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LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES
 12 Months Ended
Dec. 31, 2025
LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES [Abstract]  
LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES
5. LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES

The Company grants commercial, industrial, agricultural, residential, and consumer loans primarily to customers throughout north central, central, south-central and south-eastern Pennsylvania, Burlington County, New Jersey, southern New York and Wilmington and Dover, Delaware. Although the Company had a diversified loan portfolio at December 31, 2025 and 2024, a substantial portion of its debtors’ ability to honor their contracts is dependent on the economic conditions within these regions. The following table summarizes the primary segments of the loan portfolio, as well as how those segments are analyzed within the allowance for credit losses as of December 31, 2025 and 2024 (in thousands):

   
December 31,
  
   
2025
    
2024
  
Real estate loans:
            
Residential
  
$
340,972
    
$
351,398
  
Commercial
    
1,218,514
      
1,121,435
  
Agricultural
    
347,448
      
327,722
  
Construction
    
93,965
      
164,326
  
Consumer
    
88,210
      
109,505
  
Other commercial loans
    
179,166
      
155,012
  
Other agricultural loans
    
30,247
      
29,662
  
State and political subdivision loans
    
52,100
      
54,182
  
Total
    
2,350,622
      
2,313,242
  
Allowance for credit losses – loans
    
22,806
      
21,699
  
Net loans
  
$
2,327,816
    
$
2,291,543
  

As of December 31, 2025, and 2024, net unamortized loan fees and costs of $1,981,000 and $2,587,000, respectively, were included in the carrying value of loans. Purchased loans acquired in connection with the FNB acquisition, the State College branch acquisition, the MidCoast acquisition and the HVBC acquisition were recorded at fair value on their acquisition date without a carryover of the related allowance for credit losses.

Real estate loans serviced for Freddie Mac, Fannie Mae and the FHLB, which are not included in the Consolidated Balance Sheet, totaled $181,675,000 and $193,507,000 at December 31, 2025 and 2024, respectively. Loans sold to Freddie Mac and Fannie Mae were sold without recourse and total $173,901,000 and $184,578,000 at December 31, 2025 and 2024, respectively. Additionally, the Bank acquired a portfolio of loans sold to the FHLB during the acquisitions of FNB and HVBC, which were sold under the Mortgage Partnership Finance Program (“MPF”). The Bank was not an active participant in the MPF program in 2025 or 2024. The MPF portfolio balance was $7,774,000 and $8,929,000 at December 31, 2025 and 2024, respectively. The FHLB maintained a first-loss position for the MPF portfolio that totaled $171,000 and $168,000 as of December 31, 2025 and 2024, respectively. Should the FHLB exhaust its first-loss position, recourse to the Bank’s credit enhancement would be up to the next $197,000 and $229,000 of losses as of December 31, 2025 and 2024, respectively. The Bank did not experience any losses for the MPF portfolio during 2025, 2024 or 2023.
The segments of the Bank’s loan portfolio are disaggregated into classes to a level that allows management to monitor risk and performance. Residential real estate mortgages consist of 15 to 30 year first mortgages on residential real estate, while residential real estate home equities are consumer purpose installment loans or lines of credit secured by a mortgage which is often a second lien on residential real estate with terms of 15 years or less. Commercial real estate are business purpose loans secured by a mortgage on commercial real estate. Agricultural real estate are loans secured by a mortgage on real estate used in agriculture production. Construction real estate are loans secured by residential or commercial real estate used during the construction phase of residential and commercial projects. Consumer loans are typically unsecured or primarily secured by collateral other than real estate and overdraft lines of credit connected with customer deposit accounts. Other commercial loans are loans for commercial purposes primarily secured by non-real estate collateral. Other agricultural loans are loans for agricultural purposes primarily secured by non-real estate collateral. State and political subdivisions are loans for state and local municipalities for capital and operating expenses or tax-free loans used to finance commercial development.

Allowance for Credit Losses

The following table presents the components of the allowance for credit losses as of December 31, 2025 and 2024 (in thousands):

   
December 31,
  
   
2025
    
2024
  
Allowance for Credit Losses – Loans
  
$
22,806
    
$
21,699
  
Allowance for Credit Losses – Off-Balance Sheet credit Exposure
    
1,163
      
676
  
Total allowance for credit losses
  
$
23,969
    
$
22,375
  
The following table presents the activity in the allowance for credit losses for 2025, 2024 and 2023 (in thousands):

 
  
Allowance for Credit
Losses – Loans
    
Allowance for Credit Losses – Off-
Balance Sheet credit Exposure
    
Total
  
Balance at December 31, 2022
  
$
18,552
    
$
165
    
$
18,717
  
Impact of adopting CECL
    
(3,300
)
    
1,064
      
(2,236
)
Allowance for credit loss on PCD acquired loans
    
1,689
      
-
      
1,689
  
Loans charge-off
    
(1,329
)
    
-
      
(1,329
)
Recoveries of loans previously charged-off
    
49
      
-
      
49
  
Net loans charged-off
    
(1,280
)
    
-
      
(1,280
)
Provision for credit losses – acquisition day 1 non-PCD
    
4,591
      
-
      
4,591
  
Provision for credit losses
    
901
      
36
      
937
  
Balance at December 31, 2023
  
$
21,153
    
$
1,265
    
$
22,418
  
 
                        
Balance at December 31, 2023
  
$
21,153
    
$
1,265
    
$
22,418
  
Loans charge-off
    
(2,673
)
    
