Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2026	Apr. 30, 2026
Cover [Abstract]
Entity Central Index Key	0000920427
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2026
Document Transition Report	false
Securities Act File Number	1-12431
Entity Registrant Name	Unity Bancorp, Inc.
Entity Incorporation, State or Country Code	NJ
Entity Tax Identification Number	22-3282551
Entity Address, Address Line One	64 Old Highway 22
Entity Address, City or Town	Clinton
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	08809
City Area Code	800
Local Phone Number	618-2265
Title of 12(b) Security	Common stock
Trading Symbol	UNTY
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		10,040,902
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2026
Document Fiscal Period Focus	Q1
Amendment Flag	false

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2026	Dec. 31, 2025
ASSETS
Cash and due from banks	$ 24,591	$ 19,841
Interest-bearing deposits	204,569	196,678
Cash and cash equivalents	229,160	216,519
Securities:
Debt securities available for sale ("AFS"), at fair value (amortized cost of $65,052 and $72,474 at March 31, 2026 and December 31, 2025, respectively)	63,301	70,870
Debt securities held to maturity ("HTM"), at amortized cost	36,648	36,576
Equity securities with readily determinable fair values	15,319	16,569
Total securities	115,268	124,015
Loans:
Total loans	2,601,656	2,544,713
Allowance for credit losses	(33,354)	(32,342)
Net loans	2,568,302	2,512,371
Premises and equipment, net	18,118	18,022
Bank owned life insurance ("BOLI")	26,764	26,547
Deferred tax assets, net	14,888	14,640
Federal Home Loan Bank ("FHLB") stock	13,989	14,314
Accrued interest receivable	13,255	12,896
Goodwill	1,516	1,516
Other real estate owned ("OREO")	1,472	1,472
Prepaid expenses and other assets	24,595	24,340
Total assets	3,027,327	2,966,652
Deposits:
Noninterest-bearing demand	451,138	465,596
Interest-bearing demand	378,162	369,131
Savings	582,730	535,044
Brokered deposits	270,603	274,203
Time deposits	696,507	680,087
Total deposits	2,379,140	2,324,061
Borrowed funds	248,274	255,774
Subordinated debentures	10,310	10,310
Accrued interest payable	2,302	2,138
Accrued expenses and other liabilities	29,206	28,738
Total liabilities	2,669,232	2,621,021
Shareholders' equity:
Preferred Stock
Common stock	106,034	105,892
Retained earnings	256,620	243,935
Treasury stock	(3,425)	(3,101)
Accumulated other comprehensive loss	(1,134)	(1,095)
Total shareholders' equity	358,095	345,631
Total liabilities and shareholders' equity	3,027,327	2,966,652
Financing Receivable Portfolio Segment, Loans Held-for-Sale
Loans:
Total loans	12,557	9,490
Financing Receivable Portfolio Segment, Loans Held for Investment
Loans:
Total loans	2,589,099	2,535,223
Financing Receivable Portfolio Segment, Loans Held for Investment, Small Business Administration Loans Held for Investment
Loans:
Total loans	32,499	34,259
Allowance for credit losses	(1,111)	(785)
Commercial Portfolio Segment
Loans:
Allowance for credit losses	(22,870)	(22,148)
Commercial Portfolio Segment, Commercial Loans
Loans:
Total loans	1,559,166	1,518,032
Commercial Portfolio Segment, Commercial Construction Loans
Loans:
Total loans	159,200	147,215
Residential Portfolio Segment, Residential Mortgage Loans
Loans:
Total loans	668,739	677,221
Allowance for credit losses	(7,523)	(7,695)
Residential Portfolio Segment, Residential Construction Loans
Loans:
Total loans	83,881	73,277
Allowance for credit losses	(1,055)	(719)
Consumer Portfolio Segment
Loans:
Total loans	85,614	85,219
Allowance for credit losses	$ (795)	$ (995)

Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Mar. 31, 2026	Dec. 31, 2025
Debt Securities, Available-for-Sale
Debt securities available for sale ("AFS"), at amortized cost	$ 65,052	$ 72,474
Common shares at period end
Shares issued (in shares)	10,114	10,048
Shares outstanding (in shares)	10,041	9,982
Number of authorized shares not disclosed [true/false]	true	true
Treasury Stock
Treasury shares (in shares)	73	66

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2026	Mar. 31, 2025
INTEREST INCOME
Interest-bearing deposits	$ 558	$ 332
FHLB stock	134	182
Securities:
Taxable	1,409	1,786
Tax-exempt	18	18
Total securities	1,427	1,804
Loans:
SBA loans	844	934
Commercial loans	25,016	21,314
Commercial construction loans	3,038	2,946
Residential mortgage loans	10,913	9,947
Consumer loans	1,424	1,346
Residential construction loans	1,825	1,996
Total loans	43,060	38,483
Total interest income	45,179	40,801
INTEREST EXPENSE
Interest-bearing demand deposits	1,910	1,622
Savings deposits	3,160	2,593
Brokered deposits	2,267	1,787
Time deposits	6,128	6,415
Borrowed funds and subordinated debentures	984	1,133
Total interest expense	14,449	13,550
Net interest income	30,730	27,251
Provision for credit losses, loans	1,043	1,358
Provision for credit losses, off-balance sheet	5	(41)
Net interest income after provision for credit losses	29,682	25,934
NONINTEREST INCOME
Gain on sale of SBA loans held for sale, net	427	139
Gain on sale of mortgage loans, net	500	168
BOLI income	217	151
Net security losses	(82)	(49)
Other income	413	381
Total noninterest income	2,876	2,101
NONINTEREST EXPENSE
Compensation and benefits	8,673	7,902
Processing and communications	1,146	986
Occupancy	987	880
Furniture and equipment	715	746
Professional services	488	364
Advertising	393	391
Loan related expenses	473	46
Deposit insurance	300	241
Director fees	260	495
Other expenses	636	560
Total noninterest expense	14,071	12,611
Income before provision for income taxes	18,487	15,424
Provision for income taxes	4,199	3,826
Net income	$ 14,288	$ 11,598
Net income per common share - Basic (in dollars per share)	$ 1.43	$ 1.15
Net income per common share - Diluted (in dollars per share)	$ 1.4	$ 1.13
Weighted average common shares outstanding - Basic (in shares)	10,012	10,054
Weighted average common shares outstanding - Diluted (in shares)	10,199	10,247
Branch Fee Income
NONINTEREST INCOME
Noninterest income	$ 489	$ 447
Service and Loan Fee Income
NONINTEREST INCOME
Noninterest income	$ 912	$ 864

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2026	Mar. 31, 2025
Net income
Net income, before tax amount	$ 18,487	$ 15,424
Income tax expense (benefit)	4,199	3,826
Net Income (Loss)	14,288	11,598
Debt securities available for sale:
Unrealized holding (losses) gains on debt securities arising during the period, before tax	(147)	684
Unrealized holding (losses) gains on debt securities arising during the period, tax	(34)	167
Unrealized holding (losses) gains on debt securities arising during the period, net of tax	(113)	517
Total unrealized (losses) gains on debt securities available for sale, before tax	(147)	684
Total unrealized (losses) gains on debt securities available for sale, tax	(34)	167
Total unrealized (losses) gains on debt securities available for sale, net of tax	(113)	517
Cash flow hedges:
Unrealized holding gains (losses) on cash flow hedges arising during the period, before tax	63	(489)
Unrealized holding gains (losses) on cash flow hedges arising during the period, tax	17	(134)
Unrealized holding gains (losses) on cash flow hedges arising during the period, net of tax	46	(355)
Less: reclassification adjustment for losses on cash flow hedges included in net income, before tax	(39)	(156)
Less: reclassification adjustment for losses on cash flow hedges included in net income, tax	(11)	(43)
Less: reclassification adjustment for losses on cash flow hedges included in net income, net of tax	(28)	(113)
Total unrealized gains (losses) on cash flow hedges, before tax	102	(333)
Total unrealized gains (losses) on cash flow hedges, tax	28	(91)
Total unrealized gains (losses) on cash flow hedges, net of tax	74	(242)
Total other comprehensive (loss) income, before tax	(45)	351
Total other comprehensive (loss) income, tax	(6)	76
Total other comprehensive (loss) income, net of tax	(39)	275
Total comprehensive income, before tax	18,442	15,775
Total comprehensive income, tax	4,193	3,902
Total comprehensive income, net of tax	$ 14,249	$ 11,873

