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Loans

6 Months Ended

Jun. 30, 2026

Loan balances as of June 30, 2026 and December 31, 2025 are summarized in the table below. Categories of loans include:


(amounts in thousands)	June 30, 2026		December 31, 2025
Commercial loans
Commercial and industrial	$	212,675	$	221,714
Owner-occupied commercial real estate	51,749		48,575
Investor commercial real estate	669,970		647,394
Construction	427,076		372,668
Single tenant lease financing	288,720		222,925
Public finance	445,507		442,234
Healthcare finance	121,287		139,469
Small business lending1	435,686		430,024
Franchise finance	357,182		417,045

Total commercial loans	3,009,852		2,942,048
Consumer loans
Residential mortgage	326,258		343,110
Home equity	14,102		14,725
Other consumer loans	441,788		425,458

Total consumer loans	782,148		783,293
Total commercial and consumer loans	3,792,000		3,725,341
Net deferred loan origination costs, premiums and discounts on purchased loans, and other2	19,073		21,387
Total loans	3,811,073		3,746,728
Allowance for credit losses	(53,096)		(55,686)
Net loans	$	3,757,977	$	3,691,042

1 Balances include $59.8 million and $52.2 million that are guaranteed by the U.S. government as of June 30, 2026 and December 31, 2025, respectively.

2 Includes carrying value adjustment of $17.3 million and $19.1 million related to terminated interest rate swaps associated with public finance loans as of June 30, 2026 and December 31, 2025, respectively.

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 the 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 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: With respect to residential loans that are secured by 1-to-4 family residences and are generally owner occupied, the Company typically establishes a maximum loan-to-value ratio and requires private mortgage

insurance if that ratio is exceeded. Repayment of these loans is primarily dependent on the financial circumstances of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Repayment can also be impacted by changes in residential property values. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers in geographically diverse locations throughout the country.

Home Equity: Home equity loans and lines of credit are typically secured by a subordinate interest in 1-to-4 family residences. Repayment of these loans and lines of credit is primarily dependent on the financial circumstances of the borrowers and may be impacted by changes in unemployment levels and property values on residential properties, among other economic conditions in the market. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers in geographically diverse locations throughout the country.

Other Consumer: These loans primarily consist of consumer loans and credit cards. Consumer loans may be secured by consumer assets such as horse trailers or recreational vehicles. Some consumer loans are unsecured, such as small installment loans, home improvement loans and certain lines of credit. Repayment of consumer loans is primarily dependent upon the personal income of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers in geographically diverse locations throughout the country.

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.

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. Commercial loans are generally charged off when management determines they are uncollectible. Consumer loans are generally charged off when they reach a specified level of delinquency, unless they are well secured and in the process of collection.

The following tables present changes in the balance of the ACL during the three and six months ended June 30, 2026 and 2025.


(amounts in thousands)	Three Months Ended June 30, 2026
Allowance for credit losses:	Balance, Beginning of Period		Provision (Credit) Charged to Expense		Charge-Offs		Recoveries		Balance, End of Period
Commercial and industrial	$	1,903	$	197	$	(245)	$	5	$	1,860
Owner-occupied commercial real estate	256		27		—		—		283
Investor commercial real estate	2,382		(22)		—		—		2,360
Construction	2,736		5		—		—		2,741
Single tenant lease financing	1,007		45		—		—		1,052
Public finance	394		(10)		—		—		384
Healthcare finance	368		(44)		—		—		324
Small business lending	25,875		4,061		(5,037)		236		25,135
Franchise finance	16,558		9,058		(11,706)		145		14,055

Residential mortgage	2,169		(184)		(2)		2		1,985
Home equity	35		(4)		—		1		32
Other consumer loans	2,813		379		(338)		31		2,885

Total	$	56,496	$	13,508	$	(17,328)	$	420	$	53,096


(amounts in thousands)	Six Months Ended June 30, 2026
Allowance for credit losses:	Balance, Beginning of Period		(Credit) Provision Charged to Expense		Losses Charged Off		Recoveries		Balance, End of Period
Commercial and industrial	$	1,942	$	349	$	(447)	$	16	$	1,860
Owner-occupied commercial real estate	264		19		—		—		283
Investor commercial real estate	2,255		105		—		—		2,360
Construction	2,446		295		—		—		2,741
Single tenant lease financing	816		236		—		—		1,052
Public finance	411		(27)		—		—		384
Healthcare finance	605		(243)		(38)		—		324
Small business lending	27,796		11,180		(14,437)		596		25,135
Franchise finance	14,028		17,571		(17,753)		209		14,055

