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LOANS HELD FOR INVESTMENT
 9 Months Ended
Sep. 30, 2025
LOANS HELD FOR INVESTMENT [Abstract]  
LOANS HELD FOR INVESTMENT
3.  LOANS HELD FOR INVESTMENT

Loans held for investment are summarized by category as of the dates presented below (dollars in thousands):

   
September 30,
2025
    
December 31,
2024
  
Commercial real estate
  
$
1,035,926
    
$
1,119,063
  
Commercial - specialized
    
377,783
      
388,955
  
Commercial - general
    
629,256
      
557,371
  
Consumer:
                
1-4 family residential
    
592,578
      
566,400
  
Auto loans
    
256,281
      
254,474
  
Other consumer
    
63,727
      
64,936
  
Construction
    
97,952
      
103,855
  
     
3,053,503
      
3,055,054
  
Allowance for credit losses on loans
    
(44,125
)
    
(43,237
)
Loans, net
  
$
3,009,378
    
$
3,011,817
  

The Company has certain lending policies, underwriting standards, and procedures in place that are designed to maximize loan income with an acceptable level of risk. Management reviews and approves these policies, underwriting standards, and procedures on a regular basis and makes changes as appropriate. Management receives frequent reports related to loan originations, quality, concentrations, delinquencies, non-performing, and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions, both by type of loan and geography.
Commercial Real Estate – Underwriting standards have been designed to determine whether the borrower possesses sound business ethics and practices, evaluate current and projected cash flows to determine the ability of the borrower to repay their obligations as agreed and ensure appropriate collateral is obtained to secure the loan. Commercial real estate loans are underwritten primarily based on projected cash flows for income-producing properties and collateral values for non-income-producing properties. The repayment of these loans is generally dependent on the successful operation of the property securing the loans or the sale or refinancing of the property. Real estate loans may be adversely affected by conditions in the real estate markets or in the general economy. The properties securing the Company’s real estate portfolio are diversified by type and geographic location. This diversity helps reduce the exposure to adverse economic events that affect any single market or industry.

Commercial – General and Specialized – Commercial loans are underwritten after evaluating and understanding the borrower’s ability to operate profitably. Underwriting standards have been designed to determine whether the borrower possesses sound business ethics and practices, evaluate current and projected cash flows to determine the ability of the borrower to repay their obligations, as agreed and ensure appropriate collateral is obtained to secure the loan. Commercial loans are primarily made based on the identified cash flows of the borrower and, secondarily, on the underlying collateral provided by the borrower. Most commercial loans are secured by the assets being financed or other business assets, such as real estate, accounts receivable, or inventory, and typically include personal guarantees. Owner-occupied real estate is included in commercial loans, as the repayment of these loans is generally dependent on the operations of the commercial borrower’s business rather than on income-producing properties or the sale of the properties. Commercial loans are grouped into two distinct sub-categories: specialized and general. Commercial related segments that are considered “specialized” include agricultural production and real estate loans, energy loans, and finance, investment, and insurance loans. Commercial related segments that contain a broader diversity of borrowers, sub-industries, or serviced industries are grouped into the “general category.” These include goods, services, restaurant & retail, construction, and other industries. Performance of these loans is subject to operating and cash flow results of the borrower, with risk in the volatility of operating results for particular industries.

Consumer – Loans to consumers include 1-4 family residential loans, auto loans, and other loans for recreational vehicles or other purposes. The Company utilizes a computer-based credit scoring analysis to supplement its policies and procedures in underwriting consumer loans. The Company’s loan policy addresses types of consumer loans that may be originated and the collateral, if secured, which must be perfected. The relatively smaller individual dollar amounts of consumer loans that are spread over numerous individual borrowers also minimizes the Company’s risk. The Company generally requires mortgage title insurance and hazard insurance on 1-4 family residential loans. All consumer loans are generally dependent on the risk characteristics of the borrower’s ability to repay the loan, a consideration of the debt to income ratio, employment and income stability, the loan-to-value ratio, and the age, condition and marketability of the collateral.

