XML 28 R16.htm IDEA: XBRL DOCUMENT v3.25.1
Note 5 - Loans Receivable and the Allowance for Credit Losses on Loans
 12 Months Ended
Dec. 31, 2024
Receivables [Abstract]  
Loans Receivable and the Allowance for Credit Losses on Loans

Note 5 - Loans Receivable and the Allowance for Credit Losses on Loans

Major classes of loans are as follows:

 

December 31,

 

2024

 

 

2023

 

Commercial:

 

 

 

 

 

 

Commercial and industrial

 

$

153,187

 

 

$

137,086

 

Construction and land development

 

 

129,464

 

 

 

116,173

 

Real estate secured by multi-family properties

 

 

137,461

 

 

 

109,193

 

Real estate secured by owner-occupied properties

 

 

163,955

 

 

 

160,695

 

Real estate secured by other commercial properties

 

 

313,390

 

 

 

265,101

 

Revolving real estate secured by 1-4 family properties-business

 

 

5,652

 

 

 

5,442

 

Real estate secured by 1st lien on 1-4 family properties-business

 

 

105,779

 

 

 

103,572

 

Real estate secured by junior lien on 1-4 family properties-business

 

 

3,238

 

 

 

3,445

 

State and political subdivisions

 

 

17,683

 

 

 

18,708

 

Retail:

 

 

 

 

 

 

1-4 family residential mortgages

 

 

114,423

 

 

 

108,906

 

Revolving home equity secured by 1-4 family properties-personal

 

 

48,231

 

 

 

34,231

 

Real estate secured by 1st lien on 1-4 family properties-personal

 

 

6,561

 

 

 

11,981

 

Real estate secured by junior lien on 1-4 family properties-personal

 

 

14,092

 

 

 

15,625

 

Student loans

 

 

1,444

 

 

 

1,662

 

Overdrafts

 

 

209

 

 

 

194

 

Other consumer

 

 

1,782

 

 

 

1,757

 

Total loans

 

 

1,216,551

 

 

 

1,093,771

 

Net unearned (fees) and deferred costs

 

 

(503

)

 

 

(238

)

Allowance for credit losses on loans

 

 

(8,744

)

 

 

(8,852

)

Loans receivable, net

 

$

1,207,304

 

 

$

1,084,681

 

 

Loans secured by commercial real estate include all loans collateralized at least in part by commercial real estate. These loans may not be for the express purpose of conducting commercial real estate transactions.

QNB generally lends in Bucks, Lehigh, and Montgomery counties in southeastern Pennsylvania. To a large extent, QNB makes loans collateralized at least in part by real estate. Its lending activities could be affected by changes in the general economy, the regional economy, or real estate values. Other than disclosed in the table above, at December 31, 2024, there was a concentration of loans to lessors of residential buildings and dwellings of 21.9% of total loans and to lessors of nonresidential buildings of 23.3% of total loans, compared with 21.5% and 24.7% of total loans, respectively, at December 31, 2023. These concentrations were primarily within the commercial real estate categories.

QNB engages in a variety of lending activities, including commercial, residential real estate and consumer transactions. QNB focuses its lending activities on individuals, professionals and small to medium sized businesses. Risks associated with lending activities include economic conditions and changes in interest rates, which can adversely impact both the ability of borrowers to repay their loans and the value of the associated collateral.

Commercial and industrial loans, commercial real estate loans, construction loans and residential real estate loans with a business purpose are generally perceived as having more risk of default than residential real estate loans with a personal purpose and retail loans. These types of loans involve larger loan balances to a single borrower or groups of related borrowers and are more susceptible to a risk of loss during a downturn in the business cycle. These loans may involve greater risk because the availability of funds to repay these loans depends on the successful operation of the borrower’s business. The assets financed are used within the business for its ongoing operation. Repayment of these types of loans generally comes from the cash flow of the business or the ongoing conversions of assets, such as accounts receivable and inventory, to cash. Typical collateral for commercial and industrial loans includes the borrower’s accounts receivable, inventory and machinery and equipment. Commercial real estate and residential real estate loans secured for a business purpose are originated primarily within the southeastern Pennsylvania market area at conservative loan-to-value ratios and often backed by the individual guarantees of the borrowers or owners. Repayment of this kind of loan is dependent upon either the ongoing cash flow of the borrowing entity or the resale of or lease of the subject property. Commercial real estate loans may be affected to a greater extent than residential loans by adverse conditions in real estate markets or the economy because commercial real estate borrowers’ ability to repay their loans depends on successful development of their properties, as well as the factors affecting residential real estate borrowers.

Loans to state and political subdivisions are tax-exempt or taxable loans to municipalities, school districts and housing and industrial development authorities. These loans can be general obligations of the municipality or school district repaid through their taxing authority, revenue obligations repaid through the income generated by the operations of the authority, such as a water or sewer authority, or loans issued to a housing and industrial development agency, for which a private corporation is responsible for payments on the loans.

QNB originates fixed-rate and adjustable-rate real estate-residential mortgage loans for personal purposes that are secured by first liens on the underlying 1-4 family residential properties. Credit risk exposure in this area of lending is minimized by the evaluation of the credit worthiness of the borrower, including debt-to-income ratios, credit scores and adherence to underwriting policies that emphasize conservative loan-to-value ratios of generally no more than 80%. Residential mortgage loans granted in excess of the 80% loan-to-value ratio criterion are generally insured by private mortgage insurance.

The real estate-home equity portfolio consists of fixed-rate home equity loans and variable-rate home equity lines of credit. Risks associated with loans secured by residential properties are generally lower than commercial loans and include general economic risks, such as the strength of the job market, employment stability and the strength of the housing market. Since most loans are secured by a primary or secondary residence, the borrower’s continued employment is the greatest risk to repayment.

QNB offers a variety of loans to individuals for personal and household purposes. Consumer loans are generally considered to have greater risk than first or second mortgages on real estate because they may be unsecured, or, if they are secured, the value of the collateral may be difficult to assess and is more likely to decrease in value than real estate. Credit risk in this portfolio is controlled by conservative underwriting standards that consider debt-to-income levels and the creditworthiness of the borrower and, if secured, collateral values.

