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LOANS AND THE ALLOWANCE FOR CREDIT LOSSES
 12 Months Ended
Dec. 31, 2025
Receivables [Abstract]  
LOANS AND THE ALLOWANCE FOR CREDIT LOSSES LOANS AND THE ALLOWANCE FOR CREDIT LOSSES
The following table presents a summary of the Company’s loans at amortized cost as of the dates noted:
December 31,
(dollars in thousands)20252024
Cash, securities, and other$164,726 $119,834 
Consumer and other19,596 17,482 
Construction and development189,081 314,481 
1-4 family residential1,033,665 962,901 
Non-owner occupied CRE809,875 611,239 
Owner occupied CRE204,078 172,019 
Commercial and industrial225,281 220,326 
Total(1)
2,646,302 2,418,282 
Portfolio layer method basis adjustment for hedged portfolio939 — 
Allowance for credit losses(21,441)(18,330)
Total, net2,625,800 2,399,952 
Loans accounted for under the fair value option(2)
3,182 7,283 
Loans, net$2,628,982 $2,407,235 
_____________________________
(1)Total loans include net unamortized loan origination fees of $0.4 million and $0.3 million as of December 31, 2025 and 2024, respectively, and net unamortized discounts on loan purchased or acquired of $2.9 million and $3.5 million as of December 31, 2025 and 2024, respectively.
(2)Includes $3.2 million and $7.5 million of unpaid principal balance of loans held for investment measured at fair value as of December 31, 2025 and 2024, respectively. Includes fair value adjustments on loans held for investment accounted for under the fair value option. See Note 16 – Fair Value.
As of December 31, 2025 and 2024, total loans held for investment included $121.3 million and $164.3 million, respectively, of performing loans purchased through mergers or acquisitions.
As of December 31, 2025, the Company did not hold any Main Street Lending Program (MSLP) loans. As of December 31, 2024, the Company’s Commercial and Industrial loans included one MSLP loans with the net carrying amount of $1.7 million, or 0.8% of the total category.
The following presents, by class, an aging analysis of the amortized cost basis in loans past due as of the date noted (dollars in thousands):
December 31, 202530-59
Days
Past Due		60-89
Days
Past Due		90 or
More Days
Past Due		Total
Loans
Past Due		CurrentTotal Amortized Cost
Loans Accounted for Under the Fair Value Option(1)
Total Loans
Cash, securities, and other$— $— $1,704 $1,704 $163,022 $164,726 $— $164,726 
Consumer and other— — — — 19,596 19,596 3,182 22,778 
Construction and development— — — — 189,081 189,081 — 189,081 
1-4 family residential417 — — 417 1,033,248 1,033,665 — 1,033,665 
Non-owner occupied CRE— — — — 809,875 809,875 — 809,875 
Owner occupied CRE— — — — 204,078 204,078 — 204,078 
Commercial and industrial2,267 — 14,683 16,950 208,331 225,281 — 225,281 
Total$2,684 $— $16,387 $19,071 $2,627,231 $2,646,302 $3,182 $2,649,484 
December 31, 202430-59
Days
Past Due		60-89
Days
Past Due		90 or
More Days
Past Due		Total
Loans
Past Due		CurrentTotal Amortized Cost
Loans Accounted for Under the Fair Value Option(1)
Total Loans
Cash, securities, and other$— $— $1,704 $1,704 $118,130 $119,834 $— $119,834 
Consumer and other— — — — 17,482 17,482 7,283 24,765 
Construction and development— — — — 314,481 314,481 — 314,481 
1-4 family residential3,971 — — 3,971 958,930 962,901 — 962,901 
Non-owner occupied CRE— — — — 611,239 611,239 — 611,239 
Owner occupied CRE350 — — 350 171,669 172,019 — 172,019 
Commercial and industrial4,999 — 10,870 15,869 204,457 220,326 — 220,326 
Total$9,320 $— $12,574 $21,894 $2,396,388 $2,418,282 $7,283 $2,425,565 
_____________________________
(1)Refer to Note 16 – Fair Value for additional information on the measurement of loans accounted for under the fair value option.