Construction – Loans for residential construction are for single-family properties to developers, builders, or end-users. These loans are underwritten based on estimates of costs and completed value of the project. Funds are advanced based on estimated percentage of completion for the project. Performance of these loans is affected by economic conditions as well as the ability to control costs of the projects.

The commercial real estate and construction categories comprise the Company’s nonowner-occupied real estate loans. Total nonowner-occupied real estate loans were $1.13 billion at September 30, 2025, and $1.22 billion at December 31, 2024.

The ACL for loans was $44.1 million at September 30, 2025, compared to $43.2 million at December 31, 2024. The ratio of ACL for loans to loans held for investment was 1.45% at September 30, 2025 and 1.42% at December 31, 2024.
The following tables detail the activity in the ACL for loans for the periods indicated (dollars in thousands). Allocation of a portion of the ACL to one category of loans does not preclude its availability to absorb losses in other categories.

   
Beginning
Balance
    
Provision for
Credit Losses
    
Charge-offs
    
Recoveries
    
Ending
Balance
  
For the three months ended September 30, 2025
                              
Commercial real estate
  
$
15,706
    
$
(228
)
  
$
(541
)
  
$
—
    
$
14,937
  
Commercial - specialized
    
4,881
      
(81
)
    
—
      
9
      
4,809
  
Commercial - general
    
7,228
      
87
      
(172
)
    
105
      
7,248
  
Consumer:
                                        
1-4 family residential
    
11,150
      
234
      
(307
)
    
3
      
11,080
  
Auto loans
    
2,995
      
132
      
(202
)
    
41
      
2,966
  
Other consumer
    
1,102
      
303
      
(261
)
    
40
      
1,184
  
Construction
    
1,948
      
(47
)
    
—
      
—
      
1,901
  
   
$
45,010
    
$
400
    
$
(1,483
)
  
$
198
    
$
44,125
  
                                         
For the three months ended September 30, 2024
                                        
Commercial real estate
  
$
15,593
    
$
290
    
$
—
    
$
41
    
$
15,924
  
Commercial - specialized
    
4,736
      
149
      
—
      
22
      
4,907
  
Commercial - general
    
6,841
      
(373
)
    
(78
)
    
10
      
6,400
  
Consumer:
                                        
1-4 family residential
    
9,702
      
(143
)
    
(3
)
    
2
      
9,558
  
Auto loans
    
3,287
      
30
      
(296
)
    
39
      
3,060
  
Other consumer
    
974
      
294
      
(364
)
    
55
      
959
  
Construction
    
2,040
      
353
      
(315
)
    
—
      
2,078
  
   
$
43,173
    
$
600
    
$
(1,056
)
  
$
169
    
$
42,886
  
For the nine months ended September 30, 2025
                                        
Commercial real estate
  
$
15,973
    
$
(495
)
  
$
(541
)
  
$
—
    
$
14,937
  
Commercial - specialized
    
4,640
      
79
      
—
      
90
      
4,809
  
Commercial - general
    
6,874
      
526
      
(530
)
    
378
      
7,248
  
Consumer:
                                        
1-4 family residential
    
9,677
      
1,659
      
(307
)
    
51
      
11,080
  
Auto loans
    
3,015
      
716
      
(897
)
    
132
      
2,966
  
Other consumer
    
1,115
      
712
      
(832
)
    
189
      
1,184
  
Construction
    
1,943
      
(47
)
    
—
      
5
      
1,901
  
   
$
43,237
    
$
3,150
    
$
(3,107
)
  
$
845
    
$
44,125
  
                                         
For the nine months ended September 30, 2024
                                        
Commercial real estate
  
$
15,808
    
$
160
    
$
(86
)
  
$
42
    
$
15,924
  
Commercial - specialized
    
4,020
      
821
      
—
      
66
      
4,907
  
Commercial - general
    
6,391
      
747
      
(798
)
    
60
      
6,400
  
Consumer:
                                        
1-4 family residential
    
9,177
      
551
      
(175
)
    
5
      
9,558
  
Auto loans
    
3,601
      
129
      
(786
)
    
116
      
3,060
  
Other consumer
    
968
      
730
      
(895
)
    
156
      
959
  
Construction
    
2,391
      
2
      
(315
)
    
—
      
2,078
  
   
$
42,356
    
$
3,140
    
$
(3,055
)
  
