XML 29 R13.htm IDEA: XBRL DOCUMENT v3.25.4
LOANS
 12 Months Ended
Dec. 31, 2025
Receivables [Abstract]  
LOANS LOANS
 
The following table presents the composition of loans segregated by class of loans, as of December 31, 2025 and 2024.
  
(dollars in thousands)December 31, 2025December 31, 2024
Construction, land & land development$302,512 $205,046 
Other commercial real estate1,249,720 990,648 
Total commercial real estate1,552,232 1,195,694 
Residential real estate459,549 344,167 
Commercial, financial & agricultural218,532 213,910 
Consumer and other150,911 89,209 
Total loans$2,381,224 $1,842,980 

Included in the above table are government guaranteed loans totaling $84.9 million at December 31, 2025 and $81.6 million at December 31, 2024. The following table presents the composition of government guaranteed loans segregated by class of loans for each respective period.
(dollars in thousands)December 31, 2025December 31, 2024
Construction, land & land development$2,277 $2,317 
Other commercial real estate43,251 41,471 
Total commercial real estate45,528 43,788 
Residential real estate10,050 9,348 
Commercial, financial & agricultural29,350 28,500 
Total loans$84,928 $81,636 
The following table presents the composition of loans acquired during the year ended December 31, 2025, segregated by class of loans. The balances shown reflect a fair value discount related to interest rates applied at acquisition of $12.5 million.

(dollars in thousands)December 31, 2025
Construction, land & land development$42,422 
Other commercial real estate192,111 
Total commercial real estate234,533 
Residential real estate154,202 
Commercial, financial & agricultural16,428 
Consumer and other7,513 
Total loans$412,676 

Included in the above acquired loan table are purchased credit deteriorated loans. These are loans for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The carrying amount of those loans is as follows:
(dollars in thousands)December 31, 2025
Purchase price of loans at acquisition$11,625 
Allowance for credit losses at acquisition1,183 
Non-credit discount at acquisition580 

The Company elected to exclude accrued interest receivable from the amortized cost basis of loans disclosed throughout this note. As of December 31, 2025 and 2024, respectively, accrued interest receivable for loans totaled $11.4 million and $9.0 million and is included in the "other assets" line item on the Company's consolidated balance sheet.

Commercial, financial & agricultural loans are extended to a diverse group of businesses within the Company’s market area. These loans are often underwritten based on the borrower’s ability to service the debt from income from the business. Real estate construction loans often require loan funds to be advanced prior to completion of the project. Due to uncertainties inherent in estimating construction costs, changes in interest rates and other economic conditions, these loans often pose a higher risk than other types of loans. Consumer and other loans are originated at the bank level. These loans are generally smaller loan amounts spread across many individual borrowers to help minimize risk.

Credit Quality Indicators. As part of the ongoing monitoring of the credit quality of the loan portfolio, management tracks certain credit quality indicators including trends related to (1) the risk grade assigned to commercial and consumer loans, (2) the level of classified commercial loans, (3) net charge-offs, (4) nonperforming loans, and (5) the general economic conditions in the Company’s geographic markets.

The Company uses a risk grading matrix to assign a risk grade to each of its loans. For commercial loans over $500,000, loans are graded on a scale of 1 to 10. A description of the general characteristics of the grades is as follows:

•Grades 1, 2 and 3 - Borrowers with these assigned risk grades range from virtual absence of risk to minimal risk. Such loans may be secured by Company-issued and controlled certificates of deposit or properly margined equity securities or bonds. Other loans comprising these grades are made to companies that have been in existence for a long period of time with many years of consecutive profits and strong equity, good liquidity, excellent debt service ability and unblemished past performance, or to exceptionally strong individuals with collateral of unquestioned value that fully secures the loans. Loans in this category fall into the “pass” classification.

•Grades 4 and 5 - Loans assigned these “pass” risk grades are made to borrowers with acceptable credit quality and risk. The risk ranges from loans with no significant weaknesses in repayment capacity and collateral protection to acceptable loans with one or more risk factors considered to be more than average. These loans are also included in the “pass” classification.

•Grade 6 - This grade includes “special mention” loans on management’s watch list and is intended to be used on a temporary basis for pass grade loans where risk-modifying action is intended in the short-term.
•Grades 7 and 8 - These grades includes “substandard” loans in accordance with regulatory guidelines. This category includes borrowers with well-defined weaknesses that jeopardize the payment of the debt in accordance with the agreed terms. Loans considered to be impaired are assigned grade 8, and these loans often have assigned loss allocations as part of the allowance for credit losses. Generally, loans on which interest accrual has been stopped would be included in this grade.

