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Loans and Leases (Tables)

12 Months Ended

Dec. 31, 2020



(dollars in thousands)	2020						2019
	Originated		Acquired		Total
Commercial and industrial	$	257,277	$	23,480	$	280,757	$	122,594
Commercial real estate:
Non-owner occupied		104,653		87,490		192,143		99,801
Owner occupied		136,305		43,618		179,923		130,558
Construction		3,965		6,266		10,231		4,654
Consumer:
Home equity installment		34,561		5,586		40,147		36,631
Home equity line of credit		44,931		4,794		49,725		47,282
Auto loans		98,192		194		98,386		105,870
Direct finance leases		20,095		-		20,095		16,355
Other		7,411		191		7,602		5,634
Residential:
Real estate		180,414		38,031		218,445		167,164
Construction		23,117		240		23,357		17,770
Total		910,921		209,890		1,120,811		754,313
Less:
Allowance for loan losses		(14,202)		-		(14,202)		(9,747)
Unearned lease revenue		(1,159)		-		(1,159)		(903)
Loans and leases, net	$	895,560	$	209,890	$	1,105,450	$	743,663

Schedule of Accretable Yield



	For the year ended
(dollars in thousands)	December 31, 2020
Balance at beginning of period	$	-
Accretable yield on acquired loans		248
Reclassification from non-accretable difference		429
Accretion of accretable yield		(114)
Balance at end of period	$	563

Non-Accrual Loans, Segregated by Class



(dollars in thousands)	2020		2019
Commercial and industrial	$	590	$	336
Commercial real estate:
Non-owner occupied		846		510
Owner occupied		1,123		1,447
Consumer:
Home equity installment		61		65
Home equity line of credit		395		294
Auto loans		27		16
Residential:
Real estate		727		1,006
Total	$	3,769	$	3,674

Schedule of Modifications by Type



(dollars in thousands)	Number of Loans		Total Modification Balance		Total Loan Balance	Percentage of Total Loan Balance	Percentage of Tier 1 Capital
Commercial and industrial	1	$	881	$	280,757	0.3%	0.6%
Commercial real estate:
Non-owner occupied	2		113		192,143	0.1%	0.1%
Owner occupied	4		1,161		179,923	0.6%	0.7%
Construction	-		-		10,231	0.0%	0.0%
Total Commercial	7		2,155		663,054	0.3%	1.4%
Consumer:
Home equity installment	-		-		40,147	0.0%	0.0%
Home equity line of credit	-		-		49,725	0.0%	0.0%
Auto loans	3		51		98,386	0.1%	0.0%
Direct finance leases	-		-		20,095	0.0%	0.0%
Other	-		-		7,602	0.0%	0.0%
Total Consumer	3		51		215,955	0.0%	0.0%
Residential:
Real estate	-		-		218,445	0.0%	0.0%
Construction	-		-		23,357	0.0%	0.0%
Total Residential	-		-		241,802	0.0%	0.0%
Total	10	$	2,206	$	1,120,811	0.2%	1.5%

Schedule of Modifications by Sector


(dollars in thousands)	Count		Balance	Percentage of Tier 1 Capital

Retail Trade	2	$	1,440	1.0%
Real Estate Rental and Leasing	2		304	0.2%
Accommodation and Food Services	1		298	0.1%
Finance and Insurance	2		113	0.1%
Total commercial accommodations	7	$	2,155	1.4%


	Loans modified as TDRs for the twelve months ended:
(dollars in thousands)	December 31, 2020						December 31, 2019

			Recorded		Increase in			Recorded		Increase in
		Number	investment		allowance		Number	investment		allowance
		of	(as of		(as of		of	(as of		(as of
		contracts	period end)		period end)		contracts	period end)		period end)
Commercial and industrial		2	$	206	$	66	-	$	-	$	-
Commercial real estate - non-owner occupied		2		1,598		453	-		-		-
Total		4	$	1,804	$	519	-	$	-	$	-

In the above table, the period end balance is inclusive of all partial pay downs and charge-offs since the modification date. For all loans modified in a TDR, the pre-modification recorded investment was the same as the post-modification recorded investment.

