Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2025

Loans and Allowance for Credit Losses [Abstract]

Schedule of Composition of the Loan Portfolio

The following table summarizes the composition of the loan portfolio:

	Total Loans
($ in thousands)	September 30, 2025			December 31, 2024

Commercial & industrial	$	117,581		$	124,764
Commercial real estate - owner occupied		137,442			134,431
Commercial real estate - nonowner occupied		397,865			345,142
Agricultural		65,150			64,680
Residential real estate		309,140			308,378
Home equity line of credit (HELOC)		64,306			53,811
Consumer		19,061			15,529

Total loans		1,110,545			1,046,735
Allowance for credit losses		(15,943	)		(15,096	)

Loans, net	$	1,094,602		$	1,031,639

Schedule of Activity Related to the Allowance for Credit Losses (ACL)

The following tables summarize the activity related to the ACL for the three and nine months ended September 30, 2025, and September 30, 2024, and for the twelve months ended December 31, 2024.

($ in thousands) For the three months ended September 30, 2025	Balance, beginning of period		Initial allowance for credit losses on acquired PCD loans		Chargeoffs			Recoveries		Provision (benefit) for Credit Losses			Balance, end of period

Commercial & industrial	$	1,928	$	-	$	-		$	-	$	(16	)	$	1,912
Commercial real estate - owner occupied		1,837		-		-			-		63			1,900
Commercial real estate - nonowner occupied		6,533		-		-			-		170			6,703
Agricultural		244		-		-			-		8			252
Residential real estate		4,247		-		-			-		(33	)		4,214
HELOC		633		-		-			3		34			670
Consumer		223		-		(11	)		6		74			292
Total	$	15,645	$	-	$	(11	)	$	9	$	300		$	15,943

($ in thousands) For the nine months ended September 30, 2025	Balance, beginning of period		Initial allowance for credit losses on acquired PCD loans		Chargeoffs			Recoveries		Provision (benefit) for Credit Losses			Balance, end of period

Commercial & industrial	$	2,666	$	5	$	(61	)	$	-	$	(698	)	$	1,912
Commercial real estate - owner occupied		1,806		-		-			-		94			1,900
Commercial real estate - nonowner occupied		5,721		-		-			2		980			6,703
Agricultural		884		-		-			-		(632	)		252
Residential real estate		3,330		-		-			-		884			4,214
HELOC		520		-		(4	)		3		151			670
Consumer		169		-		(81	)		9		195			292
Total	$	15,096	$	5	$	(146	)	$	14	$	974		$	15,943

($ in thousands) For the three months ended September 30, 2024	Balance, beginning of period		Chargeoffs			Recoveries		Provision (benefit) for Credit Losses			Balance, end of period

Commercial & industrial	$	2,755	$	-		$	-	$	(179	)	$	2,576
Commercial real estate - owner occupied		1,967		-			-		(130	)		1,837
Commercial real estate - nonowner occupied		5,449		-			-		82			5,531
Agricultural		912		-			-		(48	)		864
Residential real estate		3,798		-			-		(52	)		3,746
HELOC		534		-			-		11			545
Consumer		197		(29	)		2		9			179
Total	$	15,612	$	(29	)	$	2	$	(307	)	$	15,278

($ in thousands) For the nine months ended September 30, 2024	Balance, beginning of period		Chargeoffs			Recoveries		Provision (benefit) for Credit Losses			Balance, end of period

Commercial & industrial	$	2,003	$	(42	)	$	6	$	609		$	2,576
Commercial real estate - owner occupied		1,952		-			-		(115	)		1,837
Commercial real estate - nonowner occupied		5,718		-			-		(187	)		5,531
Agricultural		440		-			-		424			864
Residential real estate		4,936		-			-		(1,190	)		3,746
HELOC		510		-			-		35			545
Consumer		227		(53	)		21		(16	)		179
Total	$	15,786	$	(95	)	$	27	$	(440	)	$	15,278

($ in thousands) For the twelve months ended December 31, 2024	Balance, beginning of period		Chargeoffs			Recoveries		Provision (benefit) for Credit Losses			Balance, end of period

