XML 22 R15.htm IDEA: XBRL DOCUMENT v3.25.3
Allowance for Credit Losses
 9 Months Ended
Sep. 30, 2025
Text Block [Abstract]  
Allowance for Credit Losses

(5) Allowance for Credit Losses

 

The following table presents, by portfolio segment, the changes in the allowance for credit losses ("ACL") for the three and nine months ended September 30, 2025 and 2024.

 

Allowance for credit losses:

 

For the three months ended September 30, 2025

 

Beginning balance

 

 

Charge-offs

 

 

Recoveries

 

 

Provision

 

 

Ending Balance

 

Commercial & Agriculture

 

$

6,057

 

 

$

(249

)

 

$

39

 

 

$

531

 

 

$

6,378

 

Commercial Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner Occupied

 

 

4,612

 

 

 

—

 

 

 

—

 

 

 

74

 

 

 

4,686

 

Non-Owner Occupied

 

 

11,321

 

 

 

—

 

 

 

—

 

 

 

(1,189

)

 

 

10,132

 

Residential Real Estate

 

 

13,075

 

 

 

(14

)

 

 

35

 

 

 

890

 

 

 

13,986

 

Real Estate Construction

 

 

3,695

 

 

 

—

 

 

 

—

 

 

 

(141

)

 

 

3,554

 

Farm Real Estate

 

 

305

 

 

 

—

 

 

 

—

 

 

 

(4

)

 

 

301

 

Lease Financing Receivables

 

 

1,214

 

 

 

(395

)

 

 

—

 

 

 

247

 

 

 

1,066

 

Consumer and Other

 

 

176

 

 

 

(4

)

 

 

9

 

 

 

(30

)

 

 

151

 

Total

 

$

40,455

 

 

$

(662

)

 

$

83

 

 

$

378

 

 

$

40,254

 

 

For the nine months ended September 30, 2025

 

Beginning balance

 

 

Charge-offs

 

 

Recoveries

 

 

Provision

 

 

Ending Balance

 

Commercial & Agriculture

 

$

6,586

 

 

$

(684

)

 

$

375

 

 

$

101

 

 

$

6,378

 

Commercial Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner Occupied

 

 

4,327

 

 

 

—

 

 

 

—

 

 

 

359

 

 

 

4,686

 

Non-Owner Occupied

 

 

11,404

 

 

 

(1,350

)

 

 

3

 

 

 

75

 

 

 

10,132

 

Residential Real Estate

 

 

11,866

 

 

 

(130

)

 

 

76

 

 

 

2,174

 

 

 

13,986

 

Real Estate Construction

 

 

3,708

 

 

 

—

 

 

 

—

 

 

 

(154

)

 

 

3,554

 

Farm Real Estate

 

 

226

 

 

 

—

 

 

 

—

 

 

 

75

 

 

 

301

 

Lease Financing Receivables

 

 

1,361

 

 

 

(546

)

 

 

43

 

 

 

208

 

 

 

1,066

 

Consumer and Other

 

 

191

 

 

 

(20

)

 

 

21

 

 

 

(41

)

 

 

151

 

Total

 

$

39,669

 

 

$

(2,730

)

 

$

518

 

 

$

2,797

 

 

$

40,254

 

 

For the three and nine months ended September 30, 2025, the Company provided $378 and $2,797, respectively, to the allowance for credit losses, as compared to a provision of $1,346 and $5,188, respectively, for the three and nine months ended September 30, 2024. The Company experienced an increase in the allowance for credit losses year-to-date as required by our current expected credit loss ("CECL") model primarily due to loan growth. Lower provisions were primarily attributable to the slowdown in net loan growth as net loans grew $14.2 million for the nine months ended September 30, 2025, compared to $178.2 million for the same period in 2024, coupled with a decrease in specific reserves primarily related to one client that made a large paydown during the nine months ended September 30, 2025.

 

 

For the three months ended September 30, 2024

 

Beginning balance

 

 

Charge-offs

 

 

Recoveries

 

 

Provision

 

 

Ending Balance

 

Commercial & Agriculture

 

$

5,348

 

 

$

—

 

 

$

15

 

 

$

(284

)

 

$

5,079

 

Commercial Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner Occupied

 

 

4,328

 

 

 

—

 

 

 

—

 

 

 

37

 

 

 

4,365

 

Non-Owner Occupied

 

 

14,421

 

 

 

—

 

 

 

—

 

 

 

126

 

 

 

14,547

 

Residential Real Estate

 

 

9,416

 

 

 

(1

)

 

 

19

 

 

 

1,288

 

 

 

10,722

 

Real Estate Construction

 

 

3,647

 

 

 

—

 

 

 

—

 

 

 

69

 

 

 

3,716

 

Farm Real Estate

 

 

261

 

 

 

—

 

 

 

—

 

 

 

(40

)

 

 

221

 

Lease Financing Receivables

 

 

2,210

 

 

 

(15

)

 

 

—

 

 

 

166

 

 

 

2,361

 

Consumer and Other

 

 

268

 

 

 

(26

)

 

 

11

 

 

 

2

 

 

 

255

 

Unallocated

 

 

20

 

 

 

—

 

 

 

—

 

 

 

(18

)

 

 

2

 

Total

 

$

39,919

 

 

$

(42

)

 

$

45

 

 

$

1,346

 

 

$

41,268

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the nine months ended September 30, 2024

 

Beginning balance

 

 

Charge-offs

 

 

Recoveries

 

 

Provision

 

 

Ending Balance

 

Commercial & Agriculture

 

$

7,587

 

 

$

(1,079

)

 

$

263

 

 

$

(1,692

)

 

$

5,079

 

Commercial Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner Occupied

 

 

4,723

 

 

 

—

 

 

 

0

 

 

 

(358

)

 

 

4,365

 

Non-Owner Occupied

 

 

12,056

 

 

 

(174

)

 

 

12

 

 

 

2,653

 

 

 

14,547

 

Residential Real Estate

 

 

8,489

 

 

 

(67

)

 

 

178

 

 

 

2,122

 

 

 

10,722

 

Real Estate Construction

 

 

3,388

 

 

 

—

 

 

 

12

 

 

 

316

 

 

 

3,716

 

Farm Real Estate

 

 

260

 

 

 

—

 

 

 

—

 

 

 

(39

)

 

 

221

 

Lease Financing Receivables

 

 

297

 

 

 

(186

)

 

 

1

 

 

 

2,249

 

 

 

2,361

 

Consumer and Other

 

 

341

 

 

 

(74

)

 

 

34

 

 

 

(46

)

 

 

255

 

Unallocated

 

 

19

 

 

 

—

 

 

 

—

 

 

 

(17

)

 

 

2

 

Total

 

$

37,160

 

 

$

(1,580

)

 

$

500

 

 

$

5,188

 

 

$

41,268

 

 

The Company’s internally assigned risk grades are as follows:

•
Pass – loans which are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral.
•
Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected.
•
Substandard – loans that have a well-defined weakness based on objective evidence and are characterized by the distinct possibility that Civista will sustain some loss if the deficiencies are not corrected.
•
Doubtful – loans classified as doubtful have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.
•
Loss – loans classified as a loss are considered uncollectible, or of such value that continuance as an asset is not warranted.

 

Homogeneous loans, generally Residential Real Estate, Real Estate Construction, and Consumer and Other loans, are not risk-graded, except when collateral is used for a business purpose. These loans are monitored based on performance, with performing loans included as Pass and nonperforming loans included as Substandard.

Based on the most recent analysis performed, the risk category of loans at September 30, 2025, and year-to-date gross charge-offs as of September 30, 2025, by type and year of originations, was as follows:

 

 

 

Term Loans Amortized Cost Basis by Origination Year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revolving

 

 

 

 

 

 

2025

 

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

Prior

 

 

Loans

 

 

Total

 

Commercial & Agriculture

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

47,595

 

 

$

52,702

 

 

$

38,622

 

 

$

24,214

 

 

$

18,250

 

 

$

4,575

 

 

$

87,114

 

 

$

273,072

 

Special Mention

 

 

500

 

 

 

—

 

 

 

669

 

 

 

1,291

 

 

 

2,720

 

 

 

944

 

 

 

8,586

 

 

 

14,710

 

Substandard

 

 

331

 

 

 

4,766

 

 

 

1,786

 

 

 

700

 

 

 

11

 

 

 

—

 

 

 

5,523

 

 

 

13,117

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,508

 

 

 

1,508

 

Total Commercial & Agriculture

 

$

48,426

 

 

$

57,467

 

 

$

41,077

 

 

$

26,205

 

 

$

20,980

 

 

$

5,520

 

 

$

102,732

 

 

$

302,407

 

Commercial & Agriculture:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current-period gross charge-offs

 

$

—

 

 

$

—

 

 

$

541

 

 

$

128

 

 

$

15

 

 

$

—

 

 

$

—

 

 

$

684

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Real Estate - Owner Occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

29,936

 

 

$

34,986

 

 

$

42,194

 

 

$

69,701

 

 

$

55,072

 

 

$

126,680

 

 

$

7,940

 

 

$

366,507

 

Special Mention

 

 

345

 

 

 

—

 

 

 

1,520

 

 

 

202

 

 

 

4,680

 

 

 

1,928

 

 

 

72

 

 

 

8,749

 

Substandard

 

 

—

 

 

 

—

 

 

 

1,555

 

 

 

2,965

 

 

 

—

 

 

 

3,020

 

 

 

1,380

 

 

 

8,920

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total Commercial Real Estate - Owner Occupied

 

$

30,281

 

 

$

34,986

 

 

$

45,269

 

 

$

72,868

 

 

$

59,751

 

 

$

131,629

 

 

$

9,392

 

 

$

384,176

 

Commercial Real Estate - Owner Occupied:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current-period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Real Estate - Non-Owner Occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

31,409

 

 

$

71,542

 

 

$

254,600

 

 

$

295,210

 

 

$

150,949

 

 

$

359,624

 

 

$

25,134

 

 

$

1,188,468

 

Special Mention

 

 

4,615

 

 

 

—

 

 

 

—

 

 

 

1,532

 

 

 

7,922

 

 

 

-

 

 

 

—

 

 

 

14,069

 

Substandard

 

 

12,354

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

654

 

 

 

—

 

 

 

13,009

 

Doubtful

 

 

484

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

484

 

Total Commercial Real Estate - Non-Owner Occupied

 

$

48,862

 

 

$

71,542

 

 

$

254,600

 

 

$

296,741

 

 

$

158,871

 

 

$

360,279

 

 

$

25,134

 

 

$

1,216,031

 

Commercial Real Estate - Non-Owner Occupied:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current-period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

800

 

 

$

550

 

 

$

—

 

 

$

1,350

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

54,508

 

 

$

138,916

 

 

$

121,061

 

 

$

106,709

 

 

$

84,730

 

 

$

139,042

 

 

$

189,197

 

 

$

834,163

 

Special Mention

 

 

—

 

 

 

59

 

 

 

—

 

 

 

—

 

 

 

557

 

 

 

263

 

 

 

350

 

 

 

1,230

 

Substandard

 

 

—

 

 

 

—

 

 

 

328

 

 

 

1,392

 

 

 

629

 

 

 

2,088

 

 

 

1,052

 

 

 

5,488

 

Doubtful

 

 

—

 

 

 

1,020

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

461

 

 

 

1,481

 

Total Residential Real Estate

 

$

54,508

 

 

$

139,995

 

 

$

121,389

 

 

$

108,101

 

 

$

85,917

 

 

$

141,393

 

 

$

191,060

 

 

$

842,362

 

Residential Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current-period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

40

 

 

$

39

 

 

$

51

 

 

$

—

 

 

$

130

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revolving

 

 

 

 

 

 

2025

 

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

Prior

 

 

Loans

 

 

Total

 

Real Estate Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

81,024

 

 

$

66,273

 

 

$

75,223

 

 

$

27,513

 

 

$

4,474

 

 

$

7,918

 

 

$

10,023

 

 

$

272,449

 

Special Mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

5,000

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

5,000

 

Substandard

 

 

—

 

 

 

—

 

 

 

714

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

714

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total Real Estate Construction

 

$

81,024

 

 

$

66,273

 

 

$

75,937

 

 

$

32,513

 

 

$

4,474

 

 

$

7,918

 

 

$

10,023

 

 

$

278,163

 

Real Estate Construction:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current-period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

847

 

 

$

348

 

 

$

2,078

 

 

$

462

 

 

$

1,932

 

 

$

14,219

 

 

$

1,954

 

 

$

21,840

 

Special Mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

368

 

 

 

—

 

 

 

158

 

 

 

905

 

 

 

1,431

 

Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

42

 

 

 

400

 

 

 

—

 

 

 

443

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total Farm Real Estate

 

$

847

 

 

$

348

 

 

$

2,078

 

 

$

830

 

 

$

1,975

 

 

$

14,778

 

 

$

2,859

 

 

$

23,713

 

Farm Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current-period charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease Financing Receivables

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

7,949

 

 

$

11,671

 

 

$

10,532

 

 

$

3,958

 

 

$

729

 

 

$

45

 

 

$

—

 

 

 

34,883

 

Special Mention

 

 

—

 

 

 

275

 

 

 

1,388

 

 

 

66

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,729

 

Substandard

 

 

47

 

 

 

1,467

 

 

 

384

 

 

 

451

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,349

 

Doubtful

 

 

—

 

 

 

—

 

 

 

-

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total Lease Financing Receivables

 

$

7,996

 

 

$

13,413

 

 

$

12,303

 

 

$

4,475

 

 

$

729

 

 

$

45

 

 

$

—

 

 

$

38,960

 

Lease Financing Receivables:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current-period charge-offs

 

$

—

 

 

$

—

 

 

$

110

 

 

$

435

 

 

$

—

 

 

$

1

 

 

$

—

 

 

$

546

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer and Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

2,244

 

 

$

1,447

 

 

$

2,599

 

 

$

1,360

 

 

$

799

 

 

$

199

 

 

$

1,510

 

 

$

10,158

 

Special Mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

17

 

 

 

7

 

 

 

—

 

 

 

—

 

 

 

24

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total Consumer and Other

 

$

2,244

 

 

$

1,447

 

 

$

2,599

 

 

$

1,377

 

 

$

806

 

 

$

199

 

 

$

1,510

 

 

$

10,182

 

Consumer and Other:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current-period charge-offs

 

$

—

 

 

$

—

 

 

$

5

 

 

$

5

 

 

$

4

 

 

$

6

 

 

$

—

 

 

$

20

 

Total Loans

 

$

274,188

 

 

$

385,471

 

 

$

555,251

 

 

$

543,109

 

 

$

333,504

 

 

$

661,761

 

 

$

342,710

 

 

$

3,095,994

 

Total Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current-period charge-offs

 

$

—

 

 

$

—

 

 

$

656

 

 

$

608

 

 

$

858

 

 

$

608

 

 

$

—

 

 

$

2,730

 

 

The risk category of loans at December 31, 2024, and year-to-date gross charge-offs as of December 31, 2024, by type and year of originations, was as follows:

 

 

 

Term Loans Amortized Cost Basis by Origination Year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revolving

 

 

 

 

 

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

Prior

 

 

Loans

 

 

Total

 

Commercial & Agriculture

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

74,397

 

 

$

55,540

 

 

$

37,078

 

 

$

33,164

 

 

$

7,477

 

 

$

13,449

 

 

$

86,804

 

 

$

307,909

 

Special Mention

 

 

255

 

 

 

1,225

 

 

 

511

 

 

 

32

 

 

 

1,286

 

 

 

—

 

 

 

4,173

 

 

 

7,482

 

Substandard

 

 

5,629

 

 

 

1,942

 

 

 

413

 

 

 

89

 

 

 

3

 

 

 

332

 

 

 

3,004

 

 

 

11,412

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,685

 

 

 

1,685

 

Total Commercial & Agriculture

 

$

80,281

 

 

$

58,707

 

 

$

38,002

 

 

$

33,285

 

 

$

8,766

 

 

$

13,781

 

 

$

95,666

 

 

$

328,488

 

Commercial & Agriculture:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current-period gross charge-offs

 

$

1,520

 

 

$

339

 

 

$

204

 

 

$

53

 

 

$

48

 

 

$

33

 

 

$

—

 

 

$

2,197

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Real Estate - Owner Occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

26,677

 

 

$

40,344

 

 

$

72,901

 

 

$

62,663

 

 

$

52,478

 

 

$

97,293

 

 

$

8,358

 

 

$

360,714

 

Special Mention

 

 

—

 

 

 

3,525

 

 

 

4,987

 

 

 

855

 

 

 

383

 

 

 

302

 

 

 

178

 

 

 

10,230

 

Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,189

 

 

 

234

 

 

 

3,423

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total Commercial Real Estate - Owner Occupied

 

$

26,677

 

 

$

43,869

 

 

$

77,888

 

 

$

63,518

 

 

$

52,861

 

 

$

100,784

 

 

$

8,770

 

 

$

374,367

 

Commercial Real Estate - Owner Occupied:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current-period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Real Estate - Non-Owner Occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

59,635

 

 

$

227,608

 

 

$

299,079

 

 

$

170,534

 

 

$

121,313

 

 

$

280,870

 

 

$

29,219

 

 

$

1,188,258

 

Special Mention

 

 

—

 

 

 

—

 

 

 

7,166

 

 

 

—

 

 

 

—

 

 

 

10,533

 

 

 

—

 

 

 

17,699

 

Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

8,000

 

 

 

—

 

 

 

12,034

 

 

 

—

 

 

 

20,034

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total Commercial Real Estate - Non-Owner Occupied

 

$

59,635

 

 

$

227,608

 

 

$

306,245

 

 

$

178,534

 

 

$

121,313

 

 

$

303,437

 

 

$

29,219

 

 

$

1,225,991

 

Commercial Real Estate - Non-Owner Occupied:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current-period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

672

 

 

$

—

 

 

$

672

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

97,552

 

 

$

127,090

 

 

$

113,877

 

 

$

90,198

 

 

$

64,528

 

 

$

91,785

 

 

$

168,840

 

 

$

753,870

 

Special Mention

 

 

71

 

 

 

286

 

 

 

—

 

 

 

576

 

 

 

92

 

 

 

481

 

 

 

426

 

 

 

1,932

 

Substandard

 

 

—

 

 

 

316

 

 

 

967

 

 

 

859

 

 

 

675

 

 

 

2,655

 

 

 

1,180

 

 

 

6,652

 

Doubtful

 

 

1,115

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

300

 

 

 

1,415

 

Total Residential Real Estate

 

$

98,738

 

 

$

127,692

 

 

$

114,844

 

 

$

91,633

 

 

$

65,295

 

 

$

94,921

 

 

$

170,746

 

 

$

763,869

 

Residential Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current-period gross charge-offs

 

$

2

 

 

$

—

 

 

$

—

 

 

$

3

 

 

$

—

 

 

$

78

 

 

$

—

 

 

$

83

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revolving

 

 

 

 

 

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

Prior

 

 

Loans

 

 

Total

 

Real Estate Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

90,417

 

 

$

133,695

 

 

$

52,564

 

 

$

10,348

 

 

$

6,841

 

 

$

2,369

 

 

$

9,449

 

 

$

305,683

 

Special Mention

 

 

154

 

 

 

—

 

 

 

—

 

 

 

155

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

309

 

Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total Real Estate Construction

 

$

90,571

 

 

$

133,695

 

 

$

52,564

 

 

$

10,503

 

 

$

6,841

 

 

$

2,369

 

 

$

9,449

 

 

$

305,992

 

Real Estate Construction:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current-period gross charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

571

 

 

$

2,125

 

 

$

495

 

 

$

2,099

 

 

$

4,122

 

 

$

11,525

 

 

$

1,490

 

 

$

22,427

 

Special Mention

 

 

—

 

 

 

—

 

 

 

388

 

 

 

—

 

 

 

—

 

 

 

158

 

 

 

62

 

 

 

608

 

Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total Farm Real Estate

 

$

571

 

 

$

2,125

 

 

$

883

 

 

$

2,099

 

 

$

4,122

 

 

$

11,683

 

 

$

1,552

 

 

$

23,035

 

Farm Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current-period charge-offs

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease Financing Receivables

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

18,783

 

 

$

16,516

 

 

$

6,955

 

 

$

1,563

 

 

$

426

 

 

$

65

 

 

$

—

 

 

$

44,308

 

Special Mention

 

 

1,107

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,107

 

Substandard

 

 

—

 

 

 

466

 

 

 

1,000

 

 

 

—

 

 

 

19

 

 

 

—

 

 

 

—

 

 

 

1,485

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

-

 

Total Lease Financing Receivables

 

$

19,890

 

 

$

16,982

 

 

$

7,955

 

 

$

1,563

 

 

$

445

 

 

$

65

 

 

$

—

 

 

$

46,900

 

Lease Financing Receivables:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current-period charge-offs

 

$

—

 

 

$

199

 

 

$

607

 

 

$

12

 

 

$

63

 

 

$

—

 

 

$

—

 

 

$

881

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer and Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

2,521

 

 

$

3,717

 

 

$

2,329

 

 

$

1,787

 

 

$

677

 

 

$

206

 

 

$

1,339

 

 

$

12,576

 

Special Mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard

 

 

—

 

 

 

3

 

 

 

—

 

 

 

9

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

12

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total Consumer and Other

 

$

2,521

 

 

$

3,720

 

 

$

2,329

 

 

$

1,796

 

 

$

677

 

 

$

206

 

 

$

1,339

 

 

$

12,588

 

Consumer and Other:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current-period charge-offs

 

$

25

 

 

$

7

 

 

$

21

 

 

$

5

 

 

$

6

 

 

$

18

 

 

$

—

 

 

$

82

 

Total Loans

 

$

378,884

 

 

$

614,398

 

 

$

600,710

 

 

$

382,931

 

 

$

260,320

 

 

$

527,246

 

 

$

316,741

 

 

$

3,081,230

 

Total Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current-period charge-offs

 

$

1,547

 

 

$

545

 

 

$

832

 

 

$

73

 

 

$

117

 

 

$

801

 

 

$

—

 

 

$

3,915

 

 

The following tables include an aging analysis of the recorded investment in past due loans outstanding as of September 30, 2025 and December 31, 2024.

 

September 30, 2025

 

30-59
Days
Past Due

 

 

60-89
Days
Past Due

 

 

90 Days
or Greater
Past Due

 

 

Total Past
Due

 

 

Current

 

 

Total Loans

 

 

Past Due
90 Days
and
Accruing

 

Commercial & Agriculture

 

$

112

 

 

$

48

 

 

$

429

 

 

$

589

 

 

$

301,818

 

 

 

302,407

 

 

$

85

 

Commercial Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner Occupied

 

 

—

 

 

 

—

 

 

 

7

 

 

 

7

 

 

 

384,169

 

 

 

384,176

 

 

 

—

 

Non-Owner Occupied

 

 

—

 

 

 

654

 

 

 

484

 

 

 

1,138

 

 

 

1,214,893

 

 

 

1,216,031

 

 

 

—

 

Residential Real Estate

 

 

538

 

 

 

1,391

 

 

 

2,000

 

 

 

3,929

 

 

 

838,433

 

 

 

842,362

 

 

 

—

 

Real Estate Construction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

278,163

 

 

 

278,163

 

 

 

—

 

Farm Real Estate

 

 

—

 

 

 

—

 

 

 

400

 

 

 

400

 

 

 

23,313

 

 

 

23,713

 

 

 

—

 

Lease Financing Receivables

 

 

 

 

 

327

 

 

 

449

 

 

 

776

 

 

 

38,184

 

 

 

38,960

 

 

 

92

 

Consumer and Other

 

 

80

 

 

 

15

 

 

 

17

 

 

 

112

 

 

 

10,070

 

 

 

10,182

 

 

 

—

 

Total

 

$

730

 

 

$

2,435

 

 

$

3,786

 

 

$

6,951

 

 

$

3,089,043

 

 

$

3,095,994

 

 

$

177

 

 

December 31, 2024

 

30-59
Days
Past Due

 

 

60-89
Days
Past Due

 

 

90 Days
or Greater
Past Due

 

 

Total Past
Due

 

 

Current

 

 

Total Loans

 

 

Past Due
90 Days
and
Accruing

 

Commercial & Agriculture

 

$

825

 

 

$

114

 

 

$

1,374

 

 

$

2,313

 

 

$

326,175

 

 

$

328,488

 

 

$

—

 

Commercial Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner Occupied

 

 

—

 

 

 

—

 

 

 

225

 

 

 

225

 

 

 

374,142

 

 

 

374,367

 

 

 

225

 

Non-Owner Occupied

 

 

69

 

 

 

8,000

 

 

 

2,514

 

 

 

10,583

 

 

 

1,215,408

 

 

 

1,225,991

 

 

 

—

 

Residential Real Estate

 

 

5,504

 

 

 

1,634

 

 

 

2,273

 

 

 

9,411

 

 

 

754,458

 

 

 

763,869

 

 

 

—

 

Real Estate Construction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

305,992

 

 

 

305,992

 

 

 

—

 

Farm Real Estate

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

23,035

 

 

 

23,035

 

 

 

—

 

Lease Financing Receivables

 

 

575

 

 

 

351

 

 

 

909

 

 

 

1,835

 

 

 

45,065

 

 

 

46,900

 

 

 

—

 

Consumer and Other

 

 

181

 

 

 

37

 

 

 

3

 

 

 

221

 

 

 

12,367

 

 

 

12,588

 

 

 

—

 

Total

 

$

7,154

 

 

$

10,136

 

 

$

7,298

 

 

$

24,588

 

 

$

3,056,642

 

 

$

3,081,230

 

 

$

225

 

 

The following table presents loans on nonaccrual status as of September 30, 2025.

 

September 30, 2025

 

Nonaccrual loans with a related ACL

 

 

Nonaccrual loans without a related ACL

 

 

Total Nonaccrual loans

 

Commercial & Agriculture

 

$

7,719

 

 

$

3,166

 

 

$

10,885

 

Commercial Real Estate:

 

 

 

 

 

 

 

 

 

Owner Occupied

 

 

7

 

 

 

2,840

 

 

 

2,847

 

Non-Owner Occupied

 

 

1,194

 

 

 

—

 

 

 

1,194

 

Residential Real Estate

 

 

5,040

 

 

 

1,482

 

 

 

6,522

 

Real Estate Construction

 

 

—

 

 

 

—

 

 

 

—

 

Farm Real Estate

 

 

401

 

 

 

—

 

 

 

401

 

Lease Financing Receivables

 

 

807

 

 

 

—

 

 

 

807

 

Consumer and Other

 

 

24

 

 

 

—

 

 

 

24

 

Total

 

$

15,192

 

 

$

7,488

 

 

$

22,680

 

 

The following table presents loans on nonaccrual status as of December 31, 2024.

 

December 31, 2024

 

Nonaccrual loans with a related ACL

 

 

Nonaccrual loans without a related ACL

 

 

Total Nonaccrual loans

 

Commercial & Agriculture

 

$

8,901

 

 

$

3,370

 

 

$

12,271

 

Commercial Real Estate:

 

 

 

 

 

 

 

 

 

Owner Occupied

 

 

36

 

 

 

—

 

 

 

36

 

Non-Owner Occupied

 

 

2,514

 

 

 

8,000

 

 

 

10,514

 

Residential Real Estate

 

 

4,745

 

 

 

2,131

 

 

 

6,876

 

Real Estate Construction

 

 

—

 

 

 

—

 

 

 

—

 

Farm Real Estate

 

 

—

 

 

 

—

 

 

 

—

 

Lease Financing Receivables

 

 

638

 

 

 

600

 

 

 

1,238

 

Consumer and Other

 

 

15

 

 

 

—

 

 

 

15

 

Total

 

$

16,849

 

 

$

14,101

 

 

$

30,950

 

 

Nonaccrual Loans: Loans are considered for nonaccrual status upon reaching 90 days delinquency, unless the loan is well secured and in the process of collection, although the Company may be receiving partial payments of interest and partial repayments of principal on such loans. When a loan is placed on nonaccrual status, previously accrued but unpaid interest is deducted from interest income. Payments received on nonaccrual loans are applied to the unpaid principal balance. A loan may be returned to accruing status only if one of two conditions are met: (1) the loan is well-secured and none of the principal and interest has been past due for a minimum of 90 days or (2) the principal and interest payments are reasonably assured and a sustained period of performance has occurred, generally six months.

 

Modifications to Borrowers Experiencing Financial Difficulty: There was one loan modified to a borrower experiencing financial difficulty during the three months ended September 30, 2025 and two loans modified to a borrower experiencing financial difficulty during the nine months ended September 30, 2025. There were no loans modified during the three and nine months ended September 30, 2024. The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each loan upon loan origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses from modifications of loans to borrowers experiencing financial difficulty. The Company uses probability of default/loss given default, discounted cash flows or remaining life method to determine the allowance for credit losses. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification.

The following table shows the amortized cost basis at the end of the reporting period of the loans modified to borrowers experiencing financial difficulty, disaggregated by loan category and type of modification granted during the nine months ended September 30, 2025. The percentage of the amortized cost basis of loans that were modified to borrowers experiencing financial difficulty as compared to the amortized cost basis of each class of loan category is also presented below:

 

 

 

Loans Modifications Made to Borrowers Experiencing Financial Difficulty

 

 

 

September 30, 2025

 

 

 

(Dollars in Thousands)

 

 

 

Term Extension

 

 

Payment Deferral

 

Loan Type

 

Amortized Cost Basis

 

 

Percent of total loans by
category

 

 

Amortized Cost Basis

 

 

Percent of total loans by
category

 

Commercial & Agriculture

 

$

87

 

 

 

0.03

%

 

$

—

 

 

 

—

 

Commercial Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

Owner Occupied

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Non-Owner Occupied

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Residential Real Estate

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Real Estate Construction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Farm Real Estate

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Leasing Financing Receivables

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Consumer and Other

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total Loan Modifications

 

$

87

 

 

 

 

 

$

—

 

 

 

 

 

Upon the Company's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. The Company closely monitors the performance of the loans that were modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. There were no modification loans that had a payment default during the three and nine months ended September 30, 2025 and September 30, 2024, and were modified during the twelve months prior to that default to borrowers experiencing financial difficulty.

 

The following table presents the payment status of the loans that were modified to borrowers experiencing financial difficulties in the last twelve months ended September 30, 2025.

 

 

 

30-59
Days
Past Due

 

 

60-89
Days
Past Due

 

 

90 Days
or Greater
Past Due

 

 

Total Past
Due

 

Current

 

Non-Accrual

 

Commercial & Agriculture

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

$

7,622

 

$

7,610

 

Commercial Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner Occupied

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

—

 

 

—

 

Non-Owner Occupied

 

 

—

 

 

 

—

 

 

 

484

 

 

 

484

 

 

—

 

 

484

 

Residential Real Estate

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

—

 

 

—

 

Real Estate Construction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

—

 

 

—

 

Farm Real Estate

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

—

 

 

—

 

Lease Financing Receivables

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

—

 

 

—

 

Consumer and Other

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

—

 

 

—

 

Total

 

$

—

 

 

$

—

 

 

$

484

 

 

$

484

 

$

7,622

 

$

8,094

 

Individually Evaluated Loans: Larger (greater than $350) Commercial & Agricultural and Commercial Real Estate loan relationships, as well as Residential Real Estate and Consumer loans and Lease Financing Receivables that are part of a larger relationship are individually evaluated on a quarterly basis, when they do not share similar risk characteristics with the collectively evaluated pools. These loans are analyzed to determine if it is probable that all amounts will not be collected according to the contractual terms of the loan agreement. If management determines that the value of the loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate

or a charge-off to the allowance. The Company’s policy for recognizing interest income on individually evaluated loans does not differ from its overall policy for interest recognition.

The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related allowance for credit losses allocated to these loans as of September 30, 2025 and December 31, 2024.

 

September 30, 2025

 

Real Estate

 

 

Other

 

 

Allowance for Credit Losses

 

Commercial & Agriculture

 

$

—

 

 

$

2,760

 

 

$

584

 

Commercial Real Estate:

 

 

 

 

 

 

 

 

 

Owner Occupied

 

 

2,840

 

 

 

—

 

 

 

—

 

Non-Owner Occupied

 

 

484

 

 

 

—

 

 

 

—

 

Residential Real Estate

 

 

1,481

 

 

 

—

 

 

 

—

 

Real Estate Construction

 

 

—

 

 

 

—

 

 

 

—

 

Farm Real Estate

 

 

—

 

 

 

—

 

 

 

—

 

Lease Financing Receivables

 

 

—

 

 

 

—

 

 

 

—

 

Consumer and Other

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

4,805

 

 

$

2,760

 

 

$

584

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2024

 

Real Estate

 

 

Other

 

 

Allowance for Credit Losses

 

Commercial & Agriculture

 

$

—

 

 

$

8,179

 

 

$

1,679

 

Commercial Real Estate:

 

 

 

 

 

 

 

 

 

Owner Occupied

 

 

—

 

 

 

—

 

 

 

—

 

Non-Owner Occupied

 

 

10,514

 

 

 

—

 

 

 

674

 

Residential Real Estate

 

 

2,131

 

 

 

—

 

 

 

—

 

Real Estate Construction

 

 

—

 

 

 

—

 

 

 

—

 

Farm Real Estate

 

 

—

 

 

 

—

 

 

 

—

 

Lease Financing Receivables

 

 

—

 

 

 

665

 

 

 

6

 

Consumer and Other

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

12,645

 

 

$

8,844

 

 

$

2,359

 

 

Collateral-dependent loans consist primarily of Residential Real Estate, Commercial Real Estate and Commercial & Agricultural loans. Individually evaluated loans are collateral-dependent when foreclosure is probable or when the repayment of the loan is expected to be provided substantially through the operation or sale of the underlying collateral. When a loan is deemed collateral-dependent, the level of credit loss is measured by the difference between amortized cost of the loan and the fair value of collateral adjusted for estimated cost to sell. In the case of Commercial & Agricultural loans secured by equipment, the fair value of the collateral is estimated by third-party valuation experts. Loan balances are charged down to the underlying collateral value when they are deemed uncollectible. Note that the Company did not elect to use the collateral maintenance agreement practical expedient available under CECL.

 

Foreclosed Assets Held For Sale

Foreclosed assets acquired in settlement of loans are carried at fair value less estimated costs to sell and are included in Other assets on the Consolidated Balance Sheets. As of September 30, 2025 and December 31, 2024, the Company had initiated formal foreclosure procedures on $1,263 and $669, respectively, of Residential Real Estate loans.

Allowance for Credit Losses on Off-Balance-Sheet Credit Exposures

The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk from a contractual obligation to extend credit, such as a loan commitment, credit line, letter of credit, or overdraft protection. The allowance for credit losses on off-balance-sheet credit exposures is adjusted as a provision for credit loss expense recognized within provision for credit losses on the Consolidated Statements of Operations. The estimated credit loss includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The estimate of expected credit loss is based on the historical loss rate for the loan class in which the loan commitments would be classified as if funded.

The following table lists the allowance for credit losses on off-balance sheet credit exposures as of the three and nine months ended September 30, 2025 and September 30, 2024:

 

 

 

Three Months Ended

 

 

 

September 30,

 

 

 

2025

 

2024

 

Beginning of Period

 

$

3,553

 

 

3,706

 

Provision for (recovery of)

 

 

(178

)

 

(325

)

End of Period

 

$

3,375

 

$

3,381

 

 

 

 

Nine months Ended

 

 

 

September 30,

 

 

 

2025

 

2024

 

Beginning of Period

 

$

3,380

 

 

3,901

 

Provision for (recovery of)

 

 

(5

)

 

(520

)

End of Period

 

$

3,375

 

$

3,381