Loans (Tables)

9 Months Ended

Sep. 30, 2024

Receivables [Abstract]

Summary of Major Classifications of Loans

Major classifications of loans, reported at amortized cost, are summarized as follows:

	September 30, 2024			December 31, 2023
	(in thousands)
Commercial:
Real estate	$	233,924		$	231,893
Other		50,307			47,898
Residential real estate:
First mortgage		96,202			97,747
Construction		959			359
Consumer:
Home equity and lines of credit		19,591			19,683
Other		88			134
Subtotal (1)		401,071			397,714
Net deferred loan costs		545			854
Allowance for credit losses for loans		(3,966	)		(3,734	)
Loans, net	$	397,650		$	394,834

(1) Totals do not include accrued interest receivable, which was $1.1 million at both September 30, 2024 and December 31, 2023, and which is recorded separately on the Company’s Consolidated Balance Sheets.

Summary of Activity in Allowance for Loan and Lease Losses and Allowance for Credit Losses for Unfunded Loan Commitments

A summary of activity in the allowance for credit losses for loans and the allowance for credit losses for unfunded loan commitments for the three and nine months ended September 30, 2024 and September 30, 2023, is presented below:

	Commercial			Residential			Consumer			Total
	(in thousands)
Three months ended September 30, 2024
Allowance for credit losses for loans
Beginning balance	$	2,814		$	860		$	197		$	3,871
Provision for credit losses		72			21			5			98
Loans charged-off		(2	)		—			(3	)		(5	)
Recoveries		2			—			—			2
Ending balance	$	2,886		$	881		$	199		$	3,966
Allowance for credit losses for unfunded loan commitments(1)
Beginning balance	$	972		$	30		$	—		$	1,002
Provision for credit losses		(23	)		—			—			(23	)
Ending balance	$	949		$	30		$	—		$	979
Total Allowance for credit losses for loans and unfunded loan commitments	$	3,835		$	911		$	199		$	4,945
Three months ended September 30, 2023
Allowance for credit losses for loans
Beginning balance	$	2,632		$	831		$	180		$	3,643
Provision for credit losses		(26	)		(8	)		(2	)		(36	)
Loans charged-off		—			—			(1	)		(1	)
Recoveries		4			—			4			8
Ending balance	$	2,610		$	823		$	181		$	3,614
Allowance for credit losses for unfunded loan commitments(1)
Beginning balance	$	771		$	27		$	—		$	798
Provision for credit losses		132			(21	)		—			111
Ending balance	$	903		$	6		$	—		$	909
Total Allowance for credit losses for loans and unfunded loan commitments	$	3,513		$	829		$	181		$	4,523

NOTE 4 – LOANS (continued)

	Commercial			Residential			Consumer			Total
	(in thousands)
Nine months ended September 30, 2024
Allowance for credit losses for loans
Beginning balance	$	2,693		$	849		$	192		$	3,734
Provision for credit losses		90			26			5			121
Loans charged-off		(3	)		—			(5	)		(8	)
Recoveries		106			6			7			119
Ending balance	$	2,886		$	881		$	199		$	3,966
Allowance for credit losses for unfunded loan commitments(1)
Beginning balance	$	847		$	28		$	—		$	875
Provision for credit losses		102			2			—			104
Ending balance	$	949		$	30		$	—		$	979
Total Allowance for credit losses for loans and unfunded loan commitments	$	3,835		$	911		$	199		$	4,945
Nine months ended September 30, 2023
Allowance for credit losses for loans
Beginning balance	$	1,944		$	752		$	507		$	3,203
Provision for credit losses		(14	)		(4	)		(1	)		(19	)
CECL Adoption Adjustment(2)		666			75			(329	)		412
Loans charged-off		—			—			(8	)		(8	)
Recoveries		14			—			12			26
Ending balance	$	2,610		$	823		$	181		$	3,614
Allowance for credit losses for unfunded loan commitments(1)
Beginning balance	$	—		$	—		$	—		$	—
Provision for credit losses		263			(19	)		—			244
CECL Adoption Adjustment(2)		640			25			—			665
Ending balance	$	903		$	6		$	—		$	909
Total Allowance for credit losses for loans and unfunded loan commitments	$	3,513		$	829		$	181		$	4,523

(1) The allowance for credit losses for unfunded loan commitments is included in other liabilities on the Company's Consolidated Balance Sheets.

