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Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2023

Loans and Allowance for Credit Losses


	March 31,		December 31,
	2023		2022
Commercial real estate loans:
Construction	$	26,243	$	20,329
Non-residential		298,600		282,422
Multi-family		71,520		67,777
Residential real estate loans		56,948		53,720
Commercial and industrial loans⁽¹⁾		84,403		87,982
Consumer loans:
Indirect automobile		443,962		457,223
Home equity		11,531		11,507
Other consumer		9,285		9,479
Total gross loans		1,002,492		990,439
Net deferred loan costs		11,373		11,872
Allowance for credit losses		(9,103)		(7,943)
Total net loans	$	1,004,762	$	994,368

⁽¹⁾	Includes $478 and $537 in U.S. Small Business Administration (“SBA”), paycheck protection program (“PPP”) loans at March 31, 2023 and December 31, 2022, respectively.

Schedule of classes of the loan portfolio by the aging categories of performing loans and nonaccrual loans

The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and non-accrual loans:


	March 31, 2023
							Greater Than
			30-59 Days		60-89 Days		90 Days Past		Total Loans
	Current		Past Due		Past Due		Due		Receivable		Non-accrual
Commercial real estate:
Construction	$	26,243	$	—	$	—	$	—	$	26,243	$	—
Non-residential		294,711		1,826		715		1,348		298,600		1,817
Multifamily		70,791		729		—		—		71,520		—
Residential real estate		55,798		95		290		765		56,948		1,946
Commercial and industrial		83,957		271		—		175		84,403		1,150
Consumer:
Indirect automobile		435,207		7,344		1,031		380		443,962		434
Home equity		11,188		167		—		176		11,531		176
Other consumer		9,130		92		15		48		9,285		48
Total	$	987,025	$	10,524	$	2,051	$	2,892	$	1,002,492	$	5,571


	December 31, 2022
							Greater Than
			30-59 Days		60-89 Days		90 Days Past		Total Loans
	Current		Past Due		Past Due		Due		Receivable		Non-accrual
Commercial real estate:
Construction	$	20,329	$	—	$	—	$	—	$	20,329	$	—
Non-residential		275,860		4,701		479		1,382		282,422		1,382
Multifamily		67,413		364		—		—		67,777		—
Residential real estate		51,476		1,417		246		581		53,720		1,794
Commercial and industrial		87,742		57		—		183		87,982		183
Consumer:
Indirect automobile		444,418		10,714		1,389		702		457,223		797
Home equity		11,279		51		58		119		11,507		217
Other consumer		9,208		149		71		51		9,479		51
Total	$	967,725	$	17,453	$	2,243	$	3,018	$	990,439	$	4,424

Schedule of amortized cost basis of individually analyzed loans and related ACL

The following table presents the Company’s amortized cost basis of individually analyzed loans and related ACL at March 31, 2023:


	March 31, 2023
	Individually analyzed loans		Related ACL
Commercial real estate:
Non-residential	$	1,817	$	—
Residential real estate		1,946		—
Commercial and industrial		1,150		710
Consumer:
Indirect automobile		434		39
Home equity		274		—
Other consumer		48		—
Total	$	5,669	$	749

Schedule of amortized cost basis of only those individually analyzed loans with a related ACL

The following table presents the Company’s amortized cost basis of only those individually analyzed loans with a related ACL at March 31, 2023:


	March 31, 2023
	Individually analyzed loans		Related ACL
Commercial and industrial	$	975	$	710
Consumer:
Indirect automobile		201		39
Total	$	1,176	$	749

Schedule of information to impaired loans by loan portfolio class

Impaired loans disclosures presented below as of December 31, 2022 represent requirements prior to the adoption of CECL on January 1, 2023. The following table summarizes information regarding impaired loans by loan portfolio class:


	December 31, 2022
	Recorded		Unpaid Principal		Related		Average Recorded
	Investment		Balance		Allowance		Investment
With no related allowance recorded:
Commercial real estate:
Non-residential	$	1,382	$	2,472	$	—	$	1,967
Residential real estate		1,794		2,445		—		1,890
Commercial and industrial		183		242		—		309
Consumer:
Indirect automobile		371		439		—		336
Home equity		217		219		—		146
Other consumer		49		53		—		38
Total	$	3,996	$	5,870	$	—	$	4,686
With an allowance recorded:
Commercial real estate:
Commercial and industrial	$	—	$	—	$	—	$	114
Consumer:
Indirect automobile		426		435		107		293
Other consumer		2		2		2		11
Total	$	428	$	437	$	109	$	418
Total:
Commercial real estate:
Non-residential	$	1,382	$	2,472	$	—	$	1,967
Residential real estate		1,794		2,445		—		1,890
Commercial and industrial		183		242		—		423
Consumer:
Indirect automobile		797		874		107		629
Home equity		217		219		—		146
Other consumer		51		55		2		49
Total	$	4,424	$	6,307	$	109	$	5,104

Schedule of loan balances by segment

Activity in the Company’s ACL for loans for the three months ended March 31, 2023 is summarized in the table below. The Adoption of the CECL Standard row presents adjustments recorded on January 1, 2023 through retained earnings.


	Commercial		Residential		Commercial
	Real Estate		Real Estate		and Industrial		Indirect		Consumer		Totals

	Three months ended March 31, 2023

Allowance for credit losses:
Beginning balance	$	3,031	$	103	$	881	$	3,868	$	60	$	7,943
Adoption of CECL standard		(860)		54		(383)		1,710		59		580
Provision for credit losses		170		13		703		104		4		994
Loans charged-off		—		—		—		(989)		(22)		(1,011)
Recoveries		—		—		—		585		12		597
Ending balance	$	2,341	$	170	$	1,201	$	5,278	$	113	$	9,103
Ending balance:
Loans individually analyzed	$	—	$	—	$	710	$	39	$	—	$	749
Loans collectively analyzed	$	2,341	$	170	$	491	$	5,239	$	113	$	8,354
Loan receivables:
Ending balance	$	396,363	$	56,948	$	84,403	$	443,962	$	20,816	$	1,002,492
Ending balance:
Loans individually analyzed	$	1,817	$	1,946	$	1,150	$	434	$	322	$	5,669
Loans collectively analyzed	$	394,546	$	55,002	$	83,253	$	443,528	$	20,494	$	996,823

Activity in the Company’s allowance for loan losses for the three months ended March 31, 2022 and December 31, 2022 is summarized in the tables below.


	Commercial		Residential		Commercial
	Real Estate		Real Estate		and Industrial			Indirect	Consumer		Totals

	Three months ended March 31, 2022
Allowance for loan losses:
Beginning balance	$	3,317	$	54	$	725	$	3,416	$	47	$	7,559
(Credit to) provision for loan losses		(3)		(109)		18		295		20		221
Loans charged-off		—		(44)		—		(647)		(23)		(714)
Recoveries		—		154		—		471		9		634
Ending balance	$	3,314	$	55	$	743	$	3,535	$	53	$	7,700


	Commercial		Residential		Commercial
	Real Estate		Real Estate		and Industrial		Indirect		Consumer		Totals

	December 31, 2022
Allowance for loan losses:
Ending balance:
Loans deemed impaired	$	—	$	—	$	—	$	107	$	2	$	109
Loans not deemed impaired	$	3,031	$	103	$	881	$	3,761	$	58	$	7,834
Loan receivables:
Ending balance	$	370,528	$	53,720	$	87,982	$	457,223	$	20,986	$	990,439
Ending balance:
Loans deemed impaired	$	1,382	$	1,794	$	183	$	797	$	268	$	4,424
Loans not deemed impaired	$	369,146	$	51,926	$	87,799	$	456,426	$	20,718	$	986,015

Summary of provision for credit losses

The following table summarizes the provision for credit losses for the three months ended March 31, 2023 and 2022:


	Three Months Ended March 31,
	2023		2022
Provision for credit losses - loans	$	994	$	221
Provision for credit losses - unfunded commitments		20		—
Provision for credit losses	$	1,014	$	221

Schedule of loans by risk rating and portfolio segment

The following table presents the credit risk profile of the Company’s loan portfolio (excluding loans in process and deferred loan fees) based on rating category, as well as gross write-offs, by fiscal year of origination as of March 31, 2023.


