
	Beginning Balance		Charge-offs		Recoveries		(Recovery of) provision for credit losses		Ending Balance
Nine months ended September 30, 2022
Commercial and industrial	$	3,480	$	(445)	$	240	$	137	$	3,412

1-4 Family	598		(24)		40		(66)		548
Hotels	2,426		—		—		111		2,537
Multi-family	483		—		—		(59)		424
Non Residential Non-Owner Occupied	2,319		—		47		(236)		2,130
Non Residential Owner Occupied	1,485		—		—		(113)		1,372
Commercial real estate	7,311		(24)		87		(363)		7,011

Residential real estate	5,716		(199)		50		(513)		5,054
Home equity	517		(90)		22		(101)		348
Consumer	106		(48)		76		(37)		97
DDA overdrafts	1,036		(1,951)		1,153		851		1,089
	$	18,166	$	(2,757)	$	1,628	$	(26)	$	17,011

Nine months ended September 30, 2021
Commercial and industrial	$	3,644	$	(245)	$	140	$	(177)	$	3,362

1-4 Family	771		(35)		100		(225)		611
Hotels	3,347		(2,075)		—		(39)		1,233
Multi-family	674		—		—		(176)		498
Non Residential Non-Owner Occupied	3,223		(1)		43		(434)		2,831
Non Residential Owner Occupied	2,982		—		54		(407)		2,629
Commercial real estate	10,997		(2,111)		197		(1,281)		7,802

Residential real estate	8,093		(197)		120		(2,042)		5,974
Home equity	630		(119)		84		(123)		472
Consumer	163		(229)		215		1		150
DDA Overdrafts	1,022		(1,516)		1,028		457		991
	$	24,549	$	(4,417)	$	1,784	$	(3,165)	$	18,751


	Beginning Balance		Charge-offs		Recoveries		(Recovery of) provision for credit losses		Ending Balance
Three months ended September 30, 2022
Commercial and industrial	$	3,519	$	(411)	$	149	$	155	$	3,412

1-4 Family	574		—		6		(32)		548
Hotels	2,508		—		—		29		2,537
Multi-family	460		—		—		(36)		424
Non Residential Non-Owner Occupied	2,096		—		3		31		2,130
Non Residential Owner Occupied	1,395		—		—		(23)		1,372
Commercial real estate	7,033		—		9		(31)		7,011

Residential real estate	4,994		(93)		1		152		5,054
Home equity	338		(71)		2		79		348
Consumer	78		(16)		29		6		97
DDA overdrafts	1,053		(716)		383		369		1,089
	$	17,015	$	(1,307)	$	573	$	730	$	17,011

Three months ended September 30, 2021
Commercial and industrial	$	3,356	$	—	$	69	$	(63)	$	3,362

1-4 Family	697		—		7		(93)		611
Hotels	1,488		(392)		—		137		1,233
Multi-family	562		—		—		(64)		498
Non Residential Non-Owner Occupied	3,009		—		6		(184)		2,831
Non Residential Owner Occupied	2,611		—		5		13		2,629
Commercial real estate	8,367		(392)		18		(191)		7,802

Residential real estate	6,791		(18)		29		(828)		5,974
Home equity	535		(47)		58		(74)		472
Consumer	178		(3)		72		(97)		150
DDA Overdrafts	789		(633)		307		528		991
	$	20,016	$	(1,093)	$	553	$	(725)	$	18,751

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. Management assesses the risk in each loan type based on historical trends, the general economic environment of its local markets, individual loan performance and other relevant factors. The Company's estimate of future economic conditions utilized in its provision estimate is primarily dependent on expected unemployment ranges over a two-year period. Beyond two years, a straight line reversion to historical average loss rates is applied over the life of the loan pool in the migration methodology. The vintage methodology applies future average loss rates based on net losses in historical periods where the unemployment rate was within the forecasted range.

Interest income on loans is accrued and credited to operations based upon the principal amount outstanding, using methods that generally result in level rates of return. Loan origination fees, and certain direct costs, are deferred and amortized as an adjustment to the yield over the term of the loan. The accrual of interest generally is discontinued when a loan becomes 90 days past due as to principal or interest for all loan types. However, any loan may be placed on non-accrual status if the Company receives information that indicates a borrower is unable to meet the contractual terms of its respective loan

agreement. Other indicators considered for placing a loan on non-accrual status include the borrower’s involvement in bankruptcies, foreclosures, repossessions, litigation and any other situation resulting in doubt as to whether full collection of contractual principal and interest is attainable. When interest accruals are discontinued, unpaid interest recognized in income in the current year is reversed, and interest accrued in prior years is charged to the allowance for credit losses. Management may elect to continue the accrual of interest when the net realizable value of collateral exceeds the principal balance and related accrued interest, and the loan is in the process of collection.

