
	Three Months Ended September 30, 2025
(In thousands)	Beginning Balance		Allowance on PCD Loans Acquired During the Period		Provision for Credit Losses		Charge- Offs		Recoveries		Ending Balance
Construction and land development	$	6,556	$	—	$	945	$	(139)	$	4	$	7,366
CRE - owner occupied	12,942		22		1,388		(197)		5		14,160
CRE - non-owner occupied	46,627		1		2,828		—		348		49,804
Residential real estate	41,687		60		686		(174)		59		42,318
Commercial and financial	27,109		18		2,411		(4,431)		1,454		26,561
Consumer	7,263		5		113		(371)		234		7,244
Totals	$	142,184	$	106	$	8,371	$	(5,312)	$	2,104	$	147,453


	Three Months Ended September 30, 2024
(In thousands)	Beginning Balance		Provision for Credit Losses		Charge- Offs		Recoveries		Ending Balance
Construction and land development	$	5,493	$	1,562	$	—	$	3	$	7,058
CRE - owner occupied	11,582		338		(2)		—		11,918
CRE - non-owner occupied	45,434		826		(602)		18		45,676
Residential real estate	39,209		(159)		(6)		104		39,148
Commercial and financial	28,429		3,003		(6,180)		726		25,978
Consumer	11,494		703		(1,794)		288		10,691
Totals	$	141,641	$	6,273	$	(8,584)	$	1,139	$	140,469


	Nine Months Ended September 30, 2025
(In thousands)	Beginning Balance		Allowance on PCD Loans Acquired During the Period		Provision for Credit Losses		Charge- Offs		Recoveries		Ending Balance
Construction and land development	$	7,252	$	—	$	241	$	(139)	$	12	$	7,366
CRE - owner occupied	11,825		22		2,503		(197)		7		14,160
CRE - non-owner occupied	43,866		1		4,761		(320)		1,496		49,804
Residential real estate	39,168		60		3,390		(400)		100		42,318
Commercial and financial	27,533		18		10,748		(14,163)		2,425		26,561
Consumer	8,411		5		357		(2,296)		767		7,244
Totals	$	138,055	$	106	$	22,000	$	(17,515)	$	4,807	$	147,453


	Nine Months Ended September 30, 2024
(In thousands)	Beginning Balance		Provision for Credit Losses		Charge- Offs		Recoveries		Ending Balance
Construction and land development	$	8,637	$	(1,593)	$	(1)	$	15	$	7,058
CRE - owner occupied	5,529		6,688		(304)		5		11,918
CRE - non-owner occupied	48,288		(2,049)		(705)		142		45,676
Residential real estate	39,016		(152)		(128)		412		39,148
Commercial and financial	34,343		6,208		(16,786)		2,213		25,978
Consumer	13,118		3,457		(6,713)		829		10,691
Totals	$	148,931	$	12,559	$	(24,637)	$	3,616	$	140,469

Management establishes the allowance using relevant available information from both internal and external sources, relating to past events, current economic 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 September 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 regarding monetary policy and changes in 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 September 30, 2025.

The allowance increased $5.3 million, or 3.7%, during the third quarter of 2025 to $147.5 million, or 1.34% of loans held for investment as of September 30, 2025.

In the Construction and land development segment, the increase in allowance is primarily due to a slight deterioration of economic forecasts. 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 increase is 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 an increase in loans. 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 a decrease in the reserves for individually evaluated loans due to payoff or charge-off of these loans, which was partly offset by an increase in the allowance due to an increase in outstanding loan balances. 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 scores. The decrease in allowance for consumer loans was driven by a decrease in loan balances.