QNB employs a ten-grade risk rating system related to the credit quality of commercial loans and loans to state and political subdivisions of which the first six categories are pass categories (credits not adversely rated). The following is a description of the internal risk ratings and the likelihood of loss related to each risk rating.

1 - Excellent - no apparent risk

2 - Good - minimal risk

3 - Acceptable - lower risk

4 - Acceptable - average risk

5 - Acceptable – higher risk

6 - Pass watch

7 - Special Mention - potential weaknesses

8 - Substandard - well defined weaknesses

9 - Doubtful - full collection unlikely

10 - Loss - considered uncollectible

QNB maintains a loan review system, which allows for a periodic review of our loan portfolio and the early identification of potential problem loans. Each loan officer assigns a rating to commercial loans and loans to state and political subdivisions at the time the loan is originated. Loans are generally reviewed annually based on the borrower’s fiscal year and the dollar amount of the relationship. Loans with risk ratings of seven through ten are reviewed at least quarterly, and as often as monthly, at management’s discretion. QNB also utilizes an outside loan review firm to review the portfolio on a semi-annual basis to provide the Board of Directors and senior management an independent review of the Bank’s loan portfolio on an ongoing basis. These reviews are designed to recognize deteriorating credits in their earliest stages in an effort to reduce and control risk in the lending function as well as identifying potential shifts in the quality of the loan portfolio. The examinations by the outside loan review firm include the review of lending activities with respect to underwriting and processing new loans, monitoring the risk of existing loans and to provide timely follow-up and corrective action for loans showing signs of deterioration in quality. In addition, the outside firm reviews the methodology for the allowance for credit losses on loans to determine compliance to policy and regulatory guidance.

 

The following tables present the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within the QNB’s internal risk rating system as of December 31, 2024 and 2023:

 

 

 

Term Loans by Origination Year

 

 

 

 

 

 

 

December 31, 2024

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

Prior

 

 

Revolving

 

 

Total

 

Commercial Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

24,130

 

 

$

11,476

 

 

$

10,818

 

 

$

4,796

 

 

$

2,513

 

 

$

8,138

 

 

$

86,094

 

 

$

147,965

 

Special mention

 

 

—

 

 

 

392

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,557

 

 

 

2,949

 

Substandard

 

 

—

 

 

 

555

 

 

 

—

 

 

 

113

 

 

 

84

 

 

 

676

 

 

 

845

 

 

 

2,273

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total commercial and industrial

 

$

24,130

 

 

$

12,423

 

 

$

10,818

 

 

$

4,909

 

 

$

2,597

 

 

$

8,814

 

 

$

89,496

 

 

$

153,187

 

Construction and land development:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

53,278

 

 

$

33,332

 

 

$

11,404

 

 

$

13,998

 

 

$

3,268

 

 

$

8,056

 

 

$

—

 

 

$

123,336

 

Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard

 

 

—

 

 

 

6,094

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

34

 

 

 

—

 

 

 

6,128

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total construction and land development

 

$

53,278

 

 

$

39,426

 

 

$

11,404

 

 

$

13,998

 

 

$

3,268

 

 

$

8,090

 

 

$

—

 

 

$

129,464

 

Real estate secured by multi-family properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

26,080

 

 

$

17,395

 

 

$

27,638

 

 

$

22,402

 

 

$

9,210

 

 

$

31,488

 

 

$

—

 

 

$

134,213

 

Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard

 

 

—

 

 

 

471

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,777

 

 

 

—

 

 

 

3,248

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total real estate secured by multi-family properties

 

$

26,080

 

 

$

17,866

 

 

$

27,638

 

 

$

22,402

 

 

$

9,210

 

 

$

34,265

 

 

$

—

 

 

$

137,461

 

Real estate secured by owner-occupied properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

14,110

 

 

$

14,121

 

 

$

25,747

 

 

$

23,080

 

 

$

14,890

 

 

$

53,062

 

 

$

—

 

 

$

145,010

 

Special mention

 

 

656

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

869

 

 

 

—

 

 

 

1,525

 

Substandard

 

 

745

 

 

 

7,027

 

 

 

1,665

 

 

 

—

 

 

 

2,131

 

 

 

5,852

 

 

 

—

 

 

 

17,420

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total real estate secured by owner-occupied properties

 

$

15,511

 

 

$

21,148

 

 

$

27,412

 

 

$

23,080

 

 

$

17,021

 

 

$

59,783

 

 

$

—

 

 

$

163,955

 

Real estate secured by other commercial properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

42,414

 

 

$

30,132

 

 

$

67,747

 

 

$

40,771

 

 

$

13,624

 

 

$

115,015

 

 

$

—

 

 

$

309,703

 

Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard

 

 

—

 

 

 

663

 

 

 

—

 

 

 

—

 

 

 

2,298

 

 

 

726

 

 

 

—

 

 

 

3,687

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total real estate secured by other commercial properties

 

$

42,414

 

 

$

30,795

 

 

$

67,747

 

 

$

40,771

 

 

$

15,922

 

 

$

115,741

 

 

$

—

 

 

$

313,390

 

Revolving real estate secured by 1-4 family properties-business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

5,652

 

 

$

5,652

 

Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total revolving real estate secured by 1-4 family properties-business

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

5,652

 

 

$

5,652

 

 

 

Term Loans by Origination Year

 

 

 

 

 

 

 

December 31, 2024

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

Prior

 

 

Revolving

 

 

Total

 

Commercial Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate secured by 1st lien on 1-4 family properties-business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

9,890

 

 

$

16,641

 

 

$

26,410

 

 

$

18,786

 

 

$

8,349

 

 

$

24,375

 

 

$

—

 

 

$

104,451

 

Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

132

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

132

 

Substandard

 

 

—

 

 

 

—

 

 

 

339

 

 

 

205

 

 

 

145

 

 

 

507

 

 

 

—

 

 

 

1,196

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total real estate secured by 1st lien on 1-4 family properties-business

 

$

9,890

 

 

$

16,641

 

 

$

26,749

 

 

$

19,123

 

 

$

8,494

 

