ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (Tables)

12 Months Ended

Dec. 31, 2025

ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY

Schedule of Activity in the Allowance for Credit Losses by Portfolio Segment

The following tables present the activity in the allowance for credit losses by portfolio segment for the year ended December 31, 2025, 2024 and 2023:


(dollars in thousands)	Commercial and Industrial		Commercial Real Estate and Multi-family Residential		Agri-business and Agricultural		Other Commercial		Consumer 1-4 Family Mortgage		Other Consumer		Unallocated		Total
2025
Beginning balance	$	45,539	$	30,865	$	3,541	$	743	$	3,358	$	1,531	$	383	$	85,960
Provision for credit losses	10,805		(807)		(226)		298		795		993		(58)		11,800
Loans charged-off	(28,868)		0		0		0		(226)		(1,320)		0		(30,414)
Recoveries	960		105		0		0		69		515		0		1,649
Net loans (charged-off) recovered	(27,908)		105		0		0		(157)		(805)		0		(28,765)
Ending balance	$	28,436	$	30,163	$	3,315	$	1,041	$	3,996	$	1,719	$	325	$	68,995


(dollars in thousands)	Commercial and Industrial		Commercial Real Estate and Multi-family Residential		Agri-business and Agricultural		Other Commercial		Consumer 1-4 Family Mortgage		Other Consumer		Unallocated		Total
2024
Beginning balance	$	30,338	$	31,335	$	4,150	$	1,129	$	3,474	$	1,174	$	372	$	71,972
Provision for credit losses	16,639		264		(609)		(386)		(75)		906		11		16,750
Loans charged-off	(1,615)		(840)		0		0		(94)		(919)		0		(3,468)
Recoveries	177		106		0		0		53		370		0		706
Net loans (charged-off) recovered	(1,438)		(734)		0		0		(41)		(549)		0		(2,762)
Ending balance	$	45,539	$	30,865	$	3,541	$	743	$	3,358	$	1,531	$	383	$	85,960


(dollars in thousands)	Commercial and Industrial		Commercial Real Estate and Multi-family Residential		Agri-business and Agricultural		Other Commercial		Consumer 1-4 Family Mortgage		Other Consumer		Unallocated		Total
2023
Beginning balance	$	35,290	$	27,394	$	4,429	$	917	$	3,001	$	1,021	$	554	$	72,606
Provision for credit losses	1,209		3,619		(279)		212		598		673		(182)		5,850
Loans charged-off	(6,341)		0		0		0		(163)		(828)		0		(7,332)
Recoveries	180		322		0		0		38		308		0		848
Net loans (charged-off) recovered	(6,161)		322		0		0		(125)		(520)		0		(6,484)
Ending balance	$	30,338	$	31,335	$	4,150	$	1,129	$	3,474	$	1,174	$	372	$	71,972

Schedule of Risk Category of Loans by Loan Segment and Origination Date

The following tables summarize the risk category of loans by loan segment and origination date as of December 31, 2025 and 2024. Balances presented are at the amortized cost basis by origination year.


(dollars in thousands)	2025		2024		2023		2022		2021		Prior		Term Total		Revolving		Total
Commercial and industrial loans:
Working capital lines of credit loans:
Pass	$	5,863	$	1,405	$	19	$	63	$	1,066	$	334	$	8,750	$	633,270	$	642,020
Special Mention	0		0		0		0		0		0		0		38,014		38,014
Substandard	300		0		2,057		924		211		230		3,722		27,759		31,481


Total	6,163		1,405		2,076		987		1,277		564		12,472		699,043		711,515
Working capital lines of credit loans:
Current period gross write offs	0		0		0		28,607		0		12		28,619		45		28,664
Non-working capital loans:
Pass	210,230		109,036		101,984		114,735		32,420		20,755		589,160		204,275		793,435
Special Mention	5,819		2,671		154		8,359		7,024		5,060		29,087		7,493		36,580
Substandard	314		327		1,998		1,543		105		3,913		8,200		391		8,591
Doubtful	0		0		0		0		0		74		74		0		74
Not Rated	939		322		767		558		107		173		2,866		0		2,866
Total	217,302		112,356		104,903		125,195		39,656		29,975		629,387		212,159		841,546
Non-working capital loans:
Current period gross write offs	1		2		0		0		0		0		3		201		204
Commercial real estate and multi-family residential loans:
Construction and land development loans:
Pass	20,946		25,430		11,990		20,692		720		0		79,778		414,386		494,164
Special Mention	1,242		0		0		0		0		0		1,242		0		1,242



