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Note 3 - Loans and Allowance for Credit Losses

6 Months Ended

Jun. 30, 2025

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

3. LOANS AND ALLOWANCE FOR CREDIT LOSSES

Commercial loans are divided among five segments based primarily on collateral type, risk characteristics, and primary and secondary sources of repayment. These segments are then further stratified based on the commercial loan grade that is assigned using our standard loan grading paradigm. Retail loans are divided into one of two groups based on risk characteristics and source of repayment. Our allowance for credit loss pools are consistent with those used for loan note disclosure purposes.

Our loan portfolio segments as of both June 30, 2025 and December 31, 2024 were as follows:

Commercial Loans

■

Commercial and Industrial: Risks to this loan category include industry concentration and the practical limitations associated with monitoring the condition of the collateral which often consists of inventory, accounts receivable, and other non-real estate assets. Equipment and inventory obsolescence can also pose a risk. Declines in general economic conditions and other events can cause cash flows to fall to levels insufficient to service debt.

■

Owner Occupied Commercial Real Estate: Risks to this loan category include industry concentration and the inability to monitor the condition of the collateral. Declines in general economic conditions and other events can cause cash flows to fall to levels insufficient to service debt. Also, declines in real estate values and lack of suitable alternative use for the properties are risks for loans in this category.

■

Non-Owner Occupied Commercial Real Estate: Loans in this category are susceptible to declines in occupancy rates, business failure, and general economic conditions. Also, declines in real estate values and lack of suitable alternative use for the properties are risks for loans in this category.

■

Multi-Family and Residential Rental: Risks to this loan category include industry concentration and the inability to monitor the condition of the collateral. Loans in this category are susceptible to weakening general economic conditions and increases in unemployment rates, as well as market demand and supply of similar property and the resulting impact on occupancy rates, market rents, cash flow, and income-based real estate values. Also, the lack of a suitable alternative use for the properties is a risk for loans in this category.

■

Vacant Land, Land Development and Residential Construction: Risks common to commercial construction loans are cost overruns, changes in market demand for property, inadequate long-term financing arrangements, and declines in real estate values. Residential construction loans are susceptible to those same risks as well as those associated with residential mortgage loans. Changes in market demand for property could lead to longer marketing times resulting in higher carrying costs, declining values, and higher interest rates.

Retail Loans

■

1-4 Family Mortgages: Residential mortgage loans are susceptible to weakening general economic conditions and increases in unemployment rates and declining real estate values.

■

Other Consumer Loans: Risks common to these loans include regulatory risks, unemployment, and changes in local economic conditions as well as the inability to monitor collateral consisting of personal property.

Our total loans at June 30, 2025 were $4.70 billion compared to $4.60 billion at December 31, 2024, an increase of $97.2 million, or 2.1%. The components of our loan portfolio disaggregated by class of loan within the loan portfolio segments at June 30, 2025 and December 31, 2024, and the percentage change in loans from the end of 2024 to the end of the second quarter of 2025, are as follows:

											Percent
	June 30, 2025					December 31, 2024					Increase
(Dollars in thousands)	Balance		%			Balance		%			(Decrease)

Commercial:
Commercial and industrial	$	1,375,368		29.3	%	$	1,287,308		28.0	%		6.8	%
Vacant land, land development, and residential construction		67,520		1.4			66,936		1.5			0.9
Real estate – owner occupied		725,106		15.4			748,837		16.3			(3.2	)
Real estate – non-owner occupied		1,134,012		24.1			1,128,404		24.5			0.5
Real estate – multi-family and residential rental		519,152		11.1			475,819		10.3			9.1
Total commercial		3,821,158		81.3			3,707,304		80.6			3.1

Retail:
1-4 family mortgages		799,427		17.0			827,597		18.0			(3.4	)
Other consumer loans		77,434		1.7			65,880		1.4			17.5
Total retail		876,861		18.7			893,477		19.4			(1.9	)

Total loans	$	4,698,019		100.0	%	$	4,600,781		100.0	%		2.1	%

An age analysis of past due loans is as follows as of June 30, 2025:

													Recorded
					Greater								Balance
	30 – 59		60 – 89		Than 89								> 89
	Days		Days		Days		Total				Total		Days and
(Dollars in thousands)	Past Due		Past Due		Past Due		Past Due		Current		Loans		Accruing

Commercial:
Commercial and industrial	$	0	$	1,305	$	400	$	1,705	$	1,373,663	$	1,375,368	$	0
Vacant land, land development, and residential construction		0		0		0		0		67,520		67,520		0
Real estate – owner occupied		0		0		0		0		725,106		725,106		0
Real estate – non- owner occupied		0		0		0		0		1,134,012		1,134,012		0
Real estate – multi-family and residential rental		0		0		0		0		519,152		519,152		0
Total commercial		0		1,305		400		1,705		3,819,453		3,821,158		0

Retail:
1-4 family mortgages		654		208		0		862		798,565		799,427		0
Other consumer loans		103		0		0		103		77,331		77,434		0
Total retail		757		208		0		965		875,896		876,861		0

Total past due loans	$	757	$	1,513	$	400	$	2,670	$	4,695,349	$	4,698,019	$	0

An age analysis of past due loans is as follows as of December 31, 2024:

													Recorded
					Greater								Balance
	30 – 59		60 – 89		Than 89								> 89
	Days		Days		Days		Total				Total		Days and
(Dollars in thousands)	Past Due		Past Due		Past Due		Past Due		Current		Loans		Accruing

Commercial:
Commercial and industrial	$	5	$	0	$	864	$	869	$	1,286,439	$	1,287,308	$	0
Vacant land, land development, and residential construction		12		0		0		12		66,924		66,936		0
Real estate – owner occupied		0		0		0		0		748,837		748,837		0
Real estate – non-owner occupied		0		0		0		0		1,128,404		1,128,404		0
Real estate – multi-family and residential rental		0		0		0		0		475,819		475,819		0
Total commercial		17		0		864		881		3,706,423		3,707,304		0

Retail:
1-4 family mortgages		2,365		713		182		3,260		824,337		827,597		0
Other consumer loans		112		0		0		112		65,768		65,880		0
Total retail		2,477		713		182		3,372		890,105		893,477		0

Total past due loans	$	2,494	$	713	$	1,046	$	4,253	$	4,596,528	$	4,600,781	$	0

Nonaccrual loans as of June 30, 2025 were as follows:

	Recorded
	Principal		Related
(Dollars in thousands)	Balance		Allowance
With no allowance recorded:
Commercial:
Commercial and industrial	$	25	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		0		0
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		25		0

Retail:
1-4 family mortgages		1,301		0
Other consumer loans		0		0
Total retail		1,301		0

Total with no allowance recorded	$	1,326	$	0

With an allowance recorded:
Commercial:
Commercial and industrial	$	1,702	$	1,204
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		0		0
Real estate – non-owner occupied		5,532		2,471
Real estate – multi-family and residential rental		0		0
Total commercial		7,234		3,675

Retail:
1-4 family mortgages		1,183		219
Other consumer loans		0		0
Total retail		1,183		219

Total with an allowance recorded	$	8,417	$	3,894

Total nonaccrual loans:
Commercial	$	7,259	$	3,675
Retail		2,484		219
Total nonaccrual loans	$	9,743	$	3,894

Nonaccrual loans represent the entire balance of collateral dependent loans. As of June 30, 2025 and December 31, 2024, all collateral dependent loans were secured by real estate, with the exception of those classified as commercial and industrial, which were secured by accounts receivable, inventory, and equipment. Interest income recognized on nonaccrual loans totaled $0.3 million and $0.4 million during the six months ended June 30, 2025 and 2024, respectively, reflecting the collection of interest at the time of principal pay-off.

