XML 20 R10.htm IDEA: XBRL DOCUMENT

LOANS AND ALLOWANCE FOR CREDIT LOSSES

3 Months Ended

Mar. 31, 2026

LOANS AND ALLOWANCE FOR CREDIT LOSSES

3. LOANS AND ALLOWANCE FOR CREDIT LOSSES

The following table summarizes the composition of our loan portfolio as of March 31, 2026 and December 31, 2025 ($ in thousands):


	March 31, 2026			December 31, 2025
Loans held for sale, at fair value	$	181,715		$	166,066
Loans held for sale, at lower of cost or market		41,465			—
Total loans held for sale	$	223,180		$	166,066

Loans held for investment
Loans secured by real estate:
Commercial real estate - owner occupied ⁽¹⁾	$	534,897		$	510,088
Commercial real estate - non-owner occupied		540,154			567,091
Secured by farmland		2,386			3,408
Construction and land development		151,426			131,757
Residential 1-4 family		560,711			576,866
Multi-family residential		150,475			140,261
Home equity lines of credit		61,786			61,738
Total real estate loans		2,001,835			1,991,209

Commercial loans ⁽²⁾		1,104,438			970,492
Paycheck Protection Program loans		1,716			1,719
Consumer loans		283,605			315,407
Total Non-PCD loans		3,391,594			3,278,827
PCD loans		4,772			4,856
Total loans held for investment	$	3,396,366		$	3,283,683

(1)	Includes $6 million related to loans collateralizing secured borrowings as of both March 31, 2026 and December 31, 2025.

(2)	Includes $9 million related to loans collateralizing secured borrowings as of both March 31, 2026 and December 31, 2025.

Consumer Program Loans

The Company had $82 million and $90 million of amortized cost balance of loans outstanding in the Consumer Program as of March 31, 2026 and December 31, 2025, respectively, or 2% and 3%, respectively of our total gross loan portfolio as of each date. Loans in the Consumer Program are included within the consumer loans category disclosures in this footnote. As of March 31, 2026, 1% of the loans were in a promotional period requiring no payment of interest, with approximately 50% of these promotional loan periods ending through the second quarter of 2026.

Accrued Interest Receivable

Accrued interest receivable on loans totaled $19 million and $18 million as of March 31, 2026 and December 31, 2025, respectively, and is included in other assets in the consolidated balance sheets.

Nonaccrual and Past Due Loans

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. In determining whether or not a borrower may be unable to meet payment obligations for each class of loans, Primis considers the borrower’s debt service capacity through the analysis of current financial information, if available, and/or current information with regards to the Company’s collateral position. Regulatory provisions typically require the placement of a loan on nonaccrual status if (i) principal or interest has been in default for a period of 90 days or more unless the loan is both well secured and in the process of collection or (ii) full payment of principal and interest is not expected. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. When interest accrual is

discontinued, all unpaid accrued interest is reversed. Interest income on nonaccrual loans is recognized only to the extent that cash payments are received in excess of principal due. A loan may be returned to accrual status when all the principal and interest amounts contractually due are brought current and future principal and interest amounts contractually due are reasonably assured, which is typically evidenced by a sustained period (at least six months) of repayment performance by the borrower.

The following tables present the aging of the recorded investment in past due loans by class of loans held for investment as of March 31, 2026 and December 31, 2025 ($ in thousands):


	30 - 59			60 - 89			90
	Days			Days			Days			Total			Loans Not			Total
March 31, 2026	Past Due			Past Due			or More			Past Due			Past Due			Loans
Commercial real estate - owner occupied	$	6,040		$	3,130		$	1,411		$	10,581		$	524,316		$	534,897
Commercial real estate - non-owner occupied		30,716			39,130			685			70,531			469,623			540,154
Secured by farmland		—			—			—			—			2,386			2,386
Construction and land development		17			12,261			389			12,667			138,759			151,426
Residential 1-4 family		6,336			606			1,994			8,936			551,775			560,711
Multi- family residential		—			498			—			498			149,977			150,475
Home equity lines of credit		209			64			66			339			61,447			61,786
Commercial loans		3,479			4,240			21,460			29,179			1,075,259			1,104,438
Paycheck Protection Program loans		—			3			1,713			1,716			—			1,716
Consumer loans		1,985			1,326			237			3,548			280,057			283,605
Total Non-PCD loans		48,782			61,258			27,955			137,995			3,253,599			3,391,594
PCD loans		—			—			—			—			4,772			4,772
Total	$	48,782		$	61,258		$	27,955		$	137,995		$	3,258,371		$	3,396,366


		30 - 59			60 - 89			90
		Days			Days			Days			Total			Loans Not			Total
December 31, 2025		Past Due			Past Due			or More			Past Due			Past Due			Loans
Commercial real estate - owner occupied		$	5,187		$	188		$	1,412		$	6,787		$	503,301		$	510,088
Commercial real estate - non-owner occupied			31,069			48,022			—			79,091			488,000			567,091
Secured by farmland			—			—			—			—			3,408			3,408
Construction and land development			12,259			407			—			12,666			119,091			131,757
Residential 1-4 family			2,071			498			2,274			4,843			572,023			576,866
Multi- family residential			1,544			—			—			1,544			138,717			140,261
Home equity lines of credit			80			58			—			138			61,600			61,738
Commercial loans			2,384			20,642			1,972			24,998			945,494			970,492
Paycheck Protection Program loans			3			—			1,714			1,717			2			1,719
Consumer loans			2,095			1,101			149			3,345			312,062			315,407
Total Non-PCD loans			56,692			70,916			7,521			135,129			3,143,698			3,278,827
PCD loans			—			—			—			—			4,856			4,856
Total		$	56,692		$	70,916		$	7,521		$	135,129		$	3,148,554		$	3,283,683

The amortized cost, by class, of loans and leases on nonaccrual status as of March 31, 2026 and December 31, 2025, was as follows ($ in thousands):


		90 Days				Less Than		Total			Nonaccrual With
		Past Due				90 Days		Nonaccrual			No Credit
March 31, 2026		or More				Past Due		Loans			Loss Allowance
Commercial real estate - owner occupied		$	1,411		$	462		$	1,873		$	548
Commercial real estate - non-owner occupied			685			39,129			39,814			360
Secured by farmland			—			249			249			249
Construction and land development			389			123			512			512
Residential 1-4 family			1,994			3,561			5,555			5,555
Home equity lines of credit			66			436			502			502
Commercial loans			2,951			31,413			34,364			8,697
Consumer loans			237			677			914			914
Total Non-PCD loans			7,733			76,050			83,783			17,337
PCD loans			—			1,166			1,166			1,166
Total		$	7,733		$	77,216		$	84,949		$	18,503

		90 Days				Less Than		Total			Nonaccrual With
		Past Due				90 Days		Nonaccrual			No Credit
December 31, 2025		or More				Past Due		Loans			Loss Allowance
Commercial real estate - owner occupied		$	1,412		$	472		$	1,884		$	559
Commercial real estate - non-owner occupied			—			39,841			39,841			360
Secured by farmland			—			275			275			275
Construction and land development			—			499			499			499
Residential 1-4 family			2,274			3,846			6,120			6,120
Home equity lines of credit			—			498			498			498
Commercial loans			1,972			31,661			33,633			8,661
Consumer loans			149			730			879			879
Total Non-PCD loans			5,807			77,822			83,629			17,851
PCD loans			—			1,194			1,194			1,193
Total		$	5,807		$	79,016		$	84,823		$	19,044

There were $2 million of PPP loans greater than 90 days past due and still accruing as of both March 31, 2026 and December 31, 2025.

The following table presents nonaccrual loans as of March 31, 2026 by class and year of origination ($ in thousands):


															Revolving Loans
													Revolving		Converted
	2026		2025		2024		2023		2022		Prior		Loans		To Term		Total
Commercial real estate - owner occupied	$	—	$	—	$	—	$	—	$	87	$	1,786	$	—	$	—	$	1,873
Commercial real estate - non-owner occupied		—		—		—		—		324		39,490		—		—		39,814
Secured by farmland		—		—		—		—		—		249		—		—		249
Construction and land development		—		—		—		—		—		512		—		—		512
Residential 1-4 family		—		721		112		—		517		3,841		67		297		5,555
Home equity lines of credit		—		—		—		—		—		—		502		—		502
Commercial loans		—		1		8,504		209		22,086		1,370		2,077		117		34,364
Consumer loans		—		7		25		107		479		291		—		5		914
Total non-PCD nonaccruals		—		729		8,641		316		23,493		47,539		2,646		419		83,783
PCD loans		—		—		—		—		—		1,166		—		—		1,166
Total nonaccrual loans	$	—	$	729	$	8,641	$	316	$	23,493	$	48,705	$	2,646	$	419	$	84,949

Interest received on nonaccrual loans was $722 thousand for the three months ended March 31, 2026, and immaterial for the three months ended March 31, 2025.

Modifications Provided to Borrowers Experiencing Financial Difficulty

The Bank determines that a borrower may be experiencing financial difficulty if the borrower is currently delinquent on any of its debt, or if the Bank is concerned that the borrower may not be able to perform in accordance with the current terms of the loan agreement in the foreseeable future. Many aspects of the borrower’s financial situation are assessed when determining whether they are experiencing financial difficulty, particularly for commercial borrowers due to the complex nature of the loan structure, business/industry risk and borrower/guarantor structures. Concessions may include the reduction of an interest rate at a rate lower than current market rates for a new loan with similar risk, extension of the maturity date, reduction of accrued interest, or principal forgiveness. When evaluating whether a concession has been granted, the Bank also considers whether the borrower has provided additional collateral or guarantors and whether such additions adequately compensate the Bank for the restructured terms, or if the revised terms are consistent with those currently being offered to new loan customers.

The assessments of whether a borrower is experiencing financial difficulty at the time a concession has been granted is inherently subjective in nature, and management’s judgment is required when determining whether the concession results in a modification that is accounted for as a new loan or a continuation of the existing loan under GAAP.

Although each occurrence is unique to the borrower and is evaluated separately, for all portfolio segments, loans modified as a result of borrowers experiencing financial difficulty are typically modified through reductions in interest rates, reductions in payments, changing the payment terms from principal and interest to interest only, and/or extensions in term maturity.

The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset 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 receivables to borrowers experiencing financial difficulty. 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. Occasionally, the Company modifies certain loans by providing principal forgiveness. When principal forgiveness is provided, the amortized cost basis of the loan is written off against the allowance. The amount of the principal forgiveness is deemed to be uncollectible; therefore,

that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses.

If it is determined 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. At that time, 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 following table provides a summary of the amortized cost basis of loan modifications to borrowers experiencing financial difficulty during the three months ended March 31, 2026 and 2025 and the related percentage of the class of the loan portfolio period-end balance by the type of modification as of March 31, 2026 and 2025, excluding Consumer Program loans ($ in thousands):


	For the three months ended March 31, 2026												For the three months ended March 31, 2025
	Payment Deferral				Interest Only Payment Periods				Total				Payment Deferral				Interest Only Payment Periods				Total
		$	%			$	%			$	%			$	%			$	%			$	%
Commercial real estate - non-owner occupied	$	—	—	%	$	7,047	1.30	%	$	7,047	1.30	%	$	—	—	%	$	—	—	%	$	—	—	%
Total	$	—	—	%	$	7,047			$	7,047	0.21	%	$	—	—	%	$	—			$	—	—	%

The following table depicts the performance of loans as of March 31, 2026, at amortized cost, that have been modified to borrowers experiencing financial difficulty in the last 12 months ($ in thousands):


	Payment Status
	Current		30-59 days past due		60-89 days past due		90 days or more
Commercial real estate - owner occupied	$	2,124	$	—	$	—	$	—
Commercial real estate - non-owner occupied		7,047		30,716		39,129		—
Multi- family residential		—		—		498		—
Commercial loans		23,262		—		476		—
Total	$	32,433	$	30,716	$	40,103	$	—

Consumer Program Modifications

The Company began offering modifications to Consumer Program borrowers beginning on January 1, 2025, in an attempt to enhance collections of delinquent loans and mitigate charge-offs. The primary type of modifications were principal forgiveness of portions of outstanding principal owed and a combination of term modifications to extend maturity dates and interest rate reductions (primarily on promotional loans).

The following table provides a summary of the loan modifications to Consumer Program borrowers experiencing financial difficulty during the three months ended March 31, 2026 and 2025, by the type of modification ($ in thousands):


	For the three months ended March 31, 2026									For the three months ended March 31, 2025
		Total			Average			Average						Average			Average
		Amortized			Term			Rate Change			Total			Term			Rate Change
	# of	Cost			Adjustment			of Modified		# of	Amount			Adjustment			of Modified
	Loans	Modified			(Years)			Loans		Loans	Modified			(Years)			Loans
Term and Interest Rate	55	$	715			3.1		(6.78)	%	—	$	—			—		—	%
Term only	—	$	—			—		N/A	%	145	$	1,809			3.3		N/A	%
Principal Forgiveness	24	$	158			N/A		N/A	%	50	$	524			N/A		N/A	%

The following table provides a status as of March 31, 2026 of the amortized cost of Consumer Program loans modified in the last 12 months by the type of modification ($ in thousands):


	Term and
	Interest
	Rate		Term		Principal
Status	Modifications		Modifications		Modifications
Current	$	5,598	$	90	$	103
1-30 days past due	$	445	$	—	$	—
31-60 days past due	$	391	$	7	$	—
61-90 days past due	$	308	$	17	$	55

Credit Quality Indicators

For each class of loan, the primary credit quality indicator used for evaluating credit quality and estimating the ACL is risk rating categories of Pass, Pass/Watch, Special Mention, Substandard, and Doubtful. Through its system of internal controls, Primis evaluates and segments loan portfolio credit quality using regulatory definitions for Pass, Special Mention, Substandard, and Doubtful. Special Mention loans are considered “criticized”, while loans classified as Substandard or Doubtful are considered “classified”.

The risk levels, as described below, do not necessarily follow the regulatory definitions of risk levels with the same name. A general description of the characteristics of the risk levels follows:

Pass is determined by the following criteria:

●

Risk rated 1 loans have little or no risk and are generally secured by cash or cash equivalents;

●

Risk rated 2 loans have minimal risk to well qualified borrowers and no significant questions as to safety;

●

Risk rated 3 loans are satisfactory loans with strong borrowers and secondary sources of repayment;

●

Risk rated 4 loans are satisfactory loans with borrowers not as strong as risk rated 3 loans and may exhibit a greater degree of financial risk based on the type of business supporting the loan.

In the first quarter of 2026, the Company expanded its risk grade matrix to include Risk Grade 5 – “Pass/Watch” that is determined by the following criteria:

●

Risk rated 5 loans are pass loans that warrant more than the normal level of supervision and have the possibility of an event occurring that may weaken the borrower’s ability to repay.

Special Mention is determined by the following criteria:

●

Risk rated 6 loans are special mention loans that have increasing potential weaknesses beyond those at which the loan originally was granted and if not addressed could lead to inadequately protecting the Company’s credit position.

Substandard is determined by the following criteria:

●

Risk rated 7 loans are substandard loans and are inadequately protected by the current sound worth or paying capacity of the obligor or the collateral pledged. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful is determined by the following criteria:

●

Risk rated 8 loans are doubtful of collection and the possibility of loss is high, but pending specific borrower plans for recovery, its classification as a loss is deferred until its more exact status is determined.

●

Risk rated 9 loans are loans which are considered uncollectable and of such little value that their continuance as bankable assets is not warranted.

In monitoring credit quality trends in the context of assessing the appropriate level of the ACL on loans, the Company monitors portfolio credit quality by the weighted-average risk grade of each class of loan.

The following table presents weighted-average risk grades for all loans, by class and year of origination/renewal as of March 31, 2026 ($ in thousands):


															Revolving
															Loans
														Revolving	Converted
	2026		2025		2024		2023		2022		Prior		Loans		To Term		Total
Commercial real estate - owner occupied
Pass	$	23,755	$	76,358	$	52,928	$	66,836	$	68,601	$	225,757	$	970	$	7,975	$	523,180
Pass/Watch		149		—		—		—		3,421		988		—		—		4,558
Special Mention		—		—		—		—		87		3,159		—		—		3,246
Substandard		—		—		—		—		—		3,913		—		—		3,913
Doubtful		—		—		—		—		—		—		—		—		—
	$	23,904	$	76,358	$	52,928	$	66,836	$	72,109	$	233,817	$	970	$	7,975	$	534,897
Current period gross charge offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Weighted average risk grade		3.49		3.29		3.21		3.57		3.46		3.48		3.54		3.74		3.44
Commercial real estate - nonowner occupied
Pass	$	6,971	$	15,853	$	21,436	$	27,564	$	21,296	$	315,248	$	7,483	$	3,286	$	419,137
Pass/Watch		—		—		—		—		—		562		—		—		562
Special Mention		—		6		—		—		17,272		4,274		—		—		21,552
Substandard		—		—		—		—		324		98,579		—		—		98,903
Doubtful		—		—		—		—		—		—		—		—		—
	$	6,971	$	15,859	$	21,436	$	27,564	$	38,892	$	418,663	$	7,483	$	3,286	$	540,154
Current period gross charge offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Weighted average risk grade		2.98		3.18		3.75		3.78		4.82		4.45		3.56		2.98		4.34
Secured by farmland
Pass	$	160	$	215	$	18	$	—	$	—	$	1,454	$	493	$	46	$	2,386
Pass/Watch		—		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
	$	160	$	215	$	18	$	—	$	—	$	1,454	$	493	$	46	$	2,386
Current period gross charge offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Weighted average risk grade		4.00		3.91		4.00		N/A		N/A		3.99		3.90		2.83		3.94
Construction and land development
Pass	$	14,739	$	77,064	$	11,705	$	7,325	$	32,837	$	6,783	$	461	$	—	$	150,914
Pass/Watch		—		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		512		—		—		512
Doubtful		—		—		—		—		—		—		—		—		—
	$	14,739	$	77,064	$	11,705	$	7,325	$	32,837	$	7,295	$	461	$	—	$	151,426
Current period gross charge offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Weighted average risk grade		3.84		3.12		3.02		3.87		3.63		3.60		3.65		N/A		3.36
Residential 1-4 family
Pass	$	18,034	$	56,401	$	22,673	$	21,085	$	132,307	$	296,286	$	5,433	$	2,606	$	554,825
Pass/Watch		—		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		268		—		—		268
Substandard		—		721		112		—		517		3,904		67		297		5,618
Doubtful		—		—		—		—		—		—		—		—		—
	$	18,034	$	57,122	$	22,785	$	21,085	$	132,824	$	300,458	$	5,500	$	2,903	$	560,711
Current period gross charge offs	$	—	$	—	$		$	—	$	—	$	5	$	—	$	—	$	5
Weighted average risk grade		3.31		3.10		3.11		3.11		3.05		3.15		3.10		3.87		3.13
Multi- family residential
Pass	$	1,987	$	7,257	$	—	$	437	$	29,125	$	104,703	$	5,768	$	—	$	149,277
Pass/Watch		—		—		—		—		—		—		—		—		—
Special Mention		431		—		—		—		—		1		—		—		432
Substandard		—		—		—		—		—		498		—		268		766
Doubtful		—		—		—		—		—		—		—		—		—
	$	2,418	$	7,257	$	—	$	437	$	29,125	$	105,202	$	5,768	$	268	$	150,475
Current period gross charge offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Weighted average risk grade		4.36		4.00		N/A		3.00		3.39		3.38		3.75		7.00		3.45
Home equity lines of credit
Pass	$	—	$	589	$	210	$	399	$	376	$	604	$	58,192	$	104	$	60,474
Pass/Watch		—		—		—		—		—		—		736		—		736
Special Mention		—		—		—		—		—		—		—		6		6
Substandard		—		—		—		—		—		—		570		—		570
Doubtful		—		—		—		—		—		—		—		—		—
	$	—	$	589	$	210	$	399	$	376	$	604	$	59,498	$	110	$	61,786
Current period gross charge offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Weighted average risk grade		N/A		3.00		3.00		3.00		3.00		3.09		3.09		3.65		3.09


															Revolving
															Loans
														Revolving	Converted
	2026		2025		2024		2023		2022		Prior		Loans		To Term		Total
Commercial loans
Pass	$	469,828	$	164,338	$	78,642	$	52,940	$	136,798	$	41,769	$	87,366	$	7,845	$	1,039,526
Pass/Watch		83		422		929		—		3,271		28		3,177		—		7,910
Special Mention		—		4,999		—		4		747		2,495		13,512		862		22,619
Substandard		—		—		956		208		22,086		1,398		2,069		117		26,834
Doubtful		—		—		7,549		—		—		—		—		—		7,549
	$	469,911	$	169,759	$	88,076	$	53,152	$	162,902	$	45,690	$	106,124	$	8,824	$	1,104,438
Current period gross charge offs	$	—	$	—	$		$		$	—	$	—	$	—	$		$	—
Weighted average risk grade		3.02		3.48		3.68		3.52		3.60		3.83		3.72		4.02		3.36
Paycheck Protection Program loans
Pass	$	—	$	—	$	—	$	—	$	—	$	1,716	$	—	$	—	$	1,716
Pass/Watch		—		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
	$	—	$	—	$	—	$	—	$	—	$	1,716	$	—	$	—	$	1,716
Current period gross charge offs	$	—	$	—	$	—	$	—	$		$	—	$	—	$	—	$	—
Weighted average risk grade		N/A		N/A		N/A		N/A		N/A		2.00		N/A		N/A		2.00
Consumer loans
Pass	$	3,651	$	15,813	$	37,704	$	33,707	$	164,917	$	18,972	$	7,488	$	511	$	282,763
Pass/Watch		—		—		—		—		—		—		—		—		—
Special Mention		—		—		1		8		54		27		—		—		90
Substandard		—		7		12		84		434		210		—		5		752
Doubtful		—		—		—		—		—		—		—		—		—
	$	3,651	$	15,820	$	37,717	$	33,799	$	165,405	$	19,209	$	7,488	$	516	$	283,605
Current period gross charge offs	$	—	$	102	$	701	$	1,070	$	586	$	137	$	—	$	—	$	2,596
Weighted average risk grade		4.00		23.11		9.33		10.86		4.29		20.06		2.46		4.03		7.81
PCD
Pass	$	—	$	—	$	—	$	—	$	—	$	2,388	$	—	$	—	$	2,388
Pass/Watch		—		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		1,098		—		—		1,098
Substandard		—		—		—		—		—		1,286		—		—		1,286
Doubtful		—		—		—		—		—		—		—		—		—
	$	—	$	—	$	—	$	—	$	—	$	4,772	$	—	$	—	$	4,772
Current period gross charge offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Weighted average risk grade		N/A		N/A		N/A		N/A		N/A		5.17		N/A		N/A		5.17
Total	$	539,788	$	420,043	$	234,875	$	210,597	$	634,470	$	1,138,880	$	193,785	$	23,928	$	3,396,366
Current period gross charge offs	$	—	$	102	$	701	$	1,070	$	586	$	142	$	—	$	—	$	2,601
Weighted average risk grade		3.08		4.06		4.40		4.72		3.71		4.04		3.46		3.80		3.86

The following table presents weighted-average risk grades for all loans, by class and year of origination/renewal as of December 31, 2025 ($ in thousands):


															Revolving
															Loans
														Revolving	Converted
	2025		2024		2023		2022		2021		Prior		Loans		To Term		Total
Commercial real estate - owner occupied
Pass	$	70,931	$	53,252	$	62,228	$	72,651	$	58,092	$	176,323	$	1,407	$	8,028	$	502,912
Special Mention		—		—		—		—		—		3,165		—		—		3,165
Substandard		—		—		—		87		187		3,737		—		—		4,011
Doubtful		—		—		—		—		—		—		—		—		—
	$	70,931	$	53,252	$	62,228	$	72,738	$	58,279	$	183,225	$	1,407	$	8,028	$	510,088
Current period gross charge offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Weighted average risk grade		3.32		3.21		3.54		3.41		3.42		3.46		3.46		3.74		3.42
Commercial real estate - nonowner occupied
Pass	$	15,950	$	21,700	$	42,907	$	27,724	$	41,446	$	282,205	$	11,365	$	3,315	$	446,612
Special Mention		—		—		—		17,276		—		4,379		—		—		21,655
Substandard		—		—		—		—		98,562		262		—		—		98,824
Doubtful		—		—		—		—		—		—		—		—		—
	$	15,950	$	21,700	$	42,907	$	45,000	$	140,008	$	286,846	$	11,365	$	3,315	$	567,091
Current period gross charge offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Weighted average risk grade		3.20		3.74		3.61		3.85		5.22		3.70		3.71		2.98		4.07
Secured by farmland
Pass	$	406	$	21	$	—	$	—	$	—	$	2,031	$	616	$	59	$	3,133
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		275		—		—		275
Doubtful		—		—		—		—		—		—		—		—		—
	$	406	$	21	$	—	$	—	$	—	$	2,306	$	616	$	59	$	3,408
Current period gross charge offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Weighted average risk grade		3.95		4.00		N/A		N/A		N/A		4.23		3.93		2.92		4.12
Construction and land development
Pass	$	69,022	$	12,971	$	7,081	$	34,816	$	166	$	6,741	$	461	$	—	$	131,258
Special Mention		—		—		—		—		—		499		—		—		499
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
	$	69,022	$	12,971	$	7,081	$	34,816	$	166	$	7,240	$	461	$	—	$	131,757
Current period gross charge offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Weighted average risk grade		3.10		3.00		3.90		3.63		3.99		3.51		3.65		N/A		3.30
Residential 1-4 family
Pass	$	53,742	$	38,550	$	23,232	$	141,982	$	123,591	$	182,506	$	4,861	$	2,663	$	571,127
Special Mention		—		—		—		—		—		267		—		—		267
Substandard		—		115		—		517		—		4,003		283		554		5,472
Doubtful		—		—		—		—		—		—		—		—		—
	$	53,742	$	38,665	$	23,232	$	142,499	$	123,591	$	186,776	$	5,144	$	3,217	$	576,866
Current period gross charge offs	$	—	$	—	$	67	$	—	$	—	$	5	$	—	$	—	$	72
Weighted average risk grade		3.06		3.34		3.10		3.09		3.04		3.21		3.22		3.94		3.14
Multi- family residential
Pass	$	7,009	$	—	$	440	$	21,344	$	22,656	$	82,644	$	5,384	$	—	$	139,477
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		513		—		271		784
Doubtful		—		—		—		—		—		—		—		—		—
	$	7,009	$	—	$	440	$	21,344	$	22,656	$	83,157	$	5,384	$	271	$	140,261
Current period gross charge offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Weighted average risk grade		4.00		N/A		3.00		3.17		3.23		3.41		3.82		6.00		3.39
Home equity lines of credit
Pass	$	562	$	215	$	420	$	355	$	312	$	325	$	58,893	$	107	$	61,189
Special Mention		—		—		—		—		—		(1)		—		—		(1)
Substandard		—		—		—		—		—		(2)		540		12		550
Doubtful		—		—		—		—		—		—		—		—		—
	$	562	$	215	$	420	$	355	$	312	$	322	$	59,433	$	119	$	61,738
Current period gross charge offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Weighted average risk grade		3.00		3.00		3.00		3.00		3.00		3.17		3.06		3.71		3.06
Commercial loans
Pass	$	169,480	$	399,604	$	55,482	$	143,884	$	25,566	$	19,446	$	92,493	$	8,292	$	914,247
Special Mention		4,994		—		—		769		2,278		1		13,510		885		22,437
Substandard		—		30		212		22,281		383		1,156		2,065		132		26,259
Doubtful		—		7,549		—		—		—		—		—		—		7,549
	$	174,474	$	407,183	$	55,694	$	166,934	$	28,227	$	20,603	$	108,068	$	9,309	$	970,492
Current period gross charge offs	$	—	$	—	$	2	$	28	$	—	$	—	$	—	$	732	$	762
Weighted average risk grade		3.44		3.12		3.45		3.41		3.92		3.46		3.52		3.92		3.33


															Revolving
															Loans
														Revolving	Converted
	2025		2024		2023		2022		2021		Prior		Loans		To Term		Total
Paycheck Protection Program loans
Pass	$	—	$	—	$	—	$	—	$	849	$	870	$	—	$	—	$	1,719
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
	$	—	$	—	$	—	$	—	$	849	$	870	$	—	$	—	$	1,719
Current period gross charge offs	$	—	$	—	$	—	$	—	$	173	$	—	$	—	$	—	$	173
Weighted average risk grade		N/A		N/A		N/A		N/A		2.00		2.00		N/A		N/A		2.00
Consumer loans
Pass	$	10,533	$	96,784	$	14,093	$	152,174	$	16,843	$	2,590	$	20,868	$	534	$	314,419
Special Mention		—		—		3		28		—		17		—		—		48
Substandard		—		10		86		517		315		2		—		10		940
Doubtful		—		—		—		—		—		—		—		—		—
	$	10,533	$	96,794	$	14,182	$	152,719	$	17,158	$	2,609	$	20,868	$	544	$	315,407
Current period gross charge offs	$	264	$	3,255	$	13,490	$	15,838	$	402	$	68	$	9	$	—	$	33,326
Weighted average risk grade		4.00		4.00		3.03		2.69		3.08		4.01		2.20		4.04		3.16
PCD
Pass	$	—	$	—	$	—	$	—	$	—	$	2,426	$	—	$	—	$	2,426
Special Mention		—		—		—		—		—		1,113		—		—		1,113
Substandard		—		—		—		—		—		1,317		—		—		1,317
Doubtful		—		—		—		—		—		—		—		—		—
	$	—	$	—	$	—	$	—	$	—	$	4,856	$	—	$	—	$	4,856
Current period gross charge offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Weighted average risk grade		N/A		N/A		N/A		N/A		N/A		4.67		N/A		N/A		4.67
Total	$	402,629	$	630,801	$	206,184	$	636,405	$	391,246	$	778,810	$	212,746	$	24,862	$	3,283,683
Current period gross charge offs	$	264	$	3,255	$	13,559	$	15,866	$	575	$	73	$	9	$	732	$	34,333
Weighted average risk grade		3.33		3.29		3.46		3.20		3.95		3.50		3.27		3.76		3.42

Revolving loans that were converted to term loans during the three months ended March 31, 2026 and 2025 were as follows ($ in thousands):


	For the three months ended March 31, 2026		For the three months ended March 31, 2025
Commercial real estate - non-owner occupied	$	—	$	16
Residential 1-4 family		—		167
Commercial loans		62		946
Total loans	$	62	$	1,129

The recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure were $1 million at both March 31, 2026 and December 31, 2025.

Allowance For Credit Losses – Loans

The allowance for credit losses on loans is a contra-asset valuation account, calculated in accordance with ASC 326 that is deducted from the amortized cost basis of loans to present the net amount expected to be collected. The amount of the allowance represents management's best estimate of current expected credit losses on loans considering available information, from internal and external sources, relevant to assessing collectability over the loans' contractual terms, adjusted for expected prepayments when appropriate. The accounting policy related to the allowance for credit losses is considered a critical policy given the level of estimation, judgment, and uncertainty in the levels of the allowance required to account for the expected losses in the loan portfolio and the material effect such estimation, judgment, and uncertainty can have on the consolidated financial results.

In calculating the allowance for credit losses, most loans are segmented into pools based upon similar characteristics and risk profiles. For allowance modeling purposes, our loan pools include but are not limited to (i) commercial real estate - owner occupied, (ii) commercial real estate - non-owner occupied, (iii) construction and land development, (iv) commercial, (v) agricultural loans, (vi) residential 1-4 family and (vii) consumer loans. We periodically reassess each pool to ensure the loans within the pool continue to share similar characteristics and risk profiles and to determine whether further segmentation is necessary. For each loan pool, we measure expected credit losses over the life of each loan utilizing

a combination of inputs: (i) probability of default, (ii) probability of attrition, (iii) loss given default and (iv) exposure at default. Internal data is supplemented by, but not replaced by, peer data when required, primarily to determine the probability of default input. The various pool-specific inputs may be adjusted for current macroeconomic assumptions. Significant macroeconomic variables utilized in our allowance models include, among other things, (i) National Gross Domestic Product, (ii) Virginia House Price Index, and (iii) Virginia unemployment rates.

Management applies qualitative adjustments to model results for risk factors that are not considered within our quantitative modeling processes but are nonetheless relevant in assessing the expected credit losses within our loan pools. Qualitative factor (“Q-Factor”) adjustments are driven by key risk indicators that management tracks on a pool-by-pool basis.

In some cases, management may determine that an individual loan exhibits unique risk characteristics which differentiate the loan from other loans within our loan pools. In such cases, the loans are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation. No allowance for credit losses has been recognized for PPP loans as such loans are fully guaranteed by the SBA.

The following tables present details of the allowance for credit losses on loans segregated by loan portfolio segment as of March 31, 2026 and December 31, 2025, calculated in accordance with ASC 326 ($ in thousands).


	Commercial			Commercial															Home
	Real Estate			Real Estate						Construction									Equity
	Owner			Non-owner			Secured by			and Land			1-4 Family			Multi-Family			Lines Of			Commercial			Consumer			PCD
March 31, 2026	Occupied			Occupied			Farmland			Development			Residential			Residential			Credit			Loans			Loans			Loans			Total
Modeled expected credit losses	$	5,344		$	3,249		$	1		$	1,165		$	5,797		$	667		$	405		$	5,761		$	3,220		$	—		$	25,609
Q-factor and other qualitative adjustments		375			1,117			4			62			771			665			23			621			296			—			3,934
Specific allocations		334			10,487			—			—			112			—			—			5,670			235			—			16,838
Total	$	6,053		$	14,853		$	5		$	1,227		$	6,680		$	1,332		$	428		$	12,052		$	3,751		$	—		$	46,381

	Commercial			Commercial															Home
	Real Estate			Real Estate						Construction									Equity
	Owner			Non-owner			Secured by			and Land			1-4 Family			Multi-Family			Lines Of			Commercial			Consumer			PCD
December 31, 2025	Occupied			Occupied			Farmland			Development			Residential			Residential			Credit			Loans			Loans			Loans			Total
Modeled expected credit losses	$	4,915		$	3,796		$	1		$	689		$	6,070		$	709		$	408		$	5,597		$	3,650		$	—		$	25,835
Q-factor and other qualitative adjustments		433			1,109			29			59			670			659			20			443			395			—			3,817
Specific allocations		334			10,424			—			—			112			—			—			5,157			204			—			16,231
Total	$	5,682		$	15,329		$	30		$	748		$	6,852		$	1,368		$	428		$	11,197		$	4,249		$	—		$	45,883

Activity in the allowance for credit losses by class of loan for the three months ended March 31, 2026 and 2025 is summarized below ($ in thousands):


