v3.26.3
Portfolio Loans Receivable and Allowance for Credit Losses
 9 Months Ended
Sep. 30, 2026
Receivables [Abstract]  
Portfolio Loans Receivable and Allowance for Credit Losses
Note 6 - Portfolio Loans Receivable and Allowance for Credit Losses
The following is a summary of the major categories of total loans outstanding:
September 30, 2026December 31, 2025
(in thousands)AmountPercentAmountPercent
Real estate:
Residential$784,220 25 %$765,808 26 %
Commercial1,024,754 33 997,081 34 
Construction380,688 12 359,566 12 
Commercial and Industrial774,297 25 698,289 23 
Credit card, net of reserve(1)
149,184 5 142,397 5 
Other consumer5,539 — 1,930 — 
Portfolio loans receivable, gross3,118,682 100 %2,965,071 100 %
Deferred origination fees, net(4,418)(5,614)
Allowance for credit losses(55,493)(54,660)
Portfolio loans receivable, net$3,058,771 $2,904,797 
_______________
(1)    Credit card loans are presented net of reserve for interest and fees.
The following tables set forth the changes in the ACL by loan segment class for the three and nine months ended September 30, 2026 and September 30, 2025.
(in thousands)Beginning
Balance		Provision (Release of Provision) for
Credit Losses		Charge-OffsRecoveriesEnding
Balance
Three Months Ended September 30, 2026
Real estate:
Residential$7,727 $(296)$(174)$2 $7,259 
Commercial14,387 (508)— — 13,879 
Construction4,930 501 — — 5,431 
Commercial and Industrial18,474 1,605 (471)— 19,608 
Credit card8,904 3,587 (3,198)— 9,293 
Other consumer9 14 — — 23 
Total$54,431 $4,903 $(3,843)$2 $55,493 
Nine Months Ended September 30, 2026
Real estate:
Residential$7,444 $(7)$(180)$2 $7,259 
Commercial14,917 (1,038)— — 13,879 
Construction4,250 1,564 (383)— 5,431 
Commercial and Industrial19,818 684 (1,639)745 19,608 
Credit card8,226 10,281 (9,220)6 9,293 
Other consumer5 18 — — 23 
Total$54,660 $11,502 $(11,422)$753 $55,493 
(in thousands)Beginning
Balance		Measurement Period Adjustment for Acquired PCD LoansProvision (Release of Provision) for
Credit Losses		Charge-OffsRecoveriesEnding
Balance
Three Months Ended September 30, 2025
Real estate:
Residential$6,772 $— $249 $— $7 $7,028 
Commercial14,262 — 603 — — 14,865 
Construction3,410 — 321 — — 3,731 
Commercial and Industrial16,249 3,424 680 (336)— 20,017 
Credit card6,749 — 2,797 (2,156)9 7,399 
Other consumer5 — — — — 5 
Total$47,447 $3,424 $4,650 $(2,492)$16 $53,045 
Nine Months Ended September 30, 2025
Real estate:
Residential$6,945 $— $76 $(1)$8 $7,028 
Commercial16,041 — 519 (1,695)— 14,865 
Construction2,973 — 1,022 (264)— 3,731 
Commercial and Industrial16,377 3,424 1,764 (1,597)49 20,017 
Credit card6,301 — 7,606 (6,524)16 7,399 
Other consumer15 — (10)— — 5 
Total$48,652 $3,424 $10,977 $(10,081)$73 $53,045 
Past due loans, segregated by age and class of loans, as of September 30, 2026 and December 31, 2025 were as follows:
Portfolio Loans Past Due
Loans
30-59 Days
Past Due		Loans
60-89 Days
Past Due		Loans
90 or More
Days
Past Due		Total Past
Due Loans		Current
Loans		Total
Portfolio
Loans		Accruing
Loans 90 or
More Days
Past Due		Nonaccrual
Loans
(in thousands)
September 30, 2026
Real estate:
Residential$9,022 $2,603 $4,791 $16,416 $767,804 $784,220 $— $4,790 
Commercial8,839 552 12,535 21,926 1,002,828 1,024,754 297 12,505 
Construction— 2,234 14,403 16,637 364,051 380,688 360 14,044 
Commercial and Industrial5,580 1,753 20,843 28,176 746,121 774,297 904 25,017 
Credit card8,077 7,198 3,233 18,508 130,676 149,184 3,233 — 
Other consumer— — — — 5,539 5,539 — — 
Total$31,518 $14,340 $55,805 $101,663 $3,017,019 $3,118,682 $4,794 $56,356 
Loans
30-59 Days
Past Due		Loans
60-89 Days
Past Due		Loans
90 or More
Days
Past Due		Total Past
Due Loans		Current
Loans		Total
Portfolio
Loans		Accruing
Loans 90 or
More Days
Past Due		Nonaccrual
Loans
December 31, 2025
Real estate:
Residential$3,886 $573 $8,480 $12,939 $752,869 $765,808 $740 $7,741 
Commercial8,148 1,166 15,660 24,974 972,107 997,081 862 15,624 
Construction2,591 — 4,717 7,308 352,258 359,566 — 4,717 
Commercial and Industrial3,501 5,134 22,496 31,131 667,158 698,289 279 26,339 
Credit card7,555 6,887 2,691 17,133 125,264 142,397 2,691 — 
Other consumer— — — — 1,930 1,930 — — 
Total$25,681 $13,760 $54,044 $93,485 $2,871,586 $2,965,071 $4,572 $54,421 
There were $10.4 million and $6.1 million of loans secured by one-to-four family residential properties in the process of foreclosure as of September 30, 2026 and December 31, 2025, respectively.
