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Loans

12 Months Ended

Dec. 31, 2025

Loans and Allowance for Credit Losses

Categories of loans include:


	December 31,
	2025		2024
Commercial loans
Commercial and industrial	$	221,714	$	120,175
Owner-occupied commercial real estate	48,575		53,591
Investor commercial real estate	647,394		269,431
Construction	372,668		413,523
Single tenant lease financing	222,925		949,748
Public finance	442,234		485,867
Healthcare finance	139,469		181,427
Small business lending 1	430,024		331,914
Franchise finance	417,045		536,909
Total commercial loans	2,942,048		3,342,585
Consumer loans
Residential mortgage	343,110		375,160
Home equity	14,725		18,274
Other consumer	425,458		407,947
Total consumer loans	783,293		801,381
Total commercial and consumer loans	3,725,341		4,143,966
Net deferred loan origination costs, premiums and discounts on purchased loans, and other 2	21,387		26,680
Total loans	3,746,728		4,170,646
Allowance for credit losses	(55,686)		(44,769)
Net loans	$	3,691,042	$	4,125,877

1 Balances include $52.2 million and $34.0 million that are guaranteed by the U.S. government as of December 31, 2025 and December 31, 2024, respectively.

2 Includes carrying value adjustment of $19.1 million and $22.9 million related to terminated interest rate swaps associated with public finance loans as of December 31, 2025 and December 31, 2024, respectively.

During the twelve months ended December 31, 2025, the Company sold a total of $851.2 million of single tenant lease financing loans from which the Company recognized a pre-tax loss on sale of $38.2 million recorded within non-interest income. The transaction was executed as part of an initiative to strengthen the Company’s regulatory capital ratios and improve its interest rate risk position. Unrelated to this transaction, the Company also sold $35.0 million of single tenant lease financing loans which resulted in a gain on sale of $0.3 million recorded within non-interest income.

The general risk characteristics specific to each loan portfolio segment are as follows:

Commercial and Industrial: Commercial and industrial loans’ sources of repayment are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected, and the collateral securing these loans may fluctuate in value. Loans are made for working capital, equipment purchases, or other purposes. Most commercial and industrial loans are secured by the assets being financed and may incorporate a personal guarantee. This portfolio segment is generally concentrated in the Midwest and Southwest regions of the United States.

Owner-Occupied Commercial Real Estate: The primary source of repayment is the cash flow from the ongoing operations and activities conducted by the borrower, or an affiliate of the borrower, who owns the property. This portfolio segment is generally concentrated in the Midwest and Southwest regions of the United States and its loans are often secured by manufacturing and service facilities.

Investor Commercial Real Estate: These loans are made on a nationwide basis and are underwritten primarily based on the cash flow expected to be generated from the property and are secondarily supported by the value of the real estate. These loans typically incorporate a personal guarantee from the primary sponsor or sponsors. This portfolio segment generally involves larger loan amounts with repayment primarily dependent on the successful leasing and operation of the property securing the loan or the business conducted on the property securing the loan. Investor commercial real estate loans may be more adversely affected by changing economic conditions in the real estate markets, industry dynamics or the overall health of the local economy where the property is located. The properties securing the Company’s investor commercial real estate portfolio tend to be diverse in terms of property type. Management monitors and evaluates commercial real estate loans based on property financial performance, collateral value, guarantor strength, economic and industry conditions together with other risk grade criteria. As a general rule, the Company avoids financing special use projects unless other underwriting factors are present to mitigate these additional risks.

Construction: Construction loans are made on a nationwide basis and are secured by land and related improvements and are made to assist in the construction of new structures, which may include commercial (retail, industrial, office, and multi-family) properties, land development for residential properties or single family residential properties offered for sale by the builder. These loans generally finance a variety of project costs, including land, site preparation, architectural services, construction, closing and soft costs and interim financing needs. The cash flows of builders, while initially predictable, may fluctuate with market conditions, and the value of the collateral securing these loans may be subject to fluctuations based on general economic changes.

Single Tenant Lease Financing: These loans are made on a nationwide basis to owners of real estate subject to long-term lease arrangements with single tenant operators. The real estate is typically operated by regionally, nationally or globally branded businesses. The loans are underwritten based on the financial strength of the borrower, characteristics of the real estate, cash flows generated from the lease arrangements and the financial strength of the tenant. Similar to the other loan portfolio segments, management monitors and evaluates these loans based on borrower and tenant financial performance, collateral value, industry trends and other risk grade criteria.

Public Finance: These loans are made on a nationwide basis to governmental and not-for-profit entities to provide both tax-exempt and taxable loans for a variety of purposes including: short-term cash-flow needs; debt refinancing; economic development; quality of life projects; infrastructure improvements; renewable energy projects; and equipment financing. The primary sources of repayment for public finance loans include pledged revenue sources including, but not limited to: general obligations; property taxes; income taxes; tax increment revenue; utility revenue; gaming revenues; sales tax; and pledged general revenue. Certain loans may also include an additional collateral pledge of mortgaged property or a security interest in financed equipment.

Healthcare Finance: These loans are made on a nationwide basis to healthcare providers, primarily dentists, for practice acquisition financing or refinancing that occasionally includes owner-occupied commercial real estate and equipment purchases. The sources of repayment are primarily based on the identified cash flows from operations of the borrower and related entities and secondarily on the underlying collateral provided by the borrower.

Small Business Lending: These loans are made on a nationwide basis to small businesses and generally carry a partial guaranty from the U.S. Small Business Administration (“SBA”) under its 7(a) loan program. We generally sell the government guaranteed portion of SBA loans into the secondary market while retaining the non-guaranteed portion of the loan and the servicing rights. Loans in the small business lending portfolio have sources of repayment that are primarily based on the identified cash flows of the borrower and secondarily on any underlying collateral provided by the borrower. Loans may, but do not always, have a collateral shortfall. For SBA loans where the guaranteed portion is retained, the SBA guaranty provides a tertiary source of repayment to the Bank in event of borrower default. Cash flows of borrowers, however, may not be as expected and collateral securing these loans may fluctuate in value. Loans are made for a broad array of purposes including, but not limited to, providing operating cash flow, funding ownership changes, and facilitating equipment and commercial real estate purchases.

Franchise Finance: These loans are made on a nationwide basis through our partnership with ApplePie Capital, which through their deep relationships with franchise brands provides franchisees with financing options for new franchise units, recapitalization, expansion, equipment and working capital. The sources of repayment are either based on identified cash flows from existing operations of the borrower or pro forma cash flow for new franchise locations.

Residential Mortgage: Residential mortgage loans are secured by one‑to‑four family residential properties, which are generally owner‑occupied. The Company establishes maximum loan‑to‑value ratios and requires private mortgage insurance when those thresholds are exceeded. Repayment performance is primarily dependent on the financial condition of the borrowers and may be adversely affected by broader economic factors, including employment conditions and changes in residential real estate values. While the portfolio is concentrated within the Company’s primary market area, risk is mitigated by the relatively small size of individual loans and the dispersion of borrowers across the residential communities served.

Home Equity: Home equity loans and lines of credit are typically secured by a subordinate lien on one‑to‑four family residential properties. Repayment is primarily dependent upon the borrowers’ financial capacity and may be adversely affected by unemployment levels, changes in residential property values, and other economic conditions within the relevant market areas. Although the Company has historically offered these products on a nationwide basis, credit risk is evaluated based on borrower characteristics, collateral valuation, and lien position.

Other Consumer: These loans primarily consist of secured consumer credit products, including loans collateralized by horse trailers or recreational vehicles. Some other consumer loans also includes credit cards and unsecured loans, such as small installment loans, home improvement loans and certain lines of credit. Repayment performance is dependent on borrowers’ personal income and overall financial condition, which may be adversely affected by economic factors such as unemployment levels and broader market conditions. Risk is partially mitigated by the presence of collateral, the relatively small loan size and broad distribution of individual exposures across the markets served.

ACL Methodology

The ACL for loans represents management's estimate of all expected credit losses over the expected life of the Company’s existing loan portfolio. Management estimates the ACL balance using relevant available information about the collectability of cash flows, from internal and external sources, including historical information relating to past events, current conditions, and reasonable and supportable forecasts of future economic conditions. When the Company is unable to forecast future economic events, management may revert to historical information.

The Company's methodologies incorporate a one-year reasonable and supportable forecast period with a one-year straight line reversion to the long-term historical average for most segments.

The ACL methodology may also consider other adjustments to address changes in conditions, trends, and circumstances such as local industry changes that could have a significant impact on the risk profile of the loan portfolio and provide for adjustments that may not be reflected and/or captured in the historical loss data. These factors include: lending policies, imprecision in forecasting future economic conditions, loan profile, lending staff, problem loan trends, loan review, collateral, credit concentration, or other internal and external factors. The Company includes these as qualitative adjustments to the ACL which include, but are not limited to:

•Changes in lending policies and procedures, including changes in underwriting standards and collections, charge-offs and recovery practices

•Changes in international, national, regional and local economic conditions

•Changes in the nature and volume of the portfolio and terms of loans

•Changes in the experience, depth and ability of lending management

•Changes in the volume and severity of past due loans and other similar conditions

•Changes in the quality of the Company’s loan review system

•Changes in the value of underlying collateral for collateral dependent loans

•The existence and effect of any concentrations of credit and changes in the levels of such concentrations

•The effect of other external factors (e.g. competition, legal and regulatory requirements) on the level of estimated credit losses

The ACL is measured on a collective or pool basis when similar risk characteristics exist. The Company segments its portfolio generally by Federal Financial Institutions Examination Council ("FFIEC") Call Report codes that align with its lines of business. Additional sub-segmentation has not been utilized to identify groups of loans with unique risk characteristics relative to the rest of the portfolio.

Loans that do not share similar risk characteristics are evaluated on an individual basis. These evaluations are typically performed on loans with a deteriorated internal risk rating. The ACL is determined based on several methods, including estimating the fair value of the underlying collateral or the present value of expected cash flows.

The Company relies on a third-party platform that offers multiple methodologies to measure historical life-of-loan losses.

Modified Loans to Borrowers Experiencing Financial Difficulty

The Company may make modifications to certain loans in order to alleviate temporary difficulties in the borrower’s financial condition and/or constraints on the borrower’s ability to repay the loan, and to minimize potential losses to the Company. Modifications may include changes in the amortization terms of the loan, other-than-insignificant payment delays, reductions in interest rates, acceptance of interest only payments, and/or reductions to the outstanding loan balance. Such loans may be placed on nonaccrual status when there is doubt concerning the full repayment of principal and interest or the loan has been delinquent for a period of 90 days or more. These loans may be returned to accrual status when all contractual amounts past due have been brought current, and the borrower’s performance under the modified terms of the loan agreement and the ultimate collectability of all contractual amounts due under the modified terms is no longer in doubt. The Company typically measures the ACL on modified loans to borrowers experiencing financial difficulty on an individual basis when the loans are deemed to no longer share risk characteristics that are similar with other loans in the portfolio. The calculation of the ACL for these loans is based on a discounted cash flow approach for both those measured collectively and individually, unless the loan is deemed collateral dependent, which requires measurement of the ACL based on the estimated expected fair value of the underlying collateral, less costs to sell. GAAP requires the Company to make certain disclosures related to these loans, including certain types of modifications, as well as how such loans have performed since their modifications.

Provision for Credit Losses

A provision for estimated losses on loans is charged to income based upon management’s evaluation of the potential losses. Such an evaluation, which includes a review of all loans for which full repayment may not be reasonably assured, considers, among other matters, the estimated net realizable value of the underlying collateral, as applicable, economic conditions, loan loss experience, and other factors that are particularly susceptible to changes that could result in a material adjustment in the near term. While management attempts to use the best information available in making its evaluations, future ACL adjustments may be necessary if conditions change substantially from the assumptions used in making the evaluations.

Policy for Charging Off Loans

The Company’s policy is to charge off a loan at any point in time when it no longer can be considered a bankable asset, meaning collectible within the parameters of policy. A secured loan is generally charged down to the estimated fair value of the collateral, less costs to sell, no later than when it is 120 days past due as to principal or interest. An unsecured loan generally is charged off no later than when it is 180 days past due as to principal or interest. A home improvement loan generally is charged off no later than when it is 90 days past due as to principal or interest.

The following tables present changes in the balance of the ACL during the twelve months ended December 31, 2025, 2024 and 2023, respectively.


	Twelve Months Ended December 31, 2025
Allowance for credit losses:	Balance, Beginning of Period		Provision (Credit) Charged to Expense		Charge-Offs		Recoveries		Balance, End of Period
Commercial and industrial	$	1,265	$	809	$	(153)	$	21	$	1,942
Owner-occupied commercial real estate	528		(264)		—		—		264
Investor commercial real estate	1,149		1,106		—		—		2,255
Construction	1,984		462		—		—		2,446
Single tenant lease financing	4,782		(3,966)		—		—		816
Public finance	703		(292)		—		—		411
Healthcare finance	1,412		(807)		—		—		605
Small business lending	16,161		49,604		(39,650)		1,681		27,796
Franchise finance	8,976		26,712		(21,754)		94		14,028
Residential mortgage	2,136		62		(75)		19		2,142
Home equity	106		(75)		—		7		38
Other consumer	5,567		(1,430)		(1,457)		263		2,943
Total	$	44,769	$	71,921	$	(63,089)	$	2,085	$	55,686

The ACL was established based on historical loss experience, current conditions, and reasonable and supportable economic forecasts. These inputs did not indicate emerging credit deterioration within the small business lending or franchise finance portfolios as of December 31, 2024. However, during 2025, credit performance in these portfolios declined at a pace that exceeded prior expectations, resulting in higher-than-anticipated charge‑offs. In response to the observed deterioration, the Company increased the allowance allocated to these loan segments and implemented more stringent underwriting and lending standards to address the heightened credit risk.


	Twelve Months Ended December 31, 2024
Allowance for credit losses:	Balance, Beginning of Period		(Credit) Provision Charged to Expense		Charge-Offs		Recoveries		Balance, End of Period
Commercial and industrial	$	2,185	$	(928)	$	—	$	8	$	1,265
Owner-occupied commercial real estate	825		(297)		—		—		528
Investor commercial real estate	1,311		(162)		—		—		1,149
Construction	2,167		(183)		—		—		1,984
Single tenant lease financing	8,129		(3,152)		(195)		—		4,782
Public finance	1,372		(669)		—		—		703
Healthcare finance	1,976		(564)		—		—		1,412
Small business lending	6,532		19,745		(10,441)		325		16,161
Franchise finance	6,363		4,079		(1,466)		—		8,976
Residential mortgage	2,054		240		(159)		1		2,136
Home equity	171		(72)		—		7		106
Other consumer	5,689		778		(1,009)		109		5,567
Total	$	38,774	$	18,815	$	(13,270)	$	450	$	44,769


	Twelve Months Ended December 31, 2023
Allowance for credit losses:	Balance, Beginning of Period		Adoption of CECL		Provision (Credit) Charged to Expense		Losses Charged Off		Recoveries		Balance, End of Period
Commercial and industrial	$	1,711	$	(120)	$	7,400	$	(7,049)	$	243	$	2,185
Owner-occupied commercial real estate	651		62		112		—		—		825
Investor commercial real estate	1,099		(191)		994		(591)		—		1,311
Construction	2,074		(435)		528		—		—		2,167
Single tenant lease financing	10,519		(346)		(2,044)		—		—		8,129
Public finance	1,753		(135)		(246)		—		—		1,372
Healthcare finance	2,997		1,034		(1,450)		(605)		—		1,976
Small business lending	2,168		334		6,539		(2,586)		77		6,532
Franchise finance	3,988		(313)		3,019		(331)		—		6,363
Residential mortgage	1,559		406		224		(140)		5		2,054
Home equity	69		133		(37)		—		6		171
Other consumer	3,149		2,533		415		(582)		174		5,689
Total	$	31,737	$	2,962	$	15,454	$	(11,884)	$	505	$	38,774

Accrued interest receivable on loans totaled $23.1 million and $23.8 million at December 31, 2025 and December 31, 2024, respectively, and is excluded from the estimate of credit losses. The Company made the accounting policy election to not measure an ACL for accrued interest receivable. Accrued interest deemed uncollectible will be written off through interest income.

In addition to the ACL, the Company maintains a reserve for off-balance sheet commitments, classified in other liabilities. This reserve is at a level management believes to be sufficient to absorb losses arising from unfunded loan commitments. The adequacy of the reserve for unfunded commitments is determined quarterly based on methodology similar to the methodology for determining the ACL. The following tables details activity in the provision for credit losses on off-balance sheet commitments for the twelve months ended December 31, 2025, 2024 and 2023.



	Balance December 31, 2024		(Benefit) Provision for Credit Losses		Balance December 31, 2025
Off-balance sheet commitments
Commercial loans
Commercial and industrial	$	233	$	(56)	$	177
Owner-occupied commercial real estate	11		(11)		—
Investor commercial real estate	1		35		36
Construction	1,568		691		2,259
Single tenant lease financing	19		(18)		1


Small business lending	263		(151)		112


Total commercial loans	2,095		490		2,585
Consumer loans
Residential mortgage	1		(1)		—
Home equity	35		(35)		—
Other consumer	8		(8)		—
Total consumer loans	44		(44)		—
Total allowance for off-balance sheet commitments	$	2,139	$	446	$	2,585



	Balance December 31, 2023		Provision (Benefit) for Credit Losses		Balance December 31, 2024
Off-balance sheet commitments
Commercial loans
Commercial and industrial	$	233	$	—	$	233
Owner-occupied commercial real estate	9		2		11
Investor commercial real estate	6		(5)		1
Construction	2,889		(1,321)		1,568
Single tenant lease financing	—		19		19


Small business lending	541		(278)		263


Total commercial loans	3,678		(1,583)		2,095
Consumer loans
Residential mortgage	11		(10)		1
Home equity	45		(10)		35
Other consumer	11		(3)		8
Total consumer loans	67		(23)		44
Total allowance for off-balance sheet commitments	$	3,745	$	(1,606)	$	2,139


	Pre-ASC 326 Adoption		Impact of ASC 326 Adoption		(Benefit) Provision for Credit Losses		Balance December 31, 2023
Off-balance sheet commitments
Commercial loans
Commercial and industrial	$	—	$	110	$	123	$	233
Owner-occupied commercial real estate	—		—		9		9
Investor commercial real estate	—		9		(3)		6
Construction	—		2,193		696		2,889
Healthcare finance	—		2		(2)		—


Small business lending	—		—		541		541


Total commercial loans			2,314		1,364		3,678
Consumer loans
Residential mortgage	—		127		(116)		11
Home equity	—		52		(7)		45
Other consumer	—		11		—		11
Total consumer loans	—		190		(123)		67
Total allowance for off-balance sheet commitments	$	—	$	2,504	$	1,241	$	3,745

The Company utilizes a risk grading matrix to assign a risk grade to each of its commercial loans, which are evaluated on a continual basis. A description of the general characteristics of the risk grades is as follows:

•“Pass” - Higher quality loans that do not fit any of the other categories described below.

•“Special Mention” - Loans that possess some credit deficiency or potential weakness which deserve close attention.

•“Substandard” - Loans that possess a defined weakness or weaknesses that jeopardize the liquidation of the debt. Loans that are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any.

•“Doubtful” - Such loans have been placed on nonaccrual status and may be heavily dependent upon collateral possessing a value that is difficult to determine or based upon some near-term event which lacks clear certainty. These loans have all of the weaknesses of those classified as Substandard; however, based on existing conditions, these weaknesses make full collection of the principal balance highly improbable.

The Company does not risk grade its consumer loans. It classifies them as either performing or nonperforming. Below is a description of those classifications:

•“Performing” - Loans that are accruing and full collection of principal and interest is expected.

•“Nonperforming” - Loans that are 90 days delinquent or for which the full collection of principal and interest may be in doubt.

The following table presents the credit risk profile of the Company’s commercial and consumer loan portfolios by loan class and by year of origination for the years indicated based on rating category and payment activity as of December 31, 2025 and December 31, 2024


	December 31, 2025
	Term Loans (amortized cost basis by origination year)												Revolving loans amortized cost basis		Revolving loans converted to term
	2025		2024		2023		2022		2021		Prior						Total
Commercial and industrial
Pass	$	91,592	$	18,608	$	6,984	$	10,450	$	530	$	14,152	$	60,071	$	—	$	202,387
Special Mention	177		256		—		4,746		4,237		—		9,671		—		19,087
Substandard	64		38		138		—		—		—		—		—		240
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial and industrial	91,833		18,902		7,122		15,196		4,767		14,152		69,742		—		221,714
Year-to-date gross charge-offs	94		59		—		—		—		—		—		—		153

Owner-occupied commercial real estate
Pass	4,159		6,202		1,421		5,174		4,155		15,966		—		—		37,077
Special Mention	—		—		—		—		852		8,991		—		—		9,843
Substandard	—		—		—		—		—		1,655		—		—		1,655
Doubtful	—		—		—		—		—		—		—		—		—
Total owner-occupied commercial real estate	4,159		6,202		1,421		5,174		5,007		26,612		—		—		48,575
Year-to-date gross charge-offs	—		—		—		—		—		—		—		—		—
Investor commercial real estate
Pass	61,333		80,798		195,528		179,155		91,708		35,141		—		—		643,663
Special Mention	—		—		—		—		—		3,731		—		—		3,731
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total investor commercial real estate	61,333		80,798		195,528		179,155		91,708		38,872		—		—		647,394
Year-to-date gross charge-offs	—		—		—		—		—		—		—		—		—
Construction
Pass	65,190		147,941		132,835		23,114		—		2,042		1,546		—		372,668
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total construction	65,190		147,941		132,835		23,114		—		2,042		1,546		—		372,668
Year-to-date gross charge-offs	—		—		—		—		—		—		—		—		—
Single tenant lease financing
Pass	144,764		1,370		1,007		10,377		2,021		29,524		—		—		189,063
Special Mention	—		—		—		18,628		4,168		9,401		—		—		32,197
Substandard	—		—		—		—		—		1,665		—		—		1,665
Doubtful	—		—		—		—		—		—		—		—		—
Total single tenant lease financing	144,764		1,370		1,007		29,005		6,189		40,590		—		—		222,925
Year-to-date gross charge-offs	—		—		—		—		—		—		—		—		—
Public finance
Pass	44,077		11,119		—		5,301		10,385		369,442		—		—		440,324
Special Mention	—		—		—		—		—		1,910		—		—		1,910
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total public finance	44,077		11,119		—		5,301		10,385		371,352		—		—		442,234
Year-to-date gross charge-offs	—		—		—		—		—		—		—		—		—


	December 31, 2025
	Term Loans (amortized cost basis by origination year)												Revolving loans amortized cost basis		Revolving loans converted to term
	2025		2024		2023		2022		2021		Prior						Total
Healthcare finance
Pass	—		—		—		—		7,317		128,623		—		—		135,940
Special Mention	—		—		—		—		—		933		—		—		933
Substandard	—		—		—		—		—		2,596		—		—		2,596
Doubtful	—		—		—		—		—		—		—		—		—
Total healthcare finance	—		—		—		—		7,317		132,152		—		—		139,469
Year-to-date gross charge-offs	—		—		—		—		—		—		—		—		—
Small business lending
Pass	152,566		103,270		62,754		21,651		7,851		13,779		27,048		—		388,919
Special Mention	—		7,519		5,276		514		—		1,475		1,953		—		16,737
Substandard	—		5,838		11,637		1,315		270		1,416		3,892		—		24,368
Doubtful	—		—		—		—		—		—		—		—		—
Total small business lending	152,566		116,627		79,667		23,480		8,121		16,670		32,893		—		430,024
Year-to-date gross charge-offs	400		16,668		17,755		2,821		1,087		919		—		—		39,650
Franchise finance
Pass	718		56,732		172,080		120,012		29,064		—		—		—		378,606
Special Mention	510		628		3,351		6,972		—		—		—		—		11,461
Substandard	—		1,281		6,831		10,877		7,989		—		—		—		26,978
Doubtful	—		—		—		—		—		—		—		—		—
Total franchise finance	1,228		58,641		182,262		137,861		37,053		—		—		—		417,045
Year-to-date gross charge-offs	—		370		7,664		9,576		4,144		—		—		—		21,754
Consumer loans
Residential mortgage
Performing	4,770		6,271		10,901		163,760		78,631		73,883		—		—		338,216
Nonperforming	—		—		—		2,721		597		1,576		—		—		4,894
Total residential mortgage	4,770		6,271		10,901		166,481		79,228		75,459		—		—		343,110
Year-to-date gross charge-offs	—		—		—		75		—		—		—		—		75
Home equity
Performing	—		—		628		1,009		187		761		11,330		810		14,725
Nonperforming	—		—		—		—		—		—		—		—		—
Total home equity	—		—		628		1,009		187		761		11,330		810		14,725
Year-to-date gross charge-offs	—		—		—		—		—		—		—		—		—
Other consumer
Performing	98,688		85,148		77,999		72,978		26,284		63,224		903		—		425,224
Nonperforming	—		96		84		9		34		11		—		—		234
Total other consumer	98,688		85,244		78,083		72,987		26,318		63,235		903		—		425,458
Year-to-date gross charge-offs	79		279		491		189		31		388		—		—		1,457
Total Loans	$	668,608	$	533,115	$	689,454	$	658,763	$	276,280	$	781,897	$	116,414	$	810	$	3,725,341
Total year-to-date gross charge-offs	$	573	$	17,376	$	25,910	$	12,661	$	5,262	$	1,307	$	—	$	—	$	63,089


	December 31, 2024
	Term Loans (amortized cost basis by origination year)												Revolving loans amortized cost basis		Revolving loans converted to term
	2024		2023		2022		2021		2020		Prior						Total
Commercial and industrial
Pass	$	23,539	$	8,501	$	13,853	$	5,418	$	2,362	$	17,829	$	44,000	$	—	$	115,502
Special Mention	47		164		4,462		—		—		—		—		—		4,673
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial and industrial	23,586		8,665		18,315		5,418		2,362		17,829		44,000		—		120,175
Year-to-date gross charge-offs	—		—		—		—		—		—		—		—		—

Owner-occupied commercial real estate
Pass	7,410		1,458		5,366		6,438		5,716		14,793		—		—		41,181
Special Mention	—		—		570		888		8,144		1,153		—		—		10,755
Substandard	—		—		—		—		—		1,655		—		—		1,655
Doubtful	—		—		—		—		—		—		—		—		—
Total owner-occupied commercial real estate	7,410		1,458		5,936		7,326		13,860		17,601		—		—		53,591
Year-to-date gross charge-offs	—		—		—		—		—		—		—		—		—
Investor commercial real estate
Pass	71,430		3,849		88,290		65,050		9,607		27,474		—		—		265,700
Special Mention	—		—		—		—		—		3,731		—		—		3,731
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total investor commercial real estate	71,430		3,849		88,290		65,050		9,607		31,205		—		—		269,431
Year-to-date gross charge-offs	—		—		—		—		—		—		—		—		—
Construction
Pass	35,177		186,979		140,299		47,598		1,622		—		1,848		—		413,523
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total construction	35,177		186,979		140,299		47,598		1,622		—		1,848		—		413,523
Year-to-date gross charge-offs	—		—		—		—		—		—		—		—		—
Single tenant lease financing
Pass	79,872		46,674		211,005		88,192		63,506		437,564		—		—		926,813
Special Mention	644		—		9,696		3,460		—		9,135		—		—		22,935
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total single tenant lease financing	80,516		46,674		220,701		91,652		63,506		446,699		—		—		949,748
Year-to-date gross charge-offs	—		—		—		—		—		195		—		—		195
Public finance
Pass	55,306		1,290		7,790		12,050		463		407,008		—		—		483,907
Special Mention	—		—		—		—		—		1,960		—		—		1,960
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total public finance	55,306		1,290		7,790		12,050		463		408,968		—		—		485,867
Year-to-date gross charge-offs	—		—		—		—		—		—		—		—		—


	December 31, 2024
	Term Loans (amortized cost basis by origination year)												Revolving loans amortized cost basis		Revolving loans converted to term
	2024		2023		2022		2021		2020		Prior						Total
Healthcare finance
Pass	—		—		—		8,969		104,427		67,413		—		—		180,809
Special Mention	—		—		—		—		—		618		—		—		618
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total healthcare finance	—		—		—		8,969		104,427		68,031		—		—		181,427
Year-to-date gross charge-offs	—		—		—		—		—		—		—		—		—
Small business lending

Pass	138,044		94,556		30,486		11,715		9,687		9,896		17,197		—		311,581
Special Mention	1,022		4,691		927		—		354		1,213		697		—		8,904
Substandard	2,940		3,909		1,457		258		970		1,001		894		—		11,429
Doubtful	—		—		—		—		—		—		—		—		—
Total small business lending	142,006		103,156		32,870		11,973		11,011		12,110		18,788		—		331,914
Year-to-date gross charge-offs	1,093		4,600		3,038		567		619		524		—		—		10,441
Franchise finance
Pass	67,065		230,425		172,830		42,869		—		—		—		—		513,189
Special Mention	—		1,978		5,084		6,275		—		—		—		—		13,337
Substandard	—		3,543		6,367		473		—		—		—		—		10,383
Doubtful	—		—		—		—		—		—		—		—		—
Total franchise finance	67,065		235,946		184,281		49,617		—		—		—		—		536,909
Year-to-date gross charge-offs	—		1,171		—		295		—		—		—		—		1,466
Consumer loans
Residential mortgage
Performing	3,577		13,533		183,484		86,213		28,655		55,615		—		—		371,077
Nonperforming	—		—		1,671		609		69		1,734		—		—		4,083
Total residential mortgage	3,577		13,533		185,155		86,822		28,724		57,349		—		—		375,160
Year-to-date gross charge-offs	—		—		101		58		—		—		—		—		159
Home equity
Performing	—		992		1,450		356		414		530		13,621		911		18,274
Nonperforming	—		—		—		—		—		—		—		—		—
Total home equity	—		992		1,450		356		414		530		13,621		911		18,274
Year-to-date gross charge-offs	—		—		—		—		—		—		—		—		—
Other consumer
Performing	101,965		97,832		88,872		33,177		20,918		64,251		870		—		407,885
Nonperforming	—		—		38		11		1		12		—		—		62
Total other consumer	101,965		97,832		88,910		33,188		20,919		64,263		870		—		407,947
Year-to-date gross charge-offs	157		242		300		127		1		182		—		—		1,009
Total Loans	$	588,038	$	700,374	$	973,997	$	420,019	$	256,915	$	1,124,585	$	79,127	$	911	$	4,143,966
Total year-to-date gross charge-offs	$	1,250	$	6,013	$	3,439	$	1,047	$	620	$	901	$	—	$	—	$	13,270

The following tables present the Company’s loan portfolio delinquency analysis, including nonaccrual loans, as of December 31, 2025 and December 31, 2024.


	December 31, 2025
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total loans
Commercial and industrial	$	515	$	200	$	—	$	715	$	220,999	$	221,714
Owner-occupied commercial real estate	—		—		—		—		48,575		48,575
Investor commercial real estate	—		—		—		—		647,394		647,394
Construction	—		—		—		—		372,668		372,668
Single tenant lease financing	—		—		—		—		222,925		222,925
Public finance	—		—		—		—		442,234		442,234
Healthcare finance	—		—		1,150		1,150		138,319		139,469
Small business lending	20,325		4,277		9,445		34,047		395,977		430,024
Franchise finance	11,641		1,110		24,912		37,663		379,382		417,045
Residential mortgage	—		3,079		4,622		7,701		335,409		343,110
Home equity	—		—		—		—		14,725		14,725
Other consumer	243		102		141		486		424,972		425,458
Total	$	32,724	$	8,768	$	40,270	$	81,762	$	3,643,579	$	3,725,341


	December 31, 2024
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total loans
Commercial and industrial	$	—	$	—	$	—	$	—	$	120,175	$	120,175
Owner-occupied commercial real estate	—		—		—		—		53,591		53,591
Investor commercial real estate	—		—		—		—		269,431		269,431
Construction	—		—		—		—		413,523		413,523
Single tenant lease financing	—		—		—		—		949,748		949,748
Public finance	—		—		—		—		485,867		485,867
Healthcare finance	—		—		—		—		181,427		181,427
Small business lending	11,817		1,310		5,587		18,714		313,200		331,914
Franchise finance	9,431		3,279		9,849		22,559		514,350		536,909
Residential mortgage	648		1,711		3,815		6,174		368,986		375,160
Home equity	—		—		—		—		18,274		18,274
Other consumer	194		196		27		417		407,530		407,947
Total	$	22,090	$	6,496	$	19,278	$	47,864	$	4,096,102	$	4,143,966

Loans are reclassified to non-accruing status when, in management’s judgment, the collateral value and financial condition of the borrower do not justify accruing interest. At the time the accrual is discontinued, all unpaid accrued interest is reversed against earnings. Interest income accrued in prior years, if any, is charged to the ACL. Payments subsequently received on nonaccrual loans are applied to principal. A loan is returned to accrual status when principal and interest are no longer past due and collectability is probable, typically after a minimum of nine consecutive months of performance.

The following table summarizes the Company’s nonaccrual loans and loans past due 90 days or more and still accruing by loan class for the periods indicated:


	December 31, 2025						December 31, 2024
	Total Nonaccrual Loans		Nonaccrual Loans with no Allowance for Credit Losses		Total Loans 90 Days or More Past Due and Accruing		Total Nonaccrual Loans		Nonaccrual Loans with no Allowance for Credit Losses		Total Loans 90 Days or More Past Due and Accruing
Commercial and industrial	$	240	$	—	$	—	$	—	$	—	$	—



Single tenant lease financing	1,665		—		—		—		—		—

Healthcare finance	2,596		2,596		—		—		—		—
Small business lending	19,781		18,928		—		11,429		4,778		1,320
Franchise finance	26,978		4,463		1,144		10,382		—		—

Residential mortgage	4,893		4,893		1,007		4,083		4,083		1,142

Other consumer	234		234		—		61		61		4
Total loans	$	56,387	$	31,114	$	2,151	$	25,955	$	8,922	$	2,466

1 Balances include $13.6 million and $4.9 million that are guaranteed by the U.S. government as of December 31, 2025 and December 31, 2024, respectively.

There was $2.4 million and $0.7 million in interest income recognized on nonaccrual loans for the twelve months ended December 31, 2025 and December 31, 2024, respectively.

Determining fair value for collateral dependent loans requires obtaining a current independent appraisal of the collateral and applying a discount factor, which includes selling costs if applicable, to the value. The fair value of real estate is generally based on appraisals by qualified licensed appraisers. The appraisers typically determine the value of the real estate by utilizing an income or market valuation approach. If an appraisal is not available, the fair value may be determined by using a cash flow analysis. Fair value on other collateral such as business assets is typically ascertained by assessing, either singularly or some combination of, asset appraisals, accounts receivable aging reports, inventory listings and/or customer financial statements. Both appraised values and values based on borrower’s financial information are discounted as considered appropriate based on age and quality of the information and current market conditions.

The following tables present the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses as of December 31, 2025 and December 31, 2024.


	December 31, 2025
	Commercial Real Estate		Residential Real Estate		Other (Includes Equipment, Machinery and Other Assets)		Total		Allowance on Collateral Dependent Loans

Owner-occupied commercial real estate	$	1,654	$	—	$	—	$	1,654	$	—





Small business lending1	6,732		—		7,681		14,413		411


Residential mortgage	—		4,893		—		4,893		—

Other consumer loans	—		—		234		234		—
Total loans	$	8,386	$	4,893	$	7,915	$	21,194	$	411

1 Balance includes $8.5 million of loans guaranteed by the U.S. government.


	December 31, 2024
	Commercial Real Estate		Residential Real Estate		Other (Includes Equipment, Machinery and Other Assets)		Total		Allowance on Collateral Dependent Loans

Owner-occupied commercial real estate	$	1,654	$	—	$	—	$	1,654	$	—





Small business lending1	723		—		8,571		9,294		4,167
Franchise finance	—		—		3,468		3,468		679

Residential mortgage	—		4,083		—		4,083		—

Other consumer loans	—		—		22		22		—
Total loans	$	2,377	$	4,083	$	12,061	$	18,521	$	4,846

1 Balance includes $3.5 million of loans guaranteed by the U.S. government.

Loan Modifications to Borrowers Experiencing Financial Difficulty

The Company may agree to modify the contractual terms of a loan to a borrower experiencing financial difficulty as a part of ongoing loss mitigation strategies. These modifications may include interest rate reductions, principal or interest forgiveness, other-than-insignificant payment delays, term extensions and other actions intended to minimize loss and to avoid foreclosure or repossession of collateral.

The Company had twelve loan modifications made to borrowers experiencing financial difficulty during the twelve months ended December 31, 2025. The Company had five loan modifications made to borrowers experiencing financial difficulty during the twelve months ended December 31, 2024.

The following tables present loans that were both experiencing financial difficulty and modified during the twelve months ended December 31, 2025 and December 31, 2024.


	Twelve Months Ended December 31, 2025
	Other-Than-Insignificant Payment Delay		Total Modification by Loan Class		% of Class of Loans
Commercial and industrial	$	350	$	350	0.2	%



Single tenant lease financing	4,672		4,672		2.1	%

Healthcare finance	2,726		2,726		2.0	%
Small business lending	3,022		3,022		0.7	%
Franchise finance	510		510		0.1	%




Total loans	$	11,280	$	11,280


	Twelve Months Ended December 31, 2024
	Other-Than-Insignificant Payment Delay		Total Modification by Loan Class		% of Class of Loans


Investor commercial real estate	$	3,731	$	3,731	1.4	%





Franchise finance	5,566		5,566		1.0	%




Total loans	$	9,297	$	9,297

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following tables present the performance of such loans that have been modified in the last twelve months as of December 31, 2025 and December 31, 2024.


	Twelve Months Ended December 31, 2025
	Current		30 - 89 Days Past Due		90+ Days Past Due
Commercial and industrial	$	350	$	—	$	—



Single tenant lease financing	4,672		—		—

Healthcare finance	1,280		1,446		—
Small business lending	3,022		—		—
Franchise finance	510		—		—




Total loans	$	9,834	$	1,446	$	—


	Twelve Months Ended December 31, 2024
	Current		30 - 89 Days Past Due		90+ Days Past Due


Investor commercial real estate	$	3,731	$	—	$	—





Franchise finance	5,566		—		—




Total loans	$	9,297	$	—	$	—

Other Real Estate Owned

The Company had $2.6 million in other real estate owned (“OREO”) as of December 31, 2025, which consisted of three small business lending properties. The Company had $0.3 million in other real estate owned (“OREO”) as of December 31, 2024, which consisted of one residential mortgage property. There were eight loans totaling $2.5 million and nine loans totaling $2.1 million, in the process of foreclosure at December 31, 2025 and December 31, 2024, respectively.