XML 30 R13.htm IDEA: XBRL DOCUMENT v3.25.4
Loans, Allowance for Credit Losses, and Asset Quality Information
 12 Months Ended
Dec. 31, 2025
Receivables [Abstract]  
Loans, Allowance for Credit Losses, and Asset Quality Information Loans, Allowance for Credit Losses, and Asset Quality Information
The following is a summary of the major categories of total loans outstanding:
December 31, 2025December 31, 2024
($ in thousands)AmountPercentageAmountPercentage
Commercial and industrial$1,046,438 12 %$919,690 11 %
Construction, development & other land loans753,199 9 %647,167 8 %
Commercial real estate - owner occupied1,353,912 15 %1,248,812 16 %
Commercial real estate - non owner occupied2,843,555 33 %2,625,554 33 %
Multi-family real estate537,015 6 %506,407 6 %
Residential 1-4 family real estate1,736,453 20 %1,729,322 21 %
Home equity loans/lines of credit383,652 4 %345,883 4 %
Consumer loans67,458 1 %70,653 1 %
Subtotal8,721,682 100 %8,093,488 100 %
Unamortized net deferred loan costs/(fees)737 1,188 
Total loans
$8,722,419 $8,094,676 
The above table includes SBA loans, generally originated under the SBA 7A loan program, with additional information on these loans presented in the table below.
($ in thousands)December 31,
2025		December 31,
2024
Guaranteed portions of SBA Loans included in table above$61,501 $34,095 
Unguaranteed portions of SBA Loans included in table above100,509 101,356 
Total SBA loans included in the table above$162,010 $135,451 
Sold portions of SBA loans with servicing retained - not included in table above$284,649 $330,482 
At December 31, 2025 and December 31, 2024, there were remaining unaccreted discounts on the retained portion of sold SBA loans amounting to $2.0 million and $2.9 million respectively.
At December 31, 2025 and December 31, 2024, loans in the amount of $7.1 billion and $6.7 billion, respectively, were pledged as collateral to the Federal Reserve and the FHLB for borrowing capacity. Refer to Note 9 for further discussion.
At December 31, 2025 and 2024, total loans included loans to directors and executive officers of the Company, and their associates, totaling approximately $60.7 million and $62.9 million, respectively. There were no new loans or advances on existing loans for the year ended December 31, 2025 and repayments amounted to $1.9 million for that period. Loans with a total balance of $0.3 million were removed from the population as the director retired from the board during 2025. Available credit on related party loans totaled $0.3 million and $1.0 million at December 31, 2025 and December 31, 2024, respectively.
As of December 31, 2025 and 2024, unamortized discounts on all acquired loans totaled $8.8 million and $15.1 million, respectively.
Nonperforming assets ("NPAs") are defined as nonaccrual loans, loans past due 90 or more days and still accruing interest, and foreclosed real estate.
The following table summarizes the NPAs for each date presented.
($ in thousands)December 31,
2025		December 31,
2024
Nonperforming assets  
Nonaccrual loans$36,315 $31,779 
Accruing loans > 90 days past due— — 
Total nonperforming loans36,315 31,779 
Foreclosed real estate1,425 4,965 
Total nonperforming assets$37,740 $36,744 
At December 31, 2025 and 2024, the Company had $1.0 million and $1.2 million, respectively, in residential mortgage loans in process of foreclosure.
At December 31, 2025 and December 31, 2024, there were commitments to lend immaterial amounts of additional funds to borrowers whose loans were nonperforming.
The following table is a summary of the Company’s nonaccrual loans by major categories as of December 31, 2025.
($ in thousands)Nonaccrual Loans with No AllowanceNonaccrual Loans with an AllowanceTotal Nonaccrual Loans
Commercial and industrial$— $9,130 $9,130 
Construction, development & other land loans— 202 202 
Commercial real estate - owner occupied1,825 11,639 13,464 
Commercial real estate - non owner occupied4,269 709 4,978 
Residential 1-4 family real estate— 5,908 5,908 
Home equity loans/lines of credit— 2,407 2,407 
Consumer loans— 226 226 
Total$6,094 $30,221 $36,315 
The following table is a summary of the Company’s nonaccrual loans by major categories as of December 31, 2024.
