v3.26.3
Loans
 9 Months Ended
Sep. 30, 2026
Loans [Abstract]  
Loans
Note 5 – Loans

The Company originates commercial, industrial, agricultural, residential, and consumer loans primarily to customers throughout north central, central, south central and south eastern  Pennsylvania, southern New York, Wilmington, Dover and Georgetown, Delaware and Burlington County, New Jersey. Although the Company had a diversified loan portfolio at September 30, 2026 and December 31, 2025, a substantial portion of its debtors’ ability to honor their contracts is dependent on the economic conditions within these regions. The following table summarizes the primary segments of the loan portfolio and how those segments are analyzed within the allowance for credit losses - loans as of September 30, 2026 and December 31, 2025 (in thousands):

 
  
September 30, 2026
    
December 31 , 2025
  
Real estate loans:
            
Residential
  
$
336,190
    
$
340,972
  
Commercial
    
1,276,050
      
1,218,514
  
Agricultural
    
370,505
      
347,448
  
Construction
    
103,498
      
93,965
  
Consumer
    
8,597
      
8,859
  
Other commercial loans
    
178,977
      
179,166
  
Other agricultural loans
    
31,323
      
30,247
  
State and political subdivision loans
    
82,556
      
52,100
  
Total
    
2,387,696
      
2,271,271
  
Allowance for credit losses - loans
    
(23,786
)
    
(22,806
)
Net loans
  
$
2,363,910
    
$
2,248,465
  

Allowance for Credit Losses - Loans

The allowance for credit losses related to loans encompasses loans evaluated collectively and individually for expected credit losses. It represents an estimate of credit losses over the expected life of the loans as of the balance sheet date and is recorded as a reduction to net loans. Loans individually evaluated consist of non-accrual commercial loans and recently modified loans that were experiencing financial difficulty at the time of the modification. The allowance for credit losses for off-balance sheet credit exposures includes estimated losses on unfunded loan commitments, letters of credit and other off-balance sheet credit exposures. The total allowance for credit losses is increased by charges to expense, through the provision for credit losses, and decreased by charge-offs, net of recoveries.

The following table presents the components of the allowance for credit losses as of September 30, 2026 and December 31, 2025 (in thousands):

 
  
September 30, 2026
    
December 31, 2025
  
Allowance for Credit Losses - Loans
  
$
23,786
    
$
22,806
  
Allowance for Credit Losses - Off-Balance Sheet credit Exposure
    
1,075
      
1,163
  
Total allowance for credit losses
  
$
24,861
    
$
23,969
  
The following table presents the activity in the allowance for credit losses for the three and nine months ended September 30, 2026 and 2025 (in thousands):

 
  
Allowance for Credit
Losses - Loans
    
Allowance for Credit
Losses - Off-Balance
Sheet credit Exposure
    
Total
  
Balance at June 30, 2026
  
$
23,559
    
$
1,441
    
$
25,000
  
Loans charge-off
    
(148
)
    
-
      
(148
)
Recoveries of loans previously charged-off
    
9
      
-
      
9
  
Net loans charged-off
    
(139
)
    
-
      
(139
)
Provision for (recovery of) credit losses
    
366
      
(366
)
    
-
  
Balance at September 30, 2026
  
$
23,786
    
$
1,075
    
$
24,861
  
 
                        
Balance at December 31, 2025
  
$
22,806
    
$
1,163
    
$
23,969
  
Loans charge-off
    
(300
)
    
-
      
(300
)
Recoveries of loans previously charged-off
    
192
      
-
      
192
  
Net loans charged-off
    
(108
)
    
-
      
(108
)
Provision for (recovery of) credit losses
    
1,088
      
(88
)
    
1,000
  
Balance at September 30, 2026
  
$
23,786
    
$
1,075
    
$
24,861
  
 
                        
Balance at June 30, 2025
  
$
22,109
    
$
914
    
$
23,023
  
Loans charge-off
    
(20
)
    
-
      
(20
)
Recoveries of loans previously charged-off
    
17
      
-
      
17
  
Net loans charged-off
    
(3
)
    
-
      
(3
)
Provision for credit losses
    
348
      
152
      
500
  
Balance at September 30, 2025
  
$
22,454
    
$
1,066
    
$
23,520
  
 
                        
Balance at December 31, 2024
  
$
21,699
    
$
676
    
$
22,375
  
Loans charge-off
    
(801
)
    
-
      
(801
)
Recoveries of loans previously charged-off
    
71
      
-
      
71
  
Net loans charged-off
    
(730
)
    
-
      
(730
)
Provision for credit losses
    
1,485
      
390
      
1,875
  
Balance at September 30, 2025
  
$
22,454
    
$
1,066
    
$
23,520
  

The following tables present the activity in the allowance for credit losses – loans, by portfolio segment, for the three and nine months ended September 30, 2026 and 2025 (in thousands):

 
  
For the three months ended September 30, 2026
  
 
  
Balance at
June 30, 2026
    
Charge-offs
    
Recoveries
    
Provision
    
Balance at
September 30, 2026
  
Real estate loans:
                              
Residential
  
$
2,671
    
$
-
    
$
-
    
$
(64
)
  
$
2,607
  
Commercial
    
11,006
      
-
      
-
      
696
      
11,702
  
Agricultural
    
4,411
      
-
      
-
      
274
      
4,685
  
Construction
    
913
      
-
      
-
      
108
      
1,021
  
Consumer
    
1,191
      
(13
)
    