	Commercial		Commercial
	Real Estate		Real Estate				Construction						Home Equity
For the Three Months Ended	Owner		Non-owner		Secured by		and Land		1-4 Family		Multi-Family		Lines Of		Commercial		Consumer		PCD
March 31, 2026	Occupied		Occupied		Farmland		Development		Residential		Residential		Credit		Loans		Loans		Loans		Total
Allowance for credit losses:
Beginning balance	$	5,682	$	15,329	$	30	$	748	$	6,852	$	1,368	$	428	$	11,197	$	4,249	$	—	$	45,883
Provision (recovery)		371		(478)		(25)		479		(167)		(36)		(1)		780		626		—		1,549
Charge offs		—		—		—		—		(5)		—		—		—		(2,596)		—		(2,601)
Recoveries		—		2		—		—		—		—		1		75		1,472		—		1,550
Ending balance	$	6,053	$	14,853	$	5	$	1,227	$	6,680	$	1,332	$	428	$	12,052	$	3,751	$	—	$	46,381

For the Three Months Ended
March 31, 2025
Allowance for credit losses:
Beginning balance	$	5,899	$	6,966	$	20	$	1,203	$	6,819	$	1,620	$	533	$	10,794	$	19,625	$	245	$	53,724
Provision (recovery)		(202)		(54)		2		(116)		(282)		(132)		(75)		511		1,969		(25)		1,596
Charge offs		—		—		—		—		—		—		—		(206)		(14,128)		—		(14,334)
Recoveries		—		—		—		—		—		—		1		—		3,034		—		3,035
Ending balance	$	5,697	$	6,912	$	22	$	1,087	$	6,537	$	1,488	$	459	$	11,099	$	10,500	$	220	$	44,021

Generally, a commercial loan, or a portion thereof, is charged-off when it is determined, through the analysis of any available current financial information with regards to the borrower, that the borrower is incapable of servicing unsecured debt, there is little or no prospect for near term improvement and no realistic strengthening action of significance is pending or, in the case of secured debt, when it is determined, through analysis of current information with regards to the collateral position, that amounts due from the borrower are in excess of the calculated current fair value of the collateral. Losses on installment loans are recognized in accordance with regulatory guidelines. All other consumer loan losses are recognized when delinquency exceeds 120 cumulative days except for the Consumer Program loans that are charged-off once they become 90 days past due.

The following table presents the principal balance of loans that were evaluated for expected credit losses on an individual basis and the related specific allocations, by loan portfolio segment as of March 31, 2026 and December 31, 2025 ($ in thousands):


	March 31, 2026				December 31, 2025
	Loan		Specific		Loan		Specific
	Balance		Allocations		Balance		Allocations
Commercial real estate - owner occupied	$	3,728	$	334	$	3,737	$	334
Commercial real estate - non-owner occupied		98,904		10,487		98,922		10,424
Secured by farmland		249		—		275		—
Construction and land development		389		—		389		—
Residential 1-4 family		3,439		112		5,129		112
Multi- family residential		766		—		784		—
Commercial loans		33,778		5,670		33,034		5,157
Consumer loans		11,377		235		15,057		204
Total non-PCD loans		152,630		16,838		157,327		16,231
PCD loans		4,772		—		4,856		-
Total loans	$	157,402	$	16,838	$	162,183	$	16,231

A loan is collateral dependent when the borrower is experiencing financial difficulty and repayment of the loan is expected to be provided substantially through the sale of the collateral. The expected credit loss for collateral-dependent loans is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral, adjusted for the estimated cost to sell. Fair value estimates for collateral-dependent loans are derived from appraised values based on the current market value or the “as is” value of the collateral, normally from recently received and reviewed appraisals.

The Company calculates expected credit losses on collateral-dependent loans as described when foreclosure is probable and also elects to apply it in instances when foreclosure is not probable as allowed by ASC 326.

Commercial real estate, loans secured by farmland, construction and land development, residential 1-4 family, multi-family, and home equity line of credit loans are secured by liens on real estate properties. Commercial loans are secured by business assets (inventory, equipment, receivables), residential real estate, and other non-real estate collateral. There have been no significant changes in collateral securing any of our collateral-dependent loans from December 31, 2025 to March 31, 2026. The following table presents a breakdown between loans at amortized cost that were evaluated on an individual basis and identified as collateral dependent loans and non-collateral dependent loans, by loan portfolio segment and their collateral value as of March 31, 2026 and December 31, 2025 ($ in thousands).


	March 31, 2026				December 31, 2025
			Non				Non
	Collateral		Collateral		Collateral		Collateral
	Dependent		Dependent		Dependent		Dependent
	Assets ⁽¹⁾		Assets ⁽¹⁾		Assets ⁽¹⁾		Assets ⁽¹⁾
Commercial real estate - owner occupied	$	3,461	$	—	$	3,485	$	—
Commercial real estate - non-owner occupied		30,231		69,845		30,015		70,431
Secured by farmland		517		—		1,146		—
Construction and land development		389		—		389		—
Residential 1-4 family		4,144		—		5,848		—
Multi- family residential		1,197		—		786		—
Commercial loans		33,609		—		32,889		—
Total loans	$	73,548	$	69,845	$	74,558	$	70,431

Collateral value	$	85,388	$	—	$	84,823	$	—

(1)	Loan balances include PCD loans and are presented net of SBA guarantees.