Note 4 - Loans and Allowance for Credit Losses

6 Months Ended

Jun. 30, 2025

Notes to Financial Statements

Financing Receivables [Text Block]

NOTE 4 Loans and Allowance for Credit Losses

The following table presents total loans outstanding, by portfolio segment, as of June 30, 2025 and December 31, 2024:

	June 30,		December 31,
(dollars in thousands)	2025		2024
Commercial
Commercial and industrial	$	675,892	$	666,727
Commercial real estate
Construction, land and development		352,749		294,677
Multifamily		333,307		363,123
Non-owner occupied		887,643		967,025
Owner occupied		440,170		371,418
Total commercial real estate		2,013,869		1,996,243
Agricultural
Land		66,395		61,299
Production		67,931		63,008
Total agricultural		134,326		124,307
Total commercial		2,824,087		2,787,277
Consumer
Residential real estate
First lien		901,738		921,019
Construction		35,754		33,547
HELOC		200,624		162,509
Junior lien		41,450		44,060
Total residential real estate		1,179,566		1,161,135
Other consumer		41,004		44,122
Total consumer		1,220,570		1,205,257
Total loans	$	4,044,657	$	3,992,534

Total loans included net deferred loan fees and costs of $0.3 million and $1.1 million at June 30, 2025 and December 31, 2024, respectively. Unearned discounts associated with bank acquisitions totaled $52.7 million and $70.6 million as of June 30, 2025 and December 31, 2024, respectively. 

Accrued interest receivable on loans is recorded within accrued interest receivable, and totaled $17.5 million at June 30, 2025 and $16.4 million at December 31, 2024. 

As of  June 30, 2025, the Company had $50.2 million in non-mortgage loans held for sale, which were previously recorded as loans, compared to $0.0 million at December 31, 2024. The Company transferred these loans to the non-mortgage loans held for sale category in the second quarter of 2025, and a valuation allowance of $78 thousand was recorded as part of this transaction. During the second quarter of 2025, the Company transferred a loan from the loans category to the non-mortgage loans held for sale category. This loan was sold prior to the end of the second quarter of 2025, and the Company received proceeds of $12.3 million. 

The Company manages its loan portfolio proactively to effectively identify problem credits and assess trends early, implement effective work-out strategies, and take charge-offs as promptly as practical. In addition, the Company continuously reassesses its underwriting standards in response to credit risk posed by changes in economic conditions. The Company monitors and manages credit risk through the following governance structure: 

● The Credit Risk team, Collection and Special Assets team and the Credit Governance Committee, which is an internal management committee comprised of various executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Collections and Special Assets, Risk, and Commercial and Retail Banking, oversee the Company’s systems and procedures to monitor the credit quality of its loan portfolio, conduct a loan review program, and maintain the integrity of the loan rating system.

● The Loan Committee is responsible for reviewing and approving all credit requests that exceed individual limits that have not been countersigned by an individual with sufficient assigned authority. This committee has full authority to commit the Bank to any request that fits within its assigned approval authority.

● The adequacy of the ACL is overseen by the ACL Governance Committee, which is an internal management committee comprised of various Company executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Collections and Special Assets, Risk, and Commercial and Retail Banking. The ACL Governance Committee supports the oversight efforts of the Bank’s Board of Directors.

● The Bank’s Board of Directors has approval authority and responsibility for all matters regarding loan policy, reviews all loans approved or declined by the Loan Committee, approves lending authority and monitors asset quality and concentration levels.

● The ACL Governance Committee and Bank Board of Directors has approval authority and oversight responsibility for the ACL adequacy and methodology.

Loans with a carrying value of $2.9 billion, as of both  June 30, 2025 and December 31, 2024, were pledged to secure public deposits, and for other purposes required or permitted by law.

ACL on Loans

The following tables present, by loan portfolio segment, a summary of the changes in the ACL on loans for the three and six months ended June 30, 2025 and 2024:

	Three months ended June 30, 2025
	Beginning		Provision for			Loan			Loan		Ending
(dollars in thousands)	Balance		Credit Losses(1)			Charge-offs			Recoveries		Balance
Commercial
Commercial and industrial	$	7,960	$	317		$	(79	)	$	128	$	8,326
Commercial real estate
Construction, land and development		18,369		160			—			—		18,529
Multifamily		4,749		127			—			—		4,876
Non-owner occupied		16,342		(22	)		(3,401	)		—		12,919
Owner occupied		3,512		301			(6	)		11		3,818
Total commercial real estate		42,972		566			(3,407	)		11		40,142
Agricultural
Land		603		12			—			—		615
Production		913		94			(384	)		—		623
Total agricultural		1,516		106			(384	)		—		1,238
Total commercial		52,448		989			(3,870	)		139		49,706
Consumer
Residential real estate
First lien		7,042		17			—			—		7,059
Construction		467		(51	)		—			—		416
HELOC		1,180		188			(10	)		—		1,358
Junior lien		439		(63	)		—			—		376
Total residential real estate		9,128		91			(10	)		—		9,209
Other consumer		353		36			(38	)		12		363
Total consumer		9,481		127			(48	)		12		9,572
Total	$	61,929	$	1,116		$	(3,918	)	$	151	$	59,278

(1) The difference in the credit loss expense reported herein compared to the consolidated statements of income is associated with the credit loss expense of ($1.2) million related to off-balance sheet credit exposure, ($2) thousand related to HTM investment securities, and $78 thousand related to non-mortgage loans transferred to held for sale.

	Six months ended June 30, 2025
	Beginning		Provision for			Loan			Loan		Ending
(dollars in thousands)	Balance		Credit Losses(1)			Charge-offs			Recoveries		Balance
Commercial
Commercial and industrial	$	8,170	$	6		$	(248	)	$	398	$	8,326
Commercial real estate
Construction, land and development		16,277		2,252			—			—		18,529
Multifamily		4,716		160			—			—		4,876
Non-owner occupied		16,513		(193	)		(3,401	)		—		12,919
Owner occupied		3,226		576			(6	)		22		3,818
Total commercial real estate		40,732		2,795			(3,407	)		22		40,142
Agricultural
Land		597		18			—			—		615
Production		631		364			(384	)		12		623
Total agricultural		1,228		382			(384	)		12		1,238
Total commercial		50,130		3,183			(4,039	)		432		49,706
Consumer
Residential real estate
First lien		6,921		192			(54	)		—		7,059
Construction		357		59			—			—		416
HELOC		1,339		279			(260	)		—		1,358
Junior lien		742		(66	)		(300	)		—		376
Total residential real estate		9,359		464			(614	)		—		9,209
Other consumer		440		(124	)		(77	)		124		363
Total consumer		9,799		340			(691	)		124		9,572
Total	$	59,929	$	3,523		$	(4,730	)	$	556	$	59,278

(1) The difference in the credit loss expense reported herein compared to the consolidated statements of income is associated with the credit loss expense of ($2.7) million related to off-balance sheet credit exposure, ($4) thousand related to HTM investment securities, and $78 thousand related to non-mortgage loans transferred to held for sale.

	Three months ended June 30, 2024
	Beginning		Provision for			Loan			Loan		Ending
(dollars in thousands)	Balance		Credit Losses(1)			Charge-offs			Recoveries		Balance
Commercial
Commercial and industrial	$	9,508	$	(663	)	$	(2,730	)	$	119	$	6,234
Commercial real estate
Construction, land and development		5,922		4,898			—			—		10,820
Multifamily		2,148		282			—			—		2,430
Non-owner occupied		8,104		668			—			—		8,772
Owner occupied		2,461		(190	)		—			9		2,280
Total commercial real estate		18,635		5,658			—			9		24,302
Agricultural
Land		248		11			—			—		259
Production		219		(34	)		—			—		185
Total agricultural		467		(23	)		—			—		444
Total commercial		28,610		4,972			(2,730	)		128		30,980
Consumer
Residential real estate
First lien		6,152		(786	)		—			—		5,366
Construction		489		(31	)		—			—		458
HELOC		864		22			—			—		886
Junior lien		284		(41	)		(3	)		74		314
Total residential real estate		7,789		(836	)		(3	)		74		7,024
Other consumer		185		134			(1	)		10		328
Total consumer		7,974		(702	)		(4	)		84		7,352
Total	$	36,584	$	4,270		$	(2,734	)	$	212	$	38,332

(1) The difference in the credit loss expense reported herein compared to the consolidated statements of income is associated with the credit loss expense of ($275) million related to off-balance sheet credit exposure and ($56) thousand related to HTM investment securities.