Loans Modified as TDR that Subsequently Defaulted


Loans modified as a TDR within the previous twelve months that subsequently defaulted during the twelve months ended:
(dollars in thousands)	December 31, 2020				December 31, 2019

		Number of		Recorded		Number of		Recorded
		contracts		investment		contracts		investment
Commercial and industrial		2	$	206		-	$	-
Total		2	$	206		-	$	-

In the above table, the period end balances are inclusive of all partial pay downs and charge-offs since the modification date.

Past Due Loans



														Recorded
					Past due									investment past
	30 - 59 Days		60 - 89 Days		90 days		Total				Total			due ≥ 90 days
December 31, 2020	past due		past due		or more ⁽¹⁾		past due		Current		loans ⁽³⁾			and accruing
Originated Loans
Commercial and industrial	$	275	$	505	$	590	$	1,370	$	255,907	$	257,277		$	-
Commercial real estate:
Non-owner occupied		-		-		846		846		103,807		104,653			-
Owner occupied		1		-		1,123		1,124		135,181		136,305			-
Construction		-		-		-		-		3,965		3,965			-
Consumer:
Home equity installment		62		-		61		123		34,438		34,561			-
Home equity line of credit		24		-		395		419		44,512		44,931			-
Auto loans		197		25		27		249		97,943		98,192			-
Direct finance leases		294		-		61		355		18,581		18,936	⁽²⁾		61
Other		6		-		-		6		7,405		7,411			-
Residential:
Real estate		-		74		727		801		179,613		180,414			-
Construction		-		-		-		-		23,117		23,117			-
Total originated loans		859		604		3,830		5,293		904,469		909,762			61
Acquired Loans
Commercial and industrial		13		-		-		13		23,467		23,480			-
Commercial real estate:
Non-owner occupied		79		-		-		79		87,411		87,490			-
Owner occupied		-		-		-		-		43,618		43,618			-
Construction		-		-		-		-		6,266		6,266			-
Consumer:
Home equity installment		40		-		-		40		5,546		5,586			-
Home equity line of credit		-		-		-		-		4,794		4,794			-
Auto loans		-		-		-		-		194		194			-
Other		3		-		-		3		188		191			-
Residential:
Real estate		-		-		-		-		38,031		38,031			-
Construction		-		-		-		-		240		240			-
Total acquired loans		135		-		-		135		209,755		209,890			-
Total Loans and Leases
Commercial and industrial		288		505		590		1,383		279,374		280,757			-
Commercial real estate:
Non-owner occupied		79		-		846		925		191,218		192,143			-
Owner occupied		1		-		1,123		1,124		178,799		179,923			-
Construction		-		-		-		-		10,231		10,231			-
Consumer:
Home equity installment		102		-		61		163		39,984		40,147			-
Home equity line of credit		24		-		395		419		49,306		49,725			-
Auto loans		197		25		27		249		98,137		98,386			-
Direct finance leases		294		-		61		355		18,581		18,936	⁽²⁾		61
Other		9		-		-		9		7,593		7,602			-
Residential:
Real estate		-		74		727		801		217,644		218,445			-
Construction		-		-		-		-		23,357		23,357			-
Total	$	994	$	604	$	3,830	$	5,428	$	1,114,224	$	1,119,652		$	61

⁽¹⁾ Includes non-accrual loans. ⁽²⁾ Net of unearned lease revenue of $1.2 million. ⁽³⁾ Includes net deferred loan costs of $1.7 million.

‎



														Recorded
					Past due									investment past
	30 - 59 Days		60 - 89 Days		90 days		Total				Total			due ≥ 90 days
December 31, 2019	past due		past due		or more ⁽¹⁾		past due		Current		loans ⁽³⁾			and accruing

Commercial and industrial	$	33	$	171	$	336	$	540	$	122,054	$	122,594		$	-
Commercial real estate:
Non-owner occupied		-		70		510		580		99,221		99,801			-
Owner occupied		180		89		1,447		1,716		128,842		130,558			-
Construction		-		-		-		-		4,654		4,654			-
Consumer:
Home equity installment		-		5		65		70		36,561		36,631			-
Home equity line of credit		49		-		294		343		46,939		47,282			-
Auto loans		316		46		16		378		105,492		105,870			-
Direct finance leases		59		79		-		138		15,314		15,452	⁽²⁾		-
Other		15		1		-		16		5,618		5,634			-
Residential:
Real estate		29		224		1,006		1,259		165,905		167,164			-
Construction		-		-		-		-		17,770		17,770			-
Total	$	681	$	685	$	3,674	$	5,040	$	748,370	$	753,410		$	-

⁽¹⁾ Includes non-accrual loans. ⁽²⁾ Net of unearned lease revenue of $0.9 million. ⁽³⁾Includes net deferred loan costs of $3.0 million.