Total	22,188		25,430		11,990		20,692		720		0		81,020		414,386		495,406
Construction and land development loans:
Current period gross write offs	0		0		0		0		0		0		0		0		0
Owner occupied loans:
Pass	151,944		106,040		89,724		118,976		128,712		143,199		738,595		31,378		769,973
Special Mention	3,083		163		1,810		14,683		0		13,069		32,808		550		33,358
Substandard	0		306		284		0		1,520		1,442		3,552		0		3,552


Total	155,027		106,509		91,818		133,659		130,232		157,710		774,955		31,928		806,883
Owner occupied loans
Current period gross write offs	0		0		0		0		0		0		0		0		0
Nonowner occupied loans:
Pass	184,183		114,323		108,411		128,867		93,880		154,390		784,054		125,655		909,709
Special Mention	0		0		11,321		59		0		0		11,380		0		11,380
Substandard	0		0		0		0		0		0		0		1,957		1,957


Total	184,183		114,323		119,732		128,926		93,880		154,390		795,434		127,612		923,046


NOTE 4 – ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (continued)

(dollars in thousands)	2025	2024	2023	2022	2021	Prior	Term Total	Revolving	Total
Nonowner occupied loans (continued):
Current period gross write offs	0	0	0	0	0	0	0	0	0
Multi-family loans:
Pass	191,399	21,552	63,810	21,472	8,485	32,995	339,713	97,877	437,590
Special Mention	0	0	0	291	0	0	291	0	291



Total	191,399	21,552	63,810	21,763	8,485	32,995	340,004	97,877	437,881
Multi-family loans:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Agri-business and agricultural loans:
Loans secured by farmland:
Pass	28,600	13,595	15,258	31,324	19,915	30,669	139,361	13,202	152,563
Special Mention	1,987	118	193	0	25	148	2,471	0	2,471
Substandard	0	0	0	0	0	49	49	0	49


Total	30,587	13,713	15,451	31,324	19,940	30,866	141,881	13,202	155,083
Loans secured by farmland:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Loans for agricultural production:
Pass	5,560	13,158	21,355	18,848	21,215	12,502	92,638	151,443	244,081
Special Mention	0	0	654	258	0	1	913	6,891	7,804



Total	5,560	13,158	22,009	19,106	21,215	12,503	93,551	158,334	251,885
Loans for agricultural production:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Other commercial loans:
Pass	11,178	1,199	13,637	24,506	2,504	11,665	64,689	30,722	95,411
Special Mention	0	0	0	0	0	1,754	1,754	0	1,754



Total	11,178	1,199	13,637	24,506	2,504	13,419	66,443	30,722	97,165
Other commercial loans:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans:
Pass	14,058	9,978	6,465	6,793	10,248	5,525	53,067	2,427	55,494
Special Mention	189	119	215	156	61	0	740	0	740
Substandard	55	305	232	436	0	755	1,783	0	1,783

Not Rated	36,511	23,578	50,011	42,657	24,998	31,020	208,775	0	208,775
Total	50,813	33,980	56,923	50,042	35,307	37,300	264,365	2,427	266,792
Closed end first mortgage loans:
Current period gross write offs	0	0	0	0	0	24	24	0	24
Open end and junior lien loans:
Pass	665	487	684	0	190	4	2,030	8,477	10,507
Special Mention	286	0	0	0	0	0	286	0	286


NOTE 4 – ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (continued)