Commercial & industrial	$	2,003	$	(233	)	$	5	$	891		$	2,666
Commercial real estate - owner occupied		1,952		-			-		(146	)		1,806
Commercial real estate - nonowner occupied		5,718		-			-		3			5,721
Agricultural		440		-			-		444			884
Residential real estate		4,936		(3	)		-		(1,603	)		3,330
HELOC		510		-			-		10			520
Consumer		227		(53	)		34		(39	)		169
Total	$	15,786	$	(289	)	$	39	$	(440	)	$	15,096

Schedule of Presents an Analysis of Collateral-Dependent Loans

The following table presents an analysis of collateral-dependent loans of the Company as of September 30, 2025, and December 31, 2024.

($ in thousands)	Collateral Type						Allocated
September 30, 2025	Real Estate		Other		Total		Allowance

Commercial & industrial	$	1,644	$	721	$	2,365	$	65
Commercial real estate - owner occupied		429		-		429		13
Commercial real estate - nonowner occupied		144		-		144		-
Agricultural		-		-		-		-
Residential real estate		782		-		782		22
HELOC		-		-		-		-
Consumer		-		-		-		-
Total	$	2,999	$	721	$	3,720	$	100

($ in thousands)	Collateral Type						Allocated
December 31, 2024	Real Estate		Other		Total		Allowance

Commercial & industrial	$	2,252	$	625	$	2,877	$	380
Commercial real estate - owner occupied		429		-		429		13
Commercial real estate - nonowner occupied		370		-		370		-
Agricultural		-		-		-		-
Residential real estate		801		-		801		26
HELOC		-		-		-		-
Consumer		-		-		-		-
Total	$	3,852	$	625	$	4,477	$	419

Schedule of Loan Balances by Credit Quality Indicators and Gross Chargeoffs

The following table presents loan balances by credit quality indicators and gross chargeoffs by loan category and year of origination as of September 30, 2025.

($ in thousands)	Term Loans by Year of Origination												Revolving		Revolving Loans Converted
September 30, 2025	2025		2024		2023		2022		2021		Prior		Loans		to Term		Total

Commercial & industrial
Pass (1 - 4)	$	14,622	$	19,952	$	10,335	$	10,180	$	12,208	$	16,186	$	30,479	$	404	$	114,366
Special Mention (5)		-		32		-		-		235		120		225		339		951
Substandard (6)		-		57		285		153		-		158		99		213		965
Doubtful (7)		-		-		153		433		204		481		-		28		1,299
Loss (8)		-		-		-		-		-		-		-		-		-
Total	$	14,622	$	20,041	$	10,773	$	10,766	$	12,647	$	16,945	$	30,803	$	984	$	117,581
Current period gross chargeoffs	$	-	$	-	$	-	$	-	$	-	$	33	$	28	$	-	$	61