(2) On January 1, 2023, the Company adopted ASU 2016-13 ("CECL").

The following table presents the components of the provision for credit losses:

	Three months ended September 30,
	2024			2023
	(in thousands)
Provision for credit losses for:
Loans	$	98		$	(36	)
Unfunded loan commitments		(23	)		111
Total	$	75		$	75

	Nine months ended September 30,
	2024		2023
	(in thousands)
Provision for credit losses for:
Loans	$	121	$	(19	)
Unfunded loan commitments		104		244
Total	$	225	$	225

Summary of Amortized Cost Basis of Loans By Credit Quality Indicator and Origination Year

The following tables presents the amortized cost basis of our loans by credit quality indicator and origination year, at September 30, 2024 and December 31, 2023:

	September 30, 2024
	2024		2023		2022		2021		2020		2019 and Prior		Revolving Lines of Credit		Revolving Lines of Credit Converted to Term Loans		Total Loans
	(in thousands)
Commercial real estate:
Pass	$	6,647	$	34,734	$	71,816	$	36,742	$	38,482	$	40,638	$	58	$	-	$	229,117
Watch and special mention		-		-		545		193		-		382		-		-		1,120
Substandard		-		1,652		1,854		-		-		181		-		-		3,687
Total commercial real estate		6,647		36,386		74,215		36,935		38,482		41,201		58		-		233,924
Other commercial loans:
Pass		9,263		6,196		4,635		2,488		326		914		12,210		-		36,032
Watch and special mention		3,319		6,454		3,183		356		33		-		28		-		13,373
Substandard		-		-		189		111		-		102		500		-		902
Total other commercial loans		12,582		12,650		8,007		2,955		359		1,016		12,738		-		50,307
Total commercial loans		19,229		49,036		82,222		39,890		38,841		42,217		12,796		-		284,231
Residential real estate - first mortgage:
Performing		3,326		14,335		13,088		32,082		14,704		17,825		-		-		95,360
Nonaccrual		-		157		-		-		-		685		-		-		842
Total residential real estate - first mortgage		3,326		14,492		13,088		32,082		14,704		18,510		-		-		96,202
Residential real estate - construction:
Performing		959		-		-		-		-		-		-		-		959
Nonaccrual		-		-		-		-		-		-		-		-		-
Total residential real estate - construction		959		-		-		-		-		-		-		-		959
Total residential real estate		4,285		14,492		13,088		32,082		14,704		18,510		-		-		97,161
Consumer - home equity and lines of credit:
Performing		74		70		40		129		62		1,064		16,645		1,419		19,503
Nonaccrual		-		-		-		-		-		84		4		-		88
Total consumer - home equity and lines of credit		74		70		40		129		62		1,148		16,649		1,419		19,591
Consumer - other
Performing		25		23		36		-		4		-		-		-		88
Nonaccrual		-		-		-		-		-		-		-		-		-
Total consumer - other		25		23		36		-		4		-		-		-		88
Total consumer		99		93		76		129		66		1,148		16,649		1,419		19,679
Total loans	$	23,613	$	63,621	$	95,386	$	72,101	$	53,611	$	61,875	$	29,445	$	1,419	$	401,071

NOTE 4 – LOANS (continued)

