v3.26.3
Allowance for Credit Losses
 9 Months Ended
Sep. 30, 2026
Allowance for Credit Loss [Abstract]  
Allowance for Credit Losses Allowance for Credit Losses
The ACL is maintained at a level considered adequate to provide for estimated expected credit losses within the loan portfolio over the contractual life of an instrument that considers our historical loss experience, current conditions and forecasts of future economic conditions as of the balance sheet date. Management’s periodic evaluation of the adequacy of the ACL is based on known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is subjective as it requires material estimates that may be susceptible to significant revisions as more information becomes available.
Roll-Forward of ACL by Portfolio Segment
The following tables provide the activity of our allowance for credit losses for the three and nine months ended September 30, 2026 and September 30, 2025 under the CECL model in accordance with ASC 326:
Three Months Ended September 30, 2026
(dollars in thousands)Beginning BalanceCharge-offsRecoveriesProvision (recovery of provision) for credit lossesEnding balance
Commercial mortgage$4,431 $(5)$— $272 $4,698 
Home equity lines and loans1,204 — 2 (85)1,121 
Residential mortgage986 — — (119)867 
Construction and land development2,233 — — 12 2,245 
Commercial, industrial & other finance receivables2,947 (1,282)292 1,056 3,013 
Small business loans8,575 (935)269 31 7,940 
Consumer— (2)1 1 — 
Leases1,087 (413)175 (43)806 
Total$21,463 $(2,637)$739 $1,125 $20,690 

Nine Months Ended September 30, 2026
(dollars in thousands)Beginning BalanceCharge-offsRecoveriesProvision (recovery of provision) for credit lossesEnding balance
Commercial mortgage$3,676 $(3,872)$— $4,894 $4,698 
Home equity lines and loans1,162 — 56 (97)1,121 
Residential mortgage926 — — (59)867 
Construction and land development2,067 — — 178 2,245 
Commercial, industrial & other finance receivables2,982 (4,463)594 3,900 3,013 
Small business loans9,321 (3,898)340 2,177 7,940 
Consumer— (6)3 3 — 
Leases1,439 (1,613)620 360 806 
Total$21,573 $(13,852)$1,613 $11,356 $20,690 
Three Months Ended September 30, 2025
(dollars in thousands)Beginning BalanceCharge-offsRecoveriesProvision (recovery of provision) for credit lossesEnding balance
Commercial mortgage$3,411 $— $— $385 $3,796 
Home equity lines and loans1,264 — 1 76 1,341 
Residential mortgage1,097 — — 208 1,305 
Construction and land development1,581 — — 224 1,805 
Commercial, industrial & other finance receivables3,653 (847)55 975 3,836 
Small business loans7,837 (997)4 1,462 8,306 
Consumer— (4)1 3 — 
Leases2,008 (273)153 (483)1,405 
Total$20,851 $(2,121)$214 $2,850 $21,794 


Nine Months Ended September 30, 2025
(dollars in thousands)Beginning BalanceCharge-offsRecoveriesProvision (recovery of provision) for credit lossesEnding balance
Commercial mortgage$3,469 $— $— $327 $3,796 
Home equity lines and loans1,147 — 4 190 1,341 
Residential mortgage1,021 — 2 282 1,305 
Construction and land development923 (738)— 1,620 1,805 
Commercial, industrial & other finance receivables3,098 (3,135)83 3,790 3,836 
Small business loans6,304 (3,426)36 5,392 8,306 
Consumer— (11)3 8 — 
Leases2,476 (1,798)641 86 1,405 
Total$18,438 $(9,108)$769 $11,695 $21,794 
Reconciliation of Provision for Credit Losses
The following table provides a reconciliation of the provision for credit losses on the consolidated statements of income between the funded and unfunded components at the dates indicated:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(dollars in thousands)2026202520262025
Provision for credit losses - funded loans$1,125 $2,850 $11,356 $11,695 
Provision for credit losses - unfunded loans5 — 235 170 
Total provision for credit losses$1,130 $2,850 $11,591 $11,865 
Allowance Allocated by Portfolio Segment
The following tables detail the allocation of the ACL and the carrying value for loans and other finance receivables by portfolio segment based on the methodology used to evaluate the loans and other finance receivables at the dates indicated:
September 30, 2026
Allowance for credit lossesCarrying value of loans and leases
(dollars in thousands)Individually evaluated Collectively evaluated TotalIndividually evaluated Collectively evaluated Total
Commercial mortgage$— $4,698 $4,698 $11,428 $886,372 $897,800 
Home equity lines and loans11 1,110 1,121 1,564 115,502 117,066 
Residential mortgage (1)
178 689 867 5,849 206,390 212,239 
Construction and land development294 1,951 2,245 24,955 317,638 342,593 
Commercial, industrial & other finance receivables263 2,750 3,013 6,905 429,025 435,930 
Small business loans2,272 5,668 7,940 23,583 90,303 113,886 
Consumer— — — — 336 336 
Leases, net— 806 806 — 28,706 28,706 
Total (2)
$3,018 $17,672 $20,690 $74,284 $2,074,272 $2,148,556 
(1) Excludes $13.3 million of loans at fair value.
(2) Excludes deferred fees.