-
      
(2,673
)
Recoveries of loans previously charged-off
    
43
      
-
      
43
  
Net loans charged-off
    
(2,630
)
    
-
      
(2,630
)
Provision for credit losses
    
3,176
      
(589
)
    
2,587
  
Balance at December 31, 2024
  
$
21,699
    
$
676
    
$
22,375
  
 
                        
Balance at December 31, 2024
  
$
21,699
    
$
676
    
$
22,375
  
Loans charge-off
    
(858
)
    
-
      
(858
)
Recoveries of loans previously charged-off
    
77
      
-
      
77
  
Net loans charged-off
    
(781
)
    
-
      
(781
)
Provision for credit losses
    
1,888
      
487
      
2,375
  
Balance at December 31, 2025
  
$
22,806
    
$
1,163
    
$
23,969
  

The following tables presents the activity in the allowance for credit losses – loans, by portfolio segment, for 2025, 2024 and 2023 (in thousands).

   
Balance at
December 31, 2024
    
Charge-offs
    
Recoveries
    
Provision
    
Balance at
December 31, 2025
  
Real estate loans:
                              
Residential
  
$
1,940
    
$
-
    
$
-
    
$
1,172
    
$
3,112
  
Commercial
    
9,174
      
(40
)
    
-
      
883
      
10,017
  
Agricultural
    
3,529
      
-
      
-
      
1,312
      
4,841
  
Construction
    
1,402
      
-
      
-
      
(486
)
    
916
  
Consumer
    
1,338
      
(327
)
    
41
      
149
      
1,201
  
Other commercial loans
    
3,766
      
(491
)
    
36
      
(777
)
    
2,534
  
Other agricultural loans
    
133
      
-
      
-
      
(18
)
    
115
  
State and political subdivision loans
    
61
      
-
      
-
      
(6
)
    
55
  
Unallocated
    
356
      
-
      
-
      
(341
)
    
15
  
Total
  
$
21,699
    
$
(858
)
  
$
77
    
$
1,888
    
$
22,806
  

   
Balance at
December 31, 2023
    
Charge-offs
    
Recoveries
    
Provision
    
Balance at
December 31, 2024
  
Real estate loans:
                              
Residential
  
$
2,354
    
$
(5
)
  
$
-
    
$
(409
)
  
$
1,940
  
Commercial
    
9,178
      
-
      
-
      
(4
)
    
9,174
  
Agricultural
    
3,264
      
-
      
-
      
265
      
3,529
  
Construction
    
1,950
      
-
      
-
      
(548
)
    
1,402
  
Consumer
    
1,412
      
(107
)
    
22
      
11
      
1,338
  
Other commercial loans
    
2,313
      
(2,561
)
    
21
      
3,993
      
3,766
  
Other agricultural loans
    
270
      
-
      
-
      
(137
)
    
133
  
State and political subdivision loans
    
45
      
-
      
-
      
16
      
61
  
Unallocated
    
367
      
-
      
-
      
(11
)
    
356
  
Total
  
$
21,153
    
$
(2,673
)
  
$
43
    
$
3,176
    
$
21,699
  
   
Balance at
December 31,
2022
    
Impact of
adopting CECL
    
Allowance for credit
loss on PCD
acquired loans
    
Charge-offs
    
Recoveries
    
Provision
    
Balance at
December 31,
2023
  
Real estate loans:
                                          
Residential
  
$
1,056
    
$
79
    
$
108
    
$
(1
)
  
$
-
    
$
1,112
    
$
2,354
  
Commercial
    
10,120
      
(3,070
)
    
39
      
-
      
-
      
2,089
      
9,178
  
Agricultural
    
4,589
      
(1,145
)
    
-
      
-
      
-
      
(180
)
    
3,264
  
Construction
    
801
      
(103
)
    
37
      
-
      
-
      
1,215
      
1,950
  
Consumer
    
135
      
1,040
      
677
      
(365
)
    
40
      
(115
)
    
1,412
  
Other commercial loans
    
1,040
      
(328
)
    
828
      
(963
)
    
9
      
1,727
      
2,313
  
Other agricultural loans
    
489
      
(219
)
    
-
      
-
      
-
      
-
      
270
  
State and political
                                                        
 subdivision loans
    
322
      
(280
)
    
-
      
-
      
-
      
3
      
45
  
Unallocated
    
-
      
726
      
-
      
-
      
-
      
(359
)
    
367
  
Total
  
$
18,552
    
$
(3,300
)
  
$
1,689
    
$
(1,329
)
  
$
49
    
$
5,492
    
$
21,153
  

The following table presents loans and the allowance for credit losses by portfolio segment, under the CECL methodology as of December 31, 2025 and 2024 (in thousands):

   
Allowance for Credit Losses – Loans
    
Loans
  
2025
  
Collectively evaluated
for impairment
    
Individually
evaluated for
impairment
    
Total
Allowance for
Credit Losses
– Loans
    
Collectively
evaluated for
impairment
    
Individually
evaluated for
impairment
    
Total Loans
  
Real estate loans:
                                    
