Loans and Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2023

Loans and Allowance for Credit Losses

Schedule of summary loan portfolio

	June 30,		December 31,
	2023		2022
Commercial real estate loans:
Construction	$	26,291	$	20,329
Non-residential		299,329		282,422
Multi-family		79,677		67,777
Residential real estate loans		60,627		53,720
Commercial and industrial loans(1)		80,374		87,982
Consumer loans:
Indirect automobile		417,953		457,223
Home equity		11,661		11,507
Other consumer		8,709		9,479
Total gross loans		984,621		990,439
Net deferred loan costs		10,406		11,872
Allowance for credit losses		(8,003)		(7,943)
Total net loans	$	987,024	$	994,368

⁽¹⁾ Includes $368 and $537 in U.S. Small Business Administration (“SBA”), paycheck protection program (“PPP”) loans at June 30, 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:

	June 30, 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	$	26,291	$	—	$	—	$	—	$	26,291	$	—
Non-residential		294,096		—		3,447		1,786		299,329		1,786
Multifamily		79,314		—		363		—		79,677		—
Residential real estate		59,324		338		201		764		60,627		1,917
Commercial and industrial		80,100		107		—		167		80,374		167
Consumer:
Indirect automobile		408,051		7,848		1,711		343		417,953		424
Home equity		11,481		1		—		179		11,661		179
Other consumer		8,586		99		—		24		8,709		24
Total	$	967,243	$	8,393	$	5,722	$	3,263	$	984,621	$	4,497

	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 June 30, 2023:

	June 30, 2023
	Individually analyzed loans		Related ACL
Commercial real estate:
Non-residential	$	1,786	$	—
Residential real estate		1,917		—
Commercial and industrial		167		—
Consumer:
Indirect automobile		424		62
Home equity		277		—
Other consumer		24		—
Total	$	4,595	$	62

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 June 30, 2023:

	June 30, 2023
	Individually analyzed loans		Related ACL
Consumer:
Indirect automobile		226		62
Total	$	226	$	62

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 and six months ended June 30, 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				Commercial
	Real Estate		Residential		and Industrial		Indirect		Consumer		Totals
	Three months ended June 30, 2023
Allowance for credit losses:
Beginning balance	$	2,341	$	170	$	1,201	$	5,278	$	113	$	9,103
Provision for (reversal of) credit losses		(47)		6		(77)		(327)		(34)		(479)
Loans charged-off		—		—		(710)		(497)		(3)		(1,210)
Recoveries		—	$	3	$	40	$	514	$	32		589
Ending balance	$	2,294	$	179	$	454	$	4,968	$	108	$	8,003

	Commercial		Residential		Commercial
	Real Estate		Real Estate		and Industrial		Indirect		Consumer		Totals
	Six months ended June 30, 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 (reversal of) credit losses		123		19		626		(223)		(30)		515
Loans charged-off		—		—		(710)		(1,486)		(25)		(2,221)
Recoveries		—		3		40		1,099		44		1,186
Ending balance	$	2,294	$	179	$	454	$	4,968	$	108	$	8,003
Ending balance:
Loans individually analyzed	$	—	$	—	$	—	$	62	$	—	$	62
Loans collectively analyzed	$	2,294	$	179	$	454	$	4,906	$	108	$	7,941
Loan receivables:
Ending balance	$	405,297	$	60,627	$	80,374	$	417,953	$	20,370	$	984,621
Ending balance:
Loans individually analyzed	$	1,786	$	1,917	$	167	$	424	$	301	$	4,595
Loans collectively analyzed	$	403,511	$	58,710	$	80,207	$	417,529	$	20,069	$	980,026

Activity in the Company’s allowance for loan losses for the three and six months ended June 30, 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 June 30, 2022
Allowance for loan losses:
Beginning balance	$	3,314	$	55	$	743	$	3,535	$	53	$	7,700
Provision for loan losses		126		4		115		60		41		346
Loans charged-off		—		—		—		(407)		(38)		(445)
Recoveries		—		—		1		550		17		568
Ending balance	$	3,440	$	59	$	859	$	3,738	$	73	$	8,169