6
      
(586
)
    
598
  
Other commercial loans
    
3,037
      
(135
)
    
3
      
(260
)
    
2,645
  
Other agricultural loans
    
190
      
-
      
-
      
28
      
218
  
State and political subdivision loans
    
106
      
-
      
-
      
15
      
121
  
Unallocated
    
34
      
-
      
-
      
155
      
189
  
Total
  
$
23,559
    
$
(148
)
  
$
9
    
$
366
    
$
23,786
  
 
  
For the nine months ended September 30, 2026
  
 
  
Balance at
December 31, 2025
    
Charge-offs
    
Recoveries
    
Provision
    
Balance at
September 30, 2026
  
Real estate loans:
                              
Residential
  
$
3,112
    
$
-
    
$
12
    
$
(517
)
  
$
2,607
  
Commercial
    
10,017
      
-
      
-
      
1,685
      
11,702
  
Agricultural
    
4,841
      
-
      
-
      
(156
)
    
4,685
  
Construction
    
916
      
-
      
-
      
105
      
1,021
  
Consumer
    
1,201
      
(33
)
    
18
      
(588
)
    
598
  
Other commercial loans
    
2,534
      
(267
)
    
162
      
216
      
2,645
  
Other agricultural loans
    
115
      
-
      
-
      
103
      
218
  
State and political subdivision loans
    
55
      
-
      
-
      
66
      
121
  
Unallocated
    
15
      
-
      
-
      
174
      
189
  
Total
  
$
22,806
    
$
(300
)
  
$
192
    
$
1,088
    
$
23,786
  

 
  
For the three months ended September 30, 2025
  
 
  
Balance at
June 30, 2025
    
Charge-offs
    
Recoveries
    
Provision
    
Balance at
September 30, 2025
  
Real estate loans:
                              
Residential
  
$
3,062
    
$
-
    
$
-
    
$
148
    
$
3,210
  
Commercial
    
9,898
      
-
      
-
      
(445
)
    
9,453
  
Agricultural
    
4,542
      
-
      
-
      
262
      
4,804
  
Construction
    
1,273
      
-
      
-
      
(306
)
    
967
  
Consumer
    
1,119
      
(10
)
    
4
      
212
      
1,325
  
Other commercial loans
    
1,993
      
(10
)
    
13
      
435
      
2,431
  
Other agricultural loans
    
132
      
-
      
-
      
(7
)
    
125
  
State and political subdivision loans
    
56
      
-
      
-
      
2
      
58
  
Unallocated
    
34
      
-
      
-
      
47
      
81
  
Total
  
$
22,109
    
$
(20
)
  
$
17
    
$
348
    
$
22,454
  

 
  
For the nine months ended September 30, 2025
  
 
  
Balance at
December 31, 2024
    
Charge-offs
    
Recoveries
    
Provision
    
Balance at
September 30, 2025
  
Real estate loans:
                                        
Residential
  
$
1,940
    
$
-
    
$
-
    
$
1,270
    
$
3,210
  
Commercial
    
9,174
      
(40
)
    
-
      
319
      
9,453
  
Agricultural
    
3,529
      
-
      
-
      
1,275
      
4,804
  
Construction
    
1,402
      
-
      
-
      
(435
)
    
967
  
Consumer
    
1,338
      
(307
)
    
37
      
257
      
1,325
  
Other commercial loans
    
3,766
      
(454
)
    
34
      
(915
)
    
2,431
  
Other agricultural loans
    
133
      
-
      
-
      
(8
)
    
125
  
State and political subdivision loans
    
61
      
-
      
-
      
(3
)
    
58
  
Unallocated
    
356
      
-
      
-
      
(275
)
    
81
  
Total
  
$
21,699
    
$
(801
)
  
$
71
    
$
1,485
    
$
22,454
  

The provision for the three and nine months ended September 30, 2026 was driven by changes in economic forecasts and the annual update of the loss driver analysis. This update includes revising prepayment and curtailment speeds as well as the historical loss factor. In addition, loss rates are updated to include the most recent completed year of 2025. The provision for 2026 was also impacted by the Iran conflict as we adjusted qualitative factors due to the impact this conflict is having on gas and diesel prices, as well as fertilizer prices and the impact they had on planting season. The provision was also impacted by the decrease in non-performing student loans that were are fully reserved. The decrease in the provision for consumer loans was due to the reclass of certain student loans to loans for held for sale, which are not subject to ASC 326 and a reduction in nonaccrual medical student loans held for investment.
The provision for the first nine months of 2025 was driven by changes in economic forecasts and the annual update of the loss driver analysis. This update includes revising prepayment and curtailment speeds. In addition, loss rates are updated to include 2024. For residential loans, the historical loss rate increased, while the prepayment speed slowed resulting in an increased provision. For other commercial loans, the historical loss rate decreased in the annual update resulting in a decrease in the provision for 2025.