Residential
  
$
3,050
    
$
62
    
$
3,112
    
$
338,600
    
$
2,372
    
$
340,972
  
Commercial
    
9,757
      
260
      
10,017
      
1,193,742
      
24,772
      
1,218,514
  
Agricultural
    
4,841
      
-
      
4,841
      
345,302
      
2,146
      
347,448
  
Construction
    
830
      
86
      
916
      
93,450
      
515
      
93,965
  
Consumer
    
327
      
874
      
1,201
      
87,301
      
909
      
88,210
  
Other commercial loans
    
1,903
      
631
      
2,534
      
171,343
      
7,823
      
179,166
  
Other agricultural loans
    
115
      
-
      
115
      
29,844
      
403
      
30,247
  
State and political subdivision loans
    
55
      
-
      
55
      
52,100
      
-
      
52,100
  
Unallocated
    
15
      
-
      
15
      
-
      
-
      
-
  
Total
  
$
20,893
    
$
1,913
    
$
22,806
    
$
2,311,682
    
$
38,940
    
$
2,350,622
  
             
2024
                                                
Real estate loans:
                                                
Residential
  
$
1,902
    
$
38
    
$
1,940
    
$
349,909
    
$
1,489
    
$
351,398
  
Commercial
    
9,070
      
104
      
9,174
      
1,105,847
      
15,588
      
1,121,435
  
Agricultural
    
3,529
      
-
      
3,529
      
323,660
      
4,062
      
327,722
  
Construction
    
1,402
      
-
      
1,402
      
164,043
      
283
      
164,326
  
Consumer
    
324
      
1,014
      
1,338
      
108,478
      
1,027
      
109,505
  
Other commercial loans
    
3,019
      
747
      
3,766
      
152,430
      
2,582
      
155,012
  
Other agricultural loans
    
133
      
-
      
133
      
29,125
      
537
      
29,662
  
State and political subdivision loans
    
61
      
-
      
61
      
54,182
      
-
      
54,182
  
Unallocated
    
356
      
-
      
356
      
-
      
-
      
-
  
Total
  
$
19,796
    
$
1,903
    
$
21,699
    
$
2,287,674
    
$
25,568
    
$
2,313,242
  

Non-performing Loans

Non-performing loans include nonaccrual loans, described in more detail below, and all loans past due 90 or more days. Loans are considered for non-accrual status upon reaching 90 days delinquency, although the Company may be receiving partial payments of interest and partial repayments of principal on such loans, or if full payment of principal and interest is not expected. Additionally, if management is made aware of other information including bankruptcy, repossession, death, or legal proceedings, the loan may be placed on non-accrual status. If a loan is 90 days or more past due and is well secured and in the process of collection, it may still be considered accruing.
The following table reflects the non-performing loan receivables, as well as those on non-accrual status as of December 31, 2025 and 2024, respectively. The balances are presented by class of loan receivable (in thousands):

   
December 31, 2025
    
December 31, 2024
  

 
Nonaccrual
With a
related
allowance
    
Nonaccrual
Without a
related
allowance
    
90 days or
greater past
due and
accruing
    
Total non-
performing
loans
    
Nonaccrual
With a
related
allowance
    
Nonaccrual
Without a
related
allowance
    
90 days or
greater past
due and
accruing
    
Total non-
performing
loans
  
Real estate loans:
                                                
Mortgages
  
$
153
    
$
3,229
    
$
-
    
$
3,382
    
$
165
    
$
2,541
    
$
-
    
$
2,706
  
Home Equity
    
-
      
61
      
151
      
212
      
-
      
165
      
-
      
165
  
Commercial
    
2,860
      
8,637
      
-
      
11,497
      
2,099
      
12,265
      
-
      
14,364
  
Agricultural
    
-
      
2,145
      
55
      
2,200
      
-
      
4,062
      
269
      
4,331
  
Construction
    
233
      
283
      
-
      
516
      
-
      
283
      
-
      
283
  
Consumer
    
770
      
-
      
15
      
785
      
1,002
      
-
      
7
      
1,009
  
Other commercial loans
    
6,282
      
1,546
      
8
      
7,836
      
2,382
      
200
      
-
      
2,582
  
Other agricultural loans
    
-
      
403
      
-
      
403
      
-
      
537
      
-
      
537
  
   
$
10,298
    
$
16,304
    
$
229
    
$
26,831
    
$
5,648
    
$
20,053
    
$
276
    
$
25,977
  

As of December 31, 2025 and 2024, there were $16,304,000 and $20,053,000, respectively, of non-accrual loans that did not have a related allowance for credit losses. The estimated fair values of the collateral securing these loans exceeded their carrying amount, or the loans were previously charged down to the realizable collateral values. Accordingly, no specific valuation allowance was considered to be necessary.

The following table presents, by class of loans and leases, the amortized cost basis of collateral-dependent nonaccrual loans and leases and type of collateral as of December 31, 2025 and 2024 (in thousands):

   
December 31, 2025
    
December 31, 2024
  
   
Real Estate
    
Other
    
None
    
Total
    
Real Estate
    
Other
    
None
    
Total
  
Real estate loans:
                                                
Mortgages
  
$
3,382
    
$
-
    
$
-
    
$
3,382
    
$
2,706
    
$
-
    
$
-
    
$
2,706
  
Home Equity
    
61
      
-
      
-
      
61
      
165
      
-
      
-
      
165
  
Commercial
    
11,497
      
-
      
-
      
11,497
      
14,364
      
-
      
-
      
14,364
  
Agricultural
    
2,145
      
-
      
-
      
2,145
      
4,062
      
-
      
-
      
4,062
  
Construction
    
516
      
-
      
-
      
516
      
283
      
-
      
-
      
283
  
Consumer
    
-
      
-
      
770
      
770
      
-
      
-
      
1,002
      
1,002
  
Other commercial loans
    
-
      
7,828
      
-
      
7,828
      
-
      
2,582
      
-
      
2,582
  
Other agricultural loans
    
-
      
403
      
-
      
403
      
-
      
537
      
-
      
537
  
   
$
17,601
    
$
8,231
    
$
770
    
$
26,602
    
$
21,580
    
$
3,119
    
$
1,002
    
$
25,701
  

Credit Quality Information

For commercial real estate, agricultural real estate, construction, other commercial, other agricultural, and state and political subdivision loans, management uses an internal risk rating system to monitor and assess credit quality. The criticized rating categories utilized by management generally follow bank regulatory definitions. The definitions of each rating are defined below:


 •
Pass (Grades 1-6) – These loans are to customers with credit quality ranging from an acceptable to very high quality and are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral.