Generally for all loan classes, interest income during the period the loan is non-performing is recorded on a cash basis after recovery of principal is reasonably assured. Cash payments received on nonperforming loans are typically applied directly against the outstanding principal balance until the loan is fully repaid. Generally, loans are restored to accrual status when the obligation is brought current, the borrower has performed in accordance with the contractual terms for a reasonable period of time, and the ultimate collectability of the total contractual principal and interest is no longer in doubt.


	Non-accrual With No		Non-accrual With		Loans Past Due
	Allowance for		Allowance for		Over 90 Days
	Credit Losses		Credit Losses		Still Accruing
Commercial & Industrial	$	—	$	785	$	—

1-4 Family	—		1,012		—
Hotels	—		114		—
Multi-family	—		—		—
Non Residential Non-Owner Occupied	—		842		—
Non Residential Owner Occupied	—		325		—
Commercial Real Estate	—		2,293		—

Residential Real Estate	127		1,962		—
Home Equity	—		140		—
Consumer	—		—		—
Total	$	127	$	5,180	$	—


	Non-accrual With No		Non-accrual With		Loans Past Due
	Allowance for		Allowance for		Over 90 Days
	Credit Losses		Credit Losses		Still Accruing
Commercial & Industrial	$	—	$	996	$	43

1-4 Family	—		1,016		—
Hotels	—		113		—
Multi-family	—		—		—
Non Residential Non-Owner Occupied	—		652		—
Non Residential Owner Occupied	—		592		—
Commercial Real Estate	—		2,373		—

Residential Real Estate	63		2,746		—
Home Equity	—		40		—
Consumer	—		—		—
Total	$	63	$	6,155	$	43

Generally, all loan types are considered past due when the contractual terms of a loan are not met and the borrower is 30 days or more past due on a payment. Furthermore, residential and home equity loans are generally subject to charge-off when the loan becomes 120 days past due, depending on the estimated fair value of the collateral less cost to dispose, versus the outstanding loan balance. Commercial loans are generally charged off when the loan becomes 120 days past due. Open-end consumer loans are generally charged off when the loan becomes 180 days past due.


	September 30, 2022
	30-59		60-89		90+		Total		Current		Non-		Total
	Past Due		Past Due		Past Due		Past Due		Loans		accrual		Loans
Commercial and industrial	$	221	$	—	$	—	$	221	$	374,729	$	785	$	375,735

1-4 Family	46		—		—		46		108,652		1,012		109,710
Hotels	—		—		—		—		354,887		114		355,001
Multi-family	37		—		—		37		186,403		—		186,440
Non Residential Non-Owner Occupied	138		—		—		138		568,389		842		569,369
Non Residential Owner Occupied	—		—		—		—		177,348		325		177,673
Commercial real estate	221		—		—		221		1,395,679		2,293		1,398,193

Residential real estate	2,841		611		—		3,452		1,673,229		2,089		1,678,770
Home Equity	359		162		—		521		130,176		140		130,837
Consumer	27		—		—		27		41,875		—		41,902
Overdrafts	496		65		—		561		2,754		—		3,315
Total	$	4,165	$	838	$	—	$	5,003	$	3,618,442	$	5,307	$	3,628,752


	December 31, 2021
	30-59		60-89		90+		Total		Current		Non-		Total
	Past Due		Past Due		Past Due		Past Due		Loans		accrual		Loans
Commercial and industrial	$	116	$	177	$	43	$	336	$	344,852	$	996	$	346,184

1-4 Family	21		—		—		21		106,836		1,016		107,873
Hotels	—		—		—		—		311,202		113		311,315
Multi-family	—		—		—		—		215,677		—		215,677
Non Residential Non-Owner Occupied	—		—		—		—		639,166		652		639,818
Non Residential Owner Occupied	—		—		—		—		203,641		592		204,233
Commercial real estate	21		—		—		21		1,476,522		2,373		1,478,916