Consolidated Statements of Changes in Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock	Retained Earnings	Treasury Stock, Common	AOCI Attributable to Parent	Total
Balance, beginning of period at Dec. 31, 2024	$ 103,936	$ 227,331	$ (33,577)	$ (2,107)	$ 295,583
Balance, beginning of period (in shares) at Dec. 31, 2024	10,026
Increase (Decrease) in Stockholders' Equity
Net Income (Loss)		11,598			11,598
Other comprehensive income (loss), net of tax				275	275
Dividends on common stock	$ 56	(1,411)			(1,355)
Dividends on common stock (in shares)	1
Share-based compensation	$ 41				41
Share-based compensation (in shares)	49
Balance, end of period at Mar. 31, 2025	$ 104,033	237,518	(33,577)	(1,832)	306,142
Balance, end of period (in shares) at Mar. 31, 2025	10,076
Balance, beginning of period at Dec. 31, 2025	$ 105,892	243,935	(3,101)	(1,095)	$ 345,631
Balance, beginning of period (in shares) at Dec. 31, 2025	9,982				9,982
Increase (Decrease) in Stockholders' Equity
Net Income (Loss)		14,288			$ 14,288
Other comprehensive income (loss), net of tax				(39)	(39)
Dividends on common stock	$ 60	(1,603)			(1,543)
Dividends on common stock (in shares)	1
Share-based compensation	$ 82				82
Share-based compensation (in shares)	65
Treasury stock purchased, at cost			(324)		(324)
Treasury stock purchased, at cost (in shares)	(7)
Balance, end of period at Mar. 31, 2026	$ 106,034	$ 256,620	$ (3,425)	$ (1,134)	$ 358,095
Balance, end of period (in shares) at Mar. 31, 2026	10,041				10,041

Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2026	Mar. 31, 2025
Common Stock
Common stock, dividends, per share, cash paid (in dollars per share)	$ 0.16	$ 0.14

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2026	Mar. 31, 2025
OPERATING ACTIVITIES:
Net income	$ 14,288	$ 11,598
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses, loans	1,043	1,358
Net accretion of purchase premiums and discounts on securities	(80)	(16)
Depreciation and amortization	296	683
Deferred income tax benefit	(240)	(598)
Net security losses	82	49
Stock compensation expense	556	493
Origination of mortgage loans held for sale	(16,414)	7,869
Origination of SBA loans held for sale	(1,745)	2,859
Proceeds from sale of mortgage loans held for sale	16,914	(8,037)
Proceeds from sale of SBA loans held for sale	2,172	(2,998)
BOLI income	(217)	(151)
Net change in other assets and liabilities	(1,733)	4,745
Net cash provided by operating activities	14,922	17,854
INVESTING ACTIVITIES
Purchases of equity securities	(384)	(77)
Purchases of AFS securities		(4,000)
Redemption (purchase) of FHLB stock, at cost, net	325	(1,076)
Maturities, calls, and principal payments on HTM securities		364
Maturities, calls, and principal payments on AFS securities	7,242	6,304
Proceeds from sales on AFS securities		998
Proceeds from sales of equity securities	1,737
Net increase in loans	(56,014)	(85,000)
Purchases of premises and equipment	(425)	(279)
Net cash used in investing activities	(47,519)	(82,766)
FINANCING ACTIVITIES
Net increase in deposits	55,079	75,085
(Repayments of) proceeds from short-term borrowings, net	(7,500)	23,000
Repayments of long-term borrowings, net		(212)
(Shares withheld for taxes), net of proceeds from stock option exercises	(474)	(451)
Dividends on common stock	(1,543)	(1,355)
Purchase of treasury stock, including excise tax accrual	(324)
Net cash provided by financing activities	45,238	96,067
Increase in cash and cash equivalents	12,641	31,155
Cash and cash equivalents, beginning of year	216,519	180,438
Cash and cash equivalents, end of period	229,160	211,593
SUPPLEMENTAL DISCLOSURES
Interest paid	14,285	13,104
Income taxes paid	88	96
Noncash activities:
Capitalization of servicing rights	$ 131	$ 41

Significant Accounting Policies

3 Months Ended

Mar. 31, 2026

Accounting Policies [Abstract]

Significant Accounting Policies

NOTE 1. Significant Accounting Policies

The accompanying Consolidated Financial Statements include the accounts of Unity Bancorp, Inc. (the "Parent Company") and its wholly-owned subsidiary, Unity Bank (the "Bank" or when consolidated with the Parent Company, the "Company"). The Bank has multiple subsidiaries used to hold part of its investment and loan portfolios and may be used to hold other real estate owned when the Bank takes title to properties securing loans. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current year presentation, with no impact on current earnings or shareholders’ equity. The financial information has been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and has not been audited. In preparing the financial statements, Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenues and expenses during the reporting periods. Actual results could differ from those estimates. Amounts requiring the use of significant estimates include the allowance for credit losses. Management believes that the allowance for credit losses is adequate. While Management uses available information to recognize credit losses, future additions to the allowance for credit losses may be necessary based on changes in economic conditions, changes in customer-related circumstances, and the general credit quality of the loan portfolio.

The interim unaudited Consolidated Financial Statements included herein have been prepared in accordance with instructions for Form 10-Q and the rules and regulations of the Securities and Exchange Commission (“SEC”) and consist of normal recurring adjustments, that in the opinion of Management, are necessary for the fair presentation of interim results. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results which may be expected for the entire year. As used in this Form 10-Q, “we” and “us” and “our” refer to Unity Bancorp, Inc., and its consolidated subsidiary, Unity Bank, depending on the context. Certain information and financial disclosures required by U.S. GAAP have been condensed or omitted from interim reporting pursuant to SEC rules. Interim financial statements should be read in conjunction with the Company’s Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The Company continues to operate as a single reportable segment as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Risks and Uncertainties

Overall, the markets and customers serviced by the Company may be significantly impacted by ongoing macro-economic trends, such as pressures created by a lower interest rate environment, uncertainty surrounding tariffs and the impact of uncertain or changing political conditions and geopolitical conflicts, uncertainty surrounding potential for economic slowdown or recession, and uncertainty regarding the federal government’s debt limit or changes in fiscal, monetary, trade or regulatory policy. Additionally, the Company assesses the impact of inflation on an ongoing basis.

Market conditions and external factors may unpredictably impact the competitive landscape for deposits in the banking industry. Additionally, the current interest rate environment has increased competition for liquidity. The Company believes the sources of liquidity presented in the Unaudited Consolidated Financial Statements and the Notes to the Unaudited Consolidated Financial Statements are sufficient to meet its needs as of the balance sheet date.

An unexpected withdrawal of deposits could adversely impact the Company's ability to rely on organic deposits to primarily fund its operations, potentially requiring greater reliance on secondary sources of liquidity to meet withdrawal demands or to fund continuing operations. These sources may include proceeds from Federal Home Loan Bank (“FHLB”) advances, sales of securities and loans, federal funds lines of credit from correspondent banks, out-of-market time deposits and other wholesale funding sources.

Such reliance on secondary funding sources could increase the Company's overall cost of funding and thereby reduce net income. While the Company believes its current sources of liquidity are adequate to fund operations, there is no

guarantee they will suffice to meet future liquidity demands. This may necessitate slowing or discontinuing loan growth, capital expenditures or other investments, or liquidating assets.

Recent Accounting Pronouncements

ASU 2024-03, “Disaggregation of Income Statement Expenses”, requires public entities to provide further disclosure surrounding expenses, including but not limited to, employee compensation, depreciation and intangible asset amortization. ASU 2025-01 clarified the effective date of ASU 2024-03. This ASU is effective for fiscal years beginning after December 31, 2026. The Company expects ASU 2024-03 to have no material impact to its financials.

ASU 2025-08, “Credit Losses: Purchased Loans”, expands the “gross-up” method to more types of purchased loans and reduce day-1 credit loss exposure volatility on purchased credit-deteriorated (“PCD”) assets. This ASU is effective for fiscal years beginning after December 31, 2026. The Company expects ASU 2025-08 to have no material impact to its financials.

ASU 2025-09, “Hedge Accounting Improvements”, aims to align hedge accounting with the economics of an entity’s risk management activities. This ASU is effective for fiscal years beginning after December 31, 2026. The Company expects ASU 2025-09 to have no material impact to its financials.