	Six months ended June 30, 2024
	Beginning		Provision for			Loan			Loan		Ending
(dollars in thousands)	Balance		Credit Losses(1)			Charge-offs			Recoveries		Balance
Commercial
Commercial and industrial	$	9,705	$	(819	)	$	(2,894	)	$	242	$	6,234
Commercial real estate
Construction, land and development		6,135		4,685			—			—		10,820
Multifamily		1,776		654			—			—		2,430
Non-owner occupied		7,726		1,046			—			—		8,772
Owner occupied		2,449		(160	)		(29	)		20		2,280
Total commercial real estate		18,086		6,225			(29	)		20		24,302
Agricultural
Land		96		163			—			—		259
Production		84		101			—			—		185
Total agricultural		180		264			—			—		444
Total commercial		27,971		5,670			(2,923	)		262		30,980
Consumer
Residential real estate
First lien		6,087		(721	)		—			—		5,366
Construction		485		(27	)		—			—		458
HELOC		835		51			—			—		886
Junior lien		264		(21	)		(3	)		74		314
Total residential real estate		7,671		(718	)		(3	)		74		7,024
Other consumer		201		117			(13	)		23		328
Total consumer		7,872		(601	)		(16	)		97		7,352
Total	$	35,843	$	5,069		$	(2,939	)	$	359	$	38,332

(1) The difference in the credit loss expense reported herein compared to the consolidated statements of income is associated with the credit loss expense of ($0.5) million related to off-balance sheet credit exposure and ($62) thousand related to HTM investment securities.

The ACL on loans at June 30, 2025 was $59.3 million, a decrease of $0.6 million, or 1.1%, from December 31, 2024. The decrease was primarily due to the non-mortgage loans transferred to held for sale, offset by loan growth and economic conditions. 

Credit Concentrations 

The Company focuses on maintaining a well-balanced and diversified loan portfolio. Despite such efforts, it is recognized that credit concentrations may occasionally emerge as a result of economic conditions, changes in local demand, natural loan growth and runoff. To identify credit concentrations effectively, all commercial and industrial and owner occupied real estate loans are assigned Standard Industrial Classification codes, North American Industry Classification System codes and state and county codes. Property type coding is used for investment real estate. There were no industry concentrations exceeding 10% of the Company’s total loan portfolio as of June 30, 2025.

Credit Quality Indicators 

The Company’s consumer loan portfolio is primarily comprised of secured loans that are evaluated at origination on a centralized basis against standardized underwriting criteria. The Company generally does not risk rate consumer loans unless a default event such as bankruptcy or extended nonperformance takes place. Credit quality for the consumer loan portfolio is measured by delinquency rates, nonaccrual amounts and actual losses incurred. These loans are rated as either performing or nonperforming.

The Company assigns a risk rating to all commercial loans, except pools of homogeneous loans, and performs detailed internal and external reviews of risk rated loans over a certain threshold to identify credit risks and to assess the overall collectability of the portfolio. These risk ratings are also subject to examination by the Company’s regulators. During the internal reviews, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which the borrowers operate and the estimated fair values of collateral securing the loans. These credit quality indicators are used to assign a risk rating to each individual loan.

The Company’s ratings are aligned to pass and criticized categories. The criticized category includes special mention, substandard, and doubtful risk ratings. The risk ratings are defined as follows:

● Pass: A pass loan is a credit with no existing or known potential weaknesses deserving of management’s close attention.

● Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the repayment prospects for the loan or in the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

● Substandard: Loans classified as substandard are not adequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Loans so classified have a well‑defined weakness, or weaknesses that jeopardize the repayment of the debt. Well-defined weaknesses include a borrower’s lack of marketability, inadequate cash flow or collateral support, failure to complete construction on time, or the failure to fulfill expectations. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

● Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

● Loss: Loans classified as loss are considered uncollectible and charged off immediately.

The following tables set forth the amortized cost basis of loans by credit quality indicator and vintage based on the most recent analysis performed, as of June 30, 2025 and December 31, 2024:

													Revolving
(dollars in thousands)	Term Loans Amortized Cost Basis by Origination Year												Loans Amortized
As of June 30, 2025	2025		2024		2023		2022		2021		Prior		Cost Basis		Total
Commercial and industrial
Pass	$	78,791	$	167,272	$	100,345	$	52,029	$	27,322	$	52,389	$	152,868	$	631,016
Special mention		—		11		—		—		674		—		—		685
Substandard		1,218		10,345		4,961		3,637		648		10,045		13,337		44,191
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	80,009	$	177,628	$	105,306	$	55,666	$	28,644	$	62,434	$	166,205	$	675,892
Gross charge-offs for the period ended	$	—	$	—	$	—	$	—	$	—	$	248	$	—	$	248
CRE − Construction, land and development
Pass	$	5,355	$	128,894	$	142,272	$	28,622	$	667	$	1,140	$	3,230	$	310,180
Special mention		—		—		—		175		—		—		—		175
Substandard		—		10,052		—		31,868		—		174		300		42,394
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	5,355	$	138,946	$	142,272	$	60,665	$	667	$	1,314	$	3,530	$	352,749
Gross charge-offs for the period ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
CRE − Multifamily
Pass	$	2,944	$	26,832	$	40,215	$	112,825	$	32,933	$	63,015	$	—	$	278,764
Special mention		—		—		—		25,152		821		1,001		—		26,974
Substandard		—		5,756		3,972		—		—		17,841		—		27,569
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	2,944	$	32,588	$	44,187	$	137,977	$	33,754	$	81,857	$	—	$	333,307
Gross charge-offs for the period ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
CRE − Non-owner occupied
Pass	$	49,808	$	193,356	$	152,003	$	197,413	$	89,190	$	185,169	$	1,970	$	868,909
Special mention		—		—		—		—		—		1,063		—		1,063
Substandard		—		—		5,417		1,293		2,778		8,183		—		17,671
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	49,808	$	193,356	$	157,420	$	198,706	$	91,968	$	194,415	$	1,970	$	887,643
Gross charge-offs for the period ended	$	—	$	—	$	—	$	632	$	775	$	1,994	$	—	$	3,401
CRE − Owner occupied
Pass	$	26,322	$	83,805	$	56,577	$	63,039	$	43,710	$	136,665	$	1,435	$	411,553
Special mention		—		450		1,400		—		—		4,317		570		6,737
Substandard		—		—		1,496		2,946		1,910		15,528		—		21,880
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	26,322	$	84,255	$	59,473	$	65,985	$	45,620	$	156,510	$	2,005	$	440,170
Gross charge-offs for the period ended	$	—	$	—	$	6	$	—	$	—	$	—	$	—	$	6
Agricultural − Land
Pass	$	6,427	$	9,376	$	9,531	$	12,568	$	5,672	$	12,793	$	1,914	$	58,281
Special mention		—		—		—		3,372		—		—		—		3,372
Substandard		—		—		303		3,604		—		835		—		4,742
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	6,427	$	9,376	$	9,834	$	19,544	$	5,672	$	13,628	$	1,914	$	66,395
Gross charge-offs for the period ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Agricultural − Production
Pass	$	8,161	$	8,140	$	5,691	$	4,011	$	484	$	1,077	$	36,187	$	63,751
Special mention		—		415		253		99		—		408		150		1,325
Substandard		—		23		539		1,237		28		—		1,028		2,855
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	8,161	$	8,578	$	6,483	$	5,347	$	512	$	1,485	$	37,365	$	67,931
Gross charge-offs for the period ended	$	—	$	—	$	—	$	384	$	—	$	—	$	—	$	384
Residential real estate − First lien
Performing	$	27,992	$	45,602	$	131,981	$	218,932	$	242,815	$	231,766	$	—	$	899,088
Nonperforming		—		—		574		—		436		1,640		—		2,650
Subtotal	$	27,992	$	45,602	$	132,555	$	218,932	$	243,251	$	233,406	$	—	$	901,738
Gross charge-offs for the period ended	$	—	$	—	$	—	$	—	$	7	$	47	$	—	$	54
Residential real estate − Construction
Performing	$	6,010	$	21,246	$	872	$	—	$	1,043	$	—	$	1,903	$	31,074
Nonperforming		—		—		—		4,680		—		—		—		4,680
Subtotal	$	6,010	$	21,246	$	872	$	4,680	$	1,043	$	—	$	1,903	$	35,754
Gross charge-offs for the period ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Residential real estate − HELOC
Performing	$	328	$	2,773	$	4,607	$	5,680	$	1,441	$	4,246	$	180,336	$	199,411
Nonperforming		—		—		25		1,130		—		58		—		1,213
Subtotal	$	328	$	2,773	$	4,632	$	6,810	$	1,441	$	4,304	$	180,336	$	200,624
Gross charge-offs for the period ended	$	—	$	—	$	10	$	250	$	—	$	—	$	—	$	260
Residential real estate − Junior lien
Performing	$	2,751	$	6,749	$	10,664	$	8,313	$	4,591	$	5,964	$	50	$	39,082
Nonperforming		—		1,775		—		—		—		593		—		2,368
Subtotal	$	2,751	$	8,524	$	10,664	$	8,313	$	4,591	$	6,557	$	50	$	41,450
Gross charge-offs for the period ended	$	—	$	—	$	—	$	300	$	—	$	—	$	—	$	300
Other consumer
Performing	$	4,101	$	3,866	$	3,615	$	3,872	$	284	$	4,848	$	20,370	$	40,956
Nonperforming		—		9		39		—		—		—		—		48
Subtotal	$	4,101	$	3,875	$	3,654	$	3,872	$	284	$	4,848	$	20,370	$	41,004
Gross charge-offs for the period ended	$	—	$	—	$	31	$	22	$	—	$	24	$	—	$	77
Total loans	$	220,208	$	726,747	$	677,352	$	786,497	$	457,447	$	760,758	$	415,648	$	4,044,657
Gross charge-offs for the period ended	$	—	$	—	$	47	$	1,588	$	782	$	2,313	$	—	$	4,730