Commercial real estate - owner occupied
Pass (1 - 4)	$	24,279	$	18,882	$	22,647	$	15,142	$	20,507	$	32,291	$	3,032	$	231	$	137,011
Special Mention (5)		-		-		-		-		-		-		-		-		-
Substandard (6)		-		-		-		-		-		430		-		-		430
Doubtful (7)		-		-		-		-		-		1		-		-		1
Loss (8)		-		-		-		-		-		-		-		-		-
Total	$	24,279	$	18,882	$	22,647	$	15,142	$	20,507	$	32,722	$	3,032	$	231	$	137,442
Current period gross chargeoffs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Commercial real estate - nonowner occupied
Pass (1 - 4)	$	61,548	$	97,771	$	40,303	$	49,538	$	36,599	$	104,009	$	7,844	$	-	$	397,612
Special Mention (5)		-		-		-		-		-		-		-		-		-
Substandard (6)		-		-		-		144		-		109		-		-		253
Doubtful (7)		-		-		-		-		-		-		-		-		-
Loss (8)		-		-		-		-		-		-		-		-		-
Total	$	61,548	$	97,771	$	40,303	$	49,682	$	36,599	$	104,118	$	7,844	$	-	$	397,865
Current period gross chargeoffs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Agricultural
Pass (1 - 4)	$	8,754	$	6,305	$	6,485	$	12,853	$	10,016	$	9,031	$	11,694	$	12	$	65,150
Special Mention (5)		-		-		-		-		-		-		-		-		-
Substandard (6)		-		-		-		-		-		-		-		-		-
Doubtful (7)		-		-		-		-		-		-		-		-		-
Loss (8)		-		-		-		-		-		-		-		-		-
Total	$	8,754	$	6,305	$	6,485	$	12,853	$	10,016	$	9,031	$	11,694	$	12	$	65,150
Current period gross chargeoffs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Residential real estate
Pass (1 - 4)	$	21,812	$	26,315	$	39,352	$	95,161	$	69,651	$	55,336	$	1	$	-	$	307,628
Special Mention (5)		-		-		-		-		-		-		-		-		-
Substandard (6)		-		-		263		99		240		910		-		-		1,512
Doubtful (7)		-		-		-		-		-		-		-		-		-
Loss (8)		-		-		-		-		-		-		-		-		-
Total	$	21,812	$	26,315	$	39,615	$	95,260	$	69,891	$	56,246	$	1	$	-	$	309,140
Current period gross chargeoffs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Home equity line of credit (HELOC)
Pass (1 - 4)	$	443	$	-	$	88	$	97	$	272	$	53	$	56,485	$	6,675	$	64,113
Special Mention (5)		-		-		-		-		-		-		-		-		-
Substandard (6)		-		-		-		-		-		38		85		70		193
Doubtful (7)		-		-		-		-		-		-		-		-		-
Loss (8)		-		-		-		-		-		-		-		-		-
Total	$	443	$	-	$	88	$	97	$	272	$	91	$	56,570	$	6,745	$	64,306
Current period gross chargeoffs	$	-	$	-	$	-	$	-	$	-	$	4	$	-	$	-	$	4

Consumer
Pass (1 - 4)	$	5,237	$	1,320	$	1,654	$	2,462	$	837	$	1,048	$	6,501	$	-	$	19,059
Special Mention (5)		-		-		-		-		-		-		-		-		-
Substandard (6)		-		-		-		2		-		-		-		-		2
Doubtful (7)		-		-		-		-		-		-		-		-		-
Loss (8)		-		-		-		-		-		-		-		-		-
Total	$	5,237	$	1,320	$	1,654	$	2,464	$	837	$	1,048	$	6,501	$	-	$	19,061
Current period gross chargeoffs	$	-	$	2	$	4	$	-	$	-	$	-	$	75	$	-	$	81

Total Loans
Pass (1 - 4)	$	136,695	$	170,545	$	120,864	$	185,433	$	150,090	$	217,954	$	116,036	$	7,322	$	1,104,939
Special Mention (5)		-		32		-		-		235		120		225		339		951
Substandard (6)		-		57		548		398		240		1,645		184		283		3,355
Doubtful (7)		-		-		153		433		204		482		-		28		1,300
Loss (8)		-		-		-		-		-		-		-		-		-
Total Loans	$	136,695	$	170,634	$	121,565	$	186,264	$	150,769	$	220,201	$	116,445	$	7,972	$	1,110,545
Current period gross chargeoffs	$	-	$	2	$	4	$	-	$	-	$	37	$	103	$	-	$	146

The following table presents loan balances by credit quality indicators and gross chargeoffs by loan category and year of origination as of December 31, 2024.

($ in thousands)	Term Loans by Year of Origination												Revolving		Revolving Loans Converted
December 31, 2024	2024		2023		2022		2021		2020		Prior		Loans		to Term		Total

Commercial & industrial
Pass (1 - 4)	$	22,688	$	12,927	$	12,813	$	14,207	$	9,101	$	10,022	$	36,363	$	3,204	$	121,325
Special Mention (5)		-		355		-		-		133		-		25		-		513
Substandard (6)		-		-		585		-		-		673		1,147		88		2,493
Doubtful (7)		-		153		-		204		-		48		-		28		433
Loss (8)		-		-		-		-		-		-		-		-		-
Total	$	22,688	$	13,435	$	13,398	$	14,411	$	9,234	$	10,743	$	37,535	$	3,320	$	124,764
Current period gross chargeoffs	$	-	$	42	$	25	$	23	$	143	$	-	$	-	$	-	$	233

