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Loans and Leases and Allowance for Credit Losses

12 Months Ended

Dec. 31, 2024

Loans and Leases and Allowance for Credit Losses

Note 5. Loans and Leases and Allowance for Credit Losses

Portfolio Segmentation:

Major categories of loans and leases are summarized as follows (in thousands):


	December 31,		December 31,
	2024		2023
Commercial real estate:
Non-owner occupied	$	1,080,404	$	940,789
Owner occupied		867,678		798,416
Consumer real estate		741,836		649,867
Construction and land development		361,735		327,185
Commercial and industrial		775,620		645,918
Leases		64,878		68,752
Consumer and other		14,189		13,535
Total loans and leases		3,906,340		3,444,462
Less: Allowance for credit losses		(37,423)		(35,066)
Loans and leases, net	$	3,868,917	$	3,409,396

The loan and lease portfolio is disaggregated into segments. There are seven loan and lease portfolio segments that include commercial real estate non-owner occupied, commercial real estate owner occupied, consumer real estate, construction and land development, commercial and industrial, leases, and consumer and other. Fees and costs of originating loans are deferred at origination and amortized over the life of the loan. At December 31, 2024 and 2023, net deferred loan origination fees exceeded deferred loan origination costs, resulting in a net reduction of loan balances totaling $5.9 million and $5.7 million, respectively.

The following describe risk characteristics relevant to each of the portfolio segments:

Commercial real estate loans for prior periods were broken out into non-owner occupied and owner occupied for presentation comparison.

Commercial Real Estate – Non-Owner Occupied: Commercial real estate loans for income-producing properties such as apartment buildings, office and industrial buildings, and retail shopping centers are repaid from rent income derived from the properties. Loans within this portfolio segment are particularly sensitive to the valuation of real estate.

Commercial Real Estate - Owner Occupied: Commercial real estate loans to operating businesses are long-term financing of land and buildings where the owner occupies the property. These loans are repaid by cash flow generated from the business operation.

Consumer Real Estate: Consumer real estate loans include real estate loans secured by first liens, second liens, or open end real estate loans, such as home equity lines. These are repaid by various means such as a borrower’s income, sale of the property, or rental income derived from the property. Loans within this portfolio segment are particularly sensitive to the valuation of real estate.

Construction and Land Development: Loans for real estate construction and development are repaid through cash flow related to the operations, sale or refinance of the underlying property. This portfolio segment includes extensions of credit to real estate developers or investors where repayment is dependent on the sale of the real estate or income generated from the real estate collateral. Loans within this portfolio segment are particularly sensitive to the valuation of real estate.

Commercial and Industrial: The commercial and industrial loan portfolio segment includes commercial and financial loans. These loans include those loans to commercial customers for use in normal business operations to finance working capital needs, equipment purchases, or expansion projects. Loans are repaid by business cash flows. Collection risk in this portfolio is driven by the creditworthiness of the underlying borrower, particularly cash flows from the customers’ business operations.

Leases: The lease portfolio segment includes leases to small and mid-size companies for equipment financing leases. These leases are secured by a secured interest in the equipment being leased.

Consumer and Other: The consumer loan portfolio segment includes direct consumer installment loans, overdrafts and other revolving credit loans, and educational loans. Loans in this portfolio are sensitive to unemployment and other key consumer economic measures.

Allowance for credit losses:

As described in Note 1 - Summary of Significant Accounting Policies, the Company adopted ASU 2016-13 on January 1, 2023.

The following tables detail the changes in the allowance for credit losses by loan and lease classification (in thousands):


	Year Ended December 31, 2024
	Commercial		Commercial
	Real Estate		Real Estate		Consumer		Construction		Commercial
	Non-Owner		Owner		Real		and Land		and				Consumer
	Occupied		Occupied		Estate		Development		Industrial		Leases		and Other		Total
Beginning balance	$	6,846	$	8,418	$	7,249	$	4,874	$	6,924	$	640	$	115	$	35,066
Charged-off loans and leases		—		—		—		(441)		(928)		(1,312)		(336)		(3,017)
Recoveries of charge-offs		—		36		4		—		159		8		101		308
Provision charged to expense ⁽¹⁾		126		(113)		1,102		(265)		2,397		1,583		236		5,066
Ending balance	$	6,972	$	8,341	$	8,355	$	4,168	$	8,552	$	919	$	116	$	37,423

(1)

In the provision charged to expense there was a provision of $87 thousand for unfunded commitments through the provision for credit losses not reflected in the year ended December 31, 2024.