(dollars in thousands)	2025		2024		2023		2022		2021		Prior		Term Total		Revolving		Total
Open end and junior lien loans (continued):
Substandard	1,728		38		99		0		3		0		1,868		317		2,185

Not Rated	28,327		13,016		9,566		10,347		1,849		1,138		64,243		176,160		240,403
Total	31,006		13,541		10,349		10,347		2,042		1,142		68,427		184,954		253,381
Open end and junior lien loans:
Current period gross write offs	0		0		0		29		2		22		53		149		202
Residential construction loans:




Not Rated	6,684		6,852		575		1,680		1,189		1,798		18,778		0		18,778
Total	6,684		6,852		575		1,680		1,189		1,798		18,778		0		18,778
Residential construction loans:
Current period gross write offs	0		0		0		0		0		0		0		0		0
Other consumer loans:
Pass	384		0		939		120		22		0		1,465		37,683		39,148

Substandard	0		35		273		91		6		11		416		0		416

Not Rated	19,055		15,982		13,837		7,631		4,301		3,349		64,155		12,269		76,424
Total	19,439		16,017		15,049		7,842		4,329		3,360		66,036		49,952		115,988
Other consumer loans:
Current period gross write offs	4		187		306		161		58		0		716		604		1,320

Total Loans	$	931,529	$	480,035	$	528,322	$	576,069	$	360,776	$	476,022	$	3,352,753	$	2,022,596	$	5,375,349

Total current period gross write offs	$	5	$	189	$	306	$	28,797	$	60	$	58	$	29,415	$	999	$	30,414


NOTE 4 – ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (continued)

(dollars in thousands)	2024		2023		2022		2021		2020		Prior		Term Total		Revolving		Total
Commercial and industrial loans:
Working capital lines of credit loans:
Pass	$	1,599	$	114	$	1,640	$	1,647	$	651	$	0	$	5,651	$	525,179	$	530,830
Special Mention	0		0		0		0		0		0		0		48,301		48,301
Substandard	0		0		933		0		195		219		1,347		25,878		27,225
Doubtful	0		3,090		39,994		0		0		0		43,084		0		43,084

Total	1,599		3,204		42,567		1,647		846		219		50,082		599,358		649,440
Working capital lines of credit loans:
Current period gross write offs	0		0		94		0		0		0		94		136		230
Non-working capital loans:
Pass	151,920		157,276		173,274		58,591		32,909		28,582		602,552		164,106		766,658
Special Mention	3,901		2,614		2,024		1,637		393		1,894		12,463		6,491		18,954
Substandard	0		2,986		1,598		107		4,142		584		9,417		406		9,823
Doubtful	0		0		0		21		386		0		407		0		407
Not Rated	1,297		1,657		1,149		395		395		23		4,916		0		4,916
Total	157,118		164,533		178,045		60,751		38,225		31,083		629,755		171,003		800,758
Non-working capital loans:
Current period gross write offs	0		383		0		542		179		44		1,148		237		1,385
Commercial real estate and multi-family residential loans:
Construction and land development loans:
Pass	23,264		69,737		43,228		2,566		0		0		138,795		426,577		565,372
Special Mention	603		0		0		0		0		0		603		0		603



Total	23,867		69,737		43,228		2,566		0		0		139,398		426,577		565,975
Construction and land development loans:
Current period gross write offs	0		0		0		0		0		0		0		0		0
Owner occupied loans:
Pass	98,847		138,299		120,191		143,642		109,451		129,051		739,481		35,003		774,484
Special Mention	6,295		2,728		14,777		0		619		2,488		26,907		0		26,907
Substandard	318		318		0		3,101		1,457		0		5,194		0		5,194


Total	105,460		141,345		134,968		146,743		111,527		131,539		771,582		35,003		806,585
Owner occupied loans:
Current period gross write offs	0		0		0		0		0		840		840		0		840
Nonowner occupied loans:
Pass	152,963		118,517		168,387		101,064		119,612		77,497		738,040		110,441		848,481
Special Mention	0		15,650		108		5,868		0		0		21,626		1,895		23,521