The following table presents the allowance for credit losses – loans and amortized cost basis of loans as of September 30, 2026 and December 31, 2025 (in thousands):

 
  
Allowance for Credit Losses - Loans
    
Loans
  
September 30, 2026
  
Collectively
evaluated
    
Individually
evaluated
    
Total Allowance
for Credit
Losses - Loans
    
Collectively
evaluated
    
Individually
evaluated
    
Total Loans
  
Real estate loans:
                                    
Residential
  
$
2,590
    
$
17
    
$
2,607
    
$
333,420
    
$
2,770
    
$
336,190
  
Commercial
    
10,737
      
965
      
11,702
      
1,237,119
      
38,931
      
1,276,050
  
Agricultural
    
4,685
      
-
      
4,685
      
368,195
      
2,310
      
370,505
  
Construction
    
952
      
69
      
1,021
      
102,547
      
951
      
103,498
  
Consumer
    
77
      
521
      
598
      
8,060
      
537
      
8,597
  
Other commercial loans
    
2,099
      
546
      
2,645
      
172,351
      
6,626
      
178,977
  
Other agricultural loans
    
187
      
31
      
218
      
30,821
      
502
      
31,323
  
State and political subdivision loans
    
121
      
-
      
121
      
82,556
      
-
      
82,556
  
Unallocated
    
189
      
-
      
189
      
-
      
-
      
-
  
Total
  
$
21,637
    
$
2,149
    
$
23,786
    
$
2,335,069
    
$
52,627
    
$
2,387,696
  

December 31, 2025
                                                
Real estate loans:
                                                
Residential
  
$
3,050
    
$
62
    
$
3,112
    
$
338,600
    
$
2,372
    
$
340,972
  
Commercial
    
9,757
      
260
      
10,017
      
1,193,742
      
24,772
      
1,218,514
  
Agricultural
    
4,841
      
-
      
4,841
      
345,302
      
2,146
      
347,448
  
Construction
    
830
      
86
      
916
      
93,450
      
515
      
93,965
  
Consumer
    
327
      
874
      
1,201
      
7,950
      
909
      
8,859
  
Other commercial loans
    
1,903
      
631
      
2,534
      
171,343
      
7,823
      
179,166
  
Other agricultural loans
    
115
      
-
      
115
      
29,844
      
403
      
30,247
  
State and political subdivision loans
    
55
      
-
      
55
      
52,100
      
-
      
52,100
  
Unallocated
    
15
      
-
      
15
      
-
      
-
      
-
  
Total
  
$
20,893
    
$
1,913
    
$
22,806
    
$
2,232,331
    
$
38,940
    
$
2,271,271
  

Non-performing Loans

Non-performing loans include those nonaccrual loans, described in more detail below, and all loans past due 90 or more days. Loans are considered for non-accrual status upon reaching 90 days delinquency, although the Company may be receiving partial payments of interest and partial repayments of principal on such loans, or if full payment of principal and interest is not expected. Additionally, if management is made aware of other information including bankruptcy, repossession, death, or legal proceedings, the loan may be placed on non-accrual status. If a loan is 90 days or more past due and is well secured and in the process of collection, it may still be considered accruing.
The following table reflects the non-performing loan receivables, as well as those on non-accrual status as of September 30, 2026 and December 31, 2025, respectively. The balances are presented by class of loan receivable (in thousands):

 
  
September 30, 2026
    
December 31, 2025
  
 
  
Nonaccrual
With a
related
allowance
    
Nonaccrual
Without a
related
allowance
    
90 days
or greater
past due
and
accruing
    
Total non-
performing
loans
    
Nonaccrual
With a
related
allowance
    
Nonaccrual
Without
a related
allowance
    
90 days
or greater
 past due
and
accruing
    
Total non-
performing
loans
  
Real estate loans:
                                                
Mortgages
  
$
272
    
$
3,351
    
$
-
    
$
3,623
    
$
153
    
$
3,229
    
$
-
    
$
3,382
  
Home Equity
    
-
      
106
      
7
      
113
      
-
      
61
      
151
      
212
  
Commercial
    
5,262
      
27,199
      
-
      
32,461
      
2,860
      
8,637
      
-
      
11,497
  
Agricultural
    
-
      
2,310
      
-
      
2,310
      
-
      
2,145
      
55
      
2,200
  
Construction
    
216
      
735
      
-
      
951
      
233
      
283
      
-
      
516
  
Consumer
    
492
      
1
      
1
      
494
      
770
      
-
      
15
      
785
  
Other commercial loans
    
6,626
      
-
      
3
      
6,629
      
6,282
      
1,546
      
8
      
7,836
  
Other agricultural loans
    
99
      
403
              
502
      
-
      
403
      
-
      
403
  
 
  
$
12,967
    
$
34,105
    
$
11
    
$
47,083
    
$
10,298
    
$
16,304
    
$
229
    
$
26,831
  

As of September 30, 2026, there were $34.1 million of non-accrual loans that did not have a related allowance for credit losses. The estimated fair values of the collateral securing these loans exceeded their carrying amount, or the loans were previously charged down to the realizable collateral values. Accordingly, no specific valuation allowance was considered to be necessary.