The following presents the nonaccrual loans as of September 30, 2026 and December 31, 2025:
September 30, 2026
Nonaccrual with No Allowance for Credit LossNonaccrual with an Allowance for Credit LossTotal Nonaccrual Loans
(in thousands)
Real estate:
Residential$4,417 $373 $4,790 
Commercial8,171 4,334 12,505 
Construction$8,730 $5,314 $14,044 
Commercial and Industrial4,180 20,837 25,017 
Total$25,498 $30,858 $56,356 
December 31, 2025
Nonaccrual with No Allowance for Credit LossNonaccrual with an Allowance for Credit LossTotal Nonaccrual Loans
Real estate:
Residential$7,435 $306 $7,741 
Commercial10,159 5,465 15,624 
Construction4,717 — 4,717 
Commercial and Industrial6,907 19,432 26,339 
Total$29,218 $25,203 $54,421 
The Company has certain loans for which repayment is dependent upon the operation or sale of collateral, as the borrower is experiencing financial difficulty. The underlying collateral can vary based upon the type of loan. The following provides more detail about the types of collateral that secure collateral dependent loans:
•Residential real estate loans are primarily secured by owner-occupied primary residences and, to a lesser extent, investor-owned residences.
•Commercial real estate loans can be secured by either owner-occupied commercial real estate or non-owner-occupied investment commercial real estate. Typically, owner-occupied commercial real estate loans are secured by office buildings, warehouses, manufacturing facilities and other commercial and industrial properties occupied by operating companies. Non-owner-occupied commercial real estate loans are generally secured by office buildings and complexes, retail facilities, multifamily complexes, land under development and/or industrial properties, as well as other commercial or industrial real estate.
•Construction loans are typically secured by owner-occupied commercial real estate or non-owner-occupied investment real estate. Typically, owner-occupied construction loans are secured by office buildings, warehouses, manufacturing facilities, and other commercial and industrial properties that are in process of construction. Non-owner-occupied commercial construction loans are generally secured by office buildings and complexes, multi-family complexes, land under development and/or other commercial and industrial real estate in process of construction.
•Commercial and industrial loans are generally secured by equipment, inventory, accounts receivable and/or other commercial property.
Collateral dependent loans amortized cost
(in thousands)September 30, 2026December 31, 2025
Real estate:
Residential$4,052 $6,449 
Commercial11,612 15,653 
Construction13,320 5,079 
Commercial and Industrial16,364 18,605 
Total$45,348 $45,786 
Of the collateral dependent loans as of September 30, 2026, a specific reserve of $0.1 million, $0.5 million, $0.9 million and $4.5 million was assessed for residential real estate, commercial real estate, construction and commercial and industrial loans, respectively. Of the collateral dependent loans as of December 31, 2025, a specific reserve of $40 thousand, $1.3 million and $4.2 million was assessed for residential real estate, commercial real estate and commercial and industrial loans. There was no specific reserve for construction loans.
The Company made five loan modifications on loans to borrowers experiencing financial difficulty during the three months ended September 30, 2026 as follows:
Modifications
(in thousands)Amortized Cost Basis% of Total Loan TypeFinancial Effect
Real estate:
Commercial$267 0.026 %
For one loan, a payment deferral of 9 months, after which payments resume on a fully amortizing basis.