Total	152,963		134,167		168,495		106,932		119,612		77,497		759,666		112,336		872,002
Nonowner occupied loans:
Current period gross write offs	0		0		0		0		0		0		0		0		0


NOTE 4 – ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (continued)

(dollars in thousands)	2024	2023	2022	2021	2020	Prior	Term Total	Revolving	Total
Multi-family loans (continued):
Pass	70,497	61,679	11,708	52,995	29,177	9,794	235,850	108,486	344,336
Special Mention	0	0	307	0	0	0	307	0	307



Total	70,497	61,679	12,015	52,995	29,177	9,794	236,157	108,486	344,643
Multi-family loans:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Agri-business and agricultural loans:
Loans secured by farmland:
Pass	14,574	21,241	29,601	23,043	25,192	18,312	131,963	24,249	156,212
Special Mention	122	209	0	0	0	0	331	0	331
Substandard	0	0	0	0	0	71	71	0	71


Total	14,696	21,450	29,601	23,043	25,192	18,383	132,365	24,249	156,614
Loans secured by farmland:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Loans for agricultural production:
Pass	15,945	26,704	21,611	24,374	21,446	1,450	111,530	118,090	229,620
Special Mention	0	0	0	0	0	0	0	1,275	1,275



Total	15,945	26,704	21,611	24,374	21,446	1,450	111,530	119,365	230,895
Loans for agricultural production:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Other commercial loans:
Pass	6,639	17,137	29,985	3,397	11,310	5,544	74,012	19,609	93,621
Special Mention	0	0	0	0	0	1,872	1,872	0	1,872



Total	6,639	17,137	29,985	3,397	11,310	7,416	75,884	19,609	95,493
Other commercial loans:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans:
Pass	11,104	8,511	9,274	11,278	6,252	4,685	51,104	4,299	55,403
Special Mention	122	226	165	66	0	0	579	0	579
Substandard	0	83	319	90	0	629	1,121	0	1,121

Not Rated	28,706	55,641	47,355	34,173	13,543	22,396	201,814	0	201,814
Total	39,932	64,461	57,113	45,607	19,795	27,710	254,618	4,299	258,917
Closed end first mortgage loans:
Current period gross write offs	0	0	0	0	0	0	0	0	0


NOTE 4 – ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (continued)

(dollars in thousands)	2024		2023		2022		2021		2020		Prior		Term Total		Revolving		Total
Open end and junior lien loans (continued):
Pass	574		738		0		438		0		5		1,755		10,090		11,845
Special Mention	0		0		0		0		309		0		309		0		309
Substandard	0		104		0		15		0		81		200		118		318

Not Rated	21,929		16,134		18,053		4,660		644		2,894		64,314		139,351		203,665
Total	22,503		16,976		18,053		5,113		953		2,980		66,578		149,559		216,137
Open end and junior lien loans:
Current period gross write offs	0		0		79		0		0		0		79		15		94
Residential construction loans:




Not Rated	10,030		1,154		2,045		1,386		759		1,348		16,722		0		16,722
Total	10,030		1,154		2,045		1,386		759		1,348		16,722		0		16,722
Residential construction loans:
Current gross period write offs	0		0		0		0		0		0		0		0		0
Other consumer loans:
Pass	79		971		234		109		0		0		1,393		20,742		22,135
Special Mention	0		0		475		0		157		0		632		0		632
Substandard	0		128		54		76		17		0		275		0		275

Not Rated	23,508		22,250		11,824		6,688		3,743		1,782		69,795		10,930		80,725
Total	23,587		23,349		12,587		6,873		3,917		1,782		72,095		31,672		103,767
Other consumer loans:
Current gross period write offs	49		303		236		33		0		26		647		272		919

TOTAL	$	644,836	$	745,896	$	750,313	$	481,427	$	382,759	$	311,201	$	3,316,432	$	1,801,516	$	5,117,948

Total current period gross write offs	$	49	$	686	$	409	$	575	$	179	$	910	$	2,808	$	660	$	3,468

