LOANS (Tables)

3 Months Ