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Note 4 - Loans and Allowance for Credit Losses

9 Months Ended

Sep. 30, 2025

NOTE 4 Loans and Allowance for Credit Losses

The following table presents total loans outstanding, by portfolio segment, as of September 30, 2025 and December 31, 2024:

	*September 30,*		*December 31,*
(dollars in thousands)	*2025*		*2024*
Commercial
Commercial and industrial	$	702,135	$	666,727
Commercial real estate
Construction, land and development		349,768		294,677
Multifamily		374,761		363,123
Non-owner occupied		865,785		967,025
Owner occupied		435,320		371,418
Total commercial real estate		2,025,634		1,996,243
Agricultural
Land		65,900		61,299
Production		63,051		63,008
Total agricultural		128,951		124,307
Total commercial		2,856,720		2,787,277
Consumer
Residential real estate
First lien		894,402		921,019
Construction		34,124		33,547
HELOC		234,681		162,509
Junior lien		40,434		44,060
Total residential real estate		1,203,641		1,161,135
Other consumer		41,714		44,122
Total consumer		1,245,355		1,205,257
Total loans	$	4,102,075	$	3,992,534

Total loans included net deferred loan fees and costs of $0.4 million and $1.1 million at September 30, 2025 and December 31, 2024, respectively. Unearned discounts associated with bank acquisitions totaled $47.3 million and $70.6 million as of September 30, 2025 and December 31, 2024, respectively.

Accrued interest receivable on loans is recorded within accrued interest receivable, and totaled $18.3 million at September 30, 2025 and $16.4 million at December 31, 2024.

The Company manages its loan portfolio proactively to effectively identify problem credits and assess trends early, implement effective work-out strategies, and take charge-offs as promptly as practical. In addition, the Company continuously reassesses its underwriting standards in response to credit risk posed by changes in economic conditions. The Company monitors and manages credit risk through the following governance structure:

●

The Credit Risk team, Collection and Special Assets team and the Credit Governance Committee, which is an internal management committee comprised of various executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Collections and Special Assets, Risk, and Commercial and Retail Banking, oversee the Company’s systems and procedures to monitor the credit quality of its loan portfolio, conduct a loan review program, and maintain the integrity of the loan rating system.

●

The Loan Committee is responsible for reviewing and approving all credit requests that exceed individual limits that have not been countersigned by an individual with sufficient assigned authority. This committee has full authority to commit the Bank to any request that fits within its assigned approval authority.

●

The adequacy of the ACL is overseen by the ACL Governance Committee, which is an internal management committee comprised of various Company executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Collections and Special Assets, Risk, and Commercial and Retail Banking. The ACL Governance Committee supports the oversight efforts of the Bank’s Board of Directors.

●

The Bank’s Board of Directors has approval authority and responsibility for all matters regarding loan policy, reviews all loans approved or declined by the Loan Committee, approves lending authority and monitors asset quality and concentration levels.

●

The ACL Governance Committee and Bank Board of Directors has approval authority and oversight responsibility for the ACL adequacy and methodology.

Loans with a carrying value of $2.6 billion as of September 30, 2025 and $2.9 billion as of December 31, 2024, were pledged to secure public deposits, and for other purposes required or permitted by law.

ACL on Loans

The following tables present, by loan portfolio segment, a summary of the changes in the ACL on loans for the three and nine months ended September 30, 2025 and 2024:

	*Three months ended September 30, 2025*
	*Beginning*		*Provision for (Recovery*			*Loan*			*Loan*		*Ending*
(dollars in thousands)	*Balance*		*of) Credit Losses(1)*			*Charge-offs*			*Recoveries*		*Balance*
Commercial
Commercial and industrial	$	8,326	$	3,270		$	(606	)	$	2,415	$	13,405
Commercial real estate
Construction, land and development		18,529		(1,272	)		—			—		17,257
Multifamily		4,876		(539	)		—			—		4,337
Non-owner occupied		12,919		(2,796	)		—			—		10,123
Owner occupied		3,818		(537	)		—			10		3,291
Total commercial real estate		40,142		(5,144	)		—			10		35,008
Agricultural
Land		615		384			—			—		999
Production		623		65			—			—		688
Total agricultural		1,238		449			—			—		1,687
Total commercial		49,706		(1,425	)		(606	)		2,425		50,100
Consumer
Residential real estate
First lien		7,059		2,235			—			—		9,294
Construction		416		(144	)		—			—		272
HELOC		1,358		395			(100	)		26		1,679
Junior lien		376		63			—			—		439
Total residential real estate		9,209		2,549			(100	)		26		11,684
Other consumer		363		12			(34	)		2		343
Total consumer		9,572		2,561			(134	)		28		12,027
Total	$	59,278	$	1,136		$	(740	)	$	2,453	$	62,127

(1)	The difference in the credit loss expense reported herein compared to the consolidated statements of income is associated with the credit loss expense of ($1.1) million related to off-balance sheet credit exposure and ($2) thousand related to HTM investment securities.

