XML 22 R12.htm IDEA: XBRL DOCUMENT

Note 4 - Loans, Allowance for Credit Losses and Other Real Estate Owned

9 Months Ended

Sep. 30, 2023

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 4: Loans, Allowance for Credit Losses and Other Real Estate Owned

A summary of the major categories of loans outstanding is shown in the following tables at the dates indicated.

	At September 30,		At December 31,
	2023		2022
	(In thousands)

Commercial	$	135,575	$	169,617
Commercial real estate		494,282		491,107
Construction		5,043		3,088
Residential real estate		11,283		13,834
Consumer installment & other		239,667		280,842
Total	$	885,850	$	958,488

	Allowance for Credit Losses
	For the Three Months Ended September 30, 2023
												Consumer
				Commercial					Residential			Installment
	Commercial			Real Estate			Construction		Real Estate			and Other			Total
	(In thousands)
Allowance for credit losses:
Balance at beginning of period	$	4,764		$	6,083		$	202	$	32		$	7,399		$	18,480
(Reversal) provision		(345	)		(194	)		40		(6	)		905			400
Chargeoffs		(262	)		-			-		-			(1,827	)		(2,089	)
Recoveries		10			15			-		-			928			953
Total allowance for credit losses	$	4,167		$	5,904		$	242	$	26		$	7,405		$	17,744

	Allowance for Credit Losses
	For the Nine Months Ended September 30, 2023
												Consumer
				Commercial					Residential			Installment
	Commercial			Real Estate			Construction		Real Estate			and Other			Total
	(In thousands)
Allowance for credit losses:
Balance at beginning of period	$	6,138		$	5,888		$	150	$	32		$	8,076		$	20,284
(Reversal) provision		(3,755	)		(29	)		92		(6	)		2,548			(1,150	)
Chargeoffs		(410	)		-			-		-			(5,379	)		(5,789	)
Recoveries		2,194			45			-		-			2,160			4,399
Total allowance for credit losses	$	4,167		$	5,904		$	242	$	26		$	7,405		$	17,744

	Allowance for Credit Losses
	For the Three Months Ended September 30, 2022
										Consumer
				Commercial				Residential		Installment
	Commercial			Real Estate		Construction		Real Estate		and Other			Total
	(In thousands)
Allowance for credit losses:
Balance at beginning of period	$	6,536		$	5,916	$	96	$	35	$	9,730		$	22,313
(Reversal) provision		(164	)		14		32		-		118			-
Chargeoffs		-			-		-		-		(1,917	)		(1,917	)
Recoveries		72			14		-		-		736			822
Total allowance for credit losses	$	6,444		$	5,944	$	128	$	35	$	8,667		$	21,218

	Allowance for Credit Losses
	For the Nine Months Ended September 30, 2022
												Consumer
				Commercial					Residential			Installment
	Commercial			Real Estate			Construction		Real Estate			and Other			Total
	(In thousands)
Allowance for credit losses:
Balance at beginning of period	$	6,966		$	6,529		$	2	$	45		$	9,972		$	23,514
(Reversal) provision		(837	)		(631	)		126		(10	)		1,352			-
Chargeoffs		(20	)		-			-		-			(4,522	)		(4,542	)
Recoveries		335			46			-		-			1,865			2,246
Total allowance for credit losses	$	6,444		$	5,944		$	128	$	35		$	8,667		$	21,218

The Company’s customers are primarily small businesses, professionals and consumers. Given the scale of these borrowers, corporate credit rating agencies do not evaluate the borrowers’ financial condition. The Bank maintains a Loan Review Department which reports directly to the Audit Committee of the Board of Directors. The Loan Review Department performs independent evaluations of loans and validates management assigned credit risk grades on evaluated loans using grading standards employed by bank regulatory agencies. Loans judged to carry lower-risk attributes are assigned a “pass” grade, with a minimal likelihood of loss. Loans judged to carry higher-risk attributes are referred to as “classified loans,” and are further disaggregated, with increasing expectations for loss recognition, as “substandard,” “doubtful,” and “loss.” The Loan Review Department performs continuous evaluations throughout the year. If the Bank becomes aware of deterioration in a borrower’s performance or financial condition between Loan Review Department examinations, assigned risk grades are re-evaluated promptly. Credit risk grades assigned by management and validated by the Loan Review Department are subject to review by the Bank’s regulatory authorities during regulatory examinations.

