10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to ______

Commission File Number 001-41505

LINKBANCORP, Inc.

(Exact name of registrant as specified in its charter)

Pennsylvania	82-5130531
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1250 Camp Hill Bypass, Suite 202 Camp Hill, PA 17011 (Address of principal executive offices)

Registrant’s telephone number, including area code: (855) 569-2265

Former name, former address, and former fiscal year, if changed since last report: N/A

Securities registered pursuant to Section 12(b) of the Act.

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	LNKB	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	☒	Smaller Reporting Company	☒
		Emerging Growth Company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes ☐ No ☒.

Indicate the number of shares of the Registrant’s Common Stock outstanding as of the latest practicable date: 16,243,186 shares as of November 8, 2023.

LINKBANCORP, Inc.

FORM 10-Q

INDEX

PART I - FINANCIAL INFORMATION
		PAGE
Item 1 -	Financial Statements (Unaudited)
	Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	1
	Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022	2
	Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2023 and 2022	3
	Consolidated Statements of Shareholders’ Equity for the three and nine months ended September 30, 2023 and 2022	4
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022	6
	Notes to Consolidated Financial Statements (Unaudited)	8
Item 2 -	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 3 -	Quantitative and Qualitative Disclosures About Market Risk	52
Item 4 -	Controls and Procedures	53
PART II - OTHER INFORMATION
Item 1 -	Legal Proceedings	53
Item 1A -	Risk Factors	53
Item 2 -	Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 3 -	Defaults Upon Senior Securities	54
Item 4 -	Mine Safety Disclosures	54
Item 5 -	Other Information	54
Item 6 -	Exhibits	55
SIGNATURES		56

1

PART I - FINANCIAL INFORMATION

Item 1 - Consolidated Financial Statements

LINKBANCORP, Inc. and Subsidiaries

Consolidated Balance Sheets (Unaudited)

	September 30, 2023			December 31, 2022
(In Thousands, except share and per share data)
ASSETS
Noninterest-bearing cash equivalents	$	5,447		$	4,209
Interest-bearing deposits with other institutions		62,532			25,802
Cash and cash equivalents		67,979			30,011
Certificates of deposit with other banks		249			5,623
Securities available for sale, at fair value		78,779			78,813
Securities held to maturity (Fair value of $34,588 and $30,080, respectively)		37,778			31,822
Less: Allowance for credit losses - securities		(512	)		—
Securities held to maturity, net		37,266			31,822
Loans receivable		978,912			927,871
Less: Allowance for credit losses - loans		(9,964	)		(4,666	)
Net loans		968,948			923,205
Investments in restricted bank stock		3,107			3,377
Premises and equipment, net		6,414			6,743
Right-of-Use Asset – Premises		9,727			10,219
Bank-owned life insurance		24,732			19,244
Goodwill and other intangible assets		36,715			36,894
Deferred tax asset		6,880			5,619
Accrued interest receivable and other assets		14,899			12,084
TOTAL ASSETS	$	1,255,695		$	1,163,654
LIABILITIES
Deposits:
Demand, noninterest bearing	$	210,404		$	192,773
Interest bearing		831,368			753,999
Total deposits		1,041,772			946,772
Other borrowings		15,000			20,938
Subordinated debt		40,354			40,484
Operating lease liabilities		9,728			10,219
Allowance for credit losses - unfunded commitments		904			54
Accrued interest payable and other liabilities		6,586			6,634
TOTAL LIABILITIES		1,114,344			1,025,101
COMMITMENTS AND CONTINGENT LIABILITIES (Note 10)
SHAREHOLDERS’ EQUITY
Preferred stock (At September 30, 2023 and December 31, 2022: no par value; 5,000,000 shares authorized; no shares issued and outstanding.)		—			—
Common stock (At September 30, 2023 and December 31, 2022: $0.01 par value; 50,000,000 and 25,000,000 shares authorized, respectively; 16,235,871 and 14,939,640 shares issued and outstanding, respectively.)		162			149
Surplus		127,856			117,709
Retained earnings		19,062			27,100
Accumulated other comprehensive loss		(5,729	)		(6,405	)
TOTAL SHAREHOLDERS’ EQUITY		141,351			138,553
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,255,695		$	1,163,654

See accompanying notes to the unaudited consolidated financial statements.

1

LINKBANCORP, Inc. and Subsidiaries

Consolidated Statements of Operations (Unaudited)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2023			2022		2023			2022
(In Thousands, except share and per share data)
INTEREST AND DIVIDEND INCOME
Loans receivable, including fees	$	13,068		$	9,410	$	37,330		$	25,287
Investment securities and certificates of deposit:
Taxable		833			745		2,309			1,608
Exempt from federal income tax		300			268		895			857
Other		577			157		1,561			306
Total interest and dividend income		14,778			10,580		42,095			28,058
INTEREST EXPENSE
Deposits		5,434			1,389		15,193			2,872
Other borrowings		550			82		1,196			106
Subordinated debt		442			439		1,311			1,080
Total interest expense		6,426			1,910		17,700			4,058
NET INTEREST INCOME BEFORE (CREDIT TO) PROVISION FOR    CREDIT LOSSES		8,352			8,670		24,395			24,000
(Credit to) provision for credit losses		(349	)		515		(549	)		1,190
NET INTEREST INCOME AFTER (CREDIT TO) PROVISION FOR    CREDIT LOSSES		8,701			8,155		24,944			22,810
NONINTEREST INCOME
Service charges on deposit accounts		198			216		593			644
Bank-owned life insurance		177			156		488			381
Net realized (losses) gains on the sales of debt securities		—			—		(2,370	)		13
Gain on sale of loans		—			420		296			753
Other		505			249		905			658
Total noninterest income		880			1,041		(88	)		2,449
NONINTEREST EXPENSE
Salaries and employee benefits		4,193			4,234		12,350			11,612
Occupancy		701			596		2,104			1,503
Equipment and data processing		934			666		2,519			1,858
Professional fees		363			330		1,162			865
FDIC insurance		276			141		619			483
Bank shares tax		278			201		834			585
Merger & system conversion related expenses		777			—		1,679			—
Other		472			877		2,280			2,481
Total noninterest expense		7,994			7,045		23,547			19,387
Income before income tax expense		1,587			2,151		1,309			5,872
Income tax expense		347			379		276			970
NET INCOME	$	1,240		$	1,772	$	1,033		$	4,902
EARNINGS PER SHARE, BASIC	$	0.08		$	0.17	$	0.06			0.49
EARNINGS PER SHARE, DILUTED	$	0.08		$	0.17	$	0.06			0.48
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING,
BASIC		16,235,144			10,590,079		15,984,151			10,087,341
DILUTED		16,235,144			10,590,079		15,984,151			10,136,457

See accompanying notes to the unaudited consolidated financial statements.

2

LINKBANCORP, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
(In Thousands)
Net income	$	1,240		$	1,772		$	1,033		$	4,902
Components of other comprehensive (loss) income:
Unrealized loss on available-for-sale securities		(2,812	)		(4,484	)		(2,405	)		(12,909	)
Tax effect		591			943			503			2,711
Net of tax amount		(2,221	)		(3,541	)		(1,902	)		(10,198	)
Unrealized gain on cash flow hedges		1,341			—			3,263			—
Tax effect		(282	)		—			(685	)		—
Net of tax amount		1,059			—			2,578			—
Reclassification adjustment for debt securities gains realized in net income		—			—			—			(13	)
Tax effect		—			—			—			3
Net of tax amount		—			—			—			(10	)
Total other comprehensive (loss) income		(1,162	)		(3,541	)		676			(10,208	)
Total comprehensive income (loss)	$	78		$	(1,769	)	$	1,709		$	(5,306	)

See accompanying notes to the unaudited consolidated financial statements.

3

LINKBANCORP, Inc. and Subsidiaries

Consolidated Statements of Shareholders’ Equity (Unaudited)

(In Thousands, except share data)	Common Stock Shares		Common Stock Amount		Surplus		Retained Earnings			Accumulated Other Comprehensive Loss			Total
Balance, June 30, 2023		16,228,440	$	162	$	127,818	$	19,039		$	(4,567	)	$	142,452
Net income		—		—		—		1,240			—			1,240
Dividends declared ($0.075 per share)		—		—		—		(1,217	)		—			(1,217	)
Employee stock purchase plan		7,431		—		—		—			—			—
Stock option expense		—		—		38		—			—			38
Other comprehensive loss		—		—		—		—			(1,162	)		(1,162	)
Balance, September 30, 2023		16,235,871	$	162	$	127,856	$	19,062		$	(5,729	)	$	141,351
(In Thousands, except share data)	Common Stock Shares		Common Stock Amount		Surplus		Retained Earnings			Accumulated Other Comprehensive Loss			Total
Balance, June 30, 2022		9,838,435	$	99	$	83,070	$	26,491		$	(4,889	)	$	104,771
Net income		—		—		—		1,772			—			1,772
Dividends declared ($0.075 per share)		—		—		—		(738	)		—			(738	)
Issuance of shares of common stock, net of proceeds		5,101,205		50		34,609		—			—			34,659
Stock option expense		—		—		19		—			—			19
Other comprehensive loss		—		—		—		—			(3,541	)		(3,541	)
Balance, September 30, 2022		14,939,640	$	149	$	117,698	$	27,525		$	(8,430	)	$	136,942

4

(In Thousands, except share data)	Common Stock Shares		Common Stock Amount		Surplus		Retained Earnings			Accumulated Other Comprehensive Loss			Total
Balance, December 31, 2022		14,939,640	$	149	$	117,709	$	27,100		$	(6,405	)	$	138,553
Cumulative effect of change in accounting principles (Note 1)		—		—		—		(5,419	)		—			(5,419	)
Balance, January 1, 2023, as adjusted		14,939,640		149		117,709		21,681			(6,405	)		133,134
Net income		—		—		—		1,033			—			1,033
Dividends declared ($0.225 per share)		—		—		—		(3,652	)		—			(3,652	)
Issuance of shares of common stock, net proceeds		1,282,052		13		9,967		—			—			9,980
Employee stock purchase plan		14,179		—		84		—			—			84
Stock option expense		—		—		96		—			—			96
Other comprehensive income		—		—		—		—			676			676
Balance, September 30, 2023		16,235,871	$	162	$	127,856	$	19,062		$	(5,729	)	$	141,351
(In Thousands, except share data)	Common Stock Shares		Common Stock Amount		Surplus		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance, December 31, 2021		9,826,435	$	99	$	82,910	$	24,836		$	1,778		$	109,623
Net income		—		—		—		4,902			—			4,902
Dividends declared ($0.225 per share)		—		—		—		(2,213	)		—			(2,213	)
Issuance of shares of common stock, net proceeds		5,101,205		50		34,609		—			—			34,659
Exercise of stock options		12,000		—		120		—			—			120
Stock option expense		—		—		59		—			—			59
Other comprehensive loss		—		—		—		—			(10,208	)		(10,208	)
Balance, September 30, 2022		14,939,640	$	149	$	117,698	$	27,525		$	(8,430	)	$	136,942

See accompanying notes to the unaudited consolidated financial statements.

5

LINKBANCORP, Inc. and Subsidiaries

Consolidated Statement of Cash Flows (Unaudited)

	For the Nine Months Ended September 30,
(In Thousands)	2023			2022
OPERATING ACTIVITIES
Net income	$	1,033		$	4,902
Adjustments to reconcile net income to net cash provided by operating activities:
(Credit to) provision for credit losses		(549	)		1,190
Depreciation		779			607
Amortization of intangible assets		179			197
Accretion of discounts, net		(447	)		(903	)
Origination of loans to be sold		(3,745	)		(9,362	)
Proceeds from loan sales		4,041			10,115
Gain on sale of loans		(296	)		(753	)
Share-based and deferred compensation		627			493
Bank-owned life insurance income		(488	)		(381	)
Loss (gain) on sale of debt securities, available for sale		2,370			(13	)
Change in accrued interest receivable and other assets		328			(1,397	)
Change in accrued interest payable and other liabilities		(495	)		56
Net cash provided by operating activities		3,337			4,751
INVESTING ACTIVITIES
Investment securities available for sale:
Proceeds from sales		1,847			513
Proceeds from calls and maturities		—			1,150
Proceeds from principal repayments		5,645			9,748
Purchases		(9,756	)		—
Investment securities held to maturity:
Proceeds from principal repayments		2,379			1,826
Purchases		(11,289	)		(34,389	)
Proceeds from redemptions of certificates of deposit with other banks		5,374			4,470
Purchase of restricted investment in bank stocks		(6,862	)		(4,525	)
Redemption of restricted investment in bank stocks		7,132			3,883
Increase in loans, net		(49,565	)		(143,654	)
Purchase of bank-owned life insurance		(5,000	)		—
Proceeds from death benefit under bank-owned life insurance		—			41
Purchase of premises and equipment		(664	)		(4,405	)
Net cash used in investing activities		(60,759	)		(165,342	)
FINANCING ACTIVITIES
Increase in deposits, net		95,000			180,045
Change in short-term borrowings, net		(5,938	)		(19,814	)
Proceeds from issuance of subordinated debt		—			20,000
Issuance of shares from exercise of stock options		—			120
Dividends paid		(3,652	)		(2,213	)
Net proceeds from issuance of common stock		9,980			34,659
Net cash provided by financing activities		95,390			212,797
Increase in cash and cash equivalents		37,968			52,206
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		30,011			22,590
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	67,979		$	74,796

See accompanying notes to the unaudited consolidated financial statements.

6

LINKBANCORP, Inc. and Subsidiaries

Consolidated Statement of Cash Flows (Unaudited)

	For the Nine Months Ended September 30,
	2023		2022
SUPPLEMENTAL CASH FLOW DISCLOSURES
Cash paid during the period for:
Interest	$	17,331	$	3,243
Income taxes	$	—	$	275

See accompanying notes to the unaudited consolidated financial statements.

7

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of significant accounting and reporting policies applied in the presentation of the accompanying consolidated financial statements follows:

Nature of Operations

LINKBANCORP, Inc. (the "Company" or "LINKBANCORP") is a bank holding company that operates LINKBANK (the "Bank"). The Company was incorporated on April 6, 2018, under the laws of the Commonwealth of Pennsylvania. The Company was formed with the intent of becoming a bank holding company through acquisition of a bank.

On September 17, 2018, the Pennsylvania Department of Banking and Securities (the "PADOBS") approved the acquisition of 100 percent of the shares of Stonebridge Bank. On October 5, 2018, LINKBANCORP purchased 100 percent of the outstanding shares of Stonebridge Bank, from its former parent company Stonebridge Financial Corp. under section 363 of the Bankruptcy Code. LINKBANCORP subsequently renamed the bank LINKBANK.

On December 10, 2020, the Company and its wholly owned subsidiary, LINKBANK, and GNB Financial Services, Inc. (“GNBF”), and its wholly owned subsidiary, The Gratz Bank entered into an Agreement and Plan of Merger pursuant to which GNBF merged with and into the Company, with the Company as the surviving corporation. LINKBANK merged with and into The Gratz Bank, with The Gratz Bank as the surviving institution. The merger was consummated effective September 18, 2021 (collectively, the "Gratz Merger"). In markets other than the pre-merger Gratz Bank areas, the Bank operated as "LINKBANK, a division of The Gratz Bank." Effective November 4, 2022, the Bank began to operate under one brand under the name LINKBANK.

The Bank is a full-service commercial bank providing personal and business lending and deposit services. The Bank’s operations are conducted from its ten Solutions Centers located in Dauphin, Chester, Cumberland, Lancaster, Northumberland, and Schuylkill Counties within Pennsylvania. The Company’s corporate office resides in Camp Hill, Pennsylvania. As a state chartered, non-Federal Reserve member bank, the Bank is subject to regulation and supervision by the PADOBS and the Federal Deposit Insurance Corporation (the "FDIC"). The Company is regulated by the Federal Reserve Bank of Philadelphia. The Bank’s deposits are insured up to the applicable limits by the FDIC.

Initial Public Offering

In September 2022, the Company completed its initial public offering ("IPO") whereby it issued and sold 5,101,205 shares of common stock at a public offering price of $7.50 per share. The Company received net proceeds of $34,659 after deducting underwriting discounts and commissions of $2,487 and other offering expenses of $1,114. The Company's common stock trades on the Nasdaq Capital Market under the symbol "LNKB."

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and the Bank. All significant intercompany accounts and transactions have been eliminated in consolidation. The accounting and reporting practices of the Company conform to accounting principles generally accepted in the United States of America (GAAP) and to general practices within the banking industry. In the opinion of management, all adjustments (all of which are of a normal recurring nature) that are necessary for a fair statement are reflected in the unaudited condensed consolidated financial statements.

The Company has evaluated events and transactions occurring subsequent to the consolidated balance sheet date of September 30, 2023 for items that should potentially be recognized or disclosed in these unaudited condensed consolidated financial statements. The evaluation was conducted through the date these unaudited condensed consolidated financial statements were issued.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly

8

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

susceptible to significant change in the near term relate to the allowance for credit losses, and the valuation of deferred tax assets.

Interim Financial Information

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Reclassification of Prior Period Financial Statements

Certain previously reported items have been reclassified to conform to the current year's classifications. Reclassifications had no effect on prior year net income or shareholders' equity.

Pending Merger with Partners Bancorp

On February 22, 2023, the Company entered into an Agreement and Plan of Merger (the "Partners Merger Agreement") with Partners Bancorp ("Partners"), a Maryland corporation, and the holding company for The Bank of Delmarva and Virginia Partners Bank, based in Seaford, Delaware and Fredericksburg, Virginia, respectively. At December 31, 2022, Partners had total assets of $1.57 billion, total loans of $1.23 billion, total deposits of $1.34 billion, and 17,973,724 shares outstanding. The Partners Merger Agreement provides that, subject to the terms and conditions thereof, Partners will merge with and into the Company, with the Company as the surviving corporation, and that The Bank of Delmarva and Virginia Partners Bank will each merge with and into LINKBANK, with LINKBANK as the surviving bank (collectively, the "Partners Merger"). On June 22, 2023, shareholders of the Company and Partners each approved the Partners Merger. On October 13, 2023, the Company and Partners announced the receipt of FDIC and state regulatory approvals for the Partners Merger. However, the Partners Merger remains subject to the approval of the Board of Governors of the Federal Reserve System and other customary closing conditions. The Partners Merger is expected to close in the fourth quarter of 2023. The Partners Merger will introduce the Company's operations into northern Virginia, eastern Maryland, Delaware, and southern New Jersey.

Unregistered Sale of Equity Securities

On February 21, 2023, the Company entered into Investment Agreements with certain directors of the Company as well as other accredited investors under which it issued and sold 1,282,052 shares of its common stock, par value $0.01, at a price of $7.80 per share. The shares were issued on February 21, 2023, in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D of the rules and regulations promulgated thereunder. The offering resulted in gross proceeds of $10.0 million. There were no underwriting discounts or commissions.

Loans Receivable

Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of an allowance for credit losses and any deferred fees or costs. Interest income is accrued on the unpaid principal balance. Accrued interest receivable on loans totaled $4,073 at September 30, 2023 and was reported within accrued interest receivable and other assets on the consolidated balance sheets and is excluded from the estimate of credit losses. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the yield (interest income) of the related loans. The Bank is generally amortizing these amounts over the contractual life of the loan. Premiums and discounts on purchased loans are amortized as adjustments to interest income using the effective yield method.

The loans receivable portfolio is segmented into commercial and consumer loans. Commercial loans consist of the following classes: agriculture, commercial and industrial, commercial real estate, and municipal. Consumer loans consist of the following classes: residential real estate, and other consumer. The loan segments are based on collateral type.

9

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

The accrual of interest on all portfolio classes is discontinued at the time the loan is more than ninety days delinquent unless the loan is well collateralized and in process of collection. Nonaccrual loans are reviewed for charge-offs if more than ninety-days past due, except for residential loans and consumer loans. Residential loans are reviewed at 180 days and consumer loans are reviewed at 120 days past due. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered unlikely.

All interest accrued but not collected for loans placed on nonaccrual or charged-off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. In addition, a loan should be in accordance with the contractual terms for a reasonable period, usually requiring a payment history of six months.

Derivative Instruments and Hedging Activities

FASB ASC 815, Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments.

As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

In accordance with the FASB’s fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

Goodwill Impairment

Goodwill is not amortized but is reviewed for potential impairment on at least an annual basis, with testing between annual tests if an event occurs or circumstances change that could potentially reduce the fair value of a reporting unit. In conjunction with the IPO, the Company issued 5,101,205 shares of common stock and the Company's stock price subsequently decreased from an average closing price of $9.32 per share for the month of August 2022, to $7.50 per share upon completion of the IPO. In the first quarter of 2023, the Company's stock price further decreased, causing management to perform a goodwill impairment test at March 31, 2023. No goodwill impairment was identified at March 31, 2023. No goodwill test has been deemed necessary by management at September 30, 2023.

Recently Adopted Accounting Standards

Reference Rate Reform

In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which added to ASU 2020-04 optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls “reference rate reform” if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Also, entities can elect various optional

10

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain criteria are met, and can make a onetime election to sell and/or reclassify held-to-maturity debt securities that reference an interest rate affected by reference rate reform. ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The amendments in this ASU are effective for all entities upon issuance through December 31, 2024. The Company identified its loan receivables that have an interest rate indexed to LIBOR, verified proper transition language existed in the contracts and executed contractual updates, as needed, with the impacted borrowers. The Company replaced LIBOR in most cases with one-month Term SOFR or Daily SOFR. The Company does not expect the impact to be material to the financial statements of the Company.

Goodwill Impairment

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This standard simplifies the test for goodwill impairment by eliminating the requirement to calculate the implied fair value of goodwill, which had been Step 2 of the goodwill impairment test. Instead, the goodwill impairment test consists of a single quantitative step comparing the fair value of the reporting unit with its carrying amount. An entity should recognize a goodwill impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. The new standard was effective for annual and any interim goodwill impairment tests in reporting periods beginning after December 15, 2022. The Company adopted ASU 2017-04 on January 1, 2023. The adoption of this standard did not have a material effect on the Company's operating results or financial condition.

Derivatives

On March 28, 2022, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method. The purpose of this updated guidance is to further align risk management objectives with hedge accounting results on the application of the last-of-layer method, which was first introduced in ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2022-01 is effective for public business entities for fiscal years beginning after December 15, 2022, with early adoption in the interim period permitted. For entities who have already adopted ASU 2017-12, immediate adoption is allowed. ASU 2022-01 requires a modified retrospective transition method for basis adjustments in which the entity will recognize the cumulative effect of the change on the opening balance of each affected component of equity in the statement of financial position as of the date of adoption. The Company adopted ASU 2022-01 on January 1, 2023. The adoption of this standard did not have a material effect on the Company's operating results or financial condition.

Current Expected Credit Losses

On January 1, 2023, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as amended, which replaces the impairment model for most financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. This model is also applicable to off-balance sheet credit exposures not accounted for as insurance, such as loan commitments, standby letters of credit, financial guarantees, and other similar instruments. In addition, the amendments in ASU 2016-03 require credit losses on available-for-sale debt securities to be presented as a valuation allowance rather than as a direct write down.

The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost, and off-balance-sheet credit exposures. Results for reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. At January 1, 2023, the Company increased the allowance for credit losses for loans by $5.7 million, the allowance for credit losses for unfunded loan commitments by $910 thousand, and the allowance on held-to-maturity securities by $602 thousand. At January 1, 2023, the Company reported a cumulative-effect adjustment of $5.4 million which decreased retained earnings.

The Company did not record an allowance for credit losses on its available-for-sale debt securities under the newly codified available-for-sale debt security impairment model, as the majority of these securities are government agency-backed securities for which the risk of loss is minimal.

The Company adopted ASC 326 using the prospective transition approach for financial assets purchased with credit deterioration (PCD) that were previously classified as purchased credit impaired and accounted for under ASC 310-30. In accordance with the standard, management did not reassess whether PCI assets met the criteria of PCD assets as of the date of the adoption. On January 1, 2023, the amortized cost basis of the PCD assets were adjusted to reflect the addition of $308 thousand to the allowance for credit losses. The remaining noncredit discount (based on the adjusted amortized cost basis) will be accreted into interest income at the effective interest rate as of January 1, 2023.

11

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

The below table shows the changes made to loan segments and the allowance for credit losses upon the adoption of ASC 326 as of January 1, 2023.

(In Thousands)	December 31, 2022 Statement Balance		Segment portfolio reclassifications			December 31, 2022 after reclassifications
Loans:
Agriculture and farmland	$	15,591	$	40,155		$	55,746
Construction		—		57,713			57,713
Commercial & industrial		103,874		881			104,755
Paycheck Protection Program		881		(881	)		—
Commercial real estate		540,914		(540,914	)		—
Multifamily		—		105,390			105,390
Owner occupied		—		139,554			139,554
Non-owner occupied		—		245,274			245,274
Residential real estate		250,832		(250,832	)		—
First liens		—		168,084			168,084
Second liens and lines of credit		—		35,576			35,576
Municipal		5,466		—			5,466
Consumer and other		10,057		—			10,057
Total		927,615		—			927,615
Deferred Costs		256		—			256
Total	$	927,871	$	—		$	927,871
Allowance:
Agriculture and farmland	$	33	$	246		$	279
Construction		—		274			274
Commercial & industrial		583		—			583
Paycheck Protection Program		—		—			—
Commercial real estate		2,462		(2,462	)		—
Multifamily		—		480			480
Owner occupied		—		635			635
Non-owner occupied		—		1,116			1,116
Residential real estate		1,536		(1,536	)		—
First liens		—		1,029			1,029
Second liens and lines of credit		—		218			218
Municipal		12		—			12
Consumer and other		40		—			40
Total	$	4,666	$	—		$	4,666

The Federal Reserve and the FDIC have adopted a rule that provides a banking organization the option to phase-in, over a three year period, the effects of CECL on its regulatory capital upon the adoption of the CECL standard. The Company has elected to exercise this phase-in option.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses: Troubled Debt Restructurings and Vintage Disclosures, which eliminates accounting guidance for troubled debt restructurings ("TDRs") by creditors that have adopted ASU 2016-13 and its related amendments. The amendments require that an entity evaluate whether the loan modification represents a new loan or a continuation of an existing loan, and introduce new requirements related to modifications made to borrowers experiencing financial difficulty. The amendments also require public business entities to disclose current-period gross write-offs for financing receivables by year of origination in the vintage disclosures. For entities that have adopted ASU 2016-13, the amendments in this ASU are effective for fiscal years beginning after December 15, 2022. For entities that have not adopted ASU 2016-13, the amendments in this update are effective at the time the entity adopts ASU 2016-13. The Company adopted this standard effective January 1, 2023 in conjunction with ASC 326. The adoption of this standard did not have a material effect on the Company's operating results or financial condition.

As a result of the adoption of ASU 2016-13, the Company revised some of its existing accounting policies as noted below:

12

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

Allowance for Credit Losses - Loans

The allowance for credit losses is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed.

Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics, such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors. The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. The Company has identified the following portfolio segments and measures the allowance for credit losses using the following methods:

Portfolio Segment	Measurement Method
Agriculture and farmland	Remaining life
Construction	Discounted cash flow
Commercial & industrial	Discounted cash flow
Commercial real estate
Multifamily	Discounted cash flow
Owner occupied	Discounted cash flow
Non-owner occupied	Discounted cash flow
Residential real estate
First liens	Discounted cash flow
Second liens and lines of credit	Discounted cash flow
Municipal	Remaining life
Consumer	Remaining life

Loans that do not share risk similar risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the collective evaluation described above. When management determines that foreclosure is probable, expected credit losses are based on the fair value of collateral at the reporting date, adjusted for selling costs as appropriate.

Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies: management has a reasonable expectation at the reporting date that a troubled debt restructuring will be executed with an individual borrower or the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancelable by the Company.

13

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

Allowance for Credit Losses - Held-to-Maturity Securities

Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type. Accrued interest receivable on held-to-maturity debt securities totaled $187 at September 30, 2023 which is excluded from the estimate of credit losses.

The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts.

Management classifies the held-to-maturity portfolio into the following major security types: Corporate debentures and structured mortgage-backed securities.

•The corporate debentures are comprised of investments in subordinated debt issued by U.S. based banks.

•All of the structured mortgage-backed securities are issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S government, are highly rated by major rating agencies and have a long history of no credit losses.

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancelable by the Company. The allowance for credit losses on off-balance sheet credit exposures is adjusted through credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The segments of off-balance sheet credit exposures are the same as the segments for the allowance for credit losses on loans. The allowance for credit losses on off balance sheet credit exposures is influenced by forecasted loss rates used in the allowance for credit losses on loans and the level of contractual obligations to extend credit.

Investment Securities

Investment securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Investment securities that will be held for indefinite periods of time, including securities that may be sold in response to changes in market interest or prepayment rates, needs for liquidity, and changes in the availability of and in the yield of alternative investments, are classified as available for sale. These investment securities are carried at fair value. Fair values of securities available for sale are determined by using Level 2 fair value measures calculated through the use of matrix pricing. Matrix pricing is a common mathematical technique that does not rely exclusively on quoted market prices for specific securities but rather utilizes the security’s relationship to other benchmark quoted prices in determining fair value. The Company uses independent service providers to calculate our Level 2 fair value measures. Unrealized gains and losses are excluded from operations and are reported net of tax as a separate component of other comprehensive income until realized. Realized gains and losses on the sale of investment securities are reported in the consolidated statements of income and determined using the adjusted cost of the specific security sold on the trade date. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities.

For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either criteria regarding intent or requirement to sell is met, the security's amortized cost basis is written down to fair value through income. For available-for-sale debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive (loss) income.

Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

14

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

Accrued interest receivable on available for sale debt securities totaled $489 at September 30, 2023 and is excluded from the estimate of credit losses.

2.INVESTMENT SECURITIES

The amortized cost, gross unrealized gains and losses, and fair value of investment securities available for sale are summarized as follows:

	September 30, 2023
(In Thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for Sale:
US government agency securities	$	2,000	$	—	$	(18	)	$	1,982
Small Business Administration loan pools		693		—		(14	)		679
Obligations of state and political subdivisions		45,614		—		(5,935	)		39,679
Mortgage-backed securities in government-sponsored entities		40,987		—		(4,548	)		36,439
	$	89,294	$	—	$	(10,515	)	$	78,779
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair  Value		Allowance for Credit Losses
Held to Maturity:
Corporate debentures	$	15,000	$	—	$	(1,963	)	$	13,037	$	512
Structured mortgage-backed securities		22,778		—		(1,227	)		21,551		—
	$	37,778	$	—	$	(3,190	)	$	34,588	$	512
	December 31, 2022
(In Thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for Sale:
Small Business Administration loan pools	$	858	$	—	$	(15	)	$	843
Obligations of state and political subdivisions		44,189		14		(4,034	)		40,169
Mortgage-backed securities in government-sponsored entities		41,873		—		(4,072	)		37,801
	$	86,920	$	14	$	(8,121	)	$	78,813
Held to Maturity:
Corporate debentures	$	14,993	$	—	$	(994	)	$	13,999
Structured mortgage-backed securities		16,829		—		(748	)		16,081
	$	31,822	$	—	$	(1,742	)	$	30,080

15

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

The following tables summarize the Company's debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by security type and length of time in a continuous unrealized loss position.

	September 30, 2023
	Less Than Twelve Months					Twelve Months or Greater					Total
(In Thousands)	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
Available for Sale:
US Government Agency Securities	$	1,982	$	(18	)	$	—	$	—		$	1,982	$	(18	)
Small Business Administration loan pools		—		—			679		(14	)		679		(14	)
Obligations of state and political subdivisions		7,383		(479	)		32,296		(5,456	)		39,679		(5,935	)
Mortgage-backed securities in government-sponsored entities		4,647		(220	)		31,792		(4,328	)		36,439		(4,548	)
	$	14,012	$	(717	)	$	64,767	$	(9,798	)	$	78,779	$	(10,515	)
Held to Maturity:
Corporate debentures	$	—	$	—		$	—	$	—		$	—	$	—
Structured mortgage-backed securities		8,227		(66	)		13,324		(1,161	)		21,551		(1,227	)
	$	8,227	$	(66	)	$	13,324	$	(1,161	)	$	21,551	$	(1,227	)
	December 31, 2022
	Less Than Twelve Months					Twelve Months or Greater					Total
(In Thousands)	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
Available for Sale:
Small Business Administration loan pools	$	334	$	(1	)	$	509	$	(14	)	$	843	$	(15	)
Obligations of state and political subdivisions		34,836		(3,372	)		2,559		(662	)		37,395		(4,034	)
Mortgage-backed securities in government-sponsored entities		18,052		(1,538	)		19,749		(2,534	)		37,801		(4,072	)
	$	53,222	$	(4,911	)	$	22,817	$	(3,210	)	$	76,039	$	(8,121	)
Held to Maturity
Corporate debentures	$	13,999	$	(994	)	$	—	$	—		$	13,999	$	(994	)
Structured mortgage-backed securities		16,081		(748	)		—		—			16,081		(748	)
	$	30,080	$	(1,742	)	$	—	$	—		$	30,080	$	(1,742	)

No allowance for credit losses on available for sale debt securities was needed at September 30, 2023. The Company reviews its position quarterly and believes that as of September 30, 2023 and December 31, 2022, the declines outlined in the above tables represent temporary declines, and the Company does not intend to sell, and does not believe it will be required to sell, these debt securities before recovery of their cost basis, which may be at maturity. There were 186 and 175 available for sale debt securities with unrealized losses at September 30, 2023 and December 31, 2022, respectively. The Company has concluded that

16

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

the unrealized losses disclosed above are the result of interest rate changes and market conditions that are not expected to result in the non-collection of principal and interest during the year.

There were 13 and ten held to maturity debt securities with unrealized losses at September 30, 2023 and December 31, 2022, respectively.

As of September 30, 2023, amortized cost and fair value by contractual maturity, where applicable, are shown below. Actual maturities may differ from contractual maturities because the borrower may have the right to prepay obligations with or without penalty.

	Available for Sale Securities				Held to Maturity Securities
(In Thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	381	$	377	$	—	$	—
Due after one year through five years		9,030		8,639		6,000		5,673
Due after five years through ten years		13,432		12,134		9,000		7,364
Due after ten years		25,464		21,190		—		—
Mortgage-backed securities and Collateralized mortgage obligations		40,987		36,439		22,778		21,551
	$	89,294	$	78,779	$	37,778	$	34,588

The following table summarizes sales of debt securities for the nine months ended September 30, 2023 and 2022. There were no sales of debt securities for the three months ended September 30, 2023 and 2022.

(In Thousands)	For the Nine Months Ended September 30,
	2023			2022
Proceeds	$	1,847		$	513
Gross gains		—			13
Gross losses		2,370			—
Net (loss) gain	$	(2,370	)	$	13

The tax benefit (provision) related to these realized gains and losses was $498 and $(3) as of September 30, 2023 and 2022, respectively.

At December 31, 2022, the Company's corporate debenture portfolio contained $3,000 of an investment in subordinated notes issued by Signature Bank. As a result of and subsequent to the failure of Signature Bank during the first quarter of 2023, the Company sold its investment in the Signature Bank subordinated notes and incurred a pre-tax gross loss of approximately $2,445.

The Company had pledged debt securities with a carrying value of $55,755 and $47,418 to secure public deposits and certain borrowing capacity as of September 30, 2023 and December 31, 2022, respectively.

17

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

3.LOANS RECEIVABLE

The portfolio segments and classes of loans are as follows:

(In Thousands)	September 30, 2023			December 31, 2022
Agriculture and farmland loans	$	50,584		$	55,746
Construction loans		65,836			57,713
Commercial & industrial loans		115,572			104,755
Commercial real estate loans
Multifamily		111,853			105,390
Owner occupied		160,929			139,554
Non-owner occupied		257,344			245,274
Residential real estate loans
First liens		172,481			168,084
Second liens and lines of credit		27,870			35,576
Consumer and other loans		11,869			10,057
Municipal loans		4,137			5,466
		978,475			927,615
Deferred costs		437			256
Allowance for credit losses		(9,964	)		(4,666	)
Total	$	968,948		$	923,205

The balances at December 31, 2022 were reclassified from those previously reported as shown in Note 1.

The Company originates commercial, residential, and consumer loans within its primary market areas of southcentral and southeastern Pennsylvania. A significant portion of the loan portfolio is secured by real estate.

At September 30, 2023 and December 31, 2022 the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process was $348 and $0, respectively.

4.ALLOWANCE FOR CREDIT LOSSES

The segments of the Company’s loan portfolio are disaggregated to a level that allows management to monitor risk and performance. The loan segments used are consistent with the internal reports evaluated by the Company’s management and Board of Directors to monitor risk and performance within various segments of its loan portfolio and, therefore, no further disaggregation is considered necessary. The Company’s loan portfolio consists primarily of real estate loans on commercial and residential property. The portfolio also includes agricultural loans, commercial loans, municipal loans, and consumer loans.

The Company’s primary lending activity is the origination of commercial loans extended to small and mid-sized commercial and industrial entities.

Commercial loans are primarily underwritten on the basis of the borrowers’ ability to service such debt from income. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. As a general practice, the Company takes as collateral a security interest in any equipment, or other chattel, although loans may also be made on an unsecured basis. Collateralized working capital loans typically are secured by short-term assets whereas long-term loans are primarily secured by long-term assets.

Construction and Land loans are to finance the construction of owner-occupied and income producing properties. These loans are categorized within commercial or one-to-four family residential loans based upon the underlying collateral and intended use following the completion of the construction period. Real estate development and construction loans are approved based on an analysis of the borrower and guarantor, the viability of the project and on an acceptable percentage of the appraised value of the property securing the loan. Construction loan funds are disbursed periodically based on the percentage of construction or development completed. The Company carefully monitors these loans with on-site inspections and requires the receipt of lien waivers on funds advanced. The Company considers the market conditions and feasibility of proposed projects, the financial condition and reputation of the borrower and guarantors, the amount of the borrower’s equity in the project, independent appraisals, cost estimates and pre-construction sale information. The Company also makes loans on occasion for the purchase of

18

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

land for future development by the borrower. Land loans are extended for the future development for either commercial or residential use by the borrower. The Company carefully analyzes the intended use of the property and the viability thereof.

The Company’s commercial real estate loans consist of mortgage loans secured by nonresidential real estate, such as by apartment buildings, small office buildings, and owner-occupied properties. Commercial real estate loans are secured by the subject property and are underwritten based on loan to value limits, cash flow coverage and general creditworthiness of the obligors. These loans tend to involve larger loan balances and their repayment is typically dependent upon the successful operation and management of the underlying real estate.

Residential real estate loans are underwritten based on the borrower’s repayment capacity and source, value of the underlying property, credit history and stability. These loans are secured by a first or second mortgage on the borrower’s principal residence or their second/vacation home (excluding investment/rental property).