	*Nine months ended September 30, 2025*
	*Beginning*		*Provision for (Recovery*			*Loan*			*Loan*		*Ending*
(dollars in thousands)	*Balance*		*of) Credit Losses(1)*			*Charge-offs*			*Recoveries*		*Balance*
Commercial
Commercial and industrial	$	8,170	$	3,276		$	(854	)	$	2,813	$	13,405
Commercial real estate
Construction, land and development		16,277		980			—			—		17,257
Multifamily		4,716		(379	)		—			—		4,337
Non-owner occupied		16,513		(2,989	)		(3,401	)		—		10,123
Owner occupied		3,226		37			(4	)		32		3,291
Total commercial real estate		40,732		(2,351	)		(3,405	)		32		35,008
Agricultural
Land		597		402			—			—		999
Production		631		429			(384	)		12		688
Total agricultural		1,228		831			(384	)		12		1,687
Total commercial		50,130		1,756			(4,643	)		2,857		50,100
Consumer
Residential real estate
First lien		6,921		2,427			(54	)		—		9,294
Construction		357		(85	)		—			—		272
HELOC		1,339		674			(360	)		26		1,679
Junior lien		742		(3	)		(300	)		—		439
Total residential real estate		9,359		3,013			(714	)		26		11,684
Other consumer		440		(112	)		(112	)		127		343
Total consumer		9,799		2,901			(826	)		153		12,027
Total	$	59,929	$	4,657		$	(5,469	)	$	3,010	$	62,127

(1)

The difference in the credit loss expense reported herein compared to the consolidated statements of income is associated with the credit loss expense of ($3.9) million related to off-balance sheet credit exposure, ($6) thousand related to HTM investment securities, and $78 thousand related to non-mortgage loans transferred to held for sale.

	*Three months ended September 30, 2024*
	*Beginning*		*Provision for (Recovery*			*Loan*			*Loan*		*Ending*
(dollars in thousands)	*Balance*		*of) Credit Losses(1)*			*Charge-offs*			*Recoveries*		*Balance*
Commercial
Commercial and industrial	$	6,234	$	660		$	(246	)	$	153	$	6,801
Commercial real estate
Construction, land and development		10,820		(447	)		—			—		10,373
Multifamily		2,430		161			—			—		2,591
Non-owner occupied		8,772		(260	)		—			—		8,512
Owner occupied		2,280		233			(98	)		14		2,429
Total commercial real estate		24,302		(313	)		(98	)		14		23,905
Agricultural
Land		259		(2	)		—			20		277
Production		185		(3	)		—			—		182
Total agricultural		444		(5	)		—			20		459
Total commercial		30,980		342			(344	)		187		31,165
Consumer
Residential real estate
First lien		5,366		74			—			—		5,440
Construction		458		(355	)		—			—		103
HELOC		886		68			—			—		954
Junior lien		314		807			—			—		1,121
Total residential real estate		7,024		594			—			—		7,618
Other consumer		328		190			(161	)		2		359
Total consumer		7,352		784			(161	)		2		7,977
Total	$	38,332	$	1,126		$	(505	)	$	189	$	39,142

(1)	The difference in the credit loss expense reported herein compared to the consolidated statements of income is associated with the credit loss expense of ($549) thousand related to off-balance sheet credit exposure and ($14) thousand related to HTM investment securities.