 

$

24,882

 

 

$

—

 

 

$

105,779

 

Real estate secured by junior lien on 1-4 family properties-business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

213

 

 

$

533

 

 

$

574

 

 

$

176

 

 

$

538

 

 

$

855

 

 

$

—

 

 

$

2,889

 

Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard

 

 

330

 

 

 

—

 

 

 

19

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

349

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total real estate secured by junior lien on 1-4 family properties-business

 

$

543

 

 

$

533

 

 

$

593

 

 

$

176

 

 

$

538

 

 

$

855

 

 

$

—

 

 

$

3,238

 

State and political subdivisions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

1,914

 

 

$

1,141

 

 

$

—

 

 

$

3,749

 

 

$

8

 

 

$

10,871

 

 

$

—

 

 

$

17,683

 

Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total real estate secured by junior lien on 1-4 family properties-business

 

$

1,914

 

 

$

1,141

 

 

$

—

 

 

$

3,749

 

 

$

8

 

 

$

10,871

 

 

$

—

 

 

$

17,683

 

Total Commercial Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

172,029

 

 

$

124,771

 

 

$

170,338

 

 

$

127,758

 

 

$

52,400

 

 

$

251,860

 

 

$

91,746

 

 

$

990,902

 

Special mention

 

 

656

 

 

 

392

 

 

 

—

 

 

 

132

 

 

 

—

 

 

 

869

 

 

 

2,557

 

 

 

4,606

 

Substandard

 

 

1,075

 

 

 

14,810

 

 

 

2,023

 

 

 

318

 

 

 

4,658

 

 

 

10,572

 

 

 

845

 

 

 

34,301

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total Commercial loans

 

$

173,760

 

 

$

139,973

 

 

$

172,361

 

 

$

128,208

 

 

$

57,058

 

 

$

263,301

 

 

$

95,148

 

 

$

1,029,809

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Period Gross Charge-Offs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

23

 

 

$

23

 

 

 

Term Loans by Origination Year

 

 

 

 

 

 

 

December 31, 2023

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

2019

 

 

Prior

 

 

Revolving

 

 

Total

 

Commercial Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

20,473

 

 

$

14,439

 

 

$

8,574

 

 

$

5,913

 

 

$

8,626

 

 

$

7,175

 

 

$

70,716

 

 

$

135,916

 

Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,170

 

 

 

1,170

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total commercial and industrial

 

$

20,473

 

 

$

14,439

 

 

$

8,574

 

 

$

5,913

 

 

$

8,626

 

 

$

7,175

 

 

$

71,886

 

 

$

137,086

 

Construction and land development:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

46,171

 

 

$

43,472

 

 

$

14,630

 

 

$

3,434

 

 

$

4,028

 

 

$

4,395

 

 

$

—

 

 

$

116,130

 

Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

43

 

 

 

—

 

 

 

43

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total construction and land development

 

$

46,171

 

 

$

43,472

 

 

$

14,630

 

 

$

3,434

 

 

$

4,028

 

 

$

4,438

 

 

$

—

 

 

$

116,173

 

Real estate secured by multi-family properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

10,826

 

 

$

28,858

 

 

$

23,430

 

 

$

9,808

 

 

$

5,804

 

 

$

27,609

 

 

$

—

 

 

$

106,335

 

Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

704

 

 

 

2,154

 

 

 

—

 

 

 

2,858

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total real estate secured by multi-family properties

 

$

10,826

 

 

$

28,858

 

 

$

23,430

 

 

$

9,808

 

 

$

6,508

 

 

$

29,763

 

 

$

—

 

 

$

109,193

 

Real estate secured by owner-occupied properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

14,430

 

 

$

29,576

 

 

$

26,908

 

 

$

18,693

 

 

$

12,239

 

 

$

53,030

 

 

$

—

 

 

$

154,876

 

Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard

 

 

—

 

 

 

—

 

 

 

 

 

 

—

 

 

 

—

 

 

 

5,819

 

 

 

—

 

 

 

5,819

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total real estate secured by owner-occupied properties

 

$

14,430

 

 

$

29,576

 

 

$

26,908

 

 

$

18,693

 

 

$

12,239

 

 

$

58,849

 

 

$

—

 

 

$

160,695

 

Real estate secured by other commercial properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

32,297

 

 

$

44,526

 

 

$

42,582

 

 

$

17,798

 

 

$

28,947

 

 

$

98,173

 

 

$

—

 

 

$

264,323

 

Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

778

 

 

 

—

 

 

 

778

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total real estate secured by other commercial properties

 

$

32,297

 

 

$

44,526

 

 

$

42,582

 

 

$

17,798

 

 

$

28,947

 

 

$

98,951

 

 

$

—

 

 

$

265,101

 

Revolving real estate secured by 1-4 family properties-business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

5,442

 

 

$

5,442

 

Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total revolving real estate secured by 1-4 family properties-business

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

5,442

 

 

$

5,442

 

Real estate secured by 1st lien on 1-4 family properties-business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

14,697

 

 

$

28,596

 

 

$

20,890

 

 

$

9,794

 

 

$

8,441

 

 

$

20,262

 

 

$

—

 

 

$

102,680

 

Special mention

 

 

—

 

 

 

—

 

 

 

137

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

137

 

 

 

Term Loans by Origination Year

 

 

 

 

 

 

 

December 31, 2023

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

2019

 

 

Prior

 

 

Revolving

 

 

Total

 

Commercial Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Substandard

 

 

—

 

 

 

189

 

 

 

—

 

 

 

—

 

 

 

423

 

 

 

143

 

 

 

—

 

 

 

755

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total real estate secured by 1st lien on 1-4 family properties-business

 

$

14,697

 

 

$

28,785

 

 

$

21,027

 

 

$

9,794

 

 

$

8,864

 

 

$

20,405

 

 

$

—

 

 

$

103,572

 

Real estate secured by junior lien on 1-4 family properties-business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

558

 

 

$

604

 

 

$

542

 

 

$

580

 

 

$

40

 

 

$

934

 

 

$

—

 

 

$

3,258

 

Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

187

 

 

 

—

 

 

 