	Year Ended December 31, 2023
	Commercial		Commercial
	Real Estate		Real Estate		Consumer		Construction		Commercial
	Non-Owner		Owner		Real		and Land		and				Consumer
	Occupied		Occupied		Estate		Development		Industrial		Leases		and Other		Total
Beginning balance	$	5,694	$	5,127	$	4,028	$	3,059	$	3,997	$	1,293	$	136	$	23,334
Impact of adopting ASU 2016-13		458		421		1,952		2,145		1,451		(683)		13		5,757
Purchased credit-deteriorated gross up		117		2,535		166		25		27		28		—		2,898
Charged-off loans and leases		—		—		(9)		—		(584)		(345)		(425)		(1,363)
Recoveries of charge-offs		—		6		53		25		396		—		205		685
Provision charged to expense ⁽¹⁾		577		329		1,059		(380)		1,637		347		186		3,755
Ending balance	$	6,846	$	8,418	$	7,249	$	4,874	$	6,924	$	640	$	115	$	35,066

(1)

In the provision charged to expense there was a release of $726 thousand for unfunded commitments through the provision for credit losses not reflected in the year ended December 31, 2023.


	Year Ended December 31, 2022
	Commercial		Commercial
	Real Estate		Real Estate		Consumer		Construction		Commercial
	Non-Owner		Owner		Real		and Land		and				Consumer
	Occupied		Occupied		Estate		Development		Industrial		Leases		and Other		Total
Beginning balance	$	5,611	$	4,170	$	3,454	$	1,882	$	3,781	$	330	$	124	$	19,352
Charged-off loans and leases		—		—		(33)		—		(307)		(110)		(744)		(1,194)
Recoveries of charge-offs		—		6		564		—		184		194		210		1,158
Provision charged to expense		83		951		43		1,177		339		879		546		4,018
Ending balance	$	5,694	$	5,127	$	4,028	$	3,059	$	3,997	$	1,293	$	136	$	23,334

We maintain the allowance for credit losses at a level that we deem appropriate to adequately cover the expected credit loss in the loan and lease portfolio. Our provision for loan and lease losses for the years ended December 31, 2024, 2023 and 2022, were $5.1 million, $3.8 million and $4.0 million, respectively. As of December 31, 2024, and 2023, our allowance for credit losses was $37.4 million and $35.1 million, respectively, which we deemed to be adequate at each of the respective dates. Our allowance for credit losses as a percentage of total loans and leases was 0.96% at December 31, 2024 and 1.02% at December 31, 2023.

Credit Risk Management:

The Company employs a credit risk management process with defined policies, accountability and routine reporting to manage credit risk in the loan and lease portfolio segments. Credit risk management is guided by credit policies that provide for a consistent and prudent approach to underwriting and approvals of credits. Within the Credit Policy, procedures exist that elevate the approval requirements as credits become larger and more complex. All loans and leases are individually underwritten, risk-rated, approved, and monitored.

Responsibility and accountability for adherence to underwriting policies and accurate risk ratings lies in each portfolio segment. For the consumer real estate and consumer and other portfolio segments, the risk management process focuses on managing customers who become delinquent in their payments. For the other portfolio segments, the risk management process focuses on underwriting new business and, on an ongoing basis, monitoring the credit of the portfolios, including a third party review of the largest credits on an annual basis or more frequently, as needed. To ensure problem credits are identified on a timely basis, several specific portfolio reviews occur periodically to assess the larger adversely rated credits for proper risk rating and accrual status.

Credit quality and trends in the loan and lease portfolio segments are measured and monitored regularly. Detailed reports (e.g., by product, collateral, accrual status) are reviewed by director, management and loan committees.

A description of the general characteristics of the risk grades used by the Company is as follows:

Pass: Loans and leases in this risk category involve borrowers of acceptable-to-strong credit quality and risk who have the apparent ability to satisfy their loan and lease obligations. Loans and leases in this risk grade would possess sufficient mitigating factors, such as adequate collateral or strong guarantors possessing the capacity to repay the debt if required, for any weakness that may exist.