	*Nine months ended September 30, 2024*
	*Beginning*		*Provision for (Recovery*			*Loan*			*Loan*		*Ending*
(dollars in thousands)	*Balance*		*of) Credit Losses(1)*			*Charge-offs*			*Recoveries*		*Balance*
Commercial
Commercial and industrial	$	9,705	$	(159	)	$	(3,140	)	$	395	$	6,801
Commercial real estate
Construction, land and development		6,135		4,238			—			—		10,373
Multifamily		1,776		815			—			—		2,591
Non-owner occupied		7,726		786			—			—		8,512
Owner occupied		2,449		73			(127	)		34		2,429
Total commercial real estate		18,086		5,912			(127	)		34		23,905
Agricultural
Land		96		161			—			20		277
Production		84		98			—			—		182
Total agricultural		180		259			—			20		459
Total commercial		27,971		6,012			(3,267	)		449		31,165
Consumer
Residential real estate
First lien		6,087		(647	)		—			—		5,440
Construction		485		(382	)		—			—		103
HELOC		835		119			—			—		954
Junior lien		264		786			(3	)		74		1,121
Total residential real estate		7,671		(124	)		(3	)		74		7,618
Other consumer		201		307			(174	)		25		359
Total consumer		7,872		183			(177	)		99		7,977
Total	$	35,843	$	6,195		$	(3,444	)	$	548	$	39,142

(1)	The difference in the credit loss expense reported herein compared to the consolidated statements of income is associated with the credit loss expense of ($31) thousand related to off-balance sheet credit exposure and ($76) thousand related to HTM investment securities.

The ACL on loans at September 30, 2025 was $62.1 million, an increase of $2.2 million, or 3.7%, from December 31, 2024. The increase was primarily due to an increase in nonperforming loans, loan growth and economic conditions.

Credit Concentrations

The Company focuses on maintaining a well-balanced and diversified loan portfolio. Despite such efforts, it is recognized that credit concentrations may occasionally emerge as a result of economic conditions, changes in local demand, natural loan growth and runoff. To identify credit concentrations effectively, all commercial and industrial and owner occupied real estate loans are assigned Standard Industrial Classification codes, North American Industry Classification System codes and state and county codes. Property type coding is used for investment real estate. There were no industry concentrations exceeding 10% of the Company’s total loan portfolio as of September 30, 2025.

Credit Quality Indicators

The Company’s consumer loan portfolio is primarily comprised of secured loans that are evaluated at origination on a centralized basis against standardized underwriting criteria. The Company generally does not risk rate consumer loans unless a default event such as bankruptcy or extended nonperformance takes place. Credit quality for the consumer loan portfolio is measured by delinquency rates, nonaccrual amounts and actual losses incurred. These loans are rated as either performing or nonperforming.

The Company assigns a risk rating to all commercial loans, except pools of homogeneous loans, and performs detailed internal and external reviews of risk rated loans over a certain threshold to identify credit risks and to assess the overall collectability of the portfolio. These risk ratings are also subject to examination by the Company’s regulators. During the internal reviews, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which the borrowers operate and the estimated fair values of collateral securing the loans. These credit quality indicators are used to assign a risk rating to each individual loan.

The Company’s ratings are aligned to pass and criticized categories. The criticized category includes special mention, substandard, and doubtful risk ratings. The risk ratings are defined as follows:

●

Pass: A pass loan is a credit with no existing or known potential weaknesses deserving of management’s close attention.

●

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the repayment prospects for the loan or in the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

●

Substandard: Loans classified as substandard are not adequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Loans so classified have a well‑defined weakness, or weaknesses that jeopardize the repayment of the debt. Well-defined weaknesses include a borrower’s lack of marketability, inadequate cash flow or collateral support, failure to complete construction on time, or the failure to fulfill expectations. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

●

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

●

Loss: Loans classified as loss are considered uncollectible and charged off immediately.

The following tables set forth the amortized cost basis of loans by credit quality indicator and vintage based on the most recent analysis performed, as of September 30, 2025 and December 31, 2024:

													*Revolving*
(dollars in thousands)	*Term Loans Amortized Cost Basis by Origination Year*												*Loans Amortized*
As of September 30, 2025	*2025*		*2024*		*2023*		*2022*		*2021*		*Prior*		*Cost Basis*		*Total*
Commercial and industrial
Pass	$	159,909	$	161,291	$	84,573	$	47,395	$	23,382	$	51,156	$	134,079	$	661,785
Special mention		324		10		26		—		651		44		—		1,055
Substandard		36		1,255		2,946		3,236		195		6,786		12,676		27,130
Doubtful		1,218		8,772		1,763		298		114		—		—		12,165
Subtotal	$	161,487	$	171,328	$	89,308	$	50,929	$	24,342	$	57,986	$	146,755	$	702,135
Gross charge-offs for the period ended	$	—	$	407	$	152	$	—	$	5	$	290	$	—	$	854
CRE − Construction, land and development
Pass	$	13,807	$	157,432	$	110,795	$	21,082	$	658	$	1,117	$	5,654	$	310,545
Special mention		—		—		—		176		—		—		—		176
Substandard		—		10,204		—		28,378		—		165		300		39,047
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	13,807	$	167,636	$	110,795	$	49,636	$	658	$	1,282	$	5,954	$	349,768
Gross charge-offs for the period ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
CRE − Multifamily
Pass	$	5,158	$	26,181	$	82,828	$	112,681	$	32,774	$	62,160	$	—	$	321,782
Special mention		—		—		—		23,247		826		1,030		—		25,103
Substandard		—		5,754		3,973		—		—		18,149		—		27,876
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	5,158	$	31,935	$	86,801	$	135,928	$	33,600	$	81,339	$	—	$	374,761
Gross charge-offs for the period ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
CRE − Non-owner occupied
Pass	$	52,409	$	184,088	$	151,333	$	196,223	$	88,658	$	173,692	$	1,971	$	848,374
Special mention		—		—		—		—		—		1,053		—		1,053
Substandard		—		—		5,390		—		2,754		8,214		—		16,358
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	52,409	$	184,088	$	156,723	$	196,223	$	91,412	$	182,959	$	1,971	$	865,785
Gross charge-offs for the period ended	$	—	$	—	$	—	$	632	$	775	$	1,994	$	—	$	3,401
CRE − Owner occupied
Pass	$	36,260	$	87,147	$	56,121	$	62,381	$	40,876	$	133,091	$	1,283	$	417,159
Special mention		1,691		450		—		—		—		1,456		308		3,905
Substandard		—		—		1,476		2,907		2,358		7,515		—		14,256
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	37,951	$	87,597	$	57,597	$	65,288	$	43,234	$	142,062	$	1,591	$	435,320
Gross charge-offs for the period ended	$	—	$	—	$	4	$	—	$	—	$	—	$	—	$	4
Agricultural − Land
Pass	$	7,878	$	8,857	$	8,482	$	12,545	$	5,214	$	12,738	$	1,902	$	57,616
Special mention		241		—		—		3,372		—		—		—		3,613
Substandard		—		—		303		3,611		—		757		—		4,671
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	8,119	$	8,857	$	8,785	$	19,528	$	5,214	$	13,495	$	1,902	$	65,900
Gross charge-offs for the period ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Agricultural − Production
Pass	$	6,393	$	7,240	$	5,206	$	3,816	$	456	$	811	$	35,233	$	59,155
Special mention		—		74		133		—		—		538		224		969
Substandard		—		22		546		1,237		28		—		1,094		2,927
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	6,393	$	7,336	$	5,885	$	5,053	$	484	$	1,349	$	36,551	$	63,051
Gross charge-offs for the period ended	$	—	$	—	$	—	$	384	$	—	$	—	$	—	$	384
Residential real estate − First lien
Performing	$	44,627	$	43,359	$	129,319	$	213,455	$	238,409	$	222,546	$	—	$	891,715
Nonperforming		—		—		512		—		652		1,523		—		2,687
Subtotal	$	44,627	$	43,359	$	129,831	$	213,455	$	239,061	$	224,069	$	—	$	894,402
Gross charge-offs for the period ended	$	—	$	—	$	—	$	—	$	7	$	47	$	—	$	54
Residential real estate − Construction
Performing	$	14,166	$	12,335	$	—	$	—	$	1,036	$	—	$	1,907	$	29,444
Nonperforming		—		—		—		4,680		—		—		—		4,680
Subtotal	$	14,166	$	12,335	$	—	$	4,680	$	1,036	$	—	$	1,907	$	34,124
Gross charge-offs for the period ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Residential real estate − HELOC
Performing	$	543	$	2,359	$	4,230	$	5,749	$	967	$	5,194	$	214,426	$	233,468
Nonperforming		—		—		25		1,152		—		36		—		1,213
Subtotal	$	543	$	2,359	$	4,255	$	6,901	$	967	$	5,230	$	214,426	$	234,681
Gross charge-offs for the period ended	$	—	$	100	$	10	$	250	$	—	$	—	$	—	$	360
Residential real estate − Junior lien
Performing	$	4,045	$	5,990	$	10,267	$	7,752	$	4,464	$	5,476	$	50	$	38,044
Nonperforming		—		1,775		—		—		—		615		—		2,390
Subtotal	$	4,045	$	7,765	$	10,267	$	7,752	$	4,464	$	6,091	$	50	$	40,434
Gross charge-offs for the period ended	$	—	$	—	$	—	$	300	$	—	$	—	$	—	$	300
Other consumer
Performing	$	4,668	$	3,212	$	3,071	$	3,456	$	228	$	4,071	$	22,951	$	41,657
Nonperforming		—		4		—		—		—		53		—		57
Subtotal	$	4,668	$	3,216	$	3,071	$	3,456	$	228	$	4,124	$	22,951	$	41,714
Gross charge-offs for the period ended	$	—	$	9	$	31	$	22	$	—	$	50	$	—	$	112
Total loans	$	353,373	$	727,811	$	663,318	$	758,829	$	444,700	$	719,986	$	434,058	$	4,102,075
Gross charge-offs for the period ended	$	—	$	516	$	197	$	1,588	$	787	$	2,381	$	—	$	5,469