Residential mortgage	2,142		(77)		(82)		2		1,985
Home equity	38		(8)		—		2		32
Other consumer loans	2,943		714		(911)		139		2,885

Total	$	55,686	$	30,114	$	(33,668)	$	964	$	53,096


(amounts in thousands)	Three Months Ended June 30, 2025
Allowance for credit losses:	Balance, Beginning of Period		Provision (Credit) Charged to Expense		Charge-Offs		Recoveries		Balance, End of Period
Commercial and industrial	$	1,360	$	545	$	—	$	2	$	1,907
Owner-occupied commercial real estate	470		2		—		—		472
Investor commercial real estate	859		750		—		—		1,609
Construction	2,167		(396)		—		—		1,771
Single tenant lease financing	4,313		133		—		—		4,446
Public finance	529		(7)		—		—		522
Healthcare finance	1,310		(111)		—		—		1,199
Small business lending	17,555		7,978		(11,851)		40		13,722
Franchise finance	11,200		4,102		(2,238)		18		13,082

Residential mortgage	1,890		32		—		1		1,923
Home equity	96		(5)		—		1		92
Other consumer loans	5,489		573		(359)		69		5,772

Total	$	47,238	$	13,596	$	(14,448)	$	131	$	46,517


(amounts in thousands)	Six Months Ended June 30, 2025
Allowance for loan losses:	Balance, Beginning of Period		(Credit) Provision Charged to Expense		Losses Charged Off		Recoveries		Balance, End of Period
Commercial and industrial	$	1,265	$	638	$	—	$	4	$	1,907
Owner-occupied commercial real estate	528		(56)		—		—		472
Investor commercial real estate	1,149		460		—		—		1,609
Construction	1,984		(213)		—		—		1,771
Single tenant lease financing	4,782		(336)		—		—		4,446
Public finance	703		(181)		—		—		522
Healthcare finance	1,412		(213)		—		—		1,199
Small business lending	16,161		12,908		(15,520)		173		13,722
Franchise finance	8,976		12,174		(8,086)		18		13,082

Residential mortgage	2,136		(209)		(11)		7		1,923
Home equity	106		(17)		—		3		92
Other consumer loans	5,567		762		(672)		115		5,772

Total	$	44,769	$	25,717	$	(24,289)	$	320	$	46,517

Accrued interest receivable on loans totaled $24.6 million and $23.1 million at June 30, 2026 and December 31, 2025, 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 detail activity in the (benefit) provision for credit losses on off-balance sheet commitments for the three and six months ended June 30, 2026.



(amounts in thousands)	Balance March 31, 2026		(Benefit) Provision for Credit Losses		Balance June 30, 2026
Off-balance sheet commitments
Commercial loans
Commercial and industrial	$	186	$	5	$	191

Investor commercial real estate	56		(10)		46
Construction	1,975		(53)		1,922
Single tenant lease financing	3		(1)		2


Small business lending	70		(17)		53


Total commercial loans	2,290		(76)		2,214





Total allowance for off-balance sheet commitments	$	2,290	$	(76)	$	2,214



(amounts in thousands)	Balance December 31, 2025		(Benefit) Provision for Credit Losses		Balance June 30, 2026
Off-balance sheet commitments
Commercial loans
Commercial and industrial	$	177	$	14	$	191

Investor commercial real estate	36		10		46
Construction	2,259		(337)		1,922
Single tenant lease financing	1		1		2


Small business lending	112		(59)		53


Total commercial loans	2,585		(371)		2,214





Total allowance for off-balance sheet commitments	$	2,585	$	(371)	$	2,214

The following table details activity in the provision (benefit) for credit losses on off-balance sheet commitments for the three and six months ended June 30, 2025.