													Revolving
(dollars in thousands)	Term Loans Amortized Cost Basis by Origination Year												Loans Amortized
As of December 31, 2024	2024		2023		2022		2021		2020		Prior		Cost Basis		Total
Commercial and industrial
Pass	$	209,001	$	141,028	$	61,254	$	34,645	$	38,342	$	36,136	$	111,194	$	631,600
Special mention		1,367		495		3,286		2,239		5,575		1		1,651		14,614
Substandard		—		12,663		220		780		3,154		2,447		1,198		20,462
Doubtful		—		—		—		—		—		51		—		51
Subtotal	$	210,368	$	154,186	$	64,760	$	37,664	$	47,071	$	38,635	$	114,043	$	666,727
Gross charge-offs for the year ended	$	—	$	218	$	2	$	397	$	2,768	$	342	$	—	$	3,727
CRE − Construction, land and development
Pass	$	97,244	$	112,845	$	40,890	$	1,560	$	517	$	1,187	$	2,801	$	257,044
Special mention		—		—		172		—		—		—		—		172
Substandard		5,406		—		31,585		—		—		170		300		37,461
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	102,650	$	112,845	$	72,647	$	1,560	$	517	$	1,357	$	3,101	$	294,677
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
CRE − Multifamily
Pass	$	35,112	$	62,982	$	138,698	$	33,782	$	33,157	$	32,204	$	—	$	335,935
Special mention		—		—		7,644		272		1,241		—		—		9,157
Substandard		—		—		—		—		17,732		299		—		18,031
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	35,112	$	62,982	$	146,342	$	34,054	$	52,130	$	32,503	$	—	$	363,123
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
CRE − Non-owner occupied
Pass	$	189,068	$	149,368	$	223,349	$	98,309	$	71,432	$	188,617	$	1,709	$	921,852
Special mention		—		—		1,694		8,603		—		4,148		4,195		18,640
Substandard		—		—		—		7,767		6,347		12,419		—		26,533
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	189,068	$	149,368	$	225,043	$	114,679	$	77,779	$	205,184	$	5,904	$	967,025
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
CRE − Owner occupied
Pass	$	63,721	$	41,918	$	60,788	$	44,957	$	38,941	$	91,804	$	1,652	$	343,781
Special mention		451		—		—		937		2,981		2,735		—		7,104
Substandard		—		311		3,023		2,694		—		13,538		967		20,533
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	64,172	$	42,229	$	63,811	$	48,588	$	41,922	$	108,077	$	2,619	$	371,418
Gross charge-offs for the year ended	$	—	$	12	$	97	$	—	$	—	$	128	$	—	$	237
Agricultural − Land
Pass	$	10,496	$	8,864	$	14,369	$	5,840	$	5,103	$	8,473	$	120	$	53,265
Special mention		69		1,612		3,275		—		—		—		—		4,956
Substandard		—		303		2,166		—		609		—		—		3,078
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	10,565	$	10,779	$	19,810	$	5,840	$	5,712	$	8,473	$	120	$	61,299
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Agricultural − Production
Pass	$	10,445	$	6,440	$	4,356	$	724	$	1,121	$	582	$	34,527	$	58,195
Special mention		130		704		—		—		420		—		1,518		2,772
Substandard		—		—		1,987		—		—		54		—		2,041
Doubtful		—		—		—		—		—		—		—		—
Subtotal	$	10,575	$	7,144	$	6,343	$	724	$	1,541	$	636	$	36,045	$	63,008
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	26	$	—	$	26
Residential real estate − First lien
Performing	$	49,414	$	144,460	$	226,993	$	251,006	$	127,200	$	118,958	$	—	$	918,031
Nonperforming		—		576		—		744		12		1,656		—		2,988
Subtotal	$	49,414	$	145,036	$	226,993	$	251,750	$	127,212	$	120,614	$	—	$	921,019
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Residential real estate − Construction
Performing	$	19,229	$	6,449	$	1,900	$	1,289	$	—	$	—	$	—	$	28,867
Nonperforming		—		—		4,680		—		—		—		—		4,680
Subtotal	$	19,229	$	6,449	$	6,580	$	1,289	$	—	$	—	$	—	$	33,547
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Residential real estate − HELOC
Performing	$	3,290	$	5,558	$	6,217	$	1,622	$	939	$	2,717	$	140,707	$	161,050
Nonperforming		—		35		—		—		—		74		1,350		1,459
Subtotal	$	3,290	$	5,593	$	6,217	$	1,622	$	939	$	2,791	$	142,057	$	162,509
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	19	$	—	$	19
Residential real estate − Junior lien
Performing	$	7,762	$	11,557	$	9,553	$	4,990	$	2,760	$	4,178	$	50	$	40,850
Nonperforming		1,775		—		300		108		—		1,027		—		3,210
Subtotal	$	9,537	$	11,557	$	9,853	$	5,098	$	2,760	$	5,205	$	50	$	44,060
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	638	$	—	$	638
Other consumer
Performing	$	9,618	$	4,695	$	4,853	$	502	$	2,541	$	4,069	$	17,505	$	43,783
Nonperforming		—		11		272		—		7		49		—		339
Subtotal	$	9,618	$	4,706	$	5,125	$	502	$	2,548	$	4,118	$	17,505	$	44,122
Gross charge-offs for the year ended	$	4	$	2	$	—	$	31	$	6	$	8	$	—	$	51
Total loans	$	713,598	$	712,874	$	853,524	$	503,370	$	360,131	$	527,593	$	321,444	$	3,992,534
Gross charge-offs for the year ended	$	4	$	232	$	99	$	428	$	2,774	$	1,161	$	—	$	4,698