													*Revolving*
(dollars in thousands)	*Term Loans Amortized Cost Basis by Origination Year*												*Loans Amortized*
As of December 31, 2024	*2024*		*2023*		*2022*		*2021*		*2020*		*Prior*		*Cost Basis*		*Total*
Commercial and industrial
Pass	$	209,001	$	141,028	$	61,254	$	34,645	$	38,342	$	36,136	$	111,194	$	631,600
Special mention		1,367		495		3,286		2,239		5,575		1		1,651		14,614
Substandard		—		12,663		220		780		3,154		2,447		1,198		20,462
Doubtful		—		—		—		—		—		51		—		51
Subtotal	$	210,368	$	154,186	$	64,760	$	37,664	$	47,071	$	38,635	$	114,043	$	666,727
Gross charge-offs for the year ended	$	—	$	218	$	2	$	397	$	2,768	$	342	$	—	$	3,727
CRE − Construction, land and development
Pass	$	97,244	$	112,845	$	40,890	$	1,560	$	517	$	1,187	$	2,801	$	257,044
Special mention		—		—		172		—		—		—		—		172
Substandard		5,406		—		31,585		—		—		170		300		37,461
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	102,650	$	112,845	$	72,647	$	1,560	$	517	$	1,357	$	3,101	$	294,677
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
CRE − Multifamily
Pass	$	35,112	$	62,982	$	138,698	$	33,782	$	33,157	$	32,204	$	—	$	335,935
Special mention		—		—		7,644		272		1,241		—		—		9,157
Substandard		—		—		—		—		17,732		299		—		18,031
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	35,112	$	62,982	$	146,342	$	34,054	$	52,130	$	32,503	$	—	$	363,123
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
CRE − Non-owner occupied
Pass	$	189,068	$	149,368	$	223,349	$	98,309	$	71,432	$	188,617	$	1,709	$	921,852
Special mention		—		—		1,694		8,603		—		4,148		4,195		18,640
Substandard		—		—		—		7,767		6,347		12,419		—		26,533
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	189,068	$	149,368	$	225,043	$	114,679	$	77,779	$	205,184	$	5,904	$	967,025
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
CRE − Owner occupied
Pass	$	63,721	$	41,918	$	60,788	$	44,957	$	38,941	$	91,804	$	1,652	$	343,781
Special mention		451		—		—		937		2,981		2,735		—		7,104
Substandard		—		311		3,023		2,694		—		13,538		967		20,533
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	64,172	$	42,229	$	63,811	$	48,588	$	41,922	$	108,077	$	2,619	$	371,418
Gross charge-offs for the year ended	$	—	$	12	$	97	$	—	$	—	$	128	$	—	$	237
Agricultural − Land
Pass	$	10,496	$	8,864	$	14,369	$	5,840	$	5,103	$	8,473	$	120	$	53,265
Special mention		69		1,612		3,275		—		—		—		—		4,956
Substandard		—		303		2,166		—		609		—		—		3,078
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	10,565	$	10,779	$	19,810	$	5,840	$	5,712	$	8,473	$	120	$	61,299
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Agricultural − Production
Pass	$	10,445	$	6,440	$	4,356	$	724	$	1,121	$	582	$	34,527	$	58,195
Special mention		130		704		—		—		420		—		1,518		2,772
Substandard		—		—		1,987		—		—		54		—		2,041
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	10,575	$	7,144	$	6,343	$	724	$	1,541	$	636	$	36,045	$	63,008
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	26	$	—	$	26
Residential real estate − First lien
Performing	$	49,414	$	144,460	$	226,993	$	251,006	$	127,200	$	118,958	$	—	$	918,031
Nonperforming		—		576		—		744		12		1,656		—		2,988
Subtotal	$	49,414	$	145,036	$	226,993	$	251,750	$	127,212	$	120,614	$	—	$	921,019
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Residential real estate − Construction
Performing	$	19,229	$	6,449	$	1,900	$	1,289	$	—	$	—	$	—	$	28,867
Nonperforming		—		—		4,680		—		—		—		—		4,680
Subtotal	$	19,229	$	6,449	$	6,580	$	1,289	$	—	$	—	$	—	$	33,547
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Residential real estate − HELOC
Performing	$	3,290	$	5,558	$	6,217	$	1,622	$	939	$	2,717	$	140,707	$	161,050
Nonperforming		—		35		—		—		—		74		1,350		1,459
Subtotal	$	3,290	$	5,593	$	6,217	$	1,622	$	939	$	2,791	$	142,057	$	162,509
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	19	$	—	$	19
Residential real estate − Junior lien
Performing	$	7,762	$	11,557	$	9,553	$	4,990	$	2,760	$	4,178	$	50	$	40,850
Nonperforming		1,775		—		300		108		—		1,027		—		3,210
Subtotal	$	9,537	$	11,557	$	9,853	$	5,098	$	2,760	$	5,205	$	50	$	44,060
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	638	$	—	$	638
Other consumer
Performing	$	9,618	$	4,695	$	4,853	$	502	$	2,541	$	4,069	$	17,505	$	43,783
Nonperforming		—		11		272		—		7		49		—		339
Subtotal	$	9,618	$	4,706	$	5,125	$	502	$	2,548	$	4,118	$	17,505	$	44,122
Gross charge-offs for the year ended	$	—	$	8	$	3	$	150	$	4	$	21	$	—	$	186
Total loans	$	713,598	$	712,874	$	853,524	$	503,370	$	360,131	$	527,593	$	321,444	$	3,992,534
Gross charge-offs for the year ended	$	—	$	238	$	102	$	547	$	2,772	$	1,174	$	—	$	4,833