Commercial and Industrial958 0.124 %
For two loans, reduced contractual interest rate from 9.500% to 6.000% for a modification period of 6.5 months, after which payments resume on a fully amortizing principal and interest basis for the remaining term.
For one loan, a payment deferral of 6 months, after which payments resume on a fully amortizing principal and interest basis for the remaining term.
For one loan, restructured payment terms for an interest-only payment period of 6 months, followed by a return to fully amortizing principal and interest payments under contractual terms.
Total$1,225 
The Company made seventeen loan modifications on loans to borrowers experiencing financial difficulty during the nine months ended September 30, 2026 as follows:
Modifications
(in thousands)Amortized Cost Basis% of Total Loan TypeFinancial Effect
Real estate:
Commercial$5,246 0.512 %
For one loan, a payment deferral of 9 months, after which payments resume on a fully amortizing basis.
For two loans, contractual interest rates were reduced from 9.500% and 9.000% to 6.000% and 6.000% for a modification period of 18 months. The modifications also include a cash flow recapture mechanism intended to recover interest income forgone during the modification period.
For two loans, restructured payment terms for 8 months, after which payments resume on a fully amortizing principal and interest basis for the remaining term.
Commercial and Industrial6,987 0.902 %
For two loans, reduced contractual interest rate based from 9.500% to 6.000% for a modification period of 6.5 months, after which payments resume on a fully amortizing principal and interest basis for the remaining term.
For one loan, a payment deferral of 6 months, after which payments resume on a fully amortizing principal and interest basis for the remaining term.
For one loan, restructured payment terms for an interest-only payment period of 6 months, followed by a return to fully amortizing principal and interest payments under contractual terms.
For one loan, the contractual interest rate was reduced from 8.250% to 6.000% for a modification period of 18 months. The modification also includes a cash flow recapture mechanism intended to recover interest income forgone during the modification period.
For one loan, restructured payment terms for 8 months, after which payments resume on a fully amortizing principal and interest basis for the remaining term.
For one loan, a payment deferral of 6 months followed by modified payments for 15 months, after which payments resume on a fully amortizing principal and interest basis for the remaining term.
For two loans, a payment deferral of 3 months and subsequent 4 months interest-only payment period, followed by a return to fully amortizing principal and interest payments under original contractual terms.
For one loan, a payment deferral of 4 months and reduced contractual floating interest rate based on Prime to 7.000% fixed rate for 6 months.
For one loan, a payment deferral of 6 months.
For one loan, a payment deferral of 7 months.
Total$12,233 
The Company made no loan modifications on loans to borrowers experiencing financial difficulty during the three months ended September 30, 2025. The Company made one loan modification on loans to borrowers experiencing financial difficulty during the nine months ended September 30, 2025.
(in thousands)Amortized Cost Basis% of Total Loan TypeFinancial Effect
Real estate:
Commercial and Industrial$44 0.007 %Extended maturity date of one loan which reduced monthly payment amount for the borrower.
Total$44 
The following table presents the payment status of loans that have been modified in the last twelve months:
September 30, 2026
Past DuePast Due
(in thousands)Current30-89 Days90 Days or MoreNonaccrualTotal
Real estate:
Commercial$3,182 $— $— $3,736 $6,918 
Commercial and Industrial 5 571 — 5,726 6,302 
$3,187 $571 $— $9,462 $13,220 
Credit quality indicators
As part of the ongoing monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to the risk grade of loans, the level of classified loans, net charge-offs, nonperforming loans, and general economic conditions in the Company’s market. From a credit risk standpoint, the Company utilizes a risk grading matrix to assign a risk grade to each of its loans. The classifications of loans reflect a judgment about the risk of expected credit loss associated with each loan. Credit quality indicators are reviewed and adjusted regularly to account for the degree of risk and expected credit loss that the Company believes to be appropriate for each financial asset.
A description of the general risk ratings are described as follows:
Pass
Loans characterized as pass includes loans graded exceptional, very good, good, satisfactory and pass/watch. The Company believes that there is a low likelihood of credit deterioration related to those loans that are considered pass.
Special mention
A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.
Borrowers may exhibit poor liquidity and leverage positions resulting from generally negative cash flow or negative trends in earnings. Access to alternative financing may be limited to finance companies for business borrowers and may be unavailable for commercial real estate borrowers.