Watch: Loans and leases in this risk category involve borrowers that exhibit characteristics, or are operating under conditions that, if not successfully mitigated as planned, have a reasonable risk of resulting in a downgrade within the next six to twelve months. Loans and leases may remain in this risk category for six months and then are either upgraded or downgraded upon subsequent evaluation.

Special Mention: Loans and leases in this risk grade are the equivalent of the regulatory definition of "Other Assets Especially Mentioned" classification. Loans and leases in this category possess some credit deficiency or potential

weakness, which requires a high level of management attention. Potential weaknesses include declining trends in operating earnings and cash flows and /or reliance on the secondary source of repayment. If left uncorrected, these potential weaknesses may result in noticeable deterioration of the repayment prospects for the asset or in the Company’s credit position.

Substandard: Loans and leases in this risk grade are inadequately protected by the borrower’s current financial condition and payment capability or of the collateral pledged, if any. Loans and leases so classified have a well-defined weakness or weaknesses that jeopardize the orderly repayment of debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans and leases in this risk grade have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or orderly repayment in full, on the basis of current existing facts, conditions and values, highly questionable and improbable. Possibility of loss is extremely high, but because of certain important and reasonably specific factors that may work to the advantage and strengthening of the exposure, its classification as an estimated loss is deferred until its more exact status may be determined.

Uncollectible: Loans and leases in this risk grade are considered to be non-collectible and of such little value that their continuance as bankable assets is not warranted. This does not mean the loan or lease has absolutely no recovery value, but rather it is neither practical nor desirable to defer writing off the loan or lease, even though partial recovery may be obtained in the future. Charge-offs against the allowance for loan and lease losses are taken in the period in which the loan or lease becomes uncollectible. Consequently, the Company typically does not maintain a recorded investment in loans or leases within this category.

The Company evaluates the loan risk grading system definitions and allowance for credit loss methodology on an ongoing basis.

The following tables outline the amount of each loan and lease classification and the amount categorized into each risk rating based on year of origination (in thousands):


	December 31, 2024
	Loans Amortized Cost Basis by Origination Year
															Revolving
															Loans
													Revolving		Converted
	2024		2023		2022		2021		2020		Prior		Loans		to Term		Total
Commercial real estate - non-owner occupied
Pass	$	241,022		118,055		286,728		228,554		85,754		97,319		8,295		696		1,066,423
Watch		-		1,637		6,769		278		-		4,275		-		-		12,959
Special mention		-		-		-		-		-		-		-		-		-
Substandard		470		-		-		-		301		251		-		-		1,022
Doubtful		-		-		-		-		-		-		-		-		-
Total commercial real estate - non-owner occupied		241,492		119,692		293,497		228,832		86,055		101,845		8,295		696		1,080,404
YTD gross charge-offs		-		-		-		-		-		-		-		-		-

Commercial real estate - owner occupied
Pass		145,848	$	118,233	$	275,328	$	155,119	$	62,755	$	78,934	$	12,368	$	198	$	848,783
Watch		1,451		2,814		2,398		1,251		1,676		364		744		-		10,698
Special mention		3,147		-		-		-		-		-		-		-		3,147
Substandard		-		332		-		3,303		305		365		745		-		5,050
Doubtful		-		-		-		-		-		-		-		-		-
Total commercial real estate - owner occupied		150,446		121,379		277,726		159,673		64,736		79,663		13,857		198		867,678
YTD gross charge-offs		-		-		-		-		-		-		-		-		-

Consumer real estate
Pass		151,786		105,416		154,956		82,463		47,122		61,844		131,267		2,099		736,953
Watch		-		81		-		109		258		420		1,241		-		2,109
Special mention		-		-		-		-		-		50		-		-		50
Substandard		184		-		61		311		-		1,854		314		-		2,724
Doubtful		-		-		-		-		-		-		-		-		-
Total consumer real estate		151,970		105,497		155,017		82,883		47,380		64,168		132,822		2,099		741,836
YTD gross charge-offs		-		-		-		-		-		-		-		-		-

Construction and land development
Pass		199,160		74,200		51,438		6,146		2,168		9,562		12,392		89		355,155
Watch		2,477		-		105		3,015		-		-		-		-		5,597
Special mention		515		-		-		-		-		-		-		-		515
Substandard		262		-		-		68		-		138		-		-		468
Doubtful		-		-		-		-		-		-		-		-		-
Total construction and land development		202,414		74,200		51,543		9,229		2,168		9,700		12,392		89		361,735
YTD gross charge-offs		-		-		-		-		(441)		-		-		-		(441)

