v3.26.3
Loans
 9 Months Ended
Sep. 30, 2026
Receivables [Abstract]  
Loans

 

(3) Loans:

 

The following table presents total loans at September 30, 2026 and December 31, 2025 by portfolio segment and class of loan:

   

  

September 30,

2026

  

December 31,

2025

 
Commercial:          
Commercial and industrial  $62,763   $71,872 
Agricultural   71,078    78,695 
Real estate:          
Commercial   548,535    549,247 
Consumer   401,307    398,022 
Agricultural   162,456    169,779 
Construction and land   48,748    39,916 
Consumer:          
Installment   4,749    4,470 
Vehicle   1,664    1,928 
Credit cards   1,307    1,365 
Total loans   1,302,607    1,315,294 
Allowance for credit losses   (15,279)   (14,992)
Loans, net  $1,287,328   $1,300,302 

 

Detailed analysis of the allowance for credit losses by portfolio segment for the three months ended September 30, 2026 follows:

   

 

Three Months Ended September 30, 2026

 

Commercial

  

Real

Estate

  

Consumer

  

Total

 
                 
Beginning balance, June 30, 2026  $1,219   $13,434   $136   $14,789 
Credit loss expense (benefit)   (289)   802    17    530 
Recoveries on loans previously charged-off   0    1    16    17 
Less loans charged-off   (28)   0    (29)   (57)
                     
Ending balance, September 30, 2026  $902   $14,237   $140   $15,279 

 

Detailed analysis of the allowance for credit losses by portfolio segment for the nine months ended September 30, 2026 follows:

 

 

Nine Months Ended September 30, 2026

 

 

Commercial

  

Real

Estate

  

 

Consumer

  

 

Total

 
                 
Balance at beginning of year  $1,037   $13,819   $136   $14,992 
Credit loss expense (benefit)   (108)   416    26    334 
Recoveries on loans previously
charged-off		   0    2    32    34 
Less loans charged-off   (27)   0    (54)   (81)
                     
Balance at September 30, 2026  $902   $14,237   $140   $15,279 

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

 

(3) Loans (continued):

 

Detailed analysis of the allowance for credit losses by portfolio segment for the three months ended September 30, 2025 follows:

 

 

Three Months Ended September 30, 2025

 

Commercial

  

Real

Estate

  

Consumer

  

Total

 
                 
Beginning balance, June 30, 2025  $1,112   $13,414   $139   $14,665 
Credit loss expense   54    87    15    156 
Recoveries on loans previously
charged-off		   6    2    8    16 
Less loans charged-off   0    0    (22)   (22)
                     
Ending balance, September 30, 2025  $1,172   $13,503   $140   $14,815 

 

Detailed analysis of the allowance for credit losses by portfolio segment for the nine months ended September 30, 2025 follows:

 

 

Nine Months Ended September 30, 2025

 

 

Commercial

  

Real

Estate

  

 

Consumer

  

 

Total

 
                 
Balance at beginning of year  $1,101   $13,201   $142   $14,444 
Credit loss expense   52    415    23    490 
Recoveries on loans previously
charged-off		   22    60    34    116 
Less loans charged-off   (3)   (173)   (59)   (235)
                     
Balance at September 30, 2025  $1,172   $13,503   $140   $14,815 

 

Detailed analysis of the allowance for unfunded commitments for the three months ended September 30, 2026 follows:

 

 

Three Months Ended September 30, 2026

 

Commercial

  

Real

Estate

  

Consumer

  

Total

 
                 
Beginning balance, June 30, 2026  $93   $1,796   $2   $1,891 
Credit loss expense (benefit)   (22)   (143)   0    (165)
                     
Ending balance, September 30, 2026  $71   $1,653   $2   $1,726 

 

Detailed analysis of the allowance for unfunded commitments for the Nine months ended September 30, 2026 follows:

 

 

Nine Months Ended September 30, 2026

 

Commercial

  

Real

Estate

  

Consumer

  

Total

 
                 
Balance at beginning of year  $84   $831   $2   $917 
Credit loss expense (benefit)   (13)   822    0    809 
                     
Balance at September 30, 2026  $71   $1,653   $2   $1,726 

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

 

(3) Loans (continued):

 

Detailed analysis of the allowance for unfunded commitments for the three months ended September 30, 2025 follows:

 

Three Months Ended September 30, 2025  Commercial   Real Estate   Consumer   Total 
                 