Loan Modifications
GAAP requires that certain types of loan modifications to borrowers experiencing financial difficulty be reported and include the following; (i) principal forgiveness, (ii) interest rate reduction, (iii) other than insignificant payment delay, (iv) term extension, or (v) any combination of the foregoing.
There were no loan modifications made to borrowers experiencing financial difficulty during the year ended December 31, 2025. During the year ended December 31, 2024, there was one loan modification made to a borrower experiencing financial difficulty.
The following presents the amortized cost basis as of December 31, 2024 of loans modified to borrowers experiencing financial difficulty disaggregated by class of financing receivable and type of concession granted during the year ended December 31, 2024:
(dollars in thousands)Principal forgivenessInterest rate reductionTerm extensionCombination: term extension and principal forgivenessCombination: term extension and interest rate reductionTotal class of financing receivable
Commercial and industrial$— $— $967 $— $— 0.4 %
Total$— $— $967 $— $— 
The following present the financial effect by type of modification made to borrowers experiencing financial difficulty during the period noted:
Year Ended December 31,
2024
(dollars in thousands)Principal forgivenessWeighted average interest rate reductionWeighted average term extension
Commercial and industrial$— — 5 months
There were no loans that experienced a default during the years ended December 31, 2025 and 2024, subsequent to being granted a modification in the preceding twelve months.
Non-Accrual Loans
The accrual of interest on loans is discontinued at the time the loan becomes 90 days or more delinquent unless the loan is well secured and in the process of collection or renewal due to maturity. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on non-accrual status or charged off if collection of interest or principal is considered doubtful. The following presents the amortized cost basis of loans on non-accrual status and loans past due over 89 days still accruing by class as of the date noted:
December 31, 2025
(dollars in thousands)Non-accrual loans with no ACL
Total non-accrual loans(1)
Loans past due over 89 days still accruing
Cash, securities, and other$1,704 $1,704 $— 
Commercial and industrial790 14,855 — 
Total$2,494 $16,559 $— 
_____________________________
(1)As of December 31, 2025, the Company had an allowance of $3.3 million on non-accrual loans.
December 31, 2024
(dollars in thousands)Non-accrual loans with no ACL
Total non-accrual loans(1)
Loans past due over 89 days still accruing
Cash, securities, and other$1,704 $1,704 $— 
Commercial and industrial10,870 11,048 — 
Total$12,574 $12,752 $— 
____________________________
(1)As of December 31, 2024, the Company had an allowance of $0.1 million for non-accrual loans.

The Company recognized no interest income on non-accrual loans during the years ended December 31, 2025 and 2024. The Company reversed $0.1 million and $0.7 million of interest income on non-accrual loans during the years ended December 31, 2025 and 2024, respectively.
Collateral Dependent Loans
A loan is considered collateral dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. The following presents the amortized cost basis of collateral-dependent loans, which are individually evaluated to determine expected credit losses, by class of loans as of the date noted:
As of December 31, 2025
Collateral Dependent Loans
(dollars in thousands)Secured by Cash and SecuritiesSecured by OtherTotal
Cash, securities, and other$1,704 $— $1,704 
Commercial and industrial— 14,855 14,855 
Total$1,704 $14,855 $16,559 
As of December 31, 2024
Collateral Dependent Loans
(dollars in thousands)Secured by Cash and SecuritiesSecured by OtherTotal
Cash, securities, and other$1,704 $— $1,704 
Commercial and industrial— 12,015 12,015 
Total$1,704 $12,015 $13,719 
Other Real Estate Owned
Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. They are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals which are updated no less frequently than on an annual basis. Appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers for differences between comparable sales and income data available. During the year ended December 31, 2024, the Company recorded $37.0 million of OREO as a result of obtaining physical possession of foreclosed properties as partial consideration for amounts owed on non-accrual loans related to a single loan relationship. During the years ended December 31, 2025 and 2024, the Company recorded OREO provisions of $1.3 million and $1.1 million, respectively. During the year ended December 31, 2025, the Company sold two OREO properties resulting in a net gain on sale of $0.5 million. As of December 31, 2025 and 2024, OREO properties had carrying amounts of $3.0 million and $35.9 million, respectively. As of December 31, 2025 and 2024, there were no loans secured by real estate in the process of foreclosure.