Litigation

3 Months Ended

Mar. 31, 2026

Commitments and Contingencies Disclosure [Abstract]

Litigation

NOTE 2. Litigation

The Company may, in the ordinary course of business, become a party to litigation involving collection matters, contract claims and other legal proceedings relating to the conduct of its business. In the best judgment of Management, based upon consultation with counsel, the consolidated financial position and results of operations of the Company will not be affected materially by the final outcome of any pending legal proceedings or other contingent liabilities and commitments.

Net Income per Share

3 Months Ended

Mar. 31, 2026

Earnings Per Share [Abstract]

Net Income per Share

NOTE 3. Net Income per Share

Basic net income per common share is calculated as net income divided by the weighted average common shares outstanding during the reporting period. Common shares include vested and unvested restricted shares.

Diluted net income per common share is computed similarly to that of basic net income per common share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares, principally stock options, were issued during the reporting period utilizing the treasury stock method.

The following is a reconciliation of the calculation of basic and diluted income per share:


		For the three months ended March 31,
(In thousands, except per share amounts)		2026			2025
Net income		$	14,288		$	11,598
Weighted average common shares outstanding - Basic			10,012			10,054
Plus: Potential dilutive common stock equivalents			187			193
Weighted average common shares outstanding - Diluted			10,199			10,247
Net income per common share - Basic		$	1.43		$	1.15
Net income per common share - Diluted			1.40			1.13
Stock options and common stock excluded from the income per share calculation as their effect would have been anti-dilutive			—			—

Other Comprehensive (Loss) Income

3 Months Ended

Mar. 31, 2026

Stockholders' Equity Note [Abstract]

Other Comprehensive (Loss) Income

NOTE 4. Other Comprehensive (Loss) Income

The following tables show the changes in other comprehensive (loss) income for the three months ended March 31, 2026 and 2025, net of tax:


	For the three months ended March 31, 2026
					Accumulated
	Net unrealized		Net unrealized		other
	losses		gains (losses) from		comprehensive
(In thousands)	on securities		cash flow hedges		loss
Balance, beginning of period	$	(1,215)	$	120	$	(1,095)
Other comprehensive (loss) income before reclassifications		(113)		46		(67)
Less: amounts reclassified from accumulated other comprehensive loss		—		(28)		(28)
Period change		(113)		74		(39)
Balance, end of period	$	(1,328)	$	194	$	(1,134)


	For the three months ended March 31, 2025

			Net unrealized		Accumulated
	Net unrealized		gains (losses)		other
	(losses) gains on		from cash flow		comprehensive
(In thousands)	securities		hedges		(loss) income
Balance, beginning of period	$	(2,653)	$	546	$	(2,107)
Other comprehensive income (loss) before reclassifications		517		(355)		162
Less: amounts reclassified from accumulated other comprehensive loss		—		(113)		(113)
Period change		517		(242)		275
Balance, end of period	$	(2,136)	$	304	$	(1,832)

Fair Value

3 Months Ended

Mar. 31, 2026

Fair Value Disclosures [Abstract]

Fair Value

NOTE 5. Fair Value

Fair Value Measurement

The Company follows Financial Accounting Standards Board (“FASB”) ASC Topic 820, “Fair Value Measurement and Disclosures,” which requires additional disclosures about the Company’s assets and liabilities that are measured at fair value. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable inputs. The Company utilizes techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed as follows:

Level 1 Inputs

●

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

●

Generally, this includes debt and equity securities and derivative contracts that are traded in an active exchange market (i.e. New York Stock Exchange), as well as certain U.S. Treasury securities that are highly liquid and are actively traded in over-the-counter markets.

Level 2 Inputs

●

Quoted prices for similar assets or liabilities in active markets.

●

Quoted prices for identical or similar assets or liabilities in inactive markets.

●

Inputs other than quoted prices that are observable, either directly or indirectly, for the term of the asset or liability (i.e. interest rates, yield curves, credit risks, prepayment speeds or volatilities) or “market corroborated inputs.”

●

Generally, this includes U.S. Government and sponsored entity mortgage-backed securities, corporate debt securities and derivative contracts.

Level 3 Inputs

●

Prices or valuation techniques that require inputs that are both unobservable (i.e. supported by little or no market activity) and that are significant to the fair value of the assets or liabilities.

●

These assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

Fair Value on a Recurring Basis

The following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis:

Debt Securities Available for Sale

As of March 31, 2026, the fair value of the Company’s AFS debt securities portfolio was $63.3 million. Most of the Company’s AFS debt securities were classified as Level 2 assets at March 31, 2026. The valuation of AFS debt securities using Level 2 inputs was primarily determined using the market approach, which uses quoted prices for similar assets or liabilities in active markets and all other relevant information. It includes third-party model pricing, defined as valuing securities based upon their relationship with other benchmark securities.

Included in the Company’s AFS debt securities are select corporate bonds which are classified as Level 3 assets at March 31, 2026. The valuation of these corporate bonds is determined using broker quotes, third-party vendor prices, or other valuation techniques. Market inputs used in the other valuation techniques or underlying third-party vendor prices or broker quotes include benchmark and government bond yield curves, credit spreads and trade execution data.

Equity Securities

As of March 31, 2026, the fair value of the Company’s equity securities portfolio was $15.3 million. All of the Company’s equity marketable securities were classified as Level 1 assets at March 31, 2026.

The following table presents a reconciliation of the Level 3 securities measured at fair value on a recurring basis for the the three months ended March 31, 2026 and 2025:


		For the three months ended
		March 31, 2026					March 31, 2025
(In thousands)		Corporate Debt		Restricted Stock		Corporate Debt		Restricted Stock
Balance of recurring Level 3 assets at January 1		$	6,708	$	3,480	$	6,488	$	—
Activity
Transfers from corporate debt to restricted stock			—		—		(818)		818

Transfers from restricted stock to unrestricted equity securities categorized as Level 1		—		(3,480)		—		—
Unrealized holding (losses) gains included in other comprehensive income		(138)		—		95		—
Unrealized holding losses included in net income		(185)		—		—		—
Balance of recurring Level 3 assets at March 31	$	6,385	$	—	$	5,765	$	818

Interest Rate Swap Agreements

The Company’s derivative instruments are classified as Level 2 assets, as the readily observable market inputs to these models are validated to external sources, such as industry pricing services, or are corroborated through recent trades, dealer quotes, yield curves, implied volatility or other market-related data.

There were no material changes in the inputs or methodologies used to determine fair value during the period ended March 31, 2026, as compared to the periods ended December 31, 2025 and March 31, 2025.

The tables below present the balances of assets measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025:

Fair Value Measurements at March 31, 2026

Quoted Prices in

Assets

Active Markets

Significant Other

Significant

Measured at Fair

for Identical

Observable

Unobservable

(In thousands)

 

Value

 

Assets (Level 1)

 

Inputs (Level 2)

 

Inputs (Level 3)

Measured on a recurring basis:

Assets:

Debt securities available for sale:

U.S. Government sponsored entities

$

4,968

$

—

$

4,968

$

—

State and political subdivisions

150

—

150

—

Residential mortgage-backed securities

11,437

—

11,437

—

Asset backed securities

14,992

—

14,992

—

Corporate and other securities

31,754

—

25,369

6,385

Total debt securities available for sale

$

63,301

$

—

$

56,916

$

6,385

Equity securities, at fair value

$

15,319

$

15,319

$

—

$

—

Total equity securities

$

15,319

$

15,319

$

—

$

—

Interest rate swap agreements

$

259

$

—

$

259

$

—

Total swap agreements

$

259

$

—

$

259

$

—


		Fair value Measurements at December 31, 2025
					Quoted Prices in
		Assets			Active Markets			Significant Other			Significant
		Measured at Fair			for Identical			Observable			Unobservable
(In thousands)		Value			Assets (Level 1)			Inputs (Level 2)			Inputs (Level 3)
Measured on a recurring basis:
Assets:
Debt securities available for sale:
U.S. Government sponsored entities		$	4,969		$	—		$	4,969		$	—
State and political subdivisions			159			—			159			—
Residential mortgage-backed securities			11,752			—			11,752			—
Asset backed securities			22,000			—			22,000			—
Corporate and other securities			31,990			—			25,282			6,708
Total debt securities available for sale		$	70,870		$	—		$	64,162		$	6,708

Equity securities, at fair value		$	16,569		$	13,089		$	—		$	3,480
Total equity securities		$	16,569		$	13,089		$	—		$	3,480

Interest rate swap agreements		$	157		$	—		$	157		$	—
Total swap agreements		$	157		$	—		$	157		$	—

There were no liabilities measured on a recurring basis as of March 31, 2026 or December 31, 2025.

