
	Beginning Balance						Charge-offs		Recoveries		Provision for (recovery of) credit losses		Ending Balance
December 31, 2024
Commercial and industrial	$	4,474					$	(672)	$	88	$	651	$	4,541

1-4 Family	1,402						(177)		211		(70)		1,366
Hotels	2,211						—		—		144		2,355
Multi-family	1,002						—		—		388		1,390
Non Residential Non-Owner Occupied	4,077						(3)		9		(1,082)		3,001
Non Residential Owner Occupied	2,453						(1,800)		161		911		1,725
Commercial real estate	11,145						(1,980)		381		291		9,837

Residential real estate	5,398						(423)		258		565		5,798
Home equity	490						(228)		77		304		643
Consumer	269						(182)		162		65		314
DDA overdrafts	969						(1,570)		1,446		(56)		789
	$	22,745					$	(5,055)	$	2,412	$	1,820	$	21,922

	Beginning Balance		Impact of Adopting ASU 2022-02		PCD Loan Reserves		Charge-offs		Recoveries		Provision for (recovery of) credit losses		Ending Balance
December 31, 2023
Commercial and industrial	$	3,568	$	12	$	—	$	(153)	$	836	$	211	$	4,474

1-4 Family	566		(1)		—		(340)		50		1,127		1,402
Hotels	2,332		—		—		(40)		—		(81)		2,211
Multi-family	380		—		500		—		—		122		1,002
Non Residential Non-Owner Occupied	2,019		—		1,536		—		171		351		4,077
Non Residential Owner Occupied	1,315		—		775		—		56		307		2,453
Commercial real estate	6,612		(1)		2,811		(380)		277		1,826		11,145

Residential real estate	5,427		(138)		—		(209)		47		271		5,398
Home equity	290		(46)		—		(400)		47		599		490
Consumer	110		(2)		—		(187)		123		225		269
DDA Overdrafts	1,101		—		—		(1,645)		1,402		111		969
	$	17,108	$	(175)	$	2,811	$	(2,974)	$	2,732	$	3,243	$	22,745


	Beginning Balance		Charge-offs		Recoveries		Provision for (recovery of) credit losses		Ending Balance
December 31, 2022
Commercial and industrial	$	3,480	$	(562)	$	334	$	316	$	3,568

1-4 Family	598		(55)		160		(137)		566
Hotels	2,426		—		—		(94)		2,332
Multi-family	483		—		—		(103)		380
Non Residential Non-Owner Occupied	2,319		—		47		(347)		2,019
Non Residential Owner Occupied	1,485		—		—		(170)		1,315
Commercial real estate	7,311		(55)		207		(851)		6,612

Residential real estate	5,716		(265)		99		(123)		5,427
Home equity	517		(279)		56		(4)		290
Consumer	106		(63)		107		(40)		110
DDA Overdrafts	1,036		(2,624)		1,513		1,176		1,101
	$	18,166	$	(3,848)	$	2,316	$	474	$	17,108

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 non-performing 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	$	590	$	2,571	$	—

1-4 Family	—		134		—
Hotels	—		—		—
Multi-family	—		—		—
Non Residential Non-Owner Occupied	—		346		—
Non Residential Owner Occupied	6,012		1,341		—
Commercial Real Estate	6,012		1,821		—

Residential Real Estate	—		2,823		156
Home Equity	—		212		26
Consumer	—		—		—
Total	$	6,602	$	7,427	$	182


	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	$	1,000	$	1,211	$	—

1-4 Family	—		521		—
Hotels	—		—		—
Multi-family	—		—		—
Non Residential Non-Owner Occupied	—		446		—
Non Residential Owner Occupied	—		1,420		—
Commercial Real Estate	—		2,387		—

Residential Real Estate	—		2,849		214
Home Equity	—		111		56
Consumer	—		—		—
Total	$	1,000	$	6,558	$	270

As of December 31, 2024, the Company had one commercial and industrial loan and three owner occupied commercial real estate loans that were considered individually evaluated collateral-dependent loans totaling $6.6 million. The Company had one commercial and industrial individually evaluated collateral-dependent loan recorded at $1.0 million as of December 31, 2023. Changes in the fair value of the collateral for collateral-dependent loans are reported as credit loss expense or a reversal of credit loss expense in the period of change. The fair value of the collateral on the one commercial and industrial individually evaluated collateral-dependent loan exceeded the carrying amount and as a result, no allowance was recorded.

