Loans and Allowance for Credit Losses

12 Months Ended

Dec. 31, 2025

Loans and Allowance for Credit Losses

Loans and Allowance for Credit Losses

3.    Loans and Allowance for credit losses

A summary of the Company’s loan portfolio is as follows:

	At December 31,
	2025		2024
Commercial real estate loans:
Non-residential	$	417,808	$	350,962
Multi-family		107,938		105,030
Construction		8,982		26,611
Commercial and industrial loans		91,526		91,517
Residential real estate loans		100,086		86,651
Consumer loans:
Indirect automobile		213,802		295,669
Home equity		12,290		11,656
Other consumer		5,733		6,830
Total gross loans		958,165		974,926
Dealer reserves		3,573		5,392
Allowance for credit losses		(8,353)		(8,539)
Total net loans	$	953,385	$	971,779

There were no unpaid principal balances of loans held for sale, included in the residential real estate category above, at either December 31, 2025 or 2024.

On an annual basis, or more often if needed, the Company reviews the ratings on all commercial real estate, multifamily, construction and commercial loans. To assist in the review process, the Company engages an independent third party to review a significant portion of loans within these segments. Consumer and residential loans are rated as performing or non-performing based on payment status in accordance with regulatory retail credit guidance. Management uses the results of these reviews as part of its annual review process. In addition, management utilizes delinquency reports, the watch list and other loan reports to monitor credit quality of other loan segments.

Credit Quality Indicators. The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on all loans at origination and is updated on a quarterly basis for loans risk rated Watch, Special Mention, Substandard, or Doubtful.

The Company uses the following definitions for risk ratings:

Watch – Loans classified as watch exhibit weaknesses that require more than usual monitoring. Issues may include deteriorating financial condition, payments made after due date but within 30 days, adverse industry conditions or management problems.

Special Mention – Loans classified as special mention exhibit signs of further deterioration but still generally make payments within 30 days. This is a transitional rating and loans should typically not be rated Special Mention for more than 12 months.

Substandard – Loans classified as substandard possess weaknesses that jeopardize the ultimate collection of the principal and interest outstanding. These loans exhibit continued financial losses, ongoing delinquency, overall poor financial condition, and/or insufficient collateral. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful – Loans classified as non-performing have all the weaknesses of substandard loans, and have deteriorated to the level that there is a high probability of substantial loss.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered Pass rated loans.

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 year ended December 31, 2025, and by fiscal year of origination as of December 31, 2025.

													Revolving
	Loans by Origination Year												Loans
	2025		2024		2023		2022		2021		Prior		Amortized Cost		Total
Commercial construction
Pass	$	2,037	$	-	$	-	$	-	$	-	$	-	$	-	$	2,037
Watch		775		6,170		-		-		-		-		-		6,945
Total commercial construction		2,812		6,170		-		-		-		-		-		8,982
Commercial non-residential
Pass	$	63,489	$	44,835	$	36,178	$	34,652	$	25,438	$	74,392	$	-	$	278,984
Watch		16,602		11,894		10,164		23,344		3,343		46,157		-		111,504
Special mention		-		-		22,921		-		-		-		-		22,921
Substandard		-		-		-		2,315		-		2,084		-		4,399
Total commercial non-residential		80,091		56,729		69,263		60,311		28,781		122,633		-		417,808
Current-period gross write-offs		-		-		-		629		-		-		-		629
Multifamily
Pass	$	10,986	$	738	$	590	$	18,086	$	27,949	$	7,063	$	-	$	65,412
Watch		996		5,627		10,210		10,756		5,514		9,423		-		42,526
Total multifamily		11,982		6,365		10,800		28,842		33,463		16,486		-		107,938
Residential
Performing	$	21,114	$	14,402	$	25,795	$	20,184	$	1,720	$	15,616	$	-	$	98,831
Non-performing		-		-		-		292		-		963		-		1,255
Total residential		21,114		14,402		25,795		20,476		1,720		16,579		-		100,086
Commercial and industrial
Pass	$	8,011	$	6,937	$	6,533	$	14,284	$	5,559	$	512	$	18,818	$	60,654
Watch		6,305		3,014		783		4,689		190		939		14,186		30,106
Special mention		-		-		-		455		-		-		250		705
Substandard		-		-		-		-		22		-		39		61
Total commercial and industrial		14,316		9,951		7,316		19,428		5,771		1,451		33,293		91,526
Current-period gross write-offs				11		151		8		-		165		-		335
Indirect automobile
Performing	$	44,776	$	38,583	$	47,088	$	58,044	$	19,391	$	5,180	$	-	$	213,062
Non-performing		41		104		120		320		87		68		-		740
Total indirect automobile		44,817		38,687		47,208		58,364		19,478		5,248		-		213,802
Current-period gross write-offs		86		428		500		1,026		463		129		-		2,632
Home equity
Performing	$	680	$	206	$	-	$	-	$	-	$	3,213	$	8,191	$	12,290
Total home equity		680		206		-		-		-		3,213		8,191		12,290
Other consumer
Performing	$	1,987	$	1,483	$	975	$	907	$	139	$	7	$	220	$	5,718
Non-performing		-		5		10		-		-		-		-		15
Total other consumer		1,987		1,488		985		907		139		7		220		5,733
Current-period gross write-offs		33		18		15		24		-		-		-		90
Total Loans
Pass/performing	$	153,080	$	107,184	$	117,159	$	146,157	$	80,196	$	105,983	$	27,229	$	736,988
Watch		24,678		26,705		21,157		38,789		9,047		56,519		14,186		191,081
Special mention		0		-		22,921		455		0		0		250		23,626
Substandard		-		-		-		2,315		22		2,084		39		4,460
Non-performing		41		109		130		612		87		1,031		-		2,010
Total Loans	$	177,799	$	133,998	$	161,367	$	188,328	$	89,352	$	165,617	$	41,704	$	958,165
Total Current-period gross write-offs	$	119	$	457	$	666	$	1,687	$	463	$	294	$	-	$	3,686