Allowance for Credit Losses on Loans
The ACL for loans is measured on the loan’s amortized cost basis, excluding interest receivable. Interest receivable excluded at December 31, 2025 and 2024 was $10.4 million and $9.8 million, respectively, presented in Accrued interest receivable on the Consolidated Balance Sheets. Refer to Note 1 – Organization and Summary of Significant Accounting Policies for additional information related to the Company’s methodology on estimated credit losses.
The ACL represents management’s best estimate of current expected credit losses (CECL) for loans considering available information, from internal and external sources, relevant to assessing collectability over the loans’ contractual terms, adjusted for expected prepayments when appropriate. Our quantitative discounted cash flow models use economic forecasts including; housing price index (HPI), gross domestic product (GDP), and national unemployment.
Allocation of a portion of the ACL to one category of loans does not preclude its availability to absorb losses in other categories. The following presents the activity in the ACL by portfolio segment during the periods presented:
(dollars in thousands)Cash, securities, and otherConsumer and otherConstruction and development1-4 family residentialNon-owner occupied CREOwner occupied CRECommercial and industrialTotal
Changes in allowance for credit losses for the year ended December 31, 2025
Beginning balance$410 $185 $5,184 $5,200 $4,340 $654 $2,357 $18,330 
Provision for (release of) credit losses740 (52)(2,974)631 19 303 6,326 4,993 
Charge-offs— — — — — (111)(2,031)(2,142)
Recoveries— 5 — 15 — — 240 260 
Ending balance$1,150 $138 $2,210 $5,846 $4,359 $846 $6,892 $21,441 
(dollars in thousands)Cash, securities, and otherConsumer and otherConstruction and development1-4 family residentialNon-owner occupied CREOwner occupied CRECommercial and industrialTotal
Changes in allowance for credit losses for the year ended December 31, 2024
Beginning balance$961 $124 $7,945 $4,370 $2,325 $1,034 $7,172 $23,931 
(Release of) provision for credit losses(551)82 (2,761)824 2,015 (380)4,210 3,439 
Charge-offs— (50)— — — — (9,352)(9,402)
Recoveries— 29 — 6 — — 327 362 
Ending balance$410 $185 $5,184 $5,200 $4,340 $654 $2,357 $18,330 
Credit Quality Indicators
The Company categorizes loans into risk categories 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. The Company analyzes loans individually by classifying the loans by credit risk on a quarterly basis. The Company uses the following definitions for risk ratings:
Special mention—Loans classified as special mention have a potential weakness or borrowing relationships that require more than the usual amount of management attention. Adverse industry conditions, deteriorating financial conditions, declining trends, management problems, documentation deficiencies or other similar weaknesses may be evident. Ability to meet current payment schedules may be questionable, even though interest and principal are still being paid as agreed. The asset has potential weaknesses that may result in deteriorating repayment prospects if left uncorrected. Loans in this risk grade are not considered adversely classified.
Substandard—Substandard loans are considered "classified" and are inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardizes the liquidation of the debt. They are characterized by the distinct possibility that the bank will sustain some loss if the deficiencies are not corrected. Loans in this category may be placed on non-accrual status and may individually be analyzed.
Doubtful—Loans graded Doubtful are considered "classified" and have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable. However, the amount of certainty of eventual loss is not known because of specific pending factors.
Loans accounted for under the fair value option are not rated.
The following presents the amortized cost basis of loans by credit quality indicator, by class of financing receivable, and year of origination for term loans as of December 31, 2025 and 2024. For revolving lines of credit that converted to term loans, if the conversion involved a credit decision, such loans are included in the origination year in which the credit decision was made. If revolving lines of credit converted to term loans without a credit decision, such lines of credit are included in the “Revolving lines of credit converted to term” column in the following table (dollars in thousands).