Nonaccrual loans as of December 31, 2024 were as follows:

	Recorded
	Principal		Related
(Dollars in thousands)	Balance		Allowance
With no allowance recorded:
Commercial:
Commercial and industrial	$	615	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		42		0
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		657		0

Retail:
1-4 family mortgages		1,167		0
Other consumer loans		0		0
Total retail		1,167		0

Total with no allowance recorded	$	1,824	$	0

With an allowance recorded:
Commercial:
Commercial and industrial	$	2,110	$	1,732
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		0		0
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		2,110		1,732

Retail:
1-4 family mortgages		1,808		402
Other consumer loans		0		0
Total retail		1,808		402

Total with an allowance recorded	$	3,918	$	2,134

Total nonaccrual loans:
Commercial	$	2,767	$	1,732
Retail		2,975		402
Total nonaccrual loans	$	5,742	$	2,134

Credit Quality Indicators. We utilize a comprehensive grading system for our commercial loans. All commercial loans are graded on a ten grade rating system. The rating system utilizes standardized grade paradigms that analyze several critical factors such as cash flow, operating performance, financial condition, collateral, industry condition and management. All commercial loans are graded at inception and reviewed and, if appropriate, re-graded at various intervals thereafter. The primary risk elements with respect to commercial loans are the financial condition of the borrower, sufficiency of collateral, and timeliness of scheduled payments. We have a policy of requesting and reviewing periodic financial statements from commercial loan customers and employ a disciplined and formalized review of the existence of collateral and its value. All commercial loans are graded using the following criteria:

Grade 1.	“Exceptional” Loans with this rating contain very little, if any, risk.

Grade 2.	“Outstanding” Loans with this rating have excellent and stable sources of repayment and conform to bank policy and regulatory requirements.

Grade 3.	“Very Good” Loans with this rating have strong sources of repayment and conform to bank policy and regulatory requirements. These are loans for which repayment risks are acceptable.

Grade 4.	“Good” Loans with this rating have solid sources of repayment and conform to bank policy and regulatory requirements. These are loans for which repayment risks are modest.

Grade 5.	“Acceptable” Loans with this rating exhibit acceptable sources of repayment and conform with most bank policies and all regulatory requirements. These are for loans for which repayment risks are satisfactory.

Grade 6.	“Monitor” Loans with this rating are considered to have emerging weaknesses which may include negative current cash flow, high leverage, or operating losses. Generally, if further deterioration is observed, these credits will be downgraded to the criticized asset report.

Grade 7.	“Special Mention” Loans with this rating have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan at some future date.

Grade 8.	“Substandard” Loans with this rate are inadequately protected by current sound net worth, paying capacity of the obligor, or of the pledged collateral, if any. A Substandard loan normally has one or more well-defined weaknesses that jeopardize the repayment of the debt. They are characterized by the distinct possibility of loss if the deficiencies are not corrected.

Grade 9.	“Doubtful” Loans with this rating exhibit all the weaknesses inherent in the Substandard classification and where collection or liquidation in full is highly questionable and improbable.

Grade 10.	“Loss” Loans with this rating are considered uncollectable, and of such little value that continuance as an active asset is not warranted.

The primary risk element with respect to each residential real estate loan and consumer loan is the timeliness of scheduled payments. We have a reporting system that monitors past due loans and have adopted policies to pursue creditors’ rights in order to preserve our collateral position. Retail loans that reach 90 days or more past due are generally placed into nonaccrual status and are categorized as nonperforming.

The following table reflects amortized cost basis of loans as of June 30, 2025 and loan charge-offs during the six months ended June 30, 2025 based on year of origination:

															Revolving		Grand
(Dollars in thousands)	2025		2024		2023		2022		2021		Prior		Term Total		Loans		Total
Commercial:
Commercial and Industrial:
Grades 1 – 4	$	36,861	$	88,985	$	53,832	$	13,126	$	40,037	$	13,399	$	246,240	$	437,487	$	683,727
Grades 5 – 7		99,390		146,328		67,494		28,903		10,321		2,740		355,176		316,063		671,239
Grades 8 – 9		22		1,305		428		25		249		26		2,055		18,347		20,402
Total	$	136,273	$	236,618	$	121,754	$	42,054	$	50,607	$	16,165	$	603,471	$	771,897	$	1,375,368
Year-to-date gross write offs	$	0	$	4	$	0	$	0	$	0	$	0	$	4	$	7	$	11

