Loans and Allowance for Credit Losses on Loans

6 Months Ended

Jun. 30, 2026

Receivables [Abstract]

Loans and Allowance for Credit Losses on Loans

Note 4. Loans and Allowance for Credit Losses on Loans

The majority of the disclosures in this footnote are prepared at the class level, which is equivalent to the call report or call code classification. The roll forward of the allowance for credit losses is presented at the portfolio segment level. Accrued interest receivable on loans of $17,758,000 and $11,625,000 at June 30, 2026 and December 31, 2025 respectively is not included in the loan tables below and is included in other assets on the Company’s consolidated balance sheets. Outstanding loans are summarized by class as follows:

Loan Type (Dollars in thousands)	June 30, 2026		December 31, 2025
Commercial:
Commercial and industrial	$	261,339	$	156,744
Agricultural production	74,117		34,152
Total commercial	335,456		190,896
Real estate:
Construction & other land loans	224,359		80,452
Commercial real estate - owner occupied	524,989		368,604
Commercial real estate - non-owner occupied	1,266,026		992,486
Farmland	162,830		142,100
Multi-family residential	230,387		199,123
1-4 family - close-ended	307,176		111,741
1-4 family - revolving	43,768		39,818
Total real estate	2,759,535		1,934,324
Consumer:
Manufactured housing	323,384		322,761
Other installment	124,898		92,589
Total consumer	448,282		415,350
Total gross loans	3,543,273		2,540,570
Net deferred origination costs	510		287
Loans, net of deferred origination costs	3,543,783		2,540,857
Allowance for credit losses	(49,422)		(30,071)
Total loans, net	$	3,494,361	$	2,510,786

At June 30, 2026 and December 31, 2025, loans originated under Small Business Administration (SBA) programs totaling $27,506,000 and $21,161,000, respectively, were included in the real estate and commercial categories, of which, $20,709,000 or 75% and $16,044,000 or 76%, respectively, were secured by government guarantees.

Allowance for Credit Losses on Loans

The measurement of the allowance for credit losses on collectively evaluated loans is based on modeled expectations of lifetime expected credit losses utilizing national and local peer group historical losses, weighting of economic scenarios, and other relevant factors. The Company incorporates forward-looking information using macroeconomic scenarios, which include variables that are considered key drivers of credit losses within the portfolio. The Company uses a probability-weighted, multiple scenario forecast approach. These scenarios may consist of a base forecast representing the most likely outcome, combined with downside or upside scenarios reflecting possible worsening or improving economic conditions.

When a loan no longer shares similar risk characteristics with other loans, such as in the case of certain nonaccrual loans, the Company estimates the allowance for credit losses on an individual loan basis.

The following table shows the summary of activities for the allowance for credit losses for the three months ended June 30, 2026 and 2025 by portfolio segment (in thousands):

	Commercial		Commercial Real Estate		1-4 Family Real Estate		Consumer		Total
Allowance for credit losses:
Beginning balance, April 1, 2026	$	3,065	$	20,449	$	2,342	$	4,374	$	30,230
Merger Day 1 ACL	1,859		6,838		1,204		9,530		19,431
Provision for credit losses (1)	1,990		2,607		426		236		5,259
Charge-offs	(816)		(2,355)		—		(2,642)		(5,813)
Recoveries	47		194		6		68		315
Ending balance, June 30, 2026	$	6,145	$	27,733	$	3,978	$	11,566	$	49,422

(1) Represents provision (credit) to credit losses for loans only. The provision for credit losses on the Consolidated Statements of Income of $5,635 includes a $(54) credit for held-to-maturity securities and a $430 provision for unfunded loan commitments.