	Commercial		Residential		Commercial
	Real Estate		Real Estate		and Industrial			Indirect	Consumer		Totals
	Six months ended June 30, 2022
Allowance for loan losses:
Beginning balance	$	3,317	$	54	$	725	$	3,416	$	47	$	7,559
Provision for (reversal of) loan losses		123		(105)		133		355		61		567
Loans charged-off		—		(44)		—		(1,054)		(61)		(1,159)
Recoveries		—		154		1		1,021		26		1,202
Ending balance	$	3,440	$	59	$	859	$	3,738	$	73	$	8,169

	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 and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Provision for (reversal of) credit losses - loans	$	(479)	$	346	$	515	$	567
Provision for credit losses - unfunded commitments		27		—		47		—
Provision for (reversal of) credit losses	$	(452)	$	346	$	562	$	567

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 for the six months ended June 30, 2023, and by fiscal year of origination as of June 30, 2023.

													Revolving
	Loans by Origination Year												Loans
	2023		2022		2021		2020		2019		Prior		Amortized Cost		Total
Commercial construction
Pass	$	-	$	4,422	$	-	$	-	$	-	$	-	$	-	$	4,422
Watch		1,969		14,565		5,335		-		-		-		-		21,869
Total commercial construction		1,969		18,987		5,335		-		-		-		-		26,291
Commercial non-residential
Pass	$	24,207	$	44,362	$	27,090	$	17,286	$	40,949	$	49,864	$	-	$	203,758
Watch		5,016		9,449		8,559		13,176		8,609		40,100		-		84,909
Special mention		-		-		-		-		5,960		1,472		-		7,432
Substandard		-		-		-		-		485		2,745		-		3,230
Total commercial non-residential		29,223		53,811		35,649		30,462		56,003		94,181		-		299,329
Multifamily
Pass	$	820	$	18,936	$	30,789	$	2,136	$	1,566	$	4,808	$	-	$	59,055
Watch		-		2,600		7,052		-		1,294		9,676		-		20,622
Total multifamily		820		21,536		37,841		2,136		2,860		14,484		-		79,677
Residential
Performing	$	9,333	$	26,619	$	2,200	$	2,765	$	2,656	$	15,136	$	-	$	58,709
Non-performing		-		-		-		-		-		1,918		-		1,918
Total residential		9,333		26,619		2,200		2,765		2,656		17,054		-		60,627
Commercial and industrial
Pass	$	6,271	$	22,481	$	12,304	$	1,866	$	1,482	$	1,997	$	19,142	$	65,543
Watch		502		1,491		367		717		695		1,666		7,586		13,024
Special mention		224		-		352		10		50		46		-		682
Substandard		-		-		-		-		133		944		48		1,125
Total commercial and industrial		6,997		23,972		13,023		2,593		2,360		4,653		26,776		80,374
Current-period gross write-offs		-		-		710		-		-		-		-		710
Indirect automobile
Performing	$	50,285	$	190,231	$	90,754	$	46,048	$	28,450	$	11,762	$	-	$	417,530
Non-performing		-		138		149		36		87		13		-		423
Total indirect automobile		50,285		190,369		90,903		46,084		28,537		11,775		-		417,953
Current-period gross write-offs		-		633		393		220		143		97		-		1,486
Home equity
Performing	$	-	$	-	$	-	$	-	$	34	$	4,240	$	7,208	$	11,482
Non-performing		-		-		-		-		-		179		-		179
Total home equity		-		-		-		-		34		4,419		7,208		11,661
Other consumer
Performing	$	1,605	$	4,511	$	1,251	$	647	$	213	$	214	$	244	$	8,685
Non-performing		-		-		-		24		-		-		-		24
Total other consumer		1,605		4,511		1,251		671		213		214		244		8,709
Current-period gross write-offs		-		13		-		11		-		1		-		25
Total Loans
Pass/performing	$	92,521	$	311,562	$	164,388	$	70,748	$	75,350	$	88,021	$	26,594	$	829,184
Watch		7,487		28,105		21,313		13,893		10,598		51,442		7,586		140,424
Special mention		224		-		352		10		6,010		1,518		-		8,114
Substandard		-		-		-		-		618		3,689		48		4,355
Non-performing		-		138		149		60		87		2,110		-		2,544
Total Loans	$	100,232	$	339,805	$	186,202	$	84,711	$	92,663	$	146,780	$	34,228	$	984,621
Total Current-period gross write-offs	$	0	$	646	$	1,103	$	231	$	143	$	98	$	-	$	2,221

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