Loans

9 Months Ended

Sep. 30, 2024

Loans

Loans

5. Loans:

The composition of the loan portfolio at September 30, 2024 and December 31, 2023 is as follows (in thousands):

	September 30, 2024		December 31, 2023
Real estate, residential	$	81,447	$	74,296
Real estate, construction		23,239		27,353
Real estate, nonresidential		111,989		115,014
Commercial and industrial		12,136		12,496
Other		10,448		9,180
Total	$	239,259	$	238,339

The age analysis of the loan portfolio, segregated by class of loans, as of September 30, 2024, and December 31, 2023 is as follows (in thousands):

													Loans Past
													Due Greater
	Number of Days Past Due												Than 90
					Greater		Total				Total		Days and
	30 - 59		60 - 89		Than 90		Past Due		Current		Loans		Still Accruing
September 30, 2024:
Real estate, residential	$	841	$	137	$	219	$	1,197	$	80,250	$	81,447	$	—
Real estate, construction		63		—		—		63		23,176		23,239		—
Real estate, nonresidential		423		—		—		423		111,566		111,989		—
Commercial and industrial		47		11		—		58		12,078		12,136		—
Other		120		7		—		127		10,321		10,448		—
Total	$	1,494	$	155	$	219	$	1,868	$	237,391	$	239,259	$	—
December 31, 2023:
Real estate, residential	$	207	$	540	$	—	$	747	$	73,549	$	74,296	$	—
Real estate, construction		131		—		—		131		27,222		27,353		—
Real estate, nonresidential		58		—		—		58		114,956		115,014		—
Commercial and industrial		21		—		—		21		12,475		12,496		—
Other		75		30		—		105		9,075		9,180		—
Total	$	492	$	570	$	—	$	1,062	$	237,277	$	238,339	$	—

The Company monitors the credit quality of its loan portfolio through the use of a loan grading system. A score of 1 – 5 is assigned to the loan based on factors including repayment ability, trends in net worth and/or financial condition of the borrower and guarantors, employment stability, management ability, loan to value fluctuations, the type and structure of the loan, conformity of the loan to bank policy and payment performance. Based on the total score, a loan grade of A, B, C, S, D, E or F is applied. A grade of A will generally be applied to loans for customers that are well known to the Company and that have excellent sources of repayment. A grade of B will generally be applied to loans for customers that have excellent sources of repayment which have no identifiable risk of collection. A grade of C will generally be applied to loans for customers that have adequate sources of repayment which have little identifiable risk of collection. A grade of S will generally be applied to loans for customers who meet the criteria for a grade of C but also warrant additional monitoring by placement on the watch list. A grade of D will generally be applied to loans for customers that are inadequately protected by current sound net worth, paying capacity of the borrower, or pledged collateral. Loans with a grade of D have unsatisfactory characteristics such as cash flow deficiencies, bankruptcy filing by the borrower or dependence on the sale of collateral for the primary source of repayment, causing more than acceptable levels of risk. Loans 60 to 89 days past due receive a grade of D. A grade of E will generally be applied to loans for customers with weaknesses inherent in the D classification and in which collection or liquidation in full is questionable. In addition, on a monthly basis the Company determines which loans are 90 days or more past due and assigns a grade of E to them.

A grade of F is applied to loans which are considered uncollectible and of such little value that their continuance in an active bank is not warranted. Loans with this grade are charged off, even though partial or full recovery may be possible in the future.

The following tables further disaggregates credit quality disclosures by amortized cost by class and vintage for term loans and by revolving and revolving converted to amortizing as of September 30, 2024 and December 31, 2023 (in thousands). The Company defines vintage as the later of origination, or restructure date.