	Commercial		Commercial Real Estate		1-4 Family Real Estate		Consumer		Total
Allowance for credit losses:
Beginning balance, April 1, 2025	$	1,782	$	17,387	$	2,521	$	4,405	$	26,095
Provision (credit) for credit losses (1)	483		1,844		(25)		338		2,640
Charge-offs	(85)		—		—		(50)		(135)
Recoveries	51		50		9		12		122
Ending balance, June 30, 2025	$	2,231	$	19,281	$	2,505	$	4,705	$	28,722

(1) Represents provision (credit) to credit losses for loans only. The credit for credit losses on the Consolidated Statements of Income of $2,613 includes a $(188) credit for held-to-maturity securities and a $161 provision for unfunded loan commitments.

During the three month period ended June 30, 2026, the increase in allowance for credit losses was primarily driven by the acquisition of USB, which contributed $19.4 million in Day 1 allowance balances across all portfolio segments. As a result of the Company's early adoption of ASU 2025-08, a Day 1 allowance for credit losses was established for acquired loans at the Merger date. Excluding the impact of the Day 1 allowance, the allowance grew modestly, reflecting a provision for credit losses of $5,259,000, partially offset by net charge-offs of $5,498,000 during the quarter. The provision for loan losses during the quarter ended June 30, 2026 was primarily due to an update of the Company’s peer group based on its larger asset size following the completion of the Merger and also from organic loan growth during the quarter. Charge-offs during the quarter were associated with loans previously fully reserved or absorbed within the Day 1 allowance recorded at the time of the Merger.

The following tables present the composition of nonaccrual loans as of June 30, 2026 and December 31, 2025 respectively (in thousands).

	June 30, 2026
	With an ACL		Without an ACL		Total Nonaccrual
Commercial and industrial	$	1,459	$	—	$	1,459
Commercial real estate - owner occupied	—		1,063		1,063
Commercial real estate - non-owner occupied	—		11,516		11,516
Farmland	1,591		403		1,994
1-4 family real estate	—		2,440		2,440
Manufactured housing	631		654		1,285
Total	$	3,681	$	16,076	$	19,757

	December 31, 2025
	With an ACL		Without an ACL		Total Nonaccrual
Commercial and industrial	$	1,533	$	—	$	1,533
Commercial real estate - owner occupied	—		101		101
Commercial real estate - non-owner occupied	—		530		530
Farmland	—		1,525		1,525
1-4 family real estate	—		1,697		1,697
Manufactured housing	809		676		1,485
Other installment	64		20		84
Total	$	2,406	$	4,549	$	6,955

The following tables present the amortized cost basis of collateral dependent loans by class of loans and by collateral type as of the dates indicated as of June 30, 2026 and December 31, 2025 (in thousands).

	June 30, 2026
	Manufactured Homes		Real Estate		Machinery & Equipment		Automobiles		Total
Commercial and industrial	$	—	$	—	$	1,459	$	—	$	1,459
Commercial real estate - owner occupied	—		1,063		—		—		1,063
Commercial real estate - non-owner occupied	—		11,013		503		—		11,516
Farmland	—		1,994		—		—		1,994
1-4 family real estate	—		2,440		—		—		2,440
Manufactured housing	1,285		—		—		—		1,285
Total	$	1,285	$	16,510	$	1,962	$	—	$	19,757

	December 31, 2025
	Manufactured Homes		Real Estate		Machinery & Equipment		Automobiles		Total
Commercial and industrial	$	—	$	—	$	1,533	$	—	$	1,533
Commercial real estate - owner occupied	—		101		—		—		101
Commercial real estate - non-owner occupied	—		13,394		530		—		13,924
Farmland	—		1,525		—		—		1,525
1-4 family real estate	—		1,697		—		—		1,697
Manufactured housing	1,485		—		—		—		1,485
Other installment	—		—		—		84		84
Total	$	1,485	$	16,717	$	2,063	$	84	$	20,349

The Company utilizes an internal asset classification system as a means of reporting problem and potential problem loans. Loan ratings are reviewed as part of the Company's normal loan monitoring process, but, at a minimum, updated on an annual basis. Under the Company’s risk rating system, the Company rates loans with potential problems as “Special Mention,” “Substandard,” “Doubtful,” and “Loss”. The following is a description of the characteristics of loan ratings.

