | | Accounts | | | | | | | | ACL | September 30, 2026 | | Real Estate | | Receivable | | Equipment | | Equity Interests | | Total | | Allocation | Commercial | | $ | - | | $ | 2,405 | | $ | - | | $ | 4,150 | | $ | 6,555 | | $ | 2,238 | Leases | | | - | | | - | | | - | | | - | | | - | | | - | Commercial real estate – investor | | | 8,390 | | | - | | | - | | | - | | | 8,390 | | | 5,035 | Commercial real estate – owner occupied | | | 9,483 | | | - | | | - | | | - | | | 9,483 | | | - | Construction | | | 1,469 | | | - | | | - | | | - | | | 1,469 | | | 8 | Residential real estate – investor | | | 78 | | | - | | | - | | | - | | | 78 | | | - | Residential real estate – owner occupied | | | 966 | | | - | | | - | | | - | | | 966 | | | - | Multifamily | | | 843 | | | - | | | - | | | - | | | 843 | | | - | HELOC | | | 206 | | | - | | | - | | | - | | | 206 | | | - | Powersport | | | - | | | - | | | - | | | | | | - | | | - | Other | | | - | | | - | | | - | | | - | | | - | | | - | Total | | $ | 21,435 | | $ | 2,405 | | $ | - | | $ | 4,150 | | $ | 27,990 | | $ | 7,281 | | | | | | | | | | | | | | | | | | | | | | | | | Accounts | | | | | | | | ACL | December 31, 2025 | | Real Estate | | Receivable | | Equipment | | Equity Interests | | Total | | Allocation | Commercial | | $ | - | | $ | 5,960 | | $ | 2,055 | | $ | - | | $ | 8,015 | | $ | 762 | Leases | | | - | | | - | | | - | | | - | | | - | | | - | Commercial real estate – investor | | | 11,345 | | | - | | | - | | | - | | | 11,345 | | | 5,682 | Commercial real estate – owner occupied | | | 19,809 | | | - | | | - | | | - | | | 19,809 | | | - | Construction | | | - | | | - | | | - | | | - | | | - | | | - | Residential real estate – investor | | | 26 | | | - | | | - | | | - | | | 26 | | | - | Residential real estate – owner occupied | | | 844 | | | - | | | - | | | - | | | 844 | | | - | Multifamily | | | 782 | | | - | | | - | | | - | | | 782 | | | - | HELOC | | | 53 | | | - | | | - | | | - | | | 53 | | | - | Powersport | | | - | | | - | | | - | | | | | | - | | | - | Other | | | - | | | - | | | - | | | - | | | - | | | - | Total | | $ | 32,859 | | $ | 5,960 | | $ | 2,055 | | $ | - | | $ | 40,874 | | $ | 6,444 | | | | | | | | | | | | | | | | | | | |
An aged analysis of past due loans by classification of loans was as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 90 days or | | | | | | | | | 90 Days or | | | | | | | | | | | Greater Past | | | 30-59 Days | | 60-89 Days | | Greater Past | | Total Past | | | | | | | | Due and | September 30, 2026 | | Past Due | | Past Due | | Due | | Due | | Current | | Total Loans | | Accruing | Commercial | | $ | 2,560 | | | - | | | 4,930 | | | 7,490 | | | 859,872 | | $ | 867,362 | | $ | 121 | Leases | | | 842 | | | 49 | | | 1,014 | | | 1,905 | | | 552,465 | | | 554,370 | | | - | Commercial real estate – investor | | | 8,604 | | | 1,156 | | | 8,712 | | | 18,472 | | | 1,113,385 | | | 1,131,857 | | | - | Commercial real estate – owner occupied | | | 3,611 | | | 322 | | | 8,331 | | | 12,264 | | | 671,905 | | | 684,169 | | | - | Construction | | | 9,780 | | | - | | | 1,585 | | | 11,365 | | | 142,126 | | | 153,491 | | | - | Residential real estate – investor | | | 403 | | | 465 | | | 433 | | | 1,301 | | | 64,378 | | | 65,679 | | | - | Residential real estate – owner occupied | | | 165 | | | 279 | | | 887 | | | 1,331 | | | 246,184 | | | 247,515 | | | 276 | Multifamily | | | 595 | | | 695 | | | 1,154 | | | 2,444 | | | 367,987 | | | 370,431 | | | - | HELOC | | | 2,684 | | | 283 | | | 672 | | | 3,639 | | | 242,299 | | | 245,938 | | | - | Powersport | | | 11,487 | | | 3,909 | | | 2,681 | | | 18,077 | | | 671,152 | | | 689,229 | | | 2,583 | Other | | | 548 | | | 95 | | | 145 | | | 788 | | | 227,228 | | | 228,016 | | | 77 | Total | | $ | 41,279 | | $ | 7,253 | | $ | 30,544 | | $ | 79,076 | | $ | 5,158,981 | | $ | 5,238,057 | | $ | 3,057 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 90 days or | | | | | | | | | 90 Days or | | | | | | | | | | | Greater Past | | | 30-59 Days | | 60-89 Days | | Greater Past | | Total Past | | | | | | | | Due and | December 31, 2025 | | Past Due | | Past Due | | Due | | Due | | Current | | Total Loans | | Accruing | Commercial | | $ | 565 | | | - | | | 4,746 | | | 5,311 | | | 836,819 | | $ | 842,130 | | $ | 1,241 | Leases | | | 2,116 | | | 595 | | | 1,677 | | | 4,388 | | | 543,868 | | | 548,256 | | | 471 | Commercial real estate – investor | | | 10,604 | | | 89 | | | - | | | 10,693 | | | 1,201,691 | | | 1,212,384 | | | - | Commercial real estate – owner occupied | | | 7,176 | | | 819 | | | 11,389 | | | 19,384 | | | 687,183 | | | 706,567 | | | 250 | Construction | | | 1,546 | | | 1,349 | | | 635 | | | 3,530 | | | 170,100 | | | 173,630 | | | - | Residential real estate – investor | | | 120 | | | 699 | | | 152 | | | 971 | | | 69,254 | | | 70,225 | | | - | Residential real estate – owner occupied | | | 7,983 | | | 562 | | | 757 | | | 9,302 | | | 221,130 | | | 230,432 | | | 141 | Multifamily | | | 404 | | | 313 | | | 1,070 | | | 1,787 | | | 337,344 | | | 339,131 | | | - | HELOC | | | 5,219 | | | 441 | | | 451 | | | 6,111 | | | 229,182 | | | 235,293 | | | - | Powersport | | | 13,796 | | | 4,860 | | | 2,778 | | | 21,434 | | | 675,525 | | | 696,959 | | | 2,710 | Other | | | 1,873 | | | 702 | | | 217 | | | 2,792 | | | 194,332 | | | 197,124 | | | 66 | Total | | $ | 51,402 | | $ | 10,429 | | $ | 23,872 | | $ | 85,703 | | $ | 5,166,428 | | $ | 5,252,131 | | $ | 4,879 |