$
445
    
$
42,886
  

During the three and nine months ended September 30, 2025 the Company recorded a provision for credit loss of $500 thousand and $3.4 million, respectively, which was comprised of a provision for credit losses on loans of $400 thousand and $3.2 million, respectively, and a provision for off-balance sheet credit exposures of $100 thousand and $270 thousand, respectively. During the three and nine months September 30, 2024, the Company recorded a provision for credit loss of $495 thousand and $3.1 million, respectively, which was comprised of a provision for credit losses on loans of $600 thousand and $3.1 million, respectively, and a provision for off-balance sheet credit exposures of $(105) and $(40) thousand, respectively.

The following tables show the Company’s amortized cost and related ACL for individually evaluated collateral dependent loans by class using the fair value of collateral loss estimation methodology of evaluating expected credit losses at the dates indicated (dollars in thousands).

   
Equipment
    
Real Estate
    
Other
    
Total Loans Individually Evaluated
    
Total ACL
for
Individually
Evaluated
Loans
  
September 30, 2025
                              
Commercial real estate
  
$
—
    
$
3,179
    
$
—
    
$
3,179
    
$
—
  
Commercial - specialized
    
—
      
—
      
—
      
—
      
—
  
Commercial - general
    
1,059
      
2,896
      
—
      
3,955
      
147
  
Consumer:
                                        
1-4 family residential
    
—
      
102
      
—
      
102
      
—
  
Auto loans
    
—
      
—
      
—
      
—
      
—
  
Other consumer
    
—
      
—
      
—
      
—
      
—
  
Construction
    
—
      
141
      
—
      
141
      
—
  
   
$
1,059
    
$
6,318
    
$
—
    
$
7,377
    
$
147
  
December 31, 2024
                                        
Commercial real estate
  
$
—
    
$
19,543
    
$
—
    
$
19,543
    
$
552
  
Commercial - specialized
    
—
      
—
      
—
      
—
      
—
  
Commercial - general
    
—
      
—
      
—
      
—
      
—
  
Consumer:
                                        
1-4 family residential
    
—
      
—
      
—
      
—
      
—
  
Auto loans
    
—
      
—
      
—
      
—
      
—
  
Other consumer
    
—
      
—
      
—
      
—
      
—
  
Construction
    
—
      
1,575
      
—
      
1,575
      
—
  
   
$
—
    
$
21,118
    
$
—
    
$
21,118
    
$
552
  
The tables below provide an age analysis on accruing past-due loans and nonaccrual loans at the dates indicated (dollars in thousands):


  
30-89 Days
Past Due
    
90 Days or
More Past
Due
    
Nonaccrual
    
Nonaccrual
with no
ACL
  
September 30, 2025
                        
Commercial real estate
  
$
226
    
$
46
    
$
3,179
    
$
3,179
  
Commercial - specialized
    
—
      
—
      
167
      
—
  
Commercial - general
    
780
      
28
      
4,109
      
—
  
Consumer:
                                
1-4 Family residential
    
2,429
      
882
      
883
      
102
  
Auto loans
    
408
      
163
      
—
      
—
  
Other consumer
    
622
      
94
      
17
      
—
  
Construction
    
529
      
—
      
141
      
141
  

 
$
4,994
    
$
1,213
    
$
8,496
    
$
3,422
  
December 31, 2024
                                
Commercial real estate
  
$
594
    
$
96
    
$
19,543
    
$
—
  
Commercial - specialized
    
1,770
      
240
      
105
      
—
  
Commercial - general
    
1,374
      
244
      
180
      
—
  
Consumer:
                                
1-4 Family residential
    
1,966
      
1,042
      
676
      
—
  
Auto loans
    
1,004
      
114
      
—
      
—
  
Other consumer
    
1,125
      
185
      
23
      
—
  
Construction
    
95
      
—
      
1,575
      
1,575
  

 
$
7,928
    
$
1,921
    
$
22,102
    
$
1,575
  

Credit Quality Indicators
The Company grades its loans on a thirteen-point grading scale. These grades fit in one of the following categories: (i) pass, (ii) special mention, (iii) substandard, (iv) doubtful, or (v) loss. Loans categorized as loss are charged-off immediately. The grading of loans reflects a judgment by the Company about the risks of default associated with the loan. The Company reviews the grades on loans as part of the Company’s on-going monitoring of the credit quality of the loan portfolio. These risk ratings are assigned based on relevant information about the ability of the borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors.

