
	Three Months Ended June 30, 2025
(In thousands)	Beginning Balance		Provision for Credit Losses		Charge- Offs		Recoveries		Ending Balance
Construction and land development	$	6,772	$	(221)	$	—	$	5	$	6,556
CRE - owner occupied	12,598		343		—		1		12,942
CRE - non-owner occupied	45,191		1,055		—		381		46,627
Residential real estate	40,348		1,544		(225)		20		41,687
Commercial and financial	27,611		1,903		(3,263)		858		27,109
Consumer	7,747		(245)		(438)		199		7,263
Totals	$	140,267	$	4,379	$	(3,926)	$	1,464	$	142,184


	Three Months Ended June 30, 2024
(In thousands)	Beginning Balance		Provision for Credit Losses		Charge- Offs		Recoveries		Ending Balance
Construction and land development	$	7,001	$	(1,515)	$	(1)	$	8	$	5,493
CRE - owner occupied	10,017		1,866		(302)		1		11,582
CRE - non-owner occupied	46,601		(1,254)		(19)		106		45,434
Residential real estate	38,628		638		(122)		65		39,209
Commercial and financial	30,707		4,706		(7,950)		966		28,429
Consumer	13,715		477		(3,031)		333		11,494
Totals	$	146,669	$	4,918	$	(11,425)	$	1,479	$	141,641


	Six Months Ended June 30, 2025
(In thousands)	Beginning Balance		Provision for Credit Losses		Charge- Offs		Recoveries		Ending Balance
Construction and land development	$	7,252	$	(704)	$	—	$	8	$	6,556
CRE - owner occupied	11,825		1,115		—		2		12,942
CRE - non-owner occupied	43,866		1,933		(320)		1,148		46,627
Residential real estate	39,168		2,704		(226)		41		41,687
Commercial and financial	27,533		8,337		(9,732)		971		27,109
Consumer	8,411		244		(1,925)		533		7,263
Totals	$	138,055	$	13,629	$	(12,203)	$	2,703	$	142,184


	Six Months Ended June 30, 2024
(In thousands)	Beginning Balance		Provision for Credit Losses		Charge- Offs		Recoveries		Ending Balance
Construction and land development	$	8,637	$	(3,155)	$	(1)	$	12	$	5,493
CRE - owner occupied	5,529		6,350		(302)		5		11,582
CRE - non-owner occupied	48,288		(2,875)		(103)		124		45,434
Residential real estate	39,016		7		(122)		308		39,209
Commercial and financial	34,343		3,205		(10,606)		1,487		28,429
Consumer	13,118		2,754		(4,919)		541		11,494
Totals	$	148,931	$	6,286	$	(16,053)	$	2,477	$	141,641

Management establishes the allowance using relevant available information from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Forecast data is sourced from Moody’s, a firm widely recognized for its research, analysis, and economic forecasts. The forecasts of future economic conditions are over the expected remaining life of the loan using economic forecasts that revert to long-term historical averages over time.

As of June 30, 2025 and December 31, 2024, the Company utilized a multiple scenario model comprised of a blend of Moody’s economic scenarios and considered the uncertainty associated with the assumptions in the scenarios, including continued actions taken by the Federal Reserve with regard to monetary policy and interest rates and the potential impact of those actions. Outcomes could differ from the scenarios utilized, and the Company incorporated qualitative considerations reflecting the risk of uncertain economic conditions, and for additional dimensions of risk that may not be captured in the quantitative model.

The following section discusses changes in the level of the allowance for credit losses for the three months ended June 30, 2025.

The allowance increased $1.9 million, or 1.4%, during the second quarter of 2025 to $142.2 million, or 1.34% of loans held for investment as of June 30, 2025.

In the Construction and Land Development segment, the decrease in allowance is primarily due to a decrease in outstanding loan balances. In this segment, the primary source of repayment is typically from proceeds of the sale or permanent financing of the underlying property; therefore, industry and collateral type and estimated collateral values are among the relevant factors in assessing expected losses.

In the CRE - Owner-Occupied segment, the allowance increased due to an increase in loan balances. Risk characteristics include, but are not limited to, collateral type, note structure and loan seasoning.

In the CRE - Non-Owner-Occupied segment, the allowance increase is driven by higher loan balances. Repayment is often dependent upon rental income from the successful operation of the underlying property or from the sale of the property. Loan performance may be adversely affected by general economic conditions or conditions specific to the real estate market, including property types. Collateral type, note structure, and loan seasoning are among the risk characteristics analyzed for this segment.

The Residential Real Estate segment includes residential mortgage, home equity loans, and HELOCs. The increase in the allowance is reflective of an increase in outstanding loan balances. Risk characteristics considered for this segment include, but are not limited to, borrower FICO score, lien position, LTV ratios, and loan seasoning.

In the Commercial and Financial segment, borrowers are primarily small to medium sized professional firms and other businesses, and loans are generally supported by projected cash flows of the business, collateralized by business assets, and/or guaranteed by the business owners. The decrease in allowance was primarily driven by improvement in the macroeconomic variables for this segment. Industry, collateral type, estimated collateral values, and loan seasoning are among the relevant factors in assessing expected losses.

Consumer loans include installment and revolving lines, loans for automobiles, boats, and other personal or family purposes. Risk characteristics considered for this segment include, but are not limited to, collateral type, LTV ratios, loan seasoning and FICO score. The decrease in allowance for consumer loans was driven by a decrease in loan balances.