Vacant Land, Land Development and Residential Construction:
Grades 1 – 4	$	12,721	$	6,415	$	1,558	$	750	$	427	$	183	$	22,054	$	0	$	22,054
Grades 5 – 7		22,047		19,164		2,078		1,605		168		401		45,463		0		45,463
Grades 8 – 9		0		0		3		0		0		0		3		0		3
Total	$	34,768	$	25,579	$	3,639	$	2,355	$	595	$	584	$	67,520	$	0	$	67,520
Year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Real Estate – Owner Occupied:
Grades 1 – 4	$	76,395	$	146,995	$	69,521	$	86,575	$	67,613	$	23,694	$	470,793	$	0	$	470,793
Grades 5 – 7		54,653		63,405		47,058		48,480		22,787		15,180		251,563		0		251,563
Grades 8 – 9		0		0		0		2,720		0		30		2,750		0		2,750
Total	$	131,048	$	210,400	$	116,579	$	137,775	$	90,400	$	38,904	$	725,106	$	0	$	725,106
Year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Real Estate – Non-Owner Occupied:
Grades 1 – 4	$	65,713	$	92,693	$	60,448	$	74,512	$	85,516	$	71,792	$	450,674	$	0	$	450,674
Grades 5 – 7		67,152		192,177		199,320		83,389		74,231		61,537		677,806		0		677,806
Grades 8 – 9		5,532		0		0		0		0		0		5,532		0		5,532
Total	$	138,397	$	284,870	$	259,768	$	157,901	$	159,747	$	133,329	$	1,134,012	$	0	$	1,134,012
Year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Real Estate – Multi-Family and Residential Rental:
Grades 1 – 4	$	25,909	$	16,350	$	40,239	$	9,676	$	31,697	$	32,232	$	156,103	$	0	$	156,103
Grades 5 – 7		84,197		86,775		149,435		28,970		5,492		8,180		363,049		0		363,049
Grades 8 – 9		0		0		0		0		0		0		0		0		0
Total	$	110,106	$	103,125	$	189,674	$	38,646	$	37,189	$	40,412	$	519,152	$	0	$	519,152
Year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Total Commercial	$	550,592	$	860,592	$	691,414	$	378,731	$	338,538	$	229,394	$	3,049,261	$	771,897	$	3,821,158
Total Commercial year-to-date gross write offs	$	0	$	4	$	0	$	0	$	0	$	0	$	4	$	7	$	11

Retail:
1-4 Family Mortgages:
Performing	$	22,457	$	66,479	$	114,073	$	292,549	$	192,250	$	109,133	$	796,941	$	0	$	796,941
Nonperforming		0		173		82		1,083		360		788		2,486		0		2,486
Total	$	22,457	$	66,652	$	114,155	$	293,632	$	192,610	$	109,921	$	799,427	$	0	$	799,427
Year-to-date gross write offs	$	0	$	0	$	0	$	22	$	61	$	3	$	86	$	0	$	86

Other Consumer Loans:
Performing	$	2,970	$	4,160	$	2,317	$	965	$	479	$	673	$	11,564	$	65,870	$	77,434
Nonperforming		0		0		0		0		0		0		0		0		0
Total	$	2,970	$	4,160	$	2,317	$	965	$	479	$	673	$	11,564	$	65,870	$	77,434
Year-to-date gross write offs	$	0	$	2	$	2	$	0	$	0	$	0	$	4	$	0	$	4
Total Retail	$	25,427	$	70,812	$	116,472	$	294,597	$	193,089	$	110,594	$	810,991	$	65,870	$	876,861
Total Retail year-to-date gross write offs	$	0	$	2	$	2	$	22	$	61	$	3	$	90	$	0	$	90

Total	$	576,019	$	931,404	$	807,886	$	673,328	$	531,627	$	339,988	$	3,860,252	$	837,767	$	4,698,019
Total year-to-date gross write offs	$	0	$	6	$	2	$	22	$	61	$	3	$	94	$	7	$	101

There were lines of credit with principal balances of $0.6 million that were converted to term loans during the first six months of 2025.