	Term Loans														Revolving
	Amortized Cost Basis by Origination Year														Loans
													Revolving		Converted to
	2024		2023		2022		2021		2020		Prior		Loans		Term Loans		Total
September 30, 2024:
Real Estate, Residential Loans:
A, B, or C	$	9,479	$	13,034	$	16,291	$	11,212	$	4,429	$	20,033	$	4,374	$	1,072	$	79,924
S		—		—		—		—		—		460		—		—		460
D		—		—		—		—		104		514		—		—		618
E		—		—		—		298		—		147		—		—		445
F		—		—		—		—		—		—		—		—		—
Total Real Estate Residential Loans	$	9,479	$	13,034	$	16,291	$	11,510	$	4,533	$	21,154	$	4,374	$	1,072	$	81,447
Real Estate, Construction Loans:
A, B, or C	$	2,301	$	435	$	2,003	$	1,941	$	1,135	$	3,149	$	8,047	$	—	$	19,011
S		—		—		—		—		—		67		3,958		—		4,025
D		—		122		—		—		81		—		—		—		203
E		—		—		—		—		—		—				—		—
F		—		—		—		—		—		—		—		—		—
Total Real Estate, Construction Loans	$	2,301	$	557	$	2,003	$	1,941	$	1,216	$	3,216	$	12,005	$	—	$	23,239
Real Estate,Nonresidential Loans:
A, B, or C	$	2,495	$	12,116	$	20,007	$	10,464	$	13,743	$	35,344	$	17,356	$	—	$	111,525
S		—		—		—		—		—		—		—		—		—
D		—		—		—		—		—		464		—		—		464
E		—		—		—		—		—		—		—		—		—
F		—		—		—		—		—		—		—		—		—
Total Real Estate, Nonresidential Loans	$	2,495	$	12,116	$	20,007	$	10,464	$	13,743	$	35,808	$	17,356	$	—	$	111,989
Commercial and industrial
A, B, or C	$	1,008	$	605	$	663	$	655	$	187	$	2,596	$	6,399	$	—	$	12,113
S		—		—		—		—		—		—		—		—		—
D		—		23		—		—		—		—		—		—		23
E		—		—		—		—		—		—		—		—		—
F		—		—		—		—		—		—		—		—		—
Total Commercial and Industrial Loans	$	1,008	$	628	$	663	$	655	$	187	$	2,596	$	6,399	$	—	$	12,136
Consumer/Other Loans
A, B, or C	$	4,291	$	3,791	$	892	$	522	$	378	$	294	$	244	$	—	$	10,412
S		—		—		—		—		—		—		—		—		—
D		—		30		2		—		—		—		4		—		36
E		—		—		—		—		—		—		—		—		—
F		—		—		—		—		—		—		—		—		—
Total Consumer/Other Loans	$	4,291	$	3,821	$	894	$	522	$	378	$	294	$	248	$	—	$	10,448

	Term Loans														Revolving
	Amortized Cost Basis by Origination Year														Loans
													Revolving		Converted to
	2023		2022		2021		2020		2019		Prior		Loans		Term Loans		Total
December 31, 2023:
Real Estate, Residential Loans:
A, B, or C	$	11,865	$	17,053	$	12,158	$	4,695	$	5,451	$	17,502	$	4,147	$	401	$	73,272
S		—		—		—		—		—		66		—		—		66
D		—		—		122		—		—		623		—		—		745
E		—		—		—		45		27		141		—		—		213
F		—		—		—		—		—		—		—		—		—
Total Real Estate Residential Loans	$	11,865	$	17,053	$	12,280	$	4,740	$	5,478	$	18,332	$	4,147	$	401	$	74,296
Real Estate, Construction Loans:
A, B, or C	$	1,069	$	2,119	$	2,133	$	1,379	$	38	$	3,966	$	12,827	$	—	$	23,531
S		—		—		—		—		—		—		3,735		—		3,735
D		—		—		—		87		—		—		—		—		87
E		—		—		—		—		—		—		—		—		—
F		—		—		—		—		—		—		—		—		—
Total Real Estate, Construction Loans	$	1,069	$	2,119	$	2,133	$	1,466	$	38	$	3,966	$	16,562	$	—	$	27,353
Real Estate,Nonresidential Loans:
A, B, or C	$	12,387	$	20,951	$	11,056	$	15,008	$	5,497	$	34,330	$	14,959	$	728	$	114,916
S		—		—		—		—		—		—		—		—		—
D		—		—		—		—		—		98		—		—		98
E		—		—		—		—		—		—		—		—		—
F		—		—		—		—		—		—		—		—		—
Total Real Estate, Nonresidential Loans	$	12,387	$	20,951	$	11,056	$	15,008	$	5,497	$	34,428	$	14,959	$	728	$	115,014
Commercial and industrial
A, B, or C	$	850	$	1,008	$	831	$	263	$	2,742	$	39	$	6,763	$	—	$	12,496
S		—		—		—		—		—		—		—		—		—
D		—		—		—		—		—		—		—		—		—
E		—		—		—		—		—		—		—		—		—
F		—		—		—		—		—		—		—		—		—
Total Commercial and Industrial Loans	$	850	$	1,008	$	831	$	263	$	2,742	$	39	$	6,763	$	—	$	12,496
Consumer/Other Loans
A, B, or C	$	5,346	$	1,417	$	841	$	439	$	234	$	304	$	508	$	52	$	9,141
S		—		—		—		—		—		—		—		—		—
D		7		6		—		—		18		3		5		—		39
E		—		—		—		—		—		—		—		—		—
F		—		—		—		—		—		—		—		—		—
Total Consumer/Other Loans	$	5,353	$	1,423	$	841	$	439	$	252	$	307	$	513	$	52	$	9,180