•Grades 9 and 10 - These grades correspond to regulatory classification definitions of “doubtful” and “loss,” respectively. In practice, any loan with these grades would be for a very short period of time, and generally the Company has no loans with these assigned grades. Management manages the Company’s problem loans in such a way that uncollectible loans or uncollectible portions of loans are charged off immediately with any residual, collectible amounts assigned a risk grade of 7 or 8. 

For smaller commercial loans (under $500,000) and consumer loans, the Company began using behavioral based risk grades during the second quarter of 2024. These loans are assigned risk grades of 98 and 99 based on payment performance with the Company.

*Grade 98 - Loans assigned this risk grade indicates a "pass" credit.

*Grade 99 - Loans assigned this risk grade indicates a "substandard" credit and is moved to a nonaccrual status.
The following tables present the loan portfolio segregated by class of loans and the risk category of term loans by vintage year, which is the year of origination or most recent renewal, as of December 31, 2025 and 2024. Those loans with a risk grade of 1, 2, 3, 4, 5 and 98 have been combined in the pass line for presentation purposes. Loans with a risk grade of 7, 8 and 99 have been combined in the substandard line. There were no loans with a risk rating of "doubtful" or "loss" at December 31, 2025 and 2024.
Term Loans Amortized Cost Basis by Origination Year
(dollars in thousands)20252024202320222021PriorRevolversRevolvers converted to term loansTotal
December 31, 2025
Construction, land & land development
Risk rating
Pass$190,131 $63,730 $8,065 $12,914 $8,517 $1,440 $110 $— $284,907 
Special Mention16,167 — — — — — — — 16,167 
Substandard54 122 1,132 92 — 38 — — 1,438 
Total Construction, land & land development206,352 63,852 9,197 13,006 8,517 1,478 110 — 302,512 
  Current period gross write offs$— $— $— $— $— $— $— $— $— 
Other commercial real estate
Risk rating
Pass235,989 121,779 113,731 351,954 191,620 177,904 15,173 1,498 1,209,648 
Special Mention6,452 — 4,680 3,110 — 2,441 — 518 17,201 
Substandard5,135 6,327 4,117 3,036 799 2,638 616 203 22,871 
Total Other commercial real estate247,576 128,106 122,528 358,100 192,419 182,983 15,789 2,219 1,249,720 
Current period gross write offs— — 206 278 5 20 — — 509 
Residential real estate
Risk rating
Pass21,212 62,992 79,928 121,472 58,367 72,633 30,633 799 448,036 
Special Mention777 94 247 — 1,283 2,803 195 — 5,399 
Substandard566 52 2,534 1,674 261 1,027 — — 6,114 
Total Residential real estate22,555 63,138 82,709 123,146 59,911 76,463 30,828 799 459,549 
Current period gross write offs— — — 140 — 43 — — 183 
Commercial, financial & agricultural
Risk rating
Pass46,062 26,351 32,121 26,463 6,811 16,282 48,395 849 203,334 
Special Mention1,666 — 95 132 — — 3,448 — 5,341 
Substandard123 2,291 3,277 1,571 2,173 136 286 — 9,857 
Total Commercial, financial & agricultural47,851 28,642 35,493 28,166 8,984 16,418 52,129 849 218,532 
Current period gross write offs178 597 1,206 915 433 60 — — 3,389 
Consumer and other
Risk rating
Pass83,905 35,690 28,544 1,272 150 408 589 22 150,580 
Special Mention— 131 — — — — — — 131 
Substandard— 114 86 — — — — — 200 
Total Consumer and other83,905 35,935 28,630 1,272 150 408 589 22 150,911 
Current period gross write offs244 1,071 274 17 — 12 — — 1,618 
Total Loans
Risk rating
Pass577,299 310,542 262,389 514,075 265,465 268,667 94,900 3,168 2,296,505 
Special Mention25,062 225 5,022 3,242 1,283 5,244 3,643 518 44,239 
Substandard5,878 8,906 11,146 6,373 3,233 3,839 902 203 40,480 
Total Loans$608,239 $319,673 $278,557 $523,690 $269,981 $277,750 $99,445 $3,889 $2,381,224 
Total current period gross write offs$422 $1,668 $1,686 $1,350 $438 $135 $— $— $5,699 