The following table reflects amortized cost basis of loans as of December 31, 2024 and loan charge-offs during the six months ended June 30, 2024 based on year of origination:

															Revolving		Grand
(Dollars in thousands)	2024		2023		2022		2021		2020		Prior		Term Total		Loans		Total
Commercial:
Commercial and Industrial:
Grades 1 – 4	$	102,898	$	68,536	$	41,609	$	47,534	$	9,551	$	8,412	$	278,540	$	351,311	$	629,851
Grades 5 – 7		188,267		88,471		31,755		13,513		3,298		2,019		327,323		309,860		637,183
Grades 8 – 9		4,813		401		3,436		262		69		0		8,981		11,293		20,274
Total	$	295,978	$	157,408	$	76,800	$	61,309	$	12,918	$	10,431	$	614,844	$	672,464	$	1,287,308
Year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	6	$	6

Vacant Land, Land Development and Residential Construction:
Grades 1 – 4	$	18,536	$	4,997	$	610	$	645	$	177	$	226	$	25,191	$	0	$	25,191
Grades 5 – 7		31,692		7,681		1,855		49		0		463		41,740		0		41,740
Grades 8 – 9		0		5		0		0		0		0		5		0		5
Total	$	50,228	$	12,683	$	2,465	$	694	$	177	$	689	$	66,936	$	0	$	66,936
Year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Real Estate – Owner Occupied:
Grades 1 – 4	$	179,763	$	84,641	$	88,794	$	75,702	$	34,031	$	3,469	$	466,400	$	0	$	466,400
Grades 5 – 7		108,316		61,998		52,072		21,833		12,386		5,611		262,216		13,290		275,506
Grades 8 – 9		714		0		6,184		0		33		0		6,931		0		6,931
Total	$	288,793	$	146,639	$	147,050	$	97,535	$	46,450	$	9,080	$	735,547	$	13,290	$	748,837
Year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Real Estate – Non-Owner Occupied:
Grades 1 – 4	$	84,773	$	79,911	$	76,468	$	93,034	$	84,355	$	13,703	$	432,244	$	0	$	432,244
Grades 5 – 7		194,634		220,681		84,897		91,569		85,828		10,569		688,178		0		688,178
Grades 8 – 9		7,982		0		0		0		0		0		7,982		0		7,982
Total	$	287,389	$	300,592	$	161,365	$	184,603	$	170,183	$	24,272	$	1,128,404	$	0	$	1,128,404
Year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Real Estate – Multi-Family and Residential Rental:
Grades 1 – 4	$	16,271	$	46,870	$	10,107	$	62,744	$	33,337	$	3,780	$	173,109	$	0	$	173,109
Grades 5 – 7		81,919		174,468		32,506		4,559		5,626		2,985		302,063		37		302,100
Grades 8 – 9		47		0		0		0		563		0		610		0		610
Total	$	98,237	$	221,338	$	42,613	$	67,303	$	39,526	$	6,765	$	475,782	$	37	$	475,819
Year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Total Commercial	$	1,020,625	$	838,660	$	430,293	$	411,444	$	269,254	$	51,237	$	3,021,513	$	685,791	$	3,707,304
Total Commercial year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	6	$	6

Retail:
1-4 Family Mortgages:
Performing	$	72,349	$	122,718	$	307,161	$	203,052	$	73,052	$	46,290	$	824,622	$	0	$	824,622
Nonperforming		0		89		1,626		439		0		821		2,975		0		2,975
Total	$	72,349	$	122,807	$	308,787	$	203,491	$	73,052	$	47,111	$	827,597	$	0	$	827,597
Year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Other Consumer Loans:
Performing	$	5,863	$	3,008	$	1,428	$	732	$	361	$	653	$	12,045	$	53,835	$	65,880
Nonperforming		0		0		0		0		0		0		0		0		0
Total	$	5,863	$	3,008	$	1,428	$	732	$	361	$	653	$	12,045	$	53,835	$	65,880
Year-to-date gross write offs	$	0	$	1	$	18	$	8	$	0	$	5	$	32	$	3	$	35
Total Retail	$	78,212	$	125,815	$	310,215	$	204,223	$	73,413	$	47,764	$	839,642	$	53,835	$	893,477
Total Retail year-to-date gross write offs	$	0	$	1	$	18	$	8	$	0	$	5	$	32	$	3	$	35

Total	$	1,098,837	$	964,475	$	740,508	$	615,667	$	342,667	$	99,001	$	3,861,155	$	739,626	$	4,600,781
Total year-to-date gross write offs	$	0	$	1	$	18	$	8	$	0	$	5	$	32	$	9	$	41

There were lines of credit with principal balances of $9.1 million as of December 31, 2023 that were converted to term loans during 2024.