Special Mention - A Special Mention loan has potential weaknesses that require management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the Company's credit position at some future date. Special mention assets are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

Substandard - A Substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. These loans have a well-defined weakness or weaknesses that jeopardize the full collection

of amounts due. They are characterized by the distinct possibility that the Company will sustain some loss if the borrower’s deficiencies are not corrected.

Doubtful - A loan classified Doubtful has all the weaknesses inherent in one classified as Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors, which may work to the advantage and strengthening of the loan, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition or liquidation procedures, capital injection, perfecting liens on additional collateral and refinancing plans.

Loss - Loans classified Loss are considered uncollectible and of such little value that their continuance as bankable loans is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this loan even though partial recovery may be realized in the future. Losses are taken in the period in which they are considered uncollectible.

Loans not meeting the criteria above are considered to be pass or watch rated loans.

The following table shows the loan portfolio by class, net of deferred costs, allocated by management’s internal risk ratings for the period indicated. The following table also shows the gross charge-offs recognized during the six months ended June 30, 2026 (in thousands):

	Term Loans Amortized Cost Basis by Origination Year As of June 30, 2026
	2026		2025		2024		2023		2022		Prior		Revolving Loans		Revolving Converted to Term		Total
Commercial and industrial
Pass/Watch	$	23,007	$	25,723	$	25,607	$	17,117	$	8,258	$	27,181	$	115,527	$	1,822	$	244,242
Special mention	—		—		—		—		75		—		150		—		225
Substandard	—		100		14		94		1,837		13,220		43		17		15,325
Total	$	23,007	$	25,823	$	25,621	$	17,211	$	10,170	$	40,401	$	115,720	$	1,839	$	259,792
Current period gross write-offs	$	—	$	553	$	170	$	—	$	—	$	93	$	—	$	—	$	816
Agricultural production
Pass/Watch	$	635	$	2,874	$	1,225	$	43	$	600	$	431	$	63,068	$	1,145	$	70,021
Special mention	—		233		—		—		—		—		3,452		233		3,918
Substandard	—		—		—		—		—		—		255				255
Total	$	635	$	3,107	$	1,225	$	43	$	600	$	431	$	66,775	$	1,378	$	74,194
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction & other land loans
Pass/Watch	$	14,579	$	65,828	$	52,796	$	13,942	$	2,320	$	3,283	$	49,176	$	—	$	201,924
Special mention	—		—		6,102		—		—		—		—		—		6,102
Substandard	—		—		—		—		—		74		15,691		—		15,765
Total	$	14,579	$	65,828	$	58,898	$	13,942	$	2,320	$	3,357	$	64,867	$	—	$	223,791
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate - owner occupied
Pass/Watch	$	61,709	$	77,595	$	62,181	$	33,627	$	53,640	$	222,294	$	11,493	$	1,898	$	524,437
Special mention	—		—		—		1,345		—		—		—		—		1,345
Substandard	—		—		—		1,724		—		3,496		—		—		5,220