Past Due and Nonaccrual Loans

The Company closely monitors the performance of its loan portfolio. A loan is placed on nonaccrual status when the financial condition of the borrower is deteriorating, payment in full of both principal and interest is not expected as scheduled or principal or interest has been in default for 90 days or more. Exceptions may be made if the asset is secured by collateral sufficient to satisfy both the principal and accrued interest in full and collection is reasonably assured. When one loan to a borrower is placed on nonaccrual status, all other loans to the borrower are re-evaluated to determine if they should also be placed on nonaccrual status. All previously accrued and unpaid interest is reversed at that time. A loan will return to accrual when collection of principal and interest is assured and the borrower has demonstrated timely payments of principal and interest for a reasonable period, generally at least six months.

The following tables present a past due aging analysis of total loans outstanding, by portfolio segment, as of September 30, 2025 and December 31, 2024:

	*September 30, 2025*
							*90 Days*
	*Accruing*		*30 - 59 Days*		*60 - 89 Days*		*or More*				*Total*
(dollars in thousands)	*Current*		*Past Due*		*Past Due*		*Past Due*		*Nonaccrual*		*Loans*
Commercial
Commercial and industrial	$	689,204	$	741	$	—	$	—	$	12,190	$	702,135
Commercial real estate
Construction, land and development		318,453		—		—		—		31,315		349,768
Multifamily		370,027		—		3,973		—		761		374,761
Non-owner occupied		864,092		—		—		—		1,693		865,785
Owner occupied		433,336		567		—		—		1,417		435,320
Total commercial real estate		1,985,908		567		3,973		—		35,186		2,025,634
Agricultural
Land		65,198		—		—		—		702		65,900
Production		62,184		329		—		—		538		63,051
Total agricultural		127,382		329		—		—		1,240		128,951
Total commercial		2,802,494		1,637		3,973		—		48,616		2,856,720
Consumer
Residential real estate
First lien		890,793		797		125		—		2,687		894,402
Construction		29,444		—		—		—		4,680		34,124
HELOC		233,127		320		21		—		1,213		234,681
Junior lien		37,947		96		—		—		2,391		40,434
Total residential real estate		1,191,311		1,213		146		—		10,971		1,203,641
Other consumer		41,270		33		354		—		57		41,714
Total consumer		1,232,581		1,246		500		—		11,028		1,245,355
Total	$	4,035,075	$	2,883	$	4,473	$	—	$	59,644	$	4,102,075

	*December 31, 2024*
							*90 Days*
	*Accruing*		*30 - 59 Days*		*60 - 89 Days*		*or More*				*Total*
(dollars in thousands)	*Current*		*Past Due*		*Past Due*		*Past Due*		*Nonaccrual*		*Loans*
Commercial
Commercial and industrial	$	654,073	$	903	$	133	$	8,400	$	3,218	$	666,727
Commercial real estate
Construction, land and development		264,633		—		—		—		30,044		294,677
Multifamily		363,123		—		—		—		—		363,123
Non-owner occupied		961,808		—		—		—		5,217		967,025
Owner occupied		369,176		225		—		—		2,017		371,418
Total commercial real estate		1,958,740		225		—		—		37,278		1,996,243
Agricultural
Land		60,690		—		—		—		609		61,299
Production		62,269		87		—		—		652		63,008
Total agricultural		122,959		87		—		—		1,261		124,307
Total commercial		2,735,772		1,215		133		8,400		41,757		2,787,277
Consumer
Residential real estate
First lien		915,167		2,104		707		53		2,988		921,019
Construction		28,867		—		—		—		4,680		33,547
HELOC		160,430		169		450		—		1,460		162,509
Junior lien		40,454		396		—		—		3,210		44,060
Total residential real estate		1,144,918		2,669		1,157		53		12,338		1,161,135
Other consumer		43,651		103		30		—		338		44,122
Total consumer		1,188,569		2,772		1,187		53		12,676		1,205,257
Total	$	3,924,341	$	3,987	$	1,320	$	8,453	$	54,433	$	3,992,534

In calculating expected credit losses, the Company includes loans on nonaccrual status and loans 90 days or more past due and still accruing. The following tables present the amortized cost basis on nonaccrual status loans and loans 90 days or more past due and still accruing as of September 30, 2025 and December 31, 2024:

	*As of September 30, 2025*
					*90 Days*
	*Nonaccrual*				*or More*
	*with no Allowance*				*Past Due*
(dollars in thousands)	*for Credit Losses*		*Nonaccrual*		*and Accruing*
Commercial
Commercial and industrial	$	—	$	12,190	$	—
Commercial real estate
Construction, land and development		24,576		31,315		—
Multifamily		761		761		—
Non-owner occupied		1,693		1,693		—
Owner occupied		1,287		1,417		—
Total commercial real estate		28,317		35,186		—
Agricultural
Land		702		702		—
Production		538		538		—
Total agricultural		1,240		1,240		—
Total commercial		29,557		48,616		—
Consumer
Residential real estate
First lien		2,575		2,687		—
Construction		4,680		4,680		—
HELOC		1,100		1,213		—
Junior lien		2,305		2,391		—
Total residential real estate		10,660		10,971		—
Other consumer		—		57		—
Total consumer		10,660		11,028		—
Total	$	40,217	$	59,644	$	—

	*December 31, 2024*
					*90 Days*
	*Nonaccrual*				*or More*
	*with no Allowance*				*Past Due*
(dollars in thousands)	*for Credit Losses*		*Nonaccrual*		*and Accruing*
Commercial
Commercial and industrial	$	2,952	$	3,218	$	8,400
Commercial real estate
Construction, land and development		24,638		30,044		—
Multifamily		—		—		—
Non-owner occupied		5,217		5,217		—
Owner occupied		1,706		2,017		—
Total commercial real estate		31,561		37,278		—
Agricultural
Land		609		609		—
Production		652		652		—
Total agricultural		1,261		1,261		—
Total commercial		35,774		41,757		8,400
Consumer
Residential real estate
First lien		2,614		2,988		53
Construction		4,680		4,680		—
HELOC		—		1,460		—
Junior lien		2,696		3,210		—
Total residential real estate		9,990		12,338		53
Other consumer		—		338		—
Total consumer		9,990		12,676		53
Total	$	45,764	$	54,433	$	8,453

Interest income that would have been recognized if loans on nonaccrual status had been current in accordance with their original terms for the three months ended September 30, 2025 and 2024, is estimated to have been $1.5 million and $1.9 million, respectively.

The Company’s policy is to reverse previously recorded interest income when a loan is placed on nonaccrual status. As a result, the Company did not record any interest income on its nonaccrual loans for the three months ended September 30, 2025 or 2024. At September 30, 2025 and December 31, 2024, total accrued interest receivable on loans, which had been excluded from reported amortized cost basis on loans, was $18.3 million and $16.4 million, respectively, and was reported within accrued interest receivable on the consolidated statements of condition. An allowance was not carried on the accrued interest receivable at either date.

