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Note 3 - Loans and Allowance for Credit Losses | 9 Months Ended
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Sep. 30, 2025
Notes to Financial Statements |
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 September 30, 2025 and December 31, 2024 were as follows:
| o | 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.
| o | 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 September 30, 2025 were $4.62 billion compared to $4.60 billion at December 31, 2024, an increase of $14.4 million, or 0.3%. The components of our loan portfolio disaggregated by class of loan within the loan portfolio segments at September 30, 2025 and December 31, 2024, and the percentage change in loans from the end of 2024 to the end of the third quarter of 2025, are as follows:
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Percent |
|  | September 30, 2025 |  |  | December 31, 2024 |  |  | Increase |
(Dollars in thousands) |  | Balance |  |  | % |  |  | Balance |  |  | % |  |  | (Decrease) |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 1,337,729 |  |  |  | 29.0 | % |  | $ | 1,287,308 |  |  |  | 28.0 | % |  |  | 3.9 | %
Vacant land, land development, and residential construction |  |  | 70,806 |  |  |  | 1.5 |  |  |  | 66,936 |  |  |  | 1.5 |  |  |  | 5.8 |
Real estate – owner occupied |  |  | 729,451 |  |  |  | 15.8 |  |  |  | 748,837 |  |  |  | 16.3 |  |  |  | (2.6 | )
Real estate – non-owner occupied |  |  | 1,091,210 |  |  |  | 23.6 |  |  |  | 1,128,404 |  |  |  | 24.5 |  |  |  | (3.3 | )
Real estate – multi-family and residential rental |  |  | 521,111 |  |  |  | 11.3 |  |  |  | 475,819 |  |  |  | 10.3 |  |  |  | 9.5 |
Total commercial |  |  | 3,750,307 |  |  |  | 81.2 |  |  |  | 3,707,304 |  |  |  | 80.6 |  |  |  | 1.2 |
Retail: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-4 family mortgages |  |  | 780,917 |  |  |  | 16.9 |  |  |  | 827,597 |  |  |  | 18.0 |  |  |  | (5.6 | )
Other consumer loans |  |  | 83,936 |  |  |  | 1.9 |  |  |  | 65,880 |  |  |  | 1.4 |  |  |  | 27.4 |
Total retail |  |  | 864,853 |  |  |  | 18.8 |  |  |  | 893,477 |  |  |  | 19.4 |  |  |  | (3.2 | )
Total loans |  | $ | 4,615,160 |  |  |  | 100.0 | % |  | $ | 4,600,781 |  |  |  | 100.0 | % |  |  | 0.3 | %
An age analysis of past due loans is as follows as of September 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 |  |  | $ | 0 |  |  | $ | 309 |  |  | $ | 309 |  |  | $ | 1,337,420 |  |  | $ | 1,337,729 |  |  | $ | 0 |
Vacant land, land development, and residential construction |  |  | 5 |  |  |  | 0 |  |  |  | 0 |  |  |  | 5 |  |  |  | 70,801 |  |  |  | 70,806 |  |  |  | 0 |
Real estate – owner occupied |  |  | 29 |  |  |  | 0 |  |  |  | 0 |  |  |  | 29 |  |  |  | 729,422 |  |  |  | 729,451 |  |  |  | 0 |
Real estate – non- owner occupied |  |  | 0 |  |  |  | 0 |  |  |  | 5,532 |  |  |  | 5,532 |  |  |  | 1,085,678 |  |  |  | 1,091,210 |  |  |  | 0 |
Real estate – multi-family and residential rental |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 521,111 |  |  |  | 521,111 |  |  |  | 0 |
Total commercial |  |  | 34 |  |  |  | 0 |  |  |  | 5,841 |  |  |  | 5,875 |  |  |  | 3,744,432 |  |  |  | 3,750,307 |  |  |  | 0 |
Retail: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-4 family mortgages |  |  | 516 |  |  |  | 82 |  |  |  | 389 |  |  |  | 987 |  |  |  | 779,930 |  |  |  | 780,917 |  |  |  | 0 |