187

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total real estate secured by junior lien on 1-4 family properties-business

 

$

558

 

 

$

604

 

 

$

542

 

 

$

580

 

 

$

40

 

 

$

1,121

 

 

$

—

 

 

$

3,445

 

State and political subdivisions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

707

 

 

$

—

 

 

$

4,247

 

 

$

18

 

 

$

5,444

 

 

$

8,292

 

 

$

—

 

 

$

18,708

 

Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total real estate secured by junior lien on 1-4 family properties-business

 

$

707

 

 

$

—

 

 

$

4,247

 

 

$

18

 

 

$

5,444

 

 

$

8,292

 

 

$

—

 

 

$

18,708

 

Total Commercial Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

140,159

 

 

$

190,071

 

 

$

141,803

 

 

$

66,038

 

 

$

73,569

 

 

$

219,870

 

 

$

76,158

 

 

$

907,668

 

Special mention

 

 

—

 

 

 

—

 

 

 

137

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

137

 

Substandard

 

 

—

 

 

 

189

 

 

 

—

 

 

 

—

 

 

 

1,127

 

 

 

9,124

 

 

 

1,170

 

 

 

11,610

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total Commercial loans

 

$

140,159

 

 

$

190,260

 

 

$

141,940

 

 

$

66,038

 

 

$

74,696

 

 

$

228,994

 

 

$

77,328

 

 

$

919,415

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Period Gross Charge-Offs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

—

 

 

$

229

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

84

 

 

$

313

 

 

 

The following tables present the recorded investment in the retail classes of the loan portfolio based on payment activity as of December 31, 2024 and 2023:

 

 

 

Term Loans by Origination Year

 

 

 

 

 

 

 

December 31, 2024

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

Prior

 

 

Revolving

 

 

Total

 

Retail Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 family residential mortgages:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

12,129

 

 

$

12,404

 

 

$

13,901

 

 

$

28,707

 

 

$

18,871

 

 

$

27,643

 

 

$

—

 

 

$

113,655

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

768

 

 

 

—

 

 

 

768

 

Total 1-4 family residential mortgages

 

$

12,129

 

 

$

12,404

 

 

$

13,901

 

 

$

28,707

 

 

$

18,871

 

 

$

28,411

 

 

$

—

 

 

$

114,423

 

Revolving home equity secured by 1-4 family properties-personal:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

47,918

 

 

$

47,918

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

313

 

 

 

313

 

Total revolving home equity secured by 1-4 family properties-personal

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

48,231

 

 

$

48,231

 

 

 

Term Loans by Origination Year

 

 

 

 

 

 

 

December 31, 2024

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

Prior

 

 

Revolving

 

 

Total

 

Retail Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate secured by 1st lien on 1-4 family properties-personal:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

599

 

 

$

721

 

 

$

968

 

 

$

1,027

 

 

$

813

 

 

$

2,315

 

 

$

—

 

 

$

6,443

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

90

 

 

 

—

 

 

 

—

 

 

 

28

 

 

 

—

 

 

 

118

 

Total real estate secured by 1st lien on 1-4 family properties-personal

 

$

599

 

 

$

721

 

 

$

1,058

 

 

$

1,027

 

 

$

813

 

 

$

2,343

 

 

$

—

 

 

$

6,561

 

Real estate secured by junior lien on 1-4 family properties-personal:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

5,241

 

 

$

3,317

 

 

$

833

 

 

$

958

 

 

$

922

 

 

$

2,804

 

 

$

—

 

 

$

14,075

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

17

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

17

 

Total real estate secured by junior lien on 1-4 family properties-personal

 

$

5,241

 

 

$

3,317

 

 

$

850

 

 

$

958

 

 

$

922

 

 

$

2,804

 

 

$

—

 

 

$

14,092

 

Student loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

1,433

 

 

$

—

 

 

$

1,433

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

11

 

 

 

—

 

 

 

11

 

Total student loans

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

1,444

 

 

$

—

 

 

$

1,444

 

Overdrafts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

209

 

 

$

209

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total overdrafts

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

209

 

 

$

209

 

Other consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

785

 

 

$

487

 

 

$

127

 

 

$

104

 

 

$

16

 

 

$

32

 

 

$

202

 

 

$

1,753

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

29

 

 

 

—

 

 

 

29

 

Total other consumer

 

$

785

 

 

$

487

 

 

$

127

 

 

$

104

 

 

$

16

 

 

$

61

 

 

$

202

 

 

$

1,782

 

Total Retail Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

18,754

 

 

$

16,929

 

 

$

15,829

 

 

$

30,796

 

 

$

20,622

 

 

$

34,227

 

 

$

48,329

 

 

$

185,486

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

107

 

 

 

—

 

 

 

—

 

 

 

836

 

 

 

313

 

 

 

1,256

 

Total Retail Loans

 

$

18,754

 

 

$

16,929

 

 

$

15,936

 

 

$

30,796

 

 

$

20,622

 

 

$

35,063

 

 

$

48,642

 

 

$

186,742

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Period Gross Charge-Offs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Student loans

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

52

 

 

$

—

 

 

$

52

 

Overdrafts

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

101

 

 

 

101

 

Other consumer

 

 

—

 

 

 

4

 

 

 

8

 

 

 

4

 

 

 

—

 

 

 

—

 

 

 

7

 

 

 

23

 

 

 

 

 

 

Term Loans by Origination Year

 

 

 

 

 

 

 

December 31, 2023

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

2019

 

 

Prior

 

 

Revolving

 

 

Total

 

Retail Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 family residential mortgages:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

12,641

 

 

$

14,635

 

 

$

30,495

 

 

$

20,304

 

 

$

4,526

 

 

$

25,500

 

 

$

—

 

 

$

108,101

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

805

 

 

 

—

 

 

 

805

 

Total 1-4 family residential mortgages

 

$

12,641

 

 

$

14,635

 

 

$

30,495

 

 

$

20,304

 

 

$

4,526

 

 

$

26,305

 

 

$

—

 

 

$

108,906

 

Revolving home equity secured by 1-4 family properties-personal:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

33,936

 

 

$

33,936

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

295

 

 

 

295

 