($ in thousands)Nonaccrual Loans with No AllowanceNonaccrual Loans with an AllowanceTotal Nonaccrual Loans
Commercial and industrial$— $9,804 $9,804 
Construction, development & other land loans— 90 90 
Commercial real estate - owner occupied879 8,488 9,367 
Commercial real estate - non owner occupied— 887 887 
Residential 1-4 family real estate— 9,487 9,487 
Home equity loans/lines of credit— 1,795 1,795 
Consumer loans— 349 349 
Total$879 $30,900 $31,779 
There was no interest income recognized during the periods presented on nonaccrual loans. In the period that the Company places a loan on nonaccrual status, contractual interest income is reversed in the consolidated income statement.
The following table presents an analysis of the payment status of the Company’s loans as of December 31, 2025.
($ in thousands)Accruing
Current		Accruing
30-59 Days
Past Due		Accruing 60-
89 Days
Past Due		Nonaccrual
Loans		Total Loans
Receivable
Commercial and industrial$1,034,943 $1,824 $541 $9,130 $1,046,438 
Construction, development & other land loans752,388 602 7 202 753,199 
Commercial real estate - owner occupied1,338,042 2,130 276 13,464 1,353,912 
Commercial real estate - non owner occupied2,838,054 — 523 4,978 2,843,555 
Multi-family real estate537,015 — — — 537,015 
Residential 1-4 family real estate1,720,305 6,685 3,555 5,908 1,736,453 
Home equity loans/lines of credit379,437 1,570 238 2,407 383,652 
Consumer loans66,692 290 250 226 67,458 
Total$8,666,876 $13,101 $5,390 $36,315 8,721,682 
Unamortized net deferred loan fees737 
Total loans$8,722,419 
The following table presents an analysis of the payment status of the Company’s loans as of December 31, 2024.
($ in thousands)Accruing
Current		Accruing
30-59 Days
Past Due		Accruing 60-
89 Days
Past Due		Nonaccrual
Loans		Total Loans
Receivable
Commercial and industrial$906,903 $2,442 $541 $9,804 $919,690 
Construction, development & other land loans647,077 — — 90 647,167 
Commercial real estate - owner occupied1,236,396 2,073 976 9,367 1,248,812 
Commercial real estate - non owner occupied2,614,843 9,678 146 887 2,625,554 
Multi-family real estate506,407 — — — 506,407 
Residential 1-4 family real estate1,699,800 12,973 7,062 9,487 1,729,322 
Home equity loans/lines of credit342,551 1,118 419 1,795 345,883 
Consumer loans69,775 317 212 349 70,653 
Total$8,023,752 $28,601 $9,356 $31,779 8,093,488 
Unamortized net deferred loan (fees) costs1,188 
Total loans$8,094,676 
Collateral dependent loans are individually evaluated loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. The Company reviews loans on nonaccrual with a net book balance of $500,000 or greater for designation as collateral dependent loans, as well as certain other loans that may still be accruing interest and/or are less than $500,000 in size that management of the Company designates as having higher risk. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the ACL.
The following table presents an analysis of collateral dependent loans of the Company as of December 31, 2025.
($ in thousands)Commercial PropertyTotal Collateral-Dependent Loans
Commercial real estate - owner occupied$5,390 $5,390 
Commercial real estate - non owner occupied4,269 4,269 
Total$9,659 $9,659 
The following table presents an analysis of collateral dependent loans of the Company as of December 31, 2024.
($ in thousands)Commercial PropertyTotal Collateral-Dependent Loans
Commercial real estate - owner occupied$879 $879 
Total$879 $879 
Under CECL, for collateral dependent loans, the Company has adopted the practical expedient to measure the ACL based on the fair value of collateral. The ACL is calculated on an individual loan basis based on the shortfall between the fair value of the loan's collateral, which is adjusted for liquidation costs/discounts, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required.