December 31, 2025
Allowance for credit lossesCarrying value of loans and leases
(dollars in thousands)Individually evaluated Collectively evaluated TotalIndividually evaluated Collectively evaluated Total
Commercial mortgage$— $3,676 $3,676 $2,472 $876,968 $879,440 
Home equity lines and loans— 1,162 1,162 2,023 104,979 107,002 
Residential mortgage (1)
122 804 926 9,875 211,864 221,739 
Construction and land development331 1,736 2,067 6,650 323,893 330,543 
Commercial, industrial & other finance receivables— 2,982 2,982 6,770 422,211 428,981 
Small business loans2,986 6,335 9,321 24,781 114,984 139,765 
Consumer— — — — 329 329 
Leases, net— 1,439 1,439 — 45,489 45,489 
Total (2)
$3,439 $18,134 $21,573 $52,571 $2,100,717 $2,153,288 
(1) Excludes $14.4 million of loans at fair value.
(2) Excludes deferred fees.

Credit Quality Indicators
As part of the process of determining the ACL to the different segments of the loan and lease portfolio, Management considers certain credit quality indicators. For the commercial mortgage, construction and commercial and industrial loan segments, periodic reviews of the individual loans are performed by Management. The results of these reviews are reflected in the risk grade assigned to each loan. These internally assigned grades are as follows:

•Pass/Watch – Considered to be satisfactory with no indications of deterioration.
•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 or of the institution’s credit position at some future date.
•Substandard – Loans classified as substandard are inadequately protected by the current net worth and payment 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 institution will sustain some loss if the deficiencies are not corrected.
•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. Loan balances classified as doubtful have been reduced by partial charge-offs and are carried at their net realizable values.

The following tables detail the carrying value of loans and other finance receivables by portfolio segment based on year of origination and the credit quality indicators used to determine the allowance for credit losses at the dates indicated:

September 30, 2026Revolving Loans Converted to Term LoansRevolving LoansTotal
Term Loans and Other Finance Receivables
(dollars in thousands)20262025202420232022Prior
Commercial mortgage
Pass/Watch$58,012 $126,449 $130,220 $96,290 $156,740 $291,736 $— $7 $859,454 
Special Mention— — — 10,959 244 6,365 — — 17,568 
Substandard— 5,022 1,873 — 5,412 8,471 — — 20,778 
Total$58,012 $131,471 $132,093 $107,249 $162,396 $306,572 $— $7 $897,800 
Year-to-date gross charge-offs$— $— $— $(5)$(3,867)$— $— $— $(3,872)
Construction and land development
Pass/Watch$56,325 $127,780 $75,042 $9,937 $3,265 $5,259 $— $27,650 $305,258 
Special Mention— — — — — 6,116 — 6,264 12,380 
Substandard854 1,430 9,011 1,185 9,096 990 — 2,389 24,955 
Total$57,179 $129,210 $84,053 $11,122 $12,361 $12,365 $— $36,303 $342,593 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $— $— 
Commercial, industrial & other finance receivables
Pass/Watch$51,908 $63,825 $59,957 $12,577 $14,347 $26,929 $— $183,083 $412,626 
Special Mention— — — — — 554 — 8,245 8,799 
Substandard— 670 — 850 — 6,092 — 6,893 14,505 
Total$51,908 $64,495 $59,957 $13,427 $14,347 $33,575 $— $198,221 $435,930 
Year-to-date gross charge-offs$(107)$(2,835)$(244)$— $— $(125)$— $(1,152)$(4,463)
Small business loans
Pass/Watch$5,549 $17,805 $12,972 $12,789 $12,465 $15,219 $— $7,311 $84,110 
Special Mention— 900 — 826 — 676 — 89 2,491 
Substandard— 3,362 1,891 4,247 2,480 11,195 — 4,110 27,285 
Total$5,549 $22,067 $14,863 $17,862 $14,945 $27,090 $— $11,510 $113,886 
Year-to-date gross charge-offs$— $(1,152)$(1,315)$(319)$(247)$(334)$— $(531)$(3,898)
Total by risk rating
Pass/Watch$171,794 $335,859 $278,191 $131,593 $186,817 $339,143 $— $218,051 $1,661,448 
Special Mention— 900 — 11,785 244 13,711 — 14,598 41,238 
Substandard854 10,484 12,775 6,282 16,988 26,748 — 13,392 87,523 
Total$172,648 $347,243 $290,966 $149,660 $204,049 $379,602 $— $246,041 $1,790,209 
Total year-to-date gross charge-offs$(107)$(3,987)$(1,559)$(324)$(4,114)$(459)$— $(1,683)$(12,233)
December 31, 2025Revolving Loans Converted to Term LoansRevolving LoansTotal
Term Loans and Other Finance Receivables
(dollars in thousands)20252024202320222021Prior
Commercial mortgage
Pass/Watch$116,630 $116,852 $102,516 $162,329 $127,627 $227,348 $— $— $853,302 
Special Mention— — 4,487 1,474 — 4,159 — — 10,120 
Substandard— — 1,029 8,074 — 6,915 — — 16,018 
Total$116,630 $116,852 $108,032 $171,877 $127,627 $238,422 $— $— $879,440 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $— $— 
Construction and land development
Pass/Watch$117,778 $118,733 $19,858 $9,212 $3,373 $8,263 $— $29,906 $307,123 
Special Mention— — 6,245 — — — — — 6,245 
Substandard1,430 211 1,185 9,096 1,826 492 — 2,935 17,175 
Total$119,208 $118,944 $27,288 $18,308 $5,199 $8,755 $— $32,841 $330,543 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $(738)$(738)
Commercial, industrial & other finance receivables
Pass/Watch$84,183 $62,904 $16,119 $17,270 $9,224 $21,836 $— $193,356 $404,892 
Special Mention— — — 145 3,857 — — 4,608 8,610 
Substandard— — 850 — 523 5,360 — 8,746 15,479 
Total$84,183 $62,904 $16,969 $17,415 $13,604 $27,196 $— $206,710 $428,981 
Year-to-date gross charge-offs$(739)$(1,487)$(160)$(23)$(1,089)$— $— $(1,290)$(4,788)
Small business loans
Pass/Watch$29,760 $17,403 $17,955 $16,903 $9,448 $8,935 $— $10,713 $111,117 
Special Mention— 477 134 — — — — 140 751 
Substandard2,567 2,127 3,893 874 10,523 4,002 — 3,911 27,897 
Total$32,327 $20,007 $21,982 $17,777 $19,971 $12,937 $— $14,764 $139,765 
Year-to-date gross charge-offs$(1,211)$(433)$(550)$(233)$(692)$(1,057)$— $(813)$(4,989)
Total by risk rating
Pass/Watch$348,351 $315,892 $156,448 $205,714 $149,672 $266,382 $— $233,975 $1,676,434 
Special Mention— 477 10,866 1,619 3,857 4,159 — 4,748 25,726 
Substandard3,997 2,338 6,957 18,044 12,872 16,769 — 15,592 76,569 
Total$352,348 $318,707 $174,271 $225,377 $166,401 $287,310 $— $254,315 $1,778,729 
Total year-to-date gross charge-offs$(1,950)$(1,920)$(710)$(256)$(1,781)$(1,057)$— $(2,841)$(10,515)

The Corporation had no loans with a risk rating of Doubtful included within recorded investment in loans and leases held for investment at September 30, 2026 and December 31, 2025.
In addition to credit quality indicators as shown in the above tables, allowance allocations for home equity lines and loans, residential mortgages, consumer loans and leases are also applied based on their year of origination and performance status at the dates indicated:

September 30, 2026Revolving LoansTotal
Term Loans
(dollars in thousands)20262025202420232022Prior
Home equity lines and loans
Performing$73 $952 $548 $122 $372 $2,896 $110,539 $115,502 
Nonperforming— 88 96 — — 433 947 1,564 
Total$73 $1,040 $644 $122 $372 $3,329 $111,486 $117,066 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $— 
Residential mortgage (1)
Performing$8,862 $22,861 $5,783 $22,639 $115,837 $27,936 $— $203,918 
Nonperforming (2)
— — 722 607 2,595 4,397 — 8,321 
Total$8,862 $22,861 $6,505 $23,246 $118,432 $32,333 $— $212,239 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $— 
Consumer
Performing$47 $— $— $16 $4 $176 $93 $336 
Nonperforming— — — — — — — — 
Total$47 $— $— $16 $4 $176 $93 $336 
Year-to-date gross charge-offs$— $— $— $— $— $— $(6)$(6)
Leases, net
Performing$4,767 $4,784 $301 $6,137 $9,873 $1,587 $— $27,449 
Nonperforming25 93 — 419 679 41 — 1,257 
Total$4,792 $4,877 $301 $6,556 $10,552 $1,628 $— $28,706 
Year-to-date gross charge-offs$(18)$(113)$— $(391)$(723)$(368)$— $(1,613)
Total by Payment Performance
Performing$13,749 $28,597 $6,632 $28,914 $126,086 $32,595 $110,632 $347,205 
Nonperforming25 181 818 1,026 3,274 4,871 947 11,142 
Total$13,774 $28,778 $7,450 $29,940 $129,360 $37,466 $111,579 $358,347 
Total year-to-date gross charge-offs$(18)$(113)$— $(391)$(723)$(368)$(6)$(1,619)
(1) Excludes $13.3 million of loans at fair value.
(2) Includes non-accrual loans and a loan 90+ days past due and still accruing
December 31, 2025Revolving LoansTotal
Term Loans
(dollars in thousands)20252024202320222021Prior
Home equity lines and loans
Performing$1,103 $658 $196 $534 $207 $3,102 $99,179 $104,979 
Nonperforming— — — — 91 342 1,590 2,023 
Total$1,103 $658 $196 $534 $298 $3,444 $100,769 $107,002 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $— 
Residential mortgage (1)
Performing$25,957 $8,080 $26,278 $122,566 $15,775 $13,208 $— $211,864 
Nonperforming— 437 672 3,398 737 4,631 — 9,875 
Total$25,957 $8,517 $26,950 $125,964 $16,512 $17,839 $— $221,739 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $— 
Consumer
Performing$— $5 $22 $12 $— $220 $70 $329 
Nonperforming— — — — — — — — 
Total$— $5 $22 $12 $— $220 $70 $329 
Year-to-date gross charge-offs$— $— $— $— $— $— $(11)$(11)
Leases, net
Performing$6,232 $482 $10,149 $19,369 $6,561 $717 $— $43,510 
Nonperforming— — 518 1,099 342 20 — 1,979 
Total$6,232 $482 $10,667 $20,468 $6,903 $737 $— $45,489 
Year-to-date gross charge-offs$— $— $(90)$(1,472)$(756)$(40)$— $(2,358)
Total by Payment Performance
Performing$33,292 $9,225 $36,645 $142,481 $22,543 $17,247 $99,249 $360,682 
Nonperforming— 437 1,190 4,497 1,170 4,993 1,590 13,877 
Total$33,292 $9,662 $37,835 $146,978 $23,713 $22,240 $100,839 $374,559 
Total year-to-date gross charge-offs$— $— $(90)$(1,472)$(756)$(40)$(11)$(2,369)
(1) Excludes $14.4 million of fair value loans.
Modifications to Borrowers Experiencing Financial Difficulty
An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the ACL on loans and leases, a change to the allowance for credit losses is generally not recorded upon modification. However, when principal forgiveness is provided, the amortized cost basis of the asset is written off against the ACL on loans and leases. The amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses.
The following presents, by class, information regarding accruing and nonaccrual modifications to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2026 and 2025.
Three Months Ended September 30, 2026Three Months Ended September 30, 2025
(dollars in thousands)NumberAmortized Cost Basis% of Total Class of Financing ReceivableRelated ReserveNumberAmortized Cost Basis% of Total Class of Financing ReceivableRelated Reserve
Accruing Modifications to Borrowers Experiencing Financial Difficulty:
Commercial mortgage—$— — %$— 3$1,388 0.2 %$— 
Construction and land development13,500 1.0 %80 —— — %— 
Commercial, industrial & other finance receivables68,843 2.0 %44 —— — %— 
Small business loans2905 0.8 %341 52,780 2.0 %— 
    Total9$13,248 $465 8$4,168 $— 
Nonaccrual Modifications to Borrowers Experiencing Financial Difficulty:
Leases
—— — %— 2109 0.2 %— 
    Total—$— $— 2$109 $— 
Nine Months Ended September 30, 2026Nine Months Ended September 30, 2025
(dollars in thousands)NumberAmortized Cost Basis% of Total Class of Financing ReceivableRelated ReserveNumberAmortized Cost Basis% of Total Class of Financing ReceivableRelated Reserve
Accruing Modifications to Borrowers Experiencing Financial Difficulty:
Commercial mortgage3$4,225 0.5 %$— 4 $2,347 0.3 %$— 
Construction and land development13,500 1.0 %80 4 11,068 3.5 %868 
Commercial, industrial & other finance receivables79,639 2.2 %86 3 1,949 0.5 %— 
Small business loans52,032 1.8 %539 9 5,186 3.8 %— 
    Total16$19,396 $705 20 $20,550 $868 
Nonaccrual Modifications to Borrowers Experiencing Financial Difficulty:
Commercial mortgage10$11,742 1.3 %$— — $— — %$— 
Residential mortgage1222 0.1 %— 2 909 0.3 %— 
Construction and land development411,662 3.4 %97 1 3,287 1.0 %474 
Commercial, industrial & other finance receivables2792 0.2 %— — — — %— 
Small business loans1267 0.2 %128 1 440 0.3 %— 
Leases9218 0.8 %2 20 953 1.9 %— 
    Total27$24,903 $227 24 $5,589 $474 
The following presents, by class, information regarding accruing and nonaccrual modifications to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2026 and 2025.
Three Months Ended
September 30, 2026		Three Months Ended September 30, 2025
NumberFinancial EffectNumberFinancial Effect
Accruing Modifications to Borrowers Experiencing Financial Difficulty:
Commercial mortgage—3Extend maturity date
Construction and land development1Extend maturity date—
Commercial, industrial & other finance receivables6Conversion to term loan and short-term P&I deferment—
Small business loans2Short-term P&I deferment and interest only payments5Extend maturity date
    Total98
Nonaccrual Modifications to Borrowers Experiencing Financial Difficulty:
Leases—2Extend maturity date
    Total—2
Nine Months Ended September 30, 2026Nine Months Ended
September 30, 2025
NumberFinancial EffectNumberFinancial Effect
Accruing Modifications to Borrowers Experiencing Financial Difficulty:
Commercial mortgage3Extend maturity date 4Extend maturity date and allow additional lender funding
Construction and land development1Extend maturity date 4Extend maturity date and allow additional funding
Commercial, industrial & other finance receivables7Extend maturity date and conversion to term loan3Extend maturity date
Small business loans5Extend maturity date, short-term interest only, short-term P&I deferment9Extend maturity date
    Total1620
Nonaccrual Modifications to Borrowers Experiencing Financial Difficulty:
Commercial mortgage10Extend maturity date, interest only payments, interest rate adjustment—
Residential mortgage1Extend maturity date2Extend maturity date
Construction and land development4Extend maturity date1Extend maturity date
Commercial, industrial & other finance receivables2Interest rate adjustment—
Small business loans1Short-term P&I deferment1Extend maturity date
Leases9Extend maturity date20Extend maturity date
    Total2724
There were 9 and 10 modifications granted to borrowers experiencing financial difficulty during the three months ended September 30, 2026 and September 30, 2025, respectively. There were 43 and 44 modifications granted to borrowers experiencing financial difficulty during the nine months ended September 30, 2026 and September 30, 2025, respectively.