Beginning balance, June 30, 2025  $        93   $946   $      2   $1,041 
Credit loss expense   6    91    0    97 
                     
Ending balance, September 30, 2025  $99   $1,037   $2   $1,138 

 

Detailed analysis of the allowance for unfunded commitments for the nine months ended September 30, 2025 follows:

 

Nine Months Ended September 30, 2025  Commercial   Real Estate   Consumer   Total 
                 
Balance at beginning of year  $          96   $889   $         2   $987 
Credit loss expense   3    148    0    151 
                     
Balance at September 30, 2025  $99   $1,037   $2   $1,138 

 

The Bank has no commitments to loan additional funds to the borrowers of collateral dependent or non-accrual loans.

 

Certain purchased loans as later discussed in Note 3 are not considered impaired or non-accrual loans if the expected cash flows as of September 30, 2026 and December 31, 2025 exceed the carrying amount and accretion income is being recorded.

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

 

(3) Loans (continued):

 

The Company regularly evaluates various attributes of loans to determine the appropriateness of the allowance for credit losses. The Company generally monitors credit quality indicators for all non-consumer loans using the following internally prepared ratings:

 

  ● ‘Pass’ ratings are assigned to loans with adequate collateral and debt service ability such that collectability of the contractual loan payments is highly probable.
  ● ‘Watch’ loans are credits that are fundamentally sound but warrant close attention by management. Borrowers in this category may have acceptable asset quality but may face challenges due to market conditions, economic conditions, management changes, or other forces that could adversely affect operations. Factors contributing to adverse conditions are expected to be temporary.
  ● ‘Special Mention’ ratings are assigned to loans where management has some concern that the collateral or debt service ability may not be adequate, though the collectability of the contractual loan payments is still probable.
  ● ‘Substandard’ ratings are assigned to loans that do not have adequate collateral and/or debt service ability such that collectability of the contractual loan payments is no longer probable.
  ● ‘Doubtful’ ratings are assigned to loans that do not have adequate collateral and/or debt service ability, and collectability of the contractual loan payments is unlikely.

 

As of September 30, 2026 and December 31, 2025, accrued interest on loans of $9,859 and $7,648, respectively, were excluded from CECL evaluation. Accrued interest on loans is recorded within accrued interest receivable on the consolidated balance sheet.

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

 

(3) Loans (continued):

 

The following table presents the credit risk profile of the Company’s loan portfolio (excluding loans in process and deferred loan fees) based on rating category and year of origination as of September 30, 2026.

   

September 30,  Year 1   Year 2   Year 3   Year 4   Year 5   Prior   Revolving Loans   Total 
September 30,  2026   2025   2024   2023   2022   Prior   Revolving Loans   Total 
Commercial:                                        
Commercial and industrial                                        
Pass   $13,431   $9,363   $6,464   $3,245   $2,188   $1,910   $22,519   $59,120 
Watch   195    165    117    124    177    0    1,495    2,273 
Special Mention   36    0    72    182    8    69    738    1,105 
Substandard   95    0    0    16    0    154    0    265 
Doubtful   0    0    0    0    0    0    0    0 
Total Commercial and industrial  $13,757   $9,528   $6,653   $3,567   $2,373   $2,133   $24,752   $62,763 
Agricultural:                                        
Pass  $3,317   $3,182   $1,143   $1,457   $2,271   $1,263   $50,910   $63,543 
Watch   601    419    108    0    53    358    4,070    5,609 
Special Mention   0    130    125    728    23    57    549    1,612 
Substandard   0    0    110    204    0    0    0    314 
Doubtful   0    0    0    0    0    0    0    0 
Total Agricultural  $3,918   $3,731   $1,486   $2,389   $2,347   $1,678   $55,529   $71,078 
Real Estate:                                        
Commercial                                        
Pass  $71,747   $70,681   $42,651   $43,188   $102,131   $144,191   $15,493   $490,082 
Watch   580    1,061    6,861    5,661    11,503    18,963    1,005    45,634 
Special Mention   0    0    2,242    102    1,245    4,719    51    8,359 
Substandard   0    237    641    901    0    2,681    0    4,460 
Doubtful   0    0    0    0    0    0    0    0 
Total Commercial  $72,327   $71,979   $52,395   $49,852   $114,879   $170,554   $16,549   $548,535 
Consumer                                        
Pass  $49,683   $51,073   $29,548   $44,137   $66,846   $97,186   $31,983   $370,456 
Watch   998    225    8,737    3,788    2,193    11,241    742    27,924 
Special Mention   0    199    909    93    61    655    269    2,186 
Substandard   111    0    100    0    92    438    0    741 
Doubtful   0    0    0    0    0    0    0    0 
Total Consumer  $50,792   $51,497   $39,294   $48,018   $69,192   $109,520   $32,994   $401,307 