The Company's policy is to obtain third-party appraisals on any significant pieces of collateral. For loans secured by real estate, the Company's policy is to write nonaccrual loans down to 90% of the appraised value, which considers estimated selling costs. For real estate collateral, the Company may discount the collateral values due to factors including market trends, collateral condition, or near-term sales. For loans secured by non-real estate collateral, the Company generally writes nonaccrual loans down to provide for selling costs and liquidity discounts that are usually incurred when disposing of non-real estate collateral. For reviewed loans that are not on nonaccrual basis, the Company assigns a specific allowance based on the parameters noted above.
Fluctuations in the ACL each period are based on loan mix and growth, changes in the levels of nonperforming loans, economic forecasts impacting loss drivers, other assumptions and inputs to the CECL model, and as
occurred in 2025, adjustments for acquired loan portfolios. Much of the change to the level of ACL during the year ended December 31, 2025 is attributed to the potential exposure from Hurricane Helene. The balance of the change was a result of loan growth during the year and updated prepayment speed estimates in the CECL model, thus requiring additional allowance for the estimated longer life of loans.
The following tables present the activity in the ACL on loans for each of the periods indicated. Fluctuations in the ACL each period are based on loan mix and growth, changes in the levels of nonperforming loans, economic forecasts impacting loss drivers, other assumptions and inputs to the CECL model.
($ in thousands)Beginning balanceCharge-offsRecoveriesProvisions/(Reversals)Ending balance
As of and for the year ended December 31, 2025
Commercial and industrial$19,474 $(7,741)$2,017 $6,294 $20,044 
Construction, development & other land loans9,314 — 168 1,983 11,465 
Commercial real estate - owner occupied19,380 (1,340)158 2,100 20,298 
Commercial real estate - non owner occupied27,768 (938)38 (1,851)25,017 
Multi-family real estate5,476 — — (271)5,205 
Residential 1-4 family real estate33,552 (127)447 196 34,068 
Home equity loans/lines of credit4,111 (69)83 (606)3,519 
Consumer loans3,497 (1,414)163 1,719 3,965 
$122,572 $(11,629)$3,074 $9,564 $123,581 

($ in thousands)Beginning balanceCharge-offsRecoveriesProvisions/(Reversals)Ending balance
As of and for the year ended December 31, 2024
Commercial and industrial$21,227 $(7,278)$2,363 $3,162 $19,474 
Construction, development & other land loans13,940 (79)229 (4,776)9,314 
Commercial real estate - owner occupied18,218 (223)36 1,349 19,380 
Commercial real estate - non owner occupied24,916 (462)107 3,207 27,768 
Multi-family real estate3,825 — — 1,651 5,476 
Residential 1-4 family real estate21,396 (18)310 11,864 33,552 
Home equity loans/lines of credit3,339 (2)272 502 4,111 
Consumer loans2,992 (1,525)238 1,792 3,497 
$109,853 $(9,587)$3,555 $18,751 $122,572 
($ in thousands)Beginning balanceInitial ACL for acquired PCD loansCharge-offsRecoveriesProvisions/(Reversals)Ending balance
As of and for the year ended December 31, 2023
Commercial and industrial$17,718 $5,197 $(8,358)$1,393 $5,277 $21,227 
Construction, development & other land loans15,128 49 (120)370 (1,487)13,940 
Commercial real estate - owner occupied14,972 191 (144)465 2,734 18,218 
Commercial real estate - non owner occupied22,780 51 (235)737 1,583 24,916 
Multi-family real estate2,957 — — 13 855 3,825 
Residential 1-4 family real estate11,354 113 (4)377 9,556 21,396 
Home equity loans/lines of credit3,158 8 (309)98 384 3,339 
Consumer loans2,900 1 (1,005)248 848 2,992 
$90,967 $5,610 $(10,175)$3,701 $19,750 $109,853 
Credit Quality Indicators
The Company tracks credit quality based on its internal risk ratings. Upon origination, a loan is assigned an initial risk grade, which is generally based on several factors such as the borrower’s credit score, the loan-to-value ratio, the debt-to-income ratio, etc. Loans that are risk-graded as substandard during the origination process are declined. After loans are initially graded, they are monitored regularly for credit quality based on many factors, such as payment history, the borrower’s financial status, and changes in collateral value. Loans can be downgraded or upgraded depending on management’s evaluation of these factors. Internal risk-grading policies are consistent throughout each loan type.