Residential real estate	5,166		156		—		5,322		1,540,834		2,809		1,548,965
Home Equity	592		26		—		618		121,687		40		122,345
Consumer	59		1		—		60		40,841		—		40,901
Overdrafts	485		4		—		489		6,014		—		6,503
Total	$	6,439	$	364	$	43	$	6,846	$	3,530,750	$	6,218	$	3,543,814

The Company’s policy on loan modifications typically does not allow for modifications that would be considered a concession from the Company. However, when there is a modification, the Company evaluates each modification to determine if the modification constitutes a troubled debt restructuring (“TDR”) in accordance with ASU 2011-02, whereby a modification of a loan would be considered a TDR when both of the following conditions are met: (1) a borrower is experiencing financial difficulty and (2) the modification constitutes a concession. These modifications range from partial deferrals (interest only) to full deferrals (principal and interest). When determining whether the borrower is experiencing financial difficulties, the

Company reviews whether the debtor is currently in payment default on any of its debt or whether it is probable that the debtor would be in payment default in the foreseeable future without the modification. Other indicators of financial difficulty include whether the debtor has declared or is in the process of declaring bankruptcy, the debtor’s ability to continue as a going concern, or the debtor’s projected cash flow to service its debt (including principal and interest) in accordance with the contractual terms for the foreseeable future, without a modification.


	Three Months Ended
	September 30, 2022					September 30, 2021
		Pre-		Post-			Pre-		Post-
		Modification		Modification			Modification		Modification
		Outstanding		Outstanding			Outstanding		Outstanding
	Number of	Recorded		Recorded		Number of	Recorded		Recorded
	Contracts	Investment		Investment		Contracts	Investment		Investment
Commercial and industrial	—	$	—	$	—	1	$	430	$	430

1-4 Family	—	—		—		—	—		—
Hotels	—	—		—		—	—		—
Multi-family	—	—		—		—	—		—
Non Owner Non-Owner Occupied	—	—		—		—	—		—
Non Owner Owner Occupied	—	—		—		—	—		—
Commercial real estate	—	—		—		—	—		—

Residential real estate	4	366		366		2	147		147
Home equity	—	—		—		—	—		—
Consumer	—	—		—		—	—		—
Total	4	$	366	$	366	3	$	577	$	577


	Nine Months Ended
	September 30, 2022					September 30, 2021
		Pre-		Post-			Pre-		Post-
		Modification		Modification			Modification		Modification
		Outstanding		Outstanding			Outstanding		Outstanding
	Number of	Recorded		Recorded		Number of	Recorded		Recorded
	Contracts	Investment		Investment		Contracts	Investment		Investment
Commercial and industrial	—	$	—	$	—	1	$	430	$	430

1-4 Family	—	—		—		—	—		—
Hotels	—	—		—		—	—		—
Multi-family	—	—		—		—	—		—
Non Owner Non-Owner Occupied	—	—		—		—	—		—
Non Owner Owner Occupied	—	—		—		—	—		—
Commercial real estate	—	—		—		—	—		—

Residential real estate	12	1,277		1,277		11	705		705
Home equity	1	30		30		—	—		—
Consumer	—	—		—		—	—		—
Total	13	$	1,307	$	1,307	12	$	1,135	$	1,135

Most TDRs above are reported due to filing Chapter 7 bankruptcy. Regulatory guidance requires that loans be accounted for as collateral-dependent loans when borrowers have filed Chapter 7 bankruptcy, the debt has been discharged by the bankruptcy court and the borrower has not reaffirmed the debt. The filing of bankruptcy is deemed to be evidence that the borrower is in financial difficulty and the discharge of debt by the bankruptcy court is deemed to be a concession granted to the borrower.

In March of 2020, in response to the COVID-19 pandemic, regulatory guidance was issued that clarified the accounting for loan modifications. Modifications of loan terms do not automatically result in a TDR. Short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not considered TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extension of repayment terms, or other delays that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time of modification. In addition, modifications or deferrals pursuant to the CARES Act do not represent TDRs. However, these deferrals do not absolve the company from performing its normal risk rating and therefore a loan could be current and have a less than satisfactory risk rating.