The table presents all nonaccrual loans as of September 30, 2026, and December 31, 2025: | | | | | | | | | | | | | | | September 30, 2026 | | December 31, 2025 | Nonaccrual loan detail | | Nonaccrual loans | | Nonaccrual loans with no ACL | | Nonaccrual loans | | Nonaccrual loans with no ACL | Commercial | | $ | 7,251 | | $ | 696 | | $ | 8,520 | | $ | 5,520 | Leases | | | 1,729 | | | 1,729 | | | 2,428 | | | 2,428 | Commercial real estate – investor | | | 8,740 | | | 350 | | | 11,377 | | | 32 | Commercial real estate – owner occupied | | | 10,228 | | | 10,228 | | | 19,493 | | | 19,493 | Construction | | | 1,736 | | | 1,616 | | | 737 | | | 737 | Residential real estate – investor | | | 1,030 | | | 1,030 | | | 681 | | | 681 | Residential real estate – owner occupied | | | 2,183 | | | 2,183 | | | 1,711 | | | 1,711 | Multifamily | | | 1,254 | | | 1,254 | | | 1,494 | | | 1,494 | HELOC | | | 2,160 | | | 2,160 | | | 1,222 | | | 1,222 | Powersport | | | 145 | | | 145 | | | 68 | | | 68 | Other | | | 123 | | | 123 | | | 221 | | | 221 | Total | | $ | 36,579 | | $ | 21,514 | | $ | 47,952 | | $ | 33,607 |
The Company recognized $20,000 and $52,000 of interest on nonaccrual loans during the three months ended and nine months ended September 30, 2026, and $53,000 and $108,000 of interest on nonaccrual loans during the three months ended and nine months ended September 30, 2025, respectively. Credit Quality Indicators The Company categorizes loans into credit risk categories based on current financial information, overall debt service coverage, comparison to industry averages, historical payment experience, and current economic trends. This analysis includes loans with outstanding balances or commitments greater than $50,000 and excludes homogeneous loans such as home equity lines of credit, residential real estate – owner occupied, powersport, and other loan categories. Loans with a classified risk rating are reviewed quarterly regardless of size or loan type. The Company uses the following definitions for classified risk ratings: Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan at some future date. Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. The substandard credit quality indicator includes both problem loans that are currently performing and nonperforming loans. Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Credits that are not covered by the definitions above are pass credits, which are not considered to be adversely rated. For residential owner-occupied, HELOC, powersport, and the other loan portfolios, the Company evaluates credit quality based on the aging status of the loan and by payment activity. Nonperforming loans are those that are either 90 days or more past due and accruing or are on nonaccrual, and all other loans not meeting these criteria are considered performing as presented in the aging table above. Credit quality indicators by loan classification and contractual loan origination date at September 30, 2026, were as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2026 | | 2025 | | 2024 | | 2023 | | 2022 | | Prior | | Revolving
Loans | | Revolving
Loans
Converted
To Term
Loans | | Total | Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | $ | 153,732 | | $ | 166,397 | | $ | 201,949 | | $ | 96,767 | | $ | 14,056 | | $ | 13,111 | | $ | 198,988 | | $ | - | | $ | 845,000 | Special Mention | | | - | | | - | | | 772 | | | - | | | - | | | - | | | 8,400 | | | - | | | 9,172 | Substandard | | | - | | | 94 | | | 42 | | | 4,150 | | | - | | | 77 | | | 8,827 | | | - | | | 13,190 | Total commercial | | | 153,732 | | | 166,491 | | | 202,763 | | | 100,917 | | | 14,056 | | | 13,188 | | | 216,215 | | | - | | | 867,362 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Leases | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 174,359 | | | 188,896 | | $ | 118,836 | | | 50,188 | | | 13,015 | | | 7,347 | | | - | | | - | | | 552,641 | Special Mention | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Substandard | | | - | | | - | | | 95 | | | 856 | | | 778 | | | - | | | - | | | - | | | 1,729 | Total leases | | | 174,359 | | | 188,896 | | | 118,931 | | | 51,044 | | | 13,793 | | | 7,347 | | | - | | | - | | | 554,370 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Commercial real estate – investor | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 166,617 | | | 243,690 | | | 175,150 | | | 102,860 | | | 251,616 | | | 164,186 | | | 7,231 | | | - | | | 1,111,350 | Special Mention | | | - | | | 367 | | | 5,377 | | | - | | | 1,110 | | | 923 | | | - | | | - | | | 7,777 | Substandard | | | - | | | - | | | 4,464 | | | 101 | | | 3,164 | | | 1,075 | | | - | | | - | | | 8,804 | Doubtful | | | - | | | - | | | 3,926 | | | - | | | - | | | - | | | - | | | - | | | 3,926 | Total commercial real estate – investor | | | 166,617 | | | 244,057 | | | 188,917 | | | 102,961 | | | 255,890 | | | 166,184 | | | 7,231 | | | - | | | 1,131,857 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Commercial real estate – owner occupied | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 167,753 | | | 174,933 | | | 54,598 | | | 61,893 | | | 51,501 | | | 124,220 | | | 14,535 | | | 749 | | | 650,182 | Special Mention | | | - | | | 5,763 | | | - | | | 1,678 | | | - | | | - | | | - | | | - | | | 7,441 | Substandard | | | - | | | 2,104 | | | 5,400 | | | 1,333 | | | 4,579 | | | 13,130 | | | - | | | - | | | 26,546 | Total commercial real estate – owner occupied | | | 167,753 | | | 182,800 | | | 59,998 | | | 64,904 | | | 56,080 | | | 137,350 | | | 14,535 | | | 749 | | | 684,169 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Credit quality indicators by loan classification and contractual loan origination date at September 30, 2026, continued: | | | 2026 | | 2025 | | 2024 | | 2023 | | 2022 | | Prior | | Revolving