In addition to the main types of loans discussed above, the Company also originates agricultural loans, consumer loans, and municipal loans. The agricultural loan portfolio consists of loans to local farmers and agricultural businesses that are generally secured by farmland and equipment. The consumer loan portfolio consists of lending in the form of home equity loans secured by financed property and personal consumer loans, which may be secured or unsecured. The municipal loan portfolio consists of loans to qualified local municipalities, which are generally supported by the taxing authority of the borrowing municipality, and is frequently secured by collateral.

Management systematically monitors the loan portfolio and the appropriateness of the allowance for credit losses on a quarterly basis to provide for expected losses inherent in the portfolio. For segments determined by discounted cash flow analysis, the Company's estimate of future economic conditions utilized in its estimate is primarily dependent on the Federal Open Market Committee's forecasts related to Real Gross Domestic Product and Unemployment rate. For segments determined by the remaining life method, an average loss rate is generally calculated based on peer losses and applied to the future outstanding loan balances at quarter end.

Certain qualitative factors are then added to the historical allocation percentage to get the adjusted factor to be applied to non-classified loans. The following qualitative factors are analyzed for each portfolio segment:

•Levels of and trends in delinquencies

•Trends in volume and terms

•Changes in collateral

•Changes in management and lending staff

•Economic trends

•Concentrations of credit

•Changes in lending policies

•External factors

•Changes in underwriting process

•Trends in credit quality ratings

These qualitative factors are reviewed each quarter and adjusted based upon relevant changes within the portfolio.

The total allowance reflects management’s estimate of loan losses inherent in the loan portfolio at the Consolidated Balance Sheet date. The Company considers the allowance for credit losses adequate to cover loan losses inherent in the loan portfolio at September 30, 2023 and December 31, 2022.

19

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

The following tables summarize the activity in the allowance for credit losses by loan segment for the three and nine months ended September 30, 2023.

	Beginning balance		Charge-offs		Recoveries		Provision for credit losses			Ending balance
(In Thousands)	For the Three Months Ended September 30, 2023
Allowance for credit losses:
Agriculture and farmland	$	209	$	—	$	—	$	(130	)	$	79
Construction		728		—		—		(275	)		453
Commercial & industrial		729		—		—		126			855
Commercial real estate
Multifamily		673		—		—		(254	)		419
Owner occupied		1,559		—		—		197			1,756
Non-owner occupied		4,350		—		—		(220	)		4,130
Residential real estate
First liens		1,397		—		11		44			1,452
Second liens and lines of credit		383		—		1		(58	)		326
Municipal		7		—		—		—			7
Consumer		22		—		—		2			24
Unallocated		171		—		—		292			463
Total	$	10,228	$	—	$	12	$	(276	)	$	9,964

	Beginning balance		Impact of adopting ASC 326			Charge-offs		Recoveries		Provision for credit losses			Ending balance
(In Thousands)	For the Nine Months Ended September 30, 2023
Allowance for credit losses:
Agriculture and farmland	$	279	$	(190	)	$	—	$	—	$	(10	)	$	79
Construction		274		513			—		—		(334	)		453
Commercial & industrial		583		283			—		1		(12	)		855
Commercial real estate
Multifamily		480		340			—		—		(401	)		419
Owner occupied		635		760			—		—		361			1,756
Non-owner occupied		1,116		3,195			—		—		(181	)		4,130
Residential real estate
First liens		1,029		635			—		50		(262	)		1,452
Second liens and lines of credit		218		140			—		60		(92	)		326
Municipal		12		(2	)		—		—		(3	)		7
Consumer		40		(19	)		—		—		3			24
Unallocated		—		—			—		—		463			463
Total	$	4,666	$	5,655		$	—	$	111	$	(468	)	$	9,964

20

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

The balances at December 31, 2022 were reclassified from those previously reported as shown in Note 1.

The following table presents the amortized cost basis of nonaccrual loans and loans past due over 89 days still accruing by segments of the loan portfolio:

	As of September 30, 2023
(In Thousands)	Nonaccrual with No Allowance for Credit Loss		Nonaccrual with a related Allowance for Credit Loss		Loans past due over 89 days still accruing
Agriculture and farmland	$	—	$	—	$	—
Construction		—		—		192
Commercial & industrial		13		—		110
Commercial real estate
Multifamily		—		—		—
Owner occupied		—		—		—
Non-owner occupied		292		140		558
Residential real estate
First liens		1,357		—		112
Second liens and lines of credit		43		—		90
Municipal		—		—		—
Consumer		50		—		1
Total	$	1,755	$	140	$	1,063

The Company recognized $35 and $49 of interest income on nonaccrual loans during the three and nine months ended September 30, 2023.

The following table presents an aging analysis of the recorded investment of past due loans at September 30, 2023.

	September 30, 2023
(In Thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total   Loans
Agriculture and farmland	$	291	$	—	$	—	$	291	$	50,293	$	50,584
Construction		—		—		192		192		65,644		65,836
Commercial & industrial		202		—		122		324		115,248		115,572
Commercial real estate
Multifamily		—		—		—		—		111,853		111,853
Owner occupied		137		—		—		137		160,792		160,929
Non-owner occupied		—		—		947		947		256,397		257,344
Residential real estate
First liens		1,096		101		592		1,789		170,692		172,481
Second liens and lines of credit		97		4		96		197		27,673		27,870
Municipal		—		—		—		—		11,869		11,869
Consumer		4		—		3		7		4,130		4,137
Total	$	1,827	$	105	$	1,952	$	3,884	$	974,591	$	978,475

Credit Quality Information

The following tables represent credit exposures by internally assigned grades as of September 30, 2023. The grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled or at all.

The Company’s internally assigned grades are as follows:

Pass – loans that are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral. There are four sub-grades within the Pass category to further distinguish the loan.

Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected.

Substandard – loans that have a well-defined weakness based on objective evidence and are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

21

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

Doubtful – loans classified as Doubtful have all the weaknesses inherent in a Substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.

Loss – loans classified as a Loss are considered uncollectible and are immediately charged against allowances.

The following table presents the classes of the loan portfolio summarized by the internal risk rating system as of September 30, 2023.

	September 30, 2023
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2023		2022		2021		2020		2019		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Agriculture and farmland
Pass	$	641	$	13,880	$	5,073	$	5,228	$	3,089	$	15,107	$	4,213	$	46	$	47,277
Special mention		—		—		—		—		45		192		242		—		479
Substandard or lower		14		—		16		129		—		2,612		57		—		2,828
Total Agriculture and farmland	$	655	$	13,880	$	5,089	$	5,357	$	3,134	$	17,911	$	4,512	$	46	$	50,584
Agriculture and farmland
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Construction
Pass		17,080		23,430		17,020		912		5,428		1,498		375		93		65,836
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		—		—		—		—		—		—		—
Total Construction		17,080		23,430		17,020		912		5,428		1,498		375		93		65,836
Construction
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Commercial & industrial
Pass		6,765		14,505		7,258		9,606		1,657		1,045		73,096		110		114,042
Special mention		—		—		161		—		—		—		914		—		1,075
Substandard or lower		—		—		51		—		203		—		200		1		455
Total Commercial & industrial		6,765		14,505		7,470		9,606		1,860		1,045		74,210		111		115,572
Commercial & industrial
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Commercial real estate - Multifamily
Pass		5,226		44,619		42,805		11,307		5,858		—		153		—		109,968
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		—		—		—		1,885		—		—		1,885
Total Commercial real estate - Multifamily		5,226		44,619		42,805		11,307		5,858		1,885		153		—		111,853
Commercial real estate - Multifamily
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

22

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

	September 30, 2023
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2023		2022		2021		2020		2019		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Commercial real estate - Owner occupied
Pass		14,164		66,271		24,299		14,821		21,357		5,767		3,051		6		149,736
Special mention		—		—		1,490		—		6,591		—		295		—		8,376
Substandard or lower		—		—		—		—		2,423		320		74		—		2,817
Total Commercial real estate - Owner occupied		14,164		66,271		25,789		14,821		30,371		6,087		3,420		6		160,929
Commercial real estate - Owner occupied
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Commercial real estate - Non-owner occupied
Pass		20,178		113,886		59,008		18,565		25,778		13,105		5,834		—		256,354
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		43		—		140		558		—		249		990
Total Commercial real estate - Non-owner occupied		20,178		113,886		59,051		18,565		25,918		13,663		5,834		249		257,344
Commercial real estate - Non-owner occupied
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Municipal
Pass		266		—		220		1,677		—		1,877		97		—		4,137
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		—		—		—		—		—		—		—
Total Commercial real estate - Municipal		266		—		220		1,677		—		1,877		97		—		4,137
Municipal
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Total
Pass	$	64,320	$	276,591	$	155,683	$	62,116	$	63,167	$	38,399	$	86,819	$	255	$	747,350
Special mention		—		—		1,651		—		6,636		192		1,451		—		9,930
Substandard or lower		14		—		110		129		2,766		5,375		331		250		8,975
Total	$	64,334	$	276,591	$	157,444	$	62,245	$	72,569	$	43,966	$	88,601	$	505	$	766,255

The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. As part of our adoption of CECL, the Company will monitor small balance, homogeneous loans, such as home equity, residential mortgage, and consumer loans based on delinquency status rather than the assignment of loan specific risk ratings. The Company will

23

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

evaluate credit quality based on the aging status of the loan. The following tables present the amortized cost of these loans based on payment activity, by origination year

	September 30, 2023
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2023		2022		2021		2020		2019		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Residential real estate - First liens
Performing	$	14,757	$	40,742	$	51,889	$	20,584	$	9,512	$	27,507	$	6,021	$	—	$	171,012
Nonperforming		—		—		—		104		211		1,154		—		—		1,469
Total Residential real estate - First liens	$	14,757	$	40,742	$	51,889	$	20,688	$	9,723	$	28,661	$	6,021	$	—	$	172,481
Residential real estate - First liens
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Residential real estate - Second liens and lines of credit
Performing		75		766		440		130		194		1,256		24,876		—		27,737
Nonperforming		—		—		—		—		—		29		90		14		133
Total Residential real estate - Second liens and lines of credit		75		766		440		130		194		1,285		24,966		14		27,870
Residential real estate - Second liens and lines of credit
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Consumer and other
Performing		1,930		169		70		70		17		9		9,553		—		11,818
Nonperforming		—		2		—		—		48		—		1		—		51
Total Consumer and other		1,930		171		70		70		65		9		9,554		—		11,869
Consumer and other
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Total
Performing	$	16,762	$	41,677	$	52,399	$	20,784	$	9,723	$	28,772	$	40,450	$	—	$	210,567
Nonperforming		—		2		—		104		259		1,183		91		14		1,653
Total	$	16,762	$	41,679	$	52,399	$	20,888	$	9,982	$	29,955	$	40,541	$	14	$	212,220

The Company may modify loans to borrowers experiencing financial difficulty by providing principal forgiveness, term extension, interest rate reduction or an other-than-insignificant payment delay. When principal forgiveness is provided, the amount of forgiveness is charged off against the allowance for credit losses. The Company may also provide multiple types of modifications on an individual loan. For the nine months ended September 30, 2023, the Company did not extend any modifications to borrowers experiencing financial difficulty that had a more-than-insignificant direct change in the contractual cash flows of the loan.

24

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

Allowance for loan losses

Prior to the adoption of ASC 326 on January 1, 2023, the Company calculated the allowance for loan losses using the incurred losses methodology. The following tables are disclosures related to the allowance for loan losses in prior periods.

The following table summarizes the activity in the allowance for loan losses by loan class for the three and nine month periods ended September 30, 2022.

	Agriculture Loans		Commercial and PPP Loans			Commercial Real Estate Loans			Residential Real Estate Loan			Consumer Loans		Municipal Loans		Unallocated Loans			Total
(In Thousands)	For the Three Months Ended September 30, 2022
Allowance for loan losses:
Beginning balance	$	17	$	506		$	1,786		$	1,547		$	21	$	13	$	—		$	3,890
Charge-offs		—		—			—			—			—		—		—			—
Recoveries		—		25			—			139			—		—		—			164
Provision		21		96			427			(43	)		12		2		—			515
Ending balance	$	38	$	627		$	2,213		$	1,643		$	33	$	15	$	-		$	4,569
(In Thousands)	For the Nine Months Ended September 30, 2022
Allowance for loan losses:
Beginning balance	$	23	$	582		$	799		$	1,634		$	22	$	15	$	77		$	3,152
Charge-offs		—		(1	)		(1	)		—			—		—		—			(2	)
Recoveries		—		32			—			195			2		—		—			229
Provision		15		14			1,415			(186	)		9		—		(77	)		1,190
Ending balance	$	38	$	627		$	2,213		$	1,643		$	33	$	15	$	-		$	4,569

The following table illustrates the balance of loans individually evaluated vs. collectively evaluated for impairment at December 31, 2022.

	Agriculture Loans		Commercial and PPP Loans		Commercial Real Estate Loans		Residential Real Estate Loan		Consumer Loans		Municipal Loans		Unallocated Loans		Total
(In Thousands)	As of December 31, 2022
Allowance for loan losses:
Ending balance	$	33	$	583	$	2,462	$	1,536	$	40	$	12	$	—	$	4,666
Ending balance: individually    evaluated for impairment	$	—	$	20	$	—	$	—	$	—	$	—	$	—	$	20
Ending balance: collectively evaluated    for impairment	$	33	$	563	$	2,462	$	1,536	$	40	$	12	$	—	$	4,646
Loans:
Ending balance	$	15,591	$	104,755	$	540,914	$	250,832	$	10,057	$	5,466			$	927,615
Ending balance: individually    evaluated for impairment	$	300	$	55	$	2,306	$	4,652	$	—	$	—			$	7,313
Ending balance: loans acquired with deteriorated credit    quality	$	—	$	—	$	2,227	$	182	$	—	$	—			$	2,409
Ending balance: collectively evaluated    for impairment	$	15,291	$	104,700	$	536,381	$	245,998	$	10,057	$	5,466			$	917,893

25

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

Credit Quality Information

The following tables represent credit exposures by internally assigned grades as of December 31, 2022. The grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled or at all.

The Company’s internally assigned grades are as follows:

Pass – loans that are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral. There are four sub-grades within the Pass category to further distinguish the loan.

Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected.

Substandard – loans that have a well-defined weakness based on objective evidence and are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

Doubtful – loans classified as Doubtful have all the weaknesses inherent in a Substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.

Loss – loans classified as a Loss are considered uncollectible and are immediately charged against allowances.

The following table presents the classes of the loan portfolio summarized by the internal risk rating system as of December 31, 2022:

(In Thousands)			Special
As of December 31, 2022	Pass		Mention		Substandard		Doubtful		Total
Agriculture loans	$	15,291	$	—	$	300	$	—	$	15,591
Commercial and PPP		101,980		2,721		54		—		104,755
Commercial real estate loans		533,864		2,516		4,534		—		540,914
Residential real estate loans		246,028		207		4,597		—		250,832
Consumer loans		10,057		—		—		—		10,057
Municipal loans		5,466		—		—		—		5,466
Total	$	912,686	$	5,444	$	9,485	$	—	$	927,615

The following table presents an aging analysis of the recorded investment of past due loans at December 31, 2022.

	December 31, 2022
(In Thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Purchased Credit Impaired Loans		Total   Loans		Total > 90 Days and   Accruing
Agriculture loans	$	193	$	48	$	149	$	390	$	15,201	$	—	$	15,591	$	149
Commercial and PPP loans		111		21		54		186		104,569		—		104,755		54
Commercial real estate loans		863		88		190		1,141		537,546		2,227		540,914		—
Residential real estate loans		2,474		137		1,176		3,787		246,863		182		250,832		540
Consumer loans		254		58		—		312		9,745		—		10,057		—
Municipal loans		—		—		—		—		5,466		—		5,466		—
Total	$	3,895	$	352	$	1,569	$	5,816	$	919,390	$	2,409	$	927,615	$	743

26

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

Impaired Loans

The following tables present the recorded investment and unpaid principal balances for impaired loans and related allowance, if applicable. Also presented are the average recorded investments and the related amount of interest recognized during the time within the period that the impaired loans were impaired.

	As of December 31, 2022
(In Thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Agriculture loans	$	300	$	300	$	—
Commercial loans		35		55		—
Commercial real estate loans		2,306		2,312		—
Residential real estate loans		4,652		4,683		—
Consumer loans		—		—		—
Municipal loans		—		—		—
With an allowance recorded:
Agriculture loans	$	—	$	—	$	—
Commercial loans		20		20		20
Commercial real estate loans		—		—		—
Residential real estate loans		—		—		—
Consumer loans		—		—		—
Municipal loans		—		—		—
		—		—		—
Total
Agriculture loans	$	300	$	300	$	—
Commercial loans		55		75		20
Commercial real estate loans		2,306		2,312		—
Residential real estate loans		4,652		4,683		—
Consumer loans		—		—		—
Municipal loans		—		—		—
	$	7,313	$	7,370	$	20

27

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2022				2022
(In Thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Agriculture loans	$	133	$	5	$	210	$	8
Commercial loans		37		—		35		—
Commercial real estate loans		2,421		65		2,451		100
Residential real estate loans		2,986		36		3,048		57
Consumer loans		—		—		—		—
Municipal loans		—		—		—		—
		5,577		106		5,744		165
With an allowance recorded:
Agriculture loans	$	—	$	—	$	—	$	—
Commercial loans		—		—		—		—
Commercial real estate loans		—		—		—		—
Residential real estate loans		174		3		175		5
Consumer loans		2		—		2		—
Municipal loans		—		—		—		—
		176		3		177		5
Total	$	5,753	$	109	$	5,921	$	170

The following table presents nonaccrual loans by classes of the loan portfolio:

(In Thousands)	December 31, 2022
Commercial and PPP loans	$	35
Commercial real estate loans		231
Residential real estate loans		1,652
Consumer loans		—
Total	$	1,918

The above nonaccrual loans as of December 31, 2022 excludes PCI loans with a total balance of $2,409. Management does not consider these loans to be non-performing as they are accounted for under the accretable yield method and are performing in line with expectations as of December 31, 2022.

At December 31, 2022, the carrying amount of borrowings secured by loans pledged to the FHLB under its blanket lien was $0.

Loan Modifications and Troubled Debt Restructurings (TDRs)

A loan is considered to be a TDR loan when the Company grants a concession to the borrower because of the borrower’s financial condition that it would not otherwise consider. Such concessions include the reduction of interest rates, forgiveness of principal or interest, or other modifications of interest rates that are less than the current market rate for new obligations with similar risk.

The Bank may grant a concession or modification for economic or legal reasons related to a borrower’s financial condition that it would not otherwise consider resulting in a modified loan which is then identified as a troubled debt restructuring (TDR). The Bank may modify loans through rate reductions, extensions of maturity, interest only payments, or payment modifications to better match the timing of cash flows due under the modified terms with the cash flows from the borrowers’ operations. Loan modifications are intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. TDRs are considered impaired loans for purposes of calculating the Bank’s allowance for loan losses.

28

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

The Bank identifies loans for potential restructure primarily through direct communication with the borrower and evaluation of the borrower’s financial statements, revenue projections, tax returns, and credit reports. Even if the borrower is not presently in default, management will consider the likelihood that cash flow shortages, adverse economic conditions, and negative trends may result in a payment default in the near future. As of December 31, 2022, the Company had no loans identified as TDRs.

5.DEPOSITS

Deposit accounts are summarized as follows:

	September 30, 2023					December 31, 2022
(In Thousands)	Amount		%			Amount		%
Demand, noninterest-bearing	$	210,404		20.20	%	$	192,773		20.36	%
Demand, interest-bearing		273,673		26.26			254,478		26.88
Money market and savings		258,334		24.80			228,048		24.09
Time deposits, $250 and over		51,563		4.95			45,616		4.82
Time deposits, other		247,798		23.79			225,857		23.86
	$	1,041,772		100.0	%	$	946,772		100.0	%

Within time deposits, other, there were $75,000 and $70,000 in brokered deposits outstanding at September 30, 2023 and December 31, 2022, respectively. The brokered deposits outstanding at September 30, 2023 matured in October 2023.

29

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

6.BORROWINGS AND SUBORDINATED DEBENTURES

Borrowings and subordinated debt were as follows:

(in Thousands)	September 30, 2023		December 31, 2022
Subordinated Debt	$	40,354	$	40,484
Short-term borrowings		15,000		20,938
Total	$	55,354	$	61,422

Subordinated Notes Sale - 2022

On April 8, 2022, LINKBANCORP entered into Subordinated Note Purchase Agreements (the “Agreements”) with certain institutional accredited investors (the “Purchasers”) and, pursuant to the Agreements, issued to the Purchasers $20,000 in aggregate principal amount of its 4.50% Fixed-to-Floating Rate Subordinated Notes due 2032 (the “Notes”). The investors included a related party entity that is controlled by a member of the Board of Directors of the Company, which purchased $7,000 in principal amount of the note. During the year ended December 31, 2022, the Company contributed $15,000 of the subordinated note proceeds to the Bank as equity capital, the impact of which can be seen within Note 9 Regulatory Capital Requirements later in this document.

The Notes are intended to qualify at the holding company level as Tier 2 capital under the capital guidelines of the Federal Reserve Board.

The Notes, which mature on April 15, 2032, bear interest at a fixed annual rate of 4.50% for the period up to but excluding April 15, 2027 (the “Fixed Interest Rate Period”). From April 15, 2027 until maturity or redemption (the “Floating Interest Rate Period”), the interest rate will adjust to a floating rate equal to a benchmark rate, which is expected to be the then-current three-month Secured Overnight Financing Rate (SOFR), plus 203 basis points. The Company will pay interest in arrears semi-annually during the Fixed Interest Rate Period and quarterly during the Floating Interest Rate Period. The Notes constitute unsecured and subordinated obligations of the Company and rank junior in right of payment to any senior indebtedness and obligations to general and secured creditors. Subject to limited exceptions, the Company cannot redeem the Notes before the fifth anniversary of the issuance date.

The Agreements and Notes contain customary subordination provisions, representations and warranties, covenants, and events of default.

Short-term Borrowings - FHLB Advances

The Company had $15,000 and $20,938 in short-term FHLB Advances outstanding at September 30, 2023 and December 31, 2022, respectively. These advances have scheduled maturities less than a year. Our balance as of September 30, 2023 represents a single FHLB advance with a one-month maturity, however, as part of our interest rate swap transaction, the Company has committed to maintain either one-month advances from the FHLB or brokered deposits with a duration of one month through May of 2028. See Note 12 for more detail on an interest rate swap transaction regarding FHLB advances.

Available Lines of Credit

The Bank has available unsecured lines of credit, with interest based on the daily Federal Funds rate, with four correspondent banks totaling $51,000 at September 30, 2023. There were no borrowings under these lines of credit at September 30, 2023 and December 31, 2022.
 

7.FAIR VALUE MEASUREMENTS

Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent weaknesses in an estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts The Company could have realized in a sales transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective year-ends and have not been re-evaluated or updated for purposes of these financial statements subsequent to those respective dates. As such, the estimated fair values of

30

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each year-end.

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with the fair value measurements accounting guidance (FASB ASC 820, Fair Value Measurements), the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

The Company uses a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value guidance establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

The following disclosures show the hierarchal disclosure framework associated with the level of pricing observations utilized in measuring assets and liabilities at fair value. The three broad levels of pricing are as follows:

Level I:	Quoted prices are available in active markets for identical assets or liabilities as of the reported date.
Level II:	Pricing inputs are other than the quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities includes items for which quoted prices are available but traded less frequently and items that are fair-valued using other financial instruments, the parameters of which can be directly observed.
Level III:	Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

This hierarchy requires the use of observable market data when available.

The estimated fair values of the Company’s financial instruments that are not required to be measured or reported at fair value are as follows:

	At September 30, 2023				At December 31, 2022
(In Thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Cash and cash equivalents (Level 1)	$	67,979	$	67,979	$	30,011	$	30,011
Certificates of deposit with other banks (Level 3)		249		249		5,623		5,590
Securities held to maturity (Level 2)		37,778		34,588		31,822		30,080
Loans (Level 3)		978,912		920,526		927,871		886,944
Derivative (Level 3)		3,264		3,264		—		—
Accrued interest receivable (Level 1)		4,767		4,767		4,661		4,661
Restricted investments in bank stock (Level 1)		3,107		3,107		3,377		3,377
Cash surrender value of life insurance (Level 1)		24,732		24,732		19,244		19,244
Financial liabilities:
Non-maturity deposits (Level 1)		742,411		742,411		675,299		675,299
Time Deposits (Level 3)		299,361		296,799		271,473		266,775
Other borrowings (Level 3)		15,000		15,000		20,938		20,938
Subordinated Notes (Level 3)		40,354		35,796		40,484		35,966
Accrued interest payable (Level 1)		1,166		1,166		797		797

31

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

The following tables present the assets reported on the Consolidated Balance Sheet at their fair value on a recurring basis as of September 30, 2023 and December 31, 2022, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The Company’s available-for-sale investment securities are reported at fair value. These securities are valued by an independent third party. The valuations are based on market data. The valuations utilize evaluated pricing models that vary by asset and incorporate available trade, bid and other market information. For securities that do not trade on a daily basis, their evaluated pricing applications apply available information such as benchmarking and matrix pricing. The market inputs normally sought in the evaluation of securities include benchmark yields, reported trades, broker/dealer quotes (only obtained from market makers or broker/dealers recognized as market participants), issuer spreads, two-sided markets, benchmark securities, bid, offers and reference data. For certain securities additional inputs may be used or some market inputs may not be applicable. Inputs are prioritized differently on any given day based on market conditions.

	September 30, 2023
(In Thousands)	Level I		Level II		Level III		Total
Assets:
US government agency securities	$	—	$	1,982	$	—	$	1,982
Small Business Administration loan pools		—		679		—		679
Obligations of state and political subdivisions		—		39,679		—		39,679
Mortgage backed securities in government-sponsored entities		—		36,439		—		36,439
Total	$	—	$	78,779	$	—	$	78,779
	December 31, 2022
(In Thousands)	Level I		Level II		Level III		Total
Assets:
Small Business Administration loan pools	$	—	$	843	$	—	$	843
Obligations of state and political subdivisions		—		40,169		—		40,169
Mortgage backed securities in government-sponsored entities		—		37,801		—		37,801
Total	$	—	$	78,813	$	—	$	78,813

For financial assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used as of September 30, 2023 and December 31, 2022 are presented in the table below.

	September 30, 2023
(In Thousands)	Level I		Level II		Level III		Total
Loans individually evaluated	$	—	$	—	$	9,523	$	9,523
	December 31, 2022
(In Thousands)	Level I		Level II		Level III		Total
Loans individually evaluated	$	—	$	—	$	7,313	$	7,313

32

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

The following tables provide information describing the valuation processes used to determine nonrecurring fair value measurements categorized within Level III of the fair value hierarchy:

	September 30, 2023
	Quantitative Information About Level III Fair Value Measurements
(In Thousands)	Fair Value		Valuation Techniques			Unobservable Input	Range (Weighted Average)
Loans individually evaluated	$	9,523	Appraisal of collateral	(1	)	Liquidation expenses		10	%
	December 31, 2022
	Quantitative Information About Level III Fair Value Measurements
(In Thousands)	Fair Value		Valuation Techniques			Unobservable Input	Range (Weighted Average)
Loans individually evaluated	$	7,313	Appraisal of collateral	(1	)	Liquidation expenses		10	%

(1)Fair value is generally determined through independent appraisals of the underlying collateral, which include various Level III inputs that are not identifiable.

Appraisals may be adjusted by management for qualitative factors, such as economic conditions, aging, and/or estimated liquidation expenses incurred when selling the collateral. The range and weighted average of appraisal adjustments and liquidation expenses are presented as a percentage of the appraisal.

33

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

8.STOCK-BASED COMPENSATION

The LINKBANCORP, Inc. 2019 Equity Incentive Plan (the "2019 Plan") authorized the issuance or delivery to participants of up to 450,000 shares of LINKBANCORP common stock pursuant to grants of incentive and non-statutory stock options. The Plan is administered by the members of LINKBANCORP’s Compensation Committee (the "Committee"). Unless the Committee specified a different vesting schedule, awards under the Plan were granted with a vesting rate of 20 percent per year. Vesting may be accelerated under certain conditions or at the discretion of the Committee at any time. Employees and directors of LINKBANCORP or its subsidiaries were eligible to receive awards under the plan, except that nonemployees were not granted incentive stock options. Stock options are either “incentive” stock options or “nonqualified” stock options. Incentive stock options have certain tax advantages and must comply with the requirements of Section 422 of the Internal Revenue Code. The 2019 Plan was frozen such that no new awards would be granted under the 2019 Plan following receipt of shareholder approval of the LINKBANCORP, Inc. 2022 Equity Incentive Plan described within this footnote.

On May 26, 2022, the Company's shareholders approved the LINKBANCORP, Inc. 2022 Equity Incentive Plan (the "2022 Plan"). The 2022 Plan authorizes the issuance or delivery to participants of up to 475,000 shares of the Company's common stock pursuant to grants of restricted stock, restricted stock units, stock options, and non-qualified stock options. The 2022 Plan is administered by the members of LINKBANCORP’s Compensation Committee (the "Committee"). At least 95% of the awards under the 2022 Plan will vest no earlier than one year after the grant date.

The table below provides details of the Company's stock options at September 30, 2023.

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term in Years		Aggregate Intrinsic Value (in ‘000s)
Outstanding, December 31, 2022		490,000		$	10.11		7.0	$	33
Granted		60,000			7.00		9.9		—
Expired/terminated		(36,000	)		10.45		—
Exercised		—			—		—
Outstanding, September 30, 2023		514,000		$	9.72		7.0	$	—
Exercisable at period end		260,000		$	10.16		5.8	$	—

The exercise prices for options outstanding as of September 30, 2023 ranged from $7.00 to $14.50.

The table below provides details of the Company's restricted shares activity at September 30, 2023.

	Number of Shares		Average Market Price at Grant
Outstanding, December 31, 2022		—
Granted		87,000	$	7.00
Expired/terminated		—
Outstanding, September 30, 2023		87,000	$	7.00

The Company recognized stock-based compensation expense of $38 and $96 for the three and nine months ended September 30, 2023 and $19 and $59 for the three and nine months ended September 30, 2022, respectively. At September 30, 2023, the total unrecognized stock-based compensation costs totaled $200 and will be recognized ratably as expense through December 31, 2027.

9.REGULATORY CAPITAL REQUIREMENTS

The Bank is subject to various regulatory capital requirements administered by the Federal Deposit Insurance Corporation and the Pennsylvania Department of Banking and Securities. Failure to meet minimum capital requirements can initiate certain mandatory, and possible additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on

34

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk-weightings, and other factors.

The Bank is subject to regulatory capital requirements administered by banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings, and other factors and the regulators can lower classifications in certain cases. Failure to meet various capital requirements can initiate regulatory action that could have a direct material effect on the financial statements. As of September 30, 2023, the Bank has met all capital adequacy requirements to which it is subject.

The prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, under-capitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If an institution is adequately capitalized, regulatory approval is required before the institution may accept brokered deposits. If an institution is undercapitalized, capital distributions are limited, as is asset growth and expansion, and plans for capital restoration are required.

The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of Common Equity Tier 1 capital to risk-weighted assets above the minimum but below the conservation buffer will face limitations on dividends, stock repurchases and certain discretionary bonus payments to management based on the amount of the shortfall. Under Basel III rules, banks must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The required capital conservation buffer is 2.50%.

The following table presents actual and required capital ratios as of September 30, 2023 and December 31, 2022 under the Basel III Capital Rules. Bank capital levels required to be considered well capitalized are based upon prompt corrective action regulations.

	September 30, 2023					December 31, 2022
(In Thousands)	Amount		Ratio			Amount		Ratio
Total capital
(to risk-weighted assets)
Actual	$	133,547		12.92	%	$	125,632		12.89	%
For capital adequacy purposes		82,664		8.00			77,953		8.00
To be well capitalized		103,331		10.00			97,441		10.00
Tier 1 capital
(to risk-weighted assets)
Actual	$	127,823		12.37	%	$	120,912		12.41	%
For capital adequacy purposes		61,998		6.00			58,465		6.00
To be well capitalized		82,664		8.00			77,953		8.00
Common equity
(to risk-weighted assets)
Actual	$	127,823		12.37	%	$	120,912		12.41	%
For capital adequacy purposes		46,499		4.50			43,848		4.50
To be well capitalized		67,165		6.50			63,337		6.50
Tier 1 capital
(to average assets)
Actual	$	127,823		10.71	%	$	120,912		10.93	%
For capital adequacy purposes		47,727		4.00			44,248		4.00
To be well capitalized		59,658		5.00			55,311		5.00

The federal banking agencies, including the FDIC, issued a rule pursuant to The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 to establish for institutions with assets of less than $10 billion a “community bank leverage ratio” (the ratio of a bank’s tier 1 capital to average total consolidated assets) of 9% that qualifying institutions may elect to use in lieu of the generally applicable leverage and risk-based capital requirements under Basel III. If an election to use the community bank leverage ratio capital framework is made, a qualifying bank with less than $10 billion in assets with capital exceeding the specified community bank leverage ratio is considered compliant with all applicable regulatory capital and

35

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

leverage requirements, including the requirement to be “well capitalized.” As of September 30, 2023 and December 31, 2022, the Bank had not elected to be subject to the alternative framework.

Federal and state banking regulations place certain restrictions on dividends paid by the Bank. The Pennsylvania Banking Code provides that cash dividends may be declared and paid out of accumulated net earnings. In addition, dividends paid by the Bank would be prohibited if the effect thereof would cause the Bank’s capital to be reduced below applicable minimum capital requirements. Loans or advances by the Bank to the Company are limited to 10 percent of the Bank’s capital stock and surplus and must have collateral securing the loans or advances.

The Federal Reserve and the FDIC have adopted a rule that provides a banking organization the option to phase-in over a three-year period the effects of CECL on its regulatory capital upon the adoption of the CECL standard. The Company opted to exercise this phase-in option.

36

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

10.FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making and monitoring commitments and conditional obligations as it does for on-balance sheet instruments. As of September 30, 2023 and December 31, 2022, the Company has an allowance for credit losses for off-balance sheet instruments of $904 and $54, respectively, included within the liabilities section of the balance sheet. The corresponding credit to provision for credit losses for the three and nine months ended September 30, 2023 was $0 and $60, respectively. The provision for credit losses for both the three and nine months ended September 30, 2022 was $0.

At September 30, 2023 and December 31, 2022, the following financial instruments were outstanding whose contract amounts represent credit risk:

(In Thousands)	September 30, 2023		December 31, 2022
Unfunded commitments under lines of credit:
Home equity loans	$	46,960	$	43,798
Commercial real estate, construction, and land development		60,239		62,146
Commercial and industrial		144,736		125,205
Total	$	251,935	$	231,149

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Company evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation. Collateral held varies but may include personal or commercial real estate, accounts receivable, inventory, and equipment.

37

LINKBANCORP, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

[In Thousands, Except Share Data]

11.EARNINGS PER SHARE

The following table sets forth the composition of earnings per share:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In Thousands, except share and per share data)	2023		2022		2023		2022
Net income	$	1,240	$	1,772	$	1,033	$	4,902
Basic weighted average common shares outstanding		16,235,144		10,590,079		15,984,151		10,087,341
Net effect of dilutive stock options and warrants		—		—		—		49,116
Net effect of dilutive restricted stock awards		—		—		—		—
Diluted weighted average common shares outstanding		16,235,144		10,590,079		15,984,151		10,136,457
Net income per common share:
Basic	$	0.08	$	0.17	$	0.06	$	0.49
Diluted	$	0.08	$	0.17	$	0.06	$	0.48

The following is a summary of securities that could potentially dilute basic earnings per common share in future periods that were included in the computation of diluted earnings per common share in the periods presented.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Stock Options		—		—		—		—
Warrants		—		—		—		1,537,484
Restricted Stock Awards		—		—		—		—
Total dilutive securities		—		—		—		1,537,484

The following is a summary of securities that could potentially dilute basic earnings per share in future periods that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the periods presented.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Stock Options		260,000		195,700		260,000		195,700
Warrants		1,537,484		1,537,484		1,537,484		—
Restricted Stock Awards		87,000		—		87,000		—
Total anti-dilutive securities		1,884,484		1,733,184		1,884,484		195,700

38

12.DERIVATIVES

During the second quarter of 2023 the Company entered into a pay fixed / received variable interest rate swap with a notional amount of $75,000 which has a fixed rate of 3.28%, a maturity of five years and is designated against either a mix of one-month FHLB advances or brokered certificates of deposit. The Company will utilize, from time to time, interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. At September 30, 2023, the derivative contract is used to hedge the variable cash flows associated with monthly brokered deposits.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income (loss) and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in Accumulated Other Comprehensive Income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. The amounts reclassified to interest expense were ($375) and ($572) for the three and nine months ended September 30, 2023. Over the next 12 months, the Company estimates that an additional $1.5 million will be reclassified as a reduction to interest expense.

The Company recorded $3.3 million within other assets on the Consolidated Balance Sheet, which represented the fair value of this derivative at September 30, 2023.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion and analysis reflects the Company’s consolidated financial statements and other relevant statistical data and is intended to enhance your understanding of the Company’s consolidated financial condition and results of operations. This Management’s Discussion and Analysis is presented in the following sections:

•Forward Looking Statements

•Overview and Strategy

•Partners Merger

•Financial Highlights

•Comparison of Financial Condition at September 30, 2023 and December 31, 2022

•Comparison of Operating Results for the Three Months Ended September 30, 2023 and 2022.

•Comparison of Operating Results for the Nine Months Ended September 30, 2023 and 2022.

•Liquidity, Commitments, and Capital Resources

•Off-Balance Sheet Arrangements

•Critical Accounting Estimates

•Recently Issued Accounting Standards

Forward Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect” or words of similar meaning, or future or conditional verbs, such as “will,” “would,” “should,” “could,” or “may.” A forward-looking statement is neither a prediction nor a guarantee of future events. These forward-looking statements include, but are not limited to:

•statements of our goals, intentions and expectations;

•statements regarding our business plans, prospects, growth and operating strategies;

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•statements regarding the quality of our loan and investment portfolios; and

•estimates of our risks and future costs and benefits.