The following table presents, by class of loans receivable, the amortized cost basis of collateral-dependent loans and type of collateral as of September 30, 2026 and December 31, 2025 (in thousands):

September 30, 2026
  
Real Estate
    
Business Assets
    
Total
  
Real estate loans:
                  
Mortgages
  
$
3,623
    
$
-
    
$
3,623
  
Home Equity
    
106
      
-
      
106
  
Commercial
    
32,461
      
-
      
32,461
  
Agricultural
    
2,310
      
-
      
2,310
  
Construction
    
951
      
-
      
951
  
Other commercial loans
    
-
      
6,626
      
6,626
  
Other agricultural loans
    
-
      
502
      
502
  
 
  
$
39,451
    
$
7,128
    
$
46,579
  

December 31, 2025
                        
Real estate loans:
                        
Mortgages
  
$
3,382
    
$
-
    
$
3,382
  
Home Equity
    
61
      
-
      
61
  
Commercial
    
11,497
      
-
      
11,497
  
Agricultural
    
2,145
      
-
      
2,145
  
Construction
    
516
      
-
      
516
  
Other commercial loans
    
-
      
7,828
      
7,828
  
Other agricultural loans
    
-
      
403
      
403
  
 
  
$
17,601
    
$
8,231
    
$
25,832
  
Credit Quality Information

For commercial real estate loans, agricultural real estate loans, construction loans, other commercial loans, other agricultural loans, and state and political subdivision loans, management uses a ten grade internal risk rating system to monitor and assess credit quality. The first six grades under the revised system are considered not criticized and are aggregated as “Pass” rated. The criticized rating categories utilized by management generally follow bank regulatory definitions. The definitions of each rating are defined below:
 

 •
Pass (Grades 1-6) – These loans are to customers with credit quality ranging from an acceptable to very high quality and are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral.
 

 •
Special Mention (Grade 7) – This loan grade is in accordance with regulatory guidance and includes loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected.
 

 •
Substandard (Grade 8) – This loan grade is in accordance with regulatory guidance and includes loans that have a well-defined weakness based on objective evidence and are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.
 

 •
Doubtful (Grade 9) – This loan grade is in accordance with regulatory guidance and includes loans that 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 (Grade 10) – This loan grade is in accordance with regulatory guidance and includes loans that are considered uncollectible, or of such value that continuance as an asset is not warranted.

To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay the loan as agreed, the Company’s loan rating process includes several layers of internal and external oversight. The Company’s loan officers are responsible for the timely and accurate risk rating of the loans in each of their portfolios at origination and on an ongoing basis under the supervision of management. Commercial, agricultural and state and political relationships over $750,000 in all Bank regions other than the Delaware region are reviewed annually to ensure the appropriateness of the loan grade. In the Delaware region all loan relationships greater than $1,000,000 are reviewed annually to ensure the appropriateness of the loan grade. In addition, the Company engages an external consultant on at least an annual basis to: 1) review a minimum of 50% of the dollar volume of the commercial loan portfolio on an annual basis, 2) a large sample of relationships in aggregate over $1,000,000, 3) selected loan relationships over $750,000 which are over 30 days past due, or classified Special Mention, Substandard, Doubtful, or Loss, and 4) such other loans which management or the consultant deems appropriate.

The following tables represent credit exposures by internally assigned grades, by origination year, as of September 30, 2026 and December 31, 2025 (in thousands):

                                       
Revolving
    
Revolving
        
         
Loans
    
Loans
        
                                       
Amortized
    
Converted
        
September 30, 2026
  
2026
    
2025
    
2024
    
2023
    
2022
    
Prior
    
Cost Basis
    
to Term
    
Total
  
Commercial real estate
                                                      
Risk Rating
                                                      
Pass
  
$
137,223
    
$
122,286
    
$
48,729
    
$
107,109
    
$
326,734
    
$
411,689
    
$
42,483
    
$
1,843
    
$
1,198,096
  
Special Mention
    
-
      
-
      
-
      
782
      
9,050
      
14,896
      
-
      
-
      
24,728
  
Substandard
    
-
      
-
      
5,043
      
548
      
29,949
      
14,249
      
3,437
      
-
      
53,226
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
137,223
    
$
122,286
    
$
53,772
    
$
108,439
    
$
365,733
    
$
440,834
    
$
45,920
    
$
1,843
    
$
1,276,050
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Agricultural real estate
                                                                        
Risk Rating
                                                                        
Pass
  
$
48,485
    
$
59,073
    
$
28,852
    
$
18,473
    
$
40,251
    
$
140,143
    
$
18,738
    
$
129
    
$
354,144
  
Special Mention
    
623
      
1,189
      
258
      
1,804
      
1,288
      
2,849
      
1,522
      
-
      
9,533
  
Substandard
    
-
      
921
      
610
      
-
      
2,047
      
2,536
      
642
      
72
      
6,828
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
49,108
    
$
61,183
    
$
29,720
    
$
20,277
    
$
43,586
    
$
145,528
    
$
20,902
    
$
201
    
$
370,505
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Construction
                                    

                                 
Risk Rating
                                                                        
Pass
  
$
55,635
    
$
24,203
    
$
4,309
    
$
3,832
    
$
6,074
    
$
-
    
$
4,326
    
$
-
    
$
98,379
  
Special Mention
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Substandard
    
-
      
-
      
-
      
734
      
4,385
      
-
      
-
      
-
      
5,119
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
55,635
    
$
24,203
    
$
4,309
    
$
4,566
    
$
10,459
    
$
-
    
$
4,326
    
$
-
    
$
103,498
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Other commercial loans
                                    

