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COMMITMENTS AND CONTINGENT LIABILITIES

3 Months Ended

Mar. 31, 2026

COMMITMENTS AND CONTINGENT LIABILITIES

COMMITMENTS AND CONTINGENT LIABILITIES

8.COMMITMENTS AND CONTINGENT LIABILITIES

Commitments to Extend Credit

The Company, in the normal course of business, is party to financial instruments with OBS risk. These financial instruments primarily include commitments to extend credit and standby letters of credit. The contract or notional amounts of these instruments reflect the potential future obligations of the Company pursuant to those financial instruments. Creditworthiness for all instruments is evaluated on a case-by-case basis in accordance with the Company’s credit policies. Collateral from the client may be required based on the Company’s credit evaluation of the client and may include business assets of commercial clients, as well as personal property and real estate of individual clients or guarantors.

The Company also extends binding commitments to clients and prospective clients. Such commitments assure a borrower of financing for a specified period of time at a specified rate. The risk to the Company under such loan commitments is limited by the terms of the contracts. For example, the Company may not be obligated to advance funds if the client’s financial condition deteriorates or if the client fails to meet specific covenants.

An approved but unfunded loan commitment represents a potential credit risk and a liquidity risk, since the Company’s client(s) may demand immediate cash that would require funding. In addition, unfunded loan commitments represent interest rate risk as market interest rates may rise above the rate committed to the Company’s client. Since a portion of these loan commitments normally expire unused, the total amount of outstanding commitments at any point in time may not require future funding.

The following table presents the Company’s commitments, exclusive of Mortgage Banking loan commitments:


(in thousands)		March 31, 2026			December 31, 2025

Unused warehouse lines of credit		$	584,152		$	436,909
Unused home equity lines of credit			512,690			487,822
Unused loan commitments - other			1,137,186			1,203,211
Standby letters of credit			10,107			10,385
Total commitments		$	2,244,135		$	2,138,327

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a client to a third-party. The terms and risk of loss involved in issuing standby letters of credit are similar to those involved in issuing loan commitments and extending credit. In addition to credit risk, the Company also has liquidity risk associated with standby letters of credit because funding for these obligations could be required immediately. The Company does not deem this risk to be material.

The following tables present a roll-forward of the ACLC:


			ACLC Roll-forward
			Three Months Ended March 31,
			2026															2025
			Beginning						Charge-						Ending			Beginning						Charge-						Ending
(in thousands)			Balance			Provision			offs			Recoveries			Balance			Balance			Provision			offs			Recoveries			Balance

Loan Commitments
Unused warehouse lines of credit			$	73		$	(11)		$	—		$	—		$	62		$	79		$	26		$	—		$	—		$	105
Unused home equity lines of credit				189			34			—			—			223			183			16			—			—			199
Unused construction lines of credit				585			94			—			—			679			677			60			—			—			737
Unused RCS lines of credit				230			20			—			—			250			300			(110)			—			—			190
Unused loan commitments - other				373			(57)			—			—			316			251			28			—			—			279

Total			$	1,450		$	80		$	—		$	—		$	1,530		$	1,490		$	20		$	—		$	—		$	1,510