The following summarizes the credit risk profile by internally assigned grade:

	Credit Risk Profile by Internally Assigned Grade
	At September 30, 2023
	Commercial		Commercial Real Estate		Construction		Residential Real Estate		Consumer Installment and Other		Total
	(In thousands)
Grade:
Pass	$	128,392	$	482,539	$	5,043	$	10,943	$	236,232	$	863,149
Substandard		7,183		11,743		-		340		863		20,129
Doubtful		-		-		-		-		1,422		1,422
Loss		-		-		-		-		1,150		1,150
Total	$	135,575	$	494,282	$	5,043	$	11,283	$	239,667	$	885,850

	Credit Risk Profile by Internally Assigned Grade
	At December 31, 2022
	Commercial		Commercial Real Estate		Construction		Residential Real Estate		Consumer Installment and Other		Total
	(In thousands)
Grade:
Pass	$	169,040	$	477,842	$	3,088	$	13,457	$	278,223	$	941,650
Substandard		577		13,265		-		377		1,079		15,298
Doubtful		-		-		-		-		752		752
Loss		-		-		-		-		788		788
Total	$	169,617	$	491,107	$	3,088	$	13,834	$	280,842	$	958,488

The following tables summarize loans by delinquency and nonaccrual status:

	Summary of Loans by Delinquency and Nonaccrual Status
	At September 30, 2023
	Current and Accruing		30-59 Days Past Due and Accruing		60-89 Days Past Due and Accruing		Past Due 90 Days or More and Accruing		Nonaccrual		Total Loans
	(In thousands)
Commercial	$	135,477	$	-	$	25	$	73	$	-	$	135,575
Commercial real estate		493,537		443		110		-		192		494,282
Construction		5,043		-		-		-		-		5,043
Residential real estate		11,280		-		-		-		3		11,283
Consumer installment and other		232,558		5,014		1,125		956		14		239,667
Total	$	877,895	$	5,457	$	1,260	$	1,029	$	209	$	885,850

	Summary of Loans by Delinquency and Nonaccrual Status
	At December 31, 2022
	Current and Accruing		30-59 Days Past Due and Accruing		60-89 Days Past Due and Accruing		Past Due 90 Days or More and Accruing		Nonaccrual		Total Loans
	(In thousands)
Commercial	$	169,337	$	172	$	58	$	-	$	50	$	169,617
Commercial real estate		490,354		508		192		-		53		491,107
Construction		3,088		-		-		-		-		3,088
Residential real estate		13,430		377		-		-		27		13,834
Consumer installment and other		273,247		5,101		1,850		628		16		280,842
Total	$	949,456	$	6,158	$	2,100	$	628	$	146	$	958,488

There was no allowance for credit losses allocated to loans on nonaccrual status as of September 30, 2023 or December 31, 2022. There were no commitments to lend additional funds to borrowers whose loans were on nonaccrual status at September 30, 2023 or December 31, 2022.

There were no loan modifications made to borrowers experiencing financial difficulty during the nine months ended September 30, 2023 and September 30, 2022.

A loan is considered collateral dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. Loans that were considered collateral dependent at September 30, 2023 included the following: seven commercial real estate loans totaling $8.8 million secured by real property, one commercial loan with a balance of $600 thousand secured by business assets and $891 thousand of indirect consumer installment loans secured by personal property. There were no other collateral dependent loans at September 30, 2023. Loans that were considered collateral dependent at December 31, 2022 included the following: five commercial real estate loans totaling $8.1 million secured by real property, and $625 thousand of indirect consumer installment loans secured by personal property. There were no other collateral dependent loans at December 31, 2022.