These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

•inflation and changes in market interest rates that reduce our margins and yields, reduce the fair value of financial instruments or reduce our volume of loan originations, or increase the level of defaults, losses and prepayments on loans we have made and make, whether held in portfolio or sold in the secondary market;

•general economic conditions, either nationally or in our market area, that are worse than expected;

•competition within our market area that is stronger than expected;

•changes in the level and direction of loan delinquencies and charge-offs and changes in estimates of the adequacy of the allowance for credit losses;

•our ability to access cost-effective funding;

•fluctuations in real estate values and both residential and commercial real estate market conditions;

•demand for loans and deposits in our market area;

•our ability to continue to implement our business strategies;

•competition among depository and other financial institutions;

•recent events involving the failure of financial institutions may adversely affect our business, and the market price of our common stock;

•any future FDIC insurance premium increases, or special assessment may adversely affect our earnings;

•adverse changes in the securities markets;

•changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements;

•our ability to manage market risk, credit risk and operational risk;

•our ability to enter new markets successfully and capitalize on growth opportunities;

•the imposition of tariffs or other domestic or international governmental polices impacting the value of the products of our borrowers;

•the Partners Merger will not close when expected or at all because required regulatory or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all;

•our ability to successfully integrate into our operations GNBF’s assets, liabilities or systems we acquired, as well as new management personnel or customers, and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto;

•changes in consumer spending, borrowing and savings habits;

•our ability to maintain our reputation;

•our ability to prevent or mitigate fraudulent activity;

•changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board;

•our ability to retain key employees and our existing customers;

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•a breach in security of our information systems, including the occurrence of a cyber incident or a deficiency in cyber security;

•political instability or civil unrest;

•risks and uncertainties related to the Coronavirus Disease 2019 ("COVID-19") pandemic and resulting governmental and societal response and its effects on our business and operations;

•acts of war or terrorism;

•our ability to evaluate the amount and timing of recognition of future tax assets and liabilities;

•our compensation expense associated with equity benefits allocated or awarded to our employees; and

•changes in the financial condition, results of operations or future prospects of issuers of securities that we own.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. We disclaim any obligation to revise or update any forward-looking statements contained in this Quarterly Report on Form 10-Q to reflect future events or developments.

Overview and Strategy

The Company’s core strategy is to further its mission of “positively impacting lives” through community banking by building strong relationships that bring value to its customers, employees, the communities it serves and its shareholders. In pursuing this mission, the Company specifically desires to invest in the development of strong future leaders for the banking industry and our communities, to contribute to economically and socially flourishing communities, and to demonstrate the continued viability and integral role of community banking for our economic and social development.

The Company operates primarily through its wholly-owned subsidiary, LINKBANK, which provides traditional lending, deposit gathering and cash services to retail customers, small businesses and nonprofit organizations. The Bank focuses its lending activities on small businesses, targeted to create a diverse loan portfolio in relation to its underlying collateral and different business segments with unique cash flow generation and varied interest rate sensitivity. The Bank offers a full suite of deposit products and cash management services focused on the small business and nonprofit segments.

Our revenues consist primarily of interest income earned on loans and investments. Interest income is partially offset by interest expense incurred on deposits, borrowings and other interest-bearing liabilities. Net interest income is affected by the balances of interest-earning assets and interest-bearing liabilities and their relative interest rates. Net interest income is typically further reduced by a provision for credit losses.

Non-interest income also contributes to our operating results, consisting of service charges on deposit accounts, earnings on bank-owned life insurance, revenue from the sale of securities, and revenue from the sale of SBA loans and residential mortgage loans to the secondary market and related servicing fees. Non-interest expenses, which include salaries and employee benefits, occupancy and equipment costs, data processing, professional fees, FDIC insurance expense, merger and system conversion expense, and other general and administrative expenses, are the Company’s primary expenditures incurred as a result of operations.

Financial institutions, in general, are significantly affected by economic conditions, competition, and the monetary and fiscal policies of the federal government. Lending activities are influenced by the demand for and supply of housing and commercial real estate, competition among lenders, interest rate conditions, and funds availability. Our operations and lending are concentrated in South Central Pennsylvania in Dauphin, Chester, Cumberland, Lancaster, Northumberland, Schuylkill, and York Counties, and are influenced by local economic conditions. Deposit balances and cost of funds are influenced by prevailing market rates on competing investments, customer preferences, and levels of personal income and savings in our primary market area. Operations are also significantly impacted by government policies and actions of regulatory authorities. Future changes in applicable law, regulations or government policies may materially impact the Company.

Partners Merger

On February 22, 2023, the Company and Partners Bancorp entered into the Merger Agreement that provides that Partners Bancorp will merge with and into the Company, with the Company as the surviving corporation (the “Partners Merger”). Partners Bancorp shareholders will receive 1.15 shares of Company common stock for each Partners Bancorp share they own. Following the Partners Merger, Partners Bancorp’s two bank subsidiaries, The Bank of Delmarva and Virginia Partners Bank, will each merge with and into LINKBANK, with LINKBANK remaining as the surviving bank (the “Bank Mergers”). On June 22, 2023, shareholders of the Company and Partners Bancorp each approved the Partners Merger. The completion of the Partners Merger and the Bank Mergers is subject to customary closing conditions, including the receipt of regulatory approvals. On October 13, 2023, the Company and Partners announced the receipt of FDIC and state regulatory approvals for the Partners Merger. However, the Partners Merger remains

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subject to the approval of the Board of Governors of the Federal Reserve System. The Partners Merger is expected to close in the fourth quarter of 2023.

Financial Highlights

The following is a summary of the financial highlights as of and for the three and nine months ended September 30, 2023:

•Quarterly Net Income and Net Income Per Share - Net income was $1.2 million for the three months ended September 30, 2023, a $532 thousand decrease from the same period in 2022 and a $107 thousand decrease from the three months ended June 30, 2023 ("Linked Quarter"). Diluted net income per share was $0.08 for the three months ended September 30, 2023, compared to $0.17 per diluted share for the comparable period in 2022 and $0.08 per diluted share for the three months ended June 30, 2023.

•YTD Net Income - Net income was $1.0 million for the nine months ended September 30, 2023, a $3.9 million decrease from net income of $4.9 million for the same period in 2022.

•Net Interest Income - Net interest income before provision for credit losses decreased $318 thousand or 3.7% for the three months ended September 30, 2023 compared to the same period in 2022. Net interest margin for the third quarter of 2023 totaled 2.89%, representing a 62 basis points decrease over the same period in 2022. Compared to the Linked Quarter, net interest income before provision for credit losses increased $263 thousand and net interest margin increased eight basis points.

•Loan Growth - Total gross loans held for investment grew by $9.4 million during the third quarter of 2023 to $978.9 million at September 30, 2023, equating to an annualized growth rate of approximately 3.84%.

•Deposit Growth - Total deposits grew by $6.9 million during the third quarter of 2023 to $1.04 billion at September 30, 2023, equating to an annualized growth rate of approximately 2.66%.

See the sections below for a complete analysis of the results of operations for both the three and nine months ended September 30, 2023.

Comparison of Financial Condition at September 30, 2023 and December 31, 2022

Total assets at September 30, 2023, were $1.26 billion, an increase of $92 million, or 7.9%, from $1.16 billion at December 31, 2022. The increase in total assets was primarily due to an increase in cash and cash equivalents of $38.0 million, from $30.0 million at December 31, 2022 to $68.0 million at September 30, 2023, an increase in securities held to maturity from $31.8 million at December 31, 2022 to $37.8 million at September 30, 2023, and an increase in net loans receivable of $45.7 million, or 5.0%, from $923.2 million at December 31, 2022 to $968.9 million at September 30, 2023.

Cash and cash equivalents increased $38.0 million, or 126.5%, from $30.0 million at December 31, 2022 to $68.0 million at September 30, 2023. The increase was primarily due to:

Primary Cash Inflows

•Net increase in deposits of $95.0 million;

•Cash received from investment securities (sales, calls, maturities, and principal repayments) of $9.9 million;

•Cash received from redemptions of certificates of deposit with other banks of $5.4 million;

•Proceeds from the issuance of common stock of $10.0 million; and

•Cash from operating activities of $3.3 million.

Primary Cash Outflows

•Net increase in cash funding of loans receivable of $49.6 million;

•Purchase of investment securities held to maturity of $11.3 million;

•Purchase of investment securities available for sale of $9.8 million;

•Purchase of bank owned life insurance of $5.0 million;

•Net decrease in borrowings of $5.9 million; and

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•Payment of dividends of $3.7 million.

Securities available-for-sale decreased by $34 thousand, with a balance of $78.8 million at both September 30, 2023 and December 31, 2022. The decrease was due to calls/repayments totaling $5.6 million, a decrease in the fair value of our securities of $2.4 million as a result of changes in market conditions, and sales of existing securities of $1.8 million, partially offset by purchases of investment securities of $9.8 million. Securities held to maturity increased $6.0 million, or 18.7% to $37.8 million at September 30, 2023 from $31.8 million at December 31, 2022. This increase was primarily the result of purchases of investment securities of $11.3 million, partially offset by principal repayments of $2.4 million and the sale of one security with a purchase value of $3.0 million that was related to a failed financial institution resulting in a loss recognized of $2.4 million.

Net loans receivable increased during the nine months ended September 30, 2023 as shown in the table below:

(dollars in thousands)	September 30, 2023			December 31, 2022			Change			%
Agriculture loans	$	50,584		$	55,746		$	(5,162	)		(9.26	)%
Construction loans		65,836			57,713			8,123			14.07
Commercial loans		115,572			104,755			10,817			10.33
Commercial real estate loans
Multifamily		111,853			105,390			6,463			6.13
Owner occupied		160,929			139,554			21,375			15.32
Non-owner occupied		257,344			245,274			12,070			4.92
Residential real estate loans
First liens		172,481			168,084			4,397			2.62
Second liens and lines of credit		27,870			35,576			(7,706	)		(21.66	)
Consumer and other loans		11,869			10,057			1,812			18.02
Municipal loans		4,137			5,466			(1,329	)		(24.31	)
Total Loans		978,475			927,615			50,860			5.48
Deferred costs		437			256			181			70.70
Allowance for credit losses		(9,964	)		(4,666	)		(5,298	)		113.54
Total	$	968,948		$	923,205			45,743			4.95	%

Commercial real estate loans increased $39.9 million during the first nine months of 2023. This growth was not attributable to any one significant relationship and was primarily the result of current balances of new loan originations of $40.0 million partially offset by normal net loan repayment activity. Construction loans increased $8.1 million during the first nine months of 2023 primarily due to draws on existing loans with new loan originations for the year to date adding $17.1 million to the balance. Commercial loans increased $10.8 million from December 31, 2022, resulting from $16.1 million in balances on newly originated loans offset by net loan repayments on existing loans.

The allowance for credit losses increased $5.3 million from $4.7 million at December 31, 2022 to $10.0 million at September 30, 2023. The primary driver of the increased allowance for credit losses related to loans was the adoption of the CECL accounting standard on January 1, 2023, which added $5.7 million. Refer to Notes 1 and 4 within the Consolidated Financial Statements for further information.

Asset quality remained strong at September 30, 2023 with non-performing loans, which is defined as non-accrual loans, and loans delinquent greater than 90 days and still accruing interest, was $3.0 million or 0.3% of total gross loans. This was compared to $2.7 million of non-performing loans at December 31, 2022, which equated to 0.29% of total gross loans. Additionally, our allowance for credit losses for loans totaled $10.0 million at September 30, 2023 and represented 1.02% to our total gross loans, which is an increase from 0.50% at December 31, 2022. The allowance for credit losses for loans does not include the unamortized credit discount on purchased loans from prior mergers which totaled $3.9 million and $5.0 million at September 30, 2023 and December 31, 2022, respectively. This significant increase in our allowance coverage was due to the adoption of CECL as of January 1, 2023. At September 30, 2023 and December 31, 2022, the Company had no other real estate owned.

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Deposits grew by $95.1 million, or 10%, from a total of $946.8 million at December 31, 2022 to $1.04 billion at September 30, 2023. Changes in the deposit types are presented in the table below:

(in thousands)	September 30, 2023		December 31, 2022		Change		%
Demand, noninterest-bearing	$	210,404	$	192,773	$	17,631		9.1	%
Demand, interest-bearing		273,673		254,478		19,195		7.5
Money market and savings		258,334		228,048		30,286		13.3
Time deposits, $250,000 and over		51,563		45,616		5,947		13.0
Time deposits, other		247,798		225,857		21,941		9.7
Total deposits	$	1,041,772	$	946,772	$	95,000		10.0	%

The increase of $36.8 million in demand deposits during the first nine months of 2023 was the result of new accounts opened during the first three quarters of 2023, partially offset by net decreases in existing account balances, with new accounts contributing approximately $70.5 million in balance at September 30, 2023. New accounts opened during the first three quarters of 2023 also explained the growth in money market and savings accounts, contributing $44.7 million to the overall balance growth of $30.3 million. Included in the time deposits balance above were brokered time deposits with a balance of $75.0 million and $70.0 million at September 30, 2023 and December 31, 2022, respectively.

The Company has estimated deposits that exceed the FDIC insurance limit of $250,000 of $414.4 million, or 39.8% of total deposits and $408.4 million, or 43.1% of total deposits at September 30, 2023 and December 31, 2022, respectively. Total uninsured deposits is calculated based on regulatory reporting requirements and reflects the portion of any deposit of a customer at an insured depository institution that exceeds the applicable FDIC insurance coverage for that depositor at that institution and amounts in any other uninsured investment or deposit accounts that are classified as deposits and not subject to any federal or state deposit insurance regime. As of September 30, 2023 and December 31, 2022, the total uninsured deposits includes $43.4 million and $36.8 million, respectively, of municipal deposits that exceed the FDIC insurance limits. These municipal deposits are fully secured with pledged securities from our available for sale securities portfolio.

At September 30, 2023 and December 31, 2022, other borrowings consisted of $15.0 million and $20.9 million, respectively in short-term FHLB advances. The advances outstanding as of September 30, 2023 are scheduled to mature in the fourth quarter of 2023. During the second quarter of 2023, the Company entered into a pay fixed/received variable interest rate swap with a notional amount of $75 million which has a fixed rate of 3.28%, and a maturity of five years. As part of the transaction, the Company will receive an offset to the interest incurred on either a mix of one-month FHLB advances or brokered certificates of deposit at a rate equal to one-month SOFR. Our time deposits balance as of September 30, 2023 contains $75 million of one-month maturity brokered deposits that matured in October 2023. As part of our interest rate swap transaction, the Company has committed to maintain either one-month advances from the FHLB or brokered deposits with a duration of one month through May 2028.

Subordinated debt with a fair value of $20.7 million was assumed as part of the Gratz Merger. These notes bear interest at a fixed interest rate of 5.0% per year for five years and then float at an index tied to the Secured Overnight Finance Rate ("SOFR"). The notes have a term of ten years, with a maturity date of October 1, 2030. The notes are redeemable at the option of the Company, in whole or in part, subject to any required regulatory approvals after five years, or October 1, 2025. Additionally, on April 8, 2022, LINKBANCORP issued subordinated debt with a carrying value of $20.0 million. These notes bear interest at a fixed annual rate of 4.50% per year up to April 15, 2027 and then float to an index tied to the three-month SOFR, plus 203 basis points. Subject to limited exceptions, the Company cannot redeem the notes before the fifth anniversary of the issuance date. The balance of subordinated debt was $40.4 million and $40.5 million at September 30, 2023 and December 31, 2022, respectively.

Total shareholders’ equity increased by $2.8 million, or 2.0%, from $138.6 million at December 31, 2022, to $141.4 million at September 30, 2023. The increase was primarily attributable to the net proceeds from the private placement of $10.0 million, net income of $1.0 million, and a $676 thousand decrease in accumulated other comprehensive loss during the first nine months of 2023 as a result of an unrealized gain on the interest rate swap, offset by decreases in fair market values of available for sale securities. These increases were offset by the cumulative effect adjustment from adoption of CECL of $5.4 million and dividends of $3.7 million for the nine months ended September 30, 2023.

Comparison of Results of Operations for the Three Months Ended September 30, 2023 and 2022

General: Net income was $1.2 million for the three months ended September 30, 2023, or $0.08 per diluted share, a decrease of $532 thousand compared to net income of $1.8 million, or $0.17 per diluted share, for the three months ended September 30, 2022.

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The decrease in net income for the three months ended September 30, 2023, as compared to the same prior year period was primarily the result of an increase in noninterest expense of $949 thousand and a decrease in net interest income before provision for credit losses of $318 thousand. Offsetting the decrease in net income was a credit to the provision for credit losses of $349 thousand for the three months ended September 30, 2023 as compared to a provision for credit losses of $515 thousand for the three months ended September 30, 2022, a decrease of $864 thousand.

Analysis of Net Interest Income

Net interest income represents the difference between the interest the Company earns on its interest-earning assets, such as loans and investment securities, and the expense the Company pays on interest-bearing liabilities, such as deposits and borrowings. Net interest income depends on both the volume of our interest-earning assets and interest-bearing liabilities and the interest rates the Company earns or pays on them. In general, the shift in the interest rate environment that began in March of 2022 resulted in higher interest rates earned on loans, securities, and interest-earning cash as well as higher interest rates paid on deposits and borrowed money when comparing the three months ended September 30, 2023 to the same period in 2022. Since December 31, 2021, the Federal Funds Target Rate rose from a range of 0.00% - 0.25% to a range of 3.00% - 3.25% as of September 30, 2022 and a range of 5.25% - 5.50% as of September 30, 2023. While this interest rate index is not used for all financial instruments, the interest rate indices and interest rate curves have increased over this same time horizon. The results of this overall upward shift in interest rates has generally caused net interest margins at financial institutions contract when comparing the third quarter of 2023 to the third quarter of 2022 as the cost of funds of financial institutions, generally, have risen at a faster pace than the yield on interest earning assets. As shown in the upcoming table and subsequent discussion, the Company experienced a similar trend whereby our average yield on interest earning assets increased 82 basis points when comparing the third quarter 2023 to the third quarter 2022, while our average cost of funds increased 155 basis points over that same period, resulting in a decrease to net interest margin of 62 basis points.

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Average Balances, Interest and Average Yields: The following table sets forth certain information relating to average balance sheets and reflects the average annualized yield on interest-earning assets and average annualized cost of interest-bearing liabilities, interest earned and interest paid for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of interest-earning assets or interest-bearing liabilities, respectively, for the periods presented. Average balances are derived from daily balances over the periods indicated. The average balances for loans are net of allowance for credit losses, but include non-accrual loans. The loan yields include net amortization of certain deferred fees and costs that are considered adjustments to yields. Yields on earning assets are shown on a fully taxable-equivalent basis assuming a tax rate of 21%.

	For the Three Months Ended September 30,
	2023								2022
(Dollars in thousands)	Avg Bal		Interest (2)			Yield/Rate			Avg Bal		Interest (2)			Yield/Rate
Int. Earn. Cash	$	55,514	$	577			4.12	%	$	30,630	$	157			2.03	%
Securities
Taxable (1)		82,499		833			4.01	%		86,330		745			3.42	%
Tax-Exempt		38,589		378			3.89	%		39,258		339			3.43	%
Total Securities		121,088		1,211			3.97	%		125,588		1,084			3.42	%
Total Cash Equiv. and Investments		176,602		1,788			4.02	%		156,218		1,241			3.15	%
Total Loans (3)		971,877		13,068			5.33	%		824,309		9,410			4.53	%
Total Interest-Earning Assets		1,148,479		14,856			5.13	%		980,527		10,651			4.31	%
Other Assets		97,995								93,116
Total Assets	$	1,246,474							$	1,073,643
Interest bearing demand	$	254,725	$	1,490			2.32	%	$	278,637	$	400			0.57	%
Money market demand		254,849		1,827			2.84	%		244,107		568			0.92	%
Time deposits		265,573		2,117			3.16	%		205,792		421			0.81	%
Total Borrowings (4)		102,669		992			3.83	%		52,562		521			3.93	%
Total Interest-Bearing Liabilities		877,816		6,426			2.90	%		781,098		1,910			0.97	%
Non Int Bearing Deposits		209,054								170,863
Total Cost of Funds	$	1,086,870	$	6,426			2.35	%	$	951,961	$	1,910			0.80	%
Other Liabilities		17,230								13,243
Total Liabilities	$	1,104,100							$	965,204
Shareholders' Equity	$	142,374							$	108,439
Total Liabilities & Shareholders' Equity	$	1,246,474							$	1,073,643
Net Interest Income/Spread (FTE)				8,430			2.23	%				8,741			3.34	%
Tax-Equivalent Basis Adjustment				(78	)							(71	)
Net Interest Income			$	8,352							$	8,670
Net Interest Margin							2.89	%							3.51	%
(1) Taxable income on securities includes income from available for sale securities and income from certificates of deposits with other banks.
(2) Income stated on a tax equivalent basis which is non-GAAP and is reconciled to GAAP at the bottom of the table.
(3) Includes the balances of nonaccrual loans.
(4) Includes the effect of the interest rate swap, which reduced interest expense by $375 thousand during the three months ended September 30, 2023.

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Rate/Volume Analysis

The following table reflects the sensitivity of the Company’s interest income and interest expense to changes in volume and in yields on interest-earning assets and costs of interest-bearing liabilities during the periods indicated.

	Three Months Ended September 30, 2023 vs. 2022 Increase (Decrease) Due To:
(Dollars in thousands)	Rate			Volume			Net
Interest Income:
Int. Earn. Cash	$	293		$	127		$	420
Securities
Taxable		121			(33	)		88
Tax-Exempt		45			(6	)		39
Total Securities		166			(39	)		127
Total Loans		1,973			1,685			3,658
Total Interest-Earning Assets		2,432			1,773			4,205
Interest Expense:
Interest bearing demand		1,124			(34	)		1,090
Money market demand		1,234			25			1,259
Time deposits		1,574			122			1,696
Total Borrowings		(25	)		496			471
Total Interest-Bearing Liabilities		3,907			609			4,516
Change in Net Interest Income	$	(1,475	)	$	1,164		$	(311	)

Net Interest Income: Net interest income decreased by $318 thousand, or 3.7%, to $8.4 million for the three months ended September 30, 2023, compared to $8.7 million for the three months ended September 30, 2022. The decrease can be attributed to an increase in the rate paid on deposits, and to a lesser extent, a higher average balance in interest bearing liabilities. The decrease caused by changes in funding liabilities were partially offset by an increase in the average yield on interest earning assets and an increase in interest income resulting from a higher average balance in interest-earning assets as compared to the same period in 2022. The net interest margin decreased 62 basis points to 2.89% for the three months ended September 30, 2023 from 3.51% for the three months ended September 30, 2022.

Interest Income: Interest income increased to $14.8 million for the three months ended September 30, 2023, compared with $10.6 million for the three months ended September 30, 2022 primarily due to an increase in interest income on loans as a result of the growth in average loans as well as the increase in average yields earned on all categories of interest earning assets. The growth in average balance of interest earning assets which increased $168.0 million to $1.1 billion for the three months ended September 30, 2023 compared to $980.5 million for the comparable period in 2022 contributed $1.8 million to the increase in interest income. The growth in the average balance of interest earning assets was due primarily to the increase in the average balance of loans which increased $147.6 million to $971.9 million for the three months ended September 30, 2023 as compared to the same period in 2022, as a result of growth in the commercial loan portfolio, which contributed $1.7 million to the increase in interest income. The average yield on loans increased 80 basis points on an annualized basis from 4.53% for the three months ended September 30, 2022 to 5.33% for the three months ended September 30, 2023, which contributed $2.0 million to the increase in interest income. Normal amortization of net loan discounts recorded as part of purchase accounting adjustments to loans acquired through the Gratz Merger contributed $346 thousand to interest income during the three months ended September 30, 2023. Overall the average yield of interest earning assets increased 82 basis points on an annualized basis to 5.13% for the three months ended September 30, 2023 as compared to the same period in 2022 due primarily to a larger concentration of interest earning assets in loans along with an increase in the average yield earned on loans.

Interest Expense: Interest expense increased by $4.5 million, or 236%, to $6.4 million for the three months ended September 30, 2023, compared to $1.9 million for the three months ended September 30, 2022. The increase in interest expense was primarily due to an increase in the average rates paid on interest-bearing liabilities. The average rate paid on interest-bearing liabilities increased 193 basis points on an annualized basis from 0.97% for the three months ended September 30, 2022 to 2.90% for the three months ended September 30, 2023 due to the increasing interest rate environment since September 30, 2022 and in particular its impact on deposit cost. This increase in interest expense was also impacted by an increase in the average balance of interest bearing liabilities, which increased $96.7 million to $877.8 million for the three months ended September 30, 2023 compared to $781.1 million for the three months ended September 30, 2022 as a result of the increase in the average balance of our deposits and borrowings. Interest expense on borrowings was reduced by $375 thousand due to the impact of the interest rate swap.

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Provision for Credit Losses: The provision for credit losses decreased by $864 thousand from a provision of $515 thousand for the three months ended September 30, 2022 to a credit to the provision of $349 thousand for the three months ended September 30, 2023. The credit to the provision for credit losses for the three months ended September 30, 2023 consisted of $275 thousand related to loans and $74 thousand related to held-to-maturity securities. The majority of the net credit to the provision for credit losses can be attributable to a decrease in the forecasted loss factors at September 30, 2023 when compared to the forecast at June 30, 2023. Additionally, the Company had net recoveries for the three mo3nths ended September 30, 2023 of $12 thousand, which contributed to the credit to the provision.

The Company completes a comprehensive quarterly evaluation to determine its provision for credit losses. The evaluation reflects analyses of individual borrowers and historical loss experience, and changes in net loan balances, supplemented as necessary by credit judgment that considers observable trends, conditions, and other relevant environmental and economic factors.

Refer to Note 4 of the Notes to the Consolidated Financial Statement for additional details on the provision for credit losses.

Non-interest Income: Non-interest income decreased by $161 thousand to $880 thousand for the three months ended September 30, 2023, from $1.0 million recognized during the same period of 2022. The decrease was primarily due to a decrease of $420 thousand in gain on sale of the guaranteed portion of SBA loans sold into the secondary market. This decrease was partially offset by an increase in other income of $256 thousand primarily due to the settlement of a legal matter.

Non-interest Expense: Non-interest expense increased $949 thousand, or 13.5%, from $7.0 million for the three months ended September 30, 2022, to $8.0 million for the three months ended September 30, 2023. The increase was largely due to: (1) an increase of $105 thousand in occupancy expense related to increased property maintenance costs, lease costs, and depreciation expense mostly related to our new corporate headquarters location and the Delaware Valley regional headquarters location; (2) an increase of $268 thousand in equipment and data processing; (3) an increase in FDIC insurance of $135 thousand and (4) an increase in merger related expenses of $777 thousand as a result of the Partners Merger which merger agreement was executed in the first quarter of 2023.

Income Tax Expense: Income tax expense for the three months ended September 30, 2023 totaled $347 compared to $379 thousand for the same period in 2022 as a result of a decrease in income before income tax expense. The income tax expense recognized for the three months ended September 30, 2023 and 2022 was the direct result of our net income adjusted for tax free income and non-deductible merger related expenses. We recognized an income tax expense for the three months ended September 30, 2023 at an effective tax rate of 21.9% which is greater than our statutory tax rate of 21% because of certain non-deductible merger related expenses incurred in preparation for our pending merger with Partners Bancorp. This is compared to income tax expense for the three months ended September 30, 2022 which resulted in an effective tax rate of 17.6%.

Comparison of Results of Operations for the Nine Months Ended September 30, 2023 and 2022

General: Net income was $1.0 million for the nine months ended September 30, 2023, or $0.06 per diluted share, a decrease of $3.9 million compared to net income of $4.9 million, or $0.48 per diluted share, for the nine months ended September 30, 2022.

The decrease in net income for the nine months ended September 30, 2023, as compared to the same prior year period was primarily the result of a decrease in noninterest income of $2.5 million and an increase in noninterest expense of $4.2 million, partially offset by an increase in net interest income before provision for credit losses of $395 thousand. Also offsetting the decrease in net income was the credit to the provision for credit losses of $549 thousand for the nine months ended September 30, 2023 as compared to the provision for credit losses of $1.2 million for the nine months ended September 30, 2022, a decrease of $1.7 million.

Analysis of Net Interest Income

Net interest income represents the difference between the interest the Company earns on its interest-earning assets, such as loans and investment securities, and the expense the Company pays on interest-bearing liabilities, such as deposits and borrowings. Net interest income depends on both the volume of our interest-earning assets and interest-bearing liabilities and the interest rates the Company earns or pays on them. In general, the shift in the interest rate environment that began in March of 2022 resulted in higher interest rates earned on loans, securities, and interest-earning cash as well as higher interest rates paid on deposits and borrowed money when comparing the nine months ended September 30, 2023 to the same period in 2022. Since December 31, 2021, the Federal Funds Target Rate rose from a range of 0.00% - 0.25% to a range of 3.00% - 3.25% as of September 30, 2022 and a range of 5.25% - 5.50% as of September 30, 2023. While this interest rate index is not used for all financial instruments, the interest rate indices and interest rate curves have increased over this same time horizon. The results of this overall upward shift in interest rates has generally caused net interest margins at financial institutions to contract when comparing the first nine months of 2023 to the same period in 2022 as the cost of funds of financial institutions, generally, have risen at a faster pace than the yield on interest earning assets. As shown in the upcoming table and subsequent discussion, the Company experienced a similar trend whereby our average yield on interest earning assets increased 99 basis points when comparing the nine months ended September 30, 2023 to the same period in 2022, while

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our average cost of funds increased 163 basis points over that same period, resulting in a decrease to net interest margin of 52 basis points.

Average Balances, Interest and Average Yields: The following table sets forth certain information relating to average balance sheets and reflects the average annualized yield on interest-earning assets and average annualized cost of interest-bearing liabilities, interest earned and interest paid for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of interest-earning assets or interest-bearing liabilities, respectively, for the periods presented. Average balances are derived from daily balances over the periods indicated. The average balances for loans are net of allowance for credit losses, but include non-accrual loans. The loan yields include net amortization of certain deferred fees and costs that are considered adjustments to yields. Yields on earning assets are shown on a fully taxable-equivalent basis assuming a tax rate of 21%.

	For the Nine Months Ended September 30,
	2023								2022
(Dollars in thousands)	Avg Bal		Interest (2)			Yield/Rate			Avg Bal		Interest (2)			Yield/Rate
Int. Earn. Cash	$	51,547	$	1,561			4.05	%	$	50,254	$	306			0.81	%
Securities
Taxable (1)		83,449		2,309			3.70	%		86,590		1,608			2.48	%
Tax-Exempt		38,617		1,133			3.92	%		41,438		1,085			3.50	%
Total Securities		121,960		3,442			3.77	%		128,028		2,693			2.81	%
Total Cash Equiv. and Investments		173,507		5,003			3.86	%		178,282		2,999			2.25	%
Total Loans (3)		958,382		37,330			5.21	%		765,267		25,287			4.42	%
Total Interest-Earning Assets		1,131,889		42,333			5.00	%		943,549		28,286			4.01	%
Other Assets		95,400								90,970
Total Assets	$	1,227,289							$	1,034,519
Interest bearing demand	$	250,830	$	3,938			2.10	%	$	269,282	$	905			0.45	%
Money market demand		248,731		4,766			2.56	%		228,105		945			0.55	%
Time deposits		285,666		6,489			3.04	%		203,947		1,022			0.67	%
Total Borrowings (4)		81,749		2,507			4.10	%		84,382		1,186			1.88	%
Total Interest-Bearing Liabilities		866,976		17,700			2.73	%		785,716		4,058			0.69	%
Non Int Bearing Deposits		203,284								151,941
Total Cost of Funds	$	1,070,260	$	17,700			2.21	%	$	937,657	$	4,058			0.58	%
Other Liabilities		17,024								11,517
Total Liabilities	$	1,087,284							$	949,174
Shareholders' Equity	$	140,005							$	85,345
Total Liabilities & Shareholders' Equity	$	1,227,289							$	1,034,519
Net Interest Income/Spread (FTE)				24,633			2.27	%				24,228			3.32	%
Tax-Equivalent Basis Adjustment				(238	)							(228	)
Net Interest Income			$	24,395							$	24,000
Net Interest Margin							2.88	%							3.40	%
(1) Taxable income on securities includes income from available for sale securities and income from certificates of deposits with other banks.
(2) Income stated on a tax equivalent basis which is non-GAAP and is reconciled to GAAP at the bottom of the table.
(3) Includes the balances of nonaccrual loans.
(4) Includes the effect of the interest rate swap, which reduced interest expense by $572 thousand during the nine months ended September 30, 2023.

Rate/Volume Analysis

The following table reflects the sensitivity of the Company’s interest income and interest expense to changes in volume and in yields on interest-earning assets and costs of interest-bearing liabilities during the periods indicated.

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	Nine Months Ended September 30, 2023 vs. 2022 Increase (Decrease) Due To:
(Dollars in thousands)	Rate			Volume			Net
Interest Income:
Int. Earn. Cash	$	1,247		$	8		$	1,255
Securities
Taxable		761			(60	)		701
Tax-Exempt		122			(74	)		48
Total Securities		883			(134	)		749
Total Loans		5,663			6,380			12,043
Total Interest-Earning Assets		7,793			6,254			14,047
Interest Expense:
Interest bearing demand		3,095			(62	)		3,033
Money market demand		3,736			85			3,821
Time deposits		5,057			410			5,467
Total Borrowings		1,358			(37	)		1,321
Total Interest-Bearing Liabilities		13,246			396			13,642
Change in Net Interest Income	$	(5,453	)	$	5,858		$	405

Net Interest Income: Net interest income increased by $395 thousand, or 1.6%, to $24.4 million for the nine months ended September 30, 2023, compared to $24.0 million for the nine months ended September 30, 2022. This increase can be attributed to an increase in interest income resulting from a higher average balance in interest-earning assets and an increase in the average yield on interest earning assets as compared to the same period in 2022. These increases on the asset side were partially offset mostly by an increase in cost of funds. The net interest margin decreased 52 basis points to 2.88% for the nine months ended September 30, 2023 from 3.40% for the nine months ended September 30, 2022.

Interest Income: Interest income increased to $42.1 million for the nine months ended September 30, 2023, compared with $28.1 million for the nine months ended September 30, 2022 primarily due to an increase in interest income on loans as a result of the growth in average loans as well as the increase in average yields earned on all categories of interest earning assets. The growth in average balance of interest earning assets which increased $188.3 million to $1.1 billion for the nine months ended September 30, 2023 compared to $943.5 million for the comparable period in 2022 contributed $6.3 million to the increase in interest income. The growth in the average balance of interest earning assets was due primarily to the increase in the average balance of loans as a result of growth in the commercial loan portfolio which increased $193.1 million to $958.3 million for the nine months ended September 30, 2023 as compared to the same period in 2022. The average yield on loans increased 79 basis points on an annualized basis from 4.42% for the nine months ended September 30, 2022 to 5.21% for the nine months ended September 30, 2023, which contributed $6.4 million to the increase in interest income. Normal amortization of net loan discounts recorded as part of purchase accounting adjustments to loans acquired through the Gratz Merger contributed $1.1 million to interest income during the nine months ended September 30, 2023. Overall the average yield of interest earning assets increased 99 basis points on an annualized basis to 5.00% for the nine months ended September 30, 2023 as compared to the same period in 2022 due primarily to a larger concentration of interest earning assets in loans along with an increase in the average yield of interest earning cash, securities and loans.

Interest Expense: Interest expense increased by $13.6 million, or 336%, to $17.7 million for the nine months ended September 30, 2023, compared to $4.1 million for the nine months ended September 30, 2022. The increase in interest expense was primarily due to an increase in the average rate paid on interest-bearing liabilities. The average rate paid on interest-bearing liabilities increased 204 basis points on an annualized basis from 0.69% for the nine months ended September 30, 2022 to 2.73% for the nine months ended September 30, 2023 due to the increasing interest rate environment during the current period and in particular its impact on deposit cost as well as the impact of interest on $20 million of subordinated notes acquired in the Gratz Merger as well as $20 million of subordinated notes issued by the Company during April 2022. This increase in interest expense was also impacted by an increase in the average balance of interest bearing liabilities, which increased $81.3 million to $867 million for the nine months ended September 30, 2023 compared to $785.7 million for the nine months ended September 30, 2022 as a result of the increase in the average balance of our deposits and borrowings. Interest expense on borrowings was reduced by $572 thousand due to the impact of the interest rate swap.

Provision for Credit Losses: The provision for credit losses decreased by $1.7 million from $1.2 million for the nine months ended September 30, 2022 to a credit to the provision of $549 thousand for the nine months ended September 30, 2023. During the nine months ended September 30, 2023, the Company adopted the current expected loss model ("CECL") which changed the methodology related to the calculation of expected credit losses within the loan portfolio. This methodology calculates losses over the expected life of our loans based on historical credit performance in conjunction with select forecasted economic factors. The provision for credit losses for the nine months ended September 30, 2023 consisted of ($468) thousand related to loans, ($60) related to unfunded

50

commitments, and ($21) thousand related to held-to-maturity securities. The majority of the net credit to the provision for credit losses can be attributable to a decrease in the forecasted loss factors at September 30, 2023 when compared to the forecast at December 31, 2022. Additionally, the Company had net recoveries for the nine months ended September 30, 2023 of $111 thousand, which contributed to the credit to the provision.

The Company completes a comprehensive quarterly evaluation to determine its provision for credit losses. The evaluation reflects analyses of individual borrowers and historical loss experience, and changes in net loan balances, supplemented as necessary by credit judgment that considers observable trends, conditions, and other relevant environmental and economic factors.

Refer to Note 4 of the Notes to the Consolidated Financial Statement for additional details on the provision for credit losses.

Non-interest Income: Non-interest income decreased by $2.5 million to a loss of $88 thousand for the nine months ended September 30, 2023, from the $2.4 million in income recognized during the same period of 2022. The decrease was primarily the result of a loss on the sale of an investment in the subordinated notes of Signature Bank which was taken into FDIC receivership during the first quarter of 2023. The Company sold our investment and recognized a loss of $2.4 million during the three months ended March 31, 2023. Gain on sale of loans decreased $454 thousand to $299 thousand for the nine months ended September 30, 2023 due to lower loan sales activity. These decreases to non-interest income were partially offset by a $244 thousand increase to other income primarily due to settlement of a legal matter.

Non-interest Expense: Non-interest expense increased $4.2 million, or 21.5%, from $19.4 million for the nine months ended September 30, 2022, to $23.5 million for the nine months ended September 30, 2023. The increase was largely due to: (1) an increase in salaries and employee benefits expense of $738 thousand related to an increase in the number of employees to facilitate our growth and foster deposit relationships; (2) an increase of $601 thousand in occupancy expense related to increased property maintenance costs, lease costs, and depreciation expense mostly related to our new corporate headquarters location and the Delaware Valley regional headquarters location; (3) an increase of $297 thousand in professional fee expenses; (4) an increase in equipment and data processing costs of $661 thousand; and (5) an increase in merger related expenses of $1.7 million as a result of the Partners Merger which merger agreement was executed in the first quarter of 2023.