The following describes the Company’s internal risk grades in ascending order of likelihood of loss:
Risk GradeDescription
Pass:
1Loans with virtually no risk, including cash secured loans.
2Loans with documented significant overall financial strength.  These loans have minimum chance of loss due to the presence of multiple sources of repayment – each clearly sufficient to satisfy the obligation.
3Loans with documented satisfactory overall financial strength.  These loans have a low loss potential due to presence of at least two clearly identified sources of repayment – each of which is sufficient to satisfy the obligation under the present circumstances.
4Loans to borrowers with acceptable financial condition.  These loans could have signs of minor operational weaknesses, lack of adequate financial information, or loans supported by collateral with questionable value or marketability.
5Loans that represent above average risk due to minor weaknesses and warrant closer scrutiny by management.  Collateral is generally available and felt to provide reasonable coverage with realizable liquidation values in normal circumstances.  Repayment performance is satisfactory.
P
(Pass)		Consumer loans that are of satisfactory credit quality with borrowers who exhibit good personal credit history, average personal financial strength and moderate debt levels.  These loans generally conform to Bank policy, but may include approved mitigated exceptions to the guidelines.
Special Mention:
6Existing loans with defined weaknesses in primary source of repayment that, if not corrected, could cause a loss to the Company.
Classified:
7An existing loan inadequately protected by the current sound net worth and paying capacity of the obligor or the collateral pledged, if any.  These loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.
8Loans that have a well-defined weakness that make the collection or liquidation in full highly questionable and improbable.  Loss appears imminent, but the exact amount and timing is uncertain.
9Loans that are considered uncollectible and are in the process of being charged-off.  This grade is a temporary grade assigned for administrative purposes until the charge-off is completed.
F
(Fail)		Consumer loans with a well-defined weakness, such as exceptions of any kind with no mitigating factors, history of paying outside the terms of the note, insufficient income to support the current level of debt, etc.
In the tables that follow, substantially all of the "Classified" loans have grades of 7 or Fail for consumer loans, with those categories having similar levels of risk.
The tables below present the Company’s recorded investment in loans by credit quality indicators by year of origination or renewal as of the periods indicated. Acquired loans are presented in the year originated, not in the year of acquisition.
As presented in the tables that follow, as of December 31, 2025, the Company had $29.3 million in loans graded Special Mention and $58.5 million in loans graded Classified, which includes all nonaccrual loans at that date. As of December 31, 2024, the Company had $37.1 million in loans graded Special Mention and $65.8 million in loans graded Classified, which includes all nonaccrual loans at that date.