Impaired Loans

Impaired loans, segregated by class, as of the period indicated are detailed below:



			Recorded		Recorded
	Unpaid		investment		investment		Total
	principal		with		with no		recorded		Related
(dollars in thousands)	balance		allowance		allowance		investment		allowance
December 31, 2020
Commercial and industrial	$	688	$	549	$	41	$	590	$	213
Commercial real estate:
Non-owner occupied		2,960		1,677		1,171		2,848		481
Owner occupied		2,058		1,219		473		1,692		309
Consumer:
Home equity installment		106		-		61		61		-
Home equity line of credit		443		105		290		395		48
Auto loans		50		27		-		27		4
Residential:
Real estate		774		559		168		727		151
Total	$	7,079	$	4,136	$	2,204	$	6,340	$	1,206



			Recorded		Recorded
	Unpaid		investment		investment		Total
	principal		with		with no		recorded		Related
(dollars in thousands)	balance		allowance		allowance		investment		allowance
December 31, 2019
Commercial and industrial	$	336	$	336	$	-	$	336	$	221
Commercial real estate:
Non-owner occupied		1,047		333		591		924		232
Owner occupied		2,336		1,052		972		2,024		194
Consumer:
Home equity installment		106		-		65		65		-
Home equity line of credit		362		88		206		294		87
Auto loans		32		-		16		16		-
Residential:										-
Real estate		1,053		678		328		1,006		174
Total	$	5,272	$	2,487	$	2,178	$	4,665	$	908

At December 31, 2020, impaired loans totaled $6.3 million consisting of $2.5 million in accruing TDRs and $3.8 million in non-accrual loans. At December 31, 2019, impaired loans totaled $4.7 million consisting of $1.0 million in accruing TDRs and $3.7 million in non-accrual loans. As of December 31, 2020, the non-accrual loans included four TDRs to three

unrelated borrowers totaling $0.7 million compared with two TDRs to two unrelated borrowers totaling $0.6 million as of December 31, 2019.

A loan is considered impaired when, based on current information and events; it is probable that the Company will be unable to collect the payments in accordance with the contractual terms of the loan. Factors considered in determining impairment include payment status, collateral value, and the probability of collecting payments when due. The significance of payment delays and/or shortfalls is determined on a case-by-case basis. All circumstances surrounding the loan are considered. Such factors include the length of the delinquency, the underlying reasons and the borrower’s prior payment record. Impairment is measured on these loans on a loan-by-loan basis. Impaired loans include non-accrual loans, TDRs and other loans deemed to be impaired based on the aforementioned factors.

The following table presents the average recorded investments in impaired loans and related amount of interest income recognized during the periods indicated below. The average balances are calculated based on the quarter-end balances of impaired loans. Payments received from non-accruing impaired loans are first applied against the outstanding principal balance, then to the recovery of any charged-off amounts. Any excess is treated as a recovery of interest income. Payments received from accruing impaired loans are applied to principal and interest, as contractually agreed upon.