	December 31, 2023
	2023		2022		2021		2020		2019		2018 and Prior		Revolving Lines of Credit		Revolving Lines of Credit Converted to Term Loans		Total Loans
	(in thousands)
Commercial real estate:
Pass	$	22,486	$	78,098	$	40,597	$	40,914	$	8,881	$	34,342	$	42	$	-	$	225,360
Watch and special mention		-		232		-		-		1,706		328		-		-		2,266
Substandard		-		1,885		598		-		287		1,075		-		-		3,845
Nonaccrual		-		79		-		-		-		343		-		-		422
Total commercial real estate		22,486		80,294		41,195		40,914		10,874		36,088		42		-		231,893
Other commercial loans:
Pass		16,949		11,347		4,729		974		64		1,488		9,905		-		45,456
Watch and special mention		-		-		197		31		15		48		828		-		1,119
Substandard		-		236		411		-		-		116		560		-		1,323
Total other commercial loans		16,949		11,583		5,337		1,005		79		1,652		11,293		-		47,898
Total commercial loans		39,435		91,877		46,532		41,919		10,953		37,740		11,335		-		279,791
Residential real estate - first mortgage:
Performing		13,485		14,419		33,619		15,854		3,033		16,680		-		-		97,090
Nonaccrual		-		-		-		-		-		657		-		-		657
Total residential real estate - first mortgage		13,485		14,419		33,619		15,854		3,033		17,337		-		-		97,747
Residential real estate - construction:
Performing		359		-		-		-		-		-		-		-		359
Nonaccrual		-		-		-		-		-		-		-		-		-
Total residential real estate - construction		359		-		-		-		-		-		-		-		359
Total residential real estate		13,844		14,419		33,619		15,854		3,033		17,337		-		-		98,106
Consumer - home equity and lines of credit:
Performing		74		53		142		66		167		1,504		16,939		707		19,652
Nonaccrual		-		-		-		-		-		31		-		-		31
Total consumer - home equity and lines of credit		74		53		142		66		167		1,535		16,939		707		19,683
Consumer - other
Performing		73		46		-		7		-		8		-		-		134
Nonaccrual		-		-		-		-		-		-		-		-		-
Total consumer - other		73		46		-		7		-		8		-		-		134
Total consumer		147		99		142		73		167		1,543		16,939		707		19,817
Total loans	$	53,426	$	106,395	$	80,293	$	57,846	$	14,153	$	56,620	$	28,274	$	707	$	397,714

Summary of Gross Charge-offs of Loans for Portfolio Class By Origination Year

The following tables present gross charge-offs of our loans for each portfolio class, by origination year, that occurred during the three and nine months ended September 30, 2024 and three and nine months ended September 30, 2023. Refer to Note 1 to the Consolidated Financial Statements in our 2023 Annual Report on Form 10-K for additional information on our charge-off policy.

	For the three months ended September 30, 2024
	2024		2023		2022		2021		2020		2019 and Prior		Revolving Lines of Credit		Revolving Lines of Credit Converted to Term Loans		Total Loans
	(in thousands)
Commercial:
Real estate	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Other		-		-		-		-		2		-		-		-		2
Total commercial loans		-		-		-		-		2		-		-		-		2
Residential real estate:
First mortgage		-		-		-		-		-		-		-		-		-
Construction		-		-		-		-		-		-		-		-		-
Total residential real estate		-		-		-		-		-		-		-		-		-
Consumer:
Home equity and lines of credit		-		-		-		-		-		-		-		-		-
Other		-		2		-		-		-		1		-		-		3
Total consumer		-		2		-		-		-		1		-		-		3
Total current period charge-offs	$	-	$	2	$	-	$	-	$	2	$	1	$	-	$	-	$	5

	For the three months ended September 30, 2023
	2023		2022		2021		2020		2019		2018 and Prior		Revolving Lines of Credit		Revolving Lines of Credit Converted to Term Loans		Total Loans
	(in thousands)
Commercial:
Real estate	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Other		-		-		-		-		-		-		-		-		-
Total commercial loans		-		-		-		-		-		-		-		-		-
Residential real estate:
First mortgage		-		-		-		-		-		-		-		-		-
Construction		-		-		-		-		-		-		-		-		-
Total residential real estate		-		-		-		-		-		-		-		-		-
Consumer:
Home equity and lines of credit		-		-		-		-		-		-		-		-		-
Other		1		-		-		-		-		-		-		-		1
Total consumer		1		-		-		-		-		-		-		-		1
Total current period charge-offs	$	1	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	1

NOTE 4 – LOANS (continued)