Fair Value on a Nonrecurring Basis

The following tables present the assets and liabilities subject to fair value adjustments on a non-recurring basis carried on the balance sheet by caption and by level within the hierarchy (as described above):

Fair Value Measurements at December 31, 2025

Quoted Prices

Significant

in Active

Other

Significant

Assets

Markets for

Observable

Unobservable

Measured at Fair

Identical Assets

Inputs

(In thousands)

 

Value

 

(Level 1)

 

(Level 2)

 

(Level 3)

Measured on a non-recurring basis:

Financial assets:

Collateral-dependent loans

$

3,376

$

—

$

—

$

3,376

There were no assets or liabilities measured on a non-recurring basis as of March 31, 2026.

Certain assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following is a description of the valuation methodologies used for instruments measured at fair value on a nonrecurring basis:

Collateral-Dependent Loans

Fair value is determined based on the fair value of the collateral and is measured for impairment based upon a third-party appraisal. When an updated appraisal is received for a nonperforming loan, the value on the appraisal may be discounted. If there is a deficiency in the value after the Company applies these discounts, Management applies a specific reserve and the loan remains in nonaccrual status. The receipt of an updated appraisal would not qualify as a reason to put a loan back into accruing status. The Company removes loans from nonaccrual status generally when the ability to collect is reasonably assured or when the loan is brought current as to principal and interest. Charge-offs are

determined based upon the loss that Management believes the Company will incur after evaluating collateral for impairment based upon the valuation methods described above and the ability of the borrower to pay any deficiency.

The allowance for individually evaluated loans is included in the allowance for credit losses in the Consolidated Balance Sheets. At March 31, 2026, there was no allowance for individually evaluated loans, compared to $0.1 million at December 31, 2025.

Fair Value of Financial Instruments

FASB ASC Topic 825, “Financial Instruments,” requires the disclosure of the estimated fair value of certain financial instruments, including those financial instruments for which the Company did not elect the fair value option. These estimated fair values as of March 31, 2026 and December 31, 2025 have been determined using available market information and appropriate valuation methodologies. Considerable judgment is required to interpret market data to develop estimates of fair value. The estimates presented are not necessarily indicative of amounts the Company could realize in a current market exchange. The use of alternative market assumptions and estimation methodologies could have had a material effect on these estimates of fair value. The methodology for estimating the fair value of financial assets and liabilities that are measured on a recurring or nonrecurring basis is discussed above.

The following methods and assumptions were used to estimate the fair value of other financial instruments for which it is practicable to estimate that value:

Securities

The fair value of securities is based upon quoted market prices for similar or identical assets or other observable inputs (Level 2) or externally developed models that use unobservable inputs due to limited or no market activity of the instrument (Level 3).

Loans Held for Sale

The fair value of loans held for sale is estimated by using a market approach that includes significant other observable inputs.

Loans

The fair value of loans is estimated by discounting the future cash flows using current market rates that reflect the interest rate risk inherent in the loan, except for previously discussed loans.

Deposit Liabilities

The fair value of demand deposits and savings accounts is the amount payable on demand at the reporting date (i.e. carrying value). The fair value of fixed-maturity certificates of deposit is estimated by discounting the future cash flows using current market rates.

Borrowed Funds and Subordinated Debentures

The fair value of borrowings is estimated by discounting the projected future cash flows using current market rates.

The table below presents the carrying amount and estimated fair values of the Company’s financial instruments presented as of March 31, 2026 and December 31, 2025:


	March 31, 2026
	Carrying
(In thousands)	amount			Level 1			Level 2			Level 3
Financial assets:
Debt securities held to maturity	$	36,648		$	—		$	30,373		$	—
Loans held for sale		12,557			—			13,471			—
Loans, net of allowance for credit losses		2,555,745			—			2,523,033			—
Financial liabilities:
Deposits		2,379,140			—			2,376,742			—
Borrowed funds and subordinated debentures		258,584			—			258,905			—


	December 31, 2025
	Carrying
(In thousands)	amount			Level 1			Level 2			Level 3
Financial assets:
Debt securities held to maturity	$	36,576		$	—		$	30,405		$	—
Loans held for sale		9,490			—			10,041			—
Loans, net of allowance for credit losses		2,502,881			—			2,466,691			3,376
Financial liabilities:
Deposits		2,324,061			—			2,322,637			—
Borrowed funds and subordinated debentures		266,084			—			266,769			—

Limitations

Fair value estimates are made at a point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. In addition, the tax ramifications related to the effect of fair value estimates have not been considered in the above estimates.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (bbb)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 107
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-107

Reference 3: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 100
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-100

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(3)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2E
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 940
-SubTopic 820
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478119/940-820-50-1

+ Details

Securities

3 Months Ended

Mar. 31, 2026

Investments, Debt and Equity Securities [Abstract]

Securities

NOTE 6. Securities

This table provides the major components of debt securities available for sale ("AFS") and held to maturity (“HTM”) at amortized cost and estimated fair value at March 31, 2026 and December 31, 2025:

March 31, 2026

 

Gross

 

Gross

Amortized

unrealized

Estimated

(In thousands)

cost

gains

losses

fair value

Available for sale:

U.S. Government sponsored entities

$

5,000

$

—

$

(32)

$

4,968

State and political subdivisions

176

—

(26)

150

Residential mortgage-backed securities

12,467

25

(1,055)

11,437

Asset backed securities

15,000

2

(10)

14,992

Corporate and other securities

32,409

337

(992)

31,754

Total debt securities available for sale

$

65,052

$

364

$

(2,115)

$

63,301

Held to maturity:

U.S. Government sponsored entities

$

28,000

$

—

$

(3,803)

$

24,197

State and political subdivisions

1,316

36

—

1,352

Residential mortgage-backed securities

7,332

—

(2,508)

4,824

Total debt securities held to maturity

$

36,648

$

36

$

(6,311)

$

30,373


	December 31, 2025
				Gross			Gross
	Amortized			unrealized			unrealized			Estimated
(In thousands)	cost			gains			losses			fair value
Available for sale:
U.S. Government sponsored entities	$	5,000		$	—		$	(31)		$	4,969
State and political subdivisions		185			—			(26)			159
Residential mortgage-backed securities		12,702			27			(977)			11,752
Asset backed securities		22,001			11			(12)			22,000
Corporate and other securities		32,586			314			(910)			31,990
Total debt securities available for sale	$	72,474		$	352		$	(1,956)		$	70,870
Held to maturity:
U.S. Government sponsored entities	$	28,000		$	—		$	(3,812)		$	24,188
State and political subdivisions		1,299			42			—			1,341
Residential mortgage-backed securities		7,277			—			(2,401)			4,876
Total debt securities held to maturity	$	36,576		$	42		$	(6,213)		$	30,405

There was no provision for credit losses on securities for the the three months ended March 31, 2026 and March 31, 2025. During the three months ended March 31, 2026, Unity entered into a modification agreement with a borrower experiencing financial difficulty. Unity holds $2.0 million par of the original senior debt security. As a component of the modification agreement, the issuer deferred the interest payment due in Q1 2026 to June 2026. The agreement noted that the issuer will pay this interest plus what is accrued until payment, else the bond will be considered delinquent. As Management has plans to sell this bond in Q2 2026, the loss has been recognized through Net Securities Gains (Losses) in the Consolidated Statements of Income, as recovery through sale is expected.

The contractual maturities of AFS and HTM debt securities at March 31, 2026 are set forth in the following table. Maturities may differ from contractual maturities in residential mortgage-backed securities because the mortgages underlying the securities may be prepaid without any penalties. Therefore, residential mortgage-backed securities are not included in the maturity categories in the following summary.