Loans | | Revolving
Loans
Converted
To Term
Loans | | Total | Construction | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 11,964 | | | 81,304 | | | 25,328 | | | 475 | | | 21,013 | | | 541 | | | - | | | - | | | 140,625 | Special Mention | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Substandard | | | - | | | 101 | | | 1,936 | | | 885 | | | 9,930 | | | 14 | | | - | | | - | | | 12,866 | Total construction | | | 11,964 | | | 81,405 | | | 27,264 | | | 1,360 | | | 30,943 | | | 555 | | | - | | | - | | | 153,491 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Residential real estate – investor | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 12,210 | | | 7,466 | | | 5,314 | | | 2,816 | | | 12,652 | | | 22,606 | | | 1,585 | | | - | | | 64,649 | Special Mention | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Substandard | | | - | | | - | | | - | | | - | | | - | | | 1,030 | | | - | | | - | | | 1,030 | Total residential real estate – investor | | | 12,210 | | | 7,466 | | | 5,314 | | | 2,816 | | | 12,652 | | | 23,636 | | | 1,585 | | | - | | | 65,679 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Residential real estate – owner occupied | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 38,973 | | | 40,981 | | | 9,626 | | | 23,066 | | | 34,207 | | | 97,234 | | | 1,179 | | | - | | | 245,266 | Special Mention | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Substandard | | | - | | | - | | | - | | | 140 | | | 353 | | | 1,756 | | | - | | | - | | | 2,249 | Total residential real estate – owner occupied | | | 38,973 | | | 40,981 | | | 9,626 | | | 23,206 | | | 34,560 | | | 98,990 | | | 1,179 | | | - | | | 247,515 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Multifamily | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 77,290 | | | 53,853 | | | 25,135 | | | 58,710 | | | 90,138 | | | 63,856 | | | 195 | | | - | | | 369,177 | Special Mention | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Substandard | | | - | | | - | | | - | | | - | | | 943 | | | 311 | | | - | | | - | | | 1,254 | Total multifamily | | | 77,290 | | | 53,853 | | | 25,135 | | | 58,710 | | | 91,081 | | | 64,167 | | | 195 | | | - | | | 370,431 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | HELOC | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 3,602 | | | 2,330 | | | 1,659 | | | 1,379 | | | 1,338 | | | 4,132 | | | 229,143 | | | - | | | 243,583 | Special Mention | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Substandard | | | - | | | - | | | 60 | | | - | | | - | | | 293 | | | 2,002 | | | - | | | 2,355 | Total HELOC | | | 3,602 | | | 2,330 | | | 1,719 | | | 1,379 | | | 1,338 | | | 4,425 | | | 231,145 | | | - | | | 245,938 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Powersport | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 255,043 | | | 221,436 | | | 110,125 | | | 66,120 | | | 28,533 | | | 7,827 | | | - | | | - | | | 689,084 | Special Mention | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Substandard | | | - | | | 9 | | | 51 | | | 46 | | | 14 | | | 25 | | | - | | | - | | | 145 | Total Powersport | | | 255,043 | | | 221,445 | | | 110,176 | | | 66,166 | | | 28,547 | | | 7,852 | | | - | | | - | | | 689,229 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Other | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 72,941 | | | 62,426 | | | 23,309 | | | 14,925 | | | 42,671 | | | 5,662 | | | 5,928 | | | - | | | 227,862 | Special Mention | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Substandard | | | - | | | - | | | - | | | 85 | | | 68 | | | 1 | | | - | | | - | | | 154 | Total other | | | 72,941 | | | 62,426 | | | 23,309 | | | 15,010 | | | 42,739 | | | 5,663 | | | 5,928 | | | - | | | 228,016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 1,134,484 | | | 1,243,712 | | | 751,029 | | | 479,199 | | | 560,740 | | | 510,722 | | | 458,784 | | | 749 | | | 5,139,419 | Special Mention | | | - | | | 6,130 | | | 6,149 | | | 1,678 | | | 1,110 | | | 923 | | | 8,400 | | | - | | | 24,390 | Substandard | | | - | | | 2,308 | | | 12,048 | | | 7,596 | | | 19,829 | | | 17,712 | | | 10,829 | | | - | | | 70,322 | Doubtful | | | - | | | - | | | 3,926 | | | - | | | - | | | - | | | - | | | - | | | 3,926 | Total loans | | $ | 1,134,484 | | $ | 1,252,150 | | $ | 773,152 | | $ | 488,473 | | $ | 581,679 | | $ | 529,357 | | $ | 478,013 | | $ | 749 | | $ | 5,238,057 |
Credit quality indicators by loan classification and loan origination date at December 31, 2025, were as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2025 | | 2024 | | 2023 | | 2022 | | 2021 | | Prior | | Revolving