(amounts in thousands)	Balance March 31, 2025		Provision (Benefit) for Credit Losses		Balance June 30, 2025
Off-balance sheet commitments
Commercial loans
Commercial and industrial	$	170	$	29	$	199
Investor commercial real estate	1		32		33
Construction	1,474		283		1,757
Single tenant lease financing	12		(7)		5
Small business lending	274		(273)		1
Total commercial loans	1,931		64		1,995
Consumer loans
Residential mortgage	1		—		1
Home equity	32		(32)		—
Other consumer loans	8		(8)		—
Total consumer loans	41		(40)		1
Total allowance for off-balance sheet commitments	$	1,972	$	24	$	1,996


(amounts in thousands)	Balance December 31, 2024		(Benefit) Provision for Credit Losses		Balance June 30, 2025
Off-balance sheet commitments
Commercial loans
Commercial and industrial	$	233	$	(34)	$	199
Owner-occupied commercial real estate	11		(11)		—
Investor commercial real estate	1		32		33
Construction	1,568		189		1,757
Single tenant lease financing	19		(14)		5
Small business lending	263		(262)		1
Total commercial loans	2,095		(100)		1,995
Consumer loans
Residential mortgage	1		—		1
Home equity	35		(35)		—
Other consumer loans	$	9	$	(9)	$	—
Total consumer loans	45		(44)		1
Total allowance for off-balance sheet commitments	$	2,140	$	(144)	$	1,996

The Company utilizes a risk grading matrix to assign a risk grade to each of its commercial loans, which are evaluated annually. 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 potential credit deficiency or weakness, which deserve close attention.

•“Substandard” - Loans that possess a defined weakness or weaknesses that jeopardize the liquidation of the debt. Loans 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 that 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 tables present 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 June 30, 2026 and December 31, 2025.


	June 30, 2026
	Term Loans (amortized cost basis by origination year)												Revolving loans amortized cost basis		Revolving loans converted to term
(amounts in thousands)	2026		2025		2024		2023		2022		Prior						Total
Commercial and industrial
Pass	$	36,689	$	79,166	$	14,249	$	5,175	$	7,019	$	14,351	$	38,385	$	—	$	195,034
Special Mention	55		1,130		531		—		579		4,222		10,907		—		17,424
Substandard	—		61		32		124		—		—		—		—		217
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial and industrial	36,744		80,357		14,812		5,299		7,598		18,573		49,292		—		212,675
Year-to-date gross charge-offs	39		378		30		—		—		—		—		—		447

Owner-occupied commercial real estate
Pass	7,099		4,069		6,069		1,401		5,076		17,826		—		—		41,540
Special Mention	—		—		—		—		—		8,572		—		—		8,572
Substandard	—		—		—		—		—		1,637		—		—		1,637
Doubtful	—		—		—		—		—		—		—		—		—
Total owner-occupied commercial real estate	7,099		4,069		6,069		1,401		5,076		28,035		—		—		51,749
Year-to-date gross charge-offs	—		—		—		—		—		—		—		—		—
Investor commercial real estate
Pass	40,739		61,405		28,629		209,580		147,076		85,659		—		—		573,088
Special Mention	—		—		—		64,757		28,394		3,731		—		—		96,882
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total investor commercial real estate	40,739		61,405		28,629		274,337		175,470		89,390		—		—		669,970
Year-to-date gross charge-offs	—		—		—		—		—		—		—		—		—
Construction
Pass	33,970		115,393		184,217		67,059		23,393		1,652		1,392		—		427,076
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total construction	33,970		115,393		184,217		67,059		23,393		1,652		1,392		—		427,076
Year-to-date gross charge-offs	—		—		—		—		—		—		—		—		—
Single tenant lease financing
Pass	85,180		143,834		1,647		999		10,255		23,039		—		—		264,954
Special Mention	—		—		—		—		18,451		5,315		—		—		23,766
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total single tenant lease financing	85,180		143,834		1,647		999		28,706		28,354		—		—		288,720
Year-to-date gross charge-offs	—		—		—		—		—		—		—		—		—
Public finance
Pass	32,803		37,836		7,214		—		5,106		361,593		—		—		444,552
Special Mention	—		—		—		—		—		955		—		—		955
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total public finance	32,803		37,836		7,214		—		5,106		362,548		—		—		445,507
Year-to-date gross charge-offs	—		—		—		—		—		—		—		—		—