Income Tax Expense: Income tax expense for the nine months ended September 30, 2023 totaled $276 thousand compared to an income tax expense of $970 thousand for the same period in 2022 as a result of a decrease in income before income tax expense. The income tax expense recognized for the nine months ended September 30, 2023 was the direct result of our net income adjusted for tax free income and non-deductible merger related expenses. We recognized an income tax expense for the nine months ended September 30, 2023 at an effective tax rate of 21.1% which is greater than our statutory tax rate of 21%. This is compared to income tax expense for the nine months ended September 30, 2022 which resulted in an effective tax rate of 17.6%.

Liquidity, Commitments, and Capital Resources

The Company’s liquidity, represented by cash and due from banks, is a product of our operating, investing and financing activities. The Company’s primary sources of funds are deposits, principal repayments of securities and outstanding loans, and funds provided from operations. In addition, the Company invests excess funds in short-term interest-earnings assets such as overnight deposits or U.S. agency securities, which provide liquidity to meet lending requirements. While scheduled payments from the amortization of loans and securities and short-term investments are relatively predictable sources of funds, general interest rates, economic conditions and competition greatly influence deposit flows and repayments on loans and mortgage-backed securities.

The Company strives to maintain sufficient liquidity to fund operations, loan demand and to satisfy fluctuations in deposit levels. The Company is required to have enough investments that qualify as liquid assets in order to maintain sufficient liquidity to ensure safe and sound banking operations. Liquidity may increase or decrease depending upon the availability of funds and comparative yields on investments in relation to the return on loans. Our attempts to maintain adequate but not excessive liquidity, and liquidity management is both a daily and long-term function of the Company’s business management. We manage our liquidity in accordance with a board of directors-approved asset liability policy, which is administered by the Company’s asset-liability committee (“ALCO”). ALCO reports interest rate sensitivity, liquidity, capital and investment-related matters on a quarterly basis to the Company’s board of directors.

The Company reviews cash flow projections regularly and updates them in order to maintain liquid assets at levels believed to meet the requirements of normal operations, including loan commitments and potential deposit outflows from maturing certificates of deposit and savings withdrawals. Certificates of deposit due within one year of September 30, 2023, totaled $280.2 million, or 93.6% of our certificates of deposit, and 26.9% of total deposits. Of these certificates of deposit, $75 million are brokered deposits. If these deposits do not remain with us, we will be required to seek other sources of funds, including other deposits and FHLB advances. Depending on market conditions, we may be required to pay higher rates on such deposits or borrowings than we currently pay. We believe, however, based on past experience that a significant portion of such deposits will remain with us. We have the ability to

51

attract and retain deposits by adjusting the interest rates offered. Additionally, management noted that approximately 14.8% of our deposits (measured on a year-to-date average balance) consisted of balances in escrow-type deposits which are distributed among 190 different customers with no customer exceeding our policy limits on size of deposits. While deposits are the Company’s primary source of funds, when needed the Company is also able to generate cash through borrowings from the Federal Home Loan Bank of Pittsburgh (“FHLB”). At September 30, 2023, the Company had $15 million outstanding in FHLB borrowings with a remaining available capacity with FHLB, subject to certain collateral restrictions, of approximately $304.0 million.

In addition to our available borrowing capacity at the FHLB, the Company has bank-level lines of credit with multiple financial institutions that provide an available $51.0 million of additional liquidity at September 30, 2023. The Company also maintains available credit at the Federal Reserve Bank's Discount Window of $14.5 million at September 30, 2023.

Consistent with the Company’s goals to operate as a sound and profitable financial institution, the Company actively seeks to maintain the Bank's status as a well-capitalized institution in accordance with regulatory standards. As of September 30, 2023 and December 31, 2022, the Bank met the capital requirements to be considered “well capitalized.” See Note 9 within the Notes to the Consolidated Financial Statements for more information regarding our capital resources.

Off-Balance Sheet Arrangements and Contractual Obligations

See Note 10 within the Notes to the Consolidated Financial Statements beginning for more information regarding the Company’s off-balance sheet arrangements.

Critical Accounting Estimates

It is management’s opinion that accounting estimates covering certain aspects of the Company’s business have more significance than others due to the relative importance of those areas to overall performance, or the level of subjectivity required in making such estimate, which have a material impact on the carrying value of certain assets and liabilities. The judgments and assumptions used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances. The more significant area in which the Company's management applies critical assumptions and estimates include the following:

Allowance for credit losses: The loan portfolio is the biggest asset on the Company's balance sheet. The allowance for credit losses represents management's estimate of credit losses in the loan portfolio at the balance sheet date. A provision for credit losses is recorded to adjust the level of the allowance for credit losses as deemed necessary by management. The allowance for credit losses consists of reserves on loans that share similar risk characteristics, and reserves on loans that do not share similar risk characteristics.

Expected credit losses are estimated over the contractual term of the loan, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies: management has a reasonable expectation at the reporting date that a restructured loan will be executed with an individual borrower or the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancelable by the Company. Management’s determination of the adequacy of the allowance for credit losses is based on periodic evaluations of past events, including historical credit loss experience on financial assets with similar risk characteristics, historical credit losses experienced by peer institutions on financial assets with similar risk characteristics, current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the financial assets. This evaluation has subjective components requiring material estimates, including forecasted national economic conditions such as GDP and unemployment, expected default probabilities, the expected loss given default, and the amounts and timing of expected future cash flows. All of these factors may be susceptible to significant change.

Generally, loans that do not share similar risk characteristics are collateral-dependent and impairment is measured through the collateral method. When the measurement of these loans is less than the recorded investment in the loan, the shortfall is recorded through the allowance for credit losses. To the extent that actual results differ from management estimates, additional provisions for credit losses may be required that would adversely impact earnings in future periods.

Recently Issued Accounting Standards

Recently issued accounting standards are included in Note 1 of the Notes to the Consolidated Financial Statements.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

Not required for smaller reporting companies.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, the Company carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management was required to apply judgment in evaluating its controls and procedures. Based on their evaluation of the Company’s disclosure controls and procedures as of September 30, 2023, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures (as defined in 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and regulations and are operating in an effective manner.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting (as such term is defined in 13a-15(f) and Rule 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2023, that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

At September 30, 2023, the Company is not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business, which involve amounts in the aggregate believed by management to be immaterial to the financial condition and operating results of the Company.

Item 1A – Risk Factors

In addition to the other information contained in this Quarterly Report on Form 10-Q, the following risk factor represents a material update and addition to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022. Additional risks not presently known to us, or that we currently deem immaterial, may also adversely affect our business, financial condition or results of operations. Further, to the extent that any of the information contained in this Quarterly Report on Form 10-Q constitutes forward-looking statements, the risk factors set forth below also are a cautionary statement identifying important factors that could cause our actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of us.

Recent events involving the failure of financial institutions may adversely affect our business, and the market price of our common stock.

Recent developments and events in the financial services industry, including the large-scale deposit withdrawals over a short period of time at Silicon Valley Bank, Signature Bank and First Republic Bank that resulted in the failure of those institutions have resulted in decreased confidence in banks among depositors, other counterparties and investors, as well as significant disruption, volatility and reduced valuations of equity and other securities of banks in the capital markets. These events have occurred against the backdrop of a rapidly rising interest rate environment which, among other things, has resulted in unrealized losses in longer duration securities and loans held by banks, more competition for bank deposits and may increase the risk of a potential recession. These events and developments could materially and adversely impact our business or financial condition, including through potential liquidity pressures, reduced net interest margins, and potential increased credit losses. These recent events and developments have, and could continue to, adversely impact the market price and volatility of our common stock. These recent events may also result in changes to laws or regulations governing banks and bank holding companies or result in the impositions of restrictions through supervisory or enforcement activities, including higher capital requirements, which could have a material impact on our businesses. The cost of resolving the recent failures may prompt the FDIC to increase its premiums above the recently increased levels or to issue additional special assessments.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

None

53

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

None

54

Item 6. Exhibits

EXHIBIT INDEX

Exhibit Number	Description
3.1	Articles of Incorporation, as amended, incorporated by reference to Exhibit 3.1 to Form S-4 Registration Statement, filed May 7, 2021
3.2	Amended and Restated Bylaws, incorporated by reference to Exhibit 3.2 to Form S-4 Registration Statement, filed May 7, 2021
31.1	Certification of Principal Executive Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
31.2	Certification of Principal Financial Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
32	Section 1350 Certification
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101 SCH**	Inline XBRL Taxonomy Extension Schema Document
101 CAL**	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101 DEF**	Inline XBRL Taxonomy Extension Definition Linkbase Document
101 LAB**	Inline XBRL Taxonomy Extension Label Linkbase Document
101 PRE**	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File - the cover page interactive data file does not appear in the interactive date file because its XBRL tags are embedded with the inline XBRL document.

** Attached as Exhibit 101 to this report are the following formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Condition as of September 30, 2023 and December 31, 2022; (ii) Consolidated Statements of Income for the three and nine months ended September 30, 2023 and 2022; (iii) Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2023 and 2022; (iv) Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022; (v) Consolidated Statements of Changes in Shareholders’ Equity for the three and nine months ended September 30, 2023 and 2022; and (vi) Notes to Unaudited Consolidated Financial Statements.

55

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 14, 2023

LINKBANCORP, INC.

By:	/s/ Andrew Samuel
	Andrew Samuel
	Vice Chairman and Chief Executive Officer
	(Principal Executive Officer)
By:	/s/ Kristofer Paul
	Kristofer Paul
	Chief Financial Officer
	(Principal Financial Officer)
	(Principal Accounting Officer)

56

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Andrew Samuel, certify that:

1.I have reviewed this quarterly report on Form 10-Q of LINKBANCORP, INC.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting, to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statement for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 14, 2023
/s/ Andrew Samuel
Andrew Samuel
Vice Chairman and Chief Executive Officer
(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Kristofer Paul, certify that:

1.I have reviewed this quarterly report on Form 10-Q of LINKBANCORP, INC.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting, to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 14, 2023
/s/ Kristofer Paul
Kristofer Paul
Chief Financial Officer
(Principal Financial Officer)
(Principal Accounting Officer)

EX-32

Exhibit 32

CERTIFICATION

Pursuant to 18 U.S.C. § 1350, the undersigned officers of LINKBANCORP, INC. (the “Company”) hereby certify that the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 14, 2023

/s/ Andrew Samuel

Andrew Samuel

Vice Chairman and Chief Executive Officer

(Principal Executive Officer)

/s/ Kristofer Paul

Kristofer Paul

Chief Financial Officer

(Principal Financial Officer)

(Principal Accounting Officer)

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2023	Nov. 08, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Entity Central Index Key	0001756701
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Registrant Name	LINKBANCORP, Inc.
Securities Act File Number	001-41505
Entity Tax Identification Number	82-5130531
Entity Incorporation, State or Country Code	PA
Entity Address, Address Line One	1250 Camp Hill Bypass
Entity Address, Address Line Two	Suite 202
Entity Address, City or Town	Camp Hill
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	17011
City Area Code	855
Local Phone Number	569-2265
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	LNKB
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		16,243,186

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
ASSETS
Noninterest-bearing cash equivalents	$ 5,447	$ 4,209
Interest-bearing deposits with other institutions	62,532	25,802
Cash and cash equivalents	67,979	30,011
Certificates of deposit with other banks	249	5,623
Securities available for sale, at fair value	78,779	78,813
Securities held to maturity (Fair value of $34,588 and $30,080, respectively)	37,778	31,822
Less: Allowance for credit losses - securities	(512)
Securities held to maturity, net	37,266	31,822
Loans receivable	978,912	927,871
Less: Allowance for credit losses - loans	(9,964)	(4,666)
Net loans	968,948	923,205
Investments in restricted bank stock	3,107	3,377
Premises and equipment, net	6,414	6,743
Right-to-Use Asset – Premises	9,727	10,219
Bank-owned life insurance	24,732	19,244
Goodwill and other intangible assets	36,715	36,894
Deferred tax asset	6,880	5,619
Accrued interest receivable and other assets	14,899	12,084
TOTAL ASSETS	1,255,695	1,163,654
Deposits:
Total deposits	1,041,772	946,772
Other borrowings	15,000	20,938
Subordinated debt	40,354	40,484
Operating lease liabilities	9,728	10,219
Allowance for credit losses - unfunded commitments	904	54
Accrued interest payable and other liabilities	6,586	6,634
TOTAL LIABILITIES	1,114,344	1,025,101
COMMITMENTS AND CONTINGENT LIABILITIES (Note 10)
SHAREHOLDERS' EQUITY
Preferred stock (At September 30, 2023 and December 31, 2022: no par value; 5,000,000 shares authorized; no shares issued and outstanding.)
Common stock (At September 30, 2023 and December 31, 2022: $0.01 par value; 50,000,000 and 25,000,000 shares authorized, respectively; 16,235,871 and 14,939,640 shares issued and outstanding, respectively.)	162	149
Surplus	127,856	117,709
Retained earnings	19,062	27,100
Accumulated other comprehensive loss	(5,729)	(6,405)
TOTAL SHAREHOLDERS' EQUITY	141,351	138,553
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	1,255,695	1,163,654
Demand, noninterest bearing
Deposits:
Total deposits	210,404	192,773
Interest bearing
Deposits:
Total deposits	$ 831,368	$ 753,999

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Held-to-maturity, fair value	$ 34,588	$ 30,080
Preferred Stock, Par or Stated Value Per Share	$ 0	$ 0
Preferred Stock, Shares Authorized	5,000,000	5,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	50,000,000	25,000,000
Common Stock, Shares, Issued	16,235,871	14,939,640
Common Stock, Shares, Outstanding	16,235,871	14,939,640

XML

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
INTEREST AND DIVIDEND INCOME
Loans receivable, including fees	$ 13,068	$ 9,410	$ 37,330	$ 25,287
Investment securities and certificates of deposit:
Taxable	833	745	2,309	1,608
Exempt from federal income tax	300	268	895	857
Other	577	157	1,561	306
Total interest and dividend income	14,778	10,580	42,095	28,058
INTEREST EXPENSE
Deposits	5,434	1,389	15,193	2,872
Other borrowings	550	82	1,196	106
Subordinated debt	442	439	1,311	1,080
Total interest expense	6,426	1,910	17,700	4,058
NET INTEREST INCOME BEFORE (CREDIT TO) PROVISION FOR CREDIT LOSSES	8,352	8,670	24,395	24,000
(Credit to) Provision for credit losses	(349)	515	(549)	1,190
NET INTEREST INCOME AFTER (CREDIT TO) PROVISION FOR CREDIT LOSSES	8,701	8,155	24,944	22,810
NONINTEREST INCOME
Service charges on deposit accounts	198	216	593	644
Bank-owned life insurance	177	156	488	381
Net realized (losses) gains on the sales of debt securities	0	0	(2,370)	13
Gain on sale of loans	0	420	296	753
Other	505	249	905	658
Total noninterest income	880	1,041	(88)	2,449
NONINTEREST EXPENSE
Salaries and employee benefits	4,193	4,234	12,350	11,612
Occupancy	701	596	2,104	1,503
Equipment and data processing	934	666	2,519	1,858
Professional fees	363	330	1,162	865
FDIC insurance	276	141	619	483
Bank shares tax	278	201	834	585
Merger & system conversion related expenses	777	0	1,679	0
Other	472	877	2,280	2,481
Total noninterest expense	7,994	7,045	23,547	19,387
Income before income tax expense	1,587	2,151	1,309	5,872
Income tax expense	347	379	276	970
NET INCOME	$ 1,240	$ 1,772	$ 1,033	$ 4,902
EARNINGS PER SHARE, BASIC	$ 0.08	$ 0.17	$ 0.06	$ 0.49
EARNINGS PER SHARE, DILUTED	$ 0.08	$ 0.17	$ 0.06	$ 0.48
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING,
BASIC	16,235,144	10,590,079	15,984,151	10,087,341
DILUTED	16,235,144	10,590,079	15,984,151	10,136,457

XML

Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 1,240	$ 1,772	$ 1,033	$ 4,902
Components of other comprehensive (loss) income:
Unrealized loss on available-for-sale securities	(2,812)	(4,484)	(2,405)	(12,909)
Tax effect	591	943	503	2,711
Net of tax amount	(2,221)	(3,541)	(1,902)	(10,198)
Unrealized gain on cash flow hedges	1,341	0	3,263	0
Tax effect	(282)	0	(685)	0
Net of tax amount	1,059	0	2,578	0
Reclassification adjustment for debt securities gains realized in net income	0	0	0	(13)
Tax effect	0	0	0	3
Net of tax amount	0	0	0	(10)
Total other comprehensive (loss) income	(1,162)	(3,541)	676	(10,208)
Total comprehensive income (loss)	$ 78	$ (1,769)	$ 1,709	$ (5,306)

XML

Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Total	Cumulative Effect Adjustment [Member]	Cumulative Effect Adjusted Balance [Member]	Common Stock [Member]	Common Stock [Member] Cumulative Effect Adjusted Balance [Member]	Surplus [Member]	Surplus [Member] Cumulative Effect Adjusted Balance [Member]	Retained Earnings [Member]	Retained Earnings [Member] Cumulative Effect Adjustment [Member]	Retained Earnings [Member] Cumulative Effect Adjusted Balance [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Accumulated Other Comprehensive Income (Loss) [Member] Cumulative Effect Adjusted Balance [Member]
Beginning Balance at Dec. 31, 2021	$ 109,623			$ 99		$ 82,910		$ 24,836			$ 1,778
Beginning Balance,shares at Dec. 31, 2021				9,826,435
Net income (loss)	4,902							4,902
Dividends declared	(2,213)							(2,213)
Issuance of shares of common stock, net proceeds	34,659			$ 50		34,609
Issuance of shares of common stock, net proceeds, shares				5,101,205
Exercise of stock options	120					120
Exercise of stock options, shares				12,000
Stock option expenses	59					59
Other comprehensive income (loss)	(10,208)										(10,208)
Ending Balance at Sep. 30, 2022	136,942			$ 149		117,698		27,525			(8,430)
Ending Balance, Shares at Sep. 30, 2022				14,939,640
Beginning Balance at Jun. 30, 2022	104,771			$ 99		83,070		26,491			(4,889)
Beginning Balance,shares at Jun. 30, 2022				9,838,435
Net income (loss)	1,772							1,772
Dividends declared	(738)							(738)
Issuance of shares of common stock, net proceeds	34,659			$ 50		34,609
Issuance of shares of common stock, net proceeds, shares				5,101,205
Stock option expenses	19					19
Other comprehensive income (loss)	(3,541)										(3,541)
Ending Balance at Sep. 30, 2022	136,942			$ 149		117,698		27,525			(8,430)
Ending Balance, Shares at Sep. 30, 2022				14,939,640
Beginning Balance at Dec. 31, 2022	138,553	$ (5,419)	$ 133,134	$ 149	$ 149	117,709	$ 117,709	27,100	$ (5,419)	$ 21,681	(6,405)	$ (6,405)
Beginning Balance,shares at Dec. 31, 2022				14,939,640	14,939,640
Net income (loss)	1,033							1,033
Dividends declared	(3,652)							(3,652)
Issuance of shares of common stock, net proceeds	9,980			$ 13		9,967
Issuance of shares of common stock, net proceeds, shares				1,282,052
Employee stock purchase plan	84					84
Employee stock purchase plan, shares				14,179
Stock option expenses	96					96
Other comprehensive income (loss)	676										676
Ending Balance at Sep. 30, 2023	141,351			$ 162		127,856		19,062			(5,729)
Ending Balance, Shares at Sep. 30, 2023				16,235,871
Beginning Balance at Jun. 30, 2023	142,452			$ 162		127,818		19,039			(4,567)
Beginning Balance,shares at Jun. 30, 2023				16,228,440
Net income (loss)	1,240							1,240
Dividends declared	(1,217)							(1,217)
Employee stock purchase plan, shares				7,431
Stock option expenses	38					38
Other comprehensive income (loss)	(1,162)										(1,162)
Ending Balance at Sep. 30, 2023	$ 141,351			$ 162		$ 127,856		$ 19,062			$ (5,729)
Ending Balance, Shares at Sep. 30, 2023				16,235,871

XML

Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Stockholders' Equity [Abstract]
Common stock dividend per share declared	$ 0.075	$ 0.075	$ 0.225	$ 0.225

XML

Consolidated Statement of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
OPERATING ACTIVITIES
Net income	$ 1,033,000	$ 4,902,000
Adjustments to reconcile net income to net cash provided by operating activities:
(Credit to) provision for credit losses	(549,000)	1,190,000
Depreciation	779,000	607,000
Amortization of intangible assets	179,000	197,000
Accretion of discounts, net	(447,000)	(903,000)
Origination of loans to be sold	(3,745,000)	(9,362,000)
Proceeds from loan sales	4,041,000	10,115,000
Gain on sale of loans	(296,000)	(753,000)
Share-based and deferred compensation	627,000	493,000
Bank-owned life insurance income	(488,000)	(381,000)
Loss (gain) on sale of debt securities, available for sale	2,370,000	(13,000)
Change in accrued interest receivable and other assets	328,000	(1,397,000)
Change in accrued interest payable and other liabilities	(495,000)	56,000
Net cash provided by operating activities	3,337,000	4,751,000
Investment securities available for sale:
Proceeds from sales	1,847,000	513,000
Proceeds from calls and maturities		1,150,000
Proceeds from principal repayments	5,645,000	9,748,000
Purchases	(9,756,000)
Investment securities held to maturity
Proceeds from principal repayments	2,379,000	1,826,000
Purchases	(11,289,000)	(34,389,000)
Proceeds from redemptions of certificates of deposit with other banks	5,374,000	4,470,000
Purchase of restricted investment in bank stocks	(6,862,000)	(4,525,000)
Redemption of restricted investment in bank stocks	7,132,000	3,883,000
Increase in loans, net	(49,565,000)	(143,654,000)
Purchase of bank-owned life insurance	(5,000,000)
Proceeds from death benefit under bank-owned life insurance		41,000
Purchase of premises and equipment	(664,000)	(4,405,000)
Net cash used in investing activities	(60,759,000)	(165,342,000)
FINANCING ACTIVITIES
Increase in deposits, net	95,000,000	180,045,000
Change in short-term borrowings, net	(5,938,000)	(19,814,000)
Proceeds from issuance of subordinated debt		20,000,000
Issuance of shares from exercise of stock options		120,000
Dividends paid	(3,652,000)	(2,213,000)
Net proceeds from issuance of common stock	9,980,000	34,659,000
Net cash provided by financing activities	95,390,000	212,797,000
Increase in cash and cash equivalents	37,968,000	52,206,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	30,011,000	22,590,000
CASH AND CASH EQUIVALENTS AT END OF PERIOD	67,979,000	74,796,000
SUPPLEMENTAL CASH FLOW DISCLOSURES
Interest	$ 17,331,000	3,243,000
Income taxes		$ 275,000

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of significant accounting and reporting policies applied in the presentation of the accompanying consolidated financial statements follows:

Nature of Operations

LINKBANCORP, Inc. (the "Company" or "LINKBANCORP") is a bank holding company that operates LINKBANK (the "Bank"). The Company was incorporated on April 6, 2018, under the laws of the Commonwealth of Pennsylvania. The Company was formed with the intent of becoming a bank holding company through acquisition of a bank.

On September 17, 2018, the Pennsylvania Department of Banking and Securities (the "PADOBS") approved the acquisition of 100 percent of the shares of Stonebridge Bank. On October 5, 2018, LINKBANCORP purchased 100 percent of the outstanding shares of Stonebridge Bank, from its former parent company Stonebridge Financial Corp. under section 363 of the Bankruptcy Code. LINKBANCORP subsequently renamed the bank LINKBANK.

On December 10, 2020, the Company and its wholly owned subsidiary, LINKBANK, and GNB Financial Services, Inc. (“GNBF”), and its wholly owned subsidiary, The Gratz Bank entered into an Agreement and Plan of Merger pursuant to which GNBF merged with and into the Company, with the Company as the surviving corporation. LINKBANK merged with and into The Gratz Bank, with The Gratz Bank as the surviving institution. The merger was consummated effective September 18, 2021 (collectively, the "Gratz Merger"). In markets other than the pre-merger Gratz Bank areas, the Bank operated as "LINKBANK, a division of The Gratz Bank." Effective November 4, 2022, the Bank began to operate under one brand under the name LINKBANK.

The Bank is a full-service commercial bank providing personal and business lending and deposit services. The Bank’s operations are conducted from its ten Solutions Centers located in Dauphin, Chester, Cumberland, Lancaster, Northumberland, and Schuylkill Counties within Pennsylvania. The Company’s corporate office resides in Camp Hill, Pennsylvania. As a state chartered, non-Federal Reserve member bank, the Bank is subject to regulation and supervision by the PADOBS and the Federal Deposit Insurance Corporation (the "FDIC"). The Company is regulated by the Federal Reserve Bank of Philadelphia. The Bank’s deposits are insured up to the applicable limits by the FDIC.

Initial Public Offering

In September 2022, the Company completed its initial public offering ("IPO") whereby it issued and sold 5,101,205 shares of common stock at a public offering price of $7.50 per share. The Company received net proceeds of $34,659 after deducting underwriting discounts and commissions of $2,487 and other offering expenses of $1,114. The Company's common stock trades on the Nasdaq Capital Market under the symbol "LNKB."

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and the Bank. All significant intercompany accounts and transactions have been eliminated in consolidation. The accounting and reporting practices of the Company conform to accounting principles generally accepted in the United States of America (GAAP) and to general practices within the banking industry. In the opinion of management, all adjustments (all of which are of a normal recurring nature) that are necessary for a fair statement are reflected in the unaudited condensed consolidated financial statements.

The Company has evaluated events and transactions occurring subsequent to the consolidated balance sheet date of September 30, 2023 for items that should potentially be recognized or disclosed in these unaudited condensed consolidated financial statements. The evaluation was conducted through the date these unaudited condensed consolidated financial statements were issued.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly

susceptible to significant change in the near term relate to the allowance for credit losses, and the valuation of deferred tax assets.

Interim Financial Information

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Reclassification of Prior Period Financial Statements

Certain previously reported items have been reclassified to conform to the current year's classifications. Reclassifications had no effect on prior year net income or shareholders' equity.

Pending Merger with Partners Bancorp

On February 22, 2023, the Company entered into an Agreement and Plan of Merger (the "Partners Merger Agreement") with Partners Bancorp ("Partners"), a Maryland corporation, and the holding company for The Bank of Delmarva and Virginia Partners Bank, based in Seaford, Delaware and Fredericksburg, Virginia, respectively. At December 31, 2022, Partners had total assets of $1.57 billion, total loans of $1.23 billion, total deposits of $1.34 billion, and 17,973,724 shares outstanding. The Partners Merger Agreement provides that, subject to the terms and conditions thereof, Partners will merge with and into the Company, with the Company as the surviving corporation, and that The Bank of Delmarva and Virginia Partners Bank will each merge with and into LINKBANK, with LINKBANK as the surviving bank (collectively, the "Partners Merger"). On June 22, 2023, shareholders of the Company and Partners each approved the Partners Merger. On October 13, 2023, the Company and Partners announced the receipt of FDIC and state regulatory approvals for the Partners Merger. However, the Partners Merger remains subject to the approval of the Board of Governors of the Federal Reserve System and other customary closing conditions. The Partners Merger is expected to close in the fourth quarter of 2023. The Partners Merger will introduce the Company's operations into northern Virginia, eastern Maryland, Delaware, and southern New Jersey.

Unregistered Sale of Equity Securities

On February 21, 2023, the Company entered into Investment Agreements with certain directors of the Company as well as other accredited investors under which it issued and sold 1,282,052 shares of its common stock, par value $0.01, at a price of $7.80 per share. The shares were issued on February 21, 2023, in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D of the rules and regulations promulgated thereunder. The offering resulted in gross proceeds of $10.0 million. There were no underwriting discounts or commissions.

Loans Receivable

Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of an allowance for credit losses and any deferred fees or costs. Interest income is accrued on the unpaid principal balance. Accrued interest receivable on loans totaled $4,073 at September 30, 2023 and was reported within accrued interest receivable and other assets on the consolidated balance sheets and is excluded from the estimate of credit losses. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the yield (interest income) of the related loans. The Bank is generally amortizing these amounts over the contractual life of the loan. Premiums and discounts on purchased loans are amortized as adjustments to interest income using the effective yield method.

The loans receivable portfolio is segmented into commercial and consumer loans. Commercial loans consist of the following classes: agriculture, commercial and industrial, commercial real estate, and municipal. Consumer loans consist of the following classes: residential real estate, and other consumer. The loan segments are based on collateral type.

The accrual of interest on all portfolio classes is discontinued at the time the loan is more than ninety days delinquent unless the loan is well collateralized and in process of collection. Nonaccrual loans are reviewed for charge-offs if more than ninety-days past due, except for residential loans and consumer loans. Residential loans are reviewed at 180 days and consumer loans are reviewed at 120 days past due. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered unlikely.

All interest accrued but not collected for loans placed on nonaccrual or charged-off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. In addition, a loan should be in accordance with the contractual terms for a reasonable period, usually requiring a payment history of six months.

Derivative Instruments and Hedging Activities

FASB ASC 815, Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments.

As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

In accordance with the FASB’s fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

Goodwill Impairment

Goodwill is not amortized but is reviewed for potential impairment on at least an annual basis, with testing between annual tests if an event occurs or circumstances change that could potentially reduce the fair value of a reporting unit. In conjunction with the IPO, the Company issued 5,101,205 shares of common stock and the Company's stock price subsequently decreased from an average closing price of $9.32 per share for the month of August 2022, to $7.50 per share upon completion of the IPO. In the first quarter of 2023, the Company's stock price further decreased, causing management to perform a goodwill impairment test at March 31, 2023. No goodwill impairment was identified at March 31, 2023. No goodwill test has been deemed necessary by management at September 30, 2023.

Recently Adopted Accounting Standards

Reference Rate Reform

In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which added to ASU 2020-04 optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls “reference rate reform” if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Also, entities can elect various optional

expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain criteria are met, and can make a onetime election to sell and/or reclassify held-to-maturity debt securities that reference an interest rate affected by reference rate reform. ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The amendments in this ASU are effective for all entities upon issuance through December 31, 2024. The Company identified its loan receivables that have an interest rate indexed to LIBOR, verified proper transition language existed in the contracts and executed contractual updates, as needed, with the impacted borrowers. The Company replaced LIBOR in most cases with one-month Term SOFR or Daily SOFR. The Company does not expect the impact to be material to the financial statements of the Company.

Goodwill Impairment

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This standard simplifies the test for goodwill impairment by eliminating the requirement to calculate the implied fair value of goodwill, which had been Step 2 of the goodwill impairment test. Instead, the goodwill impairment test consists of a single quantitative step comparing the fair value of the reporting unit with its carrying amount. An entity should recognize a goodwill impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. The new standard was effective for annual and any interim goodwill impairment tests in reporting periods beginning after December 15, 2022. The Company adopted ASU 2017-04 on January 1, 2023. The adoption of this standard did not have a material effect on the Company's operating results or financial condition.

Derivatives

On March 28, 2022, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method. The purpose of this updated guidance is to further align risk management objectives with hedge accounting results on the application of the last-of-layer method, which was first introduced in ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2022-01 is effective for public business entities for fiscal years beginning after December 15, 2022, with early adoption in the interim period permitted. For entities who have already adopted ASU 2017-12, immediate adoption is allowed. ASU 2022-01 requires a modified retrospective transition method for basis adjustments in which the entity will recognize the cumulative effect of the change on the opening balance of each affected component of equity in the statement of financial position as of the date of adoption. The Company adopted ASU 2022-01 on January 1, 2023. The adoption of this standard did not have a material effect on the Company's operating results or financial condition.

Current Expected Credit Losses

On January 1, 2023, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as amended, which replaces the impairment model for most financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. This model is also applicable to off-balance sheet credit exposures not accounted for as insurance, such as loan commitments, standby letters of credit, financial guarantees, and other similar instruments. In addition, the amendments in ASU 2016-03 require credit losses on available-for-sale debt securities to be presented as a valuation allowance rather than as a direct write down.

The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost, and off-balance-sheet credit exposures. Results for reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. At January 1, 2023, the Company increased the allowance for credit losses for loans by $5.7 million, the allowance for credit losses for unfunded loan commitments by $910 thousand, and the allowance on held-to-maturity securities by $602 thousand. At January 1, 2023, the Company reported a cumulative-effect adjustment of $5.4 million which decreased retained earnings.

The Company did not record an allowance for credit losses on its available-for-sale debt securities under the newly codified available-for-sale debt security impairment model, as the majority of these securities are government agency-backed securities for which the risk of loss is minimal.

The Company adopted ASC 326 using the prospective transition approach for financial assets purchased with credit deterioration (PCD) that were previously classified as purchased credit impaired and accounted for under ASC 310-30. In accordance with the standard, management did not reassess whether PCI assets met the criteria of PCD assets as of the date of the adoption. On January 1, 2023, the amortized cost basis of the PCD assets were adjusted to reflect the addition of $308 thousand to the allowance for credit losses. The remaining noncredit discount (based on the adjusted amortized cost basis) will be accreted into interest income at the effective interest rate as of January 1, 2023.

The below table shows the changes made to loan segments and the allowance for credit losses upon the adoption of ASC 326 as of January 1, 2023.

(In Thousands)	December 31, 2022 Statement Balance		Segment portfolio reclassifications			December 31, 2022 after reclassifications
Loans:
Agriculture and farmland	$	15,591	$	40,155		$	55,746
Construction		—		57,713			57,713
Commercial & industrial		103,874		881			104,755
Paycheck Protection Program		881		(881	)		—
Commercial real estate		540,914		(540,914	)		—
Multifamily		—		105,390			105,390
Owner occupied		—		139,554			139,554
Non-owner occupied		—		245,274			245,274
Residential real estate		250,832		(250,832	)		—
First liens		—		168,084			168,084
Second liens and lines of credit		—		35,576			35,576
Municipal		5,466		—			5,466
Consumer and other		10,057		—			10,057
Total		927,615		—			927,615
Deferred Costs		256		—			256
Total	$	927,871	$	—		$	927,871
Allowance:
Agriculture and farmland	$	33	$	246		$	279
Construction		—		274			274
Commercial & industrial		583		—			583
Paycheck Protection Program		—		—			—
Commercial real estate		2,462		(2,462	)		—
Multifamily		—		480			480
Owner occupied		—		635			635
Non-owner occupied		—		1,116			1,116
Residential real estate		1,536		(1,536	)		—
First liens		—		1,029			1,029
Second liens and lines of credit		—		218			218
Municipal		12		—			12
Consumer and other		40		—			40
Total	$	4,666	$	—		$	4,666

The Federal Reserve and the FDIC have adopted a rule that provides a banking organization the option to phase-in, over a three year period, the effects of CECL on its regulatory capital upon the adoption of the CECL standard. The Company has elected to exercise this phase-in option.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses: Troubled Debt Restructurings and Vintage Disclosures, which eliminates accounting guidance for troubled debt restructurings ("TDRs") by creditors that have adopted ASU 2016-13 and its related amendments. The amendments require that an entity evaluate whether the loan modification represents a new loan or a continuation of an existing loan, and introduce new requirements related to modifications made to borrowers experiencing financial difficulty. The amendments also require public business entities to disclose current-period gross write-offs for financing receivables by year of origination in the vintage disclosures. For entities that have adopted ASU 2016-13, the amendments in this ASU are effective for fiscal years beginning after December 15, 2022. For entities that have not adopted ASU 2016-13, the amendments in this update are effective at the time the entity adopts ASU 2016-13. The Company adopted this standard effective January 1, 2023 in conjunction with ASC 326. The adoption of this standard did not have a material effect on the Company's operating results or financial condition.

As a result of the adoption of ASU 2016-13, the Company revised some of its existing accounting policies as noted below:

Allowance for Credit Losses - Loans

The allowance for credit losses is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed.

Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics, such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors. The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. The Company has identified the following portfolio segments and measures the allowance for credit losses using the following methods:

Portfolio Segment	Measurement Method
Agriculture and farmland	Remaining life
Construction	Discounted cash flow
Commercial & industrial	Discounted cash flow
Commercial real estate
Multifamily	Discounted cash flow
Owner occupied	Discounted cash flow
Non-owner occupied	Discounted cash flow
Residential real estate
First liens	Discounted cash flow
Second liens and lines of credit	Discounted cash flow
Municipal	Remaining life
Consumer	Remaining life

Loans that do not share risk similar risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the collective evaluation described above. When management determines that foreclosure is probable, expected credit losses are based on the fair value of collateral at the reporting date, adjusted for selling costs as appropriate.

Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies: management has a reasonable expectation at the reporting date that a troubled debt restructuring will be executed with an individual borrower or the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancelable by the Company.

Allowance for Credit Losses - Held-to-Maturity Securities

Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type. Accrued interest receivable on held-to-maturity debt securities totaled $187 at September 30, 2023 which is excluded from the estimate of credit losses.

The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts.

Management classifies the held-to-maturity portfolio into the following major security types: Corporate debentures and structured mortgage-backed securities.

•The corporate debentures are comprised of investments in subordinated debt issued by U.S. based banks.

•All of the structured mortgage-backed securities are issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S government, are highly rated by major rating agencies and have a long history of no credit losses.

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancelable by the Company. The allowance for credit losses on off-balance sheet credit exposures is adjusted through credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The segments of off-balance sheet credit exposures are the same as the segments for the allowance for credit losses on loans. The allowance for credit losses on off balance sheet credit exposures is influenced by forecasted loss rates used in the allowance for credit losses on loans and the level of contractual obligations to extend credit.

Investment Securities

Investment securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Investment securities that will be held for indefinite periods of time, including securities that may be sold in response to changes in market interest or prepayment rates, needs for liquidity, and changes in the availability of and in the yield of alternative investments, are classified as available for sale. These investment securities are carried at fair value. Fair values of securities available for sale are determined by using Level 2 fair value measures calculated through the use of matrix pricing. Matrix pricing is a common mathematical technique that does not rely exclusively on quoted market prices for specific securities but rather utilizes the security’s relationship to other benchmark quoted prices in determining fair value. The Company uses independent service providers to calculate our Level 2 fair value measures. Unrealized gains and losses are excluded from operations and are reported net of tax as a separate component of other comprehensive income until realized. Realized gains and losses on the sale of investment securities are reported in the consolidated statements of income and determined using the adjusted cost of the specific security sold on the trade date. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities.

For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either criteria regarding intent or requirement to sell is met, the security's amortized cost basis is written down to fair value through income. For available-for-sale debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive (loss) income.

Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Accrued interest receivable on available for sale debt securities totaled $489 at September 30, 2023 and is excluded from the estimate of credit losses.