Based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

	At September 30, 2023
															Line of
															Credit
	Term Loans Amortized Cost Basis by Origination Year												Total		Amortized
	Prior		2019		2020		2021		2022		2023		Term Loans		Cost Basis		Total
	(In thousands)
Commercial loans by grade:
Pass	$	21,499	$	5,086	$	13,435	$	34,779	$	23,546	$	11,429	$	109,774	$	18,618	$	128,392
Substandard		12		2,525		-		2,835		-		600		5,972		1,211		7,183
Doubtful		-		-		-		-		-		-		-		-		-
Loss		-		-		-		-		-		-		-		-		-
Total	$	21,511	$	7,611	$	13,435	$	37,614	$	23,546	$	12,029	$	115,746	$	19,829	$	135,575

Current gross chargeoffs on commercial loans:
Three months ended September 30, 2023	$	-	$	-	$	3	$	135	$	-	$	-	$	138	$	124	$	262
Nine months ended September 30, 2023		-		-		3		135		-		-		138		272		410

	At December 31, 2022
															Line of
															Credit
	Term Loans Amortized Cost Basis by Origination Year												Total		Amortized
	Prior		2018		2019		2020		2021		2022		Term Loans		Cost Basis		Total
	(In thousands)
Commercial loans by grade:
Pass	$	23,891	$	5,549	$	12,557	$	17,293	$	53,928	$	23,966	$	137,184	$	31,856	$	169,040
Substandard		12		-		-		-		-		-		12		565		577
Doubtful		-		-		-		-		-		-		-		-		-
Loss		-		-		-		-		-		-		-		-		-
Total	$	23,903	$	5,549	$	12,557	$	17,293	$	53,928	$	23,966	$	137,196	$	32,421	$	169,617

	At September 30, 2023
															Line of
															Credit
	Term Loans Amortized Cost Basis by Origination Year												Total		Amortized
	Prior		2019		2020		2021		2022		2023		Term Loans		Cost Basis		Total
	(In thousands)
Commercial real estate loans by grade:
Pass	$	183,073	$	69,055	$	70,037	$	69,569	$	51,476	$	39,329	$	482,539	$	-	$	482,539
Substandard		10,137		815		791		-		-		-		11,743		-		11,743
Doubtful		-		-		-		-		-		-		-		-		-
Loss		-		-		-		-		-		-		-		-		-
Total	$	193,210	$	69,870	$	70,828	$	69,569	$	51,476	$	39,329	$	494,282	$	-	$	494,282

Current gross chargeoffs on commercial real estate loans:
Three months ended September 30, 2023	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Nine months ended September 30, 2023		-		-		-		-		-		-		-		-		-

[The remainder of this page intentionally left blank]

	At December 31, 2022
															Line of
															Credit
	Term Loans Amortized Cost Basis by Origination Year												Total		Amortized
	Prior		2018		2019		2020		2021		2022		Term Loans		Cost Basis		Total
	(In thousands)
Commercial real estate loans by grade:
Pass	$	146,588	$	58,473	$	71,440	$	74,016	$	71,618	$	55,707	$	477,842	$	-	$	477,842
Substandard		8,083		-		2,112		806		-		2,264		13,265		-		13,265
Doubtful		-		-		-		-		-		-		-		-		-
Loss		-		-		-		-		-		-		-		-		-
Total	$	154,671	$	58,473	$	73,552	$	74,822	$	71,618	$	57,971	$	491,107	$	-	$	491,107

	At September 30, 2023
															Line of
															Credit
	Term Loans Amortized Cost Basis by Origination Year												Total		Amortized
	Prior		2019		2020		2021		2022		2023		Term Loans		Cost Basis		Total
	(In thousands)
Residential real estate loans by grade:
Pass	$	10,943	$	-	$	-	$	-	$	-	$	-	$	10,943	$	-	$	10,943
Substandard		340		-		-		-		-		-		340		-		340
Doubtful		-		-		-		-		-		-		-		-		-
Loss		-		-		-		-		-		-		-		-		-
Total	$	11,283	$	-	$	-	$	-	$	-	$	-	$	11,283	$	-	$	11,283

Current gross chargeoffs on residential real estate loans:
Three months ended September 30, 2023	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Nine months ended September 30, 2023		-		-		-		-		-		-		-		-		-