Loans | | Revolving
Loans
Converted
To Term
Loans | | Total | Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | $ | 275,155 | | $ | 161,529 | | $ | 94,487 | | $ | 22,843 | | $ | 8,699 | | $ | 9,730 | | $ | 214,846 | | $ | 125 | | $ | 787,414 | Special Mention | | | - | | | - | | | - | | | 212 | | | - | | | - | | | 2,917 | | | - | | | 3,129 | Substandard | | | 231 | | | 926 | | | 19,241 | | | 3,611 | | | 291 | | | - | | | 27,287 | | | - | | | 51,587 | Total commercial | | | 275,386 | | | 162,455 | | | 113,728 | | | 26,666 | | | 8,990 | | | 9,730 | | | 245,050 | | | 125 | | | 842,130 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Leases | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 247,515 | | | 172,825 | | $ | 84,533 | | | 27,993 | | | 10,164 | | | 2,038 | | | - | | | - | | | 545,068 | Special Mention | | | - | | | - | | | 374 | | | 263 | | | 123 | | | - | | | - | | | - | | | 760 | Substandard | | | - | | | 214 | | | 469 | | | 1,745 | | | - | | | - | | | - | | | - | | | 2,428 | Total leases | | | 247,515 | | | 173,039 | | | 85,376 | | | 30,001 | | | 10,287 | | | 2,038 | | | - | | | - | | | 548,256 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Commercial real estate – investor | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 296,219 | | | 217,761 | | | 120,630 | | | 255,701 | | | 199,993 | | | 99,144 | | | 6,371 | | | - | | | 1,195,819 | Special Mention | | | 82 | | | - | | | - | | | - | | | 41 | | | 2,197 | | | - | | | - | | | 2,320 | Substandard | | | - | | | 9,703 | | | 1,677 | | | 1,690 | | | - | | | 1,175 | | | - | | | - | | | 14,245 | Total commercial real estate – investor | | | 296,301 | | | 227,464 | | | 122,307 | | | 257,391 | | | 200,034 | | | 102,516 | | | 6,371 | | | - | | | 1,212,384 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Commercial real estate – owner occupied | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 193,988 | | | 76,480 | | | 67,749 | | | 76,670 | | | 106,107 | | | 103,545 | | | 10,309 | | | - | | | 634,848 | Special Mention | | | - | | | - | | | 161 | | | 3,542 | | | 2,153 | | | 1,782 | | | - | | | - | | | 7,638 | Substandard | | | 58 | | | - | | | 20,929 | | | 8,996 | | | 20,252 | | | 13,846 | | | - | | | - | | | 64,081 | Total commercial real estate – owner occupied | | | 194,046 | | | 76,480 | | | 88,839 | | | 89,208 | | | 128,512 | | | 119,173 | | | 10,309 | | | - | | | 706,567 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Construction | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 53,522 | | | 48,906 | | | 31,121 | | | 27,500 | | | 332 | | | 828 | | | - | | | - | | | 162,209 | Special Mention | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Substandard | | | 102 | | | - | | | 1,454 | | | 9,526 | | | - | | | 339 | | | - | | | - | | | 11,421 | Total construction | | | 53,624 | | | 48,906 | | | 32,575 | | | 37,026 | | | 332 | | | 1,167 | | | - | | | - | | | 173,630 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Residential real estate – investor | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 13,993 | | | 5,729 | | | 3,677 | | | 15,256 | | | 15,288 | | | 10,743 | | | 4,397 | | | - | | | 69,083 | Special Mention | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Substandard | | | - | | | - | | | - | | | - | | | 461 | | | 681 | | | - | | | - | | | 1,142 | Total residential real estate – investor | | | 13,993 | | | 5,729 | | | 3,677 | | | 15,256 | | | 15,749 | | | 11,424 | | | 4,397 | | | - | | | 70,225 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Residential real estate – owner occupied | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 42,941 | | | 11,580 | | | 25,594 | | | 35,826 | | | 30,264 | | | 81,123 | | | 1,207 | | | - | | | 228,535 | Special Mention | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Substandard | | | - | | | - | | | 151 | | | 202 | | | 142 | | | 1,402 | | | - | | | - | | | 1,897 | Total residential real estate – owner occupied | | | 42,941 | | | 11,580 | | | 25,745 | | | 36,028 | | | 30,406 | | | 82,525 | | | 1,207 | | | - | | | 230,432 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Multifamily | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 56,753 | | | 20,133 | | | 50,464 | | | 96,747 | | | 70,496 | | | 40,926 | | | 2,118 | | | - | | | 337,637 | Special Mention | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Substandard | | | - | | | - | | | 124 | | | 892 | | | 313 | | | 165 | | | - | | | - | | | 1,494 | Total multifamily | | | 56,753 | | | 20,133 | | | 50,588 | | | 97,639 | | | 70,809 | | | 41,091 | | | 2,118 | | | - | | | 339,131 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | HELOC | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 2,888 | | | 2,192 | | | 1,700 | | | 1,646 | | | 278 | | | 4,480 | | | 220,643 | | | - | | | 233,827 | Special Mention | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Substandard | | | - | | | - | | | - | | | - | | | - | | | 240 | | | 1,226 | | | - | | | 1,466 | Total HELOC | | | 2,888 | | | 2,192 | | | 1,700 | | | 1,646 | | | 278 | | | 4,720 | | | 221,869 | | | - | | | 235,293 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Powersport | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 323,072 | | | 180,099 | | | 