Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2023

Loans and Allowance for Credit Losses

Schedule of summary loan portfolio

	September 30,		December 31,
	2023		2022
Commercial real estate loans:
Construction	$	28,231	$	20,329
Non-residential		305,752		282,422
Multi-family		84,033		67,777
Residential real estate loans		70,019		53,720
Commercial and industrial loans(1)		87,421		87,982
Consumer loans:
Indirect automobile		406,585		457,223
Home equity		11,654		11,507
Other consumer		8,872		9,479
Total gross loans		1,002,567		990,439
Net deferred loan costs		9,696		11,872
Allowance for credit losses		(8,497)		(7,943)
Total net loans	$	1,003,766	$	994,368

⁽¹⁾ Includes $321 and $537 in U.S. Small Business Administration (“SBA”), paycheck protection program (“PPP”) loans at September 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:

	September 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	$	28,231	$	—	$	—	$	—	$	28,231	$	—
Non-residential		299,723		—		3,768		2,261		305,752		2,261
Multifamily		83,673		—		360		—		84,033		—
Residential real estate		69,157		235		122		505		70,019		1,630
Commercial and industrial		86,997		188		78		158		87,421		158
Consumer:
Indirect automobile		395,521		8,772		1,771		521		406,585		567
Home equity		11,436		14		29		175		11,654		175
Other consumer		8,681		129		25		37		8,872		37
Total	$	983,419	$	9,338	$	6,153	$	3,657	$	1,002,567	$	4,828

	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 nonaccrual loans

The following table presents the Company’s amortized cost basis of individually analyzed loans for which there is no  related ACL at September 30, 2023:

	September 30, 2023
Commercial real estate:
Non-residential	$	1,364
Residential real estate		1,629
Commercial and industrial		158
Consumer:
Indirect automobile		278
Home equity		273
Other consumer		35
Total	$	3,737

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 nine months ended September 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 September 30, 2023
Allowance for credit losses:
Beginning balance	$	2,294	$	179	$	454	$	4,968	$	108	$	8,003
Provision for (reversal of) credit losses		517		13		13		341		(5)		879
Loans charged-off		—		—		—		(1,098)		—		(1,098)
Recoveries		—	$	49	$	69	$	588	$	7		713
Ending balance	$	2,811	$	241	$	536	$	4,799	$	110	$	8,497

	Commercial		Residential		Commercial
	Real Estate		Real Estate		and Industrial		Indirect		Consumer		Totals
	Nine months ended September 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		640		32		639		118		(35)		1,394
Loans charged-off		—		—		(710)		(2,584)		(25)		(3,319)
Recoveries		—		52		109		1,687		51		1,899
Ending balance	$	2,811	$	241	$	536	$	4,799	$	110	$	8,497
Ending balance:
Loans individually analyzed	$	126	$	—	$	—	$	87	$	2	$	215
Loans collectively analyzed	$	2,685	$	241	$	536	$	4,712	$	108	$	8,282
Loan receivables:
Ending balance	$	418,016	$	70,019	$	87,421	$	406,585	$	20,526	$	1,002,567
Ending balance:
Loans individually analyzed	$	2,259	$	1,629	$	158	$	573	$	310	$	4,929
Loans collectively analyzed	$	415,757	$	68,390	$	87,263	$	406,012	$	20,216	$	997,638

Activity in the Company’s allowance for loan losses for the three and nine months ended September 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 September 30, 2022
Allowance for loan losses:
Beginning balance	$	3,440	$	59	$	859	$	3,738	$	73	$	8,169
(Reversal of) provision for loan losses		(86)		26		344		238		23		545
Loans charged-off		—		—		(6)		(736)		(39)		(781)
Recoveries		117		1		—		430		11		559
Ending balance	$	3,471	$	86	$	1,197	$	3,670	$	68	$	8,492

	Commercial		Residential		Commercial
	Real Estate		Real Estate		and Industrial			Indirect	Consumer		Totals
	Nine months ended September 30, 2022
Allowance for loan losses:
Beginning balance	$	3,317	$	54	$	725	$	3,416	$	47	$	7,559
Provision for (reversal of) loan losses		37		(79)		477		593		84		1,112
Loans charged-off		—		(44)		(6)		(1,790)		(100)		(1,940)
Recoveries		117		155		1		1,451		37		1,761
Ending balance	$	3,471	$	86	$	1,197	$	3,670	$	68	$	8,492

	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 nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Provision for credit losses - loans	$	879	$	545	$	1,394	$	1,112
Provision for credit losses - unfunded commitments		31		—		78		—
Provision for credit losses	$	910	$	545	$	1,472	$	1,112

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 nine months ended September 30, 2023, and by fiscal year of origination as of September 30, 2023.