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 90 days past due.

The following presents the aging of the amortized cost basis in past-due loans as of December 31, 2024 and 2023 by class of loan (in thousands):


	December 31, 2024
	30-59 Past Due		60-89 Past Due		90+ Past Due		Total Past Due		Current Loans		Non-accrual		Total Loans
Commercial and industrial	$	—	$	—	$	—	$	—	$	416,677	$	3,161	$	419,838

1-4 Family	106		—		—		106		197,018		134		197,258
Hotels	—		—		—		—		389,660		—		389,660
Multi-family	—		—		—		—		240,943		—		240,943
Non Residential Non-Owner Occupied	—		—		—		—		706,919		346		707,265
Non Residential Owner Occupied	134		—		—		134		226,010		7,353		233,497
Commercial real estate	240		—		—		240		1,760,550		7,833		1,768,623

Residential real estate	6,014		842		156		7,012		1,813,775		2,823		1,823,610
Home equity	687		189		26		902		198,078		212		199,192
Consumer	145		128		—		273		57,543		—		57,816
Overdrafts	384		7		—		391		5,306		—		5,697
Total	$	7,470	$	1,166	$	182	$	8,818	$	4,251,929	$	14,029	$	4,274,776

	December 31, 2023
	30-59 Past Due		60-89 Past Due		90+ Past Due		Total Past Due		Current Loans		Non-accrual		Total Loans
Commercial and industrial	$	185	$	250	$	—	$	435	$	424,305	$	2,211	$	426,951

1-4 Family	67		25		—		92		205,624		521		206,237
Hotels	—		—		—		—		357,142		—		357,142
Multi-family	—		—		—		—		189,165		—		189,165
Non Residential Non-Owner Occupied	—		—		—		—		680,144		446		680,590
Non Residential Owner Occupied	623		—		—		623		238,285		1,420		240,328
Commercial real estate	690		25		—		715		1,670,360		2,387		1,673,462

Residential real estate	7,034		811		214		8,059		1,777,241		2,849		1,788,149
Home equity	1,020		159		56		1,235		165,855		111		167,201
Consumer	129		—		—		129		65,117		—		65,246
Overdrafts	355		9		—		364		4,550		—		4,914
Total	$	9,413	$	1,254	$	270	$	10,937	$	4,107,428	$	7,558	$	4,125,923

The Company adopted the accounting guidance in ASU No. 2022-02, effective as of January 1, 2023, which eliminates the recognition and measurement of troubled debt restructurings ("TDRs"). Due to the removal of the TDR designation, the Company evaluates all loan restructurings according to the accounting guidance for loan modifications to determine if the restructuring results in a new loan or a continuation of the existing loan. Loan modifications to borrowers experiencing financial difficulty that result in a direct change in the timing or amount of contractual cash flows include situations where there is principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, and combinations of the listed modifications. Therefore, the disclosures related to loan restructurings are only for modifications that directly affect cash flows. As of December 31, 2024, the Company had one loan considered to be a restructured loan with a total balance of $0.2 million. The Company had no loan modifications that were considered restructured loans as of December 31, 2023.

All commercial loans within the portfolio are subject to internal risk rating. All non-commercial loans are evaluated based on payment history. The Company’s internal risk ratings for commercial loans are: Exceptional, Good, Acceptable, 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.

Based on the most recent analysis performed, the risk category of loans by class of loans at December 31, 2024 is as follows (in thousands ) with the loans acquired from Citizens categorized by their origination date. Retail and mortgage loans are considered performing if they are less than 90 days delinquent and non-performing if they are 90 days or more delinquent.