114,212 | | | 57,740 | | | 17,237 | | | 4,531 | | | - | | | - | | | 696,891 | Special Mention | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Substandard | | | - | | | 22 | | | 44 | | | - | | | - | | | 2 | | | - | | | - | | | 68 | Total Powersport | | | 323,072 | | | 180,121 | | | 114,256 | | | 57,740 | | | 17,237 | | | 4,533 | | | - | | | - | | | 696,959 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Other | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 81,405 | | | 31,889 | | | 19,599 | | | 48,615 | | | 1,729 | | | 7,282 | | | 6,335 | | | - | | | 196,854 | Special Mention | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Substandard | | | - | | | - | | | 163 | | | 74 | | | 27 | | | 6 | | | - | | | - | | | 270 | Total other | | | 81,405 | | | 31,889 | | | 19,762 | | | 48,689 | | | 1,756 | | | 7,288 | | | 6,335 | | | - | | | 197,124 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | | 1,587,451 | | | 929,123 | | | 613,766 | | | 666,537 | | | 460,587 | | | 364,370 | | | 466,226 | | | 125 | | | 5,088,185 | Special Mention | | | 82 | | | - | | | 535 | | | 4,017 | | | 2,317 | | | 3,979 | | | 2,917 | | | - | | | 13,847 | Substandard | | | 391 | | | 10,865 | | | 44,252 | | | 26,736 | | | 21,486 | | | 17,856 | | | 28,513 | | | - | | | 150,099 | Total loans | | $ | 1,587,924 | | $ | 939,988 | | $ | 658,553 | | $ | 697,290 | | $ | 484,390 | | $ | 386,205 | | $ | 497,656 | | $ | 125 | | $ | 5,252,131 |
The following vintage tables present the amortized cost basis of non-risk rated loans by class and year of origination, based on the Company’s credit quality indicator for such loans as of September 30, 2026 and December 31, 2025. For these loan classes, the Company monitors credit quality based on performing and nonperforming status rather than internal risk ratings. | | | | | | | | | | | | | | | | | | | | | | | | | | | | September 30, 2026 | | 2026 | | 2025 | | 2024 | | 2023 | | 2022 | | Prior | | Revolving
Loans | | Revolving
Loans
Converted
To Term
Loans | | Total | Residential real estate – owner occupied | | | | | | | | | | | | | | | | | | | | | | | | | | | | Performing | | $ | 38,973 | | | 40,981 | | | 9,626 | | | 23,066 | | | 34,207 | | | 97,024 | | | 1,179 | | $ | - | | $ | 245,056 | Nonperforming | | | - | | | - | | | - | | | 140 | | | 353 | | | 1,966 | | | - | | | - | | | 2,459 | Total Residential real estate – owner occupied | | | 38,973 | | | 40,981 | | | 9,626 | | | 23,206 | | | 34,560 | | | 98,990 | | | 1,179 | | | - | | | 247,515 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | HELOC | | | | | | | | | | | | | | | | | | | | | | | | | | | | Performing | | | 3,602 | | | 2,330 | | | 1,659 | | | 1,379 | | | 1,338 | | | 4,152 | | | 229,318 | | | - | | | 243,778 | Nonperforming | | | - | | | - | | | 60 | | | - | | | - | | | 273 | | | 1,827 | | | - | | | 2,160 | Total HELOC | | | 3,602 | | | 2,330 | | | 1,719 | | | 1,379 | | | 1,338 | | | 4,425 | | | 231,145 | | | - | | | 245,938 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Powersport | | | | | | | | | | | | | | | | | | | | | | | | | | | | Performing | | | 254,709 | | | 220,694 | | | 109,561 | | | 65,695 | | | 28,178 | | | 7,664 | | | - | | | - | | | 686,501 | Nonperforming | | | 334 | | | 751 | | | 615 | | | 471 | | | 369 | | | 188 | | | - | | | - | | | 2,728 | Total Powersport | | | 255,043 | | | 221,445 | | | 110,176 | | | 66,166 | | | 28,547 | | | 7,852 | | | - | | | - | | | 689,229 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Other | | | | | | | | | | | | | | | | | | | | | | | | | | | | Performing | | | 72,917 | | | 62,426 | | | 23,308 | | | 14,931 | | | 42,671 | | | 5,635 | | | 5,928 | | | - | | | 227,816 | Nonperforming | | | 24 | | | - | | | 1 | | | 79 | | | 68 | | | 28 | | | - | | | - | | | 200 | Total Other | | | 72,941 | | | 62,426 | | | 23,309 | | | 15,010 | | | 42,739 | | | 5,663 | | | 5,928 | | | - | | | 228,016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total non-risk rated loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | Performing | | | 370,201 | | | 326,431 | | | 144,154 | | | 105,071 | | | 106,394 | | | 114,475 | | | 236,425 | | | - | | | 1,403,151 | Nonperforming | | | 358 | | | 751 | | | 676 | | | 690 | | | 790 | | | 2,455 | | | 1,827 | | | - | | | 7,547 | Total non-risk rated loans | | $ | 370,559 | | | 327,182 | | | 144,830 | | | 105,761 | | | 107,184 | | | 116,930 | | | 238,252 | | | - | | | 1,410,698 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2025 | | 2025 | | 2024 | | 2023 | | 2022 | | 2021 | | Prior | | Revolving
Loans | | Revolving
Loans
Converted
To Term