	For the nine months ended September 30, 2024
	2024		2023		2022		2021		2020		2019 and Prior		Revolving Lines of Credit		Revolving Lines of Credit Converted to Term Loans		Total Loans
	(in thousands)
Commercial:
Real estate	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Land development		-		-		-		-		-		-		-		-		-
Other		-		-		-		1		2		-		-		-		3
Total commercial loans		-		-		-		1		2		-		-		-		3
Residential real estate:
First mortgage		-		-		-		-		-		-		-		-		-
Construction		-		-		-		-		-		-		-		-		-
Total residential real estate		-		-		-		-		-		-		-		-		-
Consumer:
Home equity and lines of credit		-		-		-		-		-		-		-		-		-
Other		-		3		-		-		-		2		-		-		5
Total consumer		-		3		-		-		-		2		-		-		5
Total current period charge-offs	$	-	$	3	$	-	$	1	$	2	$	2	$	-	$	-	$	8
	For the nine months ended September 30, 2023
	2023		2022		2021		2020		2019		2018 and Prior		Revolving Lines of Credit		Revolving Lines of Credit Converted to Term Loans		Total Loans
	(in thousands)
Commercial:
Real estate	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Land development		-		-		-		-		-		-		-		-		-
Other		-		-		-		-		-		-		-		-		-
Total commercial loans		-		-		-		-		-		-		-		-		-
Residential real estate:
First mortgage		-		-		-		-		-		-		-		-		-
Construction		-		-		-		-		-		-		-		-		-
Total residential real estate		-		-		-		-		-		-		-		-		-
Consumer:
Home equity and lines of credit		-		-		-		-		-		-		-		-		-
Other		1		3		1		1		-		2		-		-		8
Total consumer		1		3		1		1		-		2		-		-		8
Total current period charge-offs	$	1	$	3	$	1	$	1	$	-	$	2	$	-	$	-	$	8

Schedule of Analysis of Past due Loans

An analysis of past due loans, net of amortized costs, is presented below:

	September 30, 2024
	Loans Past Due 30-89 Days		Loans Past Due 90+ Days		Total Past Due		Current Loans		Total Loans
	(in thousands)
Commercial:
Real estate	$	—	$	—	$	—	$	233,924	$	233,924
Other		—		—		—		50,307		50,307
Residential real estate:
First mortgage		7		315		322		95,880		96,202
Construction		—		—		—		959		959
Consumer:
Home equity and lines of credit		5		56		61		19,530		19,591
Other		—		—		—		88		88
Total	$	12	$	371	$	383	$	400,688	$	401,071

	December 31, 2023
	Loans Past Due 30-89 Days		Loans Past Due 90+ Days		Total Past Due		Current Loans		Total Loans
	(in thousands)
Commercial:
Real estate	$	79	$	343	$	422	$	231,471	$	231,893
Other		—		—		—		47,898		47,898
Residential real estate:
First mortgage		299		52		351		97,396		97,747
Construction		—		—		—		359		359
Consumer:
Home equity and lines of credit		—		—		—		19,683		19,683
Other		—		—		—		134		134
Total	$	378	$	395	$	773	$	396,941	$	397,714

Summary of Information Regarding Non-accrual Loans

The following table presents the amortized cost of our loans on nonaccrual status as of September 30, 2024 and December 31, 2023. All loans that were 90 days or more past due were on nonaccrual status as of September 30, 2024 and December 31, 2023.

	September 30, 2024			December 31, 2023
	(in thousands)
Commercial:
Real estate	$	—		$	422
Other		—			—
Residential real estate:
First mortgage		842			657
Construction		—			—
Consumer:
Home equity and lines of credit		88			31
Other		—			—
Total nonaccrual loans	$	930		$	1,110
Total nonaccrual loans to total loans		0.23	%		0.28	%
Total nonaccrual loans to total assets		0.16	%		0.20	%

Summary of Collateral Dependent Loans and Related ACL

The table below summarizes collateral dependent loans and the related allowance at September 30, 2024 and December 31, 2023 for which the borrower is experiencing financial difficulty:

	September 30, 2024				December 31, 2023
	Loans		Allowance		Loans		Allowance
	(in thousands)
Commercial:
Real estate	$	3,687	$	—	$	4,457	$	—
Other		901		—		1,323		—
Residential real estate:
First mortgage		1,034		—		855		—
Construction		—		—		—		—
Consumer:
Home equity and lines of credit		88		—		31		—
Other		—		—		—		—
Total	$	5,710	$	—	$	6,666	$	—