	December 31, 2020						December 31, 2019
					Cash basis						Cash basis
	Average		Interest		interest		Average		Interest		interest
	recorded		income		income		recorded		income		income
(dollars in thousands)	investment		recognized		recognized		investment		recognized		recognized

Commercial and industrial	$	404	$	1	$	-	$	226	$	1	$	-
Commercial real estate:
Non-owner occupied		1,939		96		-		914		185		-
Owner occupied		1,848		48		-		2,504		40		-
Construction		-		-		-		-		-		-
Consumer:
Home equity installment		53		-		-		129		2		-
Home equity line of credit		368		-		-		184		-		-
Auto Loans		51		2		-		39		-		-
Other		-		-		-		-		-		-
Residential:
Real estate		819		-		-		1,212		19		-
Total	$	5,482	$	147	$	-	$	5,208	$	247	$	-

Credit Quality Indicator Loan Categories

Commercial credit exposure

Credit risk profile by creditworthiness category



	December 31, 2020
(dollars in thousands)	Pass		Special mention		Substandard		Doubtful		Total
Originated Loans
Commercial and industrial	$	249,451	$	4,162	$	3,664	$	-	$	257,277
Commercial real estate - non-owner occupied		93,784		5,522		5,347		-		104,653
Commercial real estate - owner occupied		125,569		2,992		7,744		-		136,305
Commercial real estate - construction		2,732		1,233		-		-		3,965
Total originated loans		471,536		13,909		16,755		-		502,200
Acquired Loans
Commercial and industrial		23,438		-		42		-		23,480
Commercial real estate - non-owner occupied		85,527		923		1,040		-		87,490
Commercial real estate - owner occupied		42,304		249		1,065		-		43,618
Commercial real estate - construction		5,903		-		363		-		6,266
Total acquired loans		157,172		1,172		2,510		-		160,854
Total Loans
Commercial and industrial		272,889		4,162		3,706		-		280,757
Commercial real estate - non-owner occupied		179,311		6,445		6,387		-		192,143
Commercial real estate - owner occupied		167,873		3,241		8,809		-		179,923
Commercial real estate - construction		8,635		1,233		363		-		10,231
Total commercial	$	628,708	$	15,081	$	19,265	$	-	$	663,054

‎

Consumer & Mortgage lending credit exposure

Credit risk profile based on payment activity



	December 31, 2020
(dollars in thousands)	Performing		Non-performing		Total
Consumer
Originated Loans
Home equity installment	$	34,500	$	61	$	34,561
Home equity line of credit		44,536		395		44,931
Auto loans		98,165		27		98,192
Direct finance leases ⁽¹⁾		18,875		61		18,936
Other		7,411		-		7,411
Total originated loans		203,487		544		204,031
Acquired Loans
Home equity installment		5,586		-		5,586
Home equity line of credit		4,794		-		4,794
Auto loans		194		-		194
Other		191		-		191
Total acquired loans		10,765		-		10,765
Total Loans and Leases
Home equity installment		40,086		61		40,147
Home equity line of credit		49,330		395		49,725
Auto loans		98,359		27		98,386
Direct finance leases ⁽¹⁾		18,875		61		18,936
Other		7,602		-		7,602
Total consumer		214,252		544		214,796
Residential
Originated Loans
Real estate		179,687		727		180,414
Construction		23,117		-		23,117
Total originated loans		202,804		727		203,531
Acquired Loans
Real estate		38,031		-		38,031
Construction		240		-		240
Total acquired loans		38,271		-		38,271
Total Loans
Real estate		217,718		727		218,445
Construction		23,357		-		23,357
Total residential		241,075		727		241,802
Total consumer & residential	$	455,327	$	1,271	$	456,598

⁽¹⁾Net of unearned lease revenue of $1.2 million.

Commercial credit exposure

Credit risk profile by creditworthiness category


	December 31, 2019
(dollars in thousands)	Pass		Special mention		Substandard		Doubtful		Total

Commercial and industrial	$	115,585	$	2,061	$	4,948	$	-	$	122,594
Commercial real estate - non-owner occupied		92,016		1,360		6,425		-		99,801
Commercial real estate - owner occupied		121,887		2,065		6,606		-		130,558
Commercial real estate - construction		3,687		17		950		-		4,654
Total commercial	$	333,175	$	5,503	$	18,929	$	-	$	357,607

‎

Consumer & Mortgage lending credit exposure

Credit risk profile based on payment activity


	December 31, 2019
(dollars in thousands)	Performing		Non-performing		Total

Consumer
Home equity installment	$	36,566	$	65	$	36,631
Home equity line of credit		46,988		294		47,282
Auto loans		105,854		16		105,870
Direct finance leases⁽²⁾		15,452		-		15,452
Other		5,634		-		5,634
Total consumer		210,494		375		210,869
Residential
Real estate		166,158		1,006		167,164
Construction		17,770		-		17,770
Total residential		183,928		1,006		184,934
Total consumer & residential	$	394,422	$	1,381	$	395,803

⁽²⁾ Net of unearned lease revenue of $0.9 million.