Other consumer loans |  |  | 281 |  |  |  | 17 |  |  |  | 0 |  |  |  | 298 |  |  |  | 83,638 |  |  |  | 83,936 |  |  |  | 0 |
Total retail |  |  | 797 |  |  |  | 99 |  |  |  | 389 |  |  |  | 1,285 |  |  |  | 863,568 |  |  |  | 864,853 |  |  |  | 0 |
Total past due loans |  | $ | 831 |  |  | $ | 99 |  |  | $ | 6,230 |  |  | $ | 7,160 |  |  | $ | 4,608,000 |  |  | $ | 4,615,160 |  |  | $ | 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 September 30, 2025 were as follows:
|  | Recorded |  |  |  |
|  | Principal |  |  | Related |
(Dollars in thousands) |  | Balance |  |  | Allowance |
With no allowance recorded: |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 60 |  |  | $ | 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 |  |  | 60 |  |  |  | 0 |
Retail: |  |  |  |  |  |  |  |
1-4 family mortgages |  |  | 1,382 |  |  |  | 0 |
Other consumer loans |  |  | 36 |  |  |  | 0 |
Total retail |  |  | 1,418 |  |  |  | 0 |
Total with no allowance recorded |  | $ | 1,478 |  |  | $ | 0 |
With an allowance recorded: |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 1,449 |  |  | $ | 1,032 |
Vacant land, land development and residential construction |  |  | 0 |  |  |  | 0 |
Real estate – owner occupied |  |  | 0 |  |  |  | 0 |
Real estate – non-owner occupied |  |  | 5,532 |  |  |  | 5,532 |
Real estate – multi-family and residential rental |  |  | 0 |  |  |  | 0 |
Total commercial |  |  | 6,981 |  |  |  | 6,564 |
Retail: |  |  |  |  |  |  |  |
1-4 family mortgages |  |  | 1,385 |  |  |  | 273 |
Other consumer loans |  |  | 0 |  |  |  | 0 |
Total retail |  |  | 1,385 |  |  |  | 273 |
Total with an allowance recorded |  | $ | 8,366 |  |  | $ | 6,837 |
Total nonaccrual loans: |  |  |  |  |  |  |  |
Commercial |  | $ | 7,041 |  |  | $ | 6,564 |
Retail |  |  | 2,803 |  |  |  | 273 |
Total nonaccrual loans |  | $ | 9,844 |  |  | $ | 6,837 |
Nonaccrual loans represent the entire balance of collateral dependent loans. As of September 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 $0.5 million during both the nine months ended September 30, 2025 and 2024, 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 September 30, 2025 and loan charge-offs during the nine months ended September 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 |  | $ | 67,832 |  |  | $ | 77,878 |  |  | $ | 42,624 |  |  | $ | 11,903 |  |  | $ | 36,956 |  |  | $ | 12,604 |  |  | $ | 249,797 |  |  | $ | 409,179 |  |  | $ | 658,976 |
Grades 5 – 7 |  |  | 114,811 |  |  |  | 130,711 |  |  |  | 65,882 |  |  |  | 25,531 |  |  |  | 9,290 |  |  |  | 1,825 |  |  |  | 348,050 |  |  |  | 310,301 |  |  |  | 658,351 |
Grades 8 – 9 |  |  | 1,482 |  |  |  | 0 |  |  |  | 60 |  |  |  | 0 |  |  |  | 249 |  |  |  | 0 |  |  |  | 1,791 |  |  |  | 18,611 |  |  |  | 20,402 |
Total |  | $ | 184,125 |  |  | $ | 208,589 |  |  | $ | 108,566 |  |  | $ | 37,434 |  |  | $ | 46,495 |  |  | $ | 14,429 |  |  | $ | 599,638 |  |  | $ | 738,091 |  |  | $ | 1,337,729 |
Year-to-date gross write offs |  | $ | 0 |  |  | $ | 4 |  |  | $ | 76 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 80 |  |  | $ | 7 |  |  | $ | 87 |
Vacant Land, Land Development and Residential Construction: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grades 1 – 4 |  | $ | 16,354 |  |  | $ | 6,094 |  |  | $ | 1,448 |  |  | $ | 720 |  |  | $ | 420 |  |  | $ | 175 |  |  | $ | 25,211 |  |  | $ | 0 |  |  | $ | 25,211 |
Grades 5 – 7 |  |  | 25,633 |  |  |  | 15,783 |  |  |  | 2,053 |  |  |  | 1,578 |  |  |  | 162 |  |  |  | 385 |  |  |  | 45,594 |  |  |  | 0 |  |  |  | 45,594 |