Substandard
A substandard loan is inadequately protected by the current financial condition and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.
Borrowers may exhibit recent or unexpected unprofitable operations, an inadequate debt service coverage ratio, or marginal liquidity and capitalization. These loans require more intense supervision by Company management.
Doubtful
A doubtful loan has all the weaknesses associated with a substandard loan 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.
Ungraded
Ungraded loans represent credit card loans not included in the individual credit grading process due to the borrower type. The credit quality indicator for credit card loans is based on the delinquency status of the borrower as of the date presented.
The following table presents the balances of classified loans based on the most recent credit quality indicator analysis. Classified loans include Special Mention, Substandard and Doubtful loans. Pass classified loans include loans graded exceptional, very good, good, satisfactory, and pass/watch. Credit card loans are ungraded as they are not individually graded. Charge-offs presented represent gross charge-offs recognized in the current period:
September 30, 2026Term Loans by Origination Year
(in thousands)20262025202420232022PriorRevolvingTotal
Residential – Real estate
Pass$135,401 $173,398 $100,822 $88,216 $95,025 $181,312 $— $774,174 
Special Mention— — 355 2,573 — 1,244 — 4,172 
Substandard— — — — 132 5,742 — 5,874 
Doubtful— — — — — — — — 
Total135,401 173,398 101,177 90,789 95,157 188,298 — 784,220 
Commercial – Real estate
Pass124,110 194,692 197,462 48,839 101,660 290,884 — 957,647 
Special Mention— — — 2,300 38,107 7,840 — 48,247 
Substandard— — — 5,865 5,039 7,956 — 18,860 
Doubtful— — — — — — — — 
Total124,110 194,692 197,462 57,004 144,806 306,680 — 1,024,754 
Construction – Real estate
Pass84,765 125,442 58,344 35,144 34,833 17,518 — 356,046 
Special Mention— — — 1,000 — 6,030 — 7,030 
Substandard— 372 5,946 7,163 — 4,131 — 17,612 
Doubtful— — — — — — — — 
Total84,765 125,814 64,290 43,307 34,833 27,679 — 380,688 
Commercial and Industrial
Pass175,282 170,580 132,168 56,412 79,772 122,731 — 736,945 
Special Mention1,545 — — 3,003 — 3,769 — 8,317 
Substandard— 2,092 851 13,050 1,724 11,318 — 29,035 
Doubtful— — — — — — — — 
Total176,827 172,672 133,019 72,465 81,496 137,818 — 774,297 
Other consumer
Pass4,117 336 949 — 26 111 — 5,539 
Special Mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Total4,117 336 949 — 26 111 — 5,539 
Credit card
Ungraded— — — — — — 149,184 149,184 
Portfolio loans receivable, gross$525,220 $666,912 $496,897 $263,565 $356,318 $660,586 $149,184 $3,118,682 
September 30, 2026
(in thousands)20262025202420232022PriorRevolvingTotal
Gross Charge-Offs
Residential real estate$— $— $— $— $174 $6 $— $180 
Commercial real estate— — — — — — — — 
Construction— — — — 27 356 — 383 
Commercial and Industrial— 214 183 352 649 241 — 1,639 
Credit card— — — — — — 9,220 9,220 
Total$— $214 $183 $352 $850 $603 $9,220 $11,422 
December 31, 2025Term Loans by Origination Year
(in thousands)20252024202320222021PriorRevolvingTotal
Residential – Real estate
Pass$217,066 $110,098 $99,956 $101,423 $68,092 $153,724 $— $750,359 
Special Mention— — 1,992 1,882 1,236 3,567 — 8,677 
Substandard— 287 — 132 792 5,561 — 6,772 
Doubtful— — — — — — — — 
Total217,066 110,385 101,948 103,437 70,120 162,852 — 765,808 
Commercial – Real estate
Pass197,639 206,587 56,303 126,746 125,612 218,736 — 931,623 
Special Mention— — 2,300 39,276 4,933 2,820 — 49,329 
Substandard— 86 5,957 5,860 1,744 2,482 — 16,129 
Doubtful— — — — — — — — 
Total197,639 206,673 64,560 171,882 132,289 224,038 — 997,081 
Construction – Real estate
Pass110,320 94,973 77,852 41,729 7,198 18,856 — 350,928 
Special Mention— — 1,000 — 724 — — 1,724 
Substandard— — 255 2,197 1,536 2,926 — 6,914 
Doubtful— — — — — — — — 
Total110,320 94,973 79,107 43,926 9,458 21,782 — 359,566 
Commercial and Industrial
Pass210,890 146,107 94,365 91,066 30,540 95,813 — 668,781 
Special Mention— — — 320 — 221 — 541 