•
Special Mention (Grade 7) – This loan grade is in accordance with regulatory guidance and includes loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected.

•
Substandard (Grade 8) – This loan grade is in accordance with regulatory guidance and includes loans that have a well-defined weakness based on objective evidence and be characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.


•
Doubtful (Grade 9) – This loan grade is in accordance with regulatory guidance and includes loans that have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.


•
Loss (Grade 10) – This loan grade is in accordance with regulatory guidance and includes loans that are considered uncollectible, or of such value that continuance as an asset is not warranted.

To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay the loan as agreed, the Company’s loan rating process includes several layers of internal and external oversight. The Company’s loan officers are responsible for the timely and accurate risk rating of the loans in each of their portfolios at origination and on an ongoing basis under the supervision of management. All commercial, agricultural and state and political relationships over $500,000 are reviewed annually to ensure the appropriateness of the loan grade. In addition, the Company engages an external consultant on at least an annual basis to: 1) review a minimum of 50% of the dollar volume of the commercial loan portfolio on an annual basis, 2) a large sample of relationships in aggregate over $1,000,000, 3) selected loan relationships over $750,000 which are over 30 days past due, or classified Special Mention, Substandard, Doubtful, or Loss, and 4) such other loans which management or the consultant deems appropriate. As part of this review, our underwriting process and loan grading system is evaluated.

The following tables represent credit exposures by internally assigned grades, by origination year, as of December 31, 2025 and 2024 (in thousands):
                                       
Revolving
    
Revolving
        
         
Loans
    
Loans
        
                                       
Amortized
    
Converted
        
December 31, 2025
  
2025
    
2024
    
2023
    
2022
    
2021
    
Prior
    
Cost Basis
    
to Term
    
Total
  
Commercial real estate
                                                      
Risk Rating
                                                      
Pass
  
$
127,490
    
$
59,760
    
$
128,989
    
$
329,694
    
$
172,617
    
$
294,237
    
$
34,709
    
$
1,971
    
$
1,149,467
  
Special Mention
    
-
      
5,042
      
797
      
5,784
      
8,770
      
7,208
      
733
      
-
      
28,334
  
Substandard
    
-
      
-
      
1,021
      
24,582
      
3,024
      
9,772
      
2,314
      
-
      
40,713
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
127,490
    
$
64,802
    
$
130,807
    
$
360,060
    
$
184,411
    
$
311,217
    
$
37,756
    
$
1,971
    
$
1,218,514
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
40
    
$
-
    
$
-
    
$
40
  
                                                                         
Agricultural real estate
                                                                        
Risk Rating
                                                                        
Pass
  
$
54,278
    
$
30,648
    
$
18,810
    
$
47,254
    
$
20,747
    
$
139,424
    
$
18,558
    
$
131
    
$
329,850
  
Special Mention
    
55
      
40
      
3,276
      
1,384
      
1,731
      
1,893
      
1,723
      
-
      
10,102
  
Substandard
    
1,297
      
667
      
-
      
2,052
      
657
      
2,103
      
645
      
75
      
7,496
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
55,630
    
$
31,355
    
$
22,086
    
$
50,690
    
$
23,135
    
$
143,420
    
$
20,926
    
$
206
    
$
347,448
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Construction
                                    
-
                                  
Risk Rating
                                                                        
Pass
  
$
30,394
    
$
15,456
    
$
8,490
    
$
25,772
    
$
-
    
$
-
    
$
5,215
    
$
-
    
$
85,327
  
Special Mention
    
-
      
-
      
-
      
206
      
2,943
      
-
      
-
      
-
      
3,149
  
Substandard
    
-
      
-
      
789
      
4,417
      
283
      
-
      
-
      
-
      
5,489
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
30,394
    
$
15,456
    
$
9,279
    
$
30,395
    
$
3,226
    
$
-
    
$
5,215
    
$
-
    
$
93,965
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Other commercial loans
                                    
-
                                  
Risk Rating
                                                                        
Pass
  
$
33,300
    
$
27,244
    
$
18,039
    
$
4,938
    
$
6,098
    
$
3,819
    
$
74,628
    
$
232
    
$
168,298
  
Special Mention
    
-
      
-
      
-
      
-
      
-
      
-
      
2,442
      
-
      
2,442
  
Substandard
    
-
      
117
      
-
      
1,784
      
40
      
714
      
4,257
      
1,443
      
8,355
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
66
      
5
      
71
  
Total
  
$
33,300
    
$
27,361
    
$
18,039
    
$
6,722
    
$
6,138
    
$
4,533
    
$
81,393
    
$
1,680
    
$
179,166
  
Current period gross charge-offs
  
$
-
    
$
49
    
$
-
    
$
-
    
$
-
    
$
63
    
$
379
    
$
-
    
$
491
  
                                                                         
Other agricultural loans
                                    
-
                                  
Risk Rating
                                                                        
Pass
  
$
5,677
    
$
3,520
    
$
1,440
    
$
408
    
$
1,602
    
$
288
    
$
14,761
    
$
-
    
$
27,696
  
Special Mention
    
-
      
936
      
15
      
-
      
-
      
-
      
639
      
-
      
1,590
  
Substandard
    
-
      
-
      
294
      
438
      
-
      
-
      
229
      
-
      
961
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
5,677
    
$
4,456
    
$
1,749
    
$
846
    
$
1,602
    
$
288
    
$
15,629
    
$
-
    
$
30,247
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
State and political subdivision loans
                                    