Total revolving home equity secured by 1-4 family properties-personal

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

34,231

 

 

$

34,231

 

Real estate secured by 1st lien on 1-4 family properties-personal:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

2,591

 

 

$

1,613

 

 

$

2,933

 

 

$

1,030

 

 

$

931

 

 

$

2,767

 

 

$

—

 

 

$

11,865

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

116

 

 

 

—

 

 

 

116

 

Total real estate secured by 1st lien on 1-4 family properties-personal

 

$

2,591

 

 

$

1,613

 

 

$

2,933

 

 

$

1,030

 

 

$

931

 

 

$

2,883

 

 

$

—

 

 

$

11,981

 

Real estate secured by junior lien on 1-4 family properties-personal:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

6,438

 

 

$

1,613

 

 

$

2,184

 

 

$

1,180

 

 

$

676

 

 

$

3,515

 

 

$

—

 

 

$

15,606

 

Nonperforming

 

 

—

 

 

 

19

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

19

 

Total real estate secured by junior lien on 1-4 family properties-personal

 

$

6,438

 

 

$

1,632

 

 

$

2,184

 

 

$

1,180

 

 

$

676

 

 

$

3,515

 

 

$

—

 

 

$

15,625

 

Student loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

1,645

 

 

$

—

 

 

$

1,645

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

17

 

 

 

—

 

 

 

17

 

Total student loans

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

1,662

 

 

$

—

 

 

$

1,662

 

Overdrafts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

194

 

 

$

194

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total overdrafts

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

194

 

 

$

194

 

Other consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

793

 

 

$

290

 

 

$

245

 

 

$

89

 

 

$

73

 

 

$

41

 

 

$

189

 

 

$

1,720

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

37

 

 

 

—

 

 

 

37

 

Total other consumer

 

$

793

 

 

$

290

 

 

$

245

 

 

$

89

 

 

$

73

 

 

$

78

 

 

$

189

 

 

$

1,757

 

Total Retail Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

22,463

 

 

$

18,151

 

 

$

35,857

 

 

$

22,603

 

 

$

6,206

 

 

$

33,468

 

 

$

34,319

 

 

$

173,067

 

Nonperforming

 

 

—

 

 

 

19

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

975

 

 

 

295

 

 

 

1,289

 

Total Retail Loans

 

$

22,463

 

 

$

18,170

 

 

$

35,857

 

 

$

22,603

 

 

$

6,206

 

 

$

34,443

 

 

$

34,614

 

 

$

174,356

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Period Gross Charge-Offs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Term Loans by Origination Year

 

 

 

 

 

 

 

December 31, 2023

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

2019

 

 

Prior

 

 

Revolving

 

 

Total

 

Retail Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Student loans

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

57

 

 

$

—

 

 

$

57

 

Overdrafts

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

91

 

 

 

91

 

Other consumer

 

 

—

 

 

 

1

 

 

 

3

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

10

 

 

 

14

 

 

Retail revolving lines of credit that were termed out during 2024 and 2023 were $3,394,000 and $4,534,000, respectively; all which are performing.

 

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The following table presents the classes of the loan portfolio (excluding deferred fees and costs) summarized by the past due status, regardless of whether the loan is on non-accrual status, as of December 31, 2024 and 2023:

 

December 31, 2024

 

30-59 days
past due

 

 

60-89 days
past due

 

 

90 days or
more past
due

 

 

Total past
due loans

 

 

Current

 

 

Total loans
receivable

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

153,187

 

 

$

153,187

 

Construction and land development

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

129,464

 

 

 

129,464

 

Real estate secured by multi-family properties

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

137,461

 

 

 

137,461

 

Real estate secured by owner-occupied properties

 

 

150

 

 

 

169

 

 

 

—

 

 

 

319

 

 

 

163,636

 

 

 

163,955

 

Real estate secured by other commercial properties

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

313,390

 

 

 

313,390

 

Revolving real estate secured by 1-4 family properties-business

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

5,652

 

 

 

5,652

 

Real estate secured by 1st lien on 1-4 family properties-business

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

105,779

 

 

 

105,779

 

Real estate secured by junior lien on 1-4 family properties-business

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,238

 

 

 

3,238

 

State and political subdivisions

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

17,683

 

 

 

17,683

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 family residential mortgages

 

 

114

 

 

 

440

 

 

 

571

 

 

 

1,125

 

 

 

113,298

 

 

 

114,423

 

Revolving home equity secured by 1-4 family properties-personal

 

 

235

 

 

 

42

 

 

 

119

 

 

 

396

 

 

 

47,835

 

 

 

48,231

 

Real estate secured by 1st lien on 1-4 family properties-personal

 

 

126

 

 

 

—

 

 

 

91

 

 

 

217

 

 

 

6,344

 

 

 

6,561

 

Real estate secured by junior lien on 1-4 family properties-personal

 

 

95

 

 

 

—

 

 

 

17

 

 

 

112

 

 

 

13,980

 

 

 

14,092

 

Student loans

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,444

 

 

 

1,444

 

Overdrafts

 

 

13

 

 

 

—

 

 

 

—

 

 

 

13

 

 

 

196

 

 

 

209

 

Other consumer

 

 

5

 

 

 

—

 

 

 

—

 

 

 

5

 

 

 

1,777

 

 

 

1,782

 

Total

 

$

738

 

 

$

651

 

 

$

798

 

 

$

2,187

 

 

$

1,214,364

 

 

$

1,216,551

 

 

 

December 31, 2023

 

30-59 days
past due

 

 

60-89 days
past due

 

 

90 days or
more past
due

 

 

Total past
due loans

 

 

Current

 

 

Total loans
receivable

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

77

 

 

$

—

 

 

$

—

 

 

$

77

 

 

$

137,009

 

 

$

137,086

 

Construction and land development

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

116,173

 

 

 

116,173

 

Real estate secured by multi-family properties

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

109,193

 

 

 

109,193

 

Real estate secured by owner-occupied properties

 

 

186

 

 

 

—

 

 

 

—

 

 

 

186

 

 

 

160,509

 

 

 

160,695

 

Real estate secured by other commercial properties

 

 