                                 
Risk Rating
                                                                        
Pass
  
$
9,629
    
$
27,380
    
$
22,726
    
$
15,827
    
$
4,493
    
$
7,263
    
$
82,385
    
$
199
    
$
169,902
  
Special Mention
    
-
      
-
      
-
      
-
      
-
      
33
      
1,745
      
-
      
1,778
  
Substandard
    
-
      
-
      
101
      
-
      
3,804
      
744
      
2,648
      
-
      
7,297
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
9,629
    
$
27,380
    
$
22,827
    
$
15,827
    
$
8,297
    
$
8,040
    
$
86,778
    
$
199
    
$
178,977
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
136
    
$
-
    
$
-
    
$
30
    
$
101
    
$
-
    
$
267
  
                                                                         
Other agricultural loans
                                    

                                 
Risk Rating
                                                                        
Pass
  
$
8,623
    
$
4,761
    
$
2,087
    
$
957
    
$
197
    
$
542
    
$
11,954
    
$
-
    
$
29,121
  
Special Mention
    
-
      
13
      
614
      
7
      
-
      
-
      
644
      
-
      
1,278
  
Substandard
    
-
      
-
      
-
      
269
      
425
      
-
      
230
      
-
      
924
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
8,623
    
$
4,774
    
$
2,701
    
$
1,233
    
$
622
    
$
542
    
$
12,828
    
$
-
    
$
31,323
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
State and political subdivision loans
                                    

                                 
Risk Rating
                                                                        
Pass
  
$
34,070
    
$
230
    
$
-
    
$
1,157
    
$
12,023
    
$
34,702
    
$
374
    
$
-
    
$
82,556
  
Special Mention
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Substandard
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
34,070
    
$
230
    
$
-
    
$
1,157
    
$
12,023
    
$
34,702
    
$
374
    
$
-
    
$
82,556
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Total
                                    

                                 
Risk Rating
                                                                        
Pass
  
$
293,665
    
$
237,933
    
$
106,703
    
$
147,355
    
$
389,772
    
$
594,339
    
$
160,260
    
$
2,171
    
$
1,932,198
  
Special Mention
    
623
      
1,202
      
872
      
2,593
      
10,338
      
17,778
      
3,911
      
-
      
37,317
  
Substandard
    
-
      
921
      
5,754
      
1,551
      
40,610
      
17,529
      
6,957
      
72
      
73,394
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
294,288
    
$
240,056
    
$
113,329
    
$
151,499
    
$
440,720
    
$
629,646
    
$
171,128
    
$
2,243
    
$
2,042,909
  
                                       
Revolving
    
Revolving
        
         
Loans
    
Loans
        
                                       
Amortized
    
Converted
        
December 31, 2025
  
2025
    
2024
    
2023
    
2022
    
2021
    
Prior
    
Cost Basis
    
to Term
    
Total
  
Commercial real estate
                                                      
Risk Rating
                                                      
Pass
  
$
127,490
    
$
59,760
    
$
128,989
    
$
329,694
    
$
172,617
    
$
294,237
    
$
34,709
    
$
1,971
    
$
1,149,467
  
Special Mention
    
-
      
5,042
      
797
      
5,784
      
8,770
      
7,208
      
733
      
-
      
28,334
  
Substandard
    
-
      
-
      
1,021
      
24,582
      
3,024
      
9,772
      
2,314
      
-
      
40,713
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
127,490
    
$
64,802
    
$
130,807
    
$
360,060
    
$
184,411
    
$
311,217
    
$
37,756
    
$
1,971
    
$
1,218,514
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
40
    
$
-
    
$
-
    
$
40
  
                                                                         
Agricultural real estate
                                                                        
Risk Rating
                                                                        
Pass
  
$
54,278
    
$
30,648
    
$
18,810
    
$
47,254
    
$
20,747
    
$
139,424
    
$
18,558
    
$
131
    
$
329,850
  
Special Mention
    
55
      
40
      
3,276
      
1,384
      
1,731
      
1,893
      
1,723
      
-
      
10,102
  
Substandard
    
1,297
      
667
      
-
      
2,052
      
657
      
2,103
      
645
      
75
      
7,496
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
55,630
    
$
31,355
    
$
22,086
    
$
50,690
    
$
23,135
    
$
143,420
    
$
20,926
    
$
206
    
$
347,448
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Construction
                                    

                                 
Risk Rating
                                                                        
Pass
  
$
30,394
    
$
15,456
    
$
8,490
    
$
25,772
    
$
-
    
$
-
    
$
5,215
    
$
-
    
$
85,327
  
Special Mention
    
-
      
-
      
-
      
206
      
2,943
      
-
      
-
      
-
      
3,149
  
Substandard
    
-
      
-
      
789
      
4,417
      
283
      
-
      
-
      
-
      
5,489
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
30,394
    
$
15,456
    
$
9,279
    
$
30,395
    
$
3,226
    
$
-
    
$
5,215
    
$
-
    
$
93,965
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Other commercial loans
                                    

                                 
Risk Rating
                                                                        
Pass
  
$
33,300
    
$
27,244
    
$
18,039
    
$
4,938
    
$
6,098
    
$
3,819
    
$
74,628
    
$
232
    
$
168,298
  
Special Mention
    
-
      
-
      
-
      
-
      
-
      
-
      
2,442
      
-
      
2,442
  
Substandard
    
-
      
117
      
-
      
1,784
      
40
      
714
      
4,257
      
1,443
      
8,355
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
66
      
5
      
71
  
Total
  
$
33,300
    
$
27,361
    
$
18,039
    
$
6,722
    
$
6,138
    
$
4,533
    
$
81,393
    
$
1,680
    
$
179,166
  
Current period gross charge-offs
  
$
-
    
$
49
    
$
-
    
$
-
    
$
-
    
$
63
    
$
379
    
$
-
    
$
491
  
                                                                         
Other agricultural loans
                                    

                                 
Risk Rating
                                                                        
Pass
  
$
5,677
    
$
3,520
    
$
1,440
    
$
408
    
$
1,602
    
$
288
    
$
14,761
    
$
-
    
$
27,696
  
Special Mention
    
-
      
936
      
15
      
-
      
-
      
-
      
639
      
-
      
1,590
  
Substandard
    
-
      
-
      
294
      
438
      
-
      
-
      
229
      
-
      
961
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
5,677
    
$
4,456
    
$
1,749
    
$
846
    
$
1,602
    
$
288
    
$
15,629
    
$
-
    
$
30,247
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
State and political subdivision loans
                                    