-
                                  
Risk Rating
                                                                        
Pass
  
$
1,504
    
$
27
    
$
1,291
    
$
12,737
    
$
9,932
    
$
26,509
    
$
100
    
$
-
    
$
52,100
  
Special Mention
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Substandard
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
1,504
    
$
27
    
$
1,291
    
$
12,737
    
$
9,932
    
$
26,509
    
$
100
    
$
-
    
$
52,100
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Total
                                    
-
                                  
Risk Rating
                                                                        
Pass
  
$
252,643
    
$
136,655
    
$
177,059
    
$
420,803
    
$
210,996
    
$
464,277
    
$
147,971
    
$
2,334
    
$
1,812,738
  
Special Mention
    
55
      
6,018
      
4,088
      
7,374
      
13,444
      
9,101
      
5,537
      
-
      
45,617
  
Substandard
    
1,297
      
784
      
2,104
      
33,273
      
4,004
      
12,589
      
7,445
      
1,518
      
63,014
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
66
      
5
      
71
  
Total
  
$
253,995
    
$
143,457
    
$
183,251
    
$
461,450
    
$
228,444
    
$
485,967
    
$
161,019
    
$
3,857
    
$
1,921,440
  
                                       
Revolving
    
Revolving
        
         
Loans
    
Loans
        
                                       
Amortized
    
Converted
        
December 31, 2024
  
2024
    
2023
    
2022
    
2021
    
2020
    
Prior
    
Cost Basis
    
to Term
    
Total
  
Commercial real estate
                                                      
Risk Rating
                                                      
Pass
  
$
52,122
    
$
84,465
    
$
360,989
    
$
200,869
    
$
114,839
    
$
223,601
    
$
28,178
    
$
1,786
    
$
1,066,849
  
Special Mention
    
-
      
810
      
3,495
      
1,874
      
1,372
      
8,501
      
1,674
      
-
      
17,726
  
Substandard
    
85
      
1,057
      
19,884
      
2,843
      
629
      
11,785
      
176
      
401
      
36,860
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
52,207
    
$
86,332
    
$
384,368
    
$
205,586
    
$
116,840
    
$
243,887
    
$
30,028
    
$
2,187
    
$
1,121,435
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Agricultural real estate
                                                                        
Risk Rating
                                                                        
Pass
  
$
32,199
    
$
22,372
    
$
46,644
    
$
26,132
    
$
29,770
    
$
126,876
    
$
14,351
    
$
115
    
$
298,459
  
Special Mention
    
2,930
      
3,138
      
7,109
      
-
      
-
      
5,315
      
2,248
      
-
      
20,740
  
Substandard
    
708
      
140
      
2,179
      
1,250
      
-
      
3,604
      
529
      
113
      
8,523
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
35,837
    
$
25,650
    
$
55,932
    
$
27,382
    
$
29,770
    
$
135,795
    
$
17,128
    
$
228
    
$
327,722
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Construction
                                    
-
                                  
Risk Rating
                                                                        
Pass
  
$
48,026
    
$
56,916
    
$
34,995
    
$
-
    
$
-
    
$
-
    
$
1,355
    
$
-
    
$
141,292
  
Special Mention
    
-
      
-
      
19,391
      
2,950
      
-
      
-
      
-
      
-
      
22,341
  
Substandard
    
-
      
-
      
410
      
283
      
-
      
-
      
-
      
-
      
693
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
48,026
    
$
56,916
    
$
54,796
    
$
3,233
    
$
-
    
$
-
    
$
1,355
    
$
-
    
$
164,326
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Other commercial loans
                                    
-
                                  
Risk Rating
                                                                        
Pass
  
$
33,211
    
$
22,808
    
$
6,773
    
$
7,542
    
$
2,150
    
$
3,464
    
$
68,573
    
$
75
    
$
144,596
  
Special Mention
    
20
      
-
      
1,798
      
178
      
62
      
56
      
4,888
      
32
      
7,034
  
Substandard
    
213
      
-
      
195
      
-
      
234
      
641
      
422
      
1,661
      
3,366
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
16
      
16
  
Total
  
$
33,444
    
$
22,808
    
$
8,766
    
$
7,720
    
$
2,446
    
$
4,161
    
$
73,883
    
$
1,784
    
$
155,012
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
59
    
$
-
    
$
-
    
$
-
    
$
2,502
    
$
-
    
$
2,561
  
                                                                         
Other agricultural loans
                                    
-
                                  
Risk Rating
                                                                        
 Pass
  
$
4,576
    
$
2,008
    
$
888
    
$
3,870
    
$
407
    
$
220
    
$
14,812
    
$
-
    
$
26,781
  
Special Mention
    
1,341
      
-
      
-
      
-
      
-
      
400
      
67
      
-
      
1,808
  
Substandard
    
-
      
354
      
455
      
9
      
-
      
113
      
131
      
11
      
1,073
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
5,917
    
$
2,362
    
$
1,343
    
$
3,879
    
$
407
    
$
733
    
$
15,010
    
$
11
    
$
29,662
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
State and political subdivision loans
                                    