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Investment Securities

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Investment Securities

2.INVESTMENT SECURITIES

The amortized cost, gross unrealized gains and losses, and fair value of investment securities available for sale are summarized as follows:

	September 30, 2023
(In Thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for Sale:
US government agency securities	$	2,000	$	—	$	(18	)	$	1,982
Small Business Administration loan pools		693		—		(14	)		679
Obligations of state and political subdivisions		45,614		—		(5,935	)		39,679
Mortgage-backed securities in government-sponsored entities		40,987		—		(4,548	)		36,439
	$	89,294	$	—	$	(10,515	)	$	78,779
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair  Value		Allowance for Credit Losses
Held to Maturity:
Corporate debentures	$	15,000	$	—	$	(1,963	)	$	13,037	$	512
Structured mortgage-backed securities		22,778		—		(1,227	)		21,551		—
	$	37,778	$	—	$	(3,190	)	$	34,588	$	512
	December 31, 2022
(In Thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for Sale:
Small Business Administration loan pools	$	858	$	—	$	(15	)	$	843
Obligations of state and political subdivisions		44,189		14		(4,034	)		40,169
Mortgage-backed securities in government-sponsored entities		41,873		—		(4,072	)		37,801
	$	86,920	$	14	$	(8,121	)	$	78,813
Held to Maturity:
Corporate debentures	$	14,993	$	—	$	(994	)	$	13,999
Structured mortgage-backed securities		16,829		—		(748	)		16,081
	$	31,822	$	—	$	(1,742	)	$	30,080

The following tables summarize the Company's debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by security type and length of time in a continuous unrealized loss position.

	September 30, 2023
	Less Than Twelve Months					Twelve Months or Greater					Total
(In Thousands)	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
Available for Sale:
US Government Agency Securities	$	1,982	$	(18	)	$	—	$	—		$	1,982	$	(18	)
Small Business Administration loan pools		—		—			679		(14	)		679		(14	)
Obligations of state and political subdivisions		7,383		(479	)		32,296		(5,456	)		39,679		(5,935	)
Mortgage-backed securities in government-sponsored entities		4,647		(220	)		31,792		(4,328	)		36,439		(4,548	)
	$	14,012	$	(717	)	$	64,767	$	(9,798	)	$	78,779	$	(10,515	)
Held to Maturity:
Corporate debentures	$	—	$	—		$	—	$	—		$	—	$	—
Structured mortgage-backed securities		8,227		(66	)		13,324		(1,161	)		21,551		(1,227	)
	$	8,227	$	(66	)	$	13,324	$	(1,161	)	$	21,551	$	(1,227	)
	December 31, 2022
	Less Than Twelve Months					Twelve Months or Greater					Total
(In Thousands)	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
Available for Sale:
Small Business Administration loan pools	$	334	$	(1	)	$	509	$	(14	)	$	843	$	(15	)
Obligations of state and political subdivisions		34,836		(3,372	)		2,559		(662	)		37,395		(4,034	)
Mortgage-backed securities in government-sponsored entities		18,052		(1,538	)		19,749		(2,534	)		37,801		(4,072	)
	$	53,222	$	(4,911	)	$	22,817	$	(3,210	)	$	76,039	$	(8,121	)
Held to Maturity
Corporate debentures	$	13,999	$	(994	)	$	—	$	—		$	13,999	$	(994	)
Structured mortgage-backed securities		16,081		(748	)		—		—			16,081		(748	)
	$	30,080	$	(1,742	)	$	—	$	—		$	30,080	$	(1,742	)

No allowance for credit losses on available for sale debt securities was needed at September 30, 2023. The Company reviews its position quarterly and believes that as of September 30, 2023 and December 31, 2022, the declines outlined in the above tables represent temporary declines, and the Company does not intend to sell, and does not believe it will be required to sell, these debt securities before recovery of their cost basis, which may be at maturity. There were 186 and 175 available for sale debt securities with unrealized losses at September 30, 2023 and December 31, 2022, respectively. The Company has concluded that

the unrealized losses disclosed above are the result of interest rate changes and market conditions that are not expected to result in the non-collection of principal and interest during the year.

There were 13 and ten held to maturity debt securities with unrealized losses at September 30, 2023 and December 31, 2022, respectively.

As of September 30, 2023, amortized cost and fair value by contractual maturity, where applicable, are shown below. Actual maturities may differ from contractual maturities because the borrower may have the right to prepay obligations with or without penalty.

	Available for Sale Securities				Held to Maturity Securities
(In Thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	381	$	377	$	—	$	—
Due after one year through five years		9,030		8,639		6,000		5,673
Due after five years through ten years		13,432		12,134		9,000		7,364
Due after ten years		25,464		21,190		—		—
Mortgage-backed securities and Collateralized mortgage obligations		40,987		36,439		22,778		21,551
	$	89,294	$	78,779	$	37,778	$	34,588

The following table summarizes sales of debt securities for the nine months ended September 30, 2023 and 2022. There were no sales of debt securities for the three months ended September 30, 2023 and 2022.

(In Thousands)	For the Nine Months Ended September 30,
	2023			2022
Proceeds	$	1,847		$	513
Gross gains		—			13
Gross losses		2,370			—
Net (loss) gain	$	(2,370	)	$	13

The tax benefit (provision) related to these realized gains and losses was $498 and $(3) as of September 30, 2023 and 2022, respectively.

At December 31, 2022, the Company's corporate debenture portfolio contained $3,000 of an investment in subordinated notes issued by Signature Bank. As a result of and subsequent to the failure of Signature Bank during the first quarter of 2023, the Company sold its investment in the Signature Bank subordinated notes and incurred a pre-tax gross loss of approximately $2,445.

The Company had pledged debt securities with a carrying value of $55,755 and $47,418 to secure public deposits and certain borrowing capacity as of September 30, 2023 and December 31, 2022, respectively.

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Loans Receivable

9 Months Ended

Sep. 30, 2023

Loans and Leases Receivable Disclosure [Abstract]

Loans Receivable

3.LOANS RECEIVABLE

The portfolio segments and classes of loans are as follows:

(In Thousands)	September 30, 2023			December 31, 2022
Agriculture and farmland loans	$	50,584		$	55,746
Construction loans		65,836			57,713
Commercial & industrial loans		115,572			104,755
Commercial real estate loans
Multifamily		111,853			105,390
Owner occupied		160,929			139,554
Non-owner occupied		257,344			245,274
Residential real estate loans
First liens		172,481			168,084
Second liens and lines of credit		27,870			35,576
Consumer and other loans		11,869			10,057
Municipal loans		4,137			5,466
		978,475			927,615
Deferred costs		437			256
Allowance for credit losses		(9,964	)		(4,666	)
Total	$	968,948		$	923,205

The balances at December 31, 2022 were reclassified from those previously reported as shown in Note 1.

The Company originates commercial, residential, and consumer loans within its primary market areas of southcentral and southeastern Pennsylvania. A significant portion of the loan portfolio is secured by real estate.

At September 30, 2023 and December 31, 2022 the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process was $348 and $0, respectively.

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Allowance for Credit Losses

9 Months Ended

Sep. 30, 2023

Allowance for Credit Loss [Abstract]

Allowance for Credit Losses

4.ALLOWANCE FOR CREDIT LOSSES

The segments of the Company’s loan portfolio are disaggregated to a level that allows management to monitor risk and performance. The loan segments used are consistent with the internal reports evaluated by the Company’s management and Board of Directors to monitor risk and performance within various segments of its loan portfolio and, therefore, no further disaggregation is considered necessary. The Company’s loan portfolio consists primarily of real estate loans on commercial and residential property. The portfolio also includes agricultural loans, commercial loans, municipal loans, and consumer loans.

The Company’s primary lending activity is the origination of commercial loans extended to small and mid-sized commercial and industrial entities.

Commercial loans are primarily underwritten on the basis of the borrowers’ ability to service such debt from income. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. As a general practice, the Company takes as collateral a security interest in any equipment, or other chattel, although loans may also be made on an unsecured basis. Collateralized working capital loans typically are secured by short-term assets whereas long-term loans are primarily secured by long-term assets.

Construction and Land loans are to finance the construction of owner-occupied and income producing properties. These loans are categorized within commercial or one-to-four family residential loans based upon the underlying collateral and intended use following the completion of the construction period. Real estate development and construction loans are approved based on an analysis of the borrower and guarantor, the viability of the project and on an acceptable percentage of the appraised value of the property securing the loan. Construction loan funds are disbursed periodically based on the percentage of construction or development completed. The Company carefully monitors these loans with on-site inspections and requires the receipt of lien waivers on funds advanced. The Company considers the market conditions and feasibility of proposed projects, the financial condition and reputation of the borrower and guarantors, the amount of the borrower’s equity in the project, independent appraisals, cost estimates and pre-construction sale information. The Company also makes loans on occasion for the purchase of

land for future development by the borrower. Land loans are extended for the future development for either commercial or residential use by the borrower. The Company carefully analyzes the intended use of the property and the viability thereof.

The Company’s commercial real estate loans consist of mortgage loans secured by nonresidential real estate, such as by apartment buildings, small office buildings, and owner-occupied properties. Commercial real estate loans are secured by the subject property and are underwritten based on loan to value limits, cash flow coverage and general creditworthiness of the obligors. These loans tend to involve larger loan balances and their repayment is typically dependent upon the successful operation and management of the underlying real estate.

Residential real estate loans are underwritten based on the borrower’s repayment capacity and source, value of the underlying property, credit history and stability. These loans are secured by a first or second mortgage on the borrower’s principal residence or their second/vacation home (excluding investment/rental property).

In addition to the main types of loans discussed above, the Company also originates agricultural loans, consumer loans, and municipal loans. The agricultural loan portfolio consists of loans to local farmers and agricultural businesses that are generally secured by farmland and equipment. The consumer loan portfolio consists of lending in the form of home equity loans secured by financed property and personal consumer loans, which may be secured or unsecured. The municipal loan portfolio consists of loans to qualified local municipalities, which are generally supported by the taxing authority of the borrowing municipality, and is frequently secured by collateral.

Management systematically monitors the loan portfolio and the appropriateness of the allowance for credit losses on a quarterly basis to provide for expected losses inherent in the portfolio. For segments determined by discounted cash flow analysis, the Company's estimate of future economic conditions utilized in its estimate is primarily dependent on the Federal Open Market Committee's forecasts related to Real Gross Domestic Product and Unemployment rate. For segments determined by the remaining life method, an average loss rate is generally calculated based on peer losses and applied to the future outstanding loan balances at quarter end.

Certain qualitative factors are then added to the historical allocation percentage to get the adjusted factor to be applied to non-classified loans. The following qualitative factors are analyzed for each portfolio segment:

•Levels of and trends in delinquencies

•Trends in volume and terms

•Changes in collateral

•Changes in management and lending staff

•Economic trends

•Concentrations of credit

•Changes in lending policies

•External factors

•Changes in underwriting process

•Trends in credit quality ratings

These qualitative factors are reviewed each quarter and adjusted based upon relevant changes within the portfolio.

The total allowance reflects management’s estimate of loan losses inherent in the loan portfolio at the Consolidated Balance Sheet date. The Company considers the allowance for credit losses adequate to cover loan losses inherent in the loan portfolio at September 30, 2023 and December 31, 2022.

The following tables summarize the activity in the allowance for credit losses by loan segment for the three and nine months ended September 30, 2023.

	Beginning balance		Charge-offs		Recoveries		Provision for credit losses			Ending balance
(In Thousands)	For the Three Months Ended September 30, 2023
Allowance for credit losses:
Agriculture and farmland	$	209	$	—	$	—	$	(130	)	$	79
Construction		728		—		—		(275	)		453
Commercial & industrial		729		—		—		126			855
Commercial real estate
Multifamily		673		—		—		(254	)		419
Owner occupied		1,559		—		—		197			1,756
Non-owner occupied		4,350		—		—		(220	)		4,130
Residential real estate
First liens		1,397		—		11		44			1,452
Second liens and lines of credit		383		—		1		(58	)		326
Municipal		7		—		—		—			7
Consumer		22		—		—		2			24
Unallocated		171		—		—		292			463
Total	$	10,228	$	—	$	12	$	(276	)	$	9,964

	Beginning balance		Impact of adopting ASC 326			Charge-offs		Recoveries		Provision for credit losses			Ending balance
(In Thousands)	For the Nine Months Ended September 30, 2023
Allowance for credit losses:
Agriculture and farmland	$	279	$	(190	)	$	—	$	—	$	(10	)	$	79
Construction		274		513			—		—		(334	)		453
Commercial & industrial		583		283			—		1		(12	)		855
Commercial real estate
Multifamily		480		340			—		—		(401	)		419
Owner occupied		635		760			—		—		361			1,756
Non-owner occupied		1,116		3,195			—		—		(181	)		4,130
Residential real estate
First liens		1,029		635			—		50		(262	)		1,452
Second liens and lines of credit		218		140			—		60		(92	)		326
Municipal		12		(2	)		—		—		(3	)		7
Consumer		40		(19	)		—		—		3			24
Unallocated		—		—			—		—		463			463
Total	$	4,666	$	5,655		$	—	$	111	$	(468	)	$	9,964

The balances at December 31, 2022 were reclassified from those previously reported as shown in Note 1.

The following table presents the amortized cost basis of nonaccrual loans and loans past due over 89 days still accruing by segments of the loan portfolio:

	As of September 30, 2023
(In Thousands)	Nonaccrual with No Allowance for Credit Loss		Nonaccrual with a related Allowance for Credit Loss		Loans past due over 89 days still accruing
Agriculture and farmland	$	—	$	—	$	—
Construction		—		—		192
Commercial & industrial		13		—		110
Commercial real estate
Multifamily		—		—		—
Owner occupied		—		—		—
Non-owner occupied		292		140		558
Residential real estate
First liens		1,357		—		112
Second liens and lines of credit		43		—		90
Municipal		—		—		—
Consumer		50		—		1
Total	$	1,755	$	140	$	1,063

The Company recognized $35 and $49 of interest income on nonaccrual loans during the three and nine months ended September 30, 2023.

The following table presents an aging analysis of the recorded investment of past due loans at September 30, 2023.

	September 30, 2023
(In Thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total   Loans
Agriculture and farmland	$	291	$	—	$	—	$	291	$	50,293	$	50,584
Construction		—		—		192		192		65,644		65,836
Commercial & industrial		202		—		122		324		115,248		115,572
Commercial real estate
Multifamily		—		—		—		—		111,853		111,853
Owner occupied		137		—		—		137		160,792		160,929
Non-owner occupied		—		—		947		947		256,397		257,344
Residential real estate
First liens		1,096		101		592		1,789		170,692		172,481
Second liens and lines of credit		97		4		96		197		27,673		27,870
Municipal		—		—		—		—		11,869		11,869
Consumer		4		—		3		7		4,130		4,137
Total	$	1,827	$	105	$	1,952	$	3,884	$	974,591	$	978,475

Credit Quality Information

The following tables represent credit exposures by internally assigned grades as of September 30, 2023. The grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled or at all.

The Company’s internally assigned grades are as follows:

Pass – loans that are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral. There are four sub-grades within the Pass category to further distinguish the loan.

Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected.

Substandard – loans that have a well-defined weakness based on objective evidence and are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

Doubtful – loans classified as Doubtful have all the weaknesses inherent in a Substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.

Loss – loans classified as a Loss are considered uncollectible and are immediately charged against allowances.

The following table presents the classes of the loan portfolio summarized by the internal risk rating system as of September 30, 2023.

	September 30, 2023
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2023		2022		2021		2020		2019		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Agriculture and farmland
Pass	$	641	$	13,880	$	5,073	$	5,228	$	3,089	$	15,107	$	4,213	$	46	$	47,277
Special mention		—		—		—		—		45		192		242		—		479
Substandard or lower		14		—		16		129		—		2,612		57		—		2,828
Total Agriculture and farmland	$	655	$	13,880	$	5,089	$	5,357	$	3,134	$	17,911	$	4,512	$	46	$	50,584
Agriculture and farmland
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Construction
Pass		17,080		23,430		17,020		912		5,428		1,498		375		93		65,836
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		—		—		—		—		—		—		—
Total Construction		17,080		23,430		17,020		912		5,428		1,498		375		93		65,836
Construction
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Commercial & industrial
Pass		6,765		14,505		7,258		9,606		1,657		1,045		73,096		110		114,042
Special mention		—		—		161		—		—		—		914		—		1,075
Substandard or lower		—		—		51		—		203		—		200		1		455
Total Commercial & industrial		6,765		14,505		7,470		9,606		1,860		1,045		74,210		111		115,572
Commercial & industrial
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Commercial real estate - Multifamily
Pass		5,226		44,619		42,805		11,307		5,858		—		153		—		109,968
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		—		—		—		1,885		—		—		1,885
Total Commercial real estate - Multifamily		5,226		44,619		42,805		11,307		5,858		1,885		153		—		111,853
Commercial real estate - Multifamily
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

	September 30, 2023
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2023		2022		2021		2020		2019		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Commercial real estate - Owner occupied
Pass		14,164		66,271		24,299		14,821		21,357		5,767		3,051		6		149,736
Special mention		—		—		1,490		—		6,591		—		295		—		8,376
Substandard or lower		—		—		—		—		2,423		320		74		—		2,817
Total Commercial real estate - Owner occupied		14,164		66,271		25,789		14,821		30,371		6,087		3,420		6		160,929
Commercial real estate - Owner occupied
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Commercial real estate - Non-owner occupied
Pass		20,178		113,886		59,008		18,565		25,778		13,105		5,834		—		256,354
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		43		—		140		558		—		249		990
Total Commercial real estate - Non-owner occupied		20,178		113,886		59,051		18,565		25,918		13,663		5,834		249		257,344
Commercial real estate - Non-owner occupied
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Municipal
Pass		266		—		220		1,677		—		1,877		97		—		4,137
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		—		—		—		—		—		—		—
Total Commercial real estate - Municipal		266		—		220		1,677		—		1,877		97		—		4,137
Municipal
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Total
Pass	$	64,320	$	276,591	$	155,683	$	62,116	$	63,167	$	38,399	$	86,819	$	255	$	747,350
Special mention		—		—		1,651		—		6,636		192		1,451		—		9,930
Substandard or lower		14		—		110		129		2,766		5,375		331		250		8,975
Total	$	64,334	$	276,591	$	157,444	$	62,245	$	72,569	$	43,966	$	88,601	$	505	$	766,255

The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. As part of our adoption of CECL, the Company will monitor small balance, homogeneous loans, such as home equity, residential mortgage, and consumer loans based on delinquency status rather than the assignment of loan specific risk ratings. The Company will

evaluate credit quality based on the aging status of the loan. The following tables present the amortized cost of these loans based on payment activity, by origination year

	September 30, 2023
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2023		2022		2021		2020		2019		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Residential real estate - First liens
Performing	$	14,757	$	40,742	$	51,889	$	20,584	$	9,512	$	27,507	$	6,021	$	—	$	171,012
Nonperforming		—		—		—		104		211		1,154		—		—		1,469
Total Residential real estate - First liens	$	14,757	$	40,742	$	51,889	$	20,688	$	9,723	$	28,661	$	6,021	$	—	$	172,481
Residential real estate - First liens
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Residential real estate - Second liens and lines of credit
Performing		75		766		440		130		194		1,256		24,876		—		27,737
Nonperforming		—		—		—		—		—		29		90		14		133
Total Residential real estate - Second liens and lines of credit		75		766		440		130		194		1,285		24,966		14		27,870
Residential real estate - Second liens and lines of credit
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Consumer and other
Performing		1,930		169		70		70		17		9		9,553		—		11,818
Nonperforming		—		2		—		—		48		—		1		—		51
Total Consumer and other		1,930		171		70		70		65		9		9,554		—		11,869
Consumer and other
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Total
Performing	$	16,762	$	41,677	$	52,399	$	20,784	$	9,723	$	28,772	$	40,450	$	—	$	210,567
Nonperforming		—		2		—		104		259		1,183		91		14		1,653
Total	$	16,762	$	41,679	$	52,399	$	20,888	$	9,982	$	29,955	$	40,541	$	14	$	212,220

The Company may modify loans to borrowers experiencing financial difficulty by providing principal forgiveness, term extension, interest rate reduction or an other-than-insignificant payment delay. When principal forgiveness is provided, the amount of forgiveness is charged off against the allowance for credit losses. The Company may also provide multiple types of modifications on an individual loan. For the nine months ended September 30, 2023, the Company did not extend any modifications to borrowers experiencing financial difficulty that had a more-than-insignificant direct change in the contractual cash flows of the loan.

Allowance for loan losses

Prior to the adoption of ASC 326 on January 1, 2023, the Company calculated the allowance for loan losses using the incurred losses methodology. The following tables are disclosures related to the allowance for loan losses in prior periods.

The following table summarizes the activity in the allowance for loan losses by loan class for the three and nine month periods ended September 30, 2022.

	Agriculture Loans		Commercial and PPP Loans			Commercial Real Estate Loans			Residential Real Estate Loan			Consumer Loans		Municipal Loans		Unallocated Loans			Total
(In Thousands)	For the Three Months Ended September 30, 2022
Allowance for loan losses:
Beginning balance	$	17	$	506		$	1,786		$	1,547		$	21	$	13	$	—		$	3,890
Charge-offs		—		—			—			—			—		—		—			—
Recoveries		—		25			—			139			—		—		—			164
Provision		21		96			427			(43	)		12		2		—			515
Ending balance	$	38	$	627		$	2,213		$	1,643		$	33	$	15	$	-		$	4,569
(In Thousands)	For the Nine Months Ended September 30, 2022
Allowance for loan losses:
Beginning balance	$	23	$	582		$	799		$	1,634		$	22	$	15	$	77		$	3,152
Charge-offs		—		(1	)		(1	)		—			—		—		—			(2	)
Recoveries		—		32			—			195			2		—		—			229
Provision		15		14			1,415			(186	)		9		—		(77	)		1,190
Ending balance	$	38	$	627		$	2,213		$	1,643		$	33	$	15	$	-		$	4,569

The following table illustrates the balance of loans individually evaluated vs. collectively evaluated for impairment at December 31, 2022.

	Agriculture Loans		Commercial and PPP Loans		Commercial Real Estate Loans		Residential Real Estate Loan		Consumer Loans		Municipal Loans		Unallocated Loans		Total
(In Thousands)	As of December 31, 2022
Allowance for loan losses:
Ending balance	$	33	$	583	$	2,462	$	1,536	$	40	$	12	$	—	$	4,666
Ending balance: individually    evaluated for impairment	$	—	$	20	$	—	$	—	$	—	$	—	$	—	$	20
Ending balance: collectively evaluated    for impairment	$	33	$	563	$	2,462	$	1,536	$	40	$	12	$	—	$	4,646
Loans:
Ending balance	$	15,591	$	104,755	$	540,914	$	250,832	$	10,057	$	5,466			$	927,615
Ending balance: individually    evaluated for impairment	$	300	$	55	$	2,306	$	4,652	$	—	$	—			$	7,313
Ending balance: loans acquired with deteriorated credit    quality	$	—	$	—	$	2,227	$	182	$	—	$	—			$	2,409
Ending balance: collectively evaluated    for impairment	$	15,291	$	104,700	$	536,381	$	245,998	$	10,057	$	5,466			$	917,893

Credit Quality Information

The following tables represent credit exposures by internally assigned grades as of December 31, 2022. The grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled or at all.

The Company’s internally assigned grades are as follows:

Pass – loans that are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral. There are four sub-grades within the Pass category to further distinguish the loan.

Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected.

Substandard – loans that have a well-defined weakness based on objective evidence and are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

Doubtful – loans classified as Doubtful have all the weaknesses inherent in a Substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.

Loss – loans classified as a Loss are considered uncollectible and are immediately charged against allowances.

The following table presents the classes of the loan portfolio summarized by the internal risk rating system as of December 31, 2022:

(In Thousands)			Special
As of December 31, 2022	Pass		Mention		Substandard		Doubtful		Total
Agriculture loans	$	15,291	$	—	$	300	$	—	$	15,591
Commercial and PPP		101,980		2,721		54		—		104,755
Commercial real estate loans		533,864		2,516		4,534		—		540,914
Residential real estate loans		246,028		207		4,597		—		250,832
Consumer loans		10,057		—		—		—		10,057
Municipal loans		5,466		—		—		—		5,466
Total	$	912,686	$	5,444	$	9,485	$	—	$	927,615

The following table presents an aging analysis of the recorded investment of past due loans at December 31, 2022.

	December 31, 2022
(In Thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Purchased Credit Impaired Loans		Total   Loans		Total > 90 Days and   Accruing
Agriculture loans	$	193	$	48	$	149	$	390	$	15,201	$	—	$	15,591	$	149
Commercial and PPP loans		111		21		54		186		104,569		—		104,755		54
Commercial real estate loans		863		88		190		1,141		537,546		2,227		540,914		—
Residential real estate loans		2,474		137		1,176		3,787		246,863		182		250,832		540
Consumer loans		254		58		—		312		9,745		—		10,057		—
Municipal loans		—		—		—		—		5,466		—		5,466		—
Total	$	3,895	$	352	$	1,569	$	5,816	$	919,390	$	2,409	$	927,615	$	743

Impaired Loans

The following tables present the recorded investment and unpaid principal balances for impaired loans and related allowance, if applicable. Also presented are the average recorded investments and the related amount of interest recognized during the time within the period that the impaired loans were impaired.

	As of December 31, 2022
(In Thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Agriculture loans	$	300	$	300	$	—
Commercial loans		35		55		—
Commercial real estate loans		2,306		2,312		—
Residential real estate loans		4,652		4,683		—
Consumer loans		—		—		—
Municipal loans		—		—		—
With an allowance recorded:
Agriculture loans	$	—	$	—	$	—
Commercial loans		20		20		20
Commercial real estate loans		—		—		—
Residential real estate loans		—		—		—
Consumer loans		—		—		—
Municipal loans		—		—		—
		—		—		—
Total
Agriculture loans	$	300	$	300	$	—
Commercial loans		55		75		20
Commercial real estate loans		2,306		2,312		—
Residential real estate loans		4,652		4,683		—
Consumer loans		—		—		—
Municipal loans		—		—		—
	$	7,313	$	7,370	$	20

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2022				2022
(In Thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Agriculture loans	$	133	$	5	$	210	$	8
Commercial loans		37		—		35		—
Commercial real estate loans		2,421		65		2,451		100
Residential real estate loans		2,986		36		3,048		57
Consumer loans		—		—		—		—
Municipal loans		—		—		—		—
		5,577		106		5,744		165
With an allowance recorded:
Agriculture loans	$	—	$	—	$	—	$	—
Commercial loans		—		—		—		—
Commercial real estate loans		—		—		—		—
Residential real estate loans		174		3		175		5
Consumer loans		2		—		2		—
Municipal loans		—		—		—		—
		176		3		177		5
Total	$	5,753	$	109	$	5,921	$	170

The following table presents nonaccrual loans by classes of the loan portfolio:

(In Thousands)	December 31, 2022
Commercial and PPP loans	$	35
Commercial real estate loans		231
Residential real estate loans		1,652
Consumer loans		—
Total	$	1,918

The above nonaccrual loans as of December 31, 2022 excludes PCI loans with a total balance of $2,409. Management does not consider these loans to be non-performing as they are accounted for under the accretable yield method and are performing in line with expectations as of December 31, 2022.

At December 31, 2022, the carrying amount of borrowings secured by loans pledged to the FHLB under its blanket lien was $0.

Loan Modifications and Troubled Debt Restructurings (TDRs)

A loan is considered to be a TDR loan when the Company grants a concession to the borrower because of the borrower’s financial condition that it would not otherwise consider. Such concessions include the reduction of interest rates, forgiveness of principal or interest, or other modifications of interest rates that are less than the current market rate for new obligations with similar risk.

The Bank may grant a concession or modification for economic or legal reasons related to a borrower’s financial condition that it would not otherwise consider resulting in a modified loan which is then identified as a troubled debt restructuring (TDR). The Bank may modify loans through rate reductions, extensions of maturity, interest only payments, or payment modifications to better match the timing of cash flows due under the modified terms with the cash flows from the borrowers’ operations. Loan modifications are intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. TDRs are considered impaired loans for purposes of calculating the Bank’s allowance for loan losses.

The Bank identifies loans for potential restructure primarily through direct communication with the borrower and evaluation of the borrower’s financial statements, revenue projections, tax returns, and credit reports. Even if the borrower is not presently in default, management will consider the likelihood that cash flow shortages, adverse economic conditions, and negative trends may result in a payment default in the near future. As of December 31, 2022, the Company had no loans identified as TDRs.

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Deposits

9 Months Ended

Sep. 30, 2023

Deposits [Abstract]

Deposits

5.DEPOSITS

Deposit accounts are summarized as follows:

	September 30, 2023					December 31, 2022
(In Thousands)	Amount		%			Amount		%
Demand, noninterest-bearing	$	210,404		20.20	%	$	192,773		20.36	%
Demand, interest-bearing		273,673		26.26			254,478		26.88
Money market and savings		258,334		24.80			228,048		24.09
Time deposits, $250 and over		51,563		4.95			45,616		4.82
Time deposits, other		247,798		23.79			225,857		23.86
	$	1,041,772		100.0	%	$	946,772		100.0	%

Within time deposits, other, there were $75,000 and $70,000 in brokered deposits outstanding at September 30, 2023 and December 31, 2022, respectively. The brokered deposits outstanding at September 30, 2023 matured in October 2023.

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Borrowings and Subordinated Debentures

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Borrowings and Subordinated Debentures

6.BORROWINGS AND SUBORDINATED DEBENTURES

Borrowings and subordinated debt were as follows:

(in Thousands)	September 30, 2023		December 31, 2022
Subordinated Debt	$	40,354	$	40,484
Short-term borrowings		15,000		20,938
Total	$	55,354	$	61,422

Subordinated Notes Sale - 2022

On April 8, 2022, LINKBANCORP entered into Subordinated Note Purchase Agreements (the “Agreements”) with certain institutional accredited investors (the “Purchasers”) and, pursuant to the Agreements, issued to the Purchasers $20,000 in aggregate principal amount of its 4.50% Fixed-to-Floating Rate Subordinated Notes due 2032 (the “Notes”). The investors included a related party entity that is controlled by a member of the Board of Directors of the Company, which purchased $7,000 in principal amount of the note. During the year ended December 31, 2022, the Company contributed $15,000 of the subordinated note proceeds to the Bank as equity capital, the impact of which can be seen within Note 9 Regulatory Capital Requirements later in this document.

The Notes are intended to qualify at the holding company level as Tier 2 capital under the capital guidelines of the Federal Reserve Board.

The Notes, which mature on April 15, 2032, bear interest at a fixed annual rate of 4.50% for the period up to but excluding April 15, 2027 (the “Fixed Interest Rate Period”). From April 15, 2027 until maturity or redemption (the “Floating Interest Rate Period”), the interest rate will adjust to a floating rate equal to a benchmark rate, which is expected to be the then-current three-month Secured Overnight Financing Rate (SOFR), plus 203 basis points. The Company will pay interest in arrears semi-annually during the Fixed Interest Rate Period and quarterly during the Floating Interest Rate Period. The Notes constitute unsecured and subordinated obligations of the Company and rank junior in right of payment to any senior indebtedness and obligations to general and secured creditors. Subject to limited exceptions, the Company cannot redeem the Notes before the fifth anniversary of the issuance date.

The Agreements and Notes contain customary subordination provisions, representations and warranties, covenants, and events of default.

Short-term Borrowings - FHLB Advances

The Company had $15,000 and $20,938 in short-term FHLB Advances outstanding at September 30, 2023 and December 31, 2022, respectively. These advances have scheduled maturities less than a year. Our balance as of September 30, 2023 represents a single FHLB advance with a one-month maturity, however, as part of our interest rate swap transaction, the Company has committed to maintain either one-month advances from the FHLB or brokered deposits with a duration of one month through May of 2028. See Note 12 for more detail on an interest rate swap transaction regarding FHLB advances.

Available Lines of Credit

The Bank has available unsecured lines of credit, with interest based on the daily Federal Funds rate, with four correspondent banks totaling $51,000 at September 30, 2023. There were no borrowings under these lines of credit at September 30, 2023 and December 31, 2022.
 

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Fair Value Measurements

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

7.FAIR VALUE MEASUREMENTS

Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent weaknesses in an estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts The Company could have realized in a sales transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective year-ends and have not been re-evaluated or updated for purposes of these financial statements subsequent to those respective dates. As such, the estimated fair values of

these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each year-end.

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with the fair value measurements accounting guidance (FASB ASC 820, Fair Value Measurements), the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

The Company uses a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value guidance establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

The following disclosures show the hierarchal disclosure framework associated with the level of pricing observations utilized in measuring assets and liabilities at fair value. The three broad levels of pricing are as follows:

Level I:	Quoted prices are available in active markets for identical assets or liabilities as of the reported date.
Level II:	Pricing inputs are other than the quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities includes items for which quoted prices are available but traded less frequently and items that are fair-valued using other financial instruments, the parameters of which can be directly observed.
Level III:	Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

This hierarchy requires the use of observable market data when available.

The estimated fair values of the Company’s financial instruments that are not required to be measured or reported at fair value are as follows:

	At September 30, 2023				At December 31, 2022
(In Thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Cash and cash equivalents (Level 1)	$	67,979	$	67,979	$	30,011	$	30,011
Certificates of deposit with other banks (Level 3)		249		249		5,623		5,590
Securities held to maturity (Level 2)		37,778		34,588		31,822		30,080
Loans (Level 3)		978,912		920,526		927,871		886,944
Derivative (Level 3)		3,264		3,264		—		—
Accrued interest receivable (Level 1)		4,767		4,767		4,661		4,661
Restricted investments in bank stock (Level 1)		3,107		3,107		3,377		3,377
Cash surrender value of life insurance (Level 1)		24,732		24,732		19,244		19,244
Financial liabilities:
Non-maturity deposits (Level 1)		742,411		742,411		675,299		675,299
Time Deposits (Level 3)		299,361		296,799		271,473		266,775
Other borrowings (Level 3)		15,000		15,000		20,938		20,938
Subordinated Notes (Level 3)		40,354		35,796		40,484		35,966
Accrued interest payable (Level 1)		1,166		1,166		797		797

The following tables present the assets reported on the Consolidated Balance Sheet at their fair value on a recurring basis as of September 30, 2023 and December 31, 2022, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The Company’s available-for-sale investment securities are reported at fair value. These securities are valued by an independent third party. The valuations are based on market data. The valuations utilize evaluated pricing models that vary by asset and incorporate available trade, bid and other market information. For securities that do not trade on a daily basis, their evaluated pricing applications apply available information such as benchmarking and matrix pricing. The market inputs normally sought in the evaluation of securities include benchmark yields, reported trades, broker/dealer quotes (only obtained from market makers or broker/dealers recognized as market participants), issuer spreads, two-sided markets, benchmark securities, bid, offers and reference data. For certain securities additional inputs may be used or some market inputs may not be applicable. Inputs are prioritized differently on any given day based on market conditions.

	September 30, 2023
(In Thousands)	Level I		Level II		Level III		Total
Assets:
US government agency securities	$	—	$	1,982	$	—	$	1,982
Small Business Administration loan pools		—		679		—		679
Obligations of state and political subdivisions		—		39,679		—		39,679
Mortgage backed securities in government-sponsored entities		—		36,439		—		36,439
Total	$	—	$	78,779	$	—	$	78,779
	December 31, 2022
(In Thousands)	Level I		Level II		Level III		Total
Assets:
Small Business Administration loan pools	$	—	$	843	$	—	$	843
Obligations of state and political subdivisions		—		40,169		—		40,169
Mortgage backed securities in government-sponsored entities		—		37,801		—		37,801
Total	$	—	$	78,813	$	—	$	78,813

For financial assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used as of September 30, 2023 and December 31, 2022 are presented in the table below.

	September 30, 2023
(In Thousands)	Level I		Level II		Level III		Total
Loans individually evaluated	$	—	$	—	$	9,523	$	9,523
	December 31, 2022
(In Thousands)	Level I		Level II		Level III		Total
Loans individually evaluated	$	—	$	—	$	7,313	$	7,313

The following tables provide information describing the valuation processes used to determine nonrecurring fair value measurements categorized within Level III of the fair value hierarchy:

	September 30, 2023
	Quantitative Information About Level III Fair Value Measurements
(In Thousands)	Fair Value		Valuation Techniques			Unobservable Input	Range (Weighted Average)
Loans individually evaluated	$	9,523	Appraisal of collateral	(1	)	Liquidation expenses		10	%
	December 31, 2022
	Quantitative Information About Level III Fair Value Measurements
(In Thousands)	Fair Value		Valuation Techniques			Unobservable Input	Range (Weighted Average)
Loans individually evaluated	$	7,313	Appraisal of collateral	(1	)	Liquidation expenses		10	%

(1)Fair value is generally determined through independent appraisals of the underlying collateral, which include various Level III inputs that are not identifiable.

Appraisals may be adjusted by management for qualitative factors, such as economic conditions, aging, and/or estimated liquidation expenses incurred when selling the collateral. The range and weighted average of appraisal adjustments and liquidation expenses are presented as a percentage of the appraisal.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

8.STOCK-BASED COMPENSATION

The LINKBANCORP, Inc. 2019 Equity Incentive Plan (the "2019 Plan") authorized the issuance or delivery to participants of up to 450,000 shares of LINKBANCORP common stock pursuant to grants of incentive and non-statutory stock options. The Plan is administered by the members of LINKBANCORP’s Compensation Committee (the "Committee"). Unless the Committee specified a different vesting schedule, awards under the Plan were granted with a vesting rate of 20 percent per year. Vesting may be accelerated under certain conditions or at the discretion of the Committee at any time. Employees and directors of LINKBANCORP or its subsidiaries were eligible to receive awards under the plan, except that nonemployees were not granted incentive stock options. Stock options are either “incentive” stock options or “nonqualified” stock options. Incentive stock options have certain tax advantages and must comply with the requirements of Section 422 of the Internal Revenue Code. The 2019 Plan was frozen such that no new awards would be granted under the 2019 Plan following receipt of shareholder approval of the LINKBANCORP, Inc. 2022 Equity Incentive Plan described within this footnote.

On May 26, 2022, the Company's shareholders approved the LINKBANCORP, Inc. 2022 Equity Incentive Plan (the "2022 Plan"). The 2022 Plan authorizes the issuance or delivery to participants of up to 475,000 shares of the Company's common stock pursuant to grants of restricted stock, restricted stock units, stock options, and non-qualified stock options. The 2022 Plan is administered by the members of LINKBANCORP’s Compensation Committee (the "Committee"). At least 95% of the awards under the 2022 Plan will vest no earlier than one year after the grant date.

The table below provides details of the Company's stock options at September 30, 2023.

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term in Years		Aggregate Intrinsic Value (in ‘000s)
Outstanding, December 31, 2022		490,000		$	10.11		7.0	$	33
Granted		60,000			7.00		9.9		—
Expired/terminated		(36,000	)		10.45		—
Exercised		—			—		—
Outstanding, September 30, 2023		514,000		$	9.72		7.0	$	—
Exercisable at period end		260,000		$	10.16		5.8	$	—

The exercise prices for options outstanding as of September 30, 2023 ranged from $7.00 to $14.50.