Grades 8 – 9 |  |  | 0 |  |  |  | 0 |  |  |  | 1 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1 |  |  |  | 0 |  |  |  | 1 |
Total |  | $ | 41,987 |  |  | $ | 21,877 |  |  | $ | 3,502 |  |  | $ | 2,298 |  |  | $ | 582 |  |  | $ | 560 |  |  | $ | 70,806 |  |  | $ | 0 |  |  | $ | 70,806 |
Year-to-date gross write offs |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Real Estate – Owner Occupied: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grades 1 – 4 |  | $ | 104,690 |  |  | $ | 142,895 |  |  | $ | 60,112 |  |  | $ | 80,000 |  |  | $ | 70,632 |  |  | $ | 17,348 |  |  | $ | 475,677 |  |  | $ | 0 |  |  | $ | 475,677 |
Grades 5 – 7 |  |  | 63,439 |  |  |  | 56,698 |  |  |  | 50,622 |  |  |  | 50,848 |  |  |  | 16,327 |  |  |  | 13,114 |  |  |  | 251,048 |  |  |  | 0 |  |  |  | 251,048 |
Grades 8 – 9 |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 2,697 |  |  |  | 0 |  |  |  | 29 |  |  |  | 2,726 |  |  |  | 0 |  |  |  | 2,726 |
Total |  | $ | 168,129 |  |  | $ | 199,593 |  |  | $ | 110,734 |  |  | $ | 133,545 |  |  | $ | 86,959 |  |  | $ | 30,491 |  |  | $ | 729,451 |  |  | $ | 0 |  |  | $ | 729,451 |
Year-to-date gross write offs |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Real Estate – Non-Owner Occupied: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grades 1 – 4 |  | $ | 77,917 |  |  | $ | 80,034 |  |  | $ | 57,076 |  |  | $ | 68,944 |  |  | $ | 79,308 |  |  | $ | 56,998 |  |  | $ | 420,277 |  |  | $ | 0 |  |  | $ | 420,277 |
Grades 5 – 7 |  |  | 89,600 |  |  |  | 184,156 |  |  |  | 181,647 |  |  |  | 81,739 |  |  |  | 73,627 |  |  |  | 54,632 |  |  |  | 665,401 |  |  |  | 0 |  |  |  | 665,401 |
Grades 8 – 9 |  |  | 5,532 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 5,532 |  |  |  | 0 |  |  |  | 5,532 |
Total |  | $ | 173,049 |  |  | $ | 264,190 |  |  | $ | 238,723 |  |  | $ | 150,683 |  |  | $ | 152,935 |  |  | $ | 111,630 |  |  | $ | 1,091,210 |  |  | $ | 0 |  |  | $ | 1,091,210 |
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 |  | $ | 35,042 |  |  | $ | 13,816 |  |  | $ | 40,311 |  |  | $ | 9,705 |  |  | $ | 32,363 |  |  | $ | 30,826 |  |  | $ | 162,063 |  |  | $ | 0 |  |  | $ | 162,063 |
Grades 5 – 7 |  |  | 100,327 |  |  |  | 70,229 |  |  |  | 148,466 |  |  |  | 28,664 |  |  |  | 4,026 |  |  |  | 7,336 |  |  |  | 359,048 |  |  |  | 0 |  |  |  | 359,048 |
Grades 8 – 9 |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Total |  | $ | 135,369 |  |  | $ | 84,045 |  |  | $ | 188,777 |  |  | $ | 38,369 |  |  | $ | 36,389 |  |  | $ | 38,162 |  |  | $ | 521,111 |  |  | $ | 0 |  |  | $ | 521,111 |
Year-to-date gross write offs |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Total Commercial |  | $ | 702,659 |  |  | $ | 778,294 |  |  | $ | 650,302 |  |  | $ | 362,329 |  |  | $ | 323,360 |  |  | $ | 195,272 |  |  | $ | 3,012,216 |  |  | $ | 738,091 |  |  | $ | 3,750,307 |
Total Commercial year-to-date gross write offs |  | $ | 0 |  |  | $ | 4 |  |  | $ | 76 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 80 |  |  | $ | 7 |  |  | $ | 87 |
Retail: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-4 Family Mortgages: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 38,286 |  |  | $ | 57,460 |  |  | $ | 106,613 |  |  | $ | 286,020 |  |  | $ | 186,616 |  |  | $ | 103,154 |  |  | $ | 778,149 |  |  | $ | 0 |  |  | $ | 778,149 |
Nonperforming |  |  | 0 |  |  |  | 168 |  |  |  | 472 |  |  |  | 1,065 |  |  |  | 352 |  |  |  | 711 |  |  |  | 2,768 |  |  |  | 0 |  |  |  | 2,768 |