-
                                  
Risk Rating
                                                                        
Pass
  
$
-
    
$
1,442
    
$
13,460
    
$
10,522
    
$
5,319
    
$
23,439
    
$
-
    
$
-
    
$
54,182
  
Special Mention
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Substandard
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
-
    
$
1,442
    
$
13,460
    
$
10,522
    
$
5,319
    
$
23,439
    
$
-
    
$
-
    
$
54,182
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Total
                                    
-
                                  
Risk Rating
                                                                        
Pass
  
$
170,134
    
$
190,011
    
$
463,749
    
$
248,935
    
$
152,485
    
$
377,600
    
$
127,269
    
$
1,976
    
$
1,732,159
  
Special Mention
    
4,291
      
3,948
      
31,793
      
5,002
      
1,434
      
14,272
      
8,877
      
32
      
69,649
  
Substandard
    
1,006
      
1,551
      
23,123
      
4,385
      
863
      
16,143
      
1,258
      
2,186
      
50,515
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
16
      
16
  
Total
  
$
175,431
    
$
195,510
    
$
518,665
    
$
258,322
    
$
154,782
    
$
408,015
    
$
137,404
    
$
4,210
    
$
1,852,339
  
For residential real estate mortgage loans, home equity loans, and consumer loans, credit quality is monitored based on whether the loan is performing or non-performing, which is typically based on the aging status of the loan and payment activity, unless a specific action, such as bankruptcy, repossession, death or significant delay in payment occurs to raise awareness of a possible credit event. Non-performing loans include those loans that are considered nonaccrual, described in more detail above, and all loans past due 90 or more days and still accruing. The following table presents the recorded investment in those loan classes based on payment activity, by origination year, as of December 31, 2025 and 2024 (in thousands):
 