Through September 30, 2022, the Company granted deferrals of approximately $142 million to its mortgage customers. These deferral arrangements ranged from 30 days to 90 days. As of September 30, 2022, approximately $0.1 million of these loans were still deferring, while approximately $142 million have resumed making their normal loan payment. As of September 30, 2022, approximately $3 million of the loans previously deferred were previously and currently considered TDRs due to Chapter 7 bankruptcies. As of September 30, 2022, all outstanding commercial deferrals had resumed making their normal loan payment.

Pass/Watch, Special Mention, Substandard and Doubtful. Each internal risk rating is defined in the loan policy using the following criteria: balance sheet yields; ratios and leverage; cash flow spread and coverage; prior history; capability of management; market position/industry; potential impact of changing economic, legal, regulatory or environmental conditions; purpose; structure; collateral support; and guarantor support. Risk grades are generally assigned by the primary lending officer and are periodically evaluated by the Company’s internal loan review process. Based on an individual loan’s risk grade, estimated loss percentages are applied to the outstanding balance of the loan to determine the amount of expected loss.

The Company categorizes loans into risk categories based on relevant information regarding the customer’s debt service ability, capacity and overall collateral position, along with other economic trends and historical payment performance. The risk rating for each credit is updated when the Company receives current financial information, the loan is reviewed by the Company’s internal loan review and credit administration departments, or the loan becomes delinquent or impaired. The risk grades are updated a minimum of annually for loans rated Exceptional, Good, Acceptable, or Pass/Watch. Loans rated Special Mention, Substandard or Doubtful are reviewed at least quarterly. The Company uses the following definitions for its risk ratings:


Risk Rating			Description
Pass Ratings:
(a) Exceptional			Loans classified as exceptional are secured with liquid collateral conforming to the internal loan policy. Loans rated within this category pose minimal risk of loss to the bank.
(b) Good			Loans classified as good have similar characteristics that include a strong balance sheet, satisfactory debt service coverage ratios, strong management and/or guarantors, and little exposure to economic cycles. Loans in this category generally have a low chance of loss to the bank.
(c) Acceptable			Loans classified as acceptable have acceptable liquidity levels, adequate debt service coverage ratios, experienced management, and have average exposure to economic cycles. Loans within this category generally have a low risk of loss to the bank.
(d) Pass/watch			Loans classified as pass/watch have erratic levels of leverage and/or liquidity, cash flow is volatile and the borrower is subject to moderate economic risk. A borrower in this category poses a low to moderate risk of loss to the bank.
Special mention			Loans classified as special mention have a potential weakness(es) that deserves management’s close attention. The potential weakness could result in deterioration of the loan repayment or the bank’s credit position at some future date. A loan rated in this category poses a moderate loss risk to the bank.
Substandard			Loans classified as substandard reflect a customer with a well-defined weakness that jeopardizes the liquidation of the debt. Loans in this category have the possibility that the bank will sustain some loss if the deficiencies are not corrected and the bank’s collateral value is weakened by the financial deterioration of the borrower.
Doubtful			Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristics that make collection of the full contract amount highly improbable. Loans rated in this category are most likely to cause the bank to have a loss due to a collateral shortfall or a negative capital position.


													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
September 30, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial and industrial
Pass	$	44,014	$	92,804	$	62,781	$	27,681	$	20,657	$	11,699	$	106,925	$	366,561
Special mention	—		—		415		10		—		20		3,245		3,690
Substandard	962		221		466		1,294		287		1,585		669		5,484
Total	$	44,976	$	93,025	$	63,662	$	28,985	$	20,944	$	13,304	$	110,839	$	375,735


December 31, 2021
Commercial and industrial
Pass	$	87,148	$	82,946	$	41,908	$	27,355	$	23,895	$	6,755	$	65,775	$	335,782
Special mention	3		480		17		—		21		—		3,324		3,845
Substandard	319		1,531		1,574		510		395		1,550		678		6,557
Total	$	87,470	$	84,957	$	43,499	$	27,865	$	24,311	$	8,305	$	69,777	$	346,184


September 30, 2022
Commercial real estate -
1-4 Family
Pass	$	21,898	$	21,944	$	13,001	$	8,832	$	5,042	$	24,303	$	11,042	$	106,062
Special mention	231		172		117		—		—		855		—		1,375
Substandard	85		—		267		62		—		1,859		—		2,273
Total	$	22,214	$	22,116	$	13,385	$	8,894	$	5,042	$	27,017	$	11,042	$	109,710