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 year ended December 31, 2024, and by fiscal year of origination as of December 31, 2024.

													Revolving
	Loans by Origination Year												Loans
	2024		2023		2022		2021		2020		Prior		Amortized Cost		Total
Commercial construction
Watch	$	6,509	$	17,261	$	2,841	$	-	$	-	$	-	$	-	$	26,611
Total commercial construction		6,509		17,261		2,841		-		-		-		-		26,611
Commercial non-residential
Pass	$	46,429	$	36,900	$	47,082	$	27,329	$	16,104	$	69,260	$	-	$	243,104
Watch		8,515		14,336		16,201		7,341		10,952		33,799		-		91,144
Special mention		-		-		3,009		873		322		5,745		-		9,949
Substandard		-		-		2,834		-		-		3,931		-		6,765
Total commercial non-residential		54,944		51,236		69,126		35,543		27,378		112,735		-		350,962
Current-period gross write-offs		-		-		-		-		-		291		-		291
Multifamily
Pass	$	-	$	1,398	$	18,410	$	28,939	$	2,034	$	5,296	$	-	$	56,077
Watch		5,673		10,235		11,027		11,863		-		10,155		-		48,953
Total multifamily		5,673		11,633		29,437		40,802		2,034		15,451		-		105,030
Residential
Performing	$	15,456	$	26,755	$	23,922	$	2,032	$	2,638	$	14,666	$	-	$	85,469
Non-performing		-		-		-		-		-		1,182		-		1,182
Total residential		15,456		26,755		23,922		2,032		2,638		15,848		-		86,651
Commercial and industrial
Pass	$	13,386	$	9,810	$	19,044	$	7,944	$	650	$	957	$	17,303	$	69,094
Watch		3,269		745		5,667		191		365		1,081		10,004		21,322
Special mention		-		-		506		191		98		6		-		801
Substandard		-		-		-		-		-		103		38		141
Doubtful		-		-		-		-		-		159		-		159
Total commercial and industrial		16,655		10,555		25,217		8,326		1,113		2,306		27,345		91,517
Current-period gross write-offs		-		40		-		7		-		561		-		608
Indirect automobile
Performing	$	54,048	$	72,083	$	104,879	$	42,286	$	15,440	$	6,343	$	-	$	295,079
Non-performing		46		78		182		187		62		35		-		590
Total indirect automobile		54,094		72,161		105,061		42,473		15,502		6,378		-		295,669
Current-period gross write-offs		171		812		1,533		665		256		189		-		3,626
Home equity
Performing	$	341	$	-	$	-	$	-	$	-	$	3,684	$	7,457	$	11,482
Non-performing		-		-		-		-		-		174		-		174
Total home equity		341		-		-		-		-		3,858		7,457		11,656
Other consumer
Performing	$	2,581	$	1,703	$	1,829	$	400	$	89	$	11	$	217	$	6,830
Total other consumer		2,581		1,703		1,829		400		89		11		217		6,830
Current-period gross write-offs		12		82		73		6		24		4		-		201
Total Loans
Pass/performing	$	132,241	$	148,649	$	215,166	$	108,930	$	36,955	$	100,217	$	24,977	$	767,135
Watch		23,966		42,577		35,736		19,395		11,317		45,035		10,004		188,030
Special mention		0		-		3,515		1,064		420		5,751		-		10,750
Substandard		-		-		2,834		-		0		4,034		38		6,906
Doubtful		-		-		-		-		-		159		-		159
Non-performing		46		78		182		187		62		1,391		-		1,946
Total Loans	$	156,253	$	191,304	$	257,433	$	129,576	$	48,754	$	156,587	$	35,019	$	974,926
Total Current-period gross write-offs	$	183	$	934	$	1,606	$	678	$	280	$	1,045	$	-	$	4,726