	June 30, 2026
	Term Loans (amortized cost basis by origination year)												Revolving loans amortized cost basis		Revolving loans converted to term
(amounts in thousands)	2026		2025		2024		2023		2022		Prior						Total
Healthcare finance
Pass	257		—		—		—		—		120,170		—		—		120,427
Special Mention	—		—		—		—		—		860		—		—		860
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total healthcare finance	257		—		—		—		—		121,030		—		—		121,287
Year-to-date gross charge-offs	—		—		—		—		—		38		—		—		38
Small business lending
Pass	31,486		141,774		90,694		51,424		18,902		16,452		31,218		—		381,950
Special Mention	—		627		4,658		5,106		645		1,228		2,232		—		14,496
Substandard	—		7,940		8,641		13,328		1,482		1,209		6,640		—		39,240
Doubtful	—		—		—		—		—		—		—		—		—
Total small business lending	31,486		150,341		103,993		69,858		21,029		18,889		40,090		—		435,686
Year-to-date gross charge-offs	—		4,345		5,749		4,080		6		257		—		—		14,437
Franchise finance
Pass	—		671		51,975		141,748		96,799		18,581		—		—		309,774
Special Mention	96		486		1,165		3,273		11,351		—		—		—		16,371
Substandard	—		—		—		15,861		8,611		5,165		—		—		29,637
Doubtful	—		—		—		800		600		—		—		—		1,400
Total franchise finance	96		1,157		53,140		161,682		117,361		23,746		—		—		357,182
Year-to-date gross charge-offs	—		—		1,281		4,555		3,789		8,128		—		—		17,753
Consumer loans
Residential mortgage
Performing	—		4,688		6,163		10,763		153,905		145,237		—		—		320,756
Nonperforming	—		—		—		—		3,275		2,227		—		—		5,502
Total residential mortgage	—		4,688		6,163		10,763		157,180		147,464		—		—		326,258
Year-to-date gross charge-offs	—		—		—		—		78		4		—		—		82
Home equity
Performing	—		—		—		538		763		756		11,498		547		14,102
Nonperforming	—		—		—		—		—		—		—		—		—
Total home equity	—		—		—		538		763		756		11,498		547		14,102
Year-to-date gross charge-offs	—		—		—		—		—		—		—		—		—
Other consumer loans
Performing	62,540		91,843		76,315		68,202		65,190		76,759		730		—		441,579
Nonperforming	—		—		122		—		34		53		—		—		209
Total other consumer loans	62,540		91,843		76,437		68,202		65,224		76,812		730		—		441,788
Year-to-date gross charge-offs	23		79		129		333		108		239		—		—		911
Total Loans	$	330,914	$	690,923	$	482,321	$	660,138	$	606,906	$	917,249	$	103,002	$	547	$	3,792,000
Total year-to-date gross charge-offs	$	62	$	4,802	$	7,189	$	8,968	$	3,981	$	8,666	$	—	$	—	$	33,668


	December 31, 2025
	Term Loans (amortized cost basis by origination year)												Revolving loans amortized cost basis		Revolving loans converted to term
(amounts in thousands)	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
(amounts in thousands)	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 loans
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 loans	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

The following tables present the Company’s loan portfolio delinquency, including nonperforming loans, as of June 30, 2026 and December 31, 2025.


	June 30, 2026
(amounts in thousands)	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	$	10	$	2,005	$	—	$	2,015	$	210,660	$	212,675
Owner-occupied commercial real estate	—		—		—		—		51,749		51,749
Investor commercial real estate	—		—		—		—		669,970		669,970
Construction	—		—		—		—		427,076		427,076
Single tenant lease financing	—		—		—		—		288,720		288,720
Public finance	—		—		—		—		445,507		445,507
Healthcare finance	1,059		130		—		1,189		120,098		121,287
Small business lending	1,395		4,046		10,957		16,398		419,288		435,686
Franchise finance	1,618		4,413		27,354		33,385		323,797		357,182

Residential mortgage	2,277		1,511		3,286		7,074		319,184		326,258
Home equity	—		—		—		—		14,102		14,102
Other consumer loans	410		150		92		652		441,136		441,788

Total	$	6,769	$	12,255	$	41,689	$	60,713	$	3,731,287	$	3,792,000


	December 31, 2025
(amounts in thousands)	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 loans	243		102		141		486		424,972		425,458
Total	$	32,724	$	8,768	$	40,270	$	81,762	$	3,643,579	$	3,725,341

Loans are reclassified to a 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 allowance for credit losses. 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:


	June 30, 2026						December 31, 2025
(amounts in thousands)	Nonaccrual Loans		Nonaccrual Loans with No Allowance for Credit Losses		Total Loans 90 Days or More Past Due and Accruing		Nonaccrual Loans		Nonaccrual Loans with No Allowance for Credit Losses		Total Loans 90 Days or More Past Due and Accruing
Commercial and industrial	$	218	$	3	$	—	$	240	$	—	$	—



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

Healthcare finance	—		—		—		2,596		2,596		—
Small business lending1	24,545		23,779		34		19,781		18,928		—
Franchise finance	15,070		2,133		14,398		26,978		4,463		1,144

Residential mortgage	5,501		5,501		98		4,893		4,893		1,007

Other consumer loans	209		209		—		234		234		—
Total loans	$	45,543	$	31,625	$	14,530	$	56,387	$	31,114	$	2,151

1 Balance includes $19.2 million and $13.6 million at June 30, 2026 and December 31, 2025, respectively, of loans guaranteed by the U.S. government.