Term Loans Amortized Cost by Origination Year
December 31, 202520252024202320222021PriorRevolving Loans Amortized Cost BasisTotal
Cash, securities, and other
Pass$49,565 $1,347 $1,805 $3,506 $9,260 $13,255 $84,284 $163,022 
Special mention— — — — — — — — 
Substandard— — — — — — 1,704 1,704 
Doubtful— — — — — — — — 
Total cash, securities, and other$49,565 $1,347 $1,805 $3,506 $9,260 $13,255 $85,988 $164,726 
Current year-to-date gross write-offs$— $— $— $— $— $— $— $— 
Consumer and other
Pass$212 $275 $— $765 $302 $512 $17,480 $19,546 
Special mention— — — — — — — — 
Substandard— — — — — — 50 50 
Doubtful— — — — — — — — 
Not rated(1)
— 1 — 2,874 268 39 — 3,182 
Total consumer and other$212 $276 $— $3,639 $570 $551 $17,530 $22,778 
Current year-to-date gross write-offs$— $— $— $— $— $— $— $— 
Construction and development
Pass$38,696 $53,248 $45,026 $23,589 $891 $9,560 $4,970 $175,980 
Special mention— — — 12,124 — — — 12,124 
Substandard— 461 516 — — — — 977 
Doubtful— — — — — — — — 
Total construction and development$38,696 $53,709 $45,542 $35,713 $891 $9,560 $4,970 $189,081 
Current year-to-date gross write-offs$— $— $— $— $— $— $— $— 
Term Loans Amortized Cost by Origination Year
December 31, 202520252024202320222021PriorRevolving Loans Amortized Cost BasisTotal
1-4 family residential
Pass$220,541 $52,322 $61,879 $318,753 $113,011 $152,134 $112,114 $1,030,754 
Special mention— — — 1,370 — 1,421 118 2,909 
Substandard— — — — — — 2 2 
Doubtful— — — — — — — — 
Total 1-4 family residential$220,541 $52,322 $61,879 $320,123 $113,011 $153,555 $112,234 $1,033,665 
Current year-to-date gross write-offs$— $— $— $— $— $— $— $— 
Non-owner occupied CRE
Pass$119,685 $59,473 $50,166 $296,138 $72,242 $112,279 $31,170 $741,153 
Special mention— — — — — — — — 
Substandard— 3,706 22,872 22,716 19,428 — — 68,722 
Doubtful— — — — — — — — 
Total non-owner occupied CRE$119,685 $63,179 $73,038 $318,854 $91,670 $112,279 $31,170 $809,875 
Current year-to-date gross write-offs$— $— $— $— $— $— $— $— 
Owner occupied CRE
Pass$46,082 $4,105 $2,926 $36,535 $39,613 $73,657 $1,160 $204,078 
Special mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Total owner occupied CRE$46,082 $4,105 $2,926 $36,535 $39,613 $73,657 $1,160 $204,078 
Current year-to-date gross write-offs$— $— $— $111 $— $— $— $111 
Commercial and industrial
Pass$45,718 $22,601 $3,948 $22,911 $8,573 $35,145 $58,429 $197,325 
Special mention— — — — — — — — 
Substandard— — 5,025 6,874 1,762 9,857 4,438 27,956 
Doubtful— — — — — — — — 
Total commercial and industrial$45,718 $22,601 $8,973 $29,785 $10,335 $45,002 $62,867 $225,281 
Current year-to-date gross write-offs$— $— $— $1,403 $— $628 $— $2,031 
Total pass$520,499 $193,371 $165,750 $702,197 $243,892 $396,542 $309,607 $2,531,858 
Total special mention— — — 13,494 — 1,421 118 15,033 
Total substandard— 4,167 28,413 29,590 21,190 9,857 6,194 99,411 
Total doubtful— — — — — — — — 
Total not rated(1)
— 1 — 2,874 268 39 — 3,182 
Total$520,499 $197,539 $194,163 $748,155 $265,350 $407,859 $315,919 $2,649,484 
_____________________________
(1)Includes loans held for investment measured at fair value as of December 31, 2025. Includes fair value adjustments on loans held for investment accounted for under the fair value option.