Loans | | Total | Residential real estate – owner occupied | | | | | | | | | | | | | | | | | | | | | | | | | | | | Performing | | $ | 42,941 | | $ | 11,580 | | $ | 25,594 | | $ | 35,826 | | $ | 30,264 | | $ | 81,168 | | $ | 1,207 | | $ | - | | $ | 228,580 | Nonperforming | | | - | | | - | | | 151 | | | 202 | | | 142 | | | 1,357 | | | - | | | - | | | 1,852 | Total Residential real estate – owner occupied | | | 42,941 | | | 11,580 | | | 25,745 | | | 36,028 | | | 30,406 | | | 82,525 | | | 1,207 | | | - | | | 230,432 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | HELOC | | | | | | | | | | | | | | | | | | | | | | | | | | | | Performing | | | 2,888 | | | 2,192 | | | 1,700 | | | 1,646 | | | 278 | | | 4,499 | | | 220,868 | | | - | | | 234,071 | Nonperforming | | | - | | | - | | | - | | | | | | | | | 221 | | | 1,001 | | | - | | | 1,222 | Total HELOC | | | 2,888 | | | 2,192 | | | 1,700 | | | 1,646 | | | 278 | | | 4,720 | | | 221,869 | | | - | | | 235,293 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Powersport | | | | | | | | | | | | | | | | | | | | | | | | | | | | Performing | | | 322,369 | | | 179,391 | | | 113,725 | | | 57,266 | | | 17,026 | | | 4,404 | | | - | | | - | | | 694,181 | Nonperforming | | | 703 | | | 730 | | | 531 | | | 474 | | | 211 | | | 129 | | | - | | | - | | | 2,778 | Total Powersport | | | 323,072 | | | 180,121 | | | 114,256 | | | 57,740 | | | 17,237 | | | 4,533 | | | - | | | - | | | 696,959 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Other | | | | | | | | | | | | | | | | | | | | | | | | | | | | Performing | | | 81,405 | | | 31,889 | | | 19,596 | | | 48,615 | | | 1,730 | | | 7,267 | | | 6,335 | | | - | | | 196,837 | Nonperforming | | | - | | | - | | | 166 | | | 74 | | | 26 | | | 21 | | | | | | - | | | 287 | Total Other | | | 81,405 | | | 31,889 | | | 19,762 | | | 48,689 | | | 1,756 | | | 7,288 | | | 6,335 | | | - | | | 197,124 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total non-risk rated loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | Performing | | | 449,603 | | | 225,052 | | | 160,615 | | | 143,353 | | | 49,298 | | | 97,338 | | | 228,410 | | | - | | | 1,353,669 | Nonperforming | | | 703 | | | 730 | | | 848 | | | 750 | | | 379 | | | 1,728 | | | 1,001 | | | - | | | 6,139 | Total non-risk rated loans | | $ | 450,306 | | | 225,782 | | | 161,463 | | | 144,103 | | | 49,677 | | | 99,066 | | | 229,411 | | | - | | | 1,359,808 |
The gross charge-offs activity by loan type and year of origination for the nine months ended September 30, 2026 and 2025, were as follows: | | | | | | | | | | | | | | | | | | | | | | Nine months ended September 30, 2026 | | 2026 | | 2025 | | 2024 | | 2023 | | 2022 | | Prior | | Total | Commercial | | $ | - | | | - | | | 34 | | | 13,640 | | | - | | | 8 | | $ | 13,682 | Leases | | | - | | | 57 | | | 167 | | | 10 | | | 596 | | | 2 | | | 832 | Commercial real estate – investor | | | - | | | 1,175 | | | - | | | 1,645 | | | - | | | 3,932 | | | 6,752 | Commercial real estate – owner occupied | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Construction | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Residential real estate – investor | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Residential real estate – owner occupied | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Multifamily | | | - | | | - | | | - | | | - | | | - | | | - | | | - | HELOC | | | - | | | - | | | - | | | 2 | | | - | | | - | | | 2 | Powersport | | | 813 | | | 4,333 | | | 3,103 | | | 2,072 | | | 1,356 | | | 593 | | | 12,270 | Other | | | 10 | | | 12 | | | - | | | 141 | | | 1,012 | | | 223 | | | 1,398 | Total | | $ | 823 | | $ | 5,577 | | $ | 3,304 | | $ | 17,510 | | $ | 2,964 | | $ | 4,758 | | $ | 34,936 |
| | | | | | | | | | | | | | | | | | | | | | Nine months ended September 30, 2025 | | 2025 | | 2024 | | 2023 | | 2022 | | 2021 | | Prior | | Total | Commercial | | $ | - | | | 176 | | | 3,452 | | | - | | | 1,386 | | | 9 | | $ | 5,023 | Leases | | | - | | | - | | | 85 | | | 854 | | | - | | | 16 | | | 955 | Commercial real estate – investor | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Commercial real estate – owner occupied | | | - | | | - | | | - | | | - | | | - | | | 47 | | | 47 | Construction | | | - | | | - | | | - | | | 834 | | | - | | | - | | | 834 | Residential real estate – investor | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Residential real estate – owner occupied | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Multifamily | | | - | | | 181 | | | - | | | - | | | - | | | - | | | 181 | HELOC | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Powersport | | | 589 | | | 1,172 | | | 896 | | | 689 | | | 222 | | | 117 | | | 3,685 | Other | | | - | | | 80 | | | 29 | | | 166 | | | 4 | | | 803 | | | 1,082 | Total | | $ | 589 | | $ | 1,609 | | $ | 4,462 | | $ | 2,543 | | $ | 1,612 | | $ | 992 | | $ | 11,807 |
The Company had $2.5 million and $379,000 in residential real estate loans in the process of foreclosure as of September 30, 2026, and December 31, 2025, respectively. There were 36 loans modified during the nine-month period ending September 30, 2026, totaling $40.5 million in aggregate, which were experiencing financial difficulty. Of the 36 loans modified in the first nine months of 2026, three loans had also been modified in prior periods. There were 39 loans modified during the nine-month period ending September 30, 2025, totaling $56.1 million in aggregate, which were experiencing financial difficulty. The following tables present the amortized cost basis of loans at September 30, 2026, and September 30, 2025, that were both experiencing financial difficulty and modified during the three and nine months ended September 30, 2026, and September 30, 2025, 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. | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended September 30, 2026 | | Term Modification | | Combination - Term, Interest Rate and Payment