We use a migration to loss methodology to determine historical loss rates for commercial loans given the comprehensive loan grading process employed by our bank for over two decades, while an open pool approach is best suited for retail loans given the smaller dollar size of the segments. A baseline loss rate is produced at each reporting date for each loan portfolio segment using bank-specific loan charge-off and recovery data over a defined historical look-back period. The look-back period represents the number of data periods that will be used to calculate a baseline loss rate for each loan portfolio segment. We determined that the look-back period commencing on January 1, 2011 through the current reporting date was reasonable and appropriate, which was used in the calculation of both the June 30, 2025, and December 31, 2024 allowance for credit losses.

Our historical loss rate is then applied to future loan balances at the instrument level based on remaining contractual life adjusted for amortization, prepayment and default to develop a baseline lifetime loss. Our prepayment speed assumptions are developed at the loan segment level based upon the consideration of all relevant data which we believe could impact anticipated customer behavior, including changes in interest rates, economic conditions, and underlying property valuations. For the commercial portfolio segments, we assumed a 2.0% prepayment speed as of both June 30, 2025 and December 31, 2024 as we deemed there to be no considerable changes from historical experience. For the retail 1-4 family mortgage and retail other consumer portfolios, we used a prepayment speed of 7.8% as of June 30, 2025 and December 31, 2024.

During each reporting period, we also consider the need to adjust the historical loss rates as determined to reflect the extent to which we expect current conditions and reasonable and supportable economic forecasts to differ from the conditions that existed for the period over which the historical loss information was determined. These qualitative adjustments may increase or decrease our estimate of expected future credit losses. As of June 30, 2025 and December 31, 2024, we used a one-year reasonable and supportable economic forecast period, with a six-month straight-line reversion period for all loan segments. The economic forecasts used for our June 30, 2025 allowance calculation reflected a $0.1 million allowance balance reduction. The forecasts used for our December 31, 2024 allowance calculation reflected a $2.2 million allowance balance reduction.

Individual loans exhibiting unique risk characteristics, which differentiated the loans from other loans within the loan segments and were evaluated for expected credit losses on an individual basis, totaled $11.2 million and $7.4 million as of June 30, 2025 and December 31, 2024, respectively. Individual allowance allocations totaled $3.9 million and $2.2 million as of June 30, 2025 and December 31, 2024, respectively.

Activity in the allowance for credit losses during the three and six months ended June 30, 2025 is as follows:

(Dollars in thousands)	Commercial and industrial			Commercial vacant land, land development and residential construction		Commercial real estate – owner occupied		Commercial real estate – non-owner occupied		Commercial real estate – multi-family and residential rental		1-4 family mortgages			Other consumer loans			Unallocated		Total

Balance at 3-31-25	$	11,798		$	386	$	7,679	$	11,946	$	3,878	$	18,874		$	2,102		$	3	$	56,666
Provision for credit losses		(39	)		0		11		1,854		416		(989	)		207			140		1,600
Charge-offs		(11	)		0		0		0		0		(25	)		(2	)		0		(38	)
Recoveries		23			1		1		0		3		105			14			0		147
Ending balance	$	11,771		$	387	$	7,691	$	13,800	$	4,297	$	17,965		$	2,321		$	143	$	58,375

Balance at 12-31-24	$	11,165		$	367	$	7,671	$	10,919	$	3,667	$	18,702		$	1,936		$	27	$	54,454
Provision for credit losses		559			18		17		2,881		622		(803	)		290			116		3,700
Charge-offs		(11	)		0		0		0		0		(86	)		(4	)		0		(101	)
Recoveries		58			2		3		0		8		152			99			0		322
Ending balance	$	11,771		$	387	$	7,691	$	13,800	$	4,297	$	17,965		$	2,321		$	143	$	58,375