		Amortized		Fair
(In thousands)		Cost		Value
Available for sale:
Due in one year	$	4,000	$	3,978
Due after one year through five years		14,059		13,737
Due after five years through ten years		24,351		24,005
Due after ten years		10,175		10,144
Residential mortgage-backed securities		12,467		11,437
Total	$	65,052	$	63,301
Held to maturity:
Due in one year	$	—	$	—
Due after one year through five years		3,000		2,990
Due after five years through ten years		—		—
Due after ten years		26,316		22,559
Residential mortgage-backed securities		7,332		4,824
Total	$	36,648	$	30,373

Actual maturities of AFS and HTM debt securities may differ from those presented above since certain obligations provide the issuer the right to call or prepay the obligation prior to scheduled maturity without penalty.

The fair value of debt securities with unrealized losses by length of time that the individual securities have been in a continuous unrealized loss position at March 31, 2026 and December 31, 2025 are as follows:

March 31, 2026

Less than 12 months

12 months and greater

Total

 

Estimated

Unrealized

Estimated

Unrealized

Estimated

Unrealized

(In thousands)

fair value

loss

fair value

loss

fair value

loss

Available for sale:

U.S. Government sponsored entities

$

—

$

—

$

4,968

$

(32)

$

4,968

$

(32)

State and political subdivisions

—

150

(26)

150

(26)

Residential mortgage-backed securities

—

11,322

(1,055)

11,322

(1,055)

Asset backed securities

10,990

(10)

—

10,990

(10)

Corporate and other securities

2,462

(38)

9,477

(955)

11,939

(992)

Total temporarily impaired AFS securities

$

13,452

$

(48)

$

25,917

$

(2,068)

$

39,369

$

(2,115)

Held to maturity:

U.S. Government sponsored entities

$

—

$

—

$

20,197

$

(3,803)

$

20,197

$

(3,803)

Residential mortgage-backed securities

—

$

—

4,824

(2,508)

4,824

(2,508)

Total temporarily impaired HTM securities

$

—

$

—

$

25,021

$

(6,311)

$

25,021

$

(6,311)


			December 31, 2025
			Less than 12 months						12 months and greater						Total

			Estimated			Unrealized			Estimated			Unrealized			Estimated			Unrealized
(In thousands)			fair value			loss			fair value			loss			fair value			loss
Available for sale:
U.S. Government sponsored entities			$	—		$	—		$	4,969		$	(31)		$	4,969		$	(31)
State and political subdivisions				—			—			159			(26)			159			(26)
Residential mortgage-backed securities				—			—			11,625			(977)			11,625			(977)
Asset backed securities				9,988			(12)			—			—			9,988			(12)
Corporate and other securities				2,483			(18)			9,681			(892)			12,164			(910)
Total temporarily impaired AFS securities			$	12,471		$	(30)		$	26,434		$	(1,926)		$	38,905		$	(1,956)
Held to maturity:
U.S. Government sponsored entities			$	—		$	—		$	24,188		$	(3,812)		$	24,188		$	(3,812)
Residential mortgage-backed securities				—			—			4,876			(2,401)			4,876			(2,401)
Total temporarily impaired HTM securities			$	—		$	—		$	29,064		$	(6,213)		$	29,064		$	(6,213)

Unrealized losses in each of the categories presented in the tables above were primarily driven by market interest rate fluctuations. Residential mortgage-backed securities are guaranteed by either Ginnie Mae, Freddie Mac or Fannie Mae.

The Company is using the practical expedient to exclude accrued interest receivable from credit loss measurement. At March 31, 2026, there was $1.2 million of accrued interest on securities. At December 31, 2025, there was $0.8 million of accrued interest on securities.

Securities with a carrying value of $69.0 million and $69.2 million at March 31, 2026 and December 31, 2025, respectively, were held at the FHLB or FRB and were pledged for borrowing purposes; however, there were no securities borrowed against at March 31, 2026 and December 31, 2025.

Realized Gains and Losses on Debt Securities

Net realized gains (losses) on debt securities are included in noninterest income in the Consolidated Statements of Income as net security gains (losses). There were no gains or losses on sales of AFS debt securities during the three months ended March 31, 2026 compared to a $3 thousand loss on AFS debt securities during the three months ended March 31, 2025. There were no realized gains or losses on HTM debt securities during the three months ended March 31, 2026 and 2025.

Equity Securities

Included in this category are Community Reinvestment Act ("CRA") investments and the Company’s current other equity holdings of financial institutions. Equity securities are defined to include (a) preferred, common and other ownership interests in entities including partnerships, joint ventures and limited liability companies and (b) rights to acquire or dispose of ownership interests in entities at fixed or determinable prices.

The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during the three months ended March 31, 2026 and 2025:


		For the three months ended March 31,
(In thousands)		2026			2025
Net unrealized losses occurring during the period on equity securities		$	(504)		$	(34)
Net gains (losses) recognized during the period on equity securities sold during the period			607			(12)
Gains (losses) recognized during the reporting period on equity securities		$	103		$	(46)

Loans

3 Months Ended

Mar. 31, 2026

Receivables [Abstract]

Loans and Allowance for Credit Losses and Reserve for Unfunded Loan Commitments

NOTE 7. Loans

The following table sets forth the classification of loans by class, including unearned fees and deferred costs and excluding the allowance for credit losses as of March 31, 2026 and December 31, 2025:


(In thousands)		March 31, 2026			December 31, 2025
SBA loans held for investment			32,499			34,259
Commercial loans
SBA 504			43,254			43,802
Commercial & industrial			185,207			183,163
Commercial real estate²			1,330,705			1,291,067
Commercial real estate construction			159,200			147,215
Residential mortgage loans			668,739			677,221
Consumer loans
Home equity			82,980			82,488
Consumer other			2,634			2,731
Residential construction loans			83,881			73,277
Total loans held for investment		$	2,589,099		$	2,535,223
Loans held for sale¹			12,557			9,490
Total loans		$	2,601,656		$	2,544,713

¹Loans held for sale included SBA and residential mortgage loans of $8.2 million and $4.4 million as of March 31, 2026, respectively. Loans held for sale included SBA and residential mortgage loans of $8.0 million and $1.5 million as of December 31, 2025, respectively.

²Commercial real estate includes Commercial Mortgage – Owner Occupied, Commercial Mortgage – Nonowner Occupied and Commercial Mortgage – Other. Commercial Mortgage – Other primarily includes multifamily and land loans.

Loans are made to individuals and commercial entities. Specific loan terms vary as to interest rate, repayment and collateral requirements based on the type of loan requested and the credit worthiness of the prospective borrower. Credit risk tends to be geographically concentrated in that a majority of the loan customers are located in the markets serviced by the Bank, most notably in New Jersey. Additionally, the New Jersey credit concentration is primarily focused within the counties that the Company operates in. Loan performance may be adversely affected by factors impacting the general economy or conditions specific to the real estate market such as geographic location and/or property type. A description of the Company’s different loan segments follows:

SBA Loans: SBA 7(a) loans, on which the SBA has historically provided guarantees of up to 90 percent of the principal balance, are considered a higher risk loan product for the Company than its other loan products. The guaranteed portion of the Company’s SBA loans is generally sold in the secondary market with the nonguaranteed portion held in the portfolio as a loan held for investment. SBA loans are for the purpose of providing working capital, business acquisitions, financing the purchase of equipment, inventory or commercial real estate and for other business purposes. Loans are guaranteed by the businesses’ major owners. SBA loans are made based primarily on the historical and projected cash flow of the business and secondarily on the underlying collateral provided.

Loans held for sale includes the guaranteed portion of SBA loans and are reflected at the lower of aggregate cost or market value. When sales of SBA loans do occur, the premium received on the sale and the present value of future cash flows of the servicing assets are recognized in income. All criteria for sale accounting must be met in order for the loan sales to occur.

Servicing assets represent the estimated fair value of retained servicing rights, net of servicing costs, at the time loans are sold. Servicing assets are amortized in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on stratifying the underlying financial assets by date of origination and term. Fair value is

determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions.

Serviced loans sold to others are not included in the accompanying Consolidated Balance Sheets. Income and fees collected for loan servicing are credited to noninterest income when earned, net of amortization on the related servicing assets, in the accompanying Consolidated Statements of Income.

Commercial Loans: Commercial credit is extended primarily to middle market and small business customers. Commercial loans are generally made in the Company’s marketplace for the purpose of providing working capital, financing the purchase of equipment, inventory or commercial real estate and for other business purposes. The SBA 504 program consists of real estate backed commercial mortgages where the Company has the first mortgage and the SBA has the second mortgage on the property. Loans will generally be guaranteed in full or for a meaningful amount by the businesses’ major owners. Commercial loans are made based primarily on the historical and projected cash flow of the business and secondarily on the underlying collateral provided.