Total	$	61,709	$	77,595	$	62,181	$	36,696	$	53,640	$	225,790	$	11,493	$	1,898	$	531,002
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate - non-owner occupied
Pass/Watch	$	62,344	$	154,129	$	115,666	$	100,561	$	228,814	$	495,888	$	32,328	$	250	$	1,189,980
Special mention	—		—		13,902		—		3,613		8,965		350				26,830
Substandard	—		—		11,472		—		5,471		22,394		1,586				40,923
Total	$	62,344	$	154,129	$	141,040	$	100,561	$	237,898	$	527,247	$	34,264	$	250	$	1,257,733
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	2,355	$	—	$	—	$	2,355
Farmland
Pass/Watch	$	8,050	$	9,636	$	7,552	$	4,189	$	19,507	$	79,765	$	8,235	$	—	$	136,934
Special mention	—		1,800		—		328		—		4,159		—		—		6,287
Substandard	—		—		—		3,623		9,506		4,563		1,784		—		19,476
Total	$	8,050	$	11,436	$	7,552	$	8,140	$	29,013	$	88,487	$	10,019	$	—	$	162,697
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Multi-family residential
Pass/Watch	$	3,288	$	27,003	$	15,315	$	26,901	$	39,997	$	81,709	$	10,452	$	—	$	204,665
Special mention	—		—		2,558		15,600		—		—		—		—		18,158
Substandard			—		—		—		—		7,265		—		—		7,265
Total	$	3,288	$	27,003	$	17,873	$	42,501	$	39,997	$	88,974	$	10,452	$	—	$	230,088
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1-4 family - close-ended
Pass/Watch	$	12,296	$	9,706	$	5,797	$	223,948	$	5,195	$	36,797	$	12,265	$	—	$	306,004
Special mention	—		—		—		—		434		—		—		—		434
Substandard	—		—		43		2,397		—		122		—		—		2,562
Total	$	12,296	$	9,706	$	5,840	$	226,345	$	5,629	$	36,919	$	12,265	$	—	$	309,000
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1-4 family - revolving
Pass/Watch	$	—	$	—	$	—	$	—	$	—	$	—	$	43,140	$	847	$	43,987
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		36		36
Total	$	—	$	—	$	—	$	—	$	—	$	—	$	43,140	$	883	$	44,023
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Manufactured Housing
Pass/Watch	$	13,287	$	39,900	$	41,119	$	35,753	$	40,112	$	149,901	$	—	$	—	$	320,072
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		117		275		—		2,579		—		—		2,971
Total	$	13,287	$	39,900	$	41,236	$	36,028	$	40,112	$	152,480	$	—	$	—	$	323,043
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Other installment
Pass/Watch	$	21,875	$	28,666	$	26,132	$	13,498	$	3,361	$	33,348	$	1,078	$	—	$	127,958
Special mention	—		—		—		—		—		—		—		—		—
Substandard	25		9		301		39		—		88		—		—		462
Total	$	21,900	$	28,675	$	26,433	$	13,537	$	3,361	$	33,436	$	1,078	$	—	$	128,420
Current period gross write-offs	$	2	$	—	$	—	$	10	$	303	$	2,338	$	—	$	—	$	2,653
Total loans outstanding (risk rating):
Pass/Watch	$	221,070	$	441,060	$	353,390	$	469,579	$	401,804	$	1,130,597	$	346,762	$	5,962	$	3,370,224
Special mention	—		2,033		22,562		17,273		4,122		13,124		3,952		233		63,299
Substandard	25		109		11,947		8,152		16,814		53,801		19,359		53		110,260
Grand Total	$	221,095	$	443,202	$	387,899	$	495,004	$	422,740	$	1,197,522	$	370,073	$	6,248	$	3,543,783
Current period total gross write-offs	$	2	$	553	$	170	$	10	$	303	$	4,786	$	—	$	—	$	5,824

The following table shows the loan portfolio by class, net of deferred costs, allocated by management’s internal risk ratings for the period indicated. The following table also shows the charge-offs recognized during the twelve months ended December 31, 2025 (in thousands):

	Term Loans Amortized Cost Basis by Origination Year As of December 31, 2025
	2025		2024		2023		2022		2021		Prior		Revolving Loans		Revolving Converted to Term		Total
Commercial and industrial
Pass/Watch	$	22,082	$	23,892	$	8,368	$	13,847	$	12,978	$	8,523	$	56,992	$	—	$	146,682
Special mention	715		—		66		678		—		—		—		—		1,459
Substandard	100		23		—		1,510		159		7,086		—		—		8,878
Total	$	22,897	$	23,915	$	8,434	$	16,035	$	13,137	$	15,609	$	56,992	$	—	$	157,019
Current period gross write-offs	$	169	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	169
Agricultural production
Pass/Watch	$	1,637	$	1,044	$	43	$	—	$	5	$	120	$	29,372	$	189	$	32,410
Special mention	—		—		—		—		—		—		1,775				1,775
Substandard	—		—		—		—		—		—		—		—		—
Total	$	1,637	$	1,044	$	43	$	—	$	5	$	120	$	31,147	$	189	$	34,185
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction & other land loans
Pass/Watch	$	22,329	$	39,870	$	6,610	$	3,812	$	5,267	$	1,424	$	370	$	—	$	79,682
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		82		—		—		82
Total	$	22,329	$	39,870	$	6,610	$	3,812	$	5,267	$	1,506	$	370	$	—	$	79,764
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate - owner occupied

Pass/Watch	$	61,648	$	47,277	$	26,339	$	46,297	$	41,591	$	131,861	$	8,258	$	—	$	363,271
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		1,733		—		—		3,003		—		—		4,736
Total	$	61,648	$	47,277	$	28,072	$	46,297	$	41,591	$	134,864	$	8,258	$	—	$	368,007
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate - non-owner occupied
Pass/Watch	$	135,558	$	74,414	$	98,549	$	175,212	$	116,070	$	305,565	$	27,275	$	—	$	932,643
Special mention	—		20,217		—		4,211		615		3,746		350		—		29,139
Substandard	—		—		—		5,965		—		21,070		2,128		—		29,163
Total	$	135,558	$	94,631	$	98,549	$	185,388	$	116,685	$	330,381	$	29,753	$	—	$	990,945
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Farmland
Pass/Watch	$	5,516	$	4,569	$	4,345	$	16,049	$	10,888	$	61,865	$	8,978	$	1,500	$	113,710
Special mention	1,800		—		399		—		—		3,983		—		—		6,182
Substandard	—		—		3,824		9,808		—		5,918		2,574		—		22,124
Total	$	7,316	$	4,569	$	8,568	$	25,857	$	10,888	$	71,766	$	11,552	$	1,500	$	142,016
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Multi-family residential
Pass/Watch	$	27,289	$	12,287	$	21,926	$	30,928	$	45,465	$	28,376	$	9,624	$	—	$	175,895
Special mention	—		—		15,600		—		—		—		—		—		15,600
Substandard	—		—		—		—		—		7,283		—		—		7,283
Total	$	27,289	$	12,287	$	37,526	$	30,928	$	45,465	$	35,659	$	9,624	$	—	$	198,778
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1-4 family - close-ended
Pass/Watch	$	5,628	$	2,020	$	4,306	$	55,888	$	10,199	$	19,882	$	11,073	$	230	$	109,226
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		64		—		1,931		—		535		—		—		2,530
Total	$	5,628	$	2,084	$	4,306	$	57,819	$	10,199	$	20,417	$	11,073	$	230	$	111,756
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1-4 family - revolving
Pass/Watch	$	—	$	—	$	—	$	—	$	—	$	—	$	34,783	$	5,231	$	40,014
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		37		37
Total	$	—	$	—	$	—	$	—	$	—	$	—	$	34,783	$	5,268	$	40,051
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Manufactured Housing
Pass/Watch	$	37,751	$	42,557	$	36,972	$	41,922	$	33,714	$	126,298	$	—	$	—	$	319,214
Special mention	—		—		—		—		—		—		—		—		—

Substandard	—		117		369		2		690		2,216		—		—		3,394
Total	$	37,751	$	42,674	$	37,341	$	41,924	$	34,404	$	128,514	$	—	$	—	$	322,608
Current period gross write-offs	$	17	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	17
Other installment
Pass/Watch	$	32,798	$	34,074	$	15,061	$	3,793	$	3,419	$	5,549	$	465	$	—	$	95,159
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		28		365		93		83		—		—		569
Total	$	32,798	$	34,074	$	15,089	$	4,158	$	3,512	$	5,632	$	465	$	—	$	95,728
Current period gross write-offs	$	205	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	205
Total loans outstanding (risk rating):
Pass/Watch	$	352,236	$	282,004	$	222,519	$	387,748	$	279,596	$	689,463	$	187,190	$	7,150	$	2,407,906
Special mention	2,515		20,217		16,065		4,889		615		7,729		2,125		—		54,155
Substandard	100		204		5,954		19,581		942		47,276		4,702		37		78,796
Grand Total	$	354,851	$	302,425	$	244,538	$	412,218	$	281,153	$	744,468	$	194,017	$	7,187	$	2,540,857
Current period total gross write-offs	$	391	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	391

Student Loans

Included in installment loans are $24,237,000 and $0 in student loans at June 30, 2026, and December 31, 2025, respectively, made to medical and pharmacy school students. The student loan portfolio was acquired on April 1, 2026 through the Merger. Accrued interest on student loans totaled $2,456,000 and $0 at June 30, 2026, and December 31, 2025, respectively. Upon graduation the loan is automatically placed in a grace period of six months. This may be extended up to 48 months for graduates enrolling in internship, medical residency, or fellowship. As approved, the student may receive additional deferment for hardship or administrative reasons in the form of forbearance for a maximum of 36 months throughout the life of the loan. USB had not originated or purchased student loans since 2019.

As of June 30, 2026 and December 31, 2025, the allowance for credit losses for the student loan portfolio was $7,042,000 and $0, respectively. There were no student loans in the substandard category at June 30, 2026 and December 31, 2025.

The following tables summarize the credit quality indicators for outstanding student loans as of June 30, 2026 and December 31, 2025:

	June 30, 2026					December 31, 2025
(Dollars in thousands)	Number of Loans	Principal Amount		Accrued Interest		Number of Loans	Principal Amount		Accrued Interest
School	14	$	398	$	360	—	$	—	$	—
Grace	9	244		221		—	—		—
Repayment	304	14,629		201		—	—		—
Deferment	75	3,844		984		—	—		—
Forbearance	102	5,122		690		—	—		—
Total	504	$	24,237	$	2,456	—	$	—	$	—

School - The time in which the borrower is still actively in school at least half time. No payments are expected during this stage, though the borrower may begin immediate payments.

Grace - A six month period of time granted to the borrower immediately upon graduation, or withdrawal from school.  Interest continues to accrue. Upon completion of the six month grace period the loan is transferred to repayment status. This status may also represent a borrower activated to military duty during their time in school. The borrower must return to at least half-time status within six-months of the active duty end-date in order to return to in-school status.

Repayment - The time in which the borrower is no longer actively in school at least half time, and has not received an approved grace, deferment, or forbearance. Regular payment is expected from these borrowers under an allotted payment plan.

Deferment - May be granted up to 48 months for borrowers who have begun the repayment period on their loans but are (1) actively enrolled in an eligible school at least half time, or (2) are actively enrolled in an approved and verifiable medical residency, internship, or fellowship program.

Forbearance - The period of time during which the borrower may postpone making principal and interest payments due to hardship or administrative reasons. Interest continues to accrue on loans during periods of authorized forbearance. If the borrower is delinquent at the time the forbearance is granted, accrued and unpaid interest from the date of delinquency, if any, will be capitalized at the end of the forbearance period. The loan-term will not change and payments may be increased to allow the loan to pay off in the required time frame. A forbearance that results in an insignificant payment delay is not considered a concessionary change in terms, provided the borrower affirms the obligation. Forbearance is not an uncommon status designation; this designation is standard industry practice, and is consistent with a student’s migration to the medical profession. However, additional risk is associated with this designation.

Student Loan Aging

Student loans are generally charged off at the end of the month during which an account becomes 120 days contractually past due. Accrued but unpaid interest related to charged off student loans is reversed and charged against interest income. As of June 30, 2026, $595,000 in accrued interest receivable was reversed due to charge-offs of $2.3 million within the student loan portfolio.