The following tables present the amortized cost basis of collateral dependent loans, by the primary collateral type, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans, as of September 30, 2025 and December 31, 2024:

	*As of September 30, 2025*
	*Primary Type of Collateral*
									*Allowance for*
(dollars in thousands)	*Real estate*		*Equipment*		*Other*		*Total*		*Credit Losses*
Commercial
Commercial and industrial	$	—	$	—	$	—	$	—	$	—
Commercial real estate
Construction, land and development		31,315		—		—		31,315		4,984
Multifamily		761		—		—		761		—
Non-owner occupied		1,693		—		—		1,693		—
Owner occupied		1,341		—		—		1,341		4
Total commercial real estate		35,110		—		—		35,110		4,988
Agricultural
Land		702		—		—		702		—
Production		538		—		—		538		—
Total agricultural		1,240		—		—		1,240		—
Total commercial		36,350		—		—		36,350		4,988
Consumer
Residential real estate
First lien		2,585		—		—		2,585		3
Construction		4,680		—		—		4,680		—
HELOC		1,100		—		—		1,100		—
Junior lien		2,305		—		—		2,305		—
Total residential real estate		10,670		—		—		10,670		3
Other consumer		—		—		—		—		—
Total consumer		10,670		—		—		10,670		3
Total	$	47,020	$	—	$	—	$	47,020	$	4,991

	*As of December 31, 2024*
	*Primary Type of Collateral*
									*Allowance for*
(dollars in thousands)	*Real estate*		*Equipment*		*Other*		*Total*		*Credit Losses*
Commercial
Commercial and industrial	$	2,885	$	275	$	—	$	3,160	$	4
Commercial real estate
Construction, land and development		30,044		—		—		30,044		4,984
Multifamily		—		—		—		—		—
Non-owner occupied		5,217		—		—		5,217		—
Owner occupied		1,936		—		—		1,936		9
Total commercial real estate		37,197		—		—		37,197		4,993
Agricultural
Land		609		—		—		609		—
Production		—		652		—		652		—
Total agricultural		609		652		—		1,261		—
Total commercial		40,691		927		—		41,618		4,997
Consumer
Residential real estate
First lien		2,514		—		—		2,514		7
Construction		4,680		—		—		4,680		—
HELOC		1,366		—		—		1,366		252
Junior lien		3,105		—		—		3,105		330
Total residential real estate		11,665		—		—		11,665		589
Other consumer		—		—		289		289		50
Total consumer		11,665		—		289		11,954		639
Total	$	52,356	$	927	$	289	$	53,572	$	5,636

Collateral dependent loans are loans for which the repayment is expected to be provided substantially by the underlying collateral when there are no other available and reliable sources of repayment.

Loan Modifications to Borrowers Experiencing Financial Difficulty

Effective January 1, 2023, the Company evaluates all loan modifications in accordance with ASU 2022-02. Under ASU 2022-02, a loan is evaluated to consider whether the loan, as modified, represents a new loan or is a continuation of an existing loan.

In cases where a borrower experiences financial difficulty, the Company may make certain concessions for which the terms of the loan are modified. Loans experiencing financial difficulty can include modifications allowing an interest rate reduction below current market rates, a forgiveness of principal balance, an extension of the loan term, an other than significant payment delay, or some combination of these or similar types of modifications. During the three months ended September 30, 2025, the Company did not provide any modifications to loans under these circumstances that were experiencing financial difficulty.

The following table presents the amortized cost basis of loans as of September 30, 2025, by type of modification, that were experiencing financial difficulty during the nine months ended September 30, 2025. There were no loans that were modified to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2024. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of the class of financing receivable as of September 30, 2025, is also presented below.

	*Nine months ended September 30, 2025*
									*Combination Term*		*Combination Term*
	*Interest Rate*		*Principal*		*Term*		*Payment*		*Extension and*		*Extension and Interest*		*Total %*
(dollars in thousands)	*Reduction*		*Forgiveness*		*Extension*		*Delay*		*Principal Forgiveness*		*Rate Reduction*		*of Portfolio*
Agricultural − Land	$	—	$	—	$	—	$	1,463	$	—	$	—		2.2	%

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts and relevant factors are considered while assessing the adequacy of the ACL. For the three and nine months ended September 30, 2025 and 2024, there were no modified loans to borrowers experiencing financial difficulty that were past due or for which the borrower subsequently defaulted.