Total |  | $ | 38,286 |  |  | $ | 57,628 |  |  | $ | 107,085 |  |  | $ | 287,085 |  |  | $ | 186,968 |  |  | $ | 103,865 |  |  | $ | 780,917 |  |  | $ | 0 |  |  | $ | 780,917 |
Year-to-date gross write offs |  | $ | 0 |  |  | $ | 0 |  |  | $ | 85 |  |  | $ | 22 |  |  | $ | 61 |  |  | $ | 3 |  |  | $ | 171 |  |  | $ | 0 |  |  | $ | 171 |
Other Consumer Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 3,545 |  |  | $ | 3,760 |  |  | $ | 1,934 |  |  | $ | 781 |  |  | $ | 422 |  |  | $ | 531 |  |  | $ | 10,973 |  |  | $ | 72,927 |  |  | $ | 83,900 |
Nonperforming |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 36 |  |  |  | 36 |  |  |  | 0 |  |  |  | 36 |
Total |  | $ | 3,545 |  |  | $ | 3,760 |  |  | $ | 1,934 |  |  | $ | 781 |  |  | $ | 422 |  |  | $ | 567 |  |  | $ | 11,009 |  |  | $ | 72,927 |  |  | $ | 83,936 |
Year-to-date gross write offs |  | $ | 2 |  |  | $ | 2 |  |  | $ | 6 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 10 |  |  | $ | 5 |  |  | $ | 15 |
Total Retail |  | $ | 41,831 |  |  | $ | 61,388 |  |  | $ | 109,019 |  |  | $ | 287,866 |  |  | $ | 187,390 |  |  | $ | 104,432 |  |  | $ | 791,926 |  |  | $ | 72,927 |  |  | $ | 864,853 |
Total Retail year-to-date gross write offs |  | $ | 2 |  |  | $ | 2 |  |  | $ | 91 |  |  | $ | 22 |  |  | $ | 61 |  |  | $ | 3 |  |  | $ | 181 |  |  | $ | 5 |  |  | $ | 186 |
Total |  | $ | 744,490 |  |  | $ | 839,682 |  |  | $ | 759,321 |  |  | $ | 650,195 |  |  | $ | 510,750 |  |  | $ | 299,704 |  |  | $ | 3,804,142 |  |  | $ | 811,018 |  |  | $ | 4,615,160 |
Total year-to-date gross write offs |  | $ | 2 |  |  | $ | 6 |  |  | $ | 167 |  |  | $ | 22 |  |  | $ | 61 |  |  | $ | 3 |  |  | $ | 261 |  |  | $ | 12 |  |  | $ | 273 |
There were lines of credit with principal balances of $1.3 million that were converted to term loans during the first nine months of 2025. The following table reflects amortized cost basis of loans as of December 31, 2024 and loan charge-offs during the nine months ended September 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 |  |  | $ | 9 |  |  | $ | 9 |
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 |  |  | $ | 9 |  |  | $ | 9 |
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 |  |  | $ | 6 |  |  | $ | 33 |  |  | $ | 9 |  |  | $ | 42 |
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 |  |  | $ | 6 |  |  | $ | 33 |  |  | $ | 9 |  |  | $ | 42 |
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 |  |  | $ | 6 |  |  | $ | 33 |  |  | $ | 18 |  |  | $ | 51 |
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 September 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 September 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 9.5% as of September 30, 2025 and 7.8% as of 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 September 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 September 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 $9.8 million and $7.4 million as of September 30, 2025 and December 31, 2024, respectively. Individual allowance allocations totaled $6.8 million and $2.2 million as of September 30, 2025 and December 31, 2024, respectively. Activity in the allowance for credit losses during the three and nine months ended September 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 6-30-25 |  | $ | 11,771 |  |  | $ | 387 |  |  | $ | 7,691 |  |  | $ | 13,800 |  |  | $ | 4,297 |  |  | $ | 17,965 |  |  | $ | 2,321 |  |  | $ | 143 |  |  | $ | 58,375 |