December 31, 2021
Commercial real estate -
1-4 Family
Pass	$	26,425	$	16,163	$	10,659	$	6,208	$	4,250	$	28,734	$	10,877	$	103,316
Special mention	—		122		—		—		—		718		—		840
Substandard	—		276		158		—		722		2,561		—		3,717
Total	$	26,425	$	16,561	$	10,817	$	6,208	$	4,972	$	32,013	$	10,877	$	107,873


													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
September 30, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
Hotels
Pass	$	86,192	$	36,413	$	12,455	$	60,927	$	20,708	$	83,168	$	327	$	300,190
Special mention	—		—		—		24,384		—		—		—		24,384
Substandard	120		29		3,252		—		—		27,026		—		30,427
Total	$	86,312	$	36,442	$	15,707	$	85,311	$	20,708	$	110,194	$	327	$	355,001


December 31, 2021
Commercial real estate -
Hotels
Pass	$	38,197	$	16,183	$	64,107	$	21,222	$	41,526	$	55,895	$	279	$	237,409
Special mention	103		—		29,914		—		—		—		—		30,017
Substandard	398		140		15,413		—		5,601		22,337		—		43,889
Total	$	38,698	$	16,323	$	109,434	$	21,222	$	47,127	$	78,232	$	279	$	311,315


September 30, 2022
Commercial real estate -
Multi-family
Pass	$	13,223	$	21,941	$	66,147	$	37,963	$	2,208	$	44,434	$	465	$	186,381
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		59		—		59
Total	$	13,223	$	21,941	$	66,147	$	37,963	$	2,208	$	44,493	$	465	$	186,440


December 31, 2021
Commercial real estate -
Multi-family
Pass	$	20,434	$	78,837	$	53,033	$	2,264	$	19,783	$	38,918	$	540	$	213,809
Special mention	—		—		1,802		—		—		—		—		1,802
Substandard	—		—		—		—		—		66		—		66
Total	$	20,434	$	78,837	$	54,835	$	2,264	$	19,783	$	38,984	$	540	$	215,677


													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
September 30, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
Total
Pass	$	209,774	$	227,190	$	200,192	$	200,717	$	134,638	$	325,335	$	17,983	$	1,315,829
Special mention	231		284		290		24,897		—		1,362		114		27,178
Substandard	1,165		846		3,632		3,523		2,748		42,272		1,000		55,186
Total	$	211,170	$	228,320	$	204,114	$	229,137	$	137,386	$	368,969	$	19,097	$	1,398,193

December 31, 2021
Commercial real estate -
Total
Pass	$	276,429	$	275,141	$	238,742	$	151,509	$	114,626	$	291,696	$	16,860	$	1,365,003
Special mention	222		334		34,647		299		319		3,151		—		38,972
Substandard	1,238		546		19,308		2,769		13,023		37,191		866		74,941
Total	$	277,889	$	276,021	$	292,697	$	154,577	$	127,968	$	332,038	$	17,726	$	1,478,916

September 30, 2022
Residential real estate
Performing	$	343,469	$	346,053	$	278,231	$	126,762	$	89,007	$	401,056	$	92,102	$	1,676,680
Non-performing	—		204		—		683		11		916		276		2,090
Total	$	343,469	$	346,257	$	278,231	$	127,445	$	89,018	$	401,972	$	92,378	$	1,678,770

December 31, 2021
Residential real estate
Performing	$	375,465	$	326,107	$	155,829	$	110,551	$	87,870	$	389,519	$	100,815	$	1,546,156
Non-performing	—		—		232		29		120		692		1,736		2,809
Total	$	375,465	$	326,107	$	156,061	$	110,580	$	87,990	$	390,211	$	102,551	$	1,548,965


September 30, 2022
Home equity
Performing	$	13,409	$	7,597	$	5,176	$	3,147	$	2,010	$	5,567	$	93,793	$	130,699
Non-performing	—		—		—		—		—		—		138		138
Total	$	13,409	$	7,597	$	5,176	$	3,147	$	2,010	$	5,567	$	93,931	$	130,837


December 31, 2021
Home equity
Performing	$	9,008	$	6,474	$	3,582	$	2,949	$	1,431	$	8,176	$	90,685	$	122,305
Non-performing	—		—		—		—		—		—		40		40
Total	$	9,008	$	6,474	$	3,582	$	2,949	$	1,431	$	8,176	$	90,725	$	122,345