Term Loans by Year of Origination
($ in thousands)20252024202320222021PriorRevolvingTotal
As of December 31, 2025
Commercial and industrial
Pass$213,147 $79,715 $43,504 $91,590 $57,804 $108,133 $439,840 $1,033,733 
Special Mention85 260 164 109 82 262 1,416 2,378 
Classified515 157 949 3,177 416 3,692 1,421 10,327 
Total commercial and industrial213,747 80,132 44,617 94,876 58,302 112,087 442,677 1,046,438 
Gross charge-offs, YTD35 646 780 903 174 802 4,401 7,741 
Construction, development & other land loans
Pass469,670 115,650 76,839 18,463 18,724 8,840 39,702 747,888 
Special Mention4,172 — 573 48 — — — 4,793 
Classified57 49 72 68 2 270 — 518 
Total construction, development & other land loans473,899 115,699 77,484 18,579 18,726 9,110 39,702 753,199 
Gross charge-offs, YTD— — — — — — — — 
Commercial real estate - owner occupied
Pass298,490 187,305 185,070 215,615 220,148 184,358 25,429 1,316,415 
Special Mention2,428 2,856 1,802 3,018 406 6,541 1,757 18,808 
Classified112 1,393 568 2,313 474 13,786 43 18,689 
Total commercial real estate - owner occupied301,030 191,554 187,440 220,946 221,028 204,685 27,229 1,353,912 
Gross charge-offs, YTD— 420 — 17 — 903 — 1,340 
Commercial real estate - non owner occupied
Pass724,974 374,312 376,910 594,522 529,233 205,946 29,622 2,835,519 
Special Mention136 1,131 — — 1 382 — 1,650 
Classified78 662 — 546 — 5,100 — 6,386 
Total commercial real estate - non owner occupied725,188 376,105 376,910 595,068 529,234 211,428 29,622 2,843,555 
Gross charge-offs, YTD— 905 — 33 — — — 938 
Multi-family real estate
Pass100,953 65,838 63,983 109,323 148,234 33,429 15,124 536,884 
Special Mention— — — — — — — — 
Classified— — 131 — — — — 131 
Total multi-family real estate100,953 65,838 64,114 109,323 148,234 33,429 15,124 537,015 
Gross charge-offs, YTD— — — — — — — — 
Residential 1-4 family real estate
Pass166,356 230,701 301,965 373,118 264,824 381,796 61 1,718,821 
Special Mention390 424 — — 267 630 — 1,711 
Classified151 2,561 420 2,273 1,894 8,622 — 15,921 
Total residential 1-4 family real estate166,897 233,686 302,385 375,391 266,985 391,048 61 1,736,453 
Gross charge-offs, YTD— — — — — 127 — 127 
Home equity loans/lines of credit
Pass3,785 1,255 1,894 659 203 420 369,296 377,512 
Special Mention— — — — — — — — 
Classified158 34 254 — 88 3 5,603 6,140 
Total home equity loans/lines of credit3,943 1,289 2,148 659 291 423 374,899 383,652 
Gross charge-offs, YTD— — — 68 — — 1 69 
Consumer loans
Pass15,044 8,619 4,952 3,390 1,063 580 33,403 67,051 
Special Mention— — — — — — — — 
Classified49 74 36 24 4 — 220 407 
Total consumer loans15,093 8,693 4,988 3,414 1,067 580 33,623 67,458 
Gross charge-offs, YTD25 149 115 12 1 37 1,075 1,414 
Total loans$2,000,750 $1,072,996 $1,060,086 $1,418,256 $1,243,867 $962,790 $962,937 8,721,682 
Unamortized net deferred loan fees737 
Total loans, net of deferred loan fees$8,722,419 
Total gross charge-offs, year to date
$60 $2,120 $895 $1,033 $175 $1,869 $5,477 $11,629 
Term Loans by Year of Origination
($ in thousands)20242023202220212020PriorRevolvingTotal
As of December 31, 2024
Commercial and industrial
Pass$114,786 $81,851 $120,769 $82,810 $59,218 $70,986 $373,850 $904,270 
Special Mention1,076 26 190 36 259 804 1,825 4,216 
Classified266 2,496 3,254 713 1,199 2,634 642 11,204 
Total commercial and industrial116,128 84,373 124,213 83,559 60,676 74,424 376,317 919,690 
Gross charge-offs, YTD306 669 849 318 137 929 4,070 7,278 