Commercial and industrial
Pass		130,898		128,646		133,782		43,299		17,716		26,933		282,695		3,239		767,208
Watch		103		107		119		2,807		-		-		2,865		14		6,015
Special mention		-		-		-		-		-		-		-		-		-
Substandard		-		40		455		1,657		129		46		9		61		2,397
Doubtful		-		-		-		-		-		-		-		-		-
Total commercial and industrial		131,001		128,793		134,356		47,763		17,845		26,979		285,569		3,314		775,620
YTD gross charge-offs		-		(618)		(235)		-		-		-		(29)		(46)		(928)

Leases
Pass		25,371		18,285		16,299		3,601		1,019		303		-		-		64,878
Watch		-		-		-		-		-		-		-		-		-
Special mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Total leases		25,371		18,285		16,299		3,601		1,019		303		-		-		64,878
YTD gross charge-offs		(74)		(619)		(589)		(1)		(1)		(28)		-		-		(1,312)


	December 31, 2024
	Loans Amortized Cost Basis by Origination Year
															Revolving
															Loans
													Revolving		Converted
	2024		2023		2022		2021		2020		Prior		Loans		to Term		Total
Consumer and other
Pass		4,385		1,932		922		387		284		238		6,024		-		14,172
Watch		4		-		-		-		-		-		-		-		4
Special mention		-		-		-		-		-		-		-		-		-
Substandard		11		-		-		-		-		2		-		-		13
Doubtful		-		-		-		-		-		-		-		-		-
Total consumer and other		4,400		1,932		922		387		284		240		6,024		-		14,189
YTD gross charge-offs		(24)		(84)		(61)		(37)		(53)		(77)		-		-		(336)

Total loans
Pass		898,470		564,767		919,453		519,569		216,818		275,133		453,041		6,321		3,853,572
Watch		4,035		4,639		9,391		7,460		1,934		5,059		4,850		14		37,382
Special mention		3,662		-		-		-		-		50		-		-		3,712
Substandard		927		372		516		5,339		735		2,656		1,068		61		11,674
Doubtful		-		-		-		-		-		-		-		-		-
Total loans	$	907,094	$	569,778	$	929,360	$	532,368	$	219,487	$	282,898	$	458,959	$	6,396	$	3,906,340
Total YTD gross charge-offs	$	(98)	$	(1,321)	$	(885)	$	(38)	$	(495)	$	(105)	$	(29)	$	(46)	$	(3,017)


	December 31, 2023
	Loans Amortized Cost Basis by Origination Year
															Revolving
															Loans
													Revolving		Converted
	2023		2022		2021		2020		2019		Prior		Loans		to Term		Total
Commercial real estate - non-owner occupied
Pass	$	120,088	$	293,053	$	258,422	$	107,359	$	76,847	$	42,345	$	3,691	$	4,320	$	906,125
Watch		22,295		-		645		-		4,426		2,663		-		3,500		33,529
Special mention		-		-		-		-		-		-		-		-		-
Substandard		517		-		-		310		-		308		-		-		1,135
Doubtful		-		-		-		-		-		-		-		-		-
Total commercial real estate - non-owner occupied		142,900		293,053		259,067		107,669		81,273		45,316		3,691		7,820		940,789
YTD gross charge-offs		-		-		-		-		-		-		-		-		-

Commercial real estate - owner occupied
Pass		117,022		285,174		175,083		74,015		57,648		63,970		11,441		2,370		786,723
Watch		-		1,267		1,305		921		-		263		-		-		3,756
Special mention		-		3,215		-		-		-		-		-		-		3,215
Substandard		386		-		3,932		-		282		122		-		-		4,722
Doubtful		-		-				-		-		-		-		-		-
Total commercial real estate - owner occupied		117,408		289,656		180,320		74,936		57,930		64,355		11,441		2,370		798,416
YTD gross charge-offs		-		-		-		-		-		-		-		-		-