Commercial real estate - owner occupied
Pass (1 - 4)	$	15,070	$	30,372	$	20,002	$	24,406	$	13,491	$	30,140	$	463	$	49	$	133,993
Special Mention (5)		-		-		-		-		-		-		-		-		-
Substandard (6)		-		-		-		-		430		-		-		-		430
Doubtful (7)		-		-		-		7		-		1		-		-		8
Loss (8)		-		-		-		-		-		-		-		-		-
Total	$	15,070	$	30,372	$	20,002	$	24,413	$	13,921	$	30,141	$	463	$	49	$	134,431
Current period gross chargeoffs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Commercial real estate - nonowner occupied
Pass (1 - 4)	$	94,098	$	47,026	$	50,942	$	40,584	$	39,093	$	72,609	$	118	$	-	$	344,470
Special Mention (5)		398		-		-		-		-		-		-		-		398
Substandard (6)		-		-		154		-		-		120		-		-		274
Doubtful (7)		-		-		-		-		-		-		-		-		-
Loss (8)		-		-		-		-		-		-		-		-		-
Total	$	94,496	$	47,026	$	51,096	$	40,584	$	39,093	$	72,729	$	118	$	-	$	345,142
Current period gross chargeoffs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Agricultural
Pass (1 - 4)	$	8,100	$	8,295	$	14,482	$	10,748	$	2,618	$	8,967	$	11,470	$	-	$	64,680
Special Mention (5)		-		-		-		-		-		-		-		-		-
Substandard (6)		-		-		-		-		-		-		-		-		-
Doubtful (7)		-		-		-		-		-		-		-		-		-
Loss (8)		-		-		-		-		-		-		-		-		-
Total	$	8,100	$	8,295	$	14,482	$	10,748	$	2,618	$	8,967	$	11,470	$	-	$	64,680
Current period gross chargeoffs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Residential real estate
Pass (1 - 4)	$	31,291	$	41,982	$	100,375	$	76,146	$	28,237	$	28,797	$	-	$	-	$	306,828
Special Mention (5)		-		-		-		-		-		-		-		-		-
Substandard (6)		-		279		-		256		50		965		-		-		1,550
Doubtful (7)		-		-		-		-		-		-		-		-		-
Loss (8)		-		-		-		-		-		-		-		-		-
Total	$	31,291	$	42,261	$	100,375	$	76,402	$	28,287	$	29,762	$	-	$	-	$	308,378
Current period gross chargeoffs	$	-	$	-	$	-	$	3	$	-	$	-	$	-	$	-	$	3

Home equity line of credit (HELOC)
Pass (1 - 4)	$	-	$	-	$	-	$	12	$	18	$	51	$	46,908	$	6,591	$	53,580
Special Mention (5)		-		-		-		-		-		-		-		-		-
Substandard (6)		-		-		-		-		-		48		139		44		231
Doubtful (7)		-		-		-		-		-		-		-		-		-
Loss (8)		-		-		-		-		-		-		-		-		-
Total	$	-	$	-	$	-	$	12	$	18	$	99	$	47,047	$	6,635	$	53,811
Current period gross chargeoffs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Consumer
Pass (1 - 4)	$	1,909	$	1,993	$	3,247	$	725	$	319	$	94	$	7,229	$	-	$	15,516
Special Mention (5)		-		-		-		-		-		-		-		-		-
Substandard (6)		-		-		13		-		-		-		-		-		13
Doubtful (7)		-		-		-		-		-		-		-		-		-
Loss (8)		-		-		-		-		-		-		-		-		-
Total	$	1,909	$	1,993	$	3,260	$	725	$	319	$	94	$	7,229	$	-	$	15,529
Current period gross chargeoffs	$	-	$	-	$	-	$	5	$	2	$	-	$	46	$	-	$	53