Past Due and Nonaccrual Loans

The Company closely monitors the performance of its loan portfolio. A loan is placed on nonaccrual status when the financial condition of the borrower is deteriorating, payment in full of both principal and interest is not expected as scheduled or principal or interest has been in default for 90 days or more. Exceptions may be made if the asset is secured by collateral sufficient to satisfy both the principal and accrued interest in full and collection is reasonably assured. When one loan to a borrower is placed on nonaccrual status, all other loans to the borrower are re-evaluated to determine if they should also be placed on nonaccrual status. All previously accrued and unpaid interest is reversed at that time. A loan will return to accrual when collection of principal and interest is assured and the borrower has demonstrated timely payments of principal and interest for a reasonable period, generally at least six months.

The following tables present a past due aging analysis of total loans outstanding, by portfolio segment, as of June 30, 2025 and December 31, 2024:

	June 30, 2025
							90 Days
	Accruing		30 - 59 Days		60 - 89 Days		or More				Total
(dollars in thousands)	Current		Past Due		Past Due		Past Due		Nonaccrual		Loans
Commercial
Commercial and industrial	$	671,559	$	992	$	306	$	—	$	3,035	$	675,892
Commercial real estate
Construction, land and development		317,922		—		—		—		34,827		352,749
Multifamily		328,568		—		4,530		—		209		333,307
Non-owner occupied		887,643		—		—		—		—		887,643
Owner occupied		437,343		1,271		91		—		1,465		440,170
Total commercial real estate		1,971,476		1,271		4,621		—		36,501		2,013,869
Agricultural
Land		65,616		—		—		—		779		66,395
Production		67,590		341		—		—		—		67,931
Total agricultural		133,206		341		—		—		779		134,326
Total commercial		2,776,241		2,604		4,927		—		40,315		2,824,087
Consumer
Residential real estate
First lien		898,139		532		214		202		2,651		901,738
Construction		31,074		—		—		—		4,680		35,754
HELOC		199,141		233		36		—		1,214		200,624
Junior lien		38,949		133		—		—		2,368		41,450
Total residential real estate		1,167,303		898		250		202		10,913		1,179,566
Other consumer		40,816		130		10		—		48		41,004
Total consumer		1,208,119		1,028		260		202		10,961		1,220,570
Total	$	3,984,360	$	3,632	$	5,187	$	202	$	51,276	$	4,044,657