Consumer real estate
Pass		123,203		174,755		98,460		53,688		33,598		48,378		107,949		3,026		643,057
Watch		171		-		258		116		-		55		1,581		-		2,181
Special mention		-		-		-		-		-		53		-		-		53
Substandard		196		824		176		253		164		2,850		113		-		4,576
Doubtful		-		-		-		-		-		-		-		-		-
Total consumer real estate		123,570		175,579		98,894		54,057		33,762		51,336		109,643		3,026		649,867
YTD gross charge-offs		-		-		-		-		-		(9)		-		-		(9)

Construction and land development
Pass		113,752		115,032		23,823		2,749		5,056		6,595		40,667		7,489		315,163
Watch		6,670		3,233		607		-		-		1		-		-		10,511
Special mention		437		-		-		-		-		-		-		-		437
Substandard		-		-		35		620		-		419		-		-		1,074
Doubtful		-		-		-		-		-		-		-		-		-
Total construction and land development		120,859		118,265		24,465		3,369		5,056		7,015		40,667		7,489		327,185
YTD gross charge-offs		-		-		-		-		-		-		-		-		-


	December 31, 2023
	Loans Amortized Cost Basis by Origination Year
															Revolving
															Loans
													Revolving		Converted
	2023		2022		2021		2020		2019		Prior		Loans		to Term		Total
Commercial and industrial
Pass		168,957		162,799		62,796		22,639		9,135		25,207		185,619		7,270		644,422
Watch		54		15		13		-		-		-		120		83		285
Special mention		-		-		-		-		-		-		-		-		-
Substandard		193		614		200		129		75		-		-		-		1,211
Doubtful		-		-		-		-		-		-		-		-		-
Total commercial and industrial		169,204		163,428		63,009		22,768		9,210		25,207		185,739		7,353		645,918
YTD gross charge-offs		(75)		(274)		(50)		(183)		-		-		(2)		-		(584)

Leases
Pass		28,922		26,658		8,658		3,603		703		208		-		-		68,752
Watch		-		-		-		-		-		-		-		-		-
Special mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Total leases		28,922		26,658		8,658		3,603		703		208		-		-		68,752
YTD gross charge-offs		(122)		(193)		(18)		-		(12)		-		-		-		(345)

Consumer and other
Pass		5,926		2,049		841		373		132		206		3,931		67		13,525
Watch		-		-		-		-		10		-		-		-		10
Special mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Total consumer and other		5,926		2,049		841		373		142		206		3,931		67		13,535
YTD gross charge-offs		(40)		(135)		(74)		(54)		(33)		(89)		-		-		(425)

Total loans
Pass		677,870		1,059,520		628,083		264,426		183,119		186,909		353,298		24,542		3,377,767
Watch		29,190		4,515		2,828		1,037		4,436		2,982		1,701		3,583		50,272
Special mention		437		3,215		-		-		-		53		-		-		3,705
Substandard		1,292		1,438		4,343		1,312		521		3,699		113		-		12,718
Doubtful		-		-		-		-		-		-		-		-		-
Total loans	$	708,789	$	1,068,688	$	635,254	$	266,775	$	188,076	$	193,643	$	355,112	$	28,125	$	3,444,462
Total YTD gross charge-offs	$	(237)	$	(602)	$	(142)	$	(237)	$	(45)	$	(98)	$	(2)	$	-	$	(1,363)

Past Due Loans and Leases:

A loan or lease is considered past due if any required principal and interest payments have not been received as of the date such payments were required to be made under the terms of the loan agreement. Generally, management places a loan or lease on nonaccrual when there is a clear indication that the borrower’s cash flow may not be sufficient to meet payments as they become due, which is generally when a loan is 90 days past due.

The following tables present an aging analysis of our loan and lease portfolio (in thousands):


	December 31, 2024
					90 Days
	30-59 Days		60-89 Days		or More		Total		Loans Not		Total
	Past Due		Past Due		Past Due		Past Due		Past Due		Loans
Commercial real estate:
Non-owner occupied	$	378	$	—	$	263	$	641	$	1,079,763	$	1,080,404
Owner occupied		731		47		539		1,317		866,361		867,678
Consumer real estate		2,258		826		764		3,848		737,988		741,836
Construction and land development		523		—		—		523		361,212		361,735
Commercial and industrial		1,417		367		1,636		3,420		772,200		775,620
Leases		1,645		—		2,118		3,763		61,115		64,878
Consumer and other		96		24		18		138		14,051		14,189
Total	$	7,048	$	1,264	$	5,338	$	13,650	$	3,892,690	$	3,906,340