There were no loans that had payment defaults during the nine months ended September 30, 2026, and 2025, respectively. There were $104 thousand in commitments to lend additional funds to the borrowers experiencing financial difficulty that had modifications during the nine months ended September 30, 2026 and $1.3 million in commitments to lend additional funds to such borrowers during the nine months ended September 30, 2025.

The following presents, by class of loans, the amortized cost and performance status of accruing and nonaccrual modified loans to borrowers experiencing financial difficulty that have been modified in the last 12 months as of September 30, 2026 and 2025.
September 30, 2026
Current30-59 days past due60-89 days past due90+ days past due and still accruingNonaccrual loans and leasesTotal
(dollars in thousands)
Commercial mortgage$4,225 $— $— $— $13,125 $17,350 
Residential mortgage— — — — 222 222 
Construction and land development3,500 — — — 11,662 15,162 
Commercial, industrial & other finance receivables9,639 — — — 792 10,431 
Small business loans2,286 49 — — 723 3,057 
Leases— — — — 218 218 
    Total$19,649 $49 $— $— $26,742 $46,440 

September 30, 2025
Current30-59 days past due60-89 days past due90+ days past due and still accruingNonaccrual loans and leasesTotal
(dollars in thousands)
Commercial mortgage$2,347 $— $— $— $— $2,347 
Residential mortgage— — — — 1,310 1,310 
Construction and land development11,068 — — — 6,011 17,079 
Commercial, industrial & other finance receivables1,949 — — — 492 2,441 
Small business loans5,186 — — — 2,711 7,897 
Leases— — — — 953 953 
    Total$20,550 $— $— $— $11,477 $32,027