Schedule of Aging of the Amortized Cost Basis in Past Due Loans

The following tables present the aging of the amortized cost basis in past due loans as of December 31, 2025 and 2024 by class of loans and loans past due 90 days or more and still accruing by class of loan:


(dollars in thousands)	Loans Not Past Due		30-89 Days Past Due		Greater than 89 Days Past Due and Accruing		Total Accruing		Total Nonaccrual		Nonaccrual With No Allowance For Credit Loss		Total
2025
Commercial and industrial loans:
Working capital lines of credit loans	$	706,317	$	0	$	0	$	706,317	$	5,198	$	1,434	$	711,515
Non-working capital loans	834,134		0		0		834,134		7,412		86		841,546
Commercial real estate and multi-family residential loans:
Construction and land development loans	495,406		0		0		495,406		0		0		495,406
Owner occupied loans	804,986		0		0		804,986		1,897		170		806,883
Nonowner occupied loans	921,089		0		0		921,089		1,957		0		923,046
Multi-family loans	437,881		0		0		437,881		0		0		437,881
Agri-business and agricultural loans:
Loans secured by farmland	155,035		0		0		155,035		48		0		155,083
Loans for agricultural production	251,885		0		0		251,885		0		0		251,885
Other commercial loans	97,165		0		0		97,165		0		0		97,165
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans	263,385		1,617		7		265,009		1,783		690		266,792
Open end and junior lien loans	251,009		186		0		251,195		2,186		405		253,381
Residential construction loans	18,778		0		0		18,778		0		0		18,778
Other consumer loans	115,046		526		0		115,572		416		6		115,988
Total	$	5,352,116	$	2,329	$	7	$	5,354,452	$	20,897	$	2,791	$	5,375,349


(dollars in thousands)	Loans Not Past Due		30-89 Days Past Due		Greater than 89 Days Past Due and Accruing		Total Accruing		Total Nonaccrual		Nonaccrual With No Allowance For Credit Loss		Total
2024
Commercial and industrial loans:
Working capital lines of credit loans	$	603,016	$	1,082	$	0	$	604,098	$	45,342	$	594	$	649,440
Non-working capital loans	792,577		663		3		793,243		7,515		37		800,758
Commercial real estate and multi-family residential loans:
Construction and land development loans	565,975		0		0		565,975		0		0		565,975
Owner occupied loans	804,810		0		0		804,810		1,775		318		806,585
Nonowner occupied loans	872,002		0		0		872,002		0		0		872,002
Multi-family loans	344,643		0		0		344,643		0		0		344,643
Agri-business and agricultural loans:
Loans secured by farmland	156,543		0		0		156,543		71		0		156,614
Loans for agricultural production	230,895		0		0		230,895		0		0		230,895
Other commercial loans	95,493		0		0		95,493		0		0		95,493
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans	256,486		1,284		26		257,796		1,121		665		258,917
Open end and junior lien loans	215,505		314		0		215,819		318		318		216,137
Residential construction loans	16,722		0		0		16,722		0		0		16,722
Other consumer loans	102,565		927		0		103,492		275		17		103,767
Total	$	5,057,232	$	4,270	$	29	$	5,061,531	$	56,417	$	1,949	$	5,117,948

Schedule of Amortized Cost Basis of Collateral Dependent Loans

The following tables present the amortized cost basis of collateral dependent loans by class of loan as of December 31, 2025 and 2024:


(dollars in thousands)	Real Estate		General Business Assets		Other		Total
2025
Commercial and industrial loans:
Working capital lines of credit loans	$	2,388	$	23,827	$	673	$	26,888
Non-working capital loans	464		3,715		49		4,228
Commercial real estate and multi-family residential loans:
Owner occupied loans	476		1,726		0		2,202
Nonowner occupied loans	1,958		0		0		1,958
Agri-business and agricultural loans:
Loans secured by farmland	0		49		0		49
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	1,725		0		0		1,725
Open end and junior lien loans	2,186		0		0		2,186
Other consumer loans	0		0		416		416
Total	$	9,197	$	29,317	$	1,138	$	39,652