The following tables summarize the student loan aging for loans in repayment and forbearance as of June 30, 2026 and December 31, 2025:

	June 30, 2026			December 31, 2025
(Dollars in thousands)	Number of Borrowers	Principal Amount		Number of Borrowers	Principal Amount
Current or less than 31 days	176	$	19,010	—	$	—
31 - 60 days	3	349		—	—
61 - 90 days	2	392		—	—
Greater than 90 days	—	—		—	—
Total	181	$	19,751	—	$	—

The following table shows an aging analysis of the loan portfolio by class at June 30, 2026 (in thousands):

	30-59 Days Past Due		60-89 Days Past Due		Greater Than  89 Days Past Due		Total Past Due		Current		Total Loans		Loans Past Due > 89 Days, Still Accruing		Non-accrual
Commercial:
Commercial and industrial	$	3,191	$	136	$	1,307	$	4,634	$	254,849	$	259,483	$	—	$	1,459
Agricultural production	—		—		—		—		74,117		74,117		—		—
Real estate:
Construction & other land loans	—		—		—		—		224,359		224,359		—		—
Commercial real estate - owner occupied	—		2,061		971		3,032		528,652		531,684		—		1,063
Commercial real estate - non-owner occupied	1,655		5,303		11,388		18,346		1,240,985		1,259,331		—		11,516
Farmland	—		—		403		403		162,427		162,830		—		1,994
Multi-family residential	—		2,558		—		2,558		227,829		230,387		—		—
1-4 family - close-ended	135		434		2,397		2,966		306,066		309,032		—		2,440
1-4 family - revolving	86		—		—		86		43,682		43,768		—		—
Consumer:
Manufactured housing	612		208		102		922		322,462		323,384		—		1,285
Other installment	927		443		3		1373		123,525		124,898		—		—
Deferred costs	—		—		—		—		510		510		—		—
Total	$	6,606	$	11,143	$	16,571	$	34,320	$	3,509,463	$	3,543,783	$	—	$	19,757

The following table shows an aging analysis of the loan portfolio by class at December 31, 2025 (in thousands):

	30-59 Days Past Due		60-89 Days Past Due		Greater Than  89 Days Past Due		Total Past Due		Current		Total Loans		Loans Past Due > 89 Days, Still Accruing		Non- accrual
Commercial:
Commercial and industrial	$	551	$	64	$	1,510	$	2,125	$	154,619	$	156,744	$	—	$	1,533
Agricultural production	—		—		—		—		34,152		34,152		—		—
Real estate:
Construction & other land loans	—		—		—		—		80,452		80,452		—		—
Commercial real estate - owner occupied	239		—		—		239		368,365		368,604		—		101
Commercial real estate - non-owner occupied	13,389		—		530		13,919		978,567		992,486		—		530
Farmland	—		—		1,525		1,525		140,575		142,100		—		1,525
Multi-family residential	—		—		—		—		199,123		199,123		—		—
1-4 family - close-ended	1,552		772		1,184		3,508		108,233		111,741		—		1,697
1-4 family - revolving	569		—		—		569		39,249		39,818		—		—
Consumer:
Manufactured housing	723		345		—		1,068		321,693		322,761		—		1,485
Other installment	162		93		—		255		92,334		92,589		—		84
Deferred costs	—		—		—		—		287		287		—		—
Total	$	17,185	$	1,274	$	4,749	$	23,208	$	2,517,649	$	2,540,857	$	—	$	6,955

Foregone interest on nonaccrual loans was $342,000 and $769,000 for the three and six months ended June 30, 2026 compared to $118,000 and $199,000 for the for the three and six months ended June 30, 2025. Interest income recognized on non-accrual loans for the six months ended June 30, 2026 and 2025 was $16,000 and $34,000, respectively.

Occasionally, the Company modifies loans to borrowers in financial distress by providing reductions of the stated interest rate of the loan or an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk. There were no loan modifications granted to borrowers experiencing financial difficulty for the three and six months ended June 30, 2026 and 2025.