Activity in the allowance for credit losses during the three and six months ended June 30, 2024 is as follows:

(Dollars in thousands)	Commercial and industrial			Commercial vacant land, land development and residential construction		Commercial real estate – owner occupied			Commercial real estate – non-owner occupied		Commercial real estate – multi-family and residential rental		1-4 family mortgages			Other consumer loans			Unallocated			Total

Balance at 3-31-24	$	9,178		$	387	$	7,092		$	10,141	$	3,420	$	18,580		$	2,825		$	15		$	51,638
Provision for credit losses		4,010			4		(4	)		108		165		(93	)		(684	)		(6	)		3,500
Charge-offs		0			0		0			0		0		0			(26	)		0			(26	)
Recoveries		27			2		102			0		4		26			135			0			296
Ending balance	$	13,215		$	393	$	7,190		$	10,249	$	3,589	$	18,513		$	2,250		$	9		$	55,408

Balance at 12-31-23	$	7,441		$	384	$	7,186		$	9,852	$	3,184	$	18,986		$	2,881		$	0		$	49,914
Provision for credit losses		5,476			6		(155	)		397		397		(569	)		(761	)		9			4,800
Charge-offs		(6	)		0		0			0		0		0			(35	)		0			(41	)
Recoveries		304			3		159			0		8		96			165			0			735
Ending balance	$	13,215		$	393	$	7,190		$	10,249	$	3,589	$	18,513		$	2,250		$	9		$	55,408

There were no loan modifications to borrowers experiencing financial difficulty during the three months ended March 31, 2025. The following table presents the period-end amortized cost basis of modifications to borrowers experiencing financial difficulty by type of modification made during the three months ended June 30, 2025:

	Interest Rate				Principal
(Dollars in thousands)	Reduction		Term Extension		Forgiveness
Commercial:
Commercial and industrial	$	0	$	20	$	0
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		0		0
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total commercial	$	0	$	20	$	0

Retail:
1-4 family mortgages		0		0		0
Other consumer loans		0		0		0
Total retail	$	0	$	0	$	0

Total loans	$	0	$	20	$	0

The following table presents the period-end amortized cost basis of modifications to borrowers experiencing financial difficulty by type of modification made during the three months ended June 30, 2024:

	Interest Rate				Principal
(Dollars in thousands)	Reduction		Term Extension		Forgiveness
Commercial:
Commercial and industrial	$	0	$	1,818	$	0
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		0		0
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total commercial	$	0	$	1,818	$	0

Retail:
1-4 family mortgages		0		0		0
Other consumer loans		0		0		0
Total retail	$	0	$	0	$	0

Total loans	$	0	$	1,818	$	0

The following table presents the period-end amortized cost basis of modifications to borrowers experiencing financial difficulty by type of modification made during the six months ended June 30, 2024:

	Interest Rate				Principal
(Dollars in thousands)	Reduction		Term Extension		Forgiveness
Commercial:
Commercial and industrial	$	0	$	2,318	$	0
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		0		0
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total commercial	$	0	$	2,318	$	0

Retail:
1-4 family mortgages		0		0		0
Other consumer loans		0		0		0
Total retail	$	0	$	0	$	0

Total loans	$	0	$	2,318	$	0

Loans listed under Term Extension were generally granted a series of short-term maturity extensions as part of the workout process and associated forbearance agreements.

The following table presents the amortized cost basis of loans that have been modified in the past twelve months to borrowers experiencing financial difficulty by payment status and loan segment as of June 30, 2025:

			30 – 89 Days		90 + Days
(Dollars in thousands)	Current		Past Due		Past Due		Total
Commercial:
Commercial and industrial	$	3,883	$	0	$	0	$	3,883
Vacant land, land development and residential construction		0		0		0		0
Real estate – owner occupied		0		0		0		0
Real estate – non-owner occupied		0		0		0		0
Real estate – multi-family and residential rental		0		0		0		0
Total commercial	$	3,883	$	0	$	0	$	3,883

Retail:
1-4 family mortgages		0		0		0		0
Other consumer loans		0		0		0		0
Total retail	$	0	$	0	$	0	$	0

Total loans	$	3,883	$	0	$	0	$	3,883