9,675

 

 

 

—

 

 

 

—

 

 

 

9,675

 

 

 

255,426

 

 

 

265,101

 

Revolving real estate secured by 1-4 family properties-business

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

5,442

 

 

 

5,442

 

Real estate secured by 1st lien on 1-4 family properties-business

 

 

323

 

 

 

—

 

 

 

—

 

 

 

323

 

 

 

103,249

 

 

 

103,572

 

Real estate secured by junior lien on 1-4 family properties-business

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,445

 

 

 

3,445

 

State and political subdivisions

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

18,708

 

 

 

18,708

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 family residential mortgages

 

 

433

 

 

 

381

 

 

 

481

 

 

 

1,295

 

 

 

107,611

 

 

 

108,906

 

Revolving home equity secured by 1-4 family properties-personal

 

 

56

 

 

 

—

 

 

 

129

 

 

 

185

 

 

 

34,046

 

 

 

34,231

 

Real estate secured by 1st lien on 1-4 family properties-personal

 

 

—

 

 

 

96

 

 

 

—

 

 

 

96

 

 

 

11,885

 

 

 

11,981

 

Real estate secured by junior lien on 1-4 family properties-personal

 

 

—

 

 

 

—

 

 

 

18

 

 

 

18

 

 

 

15,607

 

 

 

15,625

 

Student loans

 

 

—

 

 

 

11

 

 

 

6

 

 

 

17

 

 

 

1,645

 

 

 

1,662

 

Overdrafts

 

 

21

 

 

 

2

 

 

 

—

 

 

 

23

 

 

 

171

 

 

 

194

 

Other consumer

 

 

—

 

 

 

8

 

 

 

—

 

 

 

8

 

 

 

1,749

 

 

 

1,757

 

Total

 

$

10,771

 

 

$

498

 

 

$

634

 

 

$

11,903

 

 

$

1,081,868

 

 

$

1,093,771

 

 

As previously discussed, QNB maintains a loan review system, which includes a continuous review of the loan portfolio by internal and external parties to aid in the early identification of potential collateral dependent loans. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as collateral dependent. When placing a loan on non-accrual status, management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. All non-accrual loans, except student loans, are individually evaluated for an allowance for credit losses ("ACL"). This ACL is measured using either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent.

 

An allowance for credit loss is established for a non-accrual loan if its carrying value exceeds its estimated fair value.

 

For commercial loans secured by real estate, estimated fair values are determined primarily through third-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the original appraisal and the condition of the property. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property.

For commercial loans secured by non-real estate collateral, such as accounts receivable, inventory and equipment, estimated fair values are determined based on the borrower’s financial statements, inventory reports, accounts receivable agings or equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets.

The following tables disclose the recorded investment in loans receivable that are either on non-accrual status or past due 90 days or more and still accruing interest as of December 31, 2024 and 2023:

 

December 31, 2024

 

90 Days or More Past Due-Still Accruing

 

 

Nonaccrual With No Specifically-Related ACL

 

 

Nonaccrual With Related ACL

 

 

Total Nonaccrual Loans

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

—

 

 

$

—

 

 

$

27

 

 

$

27

 

Construction and land development

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Real estate secured by multi-family properties

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Real estate secured by owner-occupied properties

 

 

—

 

 

 

157

 

 

 

—

 

 

 

157

 

Real estate secured by other commercial properties

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Revolving real estate secured by 1-4 family properties-business

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Real estate secured by 1st lien on 1-4 family properties-business

 

 

—

 

 

 

205

 

 

 

—

 

 

 

205

 

Real estate secured by junior lien on 1-4 family properties-business

 

 

—

 

 

 

—

 

 

 

330

 

 

 

330

 

State and political subdivisions

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

1-4 family residential mortgages

 

 

—

 

 

 

768

 

 

 

—

 

 

 

768

 

Revolving home equity secured by 1-4 family properties-personal

 

 

—

 

 

 

313

 

 

 

—

 

 

 

313

 

Real estate secured by 1st lien on 1-4 family properties-personal

 

 

—

 

 

 

118

 

 

 

—

 

 

 

118

 

Real estate secured by junior lien on 1-4 family properties-personal

 

 

—

 

 

 

17

 

 

 

—

 

 

 

17

 

Student loans

 

 

—

 

 

 

11

 

 

 

—

 

 

 

11

 

Other consumer

 

 

—

 

 

 

29

 

 

 

—

 

 

 

29

 

Total

 

$

—

 

 

$

1,618

 

 

$

357

 

 

$

1,975

 

 

 

December 31, 2023

 

90 Days or More Past Due-Still Accruing

 

 

Nonaccrual With No Specifically-Related ACL

 

 

Nonaccrual With Related ACL

 

 

Total Nonaccrual Loans

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

—

 

 

$

278

 

 

$

33

 

 

$

311

 

Construction and land development

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Real estate secured by multi-family properties

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Real estate secured by owner-occupied properties

 

 

—

 

 

 

175

 

 

 

—

 

 

 

175

 

Real estate secured by other commercial properties

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Revolving real estate secured by 1-4 family properties-business

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Real estate secured by 1st lien on 1-4 family properties-business

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Real estate secured by junior lien on 1-4 family properties-business

 

 

—

 

 

 

—

 

 

 

165

 

 

 

165

 

State and political subdivisions

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

1-4 family residential mortgages

 

 

—

 

 

 

805

 

 

 

—

 

 

 

805

 

Revolving home equity secured by 1-4 family properties-personal

 

 

—

 

 

 

21

 

 

 

274

 

 

 

295

 

Real estate secured by 1st lien on 1-4 family properties-personal

 

 

—

 

 

 

116

 

 

 

—

 

 

 

116

 

Real estate secured by junior lien on 1-4 family properties-personal

 

 

—

 

 

 

19

 

 

 

—

 

 

 

19

 

Student loans

 

 

—

 

 

 

17

 

 

 

—

 

 

 

17

 

Other consumer

 

 

—

 

 

 

37

 

 

 

—

 

 

 

37

 

Total

 

$

—

 

 

$

1,468

 

 

$

472

 

 

$

1,940

 

 

 

QNB recognized interest income of $126,000 and $557,000 on non-accrual loans for the years ended December 31, 2024 and 2023, respectively.