Construction, development & other land loans
Pass355,734 124,323 60,305 29,823 12,727 5,276 57,177 645,365 
Special Mention— 605 77 8 — 2 11 703 
Classified227 449 80 — 67 276 — 1,099 
Total construction, development & other land loans355,961 125,377 60,462 29,831 12,794 5,554 57,188 647,167 
Gross charge-offs, YTD— 79 — — — — — 79 
Commercial real estate - owner occupied
Pass194,193 222,718 261,634 252,929 153,634 109,559 15,772 1,210,439 
Special Mention9,927 1,869 2,731 184 147 7,007 — 21,865 
Classified4,506 235 2,085 1,294 1,188 7,200 — 16,508 
Total commercial real estate - owner occupied208,626 224,822 266,450 254,407 154,969 123,766 15,772 1,248,812 
Gross charge-offs, YTD— 25 — 19 114 65 — 223 
Commercial real estate - non owner occupied
Pass482,433 434,713 668,168 602,028 252,260 132,316 29,922 2,601,840 
Special Mention1,648 265 189 11 331 5,721 54 8,219 
Classified12,725 429 566 — 88 1,687 — 15,495 
Total commercial real estate - non owner occupied496,806 435,407 668,923 602,039 252,679 139,724 29,976 2,625,554 
Gross charge-offs, YTD— — — — 304 158 — 462 
Multi-family real estate
Pass87,803 65,508 114,627 159,038 40,940 9,926 27,630 505,472 
Special Mention— — — — — 793 — 793 
Classified— 142 — — — — — 142 
Total multi-family real estate87,803 65,650 114,627 159,038 40,940 10,719 27,630 506,407 
Gross charge-offs, YTD— — — — — — — — 
Residential 1-4 family real estate
Pass216,725 347,472 404,809 278,197 166,013 296,870 2,768 1,712,854 
Special Mention74 — 10 95 61 740 — 980 
Classified3,968 227 2,558 544 1,558 6,633 — 15,488 
Total residential 1-4 family real estate220,767 347,699 407,377 278,836 167,632 304,243 2,768 1,729,322 
Gross charge-offs, YTD— — — — — 18 — 18 
Home equity loans/lines of credit
Pass2,096 2,672 645 251 259 832 333,434 340,189 
Special Mention120 153 — — — — 15 288 
Classified88 43 68 90 — 7 5,110 5,406 
Total home equity loans/lines of credit2,304 2,868 713 341 259 839 338,559 345,883 
Gross charge-offs, YTD— — — — — — 2 2 
Consumer loans
Pass14,623 10,005 7,059 2,380 1,049 320 34,747 70,183 
Special Mention— — — — — — 21 21 
Classified33 21 27 9 — 28 331 449 
Total consumer loans14,656 10,026 7,086 2,389 1,049 348 35,099 70,653 
Gross charge-offs, YTD6 121 41 37 2 10 1,308 1,525 
Total loans$1,503,051 $1,296,222 $1,649,851 $1,410,440 $690,998 $659,617 $883,309 8,093,488 
Unamortized net deferred loan fees1,188 
Total loans, net of deferred loan fees$8,094,676 
Total gross charge-offs, year to date
$312 $894 $890 $374 $557 $1,180 $5,380 $9,587 
Loan Modifications to Borrowers Experiencing Financial Difficulty
Occasionally, the Company modifies loans to borrowers in financial distress as a part of our loss mitigation activities. Various types of modification may be offered including principal forgiveness, term extension, payment delays, or interest rate reductions. In some cases, the Company will modify a certain loan by providing multiple types of concessions. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession may be granted. For loans included in the “combination” columns below, multiple types of modifications have been made on the same loan within the current reporting period.
The following table presents the amortized cost basis at December 31, 2025 of the FDMs modified during the twelve months then ended for borrowers experiencing financial difficulty, by loan category and type of concession granted.