Term Loans Amortized Cost Basis by Origination Year
(dollars in thousands)20242023202220212020PriorRevolversRevolvers converted to term loansTotal
December 31, 2024
Construction, land & land development
Risk rating
Pass$98,269 $47,378 $25,930 $23,193 $1,979 $5,379 $53 $— $202,181 
Special Mention— 2,088 — — 411 — 281 — 2,780 
Substandard— — — — — 85 — — 85 
Total Construction, land & land development98,269 49,466 25,930 23,193 2,390 5,464 334 — 205,046 
  Current period gross write offs$— $— $— $— $— $— $— $— $— 
Other commercial real estate
Risk rating
Pass55,169 85,172 343,123 180,568 76,905 194,444 21,341 1,849 958,571 
Special Mention850 1,999 4,288 173 2,344 7,376 610 1,069 18,709 
Substandard4,114 2,586 2,875 459 352 2,419 563 — 13,368 
Total Other commercial real estate60,133 89,757 350,286 181,200 79,601 204,239 22,514 2,918 990,648 
Current period gross write offs— — — — — 20 — — 20 
Residential real estate
Risk rating
Pass16,675 76,074 112,784 45,111 18,978 44,892 23,222 926 338,662 
Special Mention— 1,672 374 — — 1,989 204 — 4,239 
Substandard— — 442 270 28 526 — — 1,266 
Total Residential real estate16,675 77,746 113,600 45,381 19,006 47,407 23,426 926 344,167 
Current period gross write offs— — 400 18 — 9 — — 427 
Commercial, financial & agricultural
Risk rating
Pass44,380 46,610 33,124 12,322 8,662 16,143 43,051 742 205,034 
Special Mention— 622 2,136 12 — — 700 — 3,470 
Substandard105 1,612 858 1,904 271 218 433 5 5,406 
Total Commercial, financial & agricultural44,485 48,844 36,118 14,238 8,933 16,361 44,184 747 213,910 
Current period gross write offs138 588 659 986 28 68 — — 2,467 
Consumer and other
Risk rating
Pass53,500 30,186 2,312 857 530 1,291 456 13 89,145 
Special Mention— — — — — — — — — 
Substandard49 — 12 1 2 — — — 64 
Total Consumer and other53,549 30,186 2,324 858 532 1,291 456 13 89,209 
Current period gross write offs84 392 81 1 5 41 — — 604 
Total Loans
Risk rating
Pass267,993 285,420 517,273 262,051 107,054 262,149 88,123 3,530 1,793,593 
Special Mention850 6,381 6,798 185 2,755 9,365 1,795 1,069 29,198 
Substandard4,268 4,198 4,187 2,634 653 3,248 996 5 20,189 
Total Loans$273,111 $295,999 $528,258 $264,870 $110,462 $274,762 $90,914 $4,604 $1,842,980 
Total current period gross write offs$222 $980 $1,140 $1,005 $33 $138 $— $— $3,518 

A loan’s risk grade is assigned at the inception of the loan and is based on the financial strength of the borrower and the type of collateral. Loan risk grades are subject to reassessment at various times throughout the year as part of the Company’s ongoing loan review process. Loans with an assigned risk grade of 7, 8, 9, 10 or 99 and an outstanding balance of $500,000 or more are reassessed on a quarterly basis. During this reassessment process individual reserves may be identified and placed against certain loans which are not considered impaired. In assessing the overall economic condition of the markets in which it operates, the Company monitors the unemployment rates for its major service areas. The unemployment rates are reviewed on a quarterly basis as part of the allowance for credit loss determination.
 
Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Generally, loans are placed on nonaccrual status if principal or interest payments become 90 days past due or when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provision. Loans may be placed on nonaccrual status regardless of whether such loans are considered past due.

Loans are classified as collateral-dependent when the borrower is experiencing financial difficulty, and we expect repayment to be provided substantially through the operation or sale of collateral. Our commercial loans have collateral that is comprised of real estate and business assets. Our consumer loans have collateral that is substantially comprised of residential real estate. The Company had $7.2 million and $3.1 million in collateral-dependent loans at December 31, 2025 and 2024, respectively. There were no significant changes in the extent to which collateral secures our collateral-dependent loans during the periods ended December 31, 2025 and 2024.
The following table represents an age analysis of past due loans and nonaccrual loans, segregated by class of loans, as of December 31, 2025 and 2024.

Accruing Loans   
(dollars in thousands)30-89 Days
Past Due		90 Days
or More
Past Due		Total Accruing
Loans Past Due		Nonaccrual
Loans		Current LoansTotal Loans
December 31, 2025      
Construction, land & land development$269 $— $269 $1,132 $301,111 $302,512 
Other commercial real estate4,183 — 4,183 9,663 1,235,874 1,249,720 
Total commercial real estate4,452 — 4,452 10,795 1,536,985 1,552,232 
Residential real estate3,558 — 3,558 4,501 451,490 459,549 
Commercial, financial & agricultural925 — 925 7,883 209,724 218,532 
Consumer and other915 95 1,010 201 149,700 150,911 
Total loans$9,850 $95 $9,945 $23,380 $2,347,899 $2,381,224 


Accruing Loans   
(dollars in thousands)30-89 Days
Past Due		90 Days
or More
Past Due		Total Accruing
Loans Past Due		Nonaccrual
Loans		Current LoansTotal Loans
December 31, 2024      
Construction, land & land development$544 $— $544 $— $204,502 $205,046 
Other commercial real estate2,441 — 2,441 4,833 983,374 990,648 
Total commercial real estate2,985 — 2,985 4,833 1,187,876 1,195,694 
Residential real estate3,689 — 3,689 1,204 339,274 344,167 
Commercial, financial & agricultural1,348 — 1,348 4,559 208,003 213,910 
Consumer and other339 152 491 64 88,654 89,209 
Total loans$8,361 $152 $8,513 $10,660 $1,823,807 $1,842,980 



The following table is a summary of the Company's nonaccrual loans by major categories for the periods indicated.