Total Loans
Pass (1 - 4)	$	173,156	$	142,595	$	201,861	$	166,828	$	92,877	$	150,680	$	102,551	$	9,844	$	1,040,392
Special Mention (5)		398		355		-		-		133		-		25		-		911
Substandard (6)		-		279		752		256		480		1,806		1,286		132		4,991
Doubtful (7)		-		153		-		211		-		49		-		28		441
Loss (8)		-		-		-		-		-		-		-		-		-
Total Loans	$	173,554	$	143,382	$	202,613	$	167,295	$	93,490	$	152,535	$	103,862	$	10,004	$	1,046,735
Current period gross chargeoffs	$	-	$	42	$	25	$	31	$	145	$	-	$	46	$	-	$	289

Schedule of Company’s Loan Portfolio Aging Analysis

The following tables present the Company’s loan portfolio aging analysis as of September 30, 2025, and December 31, 2024.

($ in thousands)	30-59 Days		60-89 Days		90 Days or Greater		Total Past
September 30, 2025	Past Due		Past Due		Past Due		Due		Current		Total Loans

Commercial & industrial	$	-	$	347	$	1,957	$	2,304	$	115,277	$	117,581
Commercial real estate - owner occupied		-		-		429		429		137,013		137,442
Commercial real estate - nonowner occupied		207		-		206		413		397,452		397,865
Agricultural		-		-		-		-		65,150		65,150
Residential real estate		21		573		629		1,223		307,917		309,140
HELOC		90		136		100		326		63,980		64,306
Consumer		159		146		-		305		18,756		19,061
Total Loans	$	477	$	1,202	$	3,321	$	5,000	$	1,105,545	$	1,110,545

	30-59 Days		60-89 Days		90 Days or Greater		Total Past
December 31, 2024	Past Due		Past Due		Past Due		Due		Current		Total Loans

Commercial & industrial	$	354	$	-	$	2,927	$	3,281	$	121,483	$	124,764
Commercial real estate - owner occupied		-		-		429		429		134,002		134,431
Commercial real estate - nonowner occupied		-		-		370		370		344,772		345,142
Agricultural		-		-		-		-		64,680		64,680
Residential real estate		215		1,021		787		2,023		306,355		308,378
HELOC		131		15		130		276		53,535		53,811
Consumer		193		27		-		220		15,309		15,529
Total Loans	$	893	$	1,063	$	4,643	$	6,599	$	1,040,136	$	1,046,735

Schedule of Categories of Nonaccrual Loans

The categories of nonaccrual loans as of September 30, 2025, and December 31, 2024, are presented in the following tables.

	September 30, 2025
($ in thousands)	Nonaccrual loans with no allowance		Nonaccrual loans with an allowance		Total nonaccrual loans

Commercial & industrial	$	2,181	$	62	$	2,243
Commercial real estate - owner occupied		-		429		429
Commercial real estate - nonowner occupied		349		-		349
Agricultural		-		-		-
Residential real estate		1,293		107		1,400
Home equity line of credit (HELOC)		193		-		193
Consumer		2		-		2

Total loans	$	4,018	$	598	$	4,616

	December 31, 2024
($ in thousands)	Nonaccrual loans with no allowance		Nonaccrual loans with an allowance		Total nonaccrual loans

Commercial & industrial	$	2,301	$	626	$	2,927
Commercial real estate - owner occupied		7		430		437
Commercial real estate - nonowner occupied		370		-		370
Agricultural		-		-		-
Residential real estate		1,428		111		1,539
Home equity line of credit (HELOC)		231		-		231
Consumer		12		-		12

Total loans	$	4,349	$	1,167	$	5,516

Schedule of Activity in the ACL for Unfunded Loan Commitments

The following table presents the balance and activity in the ACL for unfunded loan commitments for the three and nine months ended September 30, 2025, and September 30, 2024.

	Three Months Ended September 30,					Nine Months Ended September 30,
($ in thousands)	2025			2024		2025		2024
Balance, beginning of period	$	1,650		$	909	$	1,340	$	776
Adjustment for acquired loans		-			-		3
Provision for unfunded commitments		(176	)		507		131		640
Balance, end of period	$	1,474		$	1,416	$	1,474	$	1,416

SB FINANCIAL GROUP, INC. 10-Q