	December 31, 2023
					90 Days
	30-59 Days		60-89 Days		or More		Total		Loans Not		Total
	Past Due		Past Due		Past Due		Past Due		Past Due		Loans
Commercial real estate:
Non-owner occupied	$	—	$	—	$	571	$	571	$	940,218		940,789
Owner occupied		52		270		1,089		1,411		797,005		798,416
Consumer real estate		2,216		1,347		561		4,124		645,743		649,867
Construction and land development		631		—		620		1,251		325,934		327,185
Commercial and industrial		956		330		2,286		3,572		642,346		645,918
Leases		1,208		132		212		1,552		67,200		68,752
Consumer and other		80		9		98		187		13,348		13,535
Total	$	5,143	$	2,088	$	5,437	$	12,668	$	3,431,794	$	3,444,462

The table below presents the amortized cost basis of loans on nonaccrual status and loans past due 90 or more days and still accruing interest at December 31, 2024, and 2023. Also presented is the balance of loans on nonaccrual status at December 31, 2024, and 2023, for which there was no related allowance for credit losses recorded (in thousands):


	December 31, 2024						December 31, 2023
	Total		Nonaccrual		Loans Past Due		Total		Nonaccrual		Loans Past Due
	Nonaccrual		With No Allowance		Over 90 Days		Nonaccrual		With No Allowance		Over 90 Days
	Loans		for Credit Losses		Still Accruing		Loans		for Credit Losses		Still Accruing
Commercial real estate:
Non-owner occupied	$	514	$	263	$	—	$	571	$	263	$	—
Owner occupied		906		539				1,473		1,089
Consumer real estate		1,995		752		—		2,647		1,562		—
Construction and land development		39		—		—		620		—		—
Commercial and industrial		1,820		—		144		2,480		160		—
Leases		2,433		—		—		140		—		72
Consumer and other		2		—		18		—		—		98
Total	$	7,709	$	1,554	$	162	$	7,931	$	3,074	$	170

The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses (in thousands):


	December 31, 2024
	Real Estate		Other		Total
Commercial real estate:
Non-owner occupied	$	733	$	—	$	733
Owner occupied		4,636				4,636
Consumer real estate		1,139		—		1,139
Construction and land development		262		—		262
Commercial and industrial		—		2,286		2,286
Leases		—		534		534
Consumer and other		—		—		—
Total	$	6,770	$	2,820	$	9,590

	December 31, 2023
	Real Estate		Other		Total
Commercial real estate:
Non-owner occupied	$	780	$	—	$	780
Owner occupied		4,375				4,375
Consumer real estate		2,756		—		2,756
Construction and land development		1,411		—		1,411
Commercial and industrial		—		1,018		1,018
Leases		—		—		—
Consumer and other		—		—		—
Total	$	9,322	$	1,018	$	10,340

Impaired Loans and Leases

The following table details the average recorded investment, and the amount of interest income recognized on a cash basis for impaired loans at December 31, 2022, as determined under ASC 310 prior to the adoption of ASU 2016-13. A loan or lease held for investment is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due (both principal and interest) according to the terms of the loan or lease agreement (in thousands):


	Year Ended December 31, 2022
	Average		Interest
	Recorded		Income
	Investment		Recognized
Impaired loans and leases without a valuation allowance:
Commercial real estate:
Non-owner occupied	$	—	$	—
Owner occupied		122		—
Consumer real estate		1,728		94
Construction and land development		—		—
Commercial and industrial		—		—
Leases		—		—
Consumer and other		—		—
		1,850		94
Impaired loans and leases with a valuation allowance:
Commercial real estate:
Non-owner occupied		343		—
Owner occupied		—		—
Consumer real estate		52		—
Construction and land development		515		—
Commercial and industrial		19		—
Leases		—		—
Consumer and other		—		—
		929		—
PCI loans and leases:
Commercial real estate:
Non-owner occupied		702		57
Owner occupied		—		—
Consumer real estate		819		50
Construction and land development		—		—
Commercial and industrial		—		—
Leases		—		—
Consumer and other		2		—
		1,523		107
Total impaired loans and leases	$	4,302	$	201

Loan Modifications to Borrowers Experiencing Financial Difficulty:

The table below shows the amortized cost of loans and leases made to borrowers experiencing financial difficulty that were modified during the years ended December 31, 2024, and 2023, respectively. (dollars in thousands):


					Payment Delay
	Payment		Term		and Term
Year ended December 31, 2024	Delay		Extension		Extension		Total
Commercial real estate:
Non-owner occupied	$	—	$	—	$	—	$	—
Owner occupied		—		—		—		—
Consumer real estate		—		301		—		301
Construction and land development		—		—		—		—
Commercial and industrial		—		24		—		24
Leases		—		—		—		—
Consumer and other		—		—		—		—
Total	$	—	$	325	$	—	$	325

					Payment Delay
	Payment		Term		and Term
Year ended December 31, 2023	Delay		Extension		Extension		Total
Commercial real estate:							$	—
Non-owner occupied	$	—	$	2,492	$	—	$	2,492
Owner occupied		386		38		—		424
Consumer real estate		—		446		—		446
Construction and land development		—		690		—		690
Commercial and industrial		57		—		136		193
Leases		—		—		—		—
Consumer and other		—		—		—		—
Total	$	443	$	3,666	$	136	$	4,245

The following table summarizes the financial impacts of loan modifications made to borrowers experiencing financial difficulty for the year ended December 31, 2024, and 2023, respectively (dollars in thousands):


	Weighted-Average
	Term		Weighted-Average
	Extension		Total Payment
Year ended December 31, 2024	(in months)		Delay
Commercial real estate:
Non-owner occupied		—	$	—
Owner occupied		—		—
Consumer real estate		63		—
Construction and land development		—		—
Commercial and industrial		38		—
Leases		—		—
Consumer and other		—		—

	Weighted-Average
	Term		Weighted-Average
	Extension		Total Payment
Year ended December 31, 2023	(in months)		Delay
Commercial real estate:
Non-owner occupied		7	$	—
Owner occupied		180		22
Consumer real estate		16		—
Construction and land development		8		—
Commercial and industrial		30		6
Leases		—		—
Consumer and other		—		—

The table below shows the amortized cost of loans and leases made to borrowers experiencing financial difficulty that defaulted during the year ended December 31, 2024. No defaults for the year ended December 31, 2023. (dollars in thousands):


					Payment Delay
	Payment		Term		and Term
Year ended December 31, 2024	Delay		Extension		Extension		Total
Commercial real estate:
Non-owner occupied	$	—	$	—	$	—	$	—
Owner occupied		—		—		—		—
Consumer real estate		—		60		—		60
Construction and land development		—		—		—		—
Commercial and industrial		—		—		—		—
Leases		—		—		—		—
Consumer and other		—		—		—		—
Total	$	—	$	60	$	—	$	60

The table below shows an age analysis of loans and leases made to borrowers experiencing financial difficulty that were modified in the last twelve months, (in thousands):


	December 31, 2024
					90 Days
			30-89 Days		or More
	Current		Past Due		Past Due		Nonaccrual		Total
Commercial real estate:
Non-owner occupied	$	—	$	—	$	—	$	—	$	—
Owner occupied		—		—		—		—		—
Consumer real estate		168		—		—		134		302
Construction and land development		—		—		—		—		—
Commercial and industrial		14		—		—		9		23
Leases		—		—		—		—		—
Consumer and other		—		—		—		—		—
Total	$	182	$	—	$	—	$	143	$	325

Foreclosure Proceedings and Balances:

As of December 31, 2024, there were no residential real estate properties in which physical possession had been obtained and included within other real estate owned assets and two properties totaling $279 thousand at December 31, 2023. There were two residential real estate loans totaling $256 thousand in the process of foreclosure at December 31, 2024, and two for $1.2 million at December 31, 2023.

Related Party Loans:

In the ordinary course of business, the Company has granted loans to certain related interests, including directors, executive officers, and their affiliates (collectively referred to as "related parties"). Such loans are made in the ordinary course of business and on substantially the same terms as those for comparable transactions prevailing at the time and do not present other unfavorable features. A summary of activity in loans to related parties is as follows (in thousands):


	2024		2023
Balance, beginning of year	$	20,836	$	14,246
Disbursements		3,619		8,653
Repayments		(2,557)		(2,063)
Balance, end of year	$	21,898	$	20,836

At December 31, 2024, the Company had pre-approved but unused lines of credit totaling approximately $8.1 million to related parties.