($ in thousands)Payment DelayTerm ExtensionCombination - Payment Delay and Term Extension Combination - Interest Rate Reduction and Term ExtensionTotalPercent of Total Class of Loans
Commercial and industrial$484 $674 $— $38 $1,196 0.11 %
Commercial real estate - owner occupied722 112 — — 834 0.06 %
Commercial real estate - non owner occupied45 4,269 — — 4,314 0.15 %
Residential 1-4 family real estate— 135 10 — 145 0.01 %
Home equity loans/lines of credit— 804 — — 804 0.21 %
Total$1,251 $5,994 $10 $38 $7,293 0.08 %
The following table presents the amortized cost basis at December 31, 2024 of the FDMs modified during the twelve months then ended for borrowers experiencing financial difficulty, by loan category and type of concession granted.
($ in thousands)Payment DelayTerm ExtensionCombination - Payment Delay and Term ExtensionCombination - Interest Rate Reduction and Term ExtensionTotalPercent of Total Class of Loans
Commercial and industrial$180 $911 $878 $92 $2,061 0.22 %
Construction, development & other land loans— 171 — — 171 0.03 %
Commercial real estate - owner occupied— — 131 — 131 0.01 %
Commercial real estate - non owner occupied— 102 — — 102 — %
Residential 1-4 family real estate— 195 — — 195 0.01 %
Home equity loans/lines of credit— 413 — 238 651 0.19 %
Total$180 $1,792 $1,009 $330 $3,311 0.04 %
For the twelve months ended December 31, 2025 and December 31, 2024, there were no modifications for borrowers experiencing financial difficulty with principal forgiveness concessions.
The following table reflects the financial effect for the twelve months ended December 31, 2025 of the modifications made for borrowers experiencing financial difficulty:
Financial Effect of Modification to Borrowers Experiencing Financial Difficulty
Weighted Average Interest Rate ReductionWeighted Average Payment Delay (in months)Weighted Average Term Extension (in months)
Commercial and industrial2.24 %622
Commercial real estate - owner occupied— %652
Commercial real estate - non owner occupied— %1210
Residential 1-4 family real estate— %1261
Home equity loans/lines of credit— %050
The following table reflects the financial effect for the twelve months ended December 31, 2024 of the modifications made for borrowers experiencing financial difficulty:
Financial Effect of Modification to Borrowers Experiencing Financial Difficulty
Weighted Average Interest Rate ReductionWeighted Average Payment Delay (in months)Weighted Average Term Extension (in months)
Commercial and industrial0.75 %1110
Construction, development & other land loans— %05
Commercial real estate - owner occupied4.26 %120
Commercial real estate - non owner occupied— %013
Residential 1-4 family real estate— %0103
Home equity loans/lines of credit1.76 %061
The Company closely monitors the performance of the FDMs that are modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of loans that have been modified in the last twelve months as of December 31, 2025:
Payment Status (Amortized Cost Basis)
($ in thousands)Current30-59 Days Past Due60-89 Days Past Due90+ Days Past Due
Commercial and industrial$594 $38 $— $563 
Commercial real estate - owner occupied500 334 — — 
Commercial real estate - non owner occupied4,316 — — — 
Residential 1-4 family real estate144 — — — 
Home equity loans/lines of credit674 130 — — 
Total$6,228 $502 $— $563 
The following table presents the performance of FDMs that have been modified in the last twelve months as of December 31, 2024:
Payment Status (Amortized Cost Basis)
($ in thousands)Current30-59 Days Past Due60-89 Days Past Due90+ Days Past Due
Commercial and industrial$1,183 $— $— $878 
Construction, development & other land loans171 — — — 
Commercial real estate - owner occupied131 — — — 
Commercial real estate - non owner occupied102 — — — 
Residential 1-4 family real estate137 — — 58 
Home equity loans/lines of credit583 — 68 — 
Total$2,307 $— $68 $936 
The following table presents the amortized cost basis of FDMs that had a payment default during the year ended December 31, 2025 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty by loan category and type of concession granted.