The following table is a summary of the Company’s nonaccrual loans by major categories for the periods indicated (in thousands):

	September 30, 2024
	Nonaccrual Loans with		Nonaccrual Loans		Total Nonaccrual
	No Allowance		with an Allowance		Loans
Real estate, residential	$	427	$	—	$	427
Total	$	427	$	—	$	427

	December 31, 2023
	Nonaccrual Loans with		Nonaccrual Loans		Total Nonaccrual
	No Allowance		with an Allowance		Loans
Real estate, residential	$	168	$	45	$	213
Total	$	168	$	45	$	213

The Company recognized no interest income on nonaccrual loans during the nine months ended September 30, 2024 or the year ended December 31, 2023.

The following table represents the accrued interest receivables written off by reversing interest income during the nine months ended September 30, 2024 and the year ended December 31, 2023 (in thousands):

	September 30, 2024		December 31, 2023
Real estate, residential	$	3	$	1
Total loans	$	3	$	1

The Company designates individually evaluated loans on nonaccrual status as collateral-dependent loans, as well as other loans that management of the Company designates as having higher risk. Collateral-dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the allowance for credit losses. Under CECL, for collateral-dependent loans, the Company has adopted the practical expedient to measure the allowance for credit losses based on the fair value of collateral. The allowance for credit losses is calculated on an individual loan basis based on the shortfall between the fair value of the loan’s collateral, which is adjusted for liquidation costs/discounts, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required.

The following table presents an analysis of collateral-dependent loans of the Company as of September 30, 2024 and December 31, 2023 (in thousands):

	September 30, 2024		December 31, 2023
	Residential		Residential
	Properties		Properties
Real estate, residential	$	434	$	222
Total loans	$	434	$	222

The following tables further disaggregates nonaccrual disclosures by amortized cost by class and vintage for term loans and by revolving and revolving converted to amortizing as of September 30, 2024 and December 31, 2023 (in thousands). The Company defines vintage as the later of origination or restructure date:

	Term Loans														Revolving
	Amortized Cost Basis by Origination Year														Loans
													Revolving		Converted to
	2024		2023		2022		2021		2020		Prior		Loans		Term Loans		Total
September 30, 2024:
Real estate, residential	$	—	$	—	$	—	$	298	$	—	$	129	$	—	$	—	$	427
Total Loans on Nonaccrual	$	—	$	—	$	—	$	298	$	—	$	129	$	—	$	—	$	427

	Term Loans														Revolving
	Amortized Cost Basis by Origination Year														Loans
													Revolving		Converted to
	2023		2022		2021		2020		2019		Prior		Loans		Term Loans		Total
December 31, 2023:
Real estate, residential	$	—	$	—	$	—	$	—	$	—	$	213	$	—	$	—	$	213
Real estate, construction		—		—		—		—		—		—		—		—		—
Real estate, nonresidential		—		—		—		—		—		—		—		—		—
Commercial and industrial		—		—		—		—		—		—		—		—		—
Consumer/Other		—		—		—		—		—		—		—		—		—
Total Loans on Nonaccrual	$	—	$	—	$	—	$	—	$	—	$	213	$	—	$	—	$	213

The Company had one loan modification made to borrowers experiencing financial difficulty as of September 30, 2024 and no loan modifications as of December 31, 2023.

The following table shows the amortized cost basis as of September 30, 2024 of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of loans and type of concession granted and describes the financial effect of the modifications made to borrowers experiencing financial difficulty (in thousands):

	Term Extension
	September 30, 2024
	Amortized Cost		% of Total Loan
	Basis		Type		Financial Effect
Real estate, residential	$	18	0.02	%	Added a weighted average 3 years to the life of loan, which reduced monthly payment amounts for the borrowers. Provided 3 month payment deferrals to borrowers through our standard deferral program. The 3 monthly payments were added to the end of the original loan terms of these.
Total	$	18

The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the performance of loans that have been modified in the last 12 months (in thousands):

	Payment Status (Amortized Cost Basis)
	September 30, 2024
			30-89 Days Past		90+ Days Past
	Current		Due		Due
Real estate, residential	$	18	$	—	$	—
Total	$	18	$	—	$	—