Substandard— 892 14,941 2,414 5,401 5,319 — 28,967 
Doubtful— — — — — — — — 
Total210,890 146,999 109,306 93,800 35,941 101,353 — 698,289 
Other consumer
Pass760 963 — 46 40 121 — 1,930 
Special Mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Total760 963 — 46 40 121 — 1,930 
Credit card
Ungraded— — — — — — 142,397 142,397 
Portfolio loans receivable, gross$736,675 $559,993 $354,921 $413,091 $247,848 $510,146 $142,397 $2,965,071 
December 31, 2025
(in thousands)20252024202320222021PriorRevolvingTotal
Gross Charge-Offs
Residential real estate$— $— $— $— $— $— $— $— 
Commercial real estate— — — 197 — 1,695 — 1,892 
Construction— — — — — 264 — 264 
Commercial and Industrial— 101 2,339 347 8 625 — 3,420 
Credit card— — — — — — 9,036 9,036 
Total$— $101 $2,339 $544 $8 $2,584 $9,036 $14,612 
Outstanding loan commitments were as follows:
(in thousands)September 30, 2026December 31, 2025
Unused lines of credit on portfolio loans held for investment
Real Estate:
Residential$14,018 $22,858 
Residential - Home Equity39,793 41,864 
Commercial37,102 69,887 
Construction112,417 91,203 
Commercial and Industrial103,177 90,990 
Credit card(1)
150,980 138,632 
Other consumer235 232 
Total$457,722 $455,666 
Unused lines of credit on loans reclassified to held for sale (pending branch sale)
Real Estate:
Residential$593 $— 
Residential - Home Equity789 
Commercial1,351 — 
Commercial and Industrial94 — 
Total$2,827 $— 
Letters of credit$1,797 $1,633 
_______________
(1)Outstanding loan commitments in the credit card portfolio include $97.7 million and $95.9 million in secured and partially secured balances as of September 30, 2026 and December 31, 2025, respectively.

Lines of credit are agreements to lend to a customer as long as there is no violation of any condition of the contract. Lines of credit generally have variable interest rates. Such lines do not represent future cash requirements because it is unlikely that all customers will, at any given time, draw upon their lines in full. Loan commitments generally have variable interest rates, fixed expiration dates, and may require payment of a fee.
The Company's maximum exposure to credit loss in the event of nonperformance by the customer is the contractual amount of the credit commitment. Loan commitments and lines of credit are generally made on the same terms, including with regard to collateral, as outstanding loans. Management is not aware of any accounting loss to be incurred by funding these loan commitments.
The Company maintains an estimated reserve for unfunded commitments and certain off-balance sheet items such as unfunded lines of credit, which is reflected in other liabilities, with increases or decreases in the reserve being charged to or released from operating expense. Activity for this account is as follows for the periods presented:
Three months endedNine months ended
(in thousands)September 30, 2026September 30, 2025September 30, 2026September 30, 2025
Balance at beginning of period$1,649 $1,191 $1,379 $1,191 
Provision for (release of) credit losses on unfunded commitments(54)217 216 217 
Balance at end of period$1,595 $1,408 $1,595 $1,408 
The Company makes representations and warranties that loans sold to investors meet the investors’ program guidelines and that the information provided by the borrowers is accurate and complete. In the event of a default on a loan sold, the investor may have the right to make a claim for losses due to document deficiencies, program non-compliance, early payment default, and fraud or borrower misrepresentations.
The Company maintains a reserve for potential losses on mortgage loans and USDA/SBA loans sold, which is reflected in other liabilities, with changes being charged to or released from operating expense. Activity in this reserve is as follows for the periods presented:
Three months endedNine months ended
(in thousands)September 30, 2026September 30, 2025September 30, 2026September 30, 2025
Balance at beginning of period$1,465 $2,294 $2,339 $2,260 
Reserve utilization— — (916)— 
Provision for put-back reserve15 19 57 53 
Balance at end of period$1,480 $2,313 $1,480 $2,313