Term Loans Amortized Cost by Origination Year
December 31, 202420242023202220212020PriorRevolving Loans Amortized Cost BasisTotal
Cash, securities, and other
Pass$11,564 $6,123 $3,649 $13,157 $5,143 $13,912 $64,582 $118,130 
Special mention— — — — — — — — 
Substandard— — — — — — 1,704 1,704 
Doubtful— — — — — — — — 
Total cash, securities, and other$11,564 $6,123 $3,649 $13,157 $5,143 $13,912 $66,286 $119,834 
Current year-to-date gross write-offs$— $— $— $— $— $— $— $— 
Term Loans Amortized Cost by Origination Year
December 31, 202420242023202220212020PriorRevolving Loans Amortized Cost BasisTotal
Consumer and other
Pass$3,587 $4 $1,518 $355 $380 $548 $11,090 $17,482 
Special mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Not rated(1)
1 — 6,215 940 71 56 — 7,283 
Total consumer and other$3,588 $4 $7,733 $1,295 $451 $604 $11,090 $24,765 
Current year-to-date gross write-offs$— $1 $— $— $10 $39 $— $50 
Construction and development
Pass$48,872 $58,224 $191,874 $992 $9,395 $— $839 $310,196 
Special mention— — — — — — — — 
Substandard469 3,816 — — — — — 4,285 
Doubtful— — — — — — — — 
Total construction and development$49,341 $62,040 $191,874 $992 $9,395 $— $839 $314,481 
Current year-to-date gross write-offs$— $— $— $— $— $— $— $— 
1-4 family residential
Pass$98,612 $89,537 $351,026 $126,116 $104,427 $63,930 $129,253 $962,901 
Special mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Total 1-4 family residential$98,612 $89,537 $351,026 $126,116 $104,427 $63,930 $129,253 $962,901 
Current year-to-date gross write-offs$— $— $— $— $— $— $— $— 
Non-owner occupied CRE
Pass$48,445 $42,527 $260,055 $101,067 $70,896 $57,676 $30,573 $611,239 
Special mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Total non-owner occupied CRE$48,445 $42,527 $260,055 $101,067 $70,896 $57,676 $30,573 $611,239 
Current year-to-date gross write-offs$— $— $— $— $— $— $— $— 
Owner occupied CRE
Pass$4,177 $3,126 $44,034 $41,663 $29,402 $45,640 $1,531 $169,573 
Special mention— — — — — — — — 
Substandard— — 2,096 — — — 350 2,446 
Doubtful— — — — — — — — 
Total owner occupied CRE$4,177 $3,126 $46,130 $41,663 $29,402 $45,640 $1,881 $172,019 
Current year-to-date gross write-offs$— $— $— $— $— $— $— $— 
Commercial and industrial
Pass$21,922 $9,741 $58,160 $11,324 $5,435 $27,237 $58,665 $192,484 
Special mention— 456 685 — — — 7,979 9,120 
Substandard967 178 1,988 — 4,422 10,871 296 18,722 
Doubtful— — — — — — — — 
Total commercial and industrial$22,889 $10,375 $60,833 $11,324 $9,857 $38,108 $66,940 $220,326 
Current year-to-date gross write-offs$— $1,202 $16 $6,935 $1,199 $— $— $9,352 
Term Loans Amortized Cost by Origination Year
December 31, 202420242023202220212020PriorRevolving Loans Amortized Cost BasisTotal
Total pass$237,179 $209,282 $910,316 $294,674 $225,078 $208,943 $296,533 $2,382,005 
Total special mention— 456 685 — — — 7,979 9,120 
Total substandard1,436 3,994 4,084 — 4,422 10,871 2,350 27,157 
Total doubtful— — — — — — — — 
Total not rated(1)
1 — 6,215 940 71 56 — 7,283 
Total$238,616 $213,732 $921,300 $295,614 $229,571 $219,870 $306,862 $2,425,565 
_____________________________
(1)Includes loans held for investment measured at fair value as of December 31, 2024. Includes fair value adjustments on loans held for investment accounted for under the fair value option.