													Revolving
	Loans by Origination Year												Loans
	2023		2022		2021		2020		2019		Prior		Amortized Cost		Total
Commercial construction
Pass	$	-	$	6,531	$	-	$	-	$	-	$	-	$	-	$	6,531
Watch		4,213		11,725		5,762		-		-		-		-		21,700
Total commercial construction		4,213		18,256		5,762		-		-		-		-		28,231
Commercial non-residential
Pass	$	25,475	$	43,949	$	26,855	$	16,876	$	40,433	$	47,220	$	-	$	200,808
Watch		16,669		9,402		8,526		13,024		8,515		38,255		-		94,391
Special mention		-		-		-		-		5,927		1,445		-		7,372
Substandard		-		-		-		-		480		2,701		-		3,181
Total commercial non-residential		42,144		53,351		35,381		29,900		55,355		89,621		-		305,752
Multifamily
Pass	$	816	$	18,854	$	30,614	$	2,120	$	1,555	$	4,396	$	-	$	58,355
Watch		1,000		6,785		7,007		-		1,284		9,602		-		25,678
Total multifamily		1,816		25,639		37,621		2,120		2,839		13,998		-		84,033
Residential
Performing	$	19,934	$	26,280	$	2,172	$	2,745	$	2,638	$	14,620	$	-	$	68,389
Non-performing		-		-		-		-		-		1,630		-		1,630
Total residential		19,934		26,280		2,172		2,745		2,638		16,250		-		70,019
Commercial and industrial
Pass	$	9,577	$	27,242	$	11,561	$	1,671	$	1,160	$	1,449	$	11,171	$	63,831
Watch		1,223		1,425		344		674		592		1,687		16,011		21,956
Special mention		224		-		326		7		39		28		-		624
Substandard		-		-		-		-		112		854		44		1,010
Total commercial and industrial		11,024		28,667		12,231		2,352		1,903		4,018		27,226		87,421
Current-period gross write-offs		-		-		710		-		-		-		-		710
Indirect automobile
Performing	$	78,575	$	174,314	$	81,424	$	39,927	$	23,396	$	8,382	$	-	$	406,018
Non-performing		54		155		199		40		114		5		-		567
Total indirect automobile		78,629		174,469		81,623		39,967		23,510		8,387		-		406,585
Current-period gross write-offs		92		1,083		716		324		259		110		-		2,584
Home equity
Performing	$	-	$	-	$	-	$	-	$	34	$	3,991	$	7,454	$	11,479
Non-performing		-		-		-		-		-		175		-		175
Total home equity		-		-		-		-		34		4,166		7,454		11,654
Other consumer
Performing	$	2,697	$	4,034	$	1,032	$	520	$	170	$	157	$	225	$	8,835
Non-performing		2		1		10		24		-		-		-		37
Total other consumer		2,699		4,035		1,042		544		170		157		225		8,872
Current-period gross write-offs		-		13		-		11		-		1		-		25
Total Loans
Pass/performing	$	137,074	$	301,204	$	153,658	$	63,859	$	69,386	$	80,215	$	18,850	$	824,246
Watch		23,105		29,337		21,639		13,698		10,391		49,544		16,011		163,725
Special mention		224		-		326		7		5,966		1,473		-		7,996
Substandard		-		-		-		-		592		3,555		44		4,191
Non-performing		56		156		209		64		114		1,810		-		2,409
Total Loans	$	160,459	$	330,697	$	175,832	$	77,628	$	86,449	$	136,597	$	34,905	$	1,002,567
Total Current-period gross write-offs	$	92	$	1,096	$	1,426	$	335	$	259	$	111	$	-	$	3,319

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