													Revolving
	Loans by Origination Year												Loans
	2023		2022		2021		2020		2019		Prior		Amortized Cost		Total
Commercial construction
Pass	$	-	$	3,118	$	-	$	-	$	-	$	-	$	-	$	3,118
Watch		-		11,649		11,476		-		-		-		-		23,125
Total commercial construction		-		14,767		11,476		-		-		-		-		26,243

Commercial non-residential
Pass	$	22,338	$	44,753	$	27,328	$	18,121	$	41,308	$	51,378	$	-	$	205,226
Watch		2,372		9,489		8,043		12,943		8,699		41,064		-		82,610
Special mention		-		-		-		-		5,994		1,494		-		7,488
Substandard		-		-		-		-		485		2,791		-		3,276
Total commercial non-residential		24,710		54,242		35,371		31,064		56,486		96,727		-		298,600

Multifamily
Pass	$	824	$	19,017	$	30,923	$	2,152	$	1,576	$	5,222	$	-	$	59,714
Watch		-		-		755		-		1,302		9,749		-		11,806
Total multifamily		824		19,017		31,678		2,152		2,878		14,971		-		71,520

Residential
Performing	$	4,801	$	26,667	$	2,619	$	2,787	$	2,670	$	15,458	$	-	$	55,002
Non-performing		-		-		-		-		-		1,946		-		1,946
Total residential		4,801		26,667		2,619		2,787		2,670		17,404		-		56,948

Commercial and industrial
Pass	$	3,579	$	23,853	$	14,104	$	2,141	$	1,753	$	5,301	$	17,273	$	68,004
Watch		492		2,705		319		765		802		2,644		6,780		14,507
Special mention		-		-		377		13		59		64		-		513
Substandard		-		-		975		-		153		203		48		1,379
Total commercial and industrial		4,071		26,558		15,775		2,919		2,767		8,212		24,101		84,403

Indirect automobile
Performing	$	33,383	$	206,728	$	100,427	$	52,928	$	34,117	$	15,945	$	-	$	443,528
Non-performing		-		162		106		21		110		35		-		434
Total indirect automobile		33,383		206,890		100,533		52,949		34,227		15,980		-		443,962
Current-period gross write-offs		-		359		303		158		94		75		-		989

Home equity
Performing	$	-	$	-	$	-	$	-	$	35	$	238	$	11,082	$	11,355
Non-performing		-		-		-		-		-		-		176		176
Total home equity		-		-		-		-		35		238		11,258		11,531

Other consumer
Performing	$	829	$	5,023	$	1,520	$	961	$	256	$	414	$	234	$	9,237
Non-performing		-		-		-		23		-		25		-		48
Total other consumer		829		5,023		1,520		984		256		439		234		9,285
Current-period gross write-offs		-		11		-		11		-		-		-		22

Total Loans
Pass/performing	$	65,754	$	329,159	$	176,921	$	79,090	$	81,715	$	93,956	$	28,589	$	855,184
Watch		2,864		23,843		20,593		13,708		10,803		53,457		6,780		132,048
Special mention		0		0		377		13		6,053		1,558		0		8,001
Substandard		0		0		975		0		638		2,994		48		4,655
Non-performing		0		162		106		44		110		2,006		176		2,604
Total Loans	$	68,618	$	353,164	$	198,972	$	92,855	$	99,319	$	153,971	$	35,593	$	1,002,492
Total Current-period gross write-offs	$	0	$	370	$	303	$	169	$	94	$	75	$	-	$	1,011

The following table presents the classes of the loan portfolio summarized by the pass category and the criticized categories of special mention and substandard within the internal risk system:


	December 31, 2022
	Pass		Special Mention		Substandard		Total
Commercial real estate:
Construction	$	20,329	$	—	$	—	$	20,329
Non-residential		271,491		7,904		3,027		282,422
Multifamily		67,777		—		—		67,777
Residential real estate		52,265		—		1,455		53,720
Commercial and industrial		83,680		3,825		477		87,982
Consumer:
Indirect automobile		456,112		—		1,111		457,223
Home equity		11,290		—		217		11,507
Other consumer		9,428		—		51		9,479
Total	$	972,372	$	11,729	$	6,338	$	990,439