                                 
Risk Rating
                                                                        
Pass
  
$
1,504
    
$
27
    
$
1,291
    
$
12,737
    
$
9,932
    
$
26,509
    
$
100
    
$
-
    
$
52,100
  
Special Mention
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Substandard
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
1,504
    
$
27
    
$
1,291
    
$
12,737
    
$
9,932
    
$
26,509
    
$
100
    
$
-
    
$
52,100
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Total
                                    

                                 
Risk Rating
                                                                        
Pass
  
$
252,643
    
$
136,655
    
$
177,059
    
$
420,803
    
$
210,996
    
$
464,277
    
$
147,971
    
$
2,334
    
$
1,812,738
  
Special Mention
    
55
      
6,018
      
4,088
      
7,374
      
13,444
      
9,101
      
5,537
      
-
      
45,617
  
Substandard
    
1,297
      
784
      
2,104
      
33,273
      
4,004
      
12,589
      
7,445
      
1,518
      
63,014
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
66
      
5
      
71
  
Total
  
$
253,995
    
$
143,457
    
$
183,251
    
$
461,450
    
$
228,444
    
$
485,967
    
$
161,019
    
$
3,857
    
$
1,921,440
  
For residential real estate mortgage loans, home equity loans, and consumer loans, credit quality is monitored based on whether the loan is performing or non-performing, which is typically based on the aging status of the loan and payment activity, unless a specific action, such as bankruptcy, repossession, death or significant delay in payment occurs to raise awareness of a possible credit event. Non-performing loans include those loans that are considered nonaccrual, described in more detail above, and all loans past due 90 or more days and still accruing. The following tables present the recorded investment in those loan classes based on payment activity, by origination year, as of September 30, 2026 and December 31, 2025 (in thousands):