Pass loans have financial factors or nature of collateral that are considered reasonable credit risks in the normal course of lending and encompass several grades that are assigned based on varying levels of risk, ranging from credits that are secured by cash or marketable securities, to watch credits which have all the characteristics of an acceptable credit risk but warrant more than the normal level of monitoring.

Special mention loans have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of repayment prospects for the loans at some future date.

Substandard loans are inadequately protected by the current net worth and paying capacity of the borrower or by the collateral pledged, if any. These loans have a well-defined weakness or weaknesses that jeopardize collection and present the distinct possibility that some loss will be sustained if the deficiencies are not corrected. A protracted workout on these credits is a distinct possibility. Prompt corrective action is therefore required to strengthen the Company’s position, and/or to reduce exposure and to assure that adequate remedial measures are taken by the borrower. Credit exposure becomes more likely in such credits and a serious evaluation of the secondary support to the credit is performed. Substandard loans can be accruing or can be nonaccrual depending on the circumstances of the individual loans.

Doubtful loans have all the weaknesses inherent in substandard loans with the added characteristics that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable. All doubtful loans are on nonaccrual.
In connection with the review of the Company’s loan portfolio, management considers risk elements attributable to particular loan type or categories in assessing the quality of individual loans. The list of loans to be analyzed for individual evaluation consists of non-accrual loans over $250 thousand. Interest income recognized using a cash-basis method on non-accrual loans for the three and nine months ended September 30, 2025 and 2024 was not significant. In addition, the Company closely monitors substandard accruing loans over $1 million, and past due accruing loans over $100 thousand for possible individual evaluation. All other loans will be evaluated collectively in designated pools unless a loss exposure has been identified. Additional funds committed to be advanced on individually analyzed loans are not significant.

The following tables reflect the amortized cost basis in loans held for investment by credit quality indicator and origination year at the dates indicated, and related year-to-date gross charge-offs. Loans acquired are shown in the table by origination year. The Company had an immaterial amount of revolving loans converted to term loans at September 30, 2025 and December 31, 2024.

     
Term Loans
  
     
Amortized Cost Basis by Origination Year
September 30, 2025
  
(Dollars in thousands)
    
2025
    
2024
    
2023
    
2022
    
2021
    
Prior
    
Revolving Loans
    
Total
  
                                                   
Commercial real estate
                                                  
Pass
    
$
137,102
    
$
148,914
    
$
204,634
    
$
249,340
    
$
103,723
    
$
151,600
    
$
7,943
    
$
1,003,256
  
Special mention
      
—
      
2,840
      
6,730
      
—
      
173
      
1,104
      
—
      
10,847
  
Substandard
      
363
      
62
      
5,268
      
4,543
      
5,539
      
6,048
      
—
      
21,823
  
Total commercial real estate loans
    
$
137,465
    
$
151,816
    
$
216,632
    
$
253,883
    
$
109,435
    
$
158,752
    
$
7,943
    
$
1,035,926
  
Year-to-date gross charge-offs
    
$
—
    
$
—
    
$
541
    
$
—
    
$
—
    
$
—
    
$
—
    
$
541
  
                                                                   
Commercial - specialized
                                                                  
Pass
    
$
89,081
    
$
38,820
    
$
41,657
    
$
25,520
    
$
33,548
    
$
30,738
    
$
92,206
    
$
351,570
  
Special mention
      
6,377
      
8,968
      
845
      
1,042
      
1,747
      
915
      
3,606
      
23,500
  
Substandard
      
—
      
55
      
536
      
831
      
1,223
      
68
      
—
      
2,713
  
Total commercial - specialized loans
    
$
95,458
    
$
47,843
    
$
43,038
    
$
27,393
    
$
36,518
    
$
31,721
    
$
95,812
    
$
377,783
  
Year-to-date gross charge-offs
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
     $
—
  
                                                                    
Commercial - general
                                                                  
Pass
    
$
131,853
    
$
102,390
    
$
52,346
    
$
94,831
    
$
46,455
    
$
87,500
    
$
87,849
    
$
603,224
  
Special mention
      
—
      
2,170
      
10,675
      
—
      
1,022
      
480
      
1,365
      
15,712
  
Substandard
      
—
      
509
      
2,335
      
1,306
      
4,900
      
1,145
      
125
      
10,320
  
Total commercial - general loans
    
$
131,853
    
$
105,069
    
$
65,356
    
$
96,137
    
$
52,377
    
$
89,125
    
$
89,339
    
$
629,256
  
Year-to-date gross charge-offs
    
$
—
    
$
13
    
$
164
    
$
81
    
$
42
    
$
180
    
$
50
    
$
530
  

                                                                 
Consumer 1-4 family residential
                                                                  
Pass
    
$
86,941
    
$
71,022
    
$
92,336
    
$
141,828
    
$
79,469
    
$
100,836
    
$
4,766
    
$
577,198
  
Special mention
      
—
      
—
      
488
      
—
      
5,087
      
—
      
—
      
5,575
  
Substandard
      
—
      
2,960
      
1,385
      
1,072
      
641
      
3,747
      
—
      
9,805
  
Total consumer 1-4 family residential loans
    
$
86,941
    
$
73,982
    
$
94,209
    
$
142,900
    
$
85,197
    
$
104,583
    
$
4,766
    
$
592,578
  
Year-to-date gross charge-offs
    
$
—
    
$
—
    
$
31
    
$
—
    
$
215
    
$
61
    
$
—
    
$
307
  
                                                                    
Consumer auto loans
                                                                  
Pass
    
$
88,719
    
$
53,983
    
$
48,530
    
$
47,558
    
$
13,942
    
$
3,196
    
$
—
    
$
255,928
  
Special mention
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
      
—
      
33
      
30
      
197
      
74
      
19
      
—
      
353
  
Total consumer auto loans
    
$
88,719
    
$
54,016
    
$
48,560
    
$
47,755
    
$
14,016
    
$
3,215
    
$
—
    
$
256,281
  
Year-to-date gross charge-offs
    
$
—
    
$
162
    
$
288
    
$
283
    
$
135
    
$
29
    
$
—
     $
897
  
                                                                    
Consumer other consumer
                                                                  
Pass
    
$
23,433
    
$
14,783
    
$
8,022
    
$
8,669
    
$
2,645
    
$
4,593
    
$
1,487
    
$
63,632
  
Special mention
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
      
17
      
14
      
—
      
15
      
13
      
36
      
—
      
95
  
Total consumer other consumer loans
    
$
23,450
    
$
14,797
    
$
8,022
    
$
8,684
    
$
2,658
    
$
4,629
    
$
1,487
    
$
63,727
  
Year-to-date gross charge-offs (1)
    
$
345
    
$
177
    
$
31
    
$
97
    
$
40
    
$
141
    
$
1
     $
832
  
                                                                   
Construction
                                                                  
Pass
    
$
53,617
    
$
36,677
    
$
5,822
    
$
570
    
$
596
    
$
—
    
$
—
    
$
97,282
  
Special mention
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
      
—
      
—
      
670
      
—
      
—
      
—
      
—
      
670
  
Total construction loans
    
$
53,617
    
$
36,677
    
$
6,492
    
$
570
    
$
596
    
$
—
    
$
—
    
$
97,952
  
Year-to-date gross charge-offs
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
     $
—
  
 
(1) Includes $345 thousand in charged-off demand deposit overdrafts reported as 2025 originations.

               
Term Loans
Amortized Cost Basis by Origination Year
December 31, 2024
              
(Dollars in thousands)
  
2024
    
2023
    
2022
    
2021
    
2020
    
Prior

Revolving Loans

Total
  
 
                                                 
Commercial real estate
                                                
Pass
  
$
164,205
    
$
233,047
    
$
300,828
    
$
126,548
    
$
43,628
    
$
175,319
    
$
6,417
    
$
1,049,992
  
Special mention
    
—
      
—
      
—
      
32,243
      
441
      
5,464
      
483
      
38,631
  
Substandard
    
—
      
—
      
147
      
25,164
      
3,125
      
2,004
      
—
      
30,440
  
Total commercial real estate loans
  
$
164,205
    
$
233,047
    
$
300,975
    
$
183,955
    
$
47,194
    
$
182,787
    
$
6,900
    
$
1,119,063
  
Year-to-date gross charge-offs
  
$
—
    
$
—
    
$
65
    
$
—
    
$
—
    
$
22
    
$
—
    
$
87
  
                                                                 
Commercial - specialized
                                                                
Pass
  
$
103,288
    
$
60,881
    
$
37,940
    
$
41,721
    
$
15,678
    
$
28,488
    
$
98,092
    
$
386,088
  
Special mention
    
214
      
—
      
1,600
      
—
      
—
      
—
      
—
      
1,814
  
Substandard
    
510
      
—
      
85
      
84
      
297
      
77
      
—
      
1,053
  
Total commercial - specialized loans
  
$
104,012
    
$
60,881
    
$
39,625
    
$
41,805
    
$
15,975
    
$
28,565
    
$
98,092
    
$
388,955
  
Year-to-date gross charge-offs
  
$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—
                                                                 
Commercial - general
                                                                
Pass
  
$
107,947
    
$
72,500
    
$
109,808
    
$
65,564
    
$
29,808
    
$
82,909
    
$
78,321
    
$
546,857
  
Special mention
    
—
      
—
      
960
      
554
      
—
      
499
      
200
      
2,213
  
Substandard
    
98
      
463
      
2,405
      
4,427
      
19
      
805
      
84
      
8,301
  
Total commercial - general loans
  
$
108,045
    
$
72,963
    
$
113,173
    
$
70,545
    
$
29,827
    
$
84,213
    
$
78,605
    
$
557,371
  
Year-to-date gross charge-offs
  
$
—
    
$
199
    
$
466
    
$
17
    
$
—
    
$
134
    
$
266
    
$
1,082
  
                                                                 
Consumer 1-4 family residential































Pass
  
$
87,266
    
$
101,022
    
$
150,358
    
$
91,929
    
$
49,057
    
$
73,730
    
$
5,800
    
$
559,162
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
—
      
810
      
284
      
1,057
      
225
      
4,812
      
50
      
7,238
  
Total consumer 1-4 family residential loans
  
$
87,266
    
$
101,832
    
$
150,642
    
$
92,986
    
$
49,282
    
$
78,542
    
$
5,850
    
$
566,400
  
Year-to-date gross charge-offs
  
$
—
    
$
—
    
$
121
    
$
51
    
$
—
    
$
3
    
$
—
    
$
175
  
                                                                 
Consumer auto loans
                                                                
Pass
  
$
70,621
    
$
72,009
    
$
76,412
    
$
25,869
    
$
7,293
    
$
1,931
    
$
—
    
$
254,135
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
21
      
28
      
82
      
179
      
4
      
25
      
—
      
339
  
Total consumer auto loans
  
$
70,642
    
$
72,037
    
$
76,494
    
$
26,048
    
$
7,297
    
$
1,956
    
$
—
    
$
254,474
  
Year-to-date gross charge-offs
   
$
23
      
$
386
      
$
519
      
$
198
      
$
25
      
$
35
      
$
—
      
$
1,186
   
                                                                 
Consumer other consumer
                                                                
Pass
  
$
23,665
    
$
12,969
    
$
14,790
    
$
5,477
    
$
1,232
    
$
5,382
    
$
1,324
    
$
64,839
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
—
      
—
      
8
      
47
      
—
      
42
      
—
      
97
  
Total consumer other consumer
loans
  
$
23,665
    
$
12,969
    
$
14,798
    
$
5,524
    
$
1,232
    
$
5,424
    
$
1,324
    
$
64,936
  
Year-to-date gross charge-offs (1)
$
469

$
308

$
245

$
43

$
29

$
145

$
18

$
1,257
  

Construction
                                                
Pass
  
$
65,920
    
$
30,572
    
$
2,172
    
$
2,630
    
$
—
    
$
—
    
$
891
    
$
102,185
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
—
      
1,190
      
480
      
—
      
—
      
—
      
—
      
1,670
  
Total construction loans
  
$
65,920
    
$
31,762
    
$
2,652
    
$
2,630
    
$
—
    
$
—
    
$
891
    
$
103,855
  
Year-to-date gross charge-offs
$ —

$ 315

$ —

$ —

$ —

$ —

$ —

$ 315

(1) Includes $457 thousand in charged-off demand deposit overdrafts reported as 2024 originations.
Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extensions, an other than insignificant payment delay, or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. Typically, one type of concession, such as term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. In some cases, the Company provides multiple types of concessions on one loan.

The following tables present the amortized cost basis of loans at September 30, 2025 and 2024 that were both experiencing financial difficulty and modified during the periods indicated, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below (dollars in thousands):

   
Payment Delay
    
Term Extension
    
Rate Reduction
    
Term Extension
and Payment Delay
    
Term Extension
and Interest
Rate Reduction
    
Payment Delay and Interest
Rate Reduction
    
Payment Delay, Term Extension, and Interest Rate Reduction
    
% of Total Class of Financing Receivable
  
Three Months Ended September 30, 2025
                                                
Commercial real estate
  
$
—
    
$
124
    
$
—
    
$
604
    
$
—
    
$
—
    
$
—
      
0.07
%
Commercial - specialized
    
—
      
—
      
—
      
101
      
—
      
—
      
—
      
0.03
%
Commercial - general
    
—
      
139
      
—
      
3,955
      
—
      
—
      
—
      
0.65
%
Consumer:
                                                                
1-4 family
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
0.00
%
Auto loans
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
0.00
%
Other consumer
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
0.00
%
Construction
    
—
      
530
      
—
      
—
      
—
      
—
      
—
      
0.54
%
   
$
—
    
$
793
    
$
—
    
$
4,660
    
$
—
    
$
—
    
$
—
      
0.18
%
Three Months Ended September 30, 2024
                                                                
Commercial real estate
  
$
74
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
      
0.01
%
Commercial - specialized
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
0.00
%
Commercial - general
    
—
      
—
      
—
      
11
      
—
      
—
      
—
      
0.00
%
Consumer:
                                                                
1-4 family
    
263
      
—
      
—
      
—
      
—
      
—
      
—
      
0.05
%
Auto loans
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
0.00
%
Other consumer
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
0.00
%
Construction
    
—
      
—
      
820
      
1,538
      
—
      
—
      
—
      
2.30
%
   
$
337
    
$
—
    
$
820
    
$
1,549
    
$
—
    
$
—
    
$
—
      
0.09
%
Nine Months Ended September 30, 2025
                                                                
Commercial real estate
  
$
—
    
$
124
    
$
—
    
$
604
    
$
—
    
$
—
    
$
—
      
0.07
%
Commercial - specialized
    
—
      
—
      
—
      
101
      
—
      
—
      
—
      
0.03
%
Commercial - general
    
—
      
391
      
—
      
3,998
      
—
      
—
      
8
      
0.70
%
Consumer:
                                                                
1-4 family
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
0.00
%
Auto loans
    
44
      
—
      
—
      
—
      
—
      
—
      
3
      
0.02
%
Other consumer
    
—
      
—
      
—
      
15
      
—
      
—
      
—
      
0.02
%
Construction
    
—
      
530
      
—
      
—
      
—
      
—
      
—
      
0.54
%
   
$
44
    
$
1,045
    
$
—
    
$
4,718
    
$
—
    
$
—
    
$
11
      
0.19
%
Nine Months Ended September 30, 2024
                                                                
Commercial real estate
  
$
74
    
$
67
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
      
0.01
%
Commercial - specialized
    
15
      
—
      
—
      
—
      
—
      
—
      
—
      
0.00
%
Commercial - general
    
—
      
441
      
—
      
11
      
35
      
—
      
—
      
0.09
%
Consumer:
                                                                
1-4 family
    
263
      
—
      
—
      
—
      
—
      
—
      
—
      
0.05
%
Auto loans
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
0.00
%
Other consumer
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
0.00
%
Construction
    