Modification 1 | | Payment Modification 1 | | Combination - Interest Rate and Payment Modification 1 | | Combination - Term and Interest Rate Modification | | Combination - Term and Payment Modification 1 | | Total Loans Modified | | % of Total Loan Classification Modified to Total Loan Classification | | Commercial | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | - | % | Commercial real estate – investor | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | - | | Commercial real estate – owner occupied | | | 22,613 | | | - | | | - | | | - | | | - | | | - | | | 22,613 | | 3.3 | | Construction | | | 586 | | | - | | | - | | | - | | | - | | | - | | | 586 | | 0.4 | | Multifamily | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | - | | HELOC | | | 117 | | | - | | | - | | | - | | | - | | | - | | | 117 | | 0.0 | | Powersport | | | - | | | 41 | | | - | | | 5 | | | - | | | 1 | | | 47 | | 0.0 | | Other | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | 0.0 | | Total | | $ | 23,316 | | $ | 41 | | $ | - | | $ | 5 | | $ | - | | $ | 1 | | $ | 23,363 | | 0.4 | % |
1 Payment modifications are either contractual delays in payment or a modification of the payment amount. | | | | | | | | | | | | | | | | | | | | | | | | | Nine months ended September 30, 2026 | | Term Modification | | Combination - Term, Interest Rate and Payment Modification 1 | | Payment Modification 1 | | Combination - Interest Rate and Payment Modification 1 | | Combination - Term and Interest Rate Modification | | Combination - Term and Payment Modification 1 | | Total Loans Modified | | % of Total Loan Classification Modified to Total Loan Classification | | Commercial | | $ | 6,672 | | $ | - | | $ | - | | $ | - | | $ | - | | $ | 2,405 | | $ | 9,077 | | 1.0 | % | Commercial real estate – investor | | | - | | | - | | | - | | | - | | | 7,773 | | | - | | | 7,773 | | 0.7 | | Commercial real estate – owner occupied | | | 22,613 | | | - | | | - | | | - | | | - | | | - | | | 22,613 | | 3.3 | | Construction | | | 586 | | | - | | | - | | | - | | | - | | | - | | | 586 | | 0.4 | | Multifamily | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | - | | HELOC | | | 263 | | | - | | | - | | | - | | | - | | | - | | | 263 | | 0.1 | | Powersport | | | - | | | 171 | | | - | | | 5 | | | - | | | 1 | | | 177 | | 0.0 | | Other | | | - | | | 8 | | | - | | | - | | | - | | | - | | | 8 | | 0.0 | | Total | | $ | 30,134 | | $ | 179 | | $ | - | | $ | 5 | | $ | 7,773 | | $ | 2,406 | | $ | 40,497 | | 0.8 | % |
1 Payment modifications are either contractual delays in payment or a modification of the payment amount. | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended September 30, 2025 | | Term Modification | | Combination - Term, Interest Rate and Payment Modification 1 | | Payment Modification 1 | | Interest Rate Modification | | Combination - Term and Interest Rate Modification | | Combination - Term and Payment Modification 1 | | Total Loans Modified | | % of Total Loan Classification Modified to Total Loan Classification | | Commercial | | $ | 5,025 | | $ | - | | $ | 1,550 | | $ | - | | $ | 1,551 | | $ | 6,174 | | $ | 14,300 | | 1.8 | % | Commercial real estate – investor | | | 1,645 | | | - | | | - | | | - | | | - | | | 34 | | | 1,679 | | 0.1 | | Commercial real estate – owner occupied | | | 6,273 | | | - | | | - | | | - | | | - | | | 1,122 | | | 7,395 | | 1.1 | | Construction | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | - | | Multifamily | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | - | | HELOC | | | 20 | | | - | | | - | | | - | | | - | | | - | | | 20 | | 0.0 | | Powersport | | | - | | | 51 | | | - | | | 8 | | | - | | | - | | | 59 | | 0.0 | | Other | | | - | | | - | | | - | | | - | | | - | | | 27 | | | 27 | | 0.0 | | Total | | $ | 12,963 | | $ | 51 | | $ | 1,550 | | $ | 8 | | $ | 1,551 | | $ | 7,357 | | $ | 23,480 | | 0.4 | % |
1 Payment modifications are either contractual delays in payment or a modification of the payment amount. | | | | | | | | | | | | | | | | | | | | | | | | | Nine months ended September 30, 2025 | | Term Modification | | Combination - Term, Interest Rate and Payment Modification 1 | | Payment Modification 1 | | Combination - Interest Rate and Payment Modification 1 | | Combination - Term and Interest Rate Modification | | Combination - Term and Payment Modification 1 | | Total Loans Modified | | % of Total Loan Classification Modified to Total Loan Classification | | Commercial | | $ | 10,464 | | $ | - | | $ | 1,550 | | $ | - | | $ | 1,551 | | $ | 6,174 | | $ | 19,739 | | 2.5 | % | Commercial real estate – investor | | | 1,645 | | | - | | | - | | | - | | | 12,251 | | | 34 | | | 13,930 | | 1.1 | | Commercial real estate – owner occupied | | | 19,124 | | | - | | | - | | | - | | | - | | | 3,197 | | | 22,321 | | 3.3 | | Construction | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | - | | Multifamily | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | - | | HELOC | | | 20 | | | - | | | - | | | - | | | - | | | - | | | 20 | | 0.0 | | Powersport | | | - | | | 51 | | | - | | | 8 | | | - | | | - | | | 59 | | 0.0 | | Other | | | - | | | - | | | - | | | - | | | - | | | 27 | | | 27 | | 0.0 | | Total | | $ | 31,253 | | $ | 51 | | $ | 1,550 | | $ | 8 | | $ | 13,802 | | $ | 9,432 | | $ | 56,096 | | 1.1 | % |