Schedule of Change in Allowance for Loan Losses and the Recorded Investment in Loans



As of and for the year ended December 31, 2020
	Commercial &		Commercial					Residential
(dollars in thousands)	industrial		real estate		Consumer			real estate		Unallocated		Total
Allowance for Loan Losses:
Beginning balance	$	1,484	$	3,933	$	2,013		$	2,278	$	39	$	9,747
Charge-offs		(372)		(465)		(296)			(35)		-		(1,168)
Recoveries		26		30		120			197		-		373
Provision		1,269		2,885		715			341		40		5,250
Ending balance	$	2,407	$	6,383	$	2,552		$	2,781	$	79	$	14,202
Ending balance: individually evaluated for impairment	$	213	$	790	$	52		$	151	$	-	$	1,206
Ending balance: collectively evaluated for impairment	$	2,194	$	5,593	$	2,500		$	2,630	$	79	$	12,996
Loans Receivables:
Ending balance ⁽²⁾	$	280,757	$	382,297	$	214,796	⁽¹⁾	$	241,802	$	-	$	1,119,652
Ending balance: individually evaluated for impairment	$	590	$	4,540	$	483		$	727	$	-	$	6,340
Ending balance: collectively evaluated for impairment	$	280,167	$	377,757	$	214,313		$	241,075	$	-	$	1,113,312

⁽¹⁾ Net of unearned lease revenue of $1.2 million. ⁽²⁾ Includes $1.7 million of net deferred loan costs.



As of and for the year ended December 31, 2019
	Commercial &		Commercial					Residential
(dollars in thousands)	industrial		real estate		Consumer			real estate		Unallocated		Total
Allowance for Loan Losses:
Beginning balance	$	1,432	$	3,901	$	2,548		$	1,844	$	22	$	9,747
Charge-offs		(184)		(597)		(398)			(330)		-		(1,509)
Recoveries		32		317		67			8		-		424
Provision		204		312		(204)			756		17		1,085
Ending balance	$	1,484	$	3,933	$	2,013		$	2,278	$	39	$	9,747
Ending balance: individually evaluated for impairment	$	221	$	426	$	87		$	174	$	-	$	908
Ending balance: collectively evaluated for impairment	$	1,263	$	3,507	$	1,926		$	2,104	$	39	$	8,839
Loans Receivables:
Ending balance⁽²⁾	$	122,594	$	235,013	$	210,869	⁽¹⁾	$	184,934	$	-	$	753,410
Ending balance: individually evaluated for impairment	$	336	$	2,948	$	375		$	1,006	$	-	$	4,665
Ending balance: collectively evaluated for impairment	$	122,258	$	232,065	$	210,494		$	183,928	$	-	$	748,745

⁽¹⁾ Net of unearned lease revenue of $0.9 million. ⁽²⁾ Includes $3.0 million of net deferred loan costs.

‎


As of and for the year ended December 31, 2018
	Commercial &		Commercial				Residential
(dollars in thousands)	industrial		real estate		Consumer		real estate		Unallocated		Total
Allowance for Loan Losses:
Beginning balance	$	1,374	$	4,060	$	2,063	$	1,608	$	88	$	9,193
Charge-offs		(196)		(268)		(391)		(371)		-		(1,226)
Recoveries		77		42		211		-		-		330
Provision		177		67		665		607		(66)		1,450
Ending balance	$	1,432	$	3,901	$	2,548	$	1,844	$	22	$	9,747

Undiscounted Cash Flows to be Received on Annual Basis for Direct Finance Leases



(dollars in thousands)	Amount

2021	$	8,128
2022		4,848
2023		4,609
2024		2,385
2025		125
2026 and thereafter		-
Total future minimum lease payments receivable		20,095
Less: Unearned income		(1,159)
Undiscounted cash flows to be received	$	18,936