Residential Mortgage, Consumer and Residential Construction Loans: The Company originates mortgage and consumer loans including principally residential real estate and home equity lines and loans and residential construction lines. The Company originates qualified mortgages which are generally sold in the secondary market and nonqualified mortgages which are generally held for investment. Each loan type is evaluated on debt to income, type of collateral, loan to collateral value, credit history and Company relationship with the borrower.

Loans held for sale includes a portion of residential mortgage loans and are reflected at the lower of aggregate cost or market value. When sales of residential mortgage loans do occur, the premium received on the sale and the present value of future cash flows of the servicing assets are recognized in income. All criteria for sale accounting must be met in order for the loan sales to occur.

Inherent in the lending function is credit risk, which is the possibility a borrower may not perform in accordance with the contractual terms of their loan. A borrower’s inability to pay their obligations according to the contractual terms can create the risk of past due loans and, ultimately, credit losses, especially on collateral deficient loans. The Company minimizes its credit risk by loan diversification and adhering to credit administration policies and procedures. Due diligence on loans begins when the Company initiates contact regarding a loan with a borrower. Documentation, including a borrower’s credit history, materials establishing the value and liquidity of potential collateral, the purpose of the loan, the source of funds for repayment of the loan and other factors, are analyzed before a loan is submitted for approval. The commercial loan portfolio is then subject to on-going internal reviews for credit quality which in part is derived from ongoing collection and review of borrowers’ financial information, as well as, independent credit reviews performed by an independent external firm.

The Company’s extension of credit is governed by the Loan Policy which was established to control the quality of the Company’s loans. This policy and the underlying procedures are reviewed and approved by the Board of Directors on a regular basis.

Credit Ratings

The Company places all SBA, commercial and residential construction loans into various credit risk rating categories based on an assessment of the expected ability of the borrowers to properly service their debt. The assessment considers numerous factors including, but not limited to, current financial information on the borrower, historical payment experience, strength of any guarantor, nature of and value of any collateral, acceptability of the loan structure and documentation, relevant public information and current economic trends. The credit risk rating is evaluated at the time of loan approval and subsequently during the annual reviews, in accordance with the guidelines set forth in the Loan Policy.

The Company uses the following regulatory definitions for criticized and classified risk ratings:

Pass: Risk ratings of 1 through 6 are used for loans that are performing, as they meet, and are expected to continue to meet, all of the terms and conditions set forth in the original loan documentation, and are generally current on principal and interest payments. These performing loans are termed “Pass”.

Special Mention: These loans have a potential weakness that deserves Management’s close attention. If left uncorrected, the potential weaknesses may result in deterioration of the repayment prospects for the loans or of the institution’s credit position at some future date.

Substandard: These loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as Substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful: These loans have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable, based on currently existing facts, conditions and values. Once a borrower is deemed incapable of repayment of unsecured debt, the loan is termed a “Loss” and charged off immediately, subject to government guarantee.

Loss: These loans are considered uncollectible and hold minute value that their continuance as bankable loans is no longer warranted. This classification does not imply zero possible recovery or salvage value; rather, it is neither practical nor desirable to postpone writing off the asset despite some partial recovery occurring later.

For residential mortgage and consumer loans, Management uses performing versus nonperforming as the best indicator of credit quality. Nonperforming loans consist of loans that are not accruing interest (nonaccrual loans) as a result of principal or interest being in default for a period of 90 days or more or when the ability to collect principal and interest according to the contractual terms is in doubt. These credit quality indicators are updated on an ongoing basis, as a loan is placed on nonaccrual status as soon as Management believes there is sufficient doubt as to the ultimate ability to collect interest on a loan.

Nonaccrual and Past Due Loans

Nonaccrual loans consist of loans that are not accruing interest as a result of principal or interest being in default, typically for a period of 90 days or more or when the ability to collect principal and interest according to the contractual terms is in doubt. When a loan is classified as nonaccrual, interest accruals are discontinued and all past due interest previously recognized as income is reversed and charged against current period earnings. Generally, until the loan becomes current, any payments received from the borrower are applied to outstanding principal until such time as Management determines that the financial condition of the borrower and other factors merit recognition of a portion of such payments as interest income. Loans may be returned to an accrual status when the ability to collect is reasonably assured and when the loan is brought current as to principal and interest. The risk of loss is difficult to quantify and is subject to fluctuations in collateral values, general economic conditions and other factors. The Company values its collateral through the use of appraisals, broker price opinions and knowledge of its local market.

The following tables set forth an aging analysis of past due and nonaccrual loans as of March 31, 2026 and December 31, 2025:

March 31, 2026

 

90+ days

 

30‑59 days

60‑89 days

and still

Total past

(In thousands)

past due

accruing

Nonaccrual

due

Current

Total loans

SBA loans held for investment

$

949

$

—

$

90

$

1,645

$

2,684

$

29,815

$

32,499

Commercial loans

SBA 504

—

43,254

Commercial & industrial

—

803

—

1,205

2,008

183,199

185,207

Commercial real estate

4,860

321

—

17,170

22,351

1,308,354

1,330,705

Commercial real estate construction

—

159,200

Residential mortgage loans

9,133

6,030

—

8,915

24,078

644,661

668,739

Consumer loans

Home equity

415

1,958

—

1,557

3,930

79,050

82,980

Consumer other

—

2,634

Residential construction loans

316

—

128

444

83,437

83,881

Total loans held for investment

15,673

9,112

90

30,620

55,495

2,533,604

2,589,099

Loans held for sale

—

12,557

Total loans

$

15,673

$

9,112

$

90

$

30,620

$

55,495

$

2,546,161

$

2,601,656


		December 31, 2025
								90+ days
		30‑59 days			60‑89 days			and still						Total past
(In thousands)		past due			past due			accruing			Nonaccrual			due			Current			Total loans
SBA loans held for investment		$	730		$	68		$	—		$	1,751		$	2,549		$	31,710		$	34,259
Commercial loans
SBA 504			—			—			—			—			—			43,802			43,802
Commercial & industrial			401			—			—			1,240			1,641			181,522			183,163
Commercial real estate			6,463			150			—			17,233			23,846			1,168,535			1,192,381
Commercial other			—			—			—			—			—			98,686			98,686
Commercial construction loans			—			—			—			—			—			147,215			147,215
Residential mortgage loans			8,538			7,568			—			8,173			24,279			652,942			677,221
Consumer loans
Home equity			2,507			240			—			1,268			4,015			78,473			82,488
Consumer other			4			—			—			—			4			2,727			2,731
Residential construction loans			—			—			—			171			171			73,106			73,277
Total loans held for investment			18,643			8,026			—			29,836			56,505			2,478,718			2,535,223
Loans held for sale			—			—			—			—			—			9,490			9,490
Total loans		$	18,643		$	8,026		$	—		$	29,836		$	56,505		$	2,488,208		$	2,544,713

The Company is using the practical expedient to exclude accrued interest receivable from credit loss measurement. At March 31, 2026 and December 31, 2025, there was $11.9 million and $12.0 million of accrued interest on loans, respectively.

Individually Evaluated Loans

The Company has defined individually evaluated loans to be all nonperforming loans. Management individually evaluates a loan when, based on current information and events, it is determined that the Company will not be able to collect all amounts due according to the loan contract.

The following tables provide detail on the Company’s loans individually evaluated in the Company’s Current Expected Credit Losses (“CECL”) evaluation with the associated allowance amount, if applicable, as of March 31, 2026 and December 31, 2025:


		March 31, 2026
		Unpaid						Allowance for
		principal			Recorded			Credit Losses
(In thousands)		balance			investment			Allocated
With no related allowance:
SBA loans held for investment		$	2,884		$	1,735		$	—
Commercial loans
Commercial & industrial			1,529			1,205			—
Commercial real estate			17,260			17,170			—
Total commercial loans			18,789			18,375			—
Residential mortgage loans			8,961			8,915
Consumer loans
Home equity			1,589			1,557			—
Total consumer loans			1,589			1,557			—
Residential construction loans			171			128			—
Total individually evaluated loans with no related allowance			32,394			30,710			—

Total individually evaluated loans:
SBA loans held for investment			2,884			1,735			—
Commercial loans
Commercial & industrial			1,529			1,205			—
Commercial real estate			17,260			17,170			—
Total commercial loans			18,789			18,375			—
Residential mortgage loans			8,961			8,915			—
Consumer loans
Home equity			1,589			1,557			—
Total consumer loans			1,589			1,557			—
Residential construction loans			171			128			—
Total individually evaluated loans		$	32,394		$	30,710		$	—

As of March 31, 2026, there was no allowance for credit losses on individually evaluated loans based upon the valuation of the collateral securing each loan.