                                       
Revolving
    
Revolving
        
         
Loans
    
Loans
        
                                       
Amortized
    
Converted
        
December 31, 2025
  
2025
    
2024
    
2023
    
2022
    
2021
    
Prior
    
Cost Basis
    
to Term
    
Total
  
Residential real estate
                                                      
Payment Performance
                                                      
Performing
  
$
13,909
    
$
13,209
    
$
23,135
    
$
81,239
    
$
41,842
    
$
111,948
    
$
-
    
$
-
    
$
285,282
  
Nonperforming
    
-
      
-
      
-
      
1,057
      
1,132
      
1,193
      
-
      
-
      
3,382
  
Total
  
$
13,909
    
$
13,209
    
$
23,135
    
$
82,296
    
$
42,974
    
$
113,141
    
$
-
    
$
-
    
$
288,664
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
Home equity
                                    
-
                                  
Payment Performance
                                                                        
Performing
  
$
2,854
    
$
2,528
    
$
2,533
    
$
1,727
    
$
1,150
    
$
6,918
    
$
34,100
    
$
286
    
$
52,096
  
Nonperforming
    
63
      
-
      
18
      
-
      
-
      
110
      
21
      
-
      
212
  
Total
  
$
2,917
    
$
2,528
    
$
2,551
    
$
1,727
    
$
1,150
    
$
7,028
    
$
34,121
    
$
286
    
$
52,308
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Consumer
                                    
-
                                  
Payment Performance
                                                                        
Performing
  
$
1,934
    
$
1,050
    
$
373
    
$
354
    
$
412
    
$
2,577
    
$
80,725
    
$
-
    
$
87,425
  
Nonperforming
    
-
      
10
      
-
      
-
      
11
      
764
      
-
      
-
      
785
  
Total
  
$
1,934
    
$
1,060
    
$
373
    
$
354
    
$
423
    
$
3,341
    
$
80,725
    
$
-
    
$
88,210
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
11
    
$
1
    
$
-
    
$
285
    
$
30
    
$
-
    
$
327
  
                                                                         
Total
                                    
-
                                  
Payment Performance
                                                                        
Performing
  
$
18,697
    
$
16,787
    
$
26,041
    
$
83,320
    
$
43,404
    
$
121,443
    
$
114,826
    
$
286
    
$
424,804
  
Nonperforming
    
63
      
10
      
18
      
1,057
      
1,143
      
2,067
      
20
      
-
      
4,378
  
Total
  
$
18,760
    
$
16,797
    
$
26,059
    
$
84,377
    
$
44,547
    
$
123,510
    
$
114,846
    
$
286
    
$
429,182
  

                                       
Revolving
    
Revolving
        
         
Loans
    
Loans
        
                                       
Amortized
    
Converted
        
December 31, 2024
  
2024
    
2023
    
2022
    
2021
    
2020
    
Prior
    
Cost Basis
    
to Term
    
Total
  
Residential real estate
                                                      
Payment Performance
                                                      
Performing
  
$
11,487
    
$
23,870
    
$
88,581
    
$
45,731
    
$
27,537
    
$
101,823
    
$
-
    
$
-
    
$
299,029
  
Nonperforming
    
-
      
-
      
382
      
751
      
463
      
1,110
      
-
      
-
      
2,706
  
Total
  
$
11,487
    
$
23,870
    
$
88,963
    
$
46,482
    
$
28,000
    
$
102,933
    
$
-
    
$
-
    
$
301,735
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
5
    
$
-
    
$
-
    
$
5
  
Home equity
                                    
-
                                  
Payment Performance
                                                                        
Performing
  
$
2,987
    
$
3,456
    
$
2,418
    
$
1,454
    
$
1,525
    
$
7,937
    
$
29,302
    
$
419
    
$
49,498
  
Nonperforming
    
-
      
-
      
-
      
-
      
83
      
82
      
-
      
-
      
165
  
Total
  
$
2,987
    
$
3,456
    
$
2,418
    
$
1,454
    
$
1,608
    
$
8,019
    
$
29,302
    
$
419
    
$
49,663
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Consumer
                                    
-
                                  
Payment Performance
                                                                        
Performing
  
$
2,076
    
$
880
    
$
589
    
$
543
    
$
317
    
$
2,520
    
$
101,570
    
$
1
    
$
108,496
  
Nonperforming
    
-
      
7
      
-
      
-
      
6
      
996
      
-
      
-
      
1,009
  
Total
  
$
2,076
    
$
887
    
$
589
    
$
543
    
$
323
    
$
3,516
    
$
101,570
    
$
1
    
$
109,505
  
Current period gross charge-offs
  
$
-
    
$
13
    
$
27
    
$
-
    
$
-
    
$
38
    
$
29
    
$
-
    
$
107
  
                                                                         
Total
                                    
-
                                  
Payment Performance
                                                                        
Performing
  
$
16,550
    
$
28,206
    
$
91,588
    
$
47,728
    
$
29,379
    
$
112,280
    
$
130,872
    
$
420
    
$
457,023
  
Nonperforming
    
-
      
7
      
382
      
751
      
552
      
2,188
      
-
      
-
      
3,880
  
Total
  
$
16,550
    
$
28,213
    
$
91,970
    
$
48,479
    
$
29,931
    
$
114,468
    
$
130,872
    
$
420
    
$
460,903
  
Aging Analysis of Past Due Loan Receivables
 
Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following table includes an aging analysis of the recorded investment of past due loan receivables as of December 31, 2025 and 2024 (in thousands):
 
                                 
Total
  
   
30-59 Days
    
60-89 Days
    
90 Days
    
Total Past
          
Loans
  
December 31, 2025
  
Past Due
    
Past Due
    
Or Greater
    
Due
    
Current
    
Receivables
  
Real estate loans:
                                    
Mortgages
  
$
2,737
    
$
1,073
    
$
1,675
    
$
5,485
    
$
283,179
    
$
288,664
  
Home Equity
    
146
      
17
      
181
      
344
      
51,964
      
52,308
  
Commercial
    
1,733
      
2,695
      
9,871
      
14,299
      
1,204,215
      
1,218,514
  
Agricultural
    
1,020
      
158
      
1,982
      
3,160
      
344,288
      
347,448
  
Construction
    
-
      
233
      
283
      
516
      
93,449
      
93,965
  
Consumer
    
161
      
148
      
785
      
1,094
      
87,116
      
88,210
  
Other commercial loans
    
256
      
49
      
7,500
      
7,805
      
171,361
      
179,166
  
Other agricultural loans
    
17
      
-
      
403
      
420
      
29,827
      
30,247
  
State and political subdivision loans
    
-
      
-
      
-
      
-
      
52,100
      
52,100
  
Total
  
$
6,070
    
$
4,373
    
$
22,680
    
$
33,123
    
$
2,317,499
    
$
2,350,622
  
                                                 
Loans considered non-accrual
  
$
396
    
$
778
    
$
22,451
    
$
23,625
    
$
2,977
    
$
26,602
  
Loans still accruing
    
5,674
      
3,595
      
229
      
9,498
      
2,314,522
      
2,324,020
  
Total
  
$
6,070
    
$
4,373
    
$
22,680
    
$
33,123
    
$
2,317,499
    
$
2,350,622
  
                                                 
December 31, 2024
                                                
Real estate loans:
                                                
Mortgages
  
$
1,464
    
$
227
    
$
1,605
    
$
3,296
    
$
298,439
    
$
301,735
  
Home Equity
    
138
      
170
      
148
      
456
      
49,207
      
49,663
  
Commercial
    
2,782
      
1,360
      
6,528
      
10,670
      
1,110,765
      
1,121,435
  
Agricultural
    
1,569
      
140
      
1,845
      
3,554
      
324,168
      
327,722
  
Construction
    
1,119
      
-
      
283
      
1,402
      
162,924
      
164,326
  
Consumer
    
292
      
20
      
1,009
      
1,321
      
108,184
      
109,505
  
Other commercial loans
    
478
      
282
      
2,336
      
3,096
      
151,916
      
155,012
  
Other agricultural loans
    
403
      
-
      
-
      
403
      
29,259
      
29,662
  
State and political
                                                
subdivision loans
    
-
      
-
      
-
      
-
      
54,182
      
54,182
  
Total
  
$
8,245
    
$
2,199
    
$
13,754
    
$
24,198
    
$
2,289,044
    
$
2,313,242
  
                                                 
Loans considered non-accrual
  
$
2,428
    
$
-
    
$
13,478
    
$
15,906
    
$
9,795
    
$
25,701
  
Loans still accruing
    
5,817
      
2,199
      
276
      
8,292
      
2,279,249
      
2,287,541
  
Total
  
$
8,245
    
$
2,199
    
$
13,754
    
$
24,198
    
$
2,289,044
    
$
2,313,242
  

Modifications to Borrowers Experiencing Financial Difficulty
 
Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, 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.
 
In some cases, the Company provides multiple types of concessions on one loan. 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.
 