Interest income recognized on nonaccrual loans was $0.2 million and $0.3 million for the three and six months ended June 30, 2026, respectively, and $0.1 million and $0.2 million for the three and six months ended June 30, 2025, 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.

The following tables present the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses as of June 30, 2026 and December 31, 2025.


	June 30, 2026
(amounts in thousands)	Commercial Real Estate		Residential Real Estate		Other (Includes Equipment, Machinery and Other Assets)		Total		Allowance on Collateral Dependent Loans







Small business lending1	$	9,807	$	—	$	6,537	$	16,344	$	332


Residential mortgage	—		5,501		—		5,501		—

Other consumer loans	—		34		175		209		—
Total loans	$	9,807	$	5,535	$	6,712	$	22,054	$	332

1 Balance includes $11.8 million of loans guaranteed by the U.S. government.


	December 31, 2025
(amounts in thousands)	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.

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 seven loan modification made to borrowers experiencing financial difficulty during the three months ended June 30, 2026. The Company had eight loan modifications made to borrowers experiencing financial difficulty during the six months ended June 30, 2026. The Company had six loan modifications made to borrowers experiencing financial difficulty during the three months ended June 30, 2025. The Company had eight loan modifications made to borrowers experiencing financial difficulty during the six months ended June 30, 2025.

The following tables present loans that were both experiencing financial difficulty and modified during the three months ended June 30, 2026 and 2025.


	Three Months Ended June 30, 2026
(dollars in thousands)	Payment Delay		Total Modification by Loan Class		% of Class of Loans







Small business lending	$	3,425	$	3,425	0.8	%


Residential mortgage	91		91		—	%


Total	$	3,516	$	3,516


	Three Months Ended June 30, 2025
(dollars in thousands)	Payment Delay		Total Modification by Loan Class		% of Class of Loans
Commercial and industrial	$	393	$	393	0.3	%
Single tenant lease financing	3,007		3,007		0.3	%
Small business lending	3,084		3,084		0.6	%
Total	$	6,484	$	6,484

The following table presents loans that were both experiencing financial difficulty and modified during the six months ended June 30, 2026 and 2025.


	Six Months Ended June 30, 2026
(dollars in thousands)	Payment Delay		Total Modification by Loan Class		% of Class of Loans
Commercial and industrial	$	3	$	3	—	%






Small business lending	3,425		3,425		0.8	%


Residential mortgage	91		91		—	%


Total	$	3,519	$	3,519


	Six Months Ended June 30, 2025
(dollars in thousands)	Payment Delay		Total Modification by Loan Class		% of Class of Loans
Commercial and industrial	$	393	$	393	0.3	%
Single tenant lease financing	3,007		3,007		0.3	%
Healthcare finance	2,634		2,634		1.7	%
Small business lending	3,084		3,084		0.6	%
Total	$	9,118	$	9,118

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 table presents the performance of loans that were modified within the twelve months ended June 30, 2026.


	Twelve Months Ended June 30, 2026
(amounts in thousands)	Current		30 - 89 Days Past Due		90+ Days Past Due
Commercial and industrial	$	3	$	—	$	—





Healthcare finance	—		130		—
Small business lending	3,425		—		21
Franchise finance	485		—		—

Residential mortgage	91		—		—


Total	$	4,004	$	130	$	21

There were no loans that were modified within the twelve months ended June 30, 2026 that subsequently defaulted during the period presented.

Other Real Estate Owned

The Company had $4.1 million in other real estate owned (“OREO”) as of June 30, 2026, which consisted of three small business lending properties and one single tenant lease property. The Company had $2.6 million in OREO as of December 31, 2025, which consisted of three small business lending properties. There were thirteen loans totaling $0.4 million and eight loans totaling $2.5 million, in the process of foreclosure at June 30, 2026 and December 31, 2025, respectively.