	December 31, 2024
							90 Days
	Accruing		30 - 59 Days		60 - 89 Days		or More				Total
(dollars in thousands)	Current		Past Due		Past Due		Past Due		Nonaccrual		Loans
Commercial
Commercial and industrial	$	654,073	$	903	$	133	$	8,400	$	3,218	$	666,727
Commercial real estate
Construction, land and development		264,633		—		—		—		30,044		294,677
Multifamily		363,123		—		—		—		—		363,123
Non-owner occupied		961,808		—		—		—		5,217		967,025
Owner occupied		369,176		225		—		—		2,017		371,418
Total commercial real estate		1,958,740		225		—		—		37,278		1,996,243
Agricultural
Land		60,690		—		—		—		609		61,299
Production		62,269		87		—		—		652		63,008
Total agricultural		122,959		87		—		—		1,261		124,307
Total commercial		2,735,772		1,215		133		8,400		41,757		2,787,277
Consumer
Residential real estate
First lien		915,167		2,104		707		53		2,988		921,019
Construction		28,867		—		—		—		4,680		33,547
HELOC		160,430		169		450		—		1,460		162,509
Junior lien		40,454		396		—		—		3,210		44,060
Total residential real estate		1,144,918		2,669		1,157		53		12,338		1,161,135
Other consumer		43,651		103		30		—		338		44,122
Total consumer		1,188,569		2,772		1,187		53		12,676		1,205,257
Total	$	3,924,341	$	3,987	$	1,320	$	8,453	$	54,433	$	3,992,534

In calculating expected credit losses, the Company includes loans on nonaccrual status and loans 90 days or more past due and still accruing. The following tables present the amortized cost basis on nonaccrual status loans and loans 90 days or more past due and still accruing as of June 30, 2025 and December 31, 2024:

	As of June 30, 2025
					90 Days
	Nonaccrual				or More
	with no Allowance				Past Due
(dollars in thousands)	for Credit Losses		Nonaccrual		and Accruing
Commercial
Commercial and industrial	$	2,885	$	3,035	$	—
Commercial real estate
Construction, land and development		28,615		34,827		—
Multifamily		209		209		—
Non-owner occupied		—		—		—
Owner occupied		1,330		1,465		—
Total commercial real estate		30,154		36,501		—
Agricultural
Land		779		779		—
Production		—		—		—
Total agricultural		779		779		—
Total commercial		33,818		40,315		—
Consumer
Residential real estate
First lien		2,379		2,651		202
Construction		4,680		4,680		—
HELOC		1,102		1,214		—
Junior lien		2,320		2,368		—
Total residential real estate		10,481		10,913		202
Other consumer		—		48		—
Total consumer		10,481		10,961		202
Total	$	44,299	$	51,276	$	202

	December 31, 2024
					90 Days
	Nonaccrual				or More
	with no Allowance				Past Due
(dollars in thousands)	for Credit Losses		Nonaccrual		and Accruing
Commercial
Commercial and industrial	$	2,952	$	3,218	$	8,400
Commercial real estate
Construction, land and development		24,638		30,044		—
Multifamily		—		—		—
Non-owner occupied		5,217		5,217		—
Owner occupied		1,706		2,017		—
Total commercial real estate		31,561		37,278		—
Agricultural
Land		609		609		—
Production		652		652		—
Total agricultural		1,261		1,261		—
Total commercial		35,774		41,757		8,400
Consumer
Residential real estate
First lien		2,614		2,988		53
Construction		4,680		4,680		—
HELOC		—		1,460		—
Junior lien		2,696		3,210		—
Total residential real estate		9,990		12,338		53
Other consumer		—		338		—
Total consumer		9,990		12,676		53
Total	$	45,764	$	54,433	$	8,453

Interest income that would have been recognized if loans on nonaccrual status had been current in accordance with their original terms for the three months ended June 30, 2025 and 2024, is estimated to have been $1.1 million and $0.2 million, respectively.

The Company’s policy is to reverse previously recorded interest income when a loan is placed on nonaccrual status. As a result, the Company did not record any interest income on its nonaccrual loans for the three months ended June 30, 2025 or 2024. At June 30, 2025 and December 31, 2024, total accrued interest receivable on loans, which had been excluded from reported amortized cost basis on loans, was $17.5 million and $16.4 million, respectively, and was reported within accrued interest receivable on the consolidated statements of condition. An allowance was not carried on the accrued interest receivable at either date.