(dollars in thousands)Nonaccrual Loans with No Related ACLNonaccrual Loans with a Related ACLTotal Nonaccrual Loans
December 31, 2025   
Construction, land & land development$— $1,132 $1,132 
Other commercial real estate8,231 1,432 9,663 
Total commercial real estate8,231 2,564 10,795 
Residential real estate1,807 2,694 4,501 
Commercial, financial & agricultural4,296 3,587 7,883 
Consumer and other— 201 201 
Total loans$14,334 $9,046 $23,380 
(dollars in thousands)Nonaccrual Loans with No Related ACLNonaccrual Loans with a Related ACLTotal Nonaccrual Loans
December 31, 2024   
Construction, land & land development$— $— $— 
Other commercial real estate1,482 3,351 4,833 
Total commercial real estate1,482 3,351 4,833 
Residential real estate— 1,204 1,204 
Commercial, financial & agricultural— 4,559 4,559 
Consumer and other— 64 64 
Total loans$1,482 $9,178 $10,660 

As of December 31, 2025, the Company had $198,000 in loans secured by 1-4 family residential properties that were in the process of foreclosure. At December 31, 2024, there were no loans in process of foreclosure.

Interest income recorded on nonaccrual loans during the year ended December 31, 2025 was $1.2 million, and reflects interest income recorded on nonaccrual loans prior to them being placed on nonaccrual status. Had nonaccrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income of approximately $4.8 million for the year ended December 31, 2025.

Interest income recorded on nonaccrual loans during the year ended December 31, 2024 was $511,000, and reflects interest income recorded on nonaccrual loans prior to them being placed on nonaccrual status. Had nonaccrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income of approximately $3.8 million for the year ended December 31, 2024.
The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. The Company uses a discounted cash flow model to determine the allowance for credit losses. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification.
Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification. Occasionally, the Company modifies loans by providing principal forgiveness on certain of its real estate loans. When principal forgiveness is provided, the amortized cost basis of the asset is written off against the allowance for credit losses. The amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses.

In some cases, the Company will modify a certain loan by providing multiple types of concessions. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. Upon the Company's determination that a modified loan, or portion of a loan, has subsequently been deemed uncollectible, the loan, or portion of the loan, is written off.
The following tables present loans modified due to a financial difficulty under the above terms during the twelve month periods ended December 31, 2025 and 2024.

December 31, 2025
(dollars in thousands)Interest rate reductionPayment DelayTotal*
Construction, land & land development$54 $1,132 $1,186 
Other commercial real estate— 589 589 
Residential real estate— 233 233 
Commercial, financial & agricultural— 888 888 
Total Loans$54 $2,842 $2,896 
*less than 0.12% of total class of receivable

There were a total of five loans in the above categories for the year ended December 31, 2025. There were two construction, land & land development loans, one of which had an interest rate reduction and one that had been given a payment delay. There was one commercial real estate loan, one residential real state loan and one commercial, financial & agricultural loan, each of which had been given a payment delay.

December 31, 2024
(dollars in thousands)Term ExtensionPayment DelayTerm Extension and Payment DelayTotal*
Construction, land & land development$— $85 $— $85 
Other commercial real estate355 — 145 500 
Commercial, financial & agricultural— 353 578 931 
Total Loans$355 $438 $723 $1,516 
*less than 0.08% of total class of receivable
.


There were a total of nine loans in the above categories for the year ended December 31, 2024. There was one construction, land & land development loan which had been given a payment delay. The commercial real estate loans consisted of three loans, all three with a term extension of one year and one of these loans also given a payment delay. There were five commercial, financial & agricultural loans, one of which had been given a payment delay only and four with both a payment delay and term extensions, one loan for three years, one loan for five years and two loans for ten years.

The Company had one commercial, financial & agricultural loan that subsequently defaulted during the year ended December 31, 2025 due to late payments. The loan had been given a payment delay as well as a term extension. The Company had three loans that subsequently defaulted during the year ended December 31, 2024. These loans were commercial, financial & agricultural loans to one borrower that had been given a payment delay on each loan. The Company repossessed collateral of $300,000 and charged off the remaining balance on the loans of $810,000 in the fourth quarter of 2024.