The table below provides details of the Company's restricted shares activity at September 30, 2023.

	Number of Shares		Average Market Price at Grant
Outstanding, December 31, 2022		—
Granted		87,000	$	7.00
Expired/terminated		—
Outstanding, September 30, 2023		87,000	$	7.00

The Company recognized stock-based compensation expense of $38 and $96 for the three and nine months ended September 30, 2023 and $19 and $59 for the three and nine months ended September 30, 2022, respectively. At September 30, 2023, the total unrecognized stock-based compensation costs totaled $200 and will be recognized ratably as expense through December 31, 2027.

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Regulatory Capital Requirements

9 Months Ended

Sep. 30, 2023

Regulatory Capital Requirements Under Banking Regulations [Abstract]

Regulatory Capital Requirements

9.REGULATORY CAPITAL REQUIREMENTS

The Bank is subject to various regulatory capital requirements administered by the Federal Deposit Insurance Corporation and the Pennsylvania Department of Banking and Securities. Failure to meet minimum capital requirements can initiate certain mandatory, and possible additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on

the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk-weightings, and other factors.

The Bank is subject to regulatory capital requirements administered by banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings, and other factors and the regulators can lower classifications in certain cases. Failure to meet various capital requirements can initiate regulatory action that could have a direct material effect on the financial statements. As of September 30, 2023, the Bank has met all capital adequacy requirements to which it is subject.

The prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, under-capitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If an institution is adequately capitalized, regulatory approval is required before the institution may accept brokered deposits. If an institution is undercapitalized, capital distributions are limited, as is asset growth and expansion, and plans for capital restoration are required.

The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of Common Equity Tier 1 capital to risk-weighted assets above the minimum but below the conservation buffer will face limitations on dividends, stock repurchases and certain discretionary bonus payments to management based on the amount of the shortfall. Under Basel III rules, banks must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The required capital conservation buffer is 2.50%.

The following table presents actual and required capital ratios as of September 30, 2023 and December 31, 2022 under the Basel III Capital Rules. Bank capital levels required to be considered well capitalized are based upon prompt corrective action regulations.

	September 30, 2023					December 31, 2022
(In Thousands)	Amount		Ratio			Amount		Ratio
Total capital
(to risk-weighted assets)
Actual	$	133,547		12.92	%	$	125,632		12.89	%
For capital adequacy purposes		82,664		8.00			77,953		8.00
To be well capitalized		103,331		10.00			97,441		10.00
Tier 1 capital
(to risk-weighted assets)
Actual	$	127,823		12.37	%	$	120,912		12.41	%
For capital adequacy purposes		61,998		6.00			58,465		6.00
To be well capitalized		82,664		8.00			77,953		8.00
Common equity
(to risk-weighted assets)
Actual	$	127,823		12.37	%	$	120,912		12.41	%
For capital adequacy purposes		46,499		4.50			43,848		4.50
To be well capitalized		67,165		6.50			63,337		6.50
Tier 1 capital
(to average assets)
Actual	$	127,823		10.71	%	$	120,912		10.93	%
For capital adequacy purposes		47,727		4.00			44,248		4.00
To be well capitalized		59,658		5.00			55,311		5.00

The federal banking agencies, including the FDIC, issued a rule pursuant to The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 to establish for institutions with assets of less than $10 billion a “community bank leverage ratio” (the ratio of a bank’s tier 1 capital to average total consolidated assets) of 9% that qualifying institutions may elect to use in lieu of the generally applicable leverage and risk-based capital requirements under Basel III. If an election to use the community bank leverage ratio capital framework is made, a qualifying bank with less than $10 billion in assets with capital exceeding the specified community bank leverage ratio is considered compliant with all applicable regulatory capital and

leverage requirements, including the requirement to be “well capitalized.” As of September 30, 2023 and December 31, 2022, the Bank had not elected to be subject to the alternative framework.

Federal and state banking regulations place certain restrictions on dividends paid by the Bank. The Pennsylvania Banking Code provides that cash dividends may be declared and paid out of accumulated net earnings. In addition, dividends paid by the Bank would be prohibited if the effect thereof would cause the Bank’s capital to be reduced below applicable minimum capital requirements. Loans or advances by the Bank to the Company are limited to 10 percent of the Bank’s capital stock and surplus and must have collateral securing the loans or advances.

The Federal Reserve and the FDIC have adopted a rule that provides a banking organization the option to phase-in over a three-year period the effects of CECL on its regulatory capital upon the adoption of the CECL standard. The Company opted to exercise this phase-in option.

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Financial Instruments With Off-Balance Sheet Risk

9 Months Ended

Sep. 30, 2023

Financial Instruments With Off Balance Sheet Risk [Abstract]

Financial Instruments With Off-Balance Sheet Risk

10.FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making and monitoring commitments and conditional obligations as it does for on-balance sheet instruments. As of September 30, 2023 and December 31, 2022, the Company has an allowance for credit losses for off-balance sheet instruments of $904 and $54, respectively, included within the liabilities section of the balance sheet. The corresponding credit to provision for credit losses for the three and nine months ended September 30, 2023 was $0 and $60, respectively. The provision for credit losses for both the three and nine months ended September 30, 2022 was $0.

At September 30, 2023 and December 31, 2022, the following financial instruments were outstanding whose contract amounts represent credit risk:

(In Thousands)	September 30, 2023		December 31, 2022
Unfunded commitments under lines of credit:
Home equity loans	$	46,960	$	43,798
Commercial real estate, construction, and land development		60,239		62,146
Commercial and industrial		144,736		125,205
Total	$	251,935	$	231,149

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Company evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation. Collateral held varies but may include personal or commercial real estate, accounts receivable, inventory, and equipment.

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Earning Per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Earning per share

11.EARNINGS PER SHARE

The following table sets forth the composition of earnings per share:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In Thousands, except share and per share data)	2023		2022		2023		2022
Net income	$	1,240	$	1,772	$	1,033	$	4,902
Basic weighted average common shares outstanding		16,235,144		10,590,079		15,984,151		10,087,341
Net effect of dilutive stock options and warrants		—		—		—		49,116
Net effect of dilutive restricted stock awards		—		—		—		—
Diluted weighted average common shares outstanding		16,235,144		10,590,079		15,984,151		10,136,457
Net income per common share:
Basic	$	0.08	$	0.17	$	0.06	$	0.49
Diluted	$	0.08	$	0.17	$	0.06	$	0.48

The following is a summary of securities that could potentially dilute basic earnings per common share in future periods that were included in the computation of diluted earnings per common share in the periods presented.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Stock Options		—		—		—		—
Warrants		—		—		—		1,537,484
Restricted Stock Awards		—		—		—		—
Total dilutive securities		—		—		—		1,537,484

The following is a summary of securities that could potentially dilute basic earnings per share in future periods that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the periods presented.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Stock Options		260,000		195,700		260,000		195,700
Warrants		1,537,484		1,537,484		1,537,484		—
Restricted Stock Awards		87,000		—		87,000		—
Total anti-dilutive securities		1,884,484		1,733,184		1,884,484		195,700

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Derivatives

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

12.DERIVATIVES

During the second quarter of 2023 the Company entered into a pay fixed / received variable interest rate swap with a notional amount of $75,000 which has a fixed rate of 3.28%, a maturity of five years and is designated against either a mix of one-month FHLB advances or brokered certificates of deposit. The Company will utilize, from time to time, interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. At September 30, 2023, the derivative contract is used to hedge the variable cash flows associated with monthly brokered deposits.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income (loss) and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in Accumulated Other Comprehensive Income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. The amounts reclassified to interest expense were ($375) and ($572) for the three and nine months ended September 30, 2023. Over the next 12 months, the Company estimates that an additional $1.5 million will be reclassified as a reduction to interest expense.

The Company recorded $3.3 million within other assets on the Consolidated Balance Sheet, which represented the fair value of this derivative at September 30, 2023.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and the Bank. All significant intercompany accounts and transactions have been eliminated in consolidation. The accounting and reporting practices of the Company conform to accounting principles generally accepted in the United States of America (GAAP) and to general practices within the banking industry. In the opinion of management, all adjustments (all of which are of a normal recurring nature) that are necessary for a fair statement are reflected in the unaudited condensed consolidated financial statements.

The Company has evaluated events and transactions occurring subsequent to the consolidated balance sheet date of September 30, 2023 for items that should potentially be recognized or disclosed in these unaudited condensed consolidated financial statements. The evaluation was conducted through the date these unaudited condensed consolidated financial statements were issued.

Estimates

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly

susceptible to significant change in the near term relate to the allowance for credit losses, and the valuation of deferred tax assets.

Interim Financial Information

Interim Financial Information

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Reclassification of Prior Period Financial Statements

Reclassification of Prior Period Financial Statements

Certain previously reported items have been reclassified to conform to the current year's classifications. Reclassifications had no effect on prior year net income or shareholders' equity.

Pending Merger with Partners Bancorp

Pending Merger with Partners Bancorp

On February 22, 2023, the Company entered into an Agreement and Plan of Merger (the "Partners Merger Agreement") with Partners Bancorp ("Partners"), a Maryland corporation, and the holding company for The Bank of Delmarva and Virginia Partners Bank, based in Seaford, Delaware and Fredericksburg, Virginia, respectively. At December 31, 2022, Partners had total assets of $1.57 billion, total loans of $1.23 billion, total deposits of $1.34 billion, and 17,973,724 shares outstanding. The Partners Merger Agreement provides that, subject to the terms and conditions thereof, Partners will merge with and into the Company, with the Company as the surviving corporation, and that The Bank of Delmarva and Virginia Partners Bank will each merge with and into LINKBANK, with LINKBANK as the surviving bank (collectively, the "Partners Merger"). On June 22, 2023, shareholders of the Company and Partners each approved the Partners Merger. On October 13, 2023, the Company and Partners announced the receipt of FDIC and state regulatory approvals for the Partners Merger. However, the Partners Merger remains subject to the approval of the Board of Governors of the Federal Reserve System and other customary closing conditions. The Partners Merger is expected to close in the fourth quarter of 2023. The Partners Merger will introduce the Company's operations into northern Virginia, eastern Maryland, Delaware, and southern New Jersey.

Unregistered Sale of Equity Securities

Unregistered Sale of Equity Securities

On February 21, 2023, the Company entered into Investment Agreements with certain directors of the Company as well as other accredited investors under which it issued and sold 1,282,052 shares of its common stock, par value $0.01, at a price of $7.80 per share. The shares were issued on February 21, 2023, in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D of the rules and regulations promulgated thereunder. The offering resulted in gross proceeds of $10.0 million. There were no underwriting discounts or commissions.

Loans Receivable

Loans Receivable

Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of an allowance for credit losses and any deferred fees or costs. Interest income is accrued on the unpaid principal balance. Accrued interest receivable on loans totaled $4,073 at September 30, 2023 and was reported within accrued interest receivable and other assets on the consolidated balance sheets and is excluded from the estimate of credit losses. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the yield (interest income) of the related loans. The Bank is generally amortizing these amounts over the contractual life of the loan. Premiums and discounts on purchased loans are amortized as adjustments to interest income using the effective yield method.

The loans receivable portfolio is segmented into commercial and consumer loans. Commercial loans consist of the following classes: agriculture, commercial and industrial, commercial real estate, and municipal. Consumer loans consist of the following classes: residential real estate, and other consumer. The loan segments are based on collateral type.

The accrual of interest on all portfolio classes is discontinued at the time the loan is more than ninety days delinquent unless the loan is well collateralized and in process of collection. Nonaccrual loans are reviewed for charge-offs if more than ninety-days past due, except for residential loans and consumer loans. Residential loans are reviewed at 180 days and consumer loans are reviewed at 120 days past due. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered unlikely.

All interest accrued but not collected for loans placed on nonaccrual or charged-off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. In addition, a loan should be in accordance with the contractual terms for a reasonable period, usually requiring a payment history of six months.

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

FASB ASC 815, Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments.

As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

In accordance with the FASB’s fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

Goodwill Impairment

Goodwill Impairment

Goodwill is not amortized but is reviewed for potential impairment on at least an annual basis, with testing between annual tests if an event occurs or circumstances change that could potentially reduce the fair value of a reporting unit. In conjunction with the IPO, the Company issued 5,101,205 shares of common stock and the Company's stock price subsequently decreased from an average closing price of $9.32 per share for the month of August 2022, to $7.50 per share upon completion of the IPO. In the first quarter of 2023, the Company's stock price further decreased, causing management to perform a goodwill impairment test at March 31, 2023. No goodwill impairment was identified at March 31, 2023. No goodwill test has been deemed necessary by management at September 30, 2023.

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

Reference Rate Reform

In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which added to ASU 2020-04 optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls “reference rate reform” if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Also, entities can elect various optional

expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain criteria are met, and can make a onetime election to sell and/or reclassify held-to-maturity debt securities that reference an interest rate affected by reference rate reform. ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The amendments in this ASU are effective for all entities upon issuance through December 31, 2024. The Company identified its loan receivables that have an interest rate indexed to LIBOR, verified proper transition language existed in the contracts and executed contractual updates, as needed, with the impacted borrowers. The Company replaced LIBOR in most cases with one-month Term SOFR or Daily SOFR. The Company does not expect the impact to be material to the financial statements of the Company.

Goodwill Impairment

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This standard simplifies the test for goodwill impairment by eliminating the requirement to calculate the implied fair value of goodwill, which had been Step 2 of the goodwill impairment test. Instead, the goodwill impairment test consists of a single quantitative step comparing the fair value of the reporting unit with its carrying amount. An entity should recognize a goodwill impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. The new standard was effective for annual and any interim goodwill impairment tests in reporting periods beginning after December 15, 2022. The Company adopted ASU 2017-04 on January 1, 2023. The adoption of this standard did not have a material effect on the Company's operating results or financial condition.

Derivatives

On March 28, 2022, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method. The purpose of this updated guidance is to further align risk management objectives with hedge accounting results on the application of the last-of-layer method, which was first introduced in ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2022-01 is effective for public business entities for fiscal years beginning after December 15, 2022, with early adoption in the interim period permitted. For entities who have already adopted ASU 2017-12, immediate adoption is allowed. ASU 2022-01 requires a modified retrospective transition method for basis adjustments in which the entity will recognize the cumulative effect of the change on the opening balance of each affected component of equity in the statement of financial position as of the date of adoption. The Company adopted ASU 2022-01 on January 1, 2023. The adoption of this standard did not have a material effect on the Company's operating results or financial condition.

Current Expected Credit Losses

On January 1, 2023, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as amended, which replaces the impairment model for most financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. This model is also applicable to off-balance sheet credit exposures not accounted for as insurance, such as loan commitments, standby letters of credit, financial guarantees, and other similar instruments. In addition, the amendments in ASU 2016-03 require credit losses on available-for-sale debt securities to be presented as a valuation allowance rather than as a direct write down.

The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost, and off-balance-sheet credit exposures. Results for reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. At January 1, 2023, the Company increased the allowance for credit losses for loans by $5.7 million, the allowance for credit losses for unfunded loan commitments by $910 thousand, and the allowance on held-to-maturity securities by $602 thousand. At January 1, 2023, the Company reported a cumulative-effect adjustment of $5.4 million which decreased retained earnings.

The Company did not record an allowance for credit losses on its available-for-sale debt securities under the newly codified available-for-sale debt security impairment model, as the majority of these securities are government agency-backed securities for which the risk of loss is minimal.

The Company adopted ASC 326 using the prospective transition approach for financial assets purchased with credit deterioration (PCD) that were previously classified as purchased credit impaired and accounted for under ASC 310-30. In accordance with the standard, management did not reassess whether PCI assets met the criteria of PCD assets as of the date of the adoption. On January 1, 2023, the amortized cost basis of the PCD assets were adjusted to reflect the addition of $308 thousand to the allowance for credit losses. The remaining noncredit discount (based on the adjusted amortized cost basis) will be accreted into interest income at the effective interest rate as of January 1, 2023.

The below table shows the changes made to loan segments and the allowance for credit losses upon the adoption of ASC 326 as of January 1, 2023.

(In Thousands)	December 31, 2022 Statement Balance		Segment portfolio reclassifications			December 31, 2022 after reclassifications
Loans:
Agriculture and farmland	$	15,591	$	40,155		$	55,746
Construction		—		57,713			57,713
Commercial & industrial		103,874		881			104,755
Paycheck Protection Program		881		(881	)		—
Commercial real estate		540,914		(540,914	)		—
Multifamily		—		105,390			105,390
Owner occupied		—		139,554			139,554
Non-owner occupied		—		245,274			245,274
Residential real estate		250,832		(250,832	)		—
First liens		—		168,084			168,084
Second liens and lines of credit		—		35,576			35,576
Municipal		5,466		—			5,466
Consumer and other		10,057		—			10,057
Total		927,615		—			927,615
Deferred Costs		256		—			256
Total	$	927,871	$	—		$	927,871
Allowance:
Agriculture and farmland	$	33	$	246		$	279
Construction		—		274			274
Commercial & industrial		583		—			583
Paycheck Protection Program		—		—			—
Commercial real estate		2,462		(2,462	)		—
Multifamily		—		480			480
Owner occupied		—		635			635
Non-owner occupied		—		1,116			1,116
Residential real estate		1,536		(1,536	)		—
First liens		—		1,029			1,029
Second liens and lines of credit		—		218			218
Municipal		12		—			12
Consumer and other		40		—			40
Total	$	4,666	$	—		$	4,666

The Federal Reserve and the FDIC have adopted a rule that provides a banking organization the option to phase-in, over a three year period, the effects of CECL on its regulatory capital upon the adoption of the CECL standard. The Company has elected to exercise this phase-in option.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses: Troubled Debt Restructurings and Vintage Disclosures, which eliminates accounting guidance for troubled debt restructurings ("TDRs") by creditors that have adopted ASU 2016-13 and its related amendments. The amendments require that an entity evaluate whether the loan modification represents a new loan or a continuation of an existing loan, and introduce new requirements related to modifications made to borrowers experiencing financial difficulty. The amendments also require public business entities to disclose current-period gross write-offs for financing receivables by year of origination in the vintage disclosures. For entities that have adopted ASU 2016-13, the amendments in this ASU are effective for fiscal years beginning after December 15, 2022. For entities that have not adopted ASU 2016-13, the amendments in this update are effective at the time the entity adopts ASU 2016-13. The Company adopted this standard effective January 1, 2023 in conjunction with ASC 326. The adoption of this standard did not have a material effect on the Company's operating results or financial condition.

As a result of the adoption of ASU 2016-13, the Company revised some of its existing accounting policies as noted below:

Allowance for Credit Losses - Loans

The allowance for credit losses is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed.

Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics, such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors. The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. The Company has identified the following portfolio segments and measures the allowance for credit losses using the following methods:

Portfolio Segment	Measurement Method
Agriculture and farmland	Remaining life
Construction	Discounted cash flow
Commercial & industrial	Discounted cash flow
Commercial real estate
Multifamily	Discounted cash flow
Owner occupied	Discounted cash flow
Non-owner occupied	Discounted cash flow
Residential real estate
First liens	Discounted cash flow
Second liens and lines of credit	Discounted cash flow
Municipal	Remaining life
Consumer	Remaining life

Loans that do not share risk similar risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the collective evaluation described above. When management determines that foreclosure is probable, expected credit losses are based on the fair value of collateral at the reporting date, adjusted for selling costs as appropriate.

Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies: management has a reasonable expectation at the reporting date that a troubled debt restructuring will be executed with an individual borrower or the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancelable by the Company.

Allowance for Credit Losses - Held-to-Maturity Securities

Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type. Accrued interest receivable on held-to-maturity debt securities totaled $187 at September 30, 2023 which is excluded from the estimate of credit losses.

The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts.

Management classifies the held-to-maturity portfolio into the following major security types: Corporate debentures and structured mortgage-backed securities.

•The corporate debentures are comprised of investments in subordinated debt issued by U.S. based banks.

•All of the structured mortgage-backed securities are issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S government, are highly rated by major rating agencies and have a long history of no credit losses.

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancelable by the Company. The allowance for credit losses on off-balance sheet credit exposures is adjusted through credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The segments of off-balance sheet credit exposures are the same as the segments for the allowance for credit losses on loans. The allowance for credit losses on off balance sheet credit exposures is influenced by forecasted loss rates used in the allowance for credit losses on loans and the level of contractual obligations to extend credit.

Investment Securities

Investment Securities

Investment securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Investment securities that will be held for indefinite periods of time, including securities that may be sold in response to changes in market interest or prepayment rates, needs for liquidity, and changes in the availability of and in the yield of alternative investments, are classified as available for sale. These investment securities are carried at fair value. Fair values of securities available for sale are determined by using Level 2 fair value measures calculated through the use of matrix pricing. Matrix pricing is a common mathematical technique that does not rely exclusively on quoted market prices for specific securities but rather utilizes the security’s relationship to other benchmark quoted prices in determining fair value. The Company uses independent service providers to calculate our Level 2 fair value measures. Unrealized gains and losses are excluded from operations and are reported net of tax as a separate component of other comprehensive income until realized. Realized gains and losses on the sale of investment securities are reported in the consolidated statements of income and determined using the adjusted cost of the specific security sold on the trade date. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities.

For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either criteria regarding intent or requirement to sell is met, the security's amortized cost basis is written down to fair value through income. For available-for-sale debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive (loss) income.

Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Accrued interest receivable on available for sale debt securities totaled $489 at September 30, 2023 and is excluded from the estimate of credit losses.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2023

Accounting Standards Update and Change in Accounting Principle [Abstract]

Schedule of Changes Made to Loan Segments and Allowance for Credit Losses Upon Adoption of ASC 326

The below table shows the changes made to loan segments and the allowance for credit losses upon the adoption of ASC 326 as of January 1, 2023.

(In Thousands)	December 31, 2022 Statement Balance		Segment portfolio reclassifications			December 31, 2022 after reclassifications
Loans:
Agriculture and farmland	$	15,591	$	40,155		$	55,746
Construction		—		57,713			57,713
Commercial & industrial		103,874		881			104,755
Paycheck Protection Program		881		(881	)		—
Commercial real estate		540,914		(540,914	)		—
Multifamily		—		105,390			105,390
Owner occupied		—		139,554			139,554
Non-owner occupied		—		245,274			245,274
Residential real estate		250,832		(250,832	)		—
First liens		—		168,084			168,084
Second liens and lines of credit		—		35,576			35,576
Municipal		5,466		—			5,466
Consumer and other		10,057		—			10,057
Total		927,615		—			927,615
Deferred Costs		256		—			256
Total	$	927,871	$	—		$	927,871
Allowance:
Agriculture and farmland	$	33	$	246		$	279
Construction		—		274			274
Commercial & industrial		583		—			583
Paycheck Protection Program		—		—			—
Commercial real estate		2,462		(2,462	)		—
Multifamily		—		480			480
Owner occupied		—		635			635
Non-owner occupied		—		1,116			1,116
Residential real estate		1,536		(1,536	)		—
First liens		—		1,029			1,029
Second liens and lines of credit		—		218			218
Municipal		12		—			12
Consumer and other		40		—			40
Total	$	4,666	$	—		$	4,666

Summary of Portfolio Segments and Measures Allowance for Credit Losses

The Company has identified the following portfolio segments and measures the allowance for credit losses using the following methods:

Portfolio Segment	Measurement Method
Agriculture and farmland	Remaining life
Construction	Discounted cash flow
Commercial & industrial	Discounted cash flow
Commercial real estate
Multifamily	Discounted cash flow
Owner occupied	Discounted cash flow
Non-owner occupied	Discounted cash flow
Residential real estate
First liens	Discounted cash flow
Second liens and lines of credit	Discounted cash flow
Municipal	Remaining life
Consumer	Remaining life

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Investment Securities (Tables)

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Summary of Amortized Cost, Gross Unrealized Gains and Losses, and Fair Value of Investment Securities Available for Sale

The amortized cost, gross unrealized gains and losses, and fair value of investment securities available for sale are summarized as follows:

	September 30, 2023
(In Thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for Sale:
US government agency securities	$	2,000	$	—	$	(18	)	$	1,982
Small Business Administration loan pools		693		—		(14	)		679
Obligations of state and political subdivisions		45,614		—		(5,935	)		39,679
Mortgage-backed securities in government-sponsored entities		40,987		—		(4,548	)		36,439
	$	89,294	$	—	$	(10,515	)	$	78,779
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair  Value		Allowance for Credit Losses
Held to Maturity:
Corporate debentures	$	15,000	$	—	$	(1,963	)	$	13,037	$	512
Structured mortgage-backed securities		22,778		—		(1,227	)		21,551		—
	$	37,778	$	—	$	(3,190	)	$	34,588	$	512
	December 31, 2022
(In Thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for Sale:
Small Business Administration loan pools	$	858	$	—	$	(15	)	$	843
Obligations of state and political subdivisions		44,189		14		(4,034	)		40,169
Mortgage-backed securities in government-sponsored entities		41,873		—		(4,072	)		37,801
	$	86,920	$	14	$	(8,121	)	$	78,813
Held to Maturity:
Corporate debentures	$	14,993	$	—	$	(994	)	$	13,999
Structured mortgage-backed securities		16,829		—		(748	)		16,081
	$	31,822	$	—	$	(1,742	)	$	30,080

Summary of Debt Securities in Unrealized Loss position for Which Allowance for Credit Losses Not Recorded

The following tables summarize the Company's debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by security type and length of time in a continuous unrealized loss position.

	September 30, 2023
	Less Than Twelve Months					Twelve Months or Greater					Total
(In Thousands)	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
Available for Sale:
US Government Agency Securities	$	1,982	$	(18	)	$	—	$	—		$	1,982	$	(18	)
Small Business Administration loan pools		—		—			679		(14	)		679		(14	)
Obligations of state and political subdivisions		7,383		(479	)		32,296		(5,456	)		39,679		(5,935	)
Mortgage-backed securities in government-sponsored entities		4,647		(220	)		31,792		(4,328	)		36,439		(4,548	)
	$	14,012	$	(717	)	$	64,767	$	(9,798	)	$	78,779	$	(10,515	)
Held to Maturity:
Corporate debentures	$	—	$	—		$	—	$	—		$	—	$	—
Structured mortgage-backed securities		8,227		(66	)		13,324		(1,161	)		21,551		(1,227	)
	$	8,227	$	(66	)	$	13,324	$	(1,161	)	$	21,551	$	(1,227	)
	December 31, 2022
	Less Than Twelve Months					Twelve Months or Greater					Total
(In Thousands)	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
Available for Sale:
Small Business Administration loan pools	$	334	$	(1	)	$	509	$	(14	)	$	843	$	(15	)
Obligations of state and political subdivisions		34,836		(3,372	)		2,559		(662	)		37,395		(4,034	)
Mortgage-backed securities in government-sponsored entities		18,052		(1,538	)		19,749		(2,534	)		37,801		(4,072	)
	$	53,222	$	(4,911	)	$	22,817	$	(3,210	)	$	76,039	$	(8,121	)
Held to Maturity
Corporate debentures	$	13,999	$	(994	)	$	—	$	—		$	13,999	$	(994	)
Structured mortgage-backed securities		16,081		(748	)		—		—			16,081		(748	)
	$	30,080	$	(1,742	)	$	—	$	—		$	30,080	$	(1,742	)

No allowance for credit losses on available for sale debt securities was needed at September 30, 2023.

Summary of Amortized Cost and Fair Value by Contractual Maturity

As of September 30, 2023, amortized cost and fair value by contractual maturity, where applicable, are shown below. Actual maturities may differ from contractual maturities because the borrower may have the right to prepay obligations with or without penalty.

	Available for Sale Securities				Held to Maturity Securities
(In Thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	381	$	377	$	—	$	—
Due after one year through five years		9,030		8,639		6,000		5,673
Due after five years through ten years		13,432		12,134		9,000		7,364
Due after ten years		25,464		21,190		—		—
Mortgage-backed securities and Collateralized mortgage obligations		40,987		36,439		22,778		21,551
	$	89,294	$	78,779	$	37,778	$	34,588

Schedule of Realized Gain (Loss)

The following table summarizes sales of debt securities for the nine months ended September 30, 2023 and 2022. There were no sales of debt securities for the three months ended September 30, 2023 and 2022.

(In Thousands)	For the Nine Months Ended September 30,
	2023			2022
Proceeds	$	1,847		$	513
Gross gains		—			13
Gross losses		2,370			—
Net (loss) gain	$	(2,370	)	$	13

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Loans Receivable (Tables)

9 Months Ended

Sep. 30, 2023

Loans and Leases Receivable Disclosure [Abstract]

Summary of Portfolio Segments and Classes of Loans

The portfolio segments and classes of loans are as follows:

(In Thousands)	September 30, 2023			December 31, 2022
Agriculture and farmland loans	$	50,584		$	55,746
Construction loans		65,836			57,713
Commercial & industrial loans		115,572			104,755
Commercial real estate loans
Multifamily		111,853			105,390
Owner occupied		160,929			139,554
Non-owner occupied		257,344			245,274
Residential real estate loans
First liens		172,481			168,084
Second liens and lines of credit		27,870			35,576
Consumer and other loans		11,869			10,057
Municipal loans		4,137			5,466
		978,475			927,615
Deferred costs		437			256
Allowance for credit losses		(9,964	)		(4,666	)
Total	$	968,948		$	923,205

The balances at December 31, 2022 were reclassified from those previously reported as shown in Note 1.

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Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2023

Allowance for Credit Loss [Abstract]

Summary of Allowance for Credit Losses by Loan Segment

The following tables summarize the activity in the allowance for credit losses by loan segment for the three and nine months ended September 30, 2023.

	Beginning balance		Charge-offs		Recoveries		Provision for credit losses			Ending balance
(In Thousands)	For the Three Months Ended September 30, 2023
Allowance for credit losses:
Agriculture and farmland	$	209	$	—	$	—	$	(130	)	$	79
Construction		728		—		—		(275	)		453
Commercial & industrial		729		—		—		126			855
Commercial real estate
Multifamily		673		—		—		(254	)		419
Owner occupied		1,559		—		—		197			1,756
Non-owner occupied		4,350		—		—		(220	)		4,130
Residential real estate
First liens		1,397		—		11		44			1,452
Second liens and lines of credit		383		—		1		(58	)		326
Municipal		7		—		—		—			7
Consumer		22		—		—		2			24
Unallocated		171		—		—		292			463
Total	$	10,228	$	—	$	12	$	(276	)	$	9,964

	Beginning balance		Impact of adopting ASC 326			Charge-offs		Recoveries		Provision for credit losses			Ending balance
(In Thousands)	For the Nine Months Ended September 30, 2023
Allowance for credit losses:
Agriculture and farmland	$	279	$	(190	)	$	—	$	—	$	(10	)	$	79
Construction		274		513			—		—		(334	)		453
Commercial & industrial		583		283			—		1		(12	)		855
Commercial real estate
Multifamily		480		340			—		—		(401	)		419
Owner occupied		635		760			—		—		361			1,756
Non-owner occupied		1,116		3,195			—		—		(181	)		4,130
Residential real estate
First liens		1,029		635			—		50		(262	)		1,452
Second liens and lines of credit		218		140			—		60		(92	)		326
Municipal		12		(2	)		—		—		(3	)		7
Consumer		40		(19	)		—		—		3			24
Unallocated		—		—			—		—		463			463
Total	$	4,666	$	5,655		$	—	$	111	$	(468	)	$	9,964

Summary of Amortized Cost Basis of Nonaccrual Loans and Loans Past due Over 89 Days Still Accruing

The following table presents the amortized cost basis of nonaccrual loans and loans past due over 89 days still accruing by segments of the loan portfolio:

	As of September 30, 2023
(In Thousands)	Nonaccrual with No Allowance for Credit Loss		Nonaccrual with a related Allowance for Credit Loss		Loans past due over 89 days still accruing
Agriculture and farmland	$	—	$	—	$	—
Construction		—		—		192
Commercial & industrial		13		—		110
Commercial real estate
Multifamily		—		—		—
Owner occupied		—		—		—
Non-owner occupied		292		140		558
Residential real estate
First liens		1,357		—		112
Second liens and lines of credit		43		—		90
Municipal		—		—		—
Consumer		50		—		1
Total	$	1,755	$	140	$	1,063

Summary of Aging Analysis of the Recorded Investment of Past-Due Loans

The following table presents an aging analysis of the recorded investment of past due loans at September 30, 2023.

	September 30, 2023
(In Thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total   Loans
Agriculture and farmland	$	291	$	—	$	—	$	291	$	50,293	$	50,584
Construction		—		—		192		192		65,644		65,836
Commercial & industrial		202		—		122		324		115,248		115,572
Commercial real estate
Multifamily		—		—		—		—		111,853		111,853
Owner occupied		137		—		—		137		160,792		160,929
Non-owner occupied		—		—		947		947		256,397		257,344
Residential real estate
First liens		1,096		101		592		1,789		170,692		172,481
Second liens and lines of credit		97		4		96		197		27,673		27,870
Municipal		—		—		—		—		11,869		11,869
Consumer		4		—		3		7		4,130		4,137
Total	$	1,827	$	105	$	1,952	$	3,884	$	974,591	$	978,475

The following table presents an aging analysis of the recorded investment of past due loans at December 31, 2022.

	December 31, 2022
(In Thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Purchased Credit Impaired Loans		Total   Loans		Total > 90 Days and   Accruing
Agriculture loans	$	193	$	48	$	149	$	390	$	15,201	$	—	$	15,591	$	149
Commercial and PPP loans		111		21		54		186		104,569		—		104,755		54
Commercial real estate loans		863		88		190		1,141		537,546		2,227		540,914		—
Residential real estate loans		2,474		137		1,176		3,787		246,863		182		250,832		540
Consumer loans		254		58		—		312		9,745		—		10,057		—
Municipal loans		—		—		—		—		5,466		—		5,466		—
Total	$	3,895	$	352	$	1,569	$	5,816	$	919,390	$	2,409	$	927,615	$	743

Summary of Classes of the Loan Portfolio Summarized by the Internal Risk Rating System

The following table presents the classes of the loan portfolio summarized by the internal risk rating system as of September 30, 2023.

	September 30, 2023
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2023		2022		2021		2020		2019		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Agriculture and farmland
Pass	$	641	$	13,880	$	5,073	$	5,228	$	3,089	$	15,107	$	4,213	$	46	$	47,277
Special mention		—		—		—		—		45		192		242		—		479
Substandard or lower		14		—		16		129		—		2,612		57		—		2,828
Total Agriculture and farmland	$	655	$	13,880	$	5,089	$	5,357	$	3,134	$	17,911	$	4,512	$	46	$	50,584
Agriculture and farmland
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Construction
Pass		17,080		23,430		17,020		912		5,428		1,498		375		93		65,836
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		—		—		—		—		—		—		—
Total Construction		17,080		23,430		17,020		912		5,428		1,498		375		93		65,836
Construction
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Commercial & industrial
Pass		6,765		14,505		7,258		9,606		1,657		1,045		73,096		110		114,042
Special mention		—		—		161		—		—		—		914		—		1,075
Substandard or lower		—		—		51		—		203		—		200		1		455
Total Commercial & industrial		6,765		14,505		7,470		9,606		1,860		1,045		74,210		111		115,572
Commercial & industrial
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Commercial real estate - Multifamily
Pass		5,226		44,619		42,805		11,307		5,858		—		153		—		109,968
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		—		—		—		1,885		—		—		1,885
Total Commercial real estate - Multifamily		5,226		44,619		42,805		11,307		5,858		1,885		153		—		111,853
Commercial real estate - Multifamily
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

	September 30, 2023
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2023		2022		2021		2020		2019		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Commercial real estate - Owner occupied
Pass		14,164		66,271		24,299		14,821		21,357		5,767		3,051		6		149,736
Special mention		—		—		1,490		—		6,591		—		295		—		8,376
Substandard or lower		—		—		—		—		2,423		320		74		—		2,817
Total Commercial real estate - Owner occupied		14,164		66,271		25,789		14,821		30,371		6,087		3,420		6		160,929
Commercial real estate - Owner occupied
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Commercial real estate - Non-owner occupied
Pass		20,178		113,886		59,008		18,565		25,778		13,105		5,834		—		256,354
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		43		—		140		558		—		249		990
Total Commercial real estate - Non-owner occupied		20,178		113,886		59,051		18,565		25,918		13,663		5,834		249		257,344
Commercial real estate - Non-owner occupied
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Municipal
Pass		266		—		220		1,677		—		1,877		97		—		4,137
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		—		—		—		—		—		—		—
Total Commercial real estate - Municipal		266		—		220		1,677		—		1,877		97		—		4,137
Municipal
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Total
Pass	$	64,320	$	276,591	$	155,683	$	62,116	$	63,167	$	38,399	$	86,819	$	255	$	747,350
Special mention		—		—		1,651		—		6,636		192		1,451		—		9,930
Substandard or lower		14		—		110		129		2,766		5,375		331		250		8,975
Total	$	64,334	$	276,591	$	157,444	$	62,245	$	72,569	$	43,966	$	88,601	$	505	$	766,255

The following tables present the amortized cost of these loans based on payment activity, by origination year

	September 30, 2023
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2023		2022		2021		2020		2019		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Residential real estate - First liens
Performing	$	14,757	$	40,742	$	51,889	$	20,584	$	9,512	$	27,507	$	6,021	$	—	$	171,012
Nonperforming		—		—		—		104		211		1,154		—		—		1,469
Total Residential real estate - First liens	$	14,757	$	40,742	$	51,889	$	20,688	$	9,723	$	28,661	$	6,021	$	—	$	172,481
Residential real estate - First liens
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Residential real estate - Second liens and lines of credit
Performing		75		766		440		130		194		1,256		24,876		—		27,737
Nonperforming		—		—		—		—		—		29		90		14		133
Total Residential real estate - Second liens and lines of credit		75		766		440		130		194		1,285		24,966		14		27,870
Residential real estate - Second liens and lines of credit
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Consumer and other
Performing		1,930		169		70		70		17		9		9,553		—		11,818
Nonperforming		—		2		—		—		48		—		1		—		51
Total Consumer and other		1,930		171		70		70		65		9		9,554		—		11,869
Consumer and other
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Total
Performing	$	16,762	$	41,677	$	52,399	$	20,784	$	9,723	$	28,772	$	40,450	$	—	$	210,567
Nonperforming		—		2		—		104		259		1,183		91		14		1,653
Total	$	16,762	$	41,679	$	52,399	$	20,888	$	9,982	$	29,955	$	40,541	$	14	$	212,220

Summary of Allowances for Loan Losses by Loan Class

The following table summarizes the activity in the allowance for loan losses by loan class for the three and nine month periods ended September 30, 2022.