 

The following table presents the collateral-dependent loans by loan category at December 31, 2024 and 2023:
 

December 31, 2024

 

Real Estate Secured

 

 

Other (1)

 

 

Deficiency in Collateral

 

 

Total Collateral Dependent Nonaccrual Loans

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

—

 

 

$

—

 

 

$

27

 

 

$

27

 

Construction and land development

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Real estate secured by multi-family properties

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Real estate secured by owner-occupied properties

 

 

157

 

 

 

—

 

 

 

—

 

 

 

157

 

Real estate secured by other commercial properties

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Revolving real estate secured by 1-4 family properties-business

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Real estate secured by 1st lien on 1-4 family properties-business

 

 

205

 

 

 

—

 

 

 

—

 

 

 

205

 

Real estate secured by junior lien on 1-4 family properties-business

 

 

—

 

 

 

—

 

 

 

330

 

 

 

330

 

State and political subdivisions

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

1-4 family residential mortgages

 

 

768

 

 

 

—

 

 

 

—

 

 

 

768

 

Revolving home equity secured by 1-4 family properties-personal

 

 

313

 

 

 

—

 

 

 

—

 

 

 

313

 

Real estate secured by 1st lien on 1-4 family properties-personal

 

 

118

 

 

 

—

 

 

 

—

 

 

 

118

 

Real estate secured by junior lien on 1-4 family properties-personal

 

 

17

 

 

 

—

 

 

 

—

 

 

 

17

 

Other consumer

 

 

—

 

 

 

29

 

 

 

—

 

 

 

29

 

Total

 

$

1,578

 

 

$

29

 

 

$

357

 

 

$

1,964

 

(1) Secured by business assets, personal property and equipment or guarantees
 

 

December 31, 2023

 

Real Estate Secured

 

 

Other (1)

 

 

Deficiency in Collateral

 

 

Total Collateral Dependent Nonaccrual Loans

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

—

 

 

$

278

 

 

$

33

 

 

$

311

 

Construction and land development

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Real estate secured by multi-family properties

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Real estate secured by owner-occupied properties

 

 

175

 

 

 

—

 

 

 

—

 

 

 

175

 

Real estate secured by other commercial properties

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Revolving real estate secured by 1-4 family properties-business

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Real estate secured by 1st lien on 1-4 family properties-business

 

 

—

 

 

 

 

 

 

 

 

 

—

 

Real estate secured by junior lien on 1-4 family properties-business

 

 

—

 

 

 

—

 

 

 

165

 

 

 

165

 

State and political subdivisions

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

1-4 family residential mortgages

 

 

805

 

 

 

—

 

 

 

—

 

 

 

805

 

Revolving home equity secured by 1-4 family properties-personal

 

 

185

 

 

 

—

 

 

 

110

 

 

 

295

 

Real estate secured by 1st lien on 1-4 family properties-personal

 

 

116

 

 

 

—

 

 

 

—

 

 

 

116

 

Real estate secured by junior lien on 1-4 family properties-personal

 

 

19

 

 

 

—

 

 

 

—

 

 

 

19

 

Other consumer

 

 

—

 

 

 

37

 

 

 

—

 

 

 

37

 

Total

 

$

1,300

 

 

$

315

 

 

$

308

 

 

$

1,923

 

(1) Secured by business assets, personal property and equipment or guarantees
 

 

 


 

Activity in the allowance for credit losses on loans for the years ended December 31, 2024, 2023 and 2022 are as follows:

 

Year ended December 31, 2024

 

Beginning balance

 

 

Credit loss expense (reversal)

 

 

Charge-offs

 

 

Recoveries

 

 

Balance, end
of period

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

823

 

 

$

(23

)

 

$

(23

)

 

$

52

 

 

$

829

 

Construction and land development

 

 

1,252

 

 

 

84

 

 

 

—

 

 

 

—

 

 

 

1,336

 

Real estate secured by multi-family properties

 

 

1,735

 

 

 

277

 

 

 

—

 

 

 

—

 

 

 

2,012

 

Real estate secured by owner-occupied properties

 

 

1,001

 

 

 

(148

)

 

 

—

 

 

 

—

 

 

 

853

 

Real estate secured by other commercial properties

 

 

1,167

 

 

 

(25

)

 

 

—

 

 

 

—

 

 

 

1,142

 

Revolving real estate secured by 1-4 family properties-business

 

 

27

 

 

 

(3

)

 

 

—

 

 

 

—

 

 

 

24

 

Real estate secured by 1st lien on 1-4 family properties-business

 

 

1,507

 

 

 

(279

)

 

 

—

 

 

 

10

 

 

 

1,238

 

Real estate secured by junior lien on 1-4 family properties-business

 

 

14

 

 

 

325

 

 

 

—

 

 

 

—

 

 

 

339

 

State and political subdivisions

 

 

55

 

 

 

(21

)

 

 

—

 

 

 

—

 

 

 

34

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 family residential mortgages

 

 

427

 

 

 

(108

)

 

 

—

 

 

 

4

 

 

 

323

 

Revolving home equity secured by 1-4 family properties-personal

 

 

138

 

 

 

5

 

 

 

—

 

 

 

—

 

 

 

143

 

Real estate secured by 1st lien on 1-4 family properties-personal

 

 

182

 

 

 

(151

)

 

 

—

 

 

 

—

 

 

 

31

 

Real estate secured by junior lien on 1-4 family properties-personal

 

 

105

 

 

 

(28

)

 

 

—

 

 

 

—

 

 

 

77

 

Student loans

 

 

369

 

 

 

(37

)

 

 

(52

)

 

 

30

 

 

 

310

 

Overdrafts

 

 

16

 

 

 

69

 

 

 

(101

)

 

 

34

 

 

 

18

 

Other consumer

 

 

34

 

 

 

14

 

 

 

(23

)

 

 

10

 

 

 

35

 

Total

 

$

8,852

 

 

$

(49

)

 

$

(199

)

 

$

140

 

 

$

8,744

 