	At December 31, 2022
															Line of
															Credit
	Term Loans Amortized Cost Basis by Origination Year												Total		Amortized
	Prior		2018		2019		2020		2021		2022		Term Loans		Cost Basis		Total
	(In thousands)
Residential real estate loans by grade:
Pass	$	13,457	$	-	$	-	$	-	$	-	$	-	$	13,457	$	-	$	13,457
Substandard		377		-		-		-		-		-		377		-		377
Doubtful		-		-		-		-		-		-		-		-		-
Loss		-		-		-		-		-		-		-		-		-
Total	$	13,834	$	-	$	-	$	-	$	-	$	-	$	13,834	$	-	$	13,834

	At September 30, 2023
															Line of
															Credit
	Term Loans Amortized Cost Basis by Origination Year												Total		Amortized
	Prior		2019		2020		2021		2022		2023		Term Loans		Cost Basis		Total
	(In thousands)
Construction loans by grade:
Pass	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	5,043	$	5,043
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Loss		-		-		-		-		-		-		-		-		-
Total	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	5,043	$	5,043

Current gross chargeoffs on construction loans:
Three months ended September 30, 2023	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Nine months ended September 30, 2023		-		-		-		-		-		-		-		-		-

	At December 31, 2022
															Line of
															Credit
	Term Loans Amortized Cost Basis by Origination Year												Total		Amortized
	Prior		2018		2019		2020		2021		2022		Term Loans		Cost Basis		Total
	(In thousands)
Construction loans by grade:
Pass	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	3,088	$	3,088
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Loss		-		-		-		-		-		-		-		-		-
Total	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	3,088	$	3,088

[The remainder of this page intentionally left blank]

The Company considers the delinquency and nonaccrual status of the consumer loan portfolio and its impact on the allowance for credit losses. The following table presents the amortized cost in consumer installment and other loans based on delinquency and nonaccrual status:

	At September 30, 2023
															Line of
															Credit
	Term Loans Amortized Cost Basis by Origination Year												Total		Amortized
	Prior		2019		2020		2021		2022		2023		Term Loans		Cost Basis		Total
	(In thousands)
Consumer installment and other loans by delinquency and nonaccrual status:
Current	$	8,841	$	14,395	$	25,746	$	56,758	$	77,347	$	31,708	$	214,795	$	17,763	$	232,558
30-59 days past due		235		280		331		2,006		1,736		399		4,987		27		5,014
60-89 days past due		14		12		114		512		382		84		1,118		7		1,125
Past due 90 days or more		27		39		76		423		175		172		912		44		956
Nonaccrual		-		-		-		-		-		-		-		14		14
Total	$	9,117	$	14,726	$	26,267	$	59,699	$	79,640	$	32,363	$	221,812	$	17,855	$	239,667

Current gross chargeoffs on consumer installment and other loans:
Three months ended September 30, 2023	$	43	$	18	$	209	$	618	$	672	$	177		1,737	$	90	$	1,827
Nine months ended September 30, 2023		208		135		717		1,529		2,414		177		5,180		199		5,379

	At December 31, 2022
															Line of
															Credit
	Term Loans Amortized Cost Basis by Origination Year												Total		Amortized
	Prior		2018		2019		2020		2021		2022		Term Loans		Cost Basis		Total
	(In thousands)
Consumer installment and other loans by delinquency and nonaccrual status:
Current	$	6,017	$	13,147	$	22,330	$	35,783	$	76,126	$	99,414	$	252,817	$	20,430	$	273,247
30-59 days past due		117		268		572		1,014		1,709		1,359		5,039		62		5,101
60-89 days past due		42		65		67		275		635		750		1,834		16		1,850
Past due 90 days or more		3		20		16		61		284		241		625		3		628
Nonaccrual		-		-		-		-		-		-		-		16		16
Total	$	6,179	$	13,500	$	22,985	$	37,133	$	78,754	$	101,764	$	260,315	$	20,527	$	280,842

There were no loans held for sale at September 30, 2023 and December 31, 2022.

The Company held no other real estate owned (OREO) at September 30, 2023 and December 31, 2022. The amount of consumer mortgage loans outstanding secured by residential real estate properties for which formal foreclosure proceedings were in process was $-0- thousand at September 30, 2023 and December 31, 2022.