Amortized Cost Basis of Modified Receivables That Subsequently Defaulted
Payment DelayTerm ExtensionCombination - Interest Rate Reduction and Term ExtensionTotal
Commercial and industrial$75 $488 $38 $601 
Commercial real estate - non owner occupied334 — — 334 
Home equity loans/lines of credit— 130 — 130 
Total$409 $618 $38 $1,065 
The following table presents the amortized cost basis of FDMs that had a payment default during the year ended December 31, 2024 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty by loan category and type of concession granted.
Amortized Cost Basis of Modified Receivables That Subsequently Defaulted
Term ExtensionTotal
Residential 1-4 family real estate$58 $58 
Total$58 $58 
At December 31, 2025, there were no commitments to lend additional funds to a borrower experiencing financial difficulty for whom a modification had been made. At December 31, 2024, there was a commitment to lend $0.1 million of additional funds to one borrower experiencing financial difficulty for whom a modification had been made.
Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the ACL is adjusted by the same amount.
Concentration of Credit Risk
The Company’s loan portfolio is not concentrated in loans to any single borrower or to a relatively small number of borrowers. Additionally, management is not aware of any concentrations of loans to classes of borrowers or industries that would be similarly affected by economic conditions. Approximately 87% of the Company's loan portfolio is secured by real estate and is therefore susceptible to changes in real estate valuations.
Most of the Company's business activity is with customers located within the markets where we have banking operations. While our exposure to credit risk is affected by changes in the economy within our markets, the risk is not significantly concentrated. The following table presents the total lending exposure for the counties with the largest percentage of our loan portfolio as of December 31, 2025 and 2024. No other market (as defined by county) had total loans outstanding in excess of 5% of the total portfolio at year end.
Percentage of Loans Outstanding
20252024
New Hanover County, North Carolina9.5 %8.9 %
Wake County, North Carolina9.4 %9.7 %
Mecklenburg County, North Carolina8.2 %7.8 %
Buncombe County, North Carolina5.0 %5.2 %
In addition to monitoring potential concentrations of loans to particular borrowers or groups of borrowers, industries, and geographic regions, the Company monitors exposure to credit risk that could arise from potential concentrations of lending products and practices The Company has determined that there is no concentration of credit risk associated with its lending policies or practices.
Impact of Hurricane Helene
In the portions of Western North and South Carolina that were significantly impacted by Hurricane Helene in third quarter of 2024, the Company identified borrowers who were potentially impacted. During 2025, the Company evaluated the commercial loan portfolio and adjusted risk ratings and nonaccrual status as applicable. Therefore, for those relationships, the normal reserving process for December 31, 2025 was applied. For the potentially impacted consumer loans, the Company applied increased reserve rates based upon severe economic factors to the approximately $268 million of loans (primarily Residential 1-4 family real estate) in the most impacted path of Hurricane Helene. Due to the potential exposure from Hurricane Helene, the ACL on these impacted consumer loans was $1.9 million as of December 31, 2025, adding 2 basis points to the overall ACL as a percent of total loans, which was 1.42% as of December 31, 2025. As of December 31, 2024, the ACL on the population of potentially impacted commercial and consumer loans was $13.0 million, adding 16 basis points to the overall ACL as a percent of total loans, which was 1.51%.
Allowance for Unfunded Loan Commitments
In addition to the ACL on loans, the Company maintains an allowance for lending-related commitments such as unfunded loan commitments and letters of credit. The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for lending-related commitments on off-balance sheet credit exposures is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur, which is based on a historical funding study derived from internal information, and an estimate of expected credit losses on commitments expected to be funded over its estimated life, which are the same loss rates that are used in computing the ACL on loans, and are discussed in Note 1. The allowance for unfunded loan commitments were included in "Other liabilities" on the consolidated balance sheets.
The following table presents the balance and activity in the allowance for unfunded loan commitments for twelve months ended December 31, 2025 and December 31, 2024:
($ in thousands)December 31, 2025December 31, 2024
Beginning balance$9,066 $11,369 
Charge-offs— — 
Recoveries— — 
Provision (reversal) for unfunded commitments1,938 (2,303)
Ending balance $11,004 $9,066