                                       
Revolving
    
Revolving
        
         
Loans
    
Loans
        
                                       
Amortized
    
Converted
        
September 30, 2026
  
2026
    
2025
    
2024
    
2023
    
2022
    
Prior
    
Cost Basis
    
to Term
    
Total
  
Residential real estate
                                                      
Payment Performance
                                                      
Performing
  
$
11,056
    
$
17,204
    
$
12,383
    
$
21,273
    
$
76,899
    
$
140,644
    
$
-
    
$
-
    
$
279,459
  
Nonperforming
    
-
      
-
      
-
      
-
      
1,262
      
2,361
      
-
      
-
      
3,623
  
Total
  
$
11,056
    
$
17,204
    
$
12,383
    
$
21,273
    
$
78,161
    
$
143,005
    
$
-
    
$
-
    
$
283,082
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Home equity
                                  


                                 
Payment Performance
                                                                        
Performing
  
$
1,080
    
$
2,074
    
$
1,819
    
$
2,111
    
$
1,308
    
$
6,380
    
$
37,777
    
$
446
    
$
52,995
  
Nonperforming
    
-
      
56
      
-
      
-
      
-
      
57
      
-
      
-
      
113
  
Total
  
$
1,080
    
$
2,130
    
$
1,819
    
$
2,111
    
$
1,308
    
$
6,437
    
$
37,777
    
$
446
    
$
53,108
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Consumer
                                  


                                 
Payment Performance
                                                                        
Performing
  
$
2,122
    
$
1,163
    
$
782
    
$
189
    
$
257
    
$
2,344
    
$
1,242
    
$
4
    
$
8,103
  
Nonperforming
    
-
      
-
      
1
      
-
      
-
      
493
      
-
      
-
      
494
  
Total
  
$
2,122
    
$
1,163
    
$
783
    
$
189
    
$
257
    
$
2,837
    
$
1,242
    
$
4
    
$
8,597
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
3
    
$
1
    
$
4
    
$
25
    
$
-
    
$
33
  
                                                                         
Total
                                  


                                 
Payment Performance
                                                                        
Performing
  
$
14,258
    
$
20,441
    
$
14,984
    
$
23,573
    
$
78,464
    
$
149,368
    
$
39,019
    
$
450
    
$
340,557
  
Nonperforming
    
-
      
56
      
1
      
-
      
1,262
      
2,911
      
-
      
-
      
4,230
  
Total
  
$
14,258
    
$
20,497
    
$
14,985
    
$
23,573
    
$
79,726
    
$
152,279
    
$
39,019
    
$
450
    
$
344,787
  

                                                   
Revolving
    
Revolving
          
         
Loans
    
Loans
          
                                                   
Amortized
    
Converted
          
December 31, 2025
    
2025
      
2024
      
2023
      
2022
      
2021
    
Prior
    
Cost Basis
    
to Term
    
Total
  
Residential real estate
                                                                        
Payment Performance
                                                                        
Performing
  
$
13,909
    
$
13,209
    
$
23,135
    
$
81,239
    
$
41,842
    
$
111,948
    
$
-
    
$
-
    
$
285,282
  
Nonperforming
    
-
      
-
      
-
      
1,057
      
1,132
      
1,193
      
-
      
-
      
3,382
  
Total
  
$
13,909
    
$
13,209
    
$
23,135
    
$
82,296
    
$
42,974
    
$
113,141
    
$
-
    
$
-
    
$
288,664
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Home equity
                                    

                                 
Payment Performance
                                                                        
Performing
  
$
2,854
    
$
2,528
    
$
2,533
    
$
1,727
    
$
1,150
    
$
6,918
    
$
34,100
    
$
286
    
$
52,096
  
Nonperforming
    
63
      
-
      
18
      
-
      
-
      
110
      
21
      
-
      
212
  
Total
  
$
2,917
    
$
2,528
    
$
2,551
    
$
1,727
    
$
1,150
    
$
7,028
    
$
34,121
    
$
286
    
$
52,308
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Consumer
                                    

                                 
Payment Performance
                                                                        
Performing
  
$
1,934
    
$
1,050
    
$
373
    
$
354
    
$
412
    
$
2,577
    
$
1,374
    
$
-
    
$
8,074
  
Nonperforming
    
-
      
10
      
-
      
-
      
11
      
764
      
-
      
-
      
785
  
Total
  
$
1,934
    
$
1,060
    
$
373
    
$
354
    
$
423
    
$
3,341
    
$
1,374
    
$
-
    
$
8,859
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
11
    
$
1
    
$
-
    
$
285
    
$
30
    
$
-
    
$
327
  
                                                                         
Total
                                    

                                 
Payment Performance
                                                                        
Performing
  
$
18,697
    
$
16,787
    
$
26,041
    
$
83,320
    
$
43,404
    
$
121,443
    
$
35,474
    
$
286
    
$
345,452
  
Nonperforming
    
63
      
10
      
18
      
1,057
      
1,143
      
2,067
      
21
      
-
      
4,379
  
Total
  
$
18,760
    
$
16,797
    
$
26,059
    
$
84,377
    
$
44,547
    
$
123,510
    
$
35,495
    
$
286
    
$
349,831
  
Aging Analysis of Past Due Loan Receivables

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following table includes an aging analysis of the recorded investment of past due loan receivables as of September 30, 2026 and December 31, 2025 (in thousands):

September 30, 2026
  
30-59 Days
Past Due
    
60-89 Days
Past Due
    
90 Days
Or Greater
    
Total Past
Due
    
Current
    
Total
Loans
Receivables
  
Real estate loans:
                                    
Mortgages
  
$
865
    
$
1,106
    
$
1,290
    
$
3,261
    
$
279,821
    
$
283,082
  
Home Equity
    
186
      
72
      
57
      
315
      
52,793
      
53,108
  
Commercial
    
1,858
      
151
      
30,153
      
32,162
      
1,243,888
      
1,276,050
  
Agricultural
    
730
      
579
      
2,117
      
3,426
      
367,079
      
370,505
  
Construction
    
-
      
-
      
951
      
951
      
102,547
      
103,498
  
Consumer
    
62
      
8
      
493
      
563
      
8,034
      
8,597
  
Other commercial loans
    
246
      
49
      
373
      
668
      
178,309
      
178,977
  
Other agricultural loans
    
356
      
-
      
411
      
767
      
30,556
      
31,323
  
State and political subdivision loans
    
-
      
-
      
-
      
-
      
82,556
      
82,556
  
Total
  
$
4,303
    
$
1,965
    
$
35,845
    
$
42,113
    
$
2,345,583
    
$
2,387,696
  
                                                 
Loans considered non-accrual
  
$
1,398
    
$
174
    
$
35,834
    
$
37,406
    
$
9,666
    
$
47,072
  
Loans still accruing
    
2,905
      
1,791
      
11
      
4,707
      
2,335,917
      
2,340,624
  
Total
  
$
4,303
    
$
1,965
    
$
35,845
    
$
42,113
    
$
2,345,583
    
$
2,387,696
  

December 31, 2025
                                    
Real estate loans:
                                    
Mortgages
  
$
2,737
    
$
1,073
    
$
1,675
    
$
5,485
    
$
283,179
    
$
288,664
  
Home Equity
    
146
      
17
      
181
      
344
      
51,964
      
52,308
  
Commercial
    
1,733
      
2,695
      
9,871
      
14,299
      
1,204,215
      
1,218,514
  
Agricultural
    
1,020
      
158
      
1,982
      
3,160
      
344,288
      
347,448
  
Construction
    
-
      
233
      
283
      
516
      
93,449
      
93,965
  
Consumer
    
1
      
148
      
785
      
934
      
7,925
      
8,859
  
Other commercial loans
    
256
      
49
      
7,500
      
7,805
      
171,361
      
179,166
  
Other agricultural loans
    
17
      
-
      
403
      
420
      
29,827
      
30,247
  
State and political subdivision loans
    
-
      
-
      
-
      
-
      
52,100
      
52,100
  
Total
  
$
5,910
    
$
4,373
    
$
22,680
    
$
32,963
    
$
2,238,308
    
$
2,271,271
  
                                                 
Loans considered non-accrual
  
$
396
    
$
778
    
$
22,451
    
$
23,625
    
$
2,977
    
$
26,602
  
Loans still accruing
    
5,514
      
3,595
      
229
      
9,338
      
2,235,331
      
2,244,669
  
Total
  
$
5,910
    
$
4,373
    
$
22,680
    
$
32,963
    
$
2,238,308
    
$
2,271,271
  

Modifications to Borrowers Experiencing Financial Difficulty

Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses.