Provision for credit losses |  |  | 101 |  |  |  | 17 |  |  |  | (770 | ) |  |  | 3,632 |  |  |  | 803 |  |  |  | (3,524 | ) |  |  | 19 |  |  |  | (78 | ) |  |  | 200 |
Charge-offs |  |  | (76 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | (85 | ) |  |  | (11 | ) |  |  | 0 |  |  |  | (172 | )
Recoveries |  |  | 542 |  |  |  | 2 |  |  |  | 1 |  |  |  | 0 |  |  |  | 4 |  |  |  | 164 |  |  |  | 13 |  |  |  | 0 |  |  |  | 726 |
Ending balance |  | $ | 12,338 |  |  | $ | 406 |  |  | $ | 6,922 |  |  | $ | 17,432 |  |  | $ | 5,104 |  |  | $ | 14,520 |  |  | $ | 2,342 |  |  | $ | 65 |  |  | $ | 59,129 |
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 |  |  | 660 |  |  |  | 35 |  |  |  | (753 | ) |  |  | 6,513 |  |  |  | 1,425 |  |  |  | (4,327 | ) |  |  | 309 |  |  |  | 38 |  |  |  | 3,900 |
Charge-offs |  |  | (87 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | (171 | ) |  |  | (15 | ) |  |  | 0 |  |  |  | (273 | )
Recoveries |  |  | 600 |  |  |  | 4 |  |  |  | 4 |  |  |  | 0 |  |  |  | 12 |  |  |  | 316 |  |  |  | 112 |  |  |  | 0 |  |  |  | 1,048 |
Ending balance |  | $ | 12,338 |  |  | $ | 406 |  |  | $ | 6,922 |  |  | $ | 17,432 |  |  | $ | 5,104 |  |  | $ | 14,520 |  |  | $ | 2,342 |  |  | $ | 65 |  |  | $ | 59,129 |
Activity in the allowance for credit losses during the three and nine months ended September 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 6-30-24 |  | $ | 13,215 |  |  | $ | 393 |  |  | $ | 7,190 |  |  | $ | 10,249 |  |  | $ | 3,589 |  |  | $ | 18,513 |  |  | $ | 2,250 |  |  | $ | 9 |  |  | $ | 55,408 |
Provision for credit losses |  |  | 1,671 |  |  |  | (40 | ) |  |  | 336 |  |  |  | 351 |  |  |  | (369 | ) |  |  | (354 | ) |  |  | (539 | ) |  |  | 44 |  |  |  | 1,100 |
Charge-offs |  |  | (3 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | (7 | ) |  |  | 0 |  |  |  | (10 | )
Recoveries |  |  | 31 |  |  |  | 1 |  |  |  | 2 |  |  |  | 0 |  |  |  | 4 |  |  |  | 33 |  |  |  | 21 |  |  |  | 0 |  |  |  | 92 |
Ending balance |  | $ | 14,914 |  |  | $ | 354 |  |  | $ | 7,528 |  |  | $ | 10,600 |  |  | $ | 3,224 |  |  | $ | 18,192 |  |  | $ | 1,725 |  |  | $ | 53 |  |  | $ | 56,590 |
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 |  |  | 7,147 |  |  |  | (34 | ) |  |  | 181 |  |  |  | 748 |  |  |  | 28 |  |  |  | (923 | ) |  |  | (1,300 | ) |  |  | 53 |  |  |  | 5,900 |
Charge-offs |  |  | (9 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | (42 | ) |  |  | 0 |  |  |  | (51 | )
Recoveries |  |  | 335 |  |  |  | 4 |  |  |  | 161 |  |  |  | 0 |  |  |  | 12 |  |  |  | 129 |  |  |  | 186 |  |  |  | 0 |  |  |  | 827 |
Ending balance |  | $ | 14,914 |  |  | $ | 354 |  |  | $ | 7,528 |  |  | $ | 10,600 |  |  | $ | 3,224 |  |  | $ | 18,192 |  |  | $ | 1,725 |  |  | $ | 53 |  |  | $ | 56,590 |
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 September 30, 2025:
|  | Interest Rate |  |  |  |  |  |  | Principal |
(Dollars in thousands) |  | Reduction |  |  | Term Extension |  |  | Forgiveness |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 0 |  |  | $ | 9,590 |  |  | $ | 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 |  |  | $ | 9,590 |  |  | $ | 0 |
Retail: |  |  |  |  |  |  |  |  |  |  |  |
1-4 family mortgages |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Other consumer loans |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Total retail |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Total loans |  | $ | 0 |  |  | $ | 9,590 |  |  | $ | 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 nine months ended September 30, 2025:
|  | Interest Rate |  |  |  |  |  |  | Principal |
(Dollars in thousands) |  | Reduction |  |  | Term Extension |  |  | Forgiveness |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 0 |  |  | $ | 9,596 |  |  | $ | 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 |  |  | $ | 9,596 |  |  | $ | 0 |
Retail: |  |  |  |  |  |  |  |  |  |  |  |
1-4 family mortgages |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Other consumer loans |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Total retail |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Total loans |  | $ | 0 |  |  | $ | 9,596 |  |  | $ | 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 September 30, 2024:
|  | Interest Rate |  |  |  |  |  |  | Principal |
(Dollars in thousands) |  | Reduction |  |  | Term Extension |  |  | Forgiveness |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 0 |  |  | $ | 5,670 |  |  | $ | 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 |  |  | $ | 5,670 |  |  | $ | 0 |
Retail: |  |  |  |  |  |  |  |  |  |  |  |
1-4 family mortgages |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Other consumer loans |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Total retail |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Total loans |  | $ | 0 |  |  | $ | 5,670 |  |  | $ | 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 nine months ended September 30, 2024:
|  | Interest Rate |  |  |  |  |  |  | Principal |
(Dollars in thousands) |  | Reduction |  |  | Term Extension |  |  | Forgiveness |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 0 |  |  | $ | 7,454 |  |  | $ | 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 |  |  | $ | 7,454 |  |  | $ | 0 |
Retail: |  |  |  |  |  |  |  |  |  |  |  |
1-4 family mortgages |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Other consumer loans |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Total retail |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Total loans |  | $ | 0 |  |  | $ | 7,454 |  |  | $ | 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 September 30, 2025:
|  |  |  |  |  | 30 – 89 Days |  |  | 90 + Days |  |  |  |  |
(Dollars in thousands) |  | Current |  |  | Past Due |  |  | Past Due |  |  | Total |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 9,970 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 9,970 |
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 |  | $ | 9,970 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 9,970 |
Retail: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-4 family mortgages |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Other consumer loans |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Total retail |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Total loans |  | $ | 9,970 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 9,970 |

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- Definition The entire disclosure for claims held for amounts due to entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 310 -SubTopic 10 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/310-10/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 835 -SubTopic 30 -Name Accounting Standards Codification -Section 45 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482925/835-30-45-2 + Details
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