(dollars in thousands)	Real Estate		General Business Assets		Other		Total
2024
Commercial and industrial loans:
Working capital lines of credit loans	$	50	$	64,023	$	447	$	64,520
Non-working capital loans	1,891		6,585		19		8,495
Commercial real estate and multi-family residential loans:
Owner occupied loans	318		3,512		0		3,830

Agri-business and agricultural loans:
Loans secured by farmland	0		71		0		71
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	1,121		0		0		1,121
Open end and junior lien loans	318		0		0		318
Other consumer loans	0		0		272		272
Total	$	3,698	$	74,191	$	738	$	78,627

Schedule of Amortized Cost Basis at the End of the Reporting Period of Loans and Financial Effect of the Loan Modifications

The following tables present the amortized cost basis of loans that were experiencing financial difficulty and received a modification of terms for the years ended December 31, 2025, 2024, and 2023, by class and type of modification. 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 each class of financing receivables at the end of the reporting period is also presented below:


(dollars in thousands)	Combination Principal Forgiveness and Interest Rate Reduction		Total Modifications		Total Class of Financing Receivable
2025




















Consumer 1-4 family mortgage loans:

Open end and junior lien loans	$	1,728	$	1,728	0.68	%

Total consumer 1-4 family mortgage loans	1,728		1,728		0.32


Total consumer loans	1,728		1,728		0.26
Total loan modifications made to borrowers experiencing financial difficulty	$	1,728	$	1,728	0.03	%


(dollars in thousands)	Interest Rate Reduction		Combination Interest Rate Reduction, Term Extension and Payment Delay		Combination Principal Forgiveness, Interest Rate Reduction, Term Extension and Payment Delay		Total Modifications		Total Class of Financing Receivable
2023
Commercial and industrial loans:
Working capital lines of credit loans	$	944	$	0	$	0	$	944	0.16	%
Non-working capital loans	0		1,912		1,572		3,484		0.43
Total commercial and industrial loans	944		1,912		1,572		4,428		0.31













Total commercial loans	944		1,912		1,572		4,428		0.10









Total loan modifications made to borrowers experiencing financial difficulty	$	944	$	1,912	$	1,572	$	4,428	0.09	%

The following tables present the financial effect of the loan modifications presented above for material modifications to borrowers experiencing financial difficulty for the years ended December 31, 2025, 2024, and 2023:


(dollars in thousands)	Principal Forgiveness		Weighted Average Interest Rate Reduction
2025
Commercial and industrial loans:
Working capital lines of credit loans (1)	$	28,607	7.00	%

Total commercial and industrial loans	28,607		7.00	%














Total commercial loans	28,607		7.00	%








Total financial effect of loan modifications made to borrowers experiencing financial difficulty	$	28,607	7.00	%

(1) Principal forgiveness of $28.6 million represents one $30.6 million working capital line of credit loan, of which $28.6 million was charged off. The remaining $2.0 million was financed into an open end and junior lien loan with a personal guarantor of the forgiven loan. The modified note is collateralized by several of the guarantor's commercial and residential real estate properties.


(dollars in thousands)	Principal Forgiveness		Weighted Average Interest Rate Reduction		Weighted Average Term Extension	Payment Delay
2023
Commercial and industrial loans:
Working capital lines of credit loans	$	0	7.50	%	None	None
Non-working capital loans (1)	9,380		7.87		58 months	Extension of payment terms from fully amortizing variable rate 40 month term to 60 month fixed rate term with 480 month amortization schedule, monthly interest and semiannual principal payments, and excess cash flow recapture provisions Extension of payment terms from monthly variable rate interest only payments with balloon payment at end of term to fully amortizing ten year fixed rate principal and interest payment schedule
Total commercial and industrial loans	9,380		7.84		44 months
Total commercial loans	9,380		7.84		44 months
























Total modifications	$	9,380	7.84	%	44 months

(1) Principal forgiveness of $9.4 million represents one $11.0 million non-working capital loan, of which $9.3 million was charged off.

LAKELAND FINANCIAL CORP 10-K