—
      
—
      
820
      
1,538
      
—
      
—
      
—
      
2.30
%

 
$
352
    
$
508
    
$
820
    
$
1,549
    
$
35
    
$
—
    
$
—
      
0.11
%
The following table presents the financial effects of the loan modifications presented above to borrowers experiencing financial difficulty during the periods indicated below (dollars in thousands):

   
Weighted-Average Interest Rate Reduction
    
Weighted-
Average Term
Extension
(Months)
  
Three Months Ended September 30, 2025
            
Commercial real estate
    
0.00
%
    
9
  
Commercial - specialized
    
0.00
%
    
11
  
Commercial - general
    
0.00
%
    
5
  
Consumer:
                
1-4 Family residential
    
0.00
%
    
—
  
Auto loans
    
0.00
%
    
—
  
Other consumer
    
0.00
%
    
—
  
Construction
    
0.00
%
    
3
  
                 
Three Months Ended September 30, 2024
                
Commercial real estate
    
0.00
%
    
—
  
Commercial - specialized
    
0.00
%
    
—
  
Commercial - general
    
0.00
%
    
3
  
Consumer:
                
1-4 Family residential
    
0.00
%
    
—
  
Auto loans
    
0.00
%
    
—
  
Other consumer
    
0.00
%
    
—
  
Construction
    
4.25
%
    
6
  
                 
Nine Months Ended September 30, 2025
                
Commercial real estate
    
0.00
%
    
9
  
Commercial - specialized
    
0.00
%
    
11
  
Commercial - general
    
1.00
%
    
7
  
Consumer:
                
1-4 Family residential
    
0.00
%
    
—
  
Auto loans
    
1.20
%
    
50
  
Other consumer
    
0.00
%
    
5
  
Construction
    
0.00
%
    
3
  
                 
Nine Months Ended September 30, 2024
                
Commercial real estate
    
0.00
%
    
12
  
Commercial - specialized
    
0.00
%
    
—
  
Commercial - general
    
1.75
%
    
15
  
Consumer:
                
1-4 Family residential
    
0.00
%
    
—
  
Auto loans
    
0.00
%
    
—
  
Other consumer
    
0.00
%
    
—
  
Construction
    
4.25
%
    
6
  
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 presents the performance of such loans that have been modified in the last twelve months at the dates indicated (dollars in thousands):

   
Current
    
30-89 Days
Past Due
    
90 Days or
More Past
Due
    
Nonaccrual
  
September 30, 2025
                        
Commercial real estate
  
$
727
    
$
—
    
$
—
    
$
—
  
Commercial - specialized
    
—
      
—
      
—
      
101
  
Commercial - general
    
243
      
156
      
—
      
4,045
  
Consumer:
                                
1-4 Family residential
    
185
      
237
      
84
      
—
  
Auto loans
    
47
      
—
      
—
      
—
  
Other consumer
    
15
      
—
      
—
      
—
  
Construction
    
—
      
529
      
—
      
—
  
   
$
1,217
    
$
922
    
$
84
    
$
4,146
  

September 30, 2024
                        
Commercial real estate
  
$
2,220
    
$
—
    
$
—
    
$
—
  
Commercial - specialized
    
—
      
—
      
—
      
14
  
Commercial - general
    
969
      
—
      
—
      
80
  
Consumer:
                                
1-4 Family residential
    
762
      
—
      
21
      
—
  
Auto loans
    
49
      
—
      
—
      
—
  
Other consumer
    
—
      
—
      
—
      
—
  
Construction
    
1,240
      
96
      
—
      
1,442
  
   
$
5,240
    
$
96
    
$
21
    
$
1,536
  

During the three months ended September 30, 2025, the Company had no loans made to borrowers experiencing financial difficulty that were modified during the last twelve months that subsequently defaulted. During the nine months ended September 30, 2025, the Company had $97 thousand in loans made to borrowers experiencing financial difficulty that were modified during the last twelve months that subsequently defaulted. Payment default is defined as movement to nonperforming status, foreclosure, or charge-off.

During the three and nine months ended September 30, 2024, the Company had $32 thousand in loans made to borrowers experiencing financial difficulty that were modified during the last twelve months that subsequently defaulted.