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The past due status of all classes of loans is determined based on contractual due dates for loan payments.

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

	December 31, 2025
							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	$	8,982	$	—	$	—	$	—	$	8,982	$	—
Non-residential		415,286		837		17		1,668		417,808		1,668
Multifamily		107,938		—		—		—		107,938		—
Commercial and industrial		91,241		263		—		22		91,526		22
Residential real estate		98,355		1,157		184		390		100,086		1,255
Consumer:
Indirect automobile		204,192		7,831		1,072		707		213,802		740
Home equity		12,075		170		45		—		12,290		—
Other consumer		5,561		134		23		15		5,733		15
Total	$	943,630	$	10,392	$	1,341	$	2,802	$	958,165	$	3,700

	December 31, 2024
							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	$	26,611	$	—	$	—	$	—	$	26,611	$	—
Non-residential		348,220		873		—		1,869		350,962		1,869
Multifamily		105,008		22		—		—		105,030		—
Commercial and industrial		91,090		57		159		211		91,517		319
Residential real estate		85,961		604		—		86		86,651		1,182
Consumer:
Indirect automobile		283,458		10,062		1,593		556		295,669		590
Home equity		11,173		153		156		174		11,656		174
Other consumer		6,689		121		20		—		6,830		—
Total	$	958,210	$	11,892	$	1,928	$	2,896	$	974,926	$	4,134

All of our non-accrual loans are individually analyzed. The Company had one individually analyzed home equity loan of $98 that was accruing interest at December 31, 2025.

The following table presents the Company’s amortized cost basis of non-accrual loans for which there is no related ACL:

	December 31, 2025		December 31, 2024
Commercial real estate:
Non-residential	$	1,668	$	1,869
Multifamily		—		—
Commercial and industrial		22		299
Residential real estate		1,255		1,182
Consumer:
Indirect automobile		110		131
Home equity		—		174
Total	$	3,055	$	3,655

The following table presents the Company’s amortized cost basis of only those non-accrual loans with a related ACL:

	December 31, 2025				December 31, 2024
	Non-accrual loans		Related ACL		Non-accrual loans		Related ACL
Commercial and industrial	$	—	$	—	$	20	$	20
Consumer:
Indirect automobile		630		226		459		139
Other consumer		15		14		—		—
Total	$	645	$	240	$	479	$	159

For the year ended December 31, 2025, $117 in accrued interest was reversed for non-accrual loans. Total accrued interest receivable associated with loans totaled $4,168 and $3,937, at December 31, 2025 and December 31, 2024, respectively, and is reported in accrued interest receivable on the consolidated statements of financial condition.

The Company has transferred a portion of its originated commercial real estate loans to participating lenders. The amounts transferred have been accounted for as sales and are therefore not included in the Company’s accompanying statements of financial condition. The Company and participating lenders share ratably in any gains or losses that may result from a borrower’s lack of compliance with contractual terms of the loan. The Company continues to service the loans on behalf of the participating lenders and, as such, collects cash payments from the borrowers, remits payments to participating lenders and disburses required escrow funds to relevant parties. At December 31, 2025 and 2024, the Company was servicing loans for participants aggregating $52,240 and $54,390, respectively.