	Agriculture Loans		Commercial and PPP Loans			Commercial Real Estate Loans			Residential Real Estate Loan			Consumer Loans		Municipal Loans		Unallocated Loans			Total
(In Thousands)	For the Three Months Ended September 30, 2022
Allowance for loan losses:
Beginning balance	$	17	$	506		$	1,786		$	1,547		$	21	$	13	$	—		$	3,890
Charge-offs		—		—			—			—			—		—		—			—
Recoveries		—		25			—			139			—		—		—			164
Provision		21		96			427			(43	)		12		2		—			515
Ending balance	$	38	$	627		$	2,213		$	1,643		$	33	$	15	$	-		$	4,569
(In Thousands)	For the Nine Months Ended September 30, 2022
Allowance for loan losses:
Beginning balance	$	23	$	582		$	799		$	1,634		$	22	$	15	$	77		$	3,152
Charge-offs		—		(1	)		(1	)		—			—		—		—			(2	)
Recoveries		—		32			—			195			2		—		—			229
Provision		15		14			1,415			(186	)		9		—		(77	)		1,190
Ending balance	$	38	$	627		$	2,213		$	1,643		$	33	$	15	$	-		$	4,569

Summary of Balance of Loans Individually Evaluated vs. Collectively Evaluated for Impairment

The following table illustrates the balance of loans individually evaluated vs. collectively evaluated for impairment at December 31, 2022.

	Agriculture Loans		Commercial and PPP Loans		Commercial Real Estate Loans		Residential Real Estate Loan		Consumer Loans		Municipal Loans		Unallocated Loans		Total
(In Thousands)	As of December 31, 2022
Allowance for loan losses:
Ending balance	$	33	$	583	$	2,462	$	1,536	$	40	$	12	$	—	$	4,666
Ending balance: individually    evaluated for impairment	$	—	$	20	$	—	$	—	$	—	$	—	$	—	$	20
Ending balance: collectively evaluated    for impairment	$	33	$	563	$	2,462	$	1,536	$	40	$	12	$	—	$	4,646
Loans:
Ending balance	$	15,591	$	104,755	$	540,914	$	250,832	$	10,057	$	5,466			$	927,615
Ending balance: individually    evaluated for impairment	$	300	$	55	$	2,306	$	4,652	$	—	$	—			$	7,313
Ending balance: loans acquired with deteriorated credit    quality	$	—	$	—	$	2,227	$	182	$	—	$	—			$	2,409
Ending balance: collectively evaluated    for impairment	$	15,291	$	104,700	$	536,381	$	245,998	$	10,057	$	5,466			$	917,893

Summary of Classes of the Loan Portfolio Summarized by the Internal Risk Rating System

The following table presents the classes of the loan portfolio summarized by the internal risk rating system as of December 31, 2022:

(In Thousands)			Special
As of December 31, 2022	Pass		Mention		Substandard		Doubtful		Total
Agriculture loans	$	15,291	$	—	$	300	$	—	$	15,591
Commercial and PPP		101,980		2,721		54		—		104,755
Commercial real estate loans		533,864		2,516		4,534		—		540,914
Residential real estate loans		246,028		207		4,597		—		250,832
Consumer loans		10,057		—		—		—		10,057
Municipal loans		5,466		—		—		—		5,466
Total	$	912,686	$	5,444	$	9,485	$	—	$	927,615

Summary of Impaired Loans

The following tables present the recorded investment and unpaid principal balances for impaired loans and related allowance, if applicable. Also presented are the average recorded investments and the related amount of interest recognized during the time within the period that the impaired loans were impaired.

	As of December 31, 2022
(In Thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Agriculture loans	$	300	$	300	$	—
Commercial loans		35		55		—
Commercial real estate loans		2,306		2,312		—
Residential real estate loans		4,652		4,683		—
Consumer loans		—		—		—
Municipal loans		—		—		—
With an allowance recorded:
Agriculture loans	$	—	$	—	$	—
Commercial loans		20		20		20
Commercial real estate loans		—		—		—
Residential real estate loans		—		—		—
Consumer loans		—		—		—
Municipal loans		—		—		—
		—		—		—
Total
Agriculture loans	$	300	$	300	$	—
Commercial loans		55		75		20
Commercial real estate loans		2,306		2,312		—
Residential real estate loans		4,652		4,683		—
Consumer loans		—		—		—
Municipal loans		—		—		—
	$	7,313	$	7,370	$	20

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2022				2022
(In Thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Agriculture loans	$	133	$	5	$	210	$	8
Commercial loans		37		—		35		—
Commercial real estate loans		2,421		65		2,451		100
Residential real estate loans		2,986		36		3,048		57
Consumer loans		—		—		—		—
Municipal loans		—		—		—		—
		5,577		106		5,744		165
With an allowance recorded:
Agriculture loans	$	—	$	—	$	—	$	—
Commercial loans		—		—		—		—
Commercial real estate loans		—		—		—		—
Residential real estate loans		174		3		175		5
Consumer loans		2		—		2		—
Municipal loans		—		—		—		—
		176		3		177		5
Total	$	5,753	$	109	$	5,921	$	170

Summary of Portfolio of Nonaccrual Loans

The following table presents nonaccrual loans by classes of the loan portfolio:

(In Thousands)	December 31, 2022
Commercial and PPP loans	$	35
Commercial real estate loans		231
Residential real estate loans		1,652
Consumer loans		—
Total	$	1,918

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Deposits (Tables)

9 Months Ended

Sep. 30, 2023

Deposits [Abstract]

Summary of Deposit Accounts

Deposit accounts are summarized as follows:

	September 30, 2023					December 31, 2022
(In Thousands)	Amount		%			Amount		%
Demand, noninterest-bearing	$	210,404		20.20	%	$	192,773		20.36	%
Demand, interest-bearing		273,673		26.26			254,478		26.88
Money market and savings		258,334		24.80			228,048		24.09
Time deposits, $250 and over		51,563		4.95			45,616		4.82
Time deposits, other		247,798		23.79			225,857		23.86
	$	1,041,772		100.0	%	$	946,772		100.0	%

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Borrowings and Subordinated Debentures (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Summary of Borrowings and Subordinated Debt

Borrowings and subordinated debt were as follows:

(in Thousands)	September 30, 2023		December 31, 2022
Subordinated Debt	$	40,354	$	40,484
Short-term borrowings		15,000		20,938
Total	$	55,354	$	61,422

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Summary of Estimated Fair Value of Financial Instruments that are not Required to be Measured or Reported at Fair Value

The estimated fair values of the Company’s financial instruments that are not required to be measured or reported at fair value are as follows:

	At September 30, 2023				At December 31, 2022
(In Thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Cash and cash equivalents (Level 1)	$	67,979	$	67,979	$	30,011	$	30,011
Certificates of deposit with other banks (Level 3)		249		249		5,623		5,590
Securities held to maturity (Level 2)		37,778		34,588		31,822		30,080
Loans (Level 3)		978,912		920,526		927,871		886,944
Derivative (Level 3)		3,264		3,264		—		—
Accrued interest receivable (Level 1)		4,767		4,767		4,661		4,661
Restricted investments in bank stock (Level 1)		3,107		3,107		3,377		3,377
Cash surrender value of life insurance (Level 1)		24,732		24,732		19,244		19,244
Financial liabilities:
Non-maturity deposits (Level 1)		742,411		742,411		675,299		675,299
Time Deposits (Level 3)		299,361		296,799		271,473		266,775
Other borrowings (Level 3)		15,000		15,000		20,938		20,938
Subordinated Notes (Level 3)		40,354		35,796		40,484		35,966
Accrued interest payable (Level 1)		1,166		1,166		797		797

Summary of Fair Value of Assets and Liabilities Measured on Recurring Basis

	September 30, 2023
(In Thousands)	Level I		Level II		Level III		Total
Assets:
US government agency securities	$	—	$	1,982	$	—	$	1,982
Small Business Administration loan pools		—		679		—		679
Obligations of state and political subdivisions		—		39,679		—		39,679
Mortgage backed securities in government-sponsored entities		—		36,439		—		36,439
Total	$	—	$	78,779	$	—	$	78,779
	December 31, 2022
(In Thousands)	Level I		Level II		Level III		Total
Assets:
Small Business Administration loan pools	$	—	$	843	$	—	$	843
Obligations of state and political subdivisions		—		40,169		—		40,169
Mortgage backed securities in government-sponsored entities		—		37,801		—		37,801
Total	$	—	$	78,813	$	—	$	78,813

Summary of Financial Assets Measured at Fair Value on a Nonrecurring Basis

For financial assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used as of September 30, 2023 and December 31, 2022 are presented in the table below.

	September 30, 2023
(In Thousands)	Level I		Level II		Level III		Total
Loans individually evaluated	$	—	$	—	$	9,523	$	9,523
	December 31, 2022
(In Thousands)	Level I		Level II		Level III		Total
Loans individually evaluated	$	—	$	—	$	7,313	$	7,313

Summary of Information about Valuation Processes Used to Determine Nonrecurring Fair Value Measurements

The following tables provide information describing the valuation processes used to determine nonrecurring fair value measurements categorized within Level III of the fair value hierarchy:

	September 30, 2023
	Quantitative Information About Level III Fair Value Measurements
(In Thousands)	Fair Value		Valuation Techniques			Unobservable Input	Range (Weighted Average)
Loans individually evaluated	$	9,523	Appraisal of collateral	(1	)	Liquidation expenses		10	%
	December 31, 2022
	Quantitative Information About Level III Fair Value Measurements
(In Thousands)	Fair Value		Valuation Techniques			Unobservable Input	Range (Weighted Average)
Loans individually evaluated	$	7,313	Appraisal of collateral	(1	)	Liquidation expenses		10	%

(1)Fair value is generally determined through independent appraisals of the underlying collateral, which include various Level III inputs that are not identifiable.

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Stock Options Activity

The table below provides details of the Company's stock options at September 30, 2023.

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term in Years		Aggregate Intrinsic Value (in ‘000s)
Outstanding, December 31, 2022		490,000		$	10.11		7.0	$	33
Granted		60,000			7.00		9.9		—
Expired/terminated		(36,000	)		10.45		—
Exercised		—			—		—
Outstanding, September 30, 2023		514,000		$	9.72		7.0	$	—
Exercisable at period end		260,000		$	10.16		5.8	$	—

Summary of Restricted Shares Activity

The table below provides details of the Company's restricted shares activity at September 30, 2023.

	Number of Shares		Average Market Price at Grant
Outstanding, December 31, 2022		—
Granted		87,000	$	7.00
Expired/terminated		—
Outstanding, September 30, 2023		87,000	$	7.00

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Regulatory Capital Requirements (Tables)

9 Months Ended

Sep. 30, 2023

Regulatory Capital Requirements Under Banking Regulations [Abstract]

Schedule of Bank Actual and Required Capital Amounts and Ratios

The following table presents actual and required capital ratios as of September 30, 2023 and December 31, 2022 under the Basel III Capital Rules. Bank capital levels required to be considered well capitalized are based upon prompt corrective action regulations.

	September 30, 2023					December 31, 2022
(In Thousands)	Amount		Ratio			Amount		Ratio
Total capital
(to risk-weighted assets)
Actual	$	133,547		12.92	%	$	125,632		12.89	%
For capital adequacy purposes		82,664		8.00			77,953		8.00
To be well capitalized		103,331		10.00			97,441		10.00
Tier 1 capital
(to risk-weighted assets)
Actual	$	127,823		12.37	%	$	120,912		12.41	%
For capital adequacy purposes		61,998		6.00			58,465		6.00
To be well capitalized		82,664		8.00			77,953		8.00
Common equity
(to risk-weighted assets)
Actual	$	127,823		12.37	%	$	120,912		12.41	%
For capital adequacy purposes		46,499		4.50			43,848		4.50
To be well capitalized		67,165		6.50			63,337		6.50
Tier 1 capital
(to average assets)
Actual	$	127,823		10.71	%	$	120,912		10.93	%
For capital adequacy purposes		47,727		4.00			44,248		4.00
To be well capitalized		59,658		5.00			55,311		5.00

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Financial Instruments With Off-Balance Sheet Risk (Tables)

9 Months Ended

Sep. 30, 2023

Financial Instruments With Off Balance Sheet Risk [Abstract]

Summary of Outstanding Contract Amounts of Off Balance Sheet Credit Risk Related Financial Instruments

At September 30, 2023 and December 31, 2022, the following financial instruments were outstanding whose contract amounts represent credit risk:

(In Thousands)	September 30, 2023		December 31, 2022
Unfunded commitments under lines of credit:
Home equity loans	$	46,960	$	43,798
Commercial real estate, construction, and land development		60,239		62,146
Commercial and industrial		144,736		125,205
Total	$	251,935	$	231,149

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Earning Per Share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Summary of Composition of Earnings Per Share

The following table sets forth the composition of earnings per share:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In Thousands, except share and per share data)	2023		2022		2023		2022
Net income	$	1,240	$	1,772	$	1,033	$	4,902
Basic weighted average common shares outstanding		16,235,144		10,590,079		15,984,151		10,087,341
Net effect of dilutive stock options and warrants		—		—		—		49,116
Net effect of dilutive restricted stock awards		—		—		—		—
Diluted weighted average common shares outstanding		16,235,144		10,590,079		15,984,151		10,136,457
Net income per common share:
Basic	$	0.08	$	0.17	$	0.06	$	0.49
Diluted	$	0.08	$	0.17	$	0.06	$	0.48

Schedule of Dilutive Securities Included in Computation of Earnings Per Share

The following is a summary of securities that could potentially dilute basic earnings per common share in future periods that were included in the computation of diluted earnings per common share in the periods presented.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Stock Options		—		—		—		—
Warrants		—		—		—		1,537,484
Restricted Stock Awards		—		—		—		—
Total dilutive securities		—		—		—		1,537,484

Schedule of Dilutive Securities Excluded in Computation of Earnings Per Share

The following is a summary of securities that could potentially dilute basic earnings per share in future periods that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the periods presented.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Stock Options		260,000		195,700		260,000		195,700
Warrants		1,537,484		1,537,484		1,537,484		—
Restricted Stock Awards		87,000		—		87,000		—
Total anti-dilutive securities		1,884,484		1,733,184		1,884,484		195,700

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Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($)				1 Months Ended	3 Months Ended	9 Months Ended
	Feb. 22, 2023	Feb. 21, 2023	Jan. 01, 2023	Sep. 30, 2022	Mar. 31, 2023	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Aug. 31, 2022	Sep. 17, 2018
Accounting Policies [Line Items]
Date of incorporation						Apr. 06, 2018
Net proceeds from issuance of common stock						$ 9,980,000	$ 34,659,000
Goodwill impairment					$ 0
Total assets						1,255,695,000		$ 1,163,654,000
Total deposits						$ 1,041,772,000		$ 946,772,000
Common Stock, Shares, Outstanding						16,235,871		14,939,640
Common stock, par value						$ 0.01		$ 0.01
Retained earnings						$ 19,062,000		$ 27,100,000
Accrued interest receivable on held-to-maturity debt securities						187,000
Accrued interest receivable on available for sale debt securities						489,000
Allowance on held-to-maturity securities						$ 512,000
IPO [Member]
Accounting Policies [Line Items]
Shares of common stock issued and sold				5,101,205
Offering price per share				$ 7.5			$ 7.5		$ 9.32
Net proceeds from issuance of common stock				$ 34,659,000
Underwriting discounts and commissions				2,487,000
Other offering expenses				$ 1,114,000
Investment Agreement [Member]
Accounting Policies [Line Items]
Shares of common stock issued and sold		1,282,052
Offering price per share		$ 7.8
Underwriting discounts and commissions		$ 0
Common stock, par value		$ 0.01
Gross proceeds from issuance of common stock		$ 10,000,000
Partners Bancorp [Member]
Accounting Policies [Line Items]
Partners merger agreement date	Feb. 22, 2023
Total assets								1,570,000,000
Total loans								1,230,000,000
Total deposits								$ 1,340,000,000
Common Stock, Shares, Outstanding								17,973,724
ASU 2017-04 [Member]
Accounting Policies [Line Items]
Change in Accounting Principle, Accounting Standards Update, Adoption Date						Jan. 01, 2023
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]						true
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false]						true
ASU 2022-01 [Member]
Accounting Policies [Line Items]
Change in Accounting Principle, Accounting Standards Update, Adoption Date						Jan. 01, 2023
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]						true
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false]						true
ASU 2016-13 [Member]
Accounting Policies [Line Items]
Change in Accounting Principle, Accounting Standards Update, Adoption Date						Jan. 01, 2023
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]						true
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false]						true
ASU 2016-13 [Member] | Cumulative Effect Adjustment [Member]
Accounting Policies [Line Items]
Increase in allowance for credit losses			$ 5,700,000
Retained earnings			(5,400,000)
Allowance for credit losses for unfunded loan commitments			910,000
Allowance on held-to-maturity securities			602,000
PCD assets, allowance for credit loss			$ 308,000
Residential loans [Member]
Accounting Policies [Line Items]
Number of days past due for loans to be declared as deliquent						180 days
Consumer [Member]
Accounting Policies [Line Items]
Number of days past due for loans to be declared as deliquent						120 days
Stonebridge Bank [Member]
Accounting Policies [Line Items]
Business acquistion percentage of voting interests acquired										100.00%
Accrued Interest Receivable and Other Assets [Member]
Accounting Policies [Line Items]
Accrued interest receivable on loans						$ 4,073,000

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Summary of Significant Accounting Policies - Schedule of Changes Made to Loan Segments and Allowance for Credit Losses Upon Adoption of ASC 326 (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans	$ 978,475	$ 927,615
Deferred Costs	437	256
Total	978,912	927,871
Allowance for loan losses	9,964	4,666	$ 4,569	$ 3,890	$ 3,152
Agriculture And Farmland [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans	50,584	55,746
Allowance for loan losses		279
Construction [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans	65,836	57,713
Allowance for loan losses		274
Commercial and Industrial [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		104,755
Allowance for loan losses		583
Municipal [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans	4,137	5,466
Allowance for loan losses		12
Consumer and Other [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		10,057
Allowance for loan losses		40
Multifamily [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans	111,853	105,390
Allowance for loan losses		480
Owner Occupied [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans	160,929	139,554
Allowance for loan losses		635
Non-owner Occupied [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans	257,344	245,274
Allowance for loan losses		1,116
First Liens [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans	172,481	168,084
Allowance for loan losses		1,029
Second Liens and Lines of Credit [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans	$ 27,870	35,576
Allowance for loan losses		218
Previously Reported [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		927,615
Deferred Costs		256
Total		927,871
Allowance for loan losses		4,666
Previously Reported [Member] | Agriculture And Farmland [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		15,591
Allowance for loan losses		33
Previously Reported [Member] | Commercial and Industrial [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		103,874
Allowance for loan losses		583
Previously Reported [Member] | Paycheck Protection Program [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		881
Previously Reported [Member] | Commercial Real Estate [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		540,914
Allowance for loan losses		2,462
Previously Reported [Member] | Residential Real Estate [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		250,832
Allowance for loan losses		1,536
Previously Reported [Member] | Municipal [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		5,466
Allowance for loan losses		12
Previously Reported [Member] | Consumer and Other [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		10,057
Allowance for loan losses		40
Reclassification, Adjustment [Member] | Agriculture And Farmland [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		40,155
Allowance for loan losses		246
Reclassification, Adjustment [Member] | Construction [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		57,713
Allowance for loan losses		274
Reclassification, Adjustment [Member] | Commercial and Industrial [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		881
Reclassification, Adjustment [Member] | Paycheck Protection Program [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		(881)
Reclassification, Adjustment [Member] | Commercial Real Estate [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		(540,914)
Allowance for loan losses		(2,462)
Reclassification, Adjustment [Member] | Residential Real Estate [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		(250,832)
Allowance for loan losses		(1,536)
Reclassification, Adjustment [Member] | Multifamily [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		105,390
Allowance for loan losses		480
Reclassification, Adjustment [Member] | Owner Occupied [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		139,554
Allowance for loan losses		635
Reclassification, Adjustment [Member] | Non-owner Occupied [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		245,274
Allowance for loan losses		1,116
Reclassification, Adjustment [Member] | First Liens [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		168,084
Allowance for loan losses		1,029
Reclassification, Adjustment [Member] | Second Liens and Lines of Credit [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans		35,576
Allowance for loan losses		$ 218

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Merger - Summary of Fair Value of Consideration Paid (Detail) - shares	Sep. 30, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Common Stock, Shares, Outstanding	16,235,871	14,939,640

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Merger - Allocation of Purchase Price for Merger (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Calculated Fair Value of Liabilities Assumed
Operating lease liabilities	$ 9,728	$ 10,219

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Investment Securities - Summary of Amortized Cost and Held-to-maturity, Gross Unrealized Gains and Losses, and Fair Value of Investment Securities Available for Sale (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Securities Available For Sale Reconciliation Of Fair Value To Amortized Cost [Line Items]
Amortized Cost	$ 89,294	$ 86,920
Gross Unrealized Gains	0	14
Gross Unrealized Losses	(10,515)	(8,121)
Fair Value	78,779	78,813
Held-to-Maturity, Amortized Cost	37,778	31,822
Gross Unrecognized Gain	0	0
Gross Unrecognized Losses	(3,190)	(1,742)
Held-to-maturity, Fair value	34,588	30,080
Allowance for Credit Loss	512
U.S. government agency securities [Member]
Debt Securities Available For Sale Reconciliation Of Fair Value To Amortized Cost [Line Items]
Amortized Cost	2,000
Gross Unrealized Gains	0
Gross Unrealized Losses	(18)
Fair Value	1,982
Small Business Administration Loan Pools [Member]
Debt Securities Available For Sale Reconciliation Of Fair Value To Amortized Cost [Line Items]
Amortized Cost	693	858
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(14)	(15)
Fair Value	679	843
Obligations of state and political subdivisions [Member]
Debt Securities Available For Sale Reconciliation Of Fair Value To Amortized Cost [Line Items]
Amortized Cost	45,614	44,189
Gross Unrealized Gains	0	14
Gross Unrealized Losses	(5,935)	(4,034)
Fair Value	39,679	40,169
Mortgage-backed securities in government-sponsored entities [Member]
Debt Securities Available For Sale Reconciliation Of Fair Value To Amortized Cost [Line Items]
Amortized Cost	40,987	41,873
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(4,548)	(4,072)
Fair Value	36,439	37,801
Corporate Debentures [Member]
Debt Securities Available For Sale Reconciliation Of Fair Value To Amortized Cost [Line Items]
Held-to-Maturity, Amortized Cost	15,000	14,993
Gross Unrecognized Gain	0	0
Gross Unrecognized Losses	(1,963)	(994)
Held-to-maturity, Fair value	13,037	13,999
Allowance for Credit Loss	512
Structured Mortgage-backed Securities [Member]
Debt Securities Available For Sale Reconciliation Of Fair Value To Amortized Cost [Line Items]
Held-to-Maturity, Amortized Cost	22,778	16,829
Gross Unrecognized Gain	0	0
Gross Unrecognized Losses	(1,227)	(748)
Held-to-maturity, Fair value	21,551	$ 16,081
Allowance for Credit Loss	$ 0

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Investment Securities - Summary of Debt Securities in Unrealized Loss position for Which Allowance for Credit Losses Not Recorded (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Less than 12 Months, Fair Value	$ 14,012	$ 53,222
Available-for-sale Securities, Less than 12 Months, Unrealized Losses	(717)	(4,911)
Available-for-sale Securities, 12 Months or Longer, Fair Value	64,767	22,817
Available-for-sale Securities, 12 Months or Longer, Unrealized Losses	(9,798)	(3,210)
Available-for-sale Securities, Fair Value, Total	78,779	76,039
Available-for-sale Securities, Unrealized Losses, Total	(10,515)	(8,121)
Held-to-maturity Securities, Less than 12 Months, Fair Value	8,227	30,080
Held-to-maturity Securities, Less than 12 Months, Unrealized Losses	(66)	(1,742)
Held-to-maturity Securities, 12 Months or Longer, Fair Value	13,324	0
Held-to-maturity Securities, 12 Months or Longer, Unrealized Losses	(1,161)	0
Held-to-maturity Securities, Fair Value, Total	21,551	30,080
Held-to-maturity Securities, Unrealized Losses, Total	(1,227)	(1,742)
U.S. government agency securities [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Less than 12 Months, Fair Value	1,982
Available-for-sale Securities, Less than 12 Months, Unrealized Losses	(18)
Available-for-sale Securities, 12 Months or Longer, Fair Value	0
Available-for-sale Securities, 12 Months or Longer, Unrealized Losses	0
Available-for-sale Securities, Fair Value, Total	1,982
Available-for-sale Securities, Unrealized Losses, Total	(18)
Small Business Administration Loan Pools [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Less than 12 Months, Fair Value	0	334
Available-for-sale Securities, Less than 12 Months, Unrealized Losses	0	(1)
Available-for-sale Securities, 12 Months or Longer, Fair Value	679	509
Available-for-sale Securities, 12 Months or Longer, Unrealized Losses	(14)	(14)
Available-for-sale Securities, Fair Value, Total	679	843
Available-for-sale Securities, Unrealized Losses, Total	(14)	(15)
Obligations of state and political subdivisions [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Less than 12 Months, Fair Value	7,383	34,836
Available-for-sale Securities, Less than 12 Months, Unrealized Losses	(479)	(3,372)
Available-for-sale Securities, 12 Months or Longer, Fair Value	32,296	2,559
Available-for-sale Securities, 12 Months or Longer, Unrealized Losses	(5,456)	(662)
Available-for-sale Securities, Fair Value, Total	39,679	37,395
Available-for-sale Securities, Unrealized Losses, Total	(5,935)	(4,034)
Mortgage-backed securities in government-sponsored entities [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Less than 12 Months, Fair Value	4,647	18,052
Available-for-sale Securities, Less than 12 Months, Unrealized Losses	(220)	(1,538)
Available-for-sale Securities, 12 Months or Longer, Fair Value	31,792	19,749
Available-for-sale Securities, 12 Months or Longer, Unrealized Losses	(4,328)	(2,534)
Available-for-sale Securities, Fair Value, Total	36,439	37,801
Available-for-sale Securities, Unrealized Losses, Total	(4,548)	(4,072)
Corporate Debentures [Member]
Debt Securities, Available-for-sale [Line Items]
Held-to-maturity Securities, Less than 12 Months, Fair Value	0	13,999
Held-to-maturity Securities, Less than 12 Months, Unrealized Losses	0	(994)
Held-to-maturity Securities, 12 Months or Longer, Fair Value	0	0
Held-to-maturity Securities, 12 Months or Longer, Unrealized Losses	0	0
Held-to-maturity Securities, Fair Value, Total	0	13,999
Held-to-maturity Securities, Unrealized Losses, Total	0	(994)
Structured Mortgage-backed Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Held-to-maturity Securities, Less than 12 Months, Fair Value	8,227	16,081
Held-to-maturity Securities, Less than 12 Months, Unrealized Losses	(66)	(748)
Held-to-maturity Securities, 12 Months or Longer, Fair Value	13,324	0
Held-to-maturity Securities, 12 Months or Longer, Unrealized Losses	(1,161)	0
Held-to-maturity Securities, Fair Value, Total	21,551	16,081
Held-to-maturity Securities, Unrealized Losses, Total	$ (1,227)	$ (748)

XML

Investment Securities - Additional Information (Detail)	3 Months Ended			9 Months Ended
	Sep. 30, 2023 USD ($) Security Securities	Mar. 31, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) Security Securities	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($) Security Securities
Debt Securities, Available-for-Sale [Line Items]
Allowance for credit losses on available for sale debt securities	$ 0			$ 0
Number of debt securities with unrealized losses | Securities	186			186		175
Held to maturity debt securities | Security	13			13		10
Proceeds from sales	$ 0		$ 0	$ 1,847,000	$ 513,000
Tax benefit (provision)	498,000		$ (3,000)	498,000	(3,000)
Pledged debt securities with a carrying value	55,755,000			55,755,000		$ 47,418,000
Investment in subordinated notes	$ 78,779,000			78,779,000		78,813,000
Loss incurred on sale of investment				$ (2,370,000)	$ 13,000
Subordinated notes [Member] | Corporate Debentures [Member]
Debt Securities, Available-for-Sale [Line Items]
Investment in subordinated notes						$ 3,000,000
Loss incurred on sale of investment		$ 2,445,000

XML

Investment Securities - Summary of Amortized Cost and Fair Value by Contractual Maturity (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]
Amortized Cost, 1 year or less	$ 381
Amortized Cost, Due after one year through five years	9,030
Amortized Cost, Due after five years through ten years	13,432
Amortized Cost, Due after ten years	25,464
Amortized Cost, Mortgage-backed securities and Collateralized Mortgage Obligations	40,987
Amortized Cost	89,294	$ 86,920
Fair Value, 1 year or less	377
Fair Value, Due after one year through five years	8,639
Fair Value, Due after five years through ten years	12,134
Fair Value, Due after ten years	21,190
Fair Value, Mortgage-backed securities and Collateralized Mortgage Obligations	36,439
Fair Value	78,779	78,813
Held to Maturity Securities Amortized Cost, 1 year or less	0
Held to Maturity Securities Amortized Cost, Due after one year through five years	6,000
Held to Maturity Securities Amortized Cost, Due after five years through ten years	9,000
Held to Maturity Securities Amortized Cost, Due after ten year	0
Mortgage-backed securities and Collateralized mortgage obligations	22,778
Held-to-Maturity, Amortized Cost	37,778	31,822
Held to Maturity Securities Fair Value, 1 year or less	0
Held to Maturity Securities Fair Value, Due after one year through five years	5,673
Held to Maturity Securities Fair Value, Due after five years through ten years	7,364
Held to Maturity Securities Fair Value, Due after ten years	0
Mortgage-backed securities and Collateralized mortgage obligations	21,551
Held-to-maturity, Fair Value	$ 34,588	$ 30,080

XML

Investment Securities - Summary of Sales of Debt Securities (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Debt Securities, Available-for-Sale [Abstract]
Proceeds	$ 0	$ 0	$ 1,847,000	$ 513,000
Gross gains			0	13,000
Gross losses			2,370,000	0
Net gain	$ 0	$ 0	$ (2,370,000)	$ 13,000

XML

Loans Receivable - Summary of Portfolio Segments and Classes of Loans (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable	$ 978,475	$ 927,615
Deferred costs (fees)	(437)	(256)
Allowance for credit losses	(9,964)	(4,666)	$ (4,569)	$ (3,890)	$ (3,152)
Net loans	968,948	923,205
Agriculture And Farmland Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable	50,584	55,746
Allowance for credit losses		(279)
Construction [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable	65,836	57,713
Allowance for credit losses		(274)
Commercial And Industrial Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable	115,572	104,755
Consumer and Other Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable	11,869	10,057
Municipal Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable	4,137	5,466
Allowance for credit losses		(12)
Multifamily [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable	111,853	105,390
Allowance for credit losses		(480)
Owner Occupied [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable	160,929	139,554
Allowance for credit losses		(635)
Non-owner Occupied [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable	257,344	245,274
Allowance for credit losses		(1,116)
First Liens [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable	172,481	168,084
Allowance for credit losses		(1,029)
Second Liens and Lines of Credit [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable	$ 27,870	35,576
Allowance for credit losses		$ (218)

XML

Loans Receivable - Additional Information (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross	$ 978,475	$ 927,615
Consumer Mortgage Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross	$ 348	$ 0

XML

Allowance for Credit Losses - Summary of Allowance for Credit Losses by Loan Segment (Detail) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance	$ 10,228	$ 4,666
Charge-offs	0	0
Recoveries	12	111
Provision for credit losses	(276)	(468)
Ending balance	9,964	9,964
ASU 2016-13 [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Impact of adopting ASC 326		5,655
Agriculture and Farmland [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance	209	279
Charge-offs	0	0
Recoveries	0	0
Provision for credit losses	(130)	(10)
Ending balance	79	79
Agriculture and Farmland [Member] | ASU 2016-13 [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Impact of adopting ASC 326		(190)
Construction [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance	728	274
Charge-offs	0	0
Recoveries	0	0
Provision for credit losses	(275)	(334)
Ending balance	453	453
Construction [Member] | ASU 2016-13 [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Impact of adopting ASC 326		513
Commercial and Industrial [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance	729	583
Charge-offs	0	0
Recoveries	0	1
Provision for credit losses	126	(12)
Ending balance	855	855
Commercial and Industrial [Member] | ASU 2016-13 [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Impact of adopting ASC 326		283
Multifamily [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance	673	480
Charge-offs	0	0
Recoveries	0	0
Provision for credit losses	(254)	(401)
Ending balance	419	419
Multifamily [Member] | ASU 2016-13 [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Impact of adopting ASC 326		340
Owner Occupied [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance	1,559	635
Charge-offs	0	0
Recoveries	0	0
Provision for credit losses	197	361
Ending balance	1,756	1,756
Owner Occupied [Member] | ASU 2016-13 [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Impact of adopting ASC 326		760
Non-owner Occupied [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance	4,350	1,116
Charge-offs	0	0
Recoveries	0	0
Provision for credit losses	(220)	(181)
Ending balance	4,130	4,130
Non-owner Occupied [Member] | ASU 2016-13 [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Impact of adopting ASC 326		3,195
First Liens [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance	1,397	1,029
Charge-offs	0	0
Recoveries	11	50
Provision for credit losses	44	(262)
Ending balance	1,452	1,452
First Liens [Member] | ASU 2016-13 [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Impact of adopting ASC 326		635
Second Liens and Lines of Credit [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance	383	218
Charge-offs	0	0
Recoveries	1	60
Provision for credit losses	(58)	(92)
Ending balance	326	326
Second Liens and Lines of Credit [Member] | ASU 2016-13 [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Impact of adopting ASC 326		140
Municipal [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance	7	12
Charge-offs	0	0
Recoveries	0	0
Provision for credit losses	0	(3)
Ending balance	7	7
Municipal [Member] | ASU 2016-13 [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Impact of adopting ASC 326		(2)
Consumer [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance	22	40
Charge-offs	0	0
Recoveries	0	0
Provision for credit losses	2	3
Ending balance	24	24
Consumer [Member] | ASU 2016-13 [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Impact of adopting ASC 326		(19)
Unallocated [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance	171	0
Charge-offs	0	0
Recoveries	0	0
Provision for credit losses	292	463
Ending balance	$ 463	463
Unallocated [Member] | ASU 2016-13 [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Impact of adopting ASC 326		$ 0

XML

Allowance for Credit Losses - Summary of Amortized Cost Basis of Nonaccrual Loans and Loans Past due Over 89 Days Still Accruing (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual with No Allowance for Credit Loss	$ 1,755
Nonaccrual with a related Allowance for Credit Loss	140	$ 1,918
Loans past due over 89 days still accuring	1,063
Agriculture and Farmland [Member]
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual with No Allowance for Credit Loss	0
Nonaccrual with a related Allowance for Credit Loss	0
Loans past due over 89 days still accuring	0
Construction [Member]
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual with No Allowance for Credit Loss	0
Nonaccrual with a related Allowance for Credit Loss	0
Loans past due over 89 days still accuring	192
Commercial and Industrial [Member]
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual with No Allowance for Credit Loss	13
Nonaccrual with a related Allowance for Credit Loss	0
Loans past due over 89 days still accuring	110
Multifamily [Member]
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual with No Allowance for Credit Loss	0
Nonaccrual with a related Allowance for Credit Loss	0
Loans past due over 89 days still accuring	0
Owner Occupied [Member]
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual with No Allowance for Credit Loss	0
Nonaccrual with a related Allowance for Credit Loss	0
Loans past due over 89 days still accuring	0
Non-owner Occupied [Member]
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual with No Allowance for Credit Loss	292
Nonaccrual with a related Allowance for Credit Loss	140
Loans past due over 89 days still accuring	558
First Liens [Member]
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual with No Allowance for Credit Loss	1,357
Nonaccrual with a related Allowance for Credit Loss	0
Loans past due over 89 days still accuring	112
Second Liens and Lines of Credit [Member]
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual with No Allowance for Credit Loss	43
Nonaccrual with a related Allowance for Credit Loss	0
Loans past due over 89 days still accuring	90
Municipal [Member]
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual with No Allowance for Credit Loss	0
Nonaccrual with a related Allowance for Credit Loss	0
Loans past due over 89 days still accuring	0
Consumer [Member]
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual with No Allowance for Credit Loss	50
Nonaccrual with a related Allowance for Credit Loss	0
Loans past due over 89 days still accuring	$ 1