The following tables present the amortized cost basis of collateral dependent loans, by the primary collateral type, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans, as of June 30, 2025 and December 31, 2024:

	As of June 30, 2025
	Primary Type of Collateral
									Allowance for
(dollars in thousands)	Real estate		Equipment		Other		Total		Credit Losses
Commercial
Commercial and industrial	$	2,885	$	131	$	—	$	3,016	$	128
Commercial real estate
Construction, land and development		34,827		—		—		34,827		4,984
Multifamily		209		—		—		209		—
Non-owner occupied		—		—		—		—		—
Owner occupied		1,384		—		—		1,384		4
Total commercial real estate		36,420		—		—		36,420		4,988
Agricultural
Land		779		—		—		779		—
Production		—		—		—		—		—
Total agricultural		779		—		—		779		—
Total commercial		40,084		131		—		40,215		5,116
Consumer
Residential real estate
First lien		2,379		—		—		2,379		—
Construction		4,680		—		—		4,680		—
HELOC		1,100		—		—		1,100		—
Junior lien		2,320		—		—		2,320		—
Total residential real estate		10,479		—		—		10,479		—
Other consumer		—		—		—		—		—
Total consumer		10,479		—		—		10,479		—
Total	$	50,563	$	131	$	—	$	50,694	$	5,116

	As of December 31, 2024
	Primary Type of Collateral
									Allowance for
(dollars in thousands)	Real estate		Equipment		Other		Total		Credit Losses
Commercial
Commercial and industrial	$	2,885	$	275	$	—	$	3,160	$	4
Commercial real estate
Construction, land and development		30,044		—		—		30,044		4,984
Multifamily		—		—		—		—		—
Non-owner occupied		5,217		—		—		5,217		—
Owner occupied		1,936		—		—		1,936		9
Total commercial real estate		37,197		—		—		37,197		4,993
Agricultural
Land		609		—		—		609		—
Production		—		652		—		652		—
Total agricultural		609		652		—		1,261		—
Total commercial		40,691		927		—		41,618		4,997
Consumer
Residential real estate
First lien		2,514		—		—		2,514		7
Construction		4,680		—		—		4,680		—
HELOC		1,366		—		—		1,366		252
Junior lien		3,105		—		—		3,105		330
Total residential real estate		11,665		—		—		11,665		589
Other consumer		—		—		289		289		50
Total consumer		11,665		—		289		11,954		639
Total	$	52,356	$	927	$	289	$	53,572	$	5,636

Collateral dependent loans are loans for which the repayment is expected to be provided substantially by the underlying collateral when there are no other available and reliable sources of repayment.

Loan Modifications to Borrowers Experiencing Financial Difficulty 

Effective January 1, 2023, the Company evaluates all loan modifications in accordance with ASU 2022-02. Under ASU 2022-02, a loan is evaluated to consider whether the loan, as modified, represents a new loan or is a continuation of an existing loan.

In cases where a borrower experiences financial difficulty, the Company may make certain concessions for which the terms of the loan are modified. Loans experiencing financial difficulty can include modifications allowing an interest rate reduction below current market rates, a forgiveness of principal balance, an extension of the loan term, an other than significant payment delay, or some combination of these or similar types of modifications. During both the three and six months ended June 30, 2025 and 2024, the Company did not provide any modifications to loans under these circumstances that were experiencing financial difficulty. 

The following table presents the amortized cost basis of loans as of June 30, 2025, by class of type of modification, that were experiencing financial difficulty during the three and six months ended June 30, 2025. There were no loans that were modified to borrowers experiencing financial difficulty during the three and six months ended June 30, 2024. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of the class of financing receivable as of June 30, 2025, is also presented below. 

	Three months ended June 30, 2025
									Combination Term		Combination Term
	Interest Rate		Principal		Term		Payment		Extension and		Extension and Interest		Total %
(dollars in thousands)	Reduction		Forgiveness		Extension		Delay		Principal Forgiveness		Rate Reduction		of Portfolio
Agricultural − Land	$	—	$	—	$	—	$	1,457	$	—	$	—		2.2	%

	Six months ended June 30, 2025
									Combination Term		Combination Term
	Interest Rate		Principal		Term		Payment		Extension and		Extension and Interest		Total %
(dollars in thousands)	Reduction		Forgiveness		Extension		Delay		Principal Forgiveness		Rate Reduction		of Portfolio
Agricultural − Land	$	—	$	—	$	—	$	1,457	$	—	$	—		2.2	%

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts and relevant factors are considered while assessing the adequacy of the ACL. For the three and six months ended June 30, 2025 and 2024, there were no modified loans to borrowers experiencing financial difficulty that were past due or for which the borrower subsequently defaulted.