 

Year ended December 31, 2023

 

Beginning balance prior to adoption of ASC 326

 

 

Impact of adopting ASC 326

 

 

Credit loss expense (reversal)

 

 

Charge-offs

 

 

Recoveries

 

 

Balance, end
of period

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

1,316

 

 

$

(70

)

 

$

(771

)

 

$

(313

)

 

$

661

 

 

$

823

 

Construction and land development

 

 

755

 

 

 

(10

)

 

 

507

 

 

 

—

 

 

 

—

 

 

 

1,252

 

Real estate secured by multi-family properties

 

 

995

 

 

 

684

 

 

 

56

 

 

 

—

 

 

 

—

 

 

 

1,735

 

Real estate secured by owner-occupied properties

 

 

1,549

 

 

 

(374

)

 

 

(174

)

 

 

—

 

 

 

—

 

 

 

1,001

 

Real estate secured by other commercial properties

 

 

2,458

 

 

 

(1,128

)

 

 

(163

)

 

 

—

 

 

 

—

 

 

 

1,167

 

Revolving real estate secured by 1-4 family properties-business

 

 

25

 

 

 

7

 

 

 

(5

)

 

 

—

 

 

 

—

 

 

 

27

 

Real estate secured by 1st lien on 1-4 family properties-business

 

 

1,210

 

 

 

490

 

 

 

(203

)

 

 

—

 

 

 

10

 

 

 

1,507

 

Real estate secured by junior lien on 1-4 family properties-business

 

 

30

 

 

 

(14

)

 

 

(2

)

 

 

—

 

 

 

—

 

 

 

14

 

State and political subdivisions

 

 

94

 

 

 

(20

)

 

 

(19

)

 

 

—

 

 

 

—

 

 

 

55

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 family residential mortgages

 

 

682

 

 

 

(196

)

 

 

(59

)

 

 

—

 

 

 

—

 

 

 

427

 

Construction-individual

 

 

1

 

 

 

-

 

 

 

(1

)

 

 

—

 

 

 

—

 

 

 

—

 

Revolving home equity secured by 1-4 family properties-personal

 

 

299

 

 

 

(7

)

 

 

(154

)

 

 

—

 

 

 

—

 

 

 

138

 

Real estate secured by 1st lien on 1-4 family properties-personal

 

 

57

 

 

 

15

 

 

 

110

 

 

 

—

 

 

 

—

 

 

 

182

 

Real estate secured by junior lien on 1-4 family properties-personal

 

 

55

 

 

 

29

 

 

 

15

 

 

 

—

 

 

 

6

 

 

 

105

 

Student loans

 

 

454

 

 

 

12

 

 

 

(48

)

 

 

(57

)

 

 

8

 

 

 

369

 

Overdrafts

 

 

8

 

 

 

3

 

 

 

70

 

 

 

(91

)

 

 

26

 

 

 

16

 

Other consumer

 

 

41

 

 

 

(8

)

 

 

13

 

 

 

(14

)

 

 

2

 

 

 

34

 

Unallocated

 

 

502

 

 

 

(502

)

 

 

—

 

 

N/A

 

 

N/A

 

 

 

—

 

Total

 

$

10,531

 

 

$

(1,089

)

 

$

(828

)

 

$

(475

)

 

$

713

 

 

$

8,852

 

 

 

Year ended December 31, 2022

 

Balance,
beginning of
period

 

 

Provision for
(credit to)
loan losses

 

 

Charge-offs

 

 

Recoveries

 

 

Balance, end
of period

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

3,368

 

 

$

(2,320

)

 

$

(38

)

 

$

306

 

 

$

1,316

 

Construction

 

 

363

 

 

 

392

 

 

 

—

 

 

 

—

 

 

 

755

 

Secured by commercial real estate

 

 

4,280

 

 

 

722

 

 

 

—

 

 

 

—

 

 

 

5,002

 

Secured by residential real estate

 

 

1,035

 

 

 

160

 

 

 

—

 

 

 

45

 

 

 

1,240

 

State and political subdivisions

 

 

69

 

 

 

25

 

 

 

—

 

 

 

—

 

 

 

94

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 family residential mortgages

 

 

646

 

 

 

37

 

 

 

—

 

 

 

—

 

 

 

683

 

Home equity loans and lines

 

 

376

 

 

 

55

 

 

 

—

 

 

 

6

 

 

 

437

 

Consumer

 

 

542

 

 

 

82

 

 

 

(158

)

 

 

36

 

 

 

502

 

Unallocated

 

 

505

 

 

 

(3

)

 

N/A

 

 

N/A

 

 

 

502

 

Total

 

$

11,184

 

 

$

(850

)

 

$

(196

)

 

$

393

 

 

$

10,531

 

 

 

Since the implementation of ASU 326 on January 1, 2023, the Company may make loan modifications to borrowers experiencing financial difficulty ("FDM"). A FDM could involve principal forgiveness, term extension, an other-than-insignificant payment delay, interest rate reduction or exchanging or paying off existing debt for new debt with the Company. The effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement

methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification. Any amount forgiven would be charged to the allowance for credit losses. The amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses. In some cases, modifications could include multiple types of concessions. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. The following table shows the amortized cost basis at the end of the reporting period of the loans modified to borrowers experiencing financial difficulty, disaggregated by loan class, type of concession granted and the financial effect of the modification:

 

Year ended December 31,

 

2024

Payment Modification to Interest Only for Six Months

 

Amortized Cost Basis

 

 

% of Total Loan Class

 

 

Fiancial Effect

Commercial:

 

 

 

 

 

 

 

 

Real estate secured by owner-occupied properties

 

$

1,000

 

 

 

0.61

%

 

Temporary reduction of principal payments with no extension of term

Total

 

$

1,000

 

 

 

 

 

 

 

 

There were no payment defaults during the 2024 period on FDMs. There were no FDMs in 2023.

There was 3 mortgage loan(s) secured by residential real estate with a recorded investment of $457,000 for which foreclosure proceedings were in process at December 31, 2024. QNB had no loans secured by residential real estate for which foreclosure proceedings were in process as of December 31, 2023.