XML

Allowance for Credit Losses - Summary of Aging Analysis of the Recorded Investment of Past-Due Loans (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Loans, Gross	$ 766,255
Purchased Credit Impaired Loans		$ 2,409
Loans receivable	978,475	927,615
Total > 90 Days and Accruing		743
Agriculture Loans [Member]
Financing Receivable, Past Due [Line Items]
Purchased Credit Impaired Loans		0
Loans receivable		15,591
Total > 90 Days and Accruing		149
Agriculture and Farmland [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	50,584
Loans receivable	50,584
Construction [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	65,836
Loans receivable	65,836
Commercial and Industrial [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	115,572
Loans receivable	115,572
Multifamily [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	111,853
Loans receivable	111,853	105,390
Owner Occupied [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	160,929
Loans receivable	160,929
Non-owner Occupied [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	257,344
Loans receivable	257,344	245,274
First Liens [Member]
Financing Receivable, Past Due [Line Items]
Loans receivable	172,481	168,084
Second Liens and Lines of Credit [Member]
Financing Receivable, Past Due [Line Items]
Loans receivable	27,870	35,576
Commercial and PPP Loans [Member]
Financing Receivable, Past Due [Line Items]
Purchased Credit Impaired Loans		0
Loans receivable		104,755
Total > 90 Days and Accruing		54
Commercial Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Purchased Credit Impaired Loans		2,227
Loans receivable		540,914
Total > 90 Days and Accruing		0
Residential Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Purchased Credit Impaired Loans		182
Loans receivable		250,832
Total > 90 Days and Accruing		540
Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Purchased Credit Impaired Loans		0
Loans receivable	4,137	10,057
Total > 90 Days and Accruing		0
Municipal Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	4,137
Purchased Credit Impaired Loans		0
Loans receivable	11,869	5,466
Total > 90 Days and Accruing		0
30-59 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	1,827	3,895
30-59 Days Past Due [Member] | Agriculture Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross		193
30-59 Days Past Due [Member] | Agriculture and Farmland [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	291
30-59 Days Past Due [Member] | Construction [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	0
30-59 Days Past Due [Member] | Commercial and Industrial [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	202
30-59 Days Past Due [Member] | Multifamily [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	0
30-59 Days Past Due [Member] | Owner Occupied [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	137
30-59 Days Past Due [Member] | Non-owner Occupied [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	0
30-59 Days Past Due [Member] | First Liens [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	1,096
30-59 Days Past Due [Member] | Second Liens and Lines of Credit [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	97
30-59 Days Past Due [Member] | Commercial and PPP Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross		111
30-59 Days Past Due [Member] | Commercial Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross		863
30-59 Days Past Due [Member] | Residential Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross		2,474
30-59 Days Past Due [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	4	254
30-59 Days Past Due [Member] | Municipal Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	0	0
60-89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	105	352
60-89 Days Past Due [Member] | Agriculture Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross		48
60-89 Days Past Due [Member] | Agriculture and Farmland [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	0
60-89 Days Past Due [Member] | Construction [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	0
60-89 Days Past Due [Member] | Commercial and Industrial [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	0
60-89 Days Past Due [Member] | Multifamily [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	0
60-89 Days Past Due [Member] | Owner Occupied [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	0
60-89 Days Past Due [Member] | Non-owner Occupied [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	0
60-89 Days Past Due [Member] | First Liens [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	101
60-89 Days Past Due [Member] | Second Liens and Lines of Credit [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	4
60-89 Days Past Due [Member] | Commercial and PPP Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross		21
60-89 Days Past Due [Member] | Commercial Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross		88
60-89 Days Past Due [Member] | Residential Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross		137
60-89 Days Past Due [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	0	58
60-89 Days Past Due [Member] | Municipal Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	0	0
90 Days or Greater Past Due [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	1,952	1,569
90 Days or Greater Past Due [Member] | Agriculture Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross		149
90 Days or Greater Past Due [Member] | Agriculture and Farmland [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	0
90 Days or Greater Past Due [Member] | Construction [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	192
90 Days or Greater Past Due [Member] | Commercial and Industrial [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	122
90 Days or Greater Past Due [Member] | Multifamily [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	0
90 Days or Greater Past Due [Member] | Owner Occupied [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	0
90 Days or Greater Past Due [Member] | Non-owner Occupied [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	947
90 Days or Greater Past Due [Member] | First Liens [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	592
90 Days or Greater Past Due [Member] | Second Liens and Lines of Credit [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	96
90 Days or Greater Past Due [Member] | Commercial and PPP Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross		54
90 Days or Greater Past Due [Member] | Commercial Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross		190
90 Days or Greater Past Due [Member] | Residential Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross		1,176
90 Days or Greater Past Due [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	3	0
90 Days or Greater Past Due [Member] | Municipal Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	0	0
Total Past Due [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	3,884	5,816
Total Past Due [Member] | Agriculture Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross		390
Total Past Due [Member] | Agriculture and Farmland [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	291
Total Past Due [Member] | Construction [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	192
Total Past Due [Member] | Commercial and Industrial [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	324
Total Past Due [Member] | Multifamily [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	0
Total Past Due [Member] | Owner Occupied [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	137
Total Past Due [Member] | Non-owner Occupied [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	947
Total Past Due [Member] | First Liens [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	1,789
Total Past Due [Member] | Second Liens and Lines of Credit [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	197
Total Past Due [Member] | Commercial and PPP Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross		186
Total Past Due [Member] | Commercial Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross		1,141
Total Past Due [Member] | Residential Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross		3,787
Total Past Due [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	7	312
Total Past Due [Member] | Municipal Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	0	0
Current [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	974,591	919,390
Current [Member] | Agriculture Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross		15,201
Current [Member] | Agriculture and Farmland [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	50,293
Current [Member] | Construction [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	65,644
Current [Member] | Commercial and Industrial [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	115,248
Current [Member] | Multifamily [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	111,853
Current [Member] | Owner Occupied [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	160,792
Current [Member] | Non-owner Occupied [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	256,397
Current [Member] | First Liens [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	170,692
Current [Member] | Second Liens and Lines of Credit [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	27,673
Current [Member] | Commercial and PPP Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross		104,569
Current [Member] | Commercial Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross		537,546
Current [Member] | Residential Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross		246,863
Current [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	4,130	9,745
Current [Member] | Municipal Loans [Member]
Financing Receivable, Past Due [Line Items]
Loans, Gross	$ 11,869	$ 5,466

XML

Allowance for Credit Losses - Summary of Allowances for Loan Losses by Loan Class (Detail) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Loans and Leases Receivable Disclosure [Line Items]
Beginning balance	$ 3,890	$ 4,666	$ 3,152
Charge-offs	0		(2)
Recoveries	164		229
Provision for credit losses	515	(549)	1,190
Ending balance	4,569	9,964	4,569
Agriculture Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Beginning balance	17	33	23
Charge-offs	0		0
Recoveries	0		0
Provision for credit losses	21		15
Ending balance	38		38
Commercial and PPP Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Beginning balance	506	583	582
Charge-offs	0		(1)
Recoveries	25		32
Provision for credit losses	96		14
Ending balance	627		627
Commercial Real Estate Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Beginning balance	1,786	2,462	799
Charge-offs	0		(1)
Recoveries	0		0
Provision for credit losses	427		1,415
Ending balance	2,213		2,213
Residential Real Estate Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Beginning balance	1,547	1,536	1,634
Charge-offs	0		0
Recoveries	139		195
Provision for credit losses	(43)		(186)
Ending balance	1,643		1,643
Consumer Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Beginning balance	21	40	22
Charge-offs	0		0
Recoveries	0		2
Provision for credit losses	12		9
Ending balance	33		33
Municipal Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Beginning balance	13	12	15
Charge-offs	0		0
Recoveries	0		0
Provision for credit losses	2		0
Ending balance	15		15
Unallocated [Member]
Loans and Leases Receivable Disclosure [Line Items]
Beginning balance	0	$ 0	77
Charge-offs	0		0
Recoveries	0		0
Provision for credit losses	0		(77)
Ending balance	$ 0		$ 0

XML

Allowance for Credit Losses - Schedule of Classes of Loan Portfolio Summarized by Internal Risk Rating System (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Financing Receivable, Credit Quality Indicator [Line Items]
2023	$ 64,334
2022	276,591
2021	157,444
2020	62,245
2019	72,569
Prior	43,966
Revolving loans amortized cost basis	88,601
Revolving loans converted to term	505
Total	766,255
Payment Activity, Aging status [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	16,762
2022	41,679
2021	52,399
2020	20,888
2019	9,982
Prior	29,955
Revolving loans amortized cost basis	40,541
Revolving loans converted to term	14
Total	212,220
Payment Activity, Aging status [Member] | Performing [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	16,762
2022	41,677
2021	52,399
2020	20,784
2019	9,723
Prior	28,772
Revolving loans amortized cost basis	40,450
Total	210,567
Payment Activity, Aging status [Member] | Nonperforming [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2022	2
2020	104
2019	259
Prior	1,183
Revolving loans amortized cost basis	91
Revolving loans converted to term	14
Total	1,653
Agriculture and Farmland [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	655
2022	13,880
2021	5,089
2020	5,357
2019	3,134
Prior	17,911
Revolving loans amortized cost basis	4,512
Revolving loans converted to term	46
Total	50,584
Construction [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	17,080
2022	23,430
2021	17,020
2020	912
2019	5,428
Prior	1,498
Revolving loans amortized cost basis	375
Revolving loans converted to term	93
Total	65,836
Commercial and Industrial [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	6,765
2022	14,505
2021	7,470
2020	9,606
2019	1,860
Prior	1,045
Revolving loans amortized cost basis	74,210
Revolving loans converted to term	111
Total	115,572
Multifamily [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	5,226
2022	44,619
2021	42,805
2020	11,307
2019	5,858
Prior	1,885
Revolving loans amortized cost basis	153
Total	111,853
Owner Occupied [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	14,164
2022	66,271
2021	25,789
2020	14,821
2019	30,371
Prior	6,087
Revolving loans amortized cost basis	3,420
Revolving loans converted to term	6
Total	160,929
Non-owner Occupied [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	20,178
2022	113,886
2021	59,051
2020	18,565
2019	25,918
Prior	13,663
Revolving loans amortized cost basis	5,834
Revolving loans converted to term	249
Total	257,344
Municipal [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	266
2021	220
2020	1,677
Prior	1,877
Revolving loans amortized cost basis	97
Total	4,137
Consumer and Other [Member] | Payment Activity, Aging status [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	1,930
2022	171
2021	70
2020	70
2019	65
Prior	9
Revolving loans amortized cost basis	9,554
Total	11,869
Consumer and Other [Member] | Payment Activity, Aging status [Member] | Performing [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	1,930
2022	169
2021	70
2020	70
2019	17
Prior	9
Revolving loans amortized cost basis	9,553
Total	11,818
Consumer and Other [Member] | Payment Activity, Aging status [Member] | Nonperforming [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2022	2
2019	48
Revolving loans amortized cost basis	1
Total	51
First Liens [Member] | Payment Activity, Aging status [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	14,757
2022	40,742
2021	51,889
2020	20,688
2019	9,723
Prior	28,661
Revolving loans amortized cost basis	6,021
Total	172,481
First Liens [Member] | Payment Activity, Aging status [Member] | Performing [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	14,757
2022	40,742
2021	51,889
2020	20,584
2019	9,512
Prior	27,507
Revolving loans amortized cost basis	6,021
Total	171,012
First Liens [Member] | Payment Activity, Aging status [Member] | Nonperforming [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2020	104
2019	211
Prior	1,154
Total	1,469
Second Liens and Lines of Credit [Member] | Payment Activity, Aging status [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	75
2022	766
2021	440
2020	130
2019	194
Prior	1,285
Revolving loans amortized cost basis	24,966
Revolving loans converted to term	14
Total	27,870
Second Liens and Lines of Credit [Member] | Payment Activity, Aging status [Member] | Performing [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	75
2022	766
2021	440
2020	130
2019	194
Prior	1,256
Revolving loans amortized cost basis	24,876
Total	27,737
Second Liens and Lines of Credit [Member] | Payment Activity, Aging status [Member] | Nonperforming [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Prior	29
Revolving loans amortized cost basis	90
Revolving loans converted to term	14
Total	133
Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	64,320
2022	276,591
2021	155,683
2020	62,116
2019	63,167
Prior	38,399
Revolving loans amortized cost basis	86,819
Revolving loans converted to term	255
Total	747,350
Pass [Member] | Agriculture and Farmland [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	641
2022	13,880
2021	5,073
2020	5,228
2019	3,089
Prior	15,107
Revolving loans amortized cost basis	4,213
Revolving loans converted to term	46
Total	47,277
Pass [Member] | Construction [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	17,080
2022	23,430
2021	17,020
2020	912
2019	5,428
Prior	1,498
Revolving loans amortized cost basis	375
Revolving loans converted to term	93
Total	65,836
Pass [Member] | Commercial and Industrial [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	6,765
2022	14,505
2021	7,258
2020	9,606
2019	1,657
Prior	1,045
Revolving loans amortized cost basis	73,096
Revolving loans converted to term	110
Total	114,042
Pass [Member] | Multifamily [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	5,226
2022	44,619
2021	42,805
2020	11,307
2019	5,858
Revolving loans amortized cost basis	153
Total	109,968
Pass [Member] | Owner Occupied [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	14,164
2022	66,271
2021	24,299
2020	14,821
2019	21,357
Prior	5,767
Revolving loans amortized cost basis	3,051
Revolving loans converted to term	6
Total	149,736
Pass [Member] | Non-owner Occupied [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	20,178
2022	113,886
2021	59,008
2020	18,565
2019	25,778
Prior	13,105
Revolving loans amortized cost basis	5,834
Total	256,354
Pass [Member] | Municipal [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	266
2021	220
2020	1,677
Prior	1,877
Revolving loans amortized cost basis	97
Total	4,137
Special Mention [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2021	1,651
2019	6,636
Prior	192
Revolving loans amortized cost basis	1,451
Total	9,930
Special Mention [Member] | Agriculture and Farmland [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2019	45
Prior	192
Revolving loans amortized cost basis	242
Total	479
Special Mention [Member] | Commercial and Industrial [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2021	161
Revolving loans amortized cost basis	914
Total	1,075
Special Mention [Member] | Owner Occupied [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2021	1,490
2019	6,591
Revolving loans amortized cost basis	295
Total	8,376
Substandard or Lower [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	14
2021	110
2020	129
2019	2,766
Prior	5,375
Revolving loans amortized cost basis	331
Revolving loans converted to term	250
Total	8,975
Substandard or Lower [Member] | Agriculture and Farmland [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2023	14
2021	16
2020	129
Prior	2,612
Revolving loans amortized cost basis	57
Total	2,828
Substandard or Lower [Member] | Commercial and Industrial [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2021	51
2019	203
Revolving loans amortized cost basis	200
Revolving loans converted to term	1
Total	455
Substandard or Lower [Member] | Multifamily [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Prior	1,885
Total	1,885
Substandard or Lower [Member] | Owner Occupied [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2019	2,423
Prior	320
Revolving loans amortized cost basis	74
Total	2,817
Substandard or Lower [Member] | Non-owner Occupied [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
2021	43
2019	140
Prior	558
Revolving loans converted to term	249
Total	$ 990

XML

Allowance for Credit Losses - Summary of Balance of Loans Individually Evaluated vs. Collectively Evaluated for Impairment (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Loans and Leases Receivable Disclosure [Line Items]
Allowance for Loan Losses, Ending balance	$ 9,964	$ 4,666	$ 4,569	$ 3,890	$ 3,152
Allowance for Loan Losses, Ending balance: individually evaluated for impairment		20
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment		4,646
Loans, Ending balance	978,475	927,615
Loans, Ending balance: individually evaluated for impairment		7,313
Ending balance: loans acquired with deteriorated credit quality		2,409
Loans, Ending balance: collectively evaluated for impairment		917,893
Agriculture Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Allowance for Loan Losses, Ending balance		33	38	17	23
Allowance for Loan Losses, Ending balance: individually evaluated for impairment		0
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment		33
Loans, Ending balance		15,591
Loans, Ending balance: individually evaluated for impairment		300
Ending balance: loans acquired with deteriorated credit quality		0
Loans, Ending balance: collectively evaluated for impairment		15,291
Commercial and PPP Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Allowance for Loan Losses, Ending balance		583	627	506	582
Allowance for Loan Losses, Ending balance: individually evaluated for impairment		20
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment		563
Loans, Ending balance		104,755
Loans, Ending balance: individually evaluated for impairment		55
Ending balance: loans acquired with deteriorated credit quality		0
Loans, Ending balance: collectively evaluated for impairment		104,700
Commercial Real Estate Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Allowance for Loan Losses, Ending balance		2,462	2,213	1,786	799
Allowance for Loan Losses, Ending balance: individually evaluated for impairment		0
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment		2,462
Loans, Ending balance		540,914
Loans, Ending balance: individually evaluated for impairment		2,306
Ending balance: loans acquired with deteriorated credit quality		2,227
Loans, Ending balance: collectively evaluated for impairment		536,381
Residential Real Estate Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Allowance for Loan Losses, Ending balance		1,536	1,643	1,547	1,634
Allowance for Loan Losses, Ending balance: individually evaluated for impairment		0
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment		1,536
Loans, Ending balance		250,832
Loans, Ending balance: individually evaluated for impairment		4,652
Ending balance: loans acquired with deteriorated credit quality		182
Loans, Ending balance: collectively evaluated for impairment		245,998
Consumer Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Allowance for Loan Losses, Ending balance		40	33	21	22
Allowance for Loan Losses, Ending balance: individually evaluated for impairment		0
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment		40
Loans, Ending balance	4,137	10,057
Loans, Ending balance: individually evaluated for impairment		0
Ending balance: loans acquired with deteriorated credit quality		0
Loans, Ending balance: collectively evaluated for impairment		10,057
Municipal Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Allowance for Loan Losses, Ending balance		12	15	13	15
Allowance for Loan Losses, Ending balance: individually evaluated for impairment		0
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment		12
Loans, Ending balance	$ 11,869	5,466
Loans, Ending balance: individually evaluated for impairment		0
Ending balance: loans acquired with deteriorated credit quality		0
Loans, Ending balance: collectively evaluated for impairment		5,466
Unallocated [Member]
Loans and Leases Receivable Disclosure [Line Items]
Allowance for Loan Losses, Ending balance		0	$ 0	$ 0	$ 77
Allowance for Loan Losses, Ending balance: individually evaluated for impairment		0
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment		$ 0

XML

Allowance for Credit Losses - Summary of Classes of the Loan Portfolio Summarized by the Internal Risk Rating System (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross	$ 978,475	$ 927,615
Agriculture Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		15,591
Commercial and PPP Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		104,755
Commercial Real Estate Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		540,914
Residential Real Estate Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		250,832
Consumer Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross	4,137	10,057
Municipal Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross	$ 11,869	5,466
Pass [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		912,686
Pass [Member] | Agriculture Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		15,291
Pass [Member] | Commercial and PPP Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		101,980
Pass [Member] | Commercial Real Estate Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		533,864
Pass [Member] | Residential Real Estate Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		246,028
Pass [Member] | Consumer Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		10,057
Pass [Member] | Municipal Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		5,466
Special Mention [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		5,444
Special Mention [Member] | Agriculture Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		0
Special Mention [Member] | Commercial and PPP Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		2,721
Special Mention [Member] | Commercial Real Estate Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		2,516
Special Mention [Member] | Residential Real Estate Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		207
Special Mention [Member] | Consumer Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		0
Special Mention [Member] | Municipal Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		0
Substandard [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		9,485
Substandard [Member] | Agriculture Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		300
Substandard [Member] | Commercial and PPP Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		54
Substandard [Member] | Commercial Real Estate Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		4,534
Substandard [Member] | Residential Real Estate Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		4,597
Substandard [Member] | Consumer Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		0
Substandard [Member] | Municipal Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		0
Doubtful [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		0
Doubtful [Member] | Agriculture Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		0
Doubtful [Member] | Commercial and PPP Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		0
Doubtful [Member] | Commercial Real Estate Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		0
Doubtful [Member] | Residential Real Estate Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		0
Doubtful [Member] | Consumer Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		0
Doubtful [Member] | Municipal Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans and Leases Receivable, Gross		$ 0

XML

Allowance for Credit Losses - Summary of Impaired Loans (Detail) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Financing Receivable, Impaired [Line Items]
With an allowance recorded, Recorded Investment			$ 0
With an allowance recorded, Unpaid Principal Balance			0
With an allowance recorded, Related Allowance			20
Total, Recorded Investment			7,313
Total, Unpaid Principal Balance			7,370
Total, Related Allowance			20
With no related allowance recorded, Average Recorded Investment	$ 5,577	$ 5,744
With no related allowance recorded, Interest Recognized	106	165
With an allowance recorded, Average Recorded Investment	176	177
With an allowance recorded, Interest Recognized	3	5
Total, Average Recorded Investment	5,753	5,921
Total, Interest Recognized	109	170
Agriculture Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment			300
With no related allowance recorded, Unpaid Principal Balance			300
With an allowance recorded, Recorded Investment			0
With an allowance recorded, Unpaid Principal Balance			0
With an allowance recorded, Related Allowance			0
Total, Recorded Investment			300
Total, Unpaid Principal Balance			300
Total, Related Allowance			0
With no related allowance recorded, Average Recorded Investment	133	210
With no related allowance recorded, Interest Recognized	5	8
With an allowance recorded, Average Recorded Investment	0	0
With an allowance recorded, Interest Recognized	0	0
Commercial Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment			35
With no related allowance recorded, Unpaid Principal Balance			55
With an allowance recorded, Recorded Investment			20
With an allowance recorded, Unpaid Principal Balance			20
With an allowance recorded, Related Allowance			20
Total, Recorded Investment			55
Total, Unpaid Principal Balance			75
Total, Related Allowance			20
With no related allowance recorded, Average Recorded Investment	37	35
With no related allowance recorded, Interest Recognized	0	0
With an allowance recorded, Average Recorded Investment	0	0
With an allowance recorded, Interest Recognized	0	0
Commercial Real Estate Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment			2,306
With no related allowance recorded, Unpaid Principal Balance			2,312
With an allowance recorded, Recorded Investment			0
With an allowance recorded, Unpaid Principal Balance			0
With an allowance recorded, Related Allowance			0
Total, Recorded Investment			2,306
Total, Unpaid Principal Balance			2,312
Total, Related Allowance			0
With no related allowance recorded, Average Recorded Investment	2,421	2,451
With no related allowance recorded, Interest Recognized	65	100
With an allowance recorded, Average Recorded Investment	0	0
With an allowance recorded, Interest Recognized	0	0
Residential Real Estate Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment			4,652
With no related allowance recorded, Unpaid Principal Balance			4,683
With an allowance recorded, Recorded Investment			0
With an allowance recorded, Unpaid Principal Balance			0
With an allowance recorded, Related Allowance			0
Total, Recorded Investment			4,652
Total, Unpaid Principal Balance			4,683
Total, Related Allowance			0
With no related allowance recorded, Average Recorded Investment	2,986	3,048
With no related allowance recorded, Interest Recognized	36	57
With an allowance recorded, Average Recorded Investment	174	175
With an allowance recorded, Interest Recognized	3	5
Consumer Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment			0
With no related allowance recorded, Unpaid Principal Balance			0
With an allowance recorded, Recorded Investment			0
With an allowance recorded, Unpaid Principal Balance			0
With an allowance recorded, Related Allowance			0
Total, Recorded Investment			0
Total, Unpaid Principal Balance			0
Total, Related Allowance			0
With no related allowance recorded, Average Recorded Investment	0	0
With no related allowance recorded, Interest Recognized	0	0
With an allowance recorded, Average Recorded Investment	2	2
With an allowance recorded, Interest Recognized	0	0
Municipal Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment			0
With no related allowance recorded, Unpaid Principal Balance			0
With an allowance recorded, Recorded Investment			0
With an allowance recorded, Unpaid Principal Balance			0
With an allowance recorded, Related Allowance			0
Total, Recorded Investment			0
Total, Unpaid Principal Balance			0
Total, Related Allowance			$ 0
With no related allowance recorded, Average Recorded Investment	0	0
With no related allowance recorded, Interest Recognized	0	0
With an allowance recorded, Average Recorded Investment	0	0
With an allowance recorded, Interest Recognized	$ 0	$ 0

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Allowance for Credit Losses - Summary of Portfolio of Nonaccrual Loans (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Loans and Leases Receivable Disclosure [Line Items]
Financing receivable, nonaccrual	$ 140	$ 1,918
Commercial and PPP Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Financing receivable, nonaccrual		35
Commercial Real Estate Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Financing receivable, nonaccrual		231
Residential Real Estate Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Financing receivable, nonaccrual		1,652
Consumer Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Financing receivable, nonaccrual		$ 0

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Allowance for Credit Losses - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023	Dec. 31, 2022
Loans and Leases Receivable Disclosure [Line Items]
Interest income recognized on nonaccrual loans	$ 35	$ 49
Purchased Credit Impaired Loans			$ 2,409
Federal Home Loan Bank (FHLB) [Member]
Loans and Leases Receivable Disclosure [Line Items]
Borrowings secured by loans pledged to FHLB			0
Purchased Credit Impaired Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Purchased Credit Impaired Loans			$ 2,409

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Deposits - Summary of Deposit Accounts (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Deposits [Abstract]
Demand, noninterest-bearing	$ 210,404	$ 192,773
Demand, interest-bearing	273,673	254,478
Money market and savings	258,334	228,048
Time deposits, $250 and over	51,563	45,616
Time deposits, other	247,798	225,857
Total deposits	$ 1,041,772	$ 946,772
Demand, noninterest-bearing	20.20%	20.36%
Demand, interest-bearing	26.26%	26.88%
Money market and savings	24.80%	24.09%
Time deposits, $250 and over	4.95%	4.82%
Time deposits, other	23.79%	23.86%
Total deposits	100.00%	100.00%

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Deposits - Additional Information (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Deposits [Abstract]
Brokered deposits	$ 75,000	$ 70,000

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Borrowings and Subordinated Debentures - Borrowings and Subordinated Debt (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Disclosure [Abstract]
Subordinated Debt	$ 40,354	$ 40,484
Short-term borrowings	15,000	20,938
Total Long-term borrowings	$ 55,354	$ 61,422

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Borrowings and Subordinated Debentures - Additional Information (Detail) - USD ($)		9 Months Ended	12 Months Ended
	Apr. 08, 2022	Sep. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Proceeds from unsecured lines of credit		$ 51,000
Borrowings under line of credit		0	$ 0
Short-term FHLB advances		$ 15,000,000	20,938,000
FHLB, advance maturity term		1 month
Subordinated Notes Sale - 2022 [Member]
Debt Instrument [Line Items]
Debt Instrument, principal amount	$ 20,000,000
Subordinated borrowing interest rate	4.50%
Subordinated borrowing due date		Apr. 15, 2032
Long-term debt, fixed interest percentage rate		4.50%
Proceeds from contributed capital			$ 15,000,000
Subordinated borrowing interest rate basis		The Notes, which mature on April 15, 2032, bear interest at a fixed annual rate of 4.50% for the period up to but excluding April 15, 2027 (the “Fixed Interest Rate Period”). From April 15, 2027 until maturity or redemption (the “Floating Interest Rate Period”), the interest rate will adjust to a floating rate equal to a benchmark rate, which is expected to be the then-current three-month Secured Overnight Financing Rate (SOFR), plus 203 basis points. The Company will pay interest in arrears semi-annually during the Fixed Interest Rate Period and quarterly during the Floating Interest Rate Period.
Subordinated Notes Sale - 2022 [Member] | Board of Directors [Member]
Debt Instrument [Line Items]
Debt Instrument, principal amount	$ 7,000,000
Subordinated Notes Sale - 2022 [Member] | Secured Overnight Financing Rate (SOFR) [Member]
Debt Instrument [Line Items]
Basis points spread		203.00%

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Fair Value Measurements - Summary of Estimated Fair Value of Financial Instruments that are not Required to be Measured or Reported at Fair Value (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financial assets:
Cash and cash equivalents (Level 1)	$ 67,979	$ 30,011
Certificates of deposit with other banks	249	5,623
Securities held to maturity (Level 2)	37,778	31,822
Held-to-maturity, fair value	34,588	30,080
Loans (Level 3)	968,948	923,205
Financial liabilities:
Other borrowings (Level 3)	15,000	20,938
Subordinated Notes (Level 3)	40,354	40,484
Carrying Amount [Member] | Fair Value, Inputs, Level 1 [Member]
Financial assets:
Cash and cash equivalents (Level 1)	67,979	30,011
Accrued interest receivable (Level 1)	4,767	4,661
Restricted investments in bank stock (Level 1)	3,107	3,377
Cash surrender value of life insurance (Level 1)	24,732	19,244
Financial liabilities:
Non-maturity deposits (Level 1)	742,411	675,299
Accrued interest payable (Level 1)	1,166	797
Carrying Amount [Member] | Fair Value, Inputs, Level 2 [Member]
Financial assets:
Securities held to maturity (Level 2)	37,778	31,822
Carrying Amount [Member] | Fair Value, Inputs, Level 3 [Member]
Financial assets:
Certificates of deposit with other banks	249	5,623
Loans (Level 3)	978,912	927,871
Derivative (Level 3)	3,264
Financial liabilities:
Time Deposits (Level 3)	299,361	271,473
Other borrowings (Level 3)	15,000	20,938
Subordinated Notes (Level 3)	40,354	40,484
Fair Value [Member] | Fair Value, Inputs, Level 1 [Member]
Financial assets:
Cash and cash equivalents (Level 1)	67,979	30,011
Accrued interest receivable (Level 1)	4,767	4,661
Restricted investments in bank stock (Level 1)	3,107	3,377
Cash surrender value of life insurance (Level 1)	24,732	19,244
Financial liabilities:
Non-maturity deposits (Level 1)	742,411	675,299
Accrued interest payable (Level 1)	1,166	797
Fair Value [Member] | Fair Value, Inputs, Level 2 [Member]
Financial assets:
Securities held to maturity (Level 2)	34,588	30,080
Fair Value [Member] | Fair Value, Inputs, Level 3 [Member]
Financial assets:
Certificates of deposit with other banks	249	5,590
Loans (Level 3)	920,526	886,944
Derivative (Level 3)	3,264
Financial liabilities:
Time Deposits (Level 3)	296,799	266,775
Other borrowings (Level 3)	15,000	20,938
Subordinated Notes (Level 3)	$ 35,796	$ 35,966

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Fair Value Measurements - Summary of Fair Value of Assets and Liabilities Measured on Recurring Basis (Detail) - Fair Value, Recurring [Member] - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Assets:
US government agency securities	$ 1,982
Small Business Administration loan pools	679	$ 843
Obligations of state and political subdivisions	39,679	40,169
Mortgage backed securities in government-sponsored entities	36,439	37,801
Total	78,779	78,813
Fair Value, Inputs, Level 1 [Member]
Assets:
US government agency securities	0
Small Business Administration loan pools	0	0
Obligations of state and political subdivisions	0	0
Mortgage backed securities in government-sponsored entities	0	0
Total	0	0
Fair Value, Inputs, Level 2 [Member]
Assets:
US government agency securities	1,982
Small Business Administration loan pools	679	843
Obligations of state and political subdivisions	39,679	40,169
Mortgage backed securities in government-sponsored entities	36,439	37,801
Total	78,779	78,813
Fair Value, Inputs, Level 3 [Member]
Assets:
US government agency securities	0
Small Business Administration loan pools	0	0
Obligations of state and political subdivisions	0	0
Mortgage backed securities in government-sponsored entities	0	0
Total	$ 0	$ 0

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Fair Value Measurements - Summary of Financial Assets Measured at Fair Value on a Nonrecurring Basis (Detail) - Fair Value, Nonrecurring [Member] - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans individually evaluated	$ 9,523	$ 7,313
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans individually evaluated	0	0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans individually evaluated	0	0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans individually evaluated	$ 9,523	$ 7,313

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Fair Value Measurements - Summary of Information about Valuation Processes Used to Determine Nonrecurring Fair Value Measurements (Detail) - Fair Value, Nonrecurring [Member] $ in Thousands		Sep. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans individually evaluated		$ 9,523	$ 7,313
Fair Value, Inputs, Level 3 [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans individually evaluated		$ 9,523	$ 7,313
Fair Value, Inputs, Level 3 [Member] | Measurement Input Liquidation Expenses Rate [Member] | Appraisal Of Collateral [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Range (Weighted Average)	[1]	10	10

[1] Fair value is generally determined through independent appraisals of the underlying collateral, which include various Level III inputs that are not identifiable.

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Stock-based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended		9 Months Ended
	May 26, 2022	May 14, 2019	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Disclosure Of Compensation Related Costs Share based Payments [Line Items]
Stock-based compensation expense recognized			$ 38	$ 19	$ 96	$ 59
December 31, 2027 [Member]
Disclosure Of Compensation Related Costs Share based Payments [Line Items]
Amount remaining to be recognized as expense			$ 200		$ 200
2019 Equity Incentive Plan [Member]
Disclosure Of Compensation Related Costs Share based Payments [Line Items]
Number of shares authorized for issuance		450,000
Vesting rate		20.00%
2019 Equity Incentive Plan [Member] | Maximum [Member]
Disclosure Of Compensation Related Costs Share based Payments [Line Items]
Exercise price of options outstanding			$ 14.5		$ 14.5
2019 Equity Incentive Plan [Member] | Minimum [Member]
Disclosure Of Compensation Related Costs Share based Payments [Line Items]
Exercise price of options outstanding			7		$ 7
2019 Equity Incentive Plan [Member] | Share-Based Payment Arrangement, Option [Member]
Disclosure Of Compensation Related Costs Share based Payments [Line Items]
Number of stock options, Granted					0
2022 Equity Incentive Plan [Member]
Disclosure Of Compensation Related Costs Share based Payments [Line Items]
Number of shares authorized for issuance	475,000
2022 Equity Incentive Plan [Member] | Minimum [Member]
Disclosure Of Compensation Related Costs Share based Payments [Line Items]
Vesting rate	95.00%
Minimum period to vest for 95% of the awards	1 year
2022 Equity Incentive Plan [Member] | Share-Based Payment Arrangement, Option [Member]
Disclosure Of Compensation Related Costs Share based Payments [Line Items]
Exercise price of options outstanding			$ 9.72		$ 9.72		$ 10.11
Number of stock options, Granted					60,000

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Stock-based Compensation - Summary of Stock Options Activity (Detail) - 2022 Equity Incentive Plan [Member] - Share-Based Payment Arrangement, Option [Member] - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of Stock Options, Outstanding, December 31, 2022	490,000
Number of Stock Options, Granted	60,000
Number of Stock Options, Expired/terminated	(36,000)
Number of Stock Options, Outstanding,September 30, 2023	514,000	490,000
Number of Stock Options, Exercisable at period end	260,000
Weighted- Average Exercise Price, Outstanding, December 31, 2022	$ 10.11
Weighted- Average Exercise Price, Granted	7
Weighted- Average Exercise Price, Expired/terminated	10.45
Weighted- Average Exercise Price, Outstanding,September 30, 2023	9.72	$ 10.11
Weighted- Average Exercise Price, Exercisable at period end	$ 10.16
Weighted- Average Remaining Contractual Term, Balance	7 years	7 years
Weighted- Average Remaining Contractual Term, Granted	9 years 10 months 24 days
Weighted- Average Remaining Contractual Term, Exercisable at period end	5 years 9 months 18 days
Aggregate Intrinsic Value, Outstanding		$ 33
Aggregate Intrinsic Value, Exercisable at period end	$ 0

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Stock-based Compensation - Summary of Restricted Shares Activity (Detail) - 2022 Equity Incentive Plan [Member] - Restricted Shares [Member]	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of Shares, Granted | shares	87,000
Number of Shares, Outstanding, September 30, 2023 | shares	87,000
Average Market Price at Grant, Granted | $ / shares	$ 7
Average Market Price at Grant, Outstanding | $ / shares	$ 7

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Regulatory Capital Requirements - Schedule of Bank Actual and Required Capital Amounts and Ratios (Details) $ in Thousands	Sep. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Total capital
Actual	$ 133,547	$ 125,632
For capital adequacy purposes	82,664	77,953
To be well capitalized	103,331	97,441
Tier 1 capital
Actual	127,823	120,912
For capital adequacy purposes	61,998	58,465
To be well capitalized	82,664	77,953
Common equity
Actual	127,823	120,912
For capital adequacy purposes	46,499	43,848
To be well capitalized	67,165	63,337
Tier 1 capital
Actual	127,823	120,912
For capital adequacy purposes	47,727	44,248
To be well capitalized	$ 59,658	$ 55,311
Ratios
Actual	0.1292	0.1289
For capital adequacy purposes	0.08	0.08
To be well capitalized	0.10	0.10
Actual	0.1237	0.1241
For capital adequacy purposes	0.06	0.06
To be well capitalized	0.08	0.08
Actual	0.1237	0.1241
For capital adequacy purposes	0.045	0.045
To be well capitalized	0.065	0.065
Banking Regulation, Leverage Ratio [Abstract]
Actual	0.1071	0.1093
For capital adequacy purposes	0.04	0.04
To be well capitalized	0.05	0.05

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Regulatory Capital Requirements - Additional Information (Details) $ in Billions	Sep. 30, 2023 USD ($)	Dec. 31, 2022
Regulatory Capital Requirements Under Banking Regulations [Line Items]
Loans or advances from bank limited to percentage of the banks capital stock and surplus and must be secured by collateral	10.00%
Percentage of required capital conservation buffer	0.025
Community bank leverage ratio	0.1071	0.1093
Community Bank Leverage Ratio Requirement [Member]
Regulatory Capital Requirements Under Banking Regulations [Line Items]
Financial institutions minimum amount of assets need to maintain	$ 10
The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 [Member]
Regulatory Capital Requirements Under Banking Regulations [Line Items]
Financial institutions minimum amount of assets need to maintain	$ 10
Community bank leverage ratio	0.09

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Financial Instruments With Off-Balance Sheet Risk - Summary of Outstanding Contract Amounts of Off Balance Sheet Credit Risk Related Financial Instruments (Detail) - Unfunded Loan Commitment [Member] - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Schedule Of Loans And Leases Receivable Unfunded Commitments Under Line Of Credit [Line Items]
Unfunded commitments under lines of credit	$ 251,935	$ 231,149
Home equity loans [Member]
Schedule Of Loans And Leases Receivable Unfunded Commitments Under Line Of Credit [Line Items]
Unfunded commitments under lines of credit	46,960	43,798
Commercial real estate, construction, and land development [Member]
Schedule Of Loans And Leases Receivable Unfunded Commitments Under Line Of Credit [Line Items]
Unfunded commitments under lines of credit	60,239	62,146
Commercial and industrial [Member]
Schedule Of Loans And Leases Receivable Unfunded Commitments Under Line Of Credit [Line Items]
Unfunded commitments under lines of credit	$ 144,736	$ 125,205

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Financial Instruments With Off-Balance Sheet Risk - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Financial Instruments With Off Balance Sheet Risk [Line Items]
Amount of allowance for credit losses for off balance sheet instruments	$ 904		$ 904		$ 54
(Credit to) Provision for credit losses	(276)		(468)
Unfunded Loan Commitment [Member]
Financial Instruments With Off Balance Sheet Risk [Line Items]
(Credit to) Provision for credit losses	0	$ 0	60	$ 0
Other Liabilities [Member]
Financial Instruments With Off Balance Sheet Risk [Line Items]
Amount of allowance for credit losses for off balance sheet instruments	$ 904		$ 904		$ 54

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Earning Per Share - Summary of Composition of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share [Abstract]
Net income	$ 1,240	$ 1,772	$ 1,033	$ 4,902
Basic weighted average common shares outstanding	16,235,144	10,590,079	15,984,151	10,087,341
Net effect of dilutive stock options and warrants	0	0		49,116
Net effect of dilutive restricted stock awards	0	0	0	0
Diluted weighted average common shares outstanding	16,235,144	10,590,079	15,984,151	10,136,457
Basic	$ 0.08	$ 0.17	$ 0.06	$ 0.49
Diluted	$ 0.08	$ 0.17	$ 0.06	$ 0.48

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Earning Per Share - Schedule of Dilutive Securities Included in Computation of Earnings Per Share (Details)	9 Months Ended
	Sep. 30, 2022 shares
Earnings Per Share [Abstract]
Warrants	1,537,484
Total dilutive securities	1,537,484

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Earnings Per share - Schedule of Dilutive Securities Excluded in Computation of Earnings Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total anti-dilutive securities	1,884,484	1,733,184	1,884,484	195,700
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total anti-dilutive securities	260,000	195,700	260,000	195,700
Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total anti-dilutive securities	1,537,484	1,537,484	1,537,484
Restricted Stock Awards [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total anti-dilutive securities	87,000		87,000

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Derivatives - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023	Jun. 30, 2023
Derivative Instruments, Gain (Loss) [Line Items]
Net derivative gains (loss) included in accumulated other comprehensive income (loss) reclassified into earnings	$ (375)	$ (572)
Net derivative gains (loss) included in accumulated other comprehensive income (loss) expected to be reclassified into earnings within the next 12 months, net of tax	1,500	1,500
Other Assets [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Fair value of derivatives	$ 3,300	$ 3,300
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative notional amount			$ 75,000
Derivative fixed rate			3.28%
Derivative maturity year			5 years