In some cases, the Company provides multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.

The following table shows the amortized cost basis by class of loans receivable, information regarding accrual and nonaccrual modified loans to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2026 and during the three and nine months ended September 30, 2025 (dollars in thousands).
Loan Modifications Made to Borrowers Experiencing Financial Difficulty
  
   
Three months ended September 30, 2026
  
   
Number of loans
    
Amortized Cost Basis
    
% of Total Class of Financing Receivable
  
Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
Real estate loans:
              
Commercial
    
4
    
$
6,468
    
0.51
%
Total
    
4
    
$
6,468
    
   

Loan Modifications Made to Borrowers Experiencing Financial Difficulty
  
   
Nine months ended September 30, 2026
  
   
Number of loans
    
Amortized Cost Basis
    
% of Total Class of Financing Receivable
  
Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
Real estate loans:
              
Commercial
    
4
    
$
6,468
      
0.51
%
Total
    
4
    
$
6,468
          
                         
Non-Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
Real estate loans:
                  
Commercial
    
1
    
$
211
      
0.02
%
Other commercial loans
    
2
      
6,256
      
3.50
%
Total
    
3
    
$
6,467
          

Loan Modifications Made to Borrowers Experiencing Financial Difficulty
  
   
Three months ended September 30, 2025
  
   
Number of loans
    
Amortized Cost Basis
    
% of Total Class of Financing Receivable
  
Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
Real estate loans:
              
Commercial
    
7
    
$
13,905
      
1.18
%
Total
    
7
    
$
13,905
          

Loan Modifications Made to Borrowers Experiencing Financial Difficulty
  
   
Nine months ended September 30, 2025
  
   
Number of loans
    
Amortized Cost Basis
    
% of Total Class of Financing Receivable
  
Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
Real estate loans:
              
Mortgages
    
1
    
$
109
      
0.04
%
Commercial
    
7
      
13,905
      
1.18
%
Other commercial loans
    
1
      
179
      
0.10
%
Total
    
9
    
$
14,193
          
                         
Non-Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
Real estate loans:
                  
Commercial
    
3
    
$
1,039
      
0.09
%
Total
    
3
    
$
1,039
          

The following table shows, by class of loans receivable, information regarding the financial effect on accrual and nonaccrual modified loans to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2026 and the three and nine months ended September 30, 2025.
Three months ended September 30, 2026
    
Term Extension
           
Loan Type
  
Number of loans
  
Financial Effect
Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
    
Real estate loans:
         
Commercial
    
4
  
Extended the term of the loan 6 months and provide interest only payments for 4 months
Total
    
4
    

Nine months ended September 30, 2026
    
Term Extension
           
Loan Type
  
Number of loans
  
Financial Effect
Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
    
Real estate loans:
         
Commercial
    
4
  
Extended the term of the loan 6 months and provide interest only payments for 4 months
Total
    
4
    






Non-Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
    
Real estate loans:
           
Commercial
    
1
  
Extended term to 30 years
Other commercial loans
    
2
  
Extended the term five years
Total
    
3
    

Three months ended September 30, 2025
    
Term Extension
           
Loan Type
  
Number of loans
  
Financial Effect
Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
    
Real estate loans:
         
Commercial
    
7
  
Extended the loan maturity one year
Total
    
7
    

Nine months ended September 30, 2025
    
Term Extension
           
Loan Type
  
Number of loans
  
Financial Effect
Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
    
Real estate loans:
         
Mortgages
    
1
  
Extended the loan maturity 5 years with a 30 year amortization
Commercial
    
7
  
Extended the loan maturity one year
Other commercial loans
    
1
  
Extended the loan maturity 10 years as termed out or line of credit
Total
    
9
    
             
Non-Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
    
Real estate loans:
           
Commercial
    
3
  
Extended the loan maturity 5 years with a 30 year amortization
Total
    
3
    

The following presents, by class of loans, the amortized cost and payment status of accruing and nonaccrual modified loans to borrowers experiencing financial difficulty at September 30, 2026 (in thousands):
   
September 30, 2026
  
Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
Current
    
30-89 Days
Past Due
    
90 Days
Or Greater
    
Total
  
Real estate loans:
                        
Commercial
  
$
6,468
    
$
-
    
$
-
    
$
6,468
  

Total
  
$
6,468
    
$
-
    
$
-
    
$
6,468
  
                                 
Non-Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
                  
Real estate loans:
                                
Commercial
  
$
211
      
-
      
-
    
$
211
  
Other commercial loans
    
6,256
      
-
      
-
      
6,256
  

Total
  
$
6,467
    
$
-
    
$
-
    
$
6,467
  

Foreclosed Assets Held For Sale

Foreclosed assets acquired in settlement of loans are carried at fair value, less estimated costs to sell, and are included in other assets on the Consolidated Balance Sheet. As of September 30, 2026 and December 31, 2025, included within other assets are $4,461,000 of foreclosed assets. As of September 30, 2026, there are $1,836,000 of consumer residential mortgages included within foreclosed assets. As of September 30, 2026, the Company had initiated formal foreclosure proceedings on $1,330,000 of residential mortgage loans, the collateral properties of which have not yet been transferred into foreclosed assets.