The Company services certain loans that it has sold to third parties. The aggregate balances of loans serviced for others were $250,311 and $266,547 as of December 31, 2025 and 2024, respectively. Included in these loans serviced for others are loans serviced for the Federal Home Loan Mortgage Corporation with a recourse provision whereby the Company is obligated to bear all costs when a default, including foreclosure, occurs. At December 31, 2025 and 2024, the maximum contingent liability associated with loans sold with recourse was $473 and $805, respectively, which is not recorded in the consolidated financial statements. Losses are borne in priority order by the borrower, private mortgage insurance and the Company. The Company has never repurchased any loans or incurred any losses under these recourse provisions.

The balance of capitalized servicing rights, included in other assets at December 31, 2025 and 2024 were $1,262 and $1,592, respectively. Fair value exceeds carrying value. No impairment charges related to servicing rights were recognized during the years ended December 31, 2025 or 2024.

Residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $0 and $37 at December 31, 2025 and 2024, respectively.

In the normal course of business, the Company grants loans to officers, directors and other related parties. Balances and activity of such loans during the years presented were not material.

Activity in the Company’s ACL for loans for the year ended December 31, 2025 is summarized in the table below.

	December 31, 2025
	Balance at						Provision for		Balance at
	beginning of						(reversal of)		end of
	period		Charge-offs		Recoveries		credit losses		period
Commercial real estate:
Non-residential	$	2,675	$	(629)	$	—	$	1,096	$	3,142
Multifamily		313		—		—		177		490
Commercial and industrial		684		(335)		4		409		762
Residential real estate		575		—		—		164		739
Consumer:
Indirect automobile		4,133		(2,632)		1,702		(153)		3,050
Home equity		84		—		—		6		90
Other consumer		75		(90)		44		51		80
Total	$	8,539	$	(3,686)	$	1,750	$	1,750	$	8,353

Activity in the Company’s allowance for loan losses for the year ended December 31, 2024 is summarized in the table below.

	December 31, 2024
	Balance at						Provision for		Balance at
	beginning of						(reversal of)		end of
	period		Charge-offs		Recoveries		credit losses		period
Commercial real estate:
Non-residential	$	2,329	$	(291)	$	—	$	637	$	2,675
Multifamily		387		—		—		(74)		313
Commercial and industrial		606		(608)		2		684		684
Residential real estate		346		—		—		229		575
Consumer:
Indirect automobile		4,348		(3,626)		2,233		1,178		4,133
Home equity		49		—		—		35		84
Other consumer		59		(201)		93		124		75
Total	$	8,124	$	(4,726)	$	2,328	$	2,813	$	8,539

The Company’s allowance for credit losses for loans totaled $8,353 and $8,539 as of December 31, 2025 and December 31, 2024, respectively. The $186 decrease in our allowance for credit losses for loans was primarily driven by a decrease in our collectively evaluated loans due to the decrease in loans, partially offset by an increase in the allowance for credit losses on individually analyzed loans primarily due to the increase in commercial and industrial loans.

Activity in the Company’s ACL for unfunded commitments for the years ended December 31, 2025 and 2024 is summarized in the tables below and included in accrued expenses and other liabilities.

	Commercial				Commercial
Allowance for credit losses:	Real Estate		Residential		and Industrial		Indirect		Consumer		Totals
Balance at December 31, 2023	$	172	$	—	$	72	$	—	$	13	$	257
(Reversal of) provision for credit losses		(53)		1		32		—		7		(13)
Balance at December 31, 2024	$	119	$	1	$	104	$	—	$	20	$	244
(Reversal of) provision for credit losses		(100)		2		8		—		(1)		(91)
Balance at December 31, 2025	$	19	$	3	$	112	$	—	$	19	$	153

The following table summarizes the provision for credit losses for the years ended December 31, 2025 and 2024:

	Year Ended December 31,
	2025		2024
Provision for credit losses - loans	$	1,750	$	2,813
(Reversal of) provision for credit losses - unfunded commitments		(91)		(13)
Provision for credit losses	$	1,659	$	2,800

The Company had no loans identified as collateral dependent as of December 31, 2025 or 2024.

There were no loans modified for borrowers experiencing financial difficulty during the years ended December 31, 2025 or 2024.