The following table shows the amortized cost basis, by class of loans receivable, information regarding accruing and nonaccrual modified loans to borrowers experiencing financial difficulty during 2025, 2024 and 2023 (dollars in thousands):
 
   
For the year ended December 31, 2025
  
   
Number of loans
    
Amortized Cost Basis
    
% of Total Class of Financing Receivable
  
Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
Real estate loans:
              
Mortgages
    
1
    
$
108
      
0.04
%
Commercial
    
7
      
13,275
      
1.09
%
Other commercial loans
    
1
      
178
      
0.10
%
Total
    
9
    
$
13,561
          
                         
Non-Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
Real estate loans:
                  
Commercial
    
4
    
$
1,369
      
0.11
%
Agricultural
    
1
      
219
      
0.06
%
Total
    
5
    
$
1,588
          

 
  
For the year ended December 31, 2024
  
 
  
Number of loans
    
Amortized Cost Basis
    
% of Total Class of Financing Receivable
  
Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
Real estate loans:
              
Mortgages
    
1
    
$
12
      
0.00
%
Total
    
1
    
$
12
          
 
                        
Non-Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
Other commercial loans
    
1
    
$
149
      
0.11
%
Total
    
1
    
$
149
          

 
  
For the year ended December 31, 2023
  
 
  
Number of loans
    
Amortized Cost Basis
    
% of Total Class of Financing Receivable
  
Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
Real estate loans:
              
Mortgages
    
1
    
$
126
      
0.04
%
Commercial
    
4
      
1,142
      
0.10
%
Agricultural
    
3
      
688
      
0.22
%
Other commercial loans
    
1
      
610
      
0.45
%
Total
    
9
    
$
2,566
          
 
                        
Non-Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
Real estate loans:
                  
Mortgages
    
1
    
$
315
      
0.10
%
Commercial
    
3
      
261
      
0.02
%
Other commercial loans
    
5
      
1,108
      
0.81
%
Total
    
9
    
$
1,684
          

The following table shows, by class of loans receivable, information regarding the financial effect on accruing and nonaccrual modified loans to borrowers experiencing financial difficulty during 2025, 2024 and 2023:
 
For the year ended December 31, 2025
Term Extension
Loan Type
  
Number of loans
  
Financial Effect
Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
Real estate loans:
         
Mortgages
  
1
  
Extended the loan maturity 5 years with a 30 year amortization
Commercial
    
7
  
Extended the loan maturity one year
Other commercial loans
    
1
  
Extended the loan maturity 10 years as termed out or line of credit
Total
    
9
    
             
Non-Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
Real estate loans:
           
Commercial
    
4
  
Extended the loan maturity 5 years with 3 loans having a 30 year amortization and one loan having a 20 year amortization
Agricultural
    
1
  
Extended the loan maturity 5 years with amortization of 12 years
Total
    
5
    
 
For the year ended December 31, 2024
Term Extension
Loan Type
  
Number of loans
  
Financial Effect
Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
 
Real estate loans:
      
  
Mortgages
    
1
  
Extended the loan maturity 4 months
Total
    
1
  
 
 
        
   
Non-Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
 
Other commercial loans
    
1
  
Extended the loan maturity 120 months
Total
    
1
  
 


For the year ended December 31, 2023
Term Extension
Loan Type
  
Number of loans
  
Financial Effect
Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
 
Real estate loans:
      
  
Mortgages
    
1
  
Extended the loan maturity 4 months
Commercial
    
4
  
Extended the weighted average loan maturity 4 months
Agricultural
    
3
  
Extended the weighted average loan maturity 5 months
Other commercial loans
    
1
  
Extended the loan maturity 60 months
Total
    
9
  
 
 
        
   
Non-Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
 
Real estate loans:
        
  
Mortgages
    
1
  
Extended the loan maturing 10 months
Commercial
    
3
  
Extended the weighted average loan maturity 5 months
Other commercial loans
    
5
  
Extended the weighted average loan maturity 13 months
Total
    
9
  
 

There were no accruing or nonaccrual modified loans to borrowers experiencing financial difficulty that were modified during 2025 for which there were payment defaults after the modification date for 2025.
 
The following presents, by class of loans, the amortized cost and payment status of accruing and nonaccrual modified loans to borrowers experiencing financial difficulty at December 31, 2025 (in thousands):
 
         
30-89 Days
    
90 Days
        
Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
Current
    
Past Due
    
Or Greater
    
Total
  
Real estate loans:
                        
Mortgages
  
$
108
    
$
-
    
$
-
    
$
108
  
Commercial
    
13,275
      
-
      
-
      
13,275
  
Other commercial loans
    
178
      
-
      
-
      
178
  
Total
  
$
13,561
    
$
-
    
$
-
    
$
13,561
  
                                 
Non-Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
                                
Real estate loans:
                                
Commercial
  
$
1,369
    
$
-
    
$
-
    
$
1,369
  
Agricultural
    
219
      
-
      
-
      
219
  
Total
  
$
1,588
    
$
-
    
$
-
    
$
1,588
  
Foreclosed Assets Held For Sale
 
Foreclosed assets acquired in settlement of loans are carried at fair value, less estimated costs to sell, and are included in other assets on the Consolidated Balance Sheet. As of December 31, 2025 and 2024, included with other assets are $2,358,000 and $2,635,000, respectively, of foreclosed assets. As of December 31, 2025, there are no consumer residential mortgages included within the foreclosed assets. As of December 31, 2025, the Company has initiated formal foreclosure proceedings on $617,000 of consumer residential mortgages, which have not yet been transferred into foreclosed assets.