													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
	2024		2023		2022		2021		2020		Prior		Cost Basis		Total
Commercial and industrial
Pass	$	65,161	$	63,650	$	26,201	$	62,445	$	36,440	$	21,148	$	109,869	$	384,914
Special mention	60		5		—		—		—		—		—		65
Substandard	1,134		452		1,926		548		2,449		2,051		26,299		34,859
Total	$	66,355	$	64,107	$	28,127	$	62,993	$	38,889	$	23,199	$	136,168	$	419,838






YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial real estate -
Multi-family
Pass	$	73,914	$	6,939	$	18,191	$	19,174	$	56,587	$	63,314	$	1,825	$	239,944
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		542		457		—		—		—		999
Total	$	73,914	$	6,939	$	18,733	$	19,631	$	56,587	$	63,314	$	1,825	$	240,943
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—






													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
	2024		2023		2022		2021		2020		Prior		Cost Basis		Total
Commercial real estate -
Non Residential Non-Owner Occupied
Pass	$	76,051	$	110,212	$	115,753	$	92,783	$	53,513	$	213,886	$	16,284	$	678,482
Special mention	—		—		839		92		486		24,108		—		25,525
Substandard	73		15		—		139		—		3,031		—		3,258
Total	$	76,124	$	110,227	$	116,592	$	93,014	$	53,999	$	241,025	$	16,284	$	707,265






YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	3	$	—	$	3

Commercial real estate -
Non Residential Owner Occupied
Pass	$	23,376	$	45,011	$	28,830	$	38,061	$	15,154	$	58,846	$	3,938	$	213,216
Special mention	—		—		—		—		—		2,029		—		2,029
Substandard	—		3,713		842		1,950		1,167		10,221		359		18,252
Total	$	23,376	$	48,724	$	29,672	$	40,011	$	16,321	$	71,096	$	4,297	$	233,497


													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial and industrial
Pass	$	70,494	$	47,473	$	76,605	$	47,688	$	21,820	$	18,328	$	111,546	$	393,954
Special mention	—		33		—		2,600		22		—		70		2,725
Substandard	379		2,748		854		775		923		1,538		23,055		30,272
Total	$	70,873	$	50,254	$	77,459	$	51,063	$	22,765	$	19,866	$	134,671	$	426,951






													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
Commercial real estate -
Non Residential Non-Owner Occupied
Pass	$	117,515	$	119,382	$	99,210	$	59,083	$	64,332	$	156,941	$	32,111	$	648,574
Special mention	—		—		102		731		165		24,747		—		25,745
Substandard	—		—		145		2,395		79		3,652		—		6,271
Total	$	117,515	$	119,382	$	99,457	$	62,209	$	64,576	$	185,340	$	32,111	$	680,590






Commercial real estate -
Non Residential Owner Occupied
Pass	$	41,481	$	34,320	$	42,203	$	16,990	$	21,772	$	52,363	$	6,060	$	215,189
Special mention	—		—		164		—		2,880		431		188		3,663
Substandard	3,957		909		2,010		1,212		1,335		11,792		261		21,476
Total	$	45,438	$	35,229	$	44,377	$	18,202	$	25,987	$	64,586	$	6,509	$	240,328






Home equity
Performing	$	29,611	$	13,921	$	6,218	$	3,826	$	2,510	$	5,108	$	105,896	$	167,090
Non-performing	—		—		—		14		—		—		97		111
Total	$	29,611	$	13,921	$	6,218	$	3,840	$	2,510	$	5,108	$	105,993	$	167,201

Consumer
Performing	$	33,700	$	18,293	$	4,531	$	3,148	$	2,120	$	1,645	$	1,809	$	65,246
Non-performing	—		—		—		—		—		—		—		—
Total	$	33,700	$	18,293	$	4,531	$	3,148	$	2,120	$	1,645	$	1,809	$	65,246