1 Payment modifications are either contractual delays in payment or a modification of the payment amount. The Company closely monitors the performance of loan modifications to borrowers experiencing financial difficulty. The following tables present the performance of loans that have been modified in the last twelve months as of September 30, 2026, and September 30, 2025. | | | | | | | | | | | | | | | | | | | September 30, 2026 | | 30-59 days past due | | 60-89 Days Past Due | | 90 Days or Greater Past Due | | Total Past Due | | Current | | Total Modifications | Commercial | | $ | 2,405 | | $ | - | | $ | - | | $ | 2,405 | | $ | 6,672 | | $ | 9,077 | Leases | | | - | | | - | | | - | | | - | | | - | | | - | Commercial real estate – investor | | | - | | | - | | | 8,390 | | | 8,390 | | | 7,773 | | | 16,163 | Commercial real estate – owner occupied | | | 1,661 | | | - | | | 7,587 | | | 9,248 | | | 19,955 | | | 29,203 | Construction | | | - | | | - | | | - | | | - | | | 586 | | | 586 | Residential real estate – investor | | | - | | | - | | | - | | | - | | | - | | | - | Residential real estate – owner occupied | | | - | | | - | | | - | | | - | | | - | | | - | Multifamily | | | - | | | - | | | - | | | - | | | - | | | - | HELOC | | | - | | | - | | | - | | | - | | | 328 | | | 328 | Powersport | | | 12 | | | 4 | | | 6 | | | 22 | | | 162 | | | 184 | Other | | | - | | | - | | | - | | | - | | | 8 | | | 8 | Total | | $ | 4,078 | | $ | 4 | | $ | 15,983 | | $ | 20,065 | | $ | 35,484 | | $ | 55,549 |
| | | | | | | | | | | | | | | | | | | September 30, 2025 | | 30-59 days past due | | 60-89 Days Past Due | | 90 Days or Greater Past Due | | Total Past Due | | Current | | Total Modifications | Commercial | | $ | 3,520 | | $ | - | | $ | 1,609 | | $ | 5,129 | | $ | 14,610 | | $ | 19,739 | Leases | | | - | | | - | | | - | | | - | | | - | | | - | Commercial real estate – investor | | | - | | | - | | | - | | | - | | | 13,930 | | | 13,930 | Commercial real estate – owner occupied | | | 2,136 | | | - | | | 19,063 | | | 21,199 | | | 1,122 | | | 22,321 | Construction | | | - | | | - | | | - | | | - | | | - | | | - | Residential real estate – investor | | | - | | | - | | | - | | | - | | | - | | | - | Residential real estate – owner occupied | | | - | | | - | | | - | | | - | | | - | | | - | Multifamily | | | - | | | - | | | - | | | - | | | - | | | - | HELOC | | | - | | | - | | | - | | | - | | | 20 | | | 20 | Powersport | | | - | | | - | | | - | | | - | | | 59 | | | 59 | Other | | | - | | | - | | | - | | | - | | | 27 | | | 27 | Total | | $ | 5,656 | | $ | - | | $ | 20,672 | | $ | 26,328 | | $ | 29,768 | | $ | 56,096 |
The following tables summarize the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the three and nine months ended September 30, 2026 and September 30, 2025. The financial impact of these modifications was immaterial. | | | | | | | | | | | Three months ended September 30, 2026 | | Weighted-Average Term Extension (In Months) | | Weighted-Average Interest Rate Change | | Weighted-Average Delay of Payment (In Months) | Commercial | | | - | | | - | % | | | - | Commercial real estate – investor | | | - | | | - | | | | - | Commercial real estate – owner occupied | | | 9.45 | | | - | | | | - | Construction | | | 8.00 | | | - | | | | - | HELOC | | | 22.00 | | | - | | | | - | Powersport | | | 19.83 | | | (2.42) | | | | - | Other | | | - | | | - | | | | - | Total | | | 9.49 | | | (2.42) | % | | | - |
| | | | | | | | | | | Nine months ended September 30, 2026 | | Weighted-Average Term Modification (In Months) | | Weighted-Average Interest Rate Change | | Weighted-Average Delay of Payment (In Months) | Commercial | | | 11.97 | | | - | % | | | - | Commercial real estate – investor | | | 42.00 | | | 2.10 | | | | - | Commercial real estate – owner occupied | | | 9.45 | | | - | | | | - | Construction | | | 8.00 | | | - | | | | - | HELOC | | | 23.11 | | | - | | | | - | Powersport | | | 11.15 | | | (2.26) | | | | - | Other | | | 1.00 | | | (3.10) | | | | - | Total | | | 16.34 | | | 2.00 | % | | | - |
| | | | | | | | | | | Three months ended September 30, 2025 | | Weighted-Average Term Extension (In Months) | | Weighted-Average Interest Rate Change | | Weighted-Average Delay of Payment (In Months) | Commercial | | | 7.48 | | | 1.50 | % | | | 6.00 | Commercial real estate – investor | | | 8.94 | | | - | | | | - | Commercial real estate – owner occupied | | | 12.94 | | | - | | | | - | Construction | | | - | | | - | | | | - | HELOC | | | 24.00 | | | - | | | | - | Powersport | | | 14.62 | | | (8.94) | | | | - | Other | | | 24.00 | | | - | | | | - | Total | | | 9.48 | | | 1.12 | % | | | 6.00 |
| | | | | | | | | | | Nine months ended September 30, 2025 | | Weighted-Average Term Extension (In Months) | | Weighted-Average Interest Rate Change | | Weighted-Average Delay of Payment (In Months) | Commercial | | | 6.24 | | | 1.50 | % | | | 2.70 | Commercial real estate – investor | | | 8.99 | | | (1.00) | | | | - | Commercial real estate – owner occupied | | | 8.36 | | | - | | | | - | Construction | | | - | | | - | | | | - | HELOC | | | 24.00 | | | - | | | | - | Powersport | | | 14.62 | | | (8.94) | | | | - | Other | | | 24.00 | | | - | | | | - | Total | | | 7.83 | | | (0.75) | % | | | 2.70 |
|