		December 31, 2025
		Unpaid						Allowance for
		principal			Recorded			Credit Losses
(In thousands)		balance			investment			Allocated
With no related allowance:
SBA loans held for investment		$	1,355		$	1,163		$	—
Commercial loans
Commercial & industrial			1,468			1,156			—
Commercial real estate			17,235			17,233			—
Total commercial loans			18,703			18,389			—
Residential mortgage loans			5,704			5,494			—
Consumer loans
Home equity			1,292			1,268			—
Total consumer loans			1,292			1,268			—
Total individually evaluated loans with no related allowance			27,054			26,314			—

With an allowance:
SBA loans held for investment			1,504			588			3
Commercial loans
Commercial & industrial			91			84			84
Total commercial loans			91			84			84
Residential mortgage loans			2,725			2,679			15
Residential construction loans			171			171			44
Total individually evaluated loans with a related allowance			4,491			3,522			146

Total individually evaluated loans:
SBA loans held for investment			2,859			1,751			3
Commercial loans
Commercial & industrial			1,559			1,240			84
Commercial real estate			17,235			17,233			—
Total commercial loans			18,794			18,473			84
Residential mortgage loans			8,429			8,173			15
Consumer loans
Home equity			1,292			1,268			—
Total consumer loans			1,292			1,268			—
Residential construction loans			171			171			44
Total individually evaluated loans		$	31,545		$	29,836		$	146

The following tables show the internal loan classification risk by loan portfolio classification by origination year as of March 31, 2026 and December 31, 2025, respectively, as well as gross write-offs for the three months ended March 31, 2026 and the twelve months ended December 31, 2025:


	Term Loans
	Amortized Cost Basis by Origination Year, March 31, 2026

(In thousands)		2026			2025			2024			2023			2022			2021 and Earlier			Revolving Loans Amortized Cost Basis			Total
SBA loans held for investment
Risk Rating:
Pass	$	1,129		$	2,648		$	2,015		$	1,057		$	5,898		$	17,278		$	-		$	30,025
Special Mention		-			-			-			-			-			760			-			760
Substandard		-			-			-			236			1,444			34			-			1,714
Total SBA loans held for investment	$	1,129		$	2,648		$	2,015		$	1,293		$	7,342		$	18,072		$	-		$	32,499
SBA loans held for investment
Current-period gross writeoffs	$	-		$	-		$	-		$	-		$	50		$	-		$	-		$	50

Commercial loans
Risk Rating:
Pass	$	67,689		$	290,790		$	147,840		$	121,635		$	297,825		$	501,575		$	106,918		$	1,534,272
Special Mention		-			1,305			-			757			535			3,750			178			6,525
Substandard		-			-			9,893			113			-			8,363			-			18,369
Total commercial loans	$	67,689		$	292,095		$	157,733		$	122,505		$	298,360		$	513,688		$	107,096		$	1,559,166
Commercial loans
Current-period gross writeoffs	$	-		$	-		$	-		$	-		$	-		$	140		$	-		$	140

Commercial construction loans
Risk Rating:
Pass	$	539		$	68,423		$	59,889		$	10,993		$	9,846		$	5,692		$	3,818		$	159,200
Total commercial construction loans	$	539		$	68,423		$	59,889		$	10,993		$	9,846		$	5,692		$	3,818		$	159,200
Commercial construction loans
Current-period gross writeoffs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Residential mortgage loans
Risk Rating:
Performing	$	30,993		$	142,483		$	64,049		$	50,107		$	181,557		$	190,635		$	-		$	659,824
Nonperforming		-			-			-			669			5,058			3,188			-			8,915
Total residential mortgage loans	$	30,993		$	142,483		$	64,049		$	50,776		$	186,615		$	193,823		$	-		$	668,739
Residential mortgage loans
Current-period gross writeoffs	$	-		$	-		$	-		$	-		$	-		$	-		$	-			-

Consumer loans
Risk Rating:
Performing	$	2,917		$	8,575		$	4,268		$	1,587		$	2,319		$	8,094		$	56,289		$	84,049
Nonperforming		-			-			926			-			-			344			295			1,565
Total consumer loans	$	2,917		$	8,575		$	5,194		$	1,587		$	2,319		$	8,438		$	56,584		$	85,614
Consumer loans
Current-period gross writeoffs	$	-		$	-		$	-		$	-		$	-		$	10		$	-		$	10

Residential construction
Risk Rating:
Pass	$	13,401		$	48,624		$	17,687		$	398		$	-		$	3,153		$	-		$	83,263
Special Mention		-			-			490			-			-			-			-			490
Substandard		-			-			-			-			-			128			-			128
Total residential construction loans	$	13,401		$	48,624		$	18,177		$	398		$	-		$	3,281		$	-		$	83,881
Residential construction
Current-period gross writeoffs	$	-		$	-		$	-		$	-		$	-		$	40		$	-		$	40

Total loans held for investment	$	116,668		$	562,848		$	307,057		$	187,552		$	504,482		$	742,994		$	167,498		$	2,589,099


	Term Loans
	Amortized Cost Basis by Origination Year, December 31, 2025
(In thousands)		2025			2024			2023			2022			2021			2020 and Earlier			Revolving Loans Amortized Cost Basis			Total
SBA loans held for investment
Risk Rating:
Pass	$	2,719		$	3,311		$	1,155		$	5,663		$	6,339		$	11,751		$	-		$	30,938
Special Mention		-			-			711			283			351			311			-			1,656
Substandard		-			-			172			1,493			-			-			-			1,665
Total SBA loans held for investment	$	2,719		$	3,311		$	2,038		$	7,439		$	6,690		$	12,062		$	-		$	34,259
SBA loans held for investment
Current-period gross writeoffs	$	-		$	-		$	61		$	535		$	323		$	11		$	-		$	930

Commercial loans
Risk Rating:
Pass	$	291,258		$	148,983		$	127,049		$	309,072		$	137,214		$	375,281		$	100,978		$	1,489,835
Special Mention		-			-			762			536			914			6,460			-			8,672
Substandard		-			9,893			137			-			6,714			2,781			-			19,525
Total commercial loans	$	291,258		$	158,876		$	127,948		$	309,608		$	144,842		$	384,522		$	100,978		$	1,518,032
Commercial loans
Current-period gross writeoffs	$	-		$	-		$	-		$	-		$	1		$	101		$	-		$	102

Commercial construction loans
Risk Rating:
Pass	$	58,495		$	55,511		$	10,118		$	10,003		$	-		$	5,692		$	7,396		$	147,215
Total commercial construction loans	$	58,495		$	55,511		$	10,118		$	10,003		$	-		$	5,692		$	7,396		$	147,215
Commercial construction loans
Current-period gross writeoffs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Residential mortgage loans
Risk Rating:
Performing	$	147,623		$	69,751		$	53,816		$	197,958		$	57,512		$	142,388		$	-		$	669,048
Nonperforming		-			865			-			3,294			944			3,070			-			8,173
Total residential mortgage loans	$	147,623		$	70,616		$	53,816		$	201,252		$	58,456		$	145,458		$	-		$	677,221
Residential mortgage loans
Current-period gross writeoffs	$	-		$	-		$	-		$	-		$	312		$	231		$	-		$	543

Consumer loans
Risk Rating:
Performing	$	9,647		$	4,093		$	1,624		$	2,404		$	390		$	7,928		$	57,865		$	83,951
Nonperforming		-			926			-			-			-			342			-			1,268
Total consumer loans	$	9,647		$	5,019		$	1,624		$	2,404		$	390		$	8,270		$	57,865		$	85,219
Consumer loans
Current-period gross writeoffs	$	-		$	-		$	-		$	11		$	71		$	30		$	-		$	112

Residential construction
Risk Rating:
Pass	$	46,077		$	22,263		$	1,773		$	-		$	595		$	2,398		$	-		$	73,106
Substandard		-			-			-			-			-			171			-			171
Total residential construction loans	$	46,077		$	22,263		$	1,773		$	-		$	595		$	2,569		$	-		$	73,277
Residential construction
Current-period gross writeoffs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Total loans held for investment	$	555,819		$	315,596		$	197,317		$	530,706		$	210,973		$	558,573		$	166,239		$	2,535,223

Modifications

The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on in-scope assets upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. The Company uses a weighted-average remaining maturity model to determine the allowance for credit losses. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification.

Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification. Occasionally, the Company modifies loans by providing principal forgiveness on certain of its real estate loans. When principal forgiveness is provided, the amortized cost basis of the asset is written off against the allowance for credit losses. The amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses.

In some cases, the Company will modify a certain loan by providing multiple types of concessions. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.

The following table shows the amortized cost basis at the end of the reporting period of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of gross loans and type of concession granted during the three months ended March 31, 2026 and 2025, respectively:


		Payment Delay				Term Extension
		Principal	Percentage			Principal	Percentage
(Dollars in thousands)		Balance	of Loan Class			Balance	of Loan Class
Commercial loans
Commercial & industrial		—	—			578	0.3
Commercial real estate		—	—			333	—
Consumer loans
Home equity		275	0.3			—	—
Balance as of March 31, 2026	$	275	—	%	$	911	—	%


		Payment Delay				Term Extension
		Principal	Percentage			Principal	Percentage
(Dollars in thousands)		Balance	of Loan Class			Balance	of Loan Class
SBA loans held for investment	$	187	0.5	%	$	—	—	%
Residential mortgage loans		1,101	0.2			—	—
Consumer loans
Home equity		—	—			104	0.1
Balance as of March 31, 2025	$	1,288	0.1	%	$	104	—	%

Upon the Company's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. Three loans, totaling $1.2 million that were modified during the twelve months ended March 31, 2026 were not in compliance with the modified terms.

NOTE 8. Allowance for Credit Losses and Reserve for Unfunded Loan Commitments

Allowance for Credit Losses

The Company has an established methodology to determine the adequacy of the allowance for credit losses that assesses the risks and losses inherent in the loan portfolio. At a minimum, the adequacy of the allowance for credit losses is reviewed by Management on a quarterly basis. The allowance is increased by provisions charged to expense and is reduced by net charge-offs. For purposes of determining the allowance for credit losses, the Company has segmented the loans in its portfolio by loan type. Loans are segmented into the following pools: SBA, commercial, residential mortgage, consumer and residential construction loans. Certain portfolio segments are further broken down into classes based on the associated risks within those segments and the type of collateral underlying each loan. Commercial loans are divided into the following four classes: commercial real estate, commercial real estate construction, commercial & industrial and SBA 504. Consumer loans are divided into two classes as follows: home equity and other.

The standardized methodology used to assess the adequacy of the allowance includes the allocation of specific and general reserves. The same standard methodology is used, regardless of loan type. Specific reserves are established for individually evaluated loans. The general reserve is set based upon a representative average historical net charge-off rate adjusted for the following environmental factors: delinquency and impairment trends, charge-off and recovery trends, volume and loan term trends, changes in risk and underwriting policy trends, staffing and experience changes, national and local economic trends, industry conditions and credit concentration changes. These environmental factors include reasonable and supportable forecasts. Within the historical net charge-off rate, the Company weights the data dating back ten years on a straight line basis and projects the losses on a weighted average remaining maturity basis for each segment. All of the environmental factors are ranked and assigned a basis points value based on the following scale: low, low moderate, moderate, high moderate and high risk. Each environmental factor is evaluated separately for each class of loans and risk weighted based on its individual characteristics.

●

For SBA 7(a) and commercial loans, the estimate of loss based on pools of loans with similar characteristics is made through the use of a standardized loan grading system that is applied on an individual loan level and updated on a continuous basis. The loan grading system incorporates reviews of the financial performance of the borrower, including cash flow, debt-service coverage ratio, earnings power, debt level and equity position, in conjunction with an assessment of the borrower’s industry and future prospects. It also incorporates analysis of the type of collateral and the relative loan to value ratio.

●

For residential mortgage, consumer and residential construction loans, the estimate of loss is based on pools of loans with similar characteristics. Factors such as delinquency status and type of collateral are evaluated. Factors are updated frequently to capture the recent behavioral characteristics of the subject portfolios, as well as any changes in loss mitigation or credit origination strategies, and adjustments to the reserve factors are made as needed.

According to the Company’s policy, a loss (“charge-off”) is to be recognized and charged to the allowance for credit losses as soon as a loan is recognized as uncollectable. All credits which are 90 days past due must be analyzed for the Company’s ability to collect on the credit. Once a loss is known to exist, the charge-off approval process is immediately expedited. This charge-off policy is followed for all loan types.

The following tables detail the activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2026 and 2025:

For the three months ended March 31, 2026

SBA

Residential

(In thousands)

Held for Investment

Commercial

Residential

Consumer

construction

Total

Balance, beginning of period

$

785

$

22,148

$

7,695

$

995

$

719

$

32,342

Charge-offs

(50)

(140)

—

(10)

(40)

(240)

Recoveries

5

93

100

11

—

209

Net (charge-offs) recoveries

(45)

(47)

100

1

(40)

(31)

Provision (credit to) for credit losses charged to expense

371

769

(272)

(201)

376

1,043

Balance, end of period

$

1,111

$

22,870

$

7,523

$

795

$

1,055

$

33,354


	For the three months ended March 31, 2025
	SBA									Residential
(In thousands)	Held for Investment		Commercial		Residential		Consumer		construction		Total
Balance, beginning of period	$	1,535	$	17,361	$	6,254	$	775	$	863	$	26,788
Charge-offs		(350)		(2)		(130)		(50)		—		(532)
Recoveries		5		5		—		27		—		37
Net (charge-offs) recoveries		(345)		3		(130)		(23)		—		(495)
(Credit to) provision for credit losses charged to expense		(95)		1,276		403		8		(234)		1,358
Balance, end of period	$	1,095	$	18,640	$	6,527	$	760	$	629	$	27,651

Reserve for Unfunded Loan Commitments

In addition to the allowance for credit losses, the Company maintains a reserve for unfunded loan commitments at a level that Management believes is adequate to absorb estimated probable losses. At March 31, 2026 and December 31, 2025, a $0.7 million commitment reserve was reported on the Balance Sheet as “Accrued expenses and other liabilities” and reported in the Consolidated Statements of Income as “Provision for credit losses, off-balance sheet”.

Reserve for Security Impairment

The Company maintains a reserve for credit losses on AFS debt securities. Adjustments to the reserve are made through the provision for credit losses and applied to the reserve, which is classified in “Debt securities available for sale” on the Balance Sheet. At March 31, 2026 and December 31, 2025, there was no reserve for AFS debt securities.

The Company maintains a reserve for credit losses on HTM debt securities at a level that Management believes is adequate to absorb estimated probable losses. At March 31, 2026 and December 31, 2025, no reserve was reported on the Consolidated Balance Sheet as these securities are either explicitly or implicitly guaranteed by the U.S. Government, are highly rated by major agencies or have a long history of no credit losses.

Allowance for Credit Losses and Reserve for Unfunded Loan Commitments

3 Months Ended

Mar. 31, 2026

Receivables [Abstract]

Loans and Allowance for Credit Losses and Reserve for Unfunded Loan Commitments

NOTE 7. Loans

The following table sets forth the classification of loans by class, including unearned fees and deferred costs and excluding the allowance for credit losses as of March 31, 2026 and December 31, 2025:


(In thousands)		March 31, 2026			December 31, 2025
SBA loans held for investment			32,499			34,259
Commercial loans
SBA 504			43,254			43,802
Commercial & industrial			185,207			183,163
Commercial real estate²			1,330,705			1,291,067
Commercial real estate construction			159,200			147,215
Residential mortgage loans			668,739			677,221
Consumer loans
Home equity			82,980			82,488
Consumer other			2,634			2,731
Residential construction loans			83,881			73,277
Total loans held for investment		$	2,589,099		$	2,535,223
Loans held for sale¹			12,557			9,490
Total loans		$	2,601,656		$	2,544,713