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

 

(3) Loans (continued):

 

September 30,  2026   2025   2024   2023   2022   Prior   Revolving Loans   Total 
Real Estate Continued):                                        
Agricultural                                        
Pass  $10,075   $13,405   $10,674   $12,808   $27,229   $67,276   $13,499   $154,966 
Watch   0    122    0    0    0    1,826    0    1,948 
Special Mention   368    499    103    1,368    0    1,809    260    4,407 
Substandard   0    0    0    0    0    1,135    0    1,135 
Doubtful   0    0    0    0    0    0    0    0 
Total Agricultural  $10,443   $14,026   $10,777   $14,176   $27,229   $72,046   $13,759   $162,456 
Construction and land:                                        
Pass  $23,116   $17,829   $1,348   $1,948   $596   $3,422   $49   $48,308 
Watch   293    0    0    0    147    0    0    440 
Special Mention   0    0    0    0    0    0    0    0 
Substandard   0    0    0    0    0    0    0    0 
Doubtful   0    0    0    0    0    0    0    0 
Total Construction and land  $23,409   $17,829   $1,348   $1,948   $743   $3,422   $49   $48,748 
Consumer:                                        
Installment                                        
Pass  $1,852   $1,451   $333   $262   $289   $525   $33   $4,745 
Watch   0    0    0    0    0    0    0    0 
Special Mention   0    0    0    0    0    0    0    0 
Substandard   0    0    0    0    4    0    0    4 
Doubtful   0    0    0    0    0    0    0    0 
Total Consumer  $1,852   $1,451   $333   $262   $293   $525   $33   $4,749 
Vehicle                                        
Pass  $624   $318   $427   $172   $85   $16   $0   $1,642 
Watch   0    0    0    0    0    0    0    0 
Special Mention   0    0    0    0    22    0    0    22 
Substandard   0    0    0    0    0    0    0    0 
Doubtful   0    0    0    0    0    0    0    0 
Total Vehicle  $624   $318   $427   $172   $107   $16   $0   $1,664 
Credit cards                                        
Pass  $0   $1,307   $0   $0   $0   $0   $0   $1,307 
Watch   0    0    0    0    0    0    0    0 
Special Mention   0    0    0    0    0    0    0    0 
Substandard   0    0    0    0    0    0    0    0 
Doubtful   0    0    0    0    0    0    0    0 
Total Credit Cards  $0   $1,307   $0   $0   $0   $0   $0   $1,307 
Total Loans                                        
Pass  $173,845   $168,609   $92,588   $107,217   $201,635   $315,789   $134,486   $1,194,169 
Watch   2,667    1,992    15,823    9,573    14,073    32,388    7,312    83,828 
Special Mention   404    828    3,451    2,473    1,359    7,309    1,867    17,691 
Substandard   206    237    851    1,121    96    4,408    0    6,919 
Doubtful   0    0    0    0    0    0    0    0 
Total  $177,122   $171,666   $112,713   $120,384   $217,163   $359,894   $143,665   $1,302,607 

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

 

(3) Loans (continued):

 

The following table presents the credit risk profile of the Company’s loan portfolio (excluding loans in process and deferred loan fees) based on rating category and year of origination as of December 31, 2025:

 

December 31,  2025   2024   2023   2022   2021   Prior   Revolving Loans   Total 
Commercial:                                        
Commercial and industrial                                        
Pass  $20,312   $9,686   $4,745   $4,996   $1,318   $8,336   $19,746   $69,139 
Watch   205    178    210    0    0    0    942    1,535 
Special Mention   0    126    258    14    5    0    547    950 
Substandard   0    0    22    6    195    25    0    248 
Doubtful   0    0    0    0    0    0    0    0 
Total Commercial and industrial  $20,517   $9,990   $5,235   $5,016   $1,518   $8,361   $21,235   $71,872 
Agricultural:                                        
Pass  $4,621   $1,578   $1,687   $4,066   $3,105   $216   $57,806   $73,079 
Watch   9    144    222    67    129    376    2,126    3,073 
Special Mention   130    124    750    0    52    0    1,183    2,239 
Substandard   0    110    107    1    0    0    86    304 
Doubtful   0    0    0    0    0    0    0    0 
Total Agricultural  $4,760   $1,956   $2,766   $4,134   $3,286   $592   $61,201   $78,695 
Real Estate:                                        
Commercial                                        
Pass  $81,399   $49,772   $52,788   $109,941   $59,516   $116,804   $8,107   $478,327 
Watch   647    5,862    5,021    15,297    6,324    18,764    6,891    58,806 
Special Mention   0    2,294    111    1,127    2,082    1,943    0    7,557 
Substandard   0    246    1,213    0    2,952    146    0    4,557 
Doubtful   0    0    0    0    0    0    0    0 
Total Commercial  $82,046   $58,174   $59,133   $126,365   $70,874   $137,657   $14,998   $549,247 
Consumer                                        
Pass  $61,513   $40,060   $51,021   $75,474   $44,368   $71,370   $29,661   $373,467 
Watch   99    8,743    3,626    2,071    3,458    3,883    557    22,437 
Special Mention   0    0    95    63    68    696    269    1,191 
Substandard   0    100    0    325    91    393    18    927 
Doubtful   0    0    0    0    0    0    0    0 
Total Consumer  $61,612   $48,903   $54,742   $77,933   $47,985   $76,342   $30,505   $398,022 

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

 

(3) Loans (continued):

 

December 31,  2025   2024   2023   2022   2021   Prior   Revolving Loans   Total 
Real Estate Continued):                                        
Agricultural                                        
Pass  $14,104   $11,333   $12,862   $28,975   $24,335   $48,689   $20,087   $160,385 
Watch   124    199    1,389    1,057    294    2,543    466    6,072 
Special Mention   507    0    0    0    0    1,360    320    2,187 
Substandard   0    0    0    0    0    1,135    0    1,135 
Doubtful   0    0    0    0    0    0    0    0 
Total Agricultural  $14,735   $11,532   $14,251   $30,032   $24,629   $53,727   $20,873   $169,779 
Construction and land:                                        
Pass  $20,462   $12,330   $1,949   $673   $525   $3,322   $412   $39,673 
Watch   0    0    0    243    0    0    0    243 
Special Mention   0    0    0    0    0    0    0    0 
Substandard   0    0    0    0    0    0    0    0 
Doubtful   0    0    0    0    0    0    0    0 
Total Construction and land  $20,462   $12,330   $1,949   $916   $525   $3,322   $412   $39,916 
Consumer:                                        
Installment                                        
Pass  $2,206   $628   $494   $352   $283   $457   $37   $4,457 
Watch   0    0    0    0    0    0    0    0 
Special Mention   0    0    0    0    0    0    0    0 
Substandard   0    0    0    13    0    0    0    13 
Doubtful   0    0    0    0    0    0    0    0 
Total Consumer  $2,206   $628   $494   $365   $283   $457   $37   $4,470 
Vehicle                                        
Pass  $613   $656   $357   $264   $36   $2   $0   $1,928 
Watch   0    0    0    0    0    0    0    0 
Special Mention   0    0    0    0    0    0    0    0 
Substandard   0    0    0    0    0    0    0    0 
Doubtful   0    0    0    0    0    0    0    0 
Total Vehicle  $613   $656   $357   $264   $36   $2   $0   $1,928 
Credit cards                                        
Pass  $1,365   $0   $0   $0   $0   $0   $0   $1,365 
Watch   0    0    0    0    0    0    0    0 
Special Mention   0    0    0    0    0    0    0    0 
Substandard   0    0    0    0    0    0    0    0 
Doubtful   0    0    0    0    0    0    0    0 
Total Credit Cards  $1,365   $0   $0   $0   $0   $0   $0   $1,365 
Total Loans                                        
Pass  $206,595   $126,043   $125,903   $224,741   $133,486   $249,196   $135,856   $1,201,820 
Watch   1,084    15,126    10,468    18,735    10,205    25,566    10,982    92,166 
Special Mention   637    2,544    1,214    1,204    2,207    3,999    2,319    14,124 
Substandard   0    456    1,342    345    3,238    1,699    104    7,184 
Doubtful   0    0    0    0    0    0    0    0 
Total  $208,316   $144,169   $138,927   $245,025   $149,136   $280,460   $149,261   $1,315,294 

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

 

(3) Loans (continued):

 

The following table presents the amortized cost basis of loans on non-accrual status and loans past due over 89 days still accruing as of September 30, 2026:

   

2026  Non-accrual   Non-accrual With No ACL   Loans Past Due Over 89 Days and Still Accruing 
2026  Non-accrual   Non-accrual With No ACL   Loans Past Due Over 89 Days and Still Accruing 
             
Commercial:               
Commercial  $        155   $             0   $0 
Agricultural   314    314    0 
Real estate:               
Commercial real estate   3,773    1,163    579 
Agricultural real estate   1,135    1,135    0 
Consumer real estate   386    386    554 
Consumer:               
Installment   0    0    4 
                
Total  $5,763   $2,998   $1,137 

 

The following table presents the amortized cost basis of loans on non-accrual status and loans past due over 89 days still accruing as of December 31, 2025:

 

2025  Non-accrual   Non-accrual With No ACL   Loans Past Due Over 89 Days and Still Accruing 
             
Commercial:               
Commercial  $          195   $              0   $31 
Agricultural   0    0    302 
Real estate:               
Commercial real estate   4,095    3    246 
Agricultural real estate   0    0    0 
Consumer real estate   211    214    573 
Consumer:               
Installment   0    0    6 
                
Total  $4,501   $217   $1,158 

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

 

(3) Loans (continued):

 

Loan aging information by class of loan at September 30, 2026 and December 31, 2025:

   

September 30, 2026  Loans Past Due 30-59 Days   Loans Past Due 60-89 Days   Loans Past Due 90+ Days   Total Past Due 
September 30, 2026  Loans Past Due 30-59 Days   Loans Past Due 60-89 Days   Loans Past Due 90+ Days   Total Past Due 
                 
Commercial:                    
Commercial  $99   $23   $0   $122 
Agricultural   26    0    302    328 
Real estate:                    
Commercial real estate   1,928    283    4,116    6,327 
Agricultural real estate   0    122    1,135    1,257 
Consumer real estate   3,725    549    876    5,150 
Consumer:                    
Consumer other   69    14    4    87 
Consumer vehicle   3    9    0    12 
                     
Totals  $5,850   $1,000   $6,433   $13,283 

 

December 31, 2025  Loans Past Due 30-59 Days   Loans Past Due 60-89 Days   Loans Past Due 90+ Days   Total Past Due 
                 
Commercial:                    
Commercial  $0   $25   $31   $56 
Agricultural   37    0    303    340 
Real estate:                    
Commercial real estate   2,317    382    4,341    7,040 
Agricultural real estate   0    0    0    0 
Consumer real estate   2,513    825    572    3,910 
Consumer:                    
Installment   11    15    6    32 
                     
Totals  $4,878   $1,247   $5,253   $11,378 

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

 

(3) Loans (continued):

 

The following table represents collateral dependent loans. A loan is considered to be collateral dependent when the borrower is experiencing financial difficulty, and the repayment is expected to be provided substantially through the operation or sale of collateral. The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of September 30, 2026:

   

2026 

Collateral dependent loans

  

Collateral dependent loans

  

Collateral dependent loans

  

Total

 
2026 

Commercial

  

Real Estate

  

Vehicle

  

Total

 
                 
Commercial and industrial  $          279   $0   $          0   $279 
Agriculture   314    0    0    314 
Commercial real estate   0    4,460    0    4,460 
Agricultural real estate   0    1,135    0    1,135 
Consumer real estate   0    741    0    741 
Consumer other   0    0    4    4 
Consumer vehicle   0    0    0    0 
                     
Totals  $593   $6,336   $4   $6,933 

 

The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of December 31, 2025:

 

2025

 

Collateral dependent loans

  

Collateral dependent loans

  

Collateral dependent loans

  

Total

 

2025

 

Commercial

  

Real Estate

  

Vehicle

  

Total

 
                 
Commercial and industrial  $           261   $0   $            0   $261 
Agricultural   304    0    0    304 
Commercial real estate   0    4,557    0    4,557 
Agricultural real estate   0    1,135    0    1,135 
Consumer real estate   100    832    0    932 
Consumer other   0    0    13    13 
Consumer vehicle   0    0    0    0 
                     
Totals  $665   $6,524   $13   $7,202 

 

The Company had no loans modified to borrowers experiencing financial difficulty as of September 30, 2026 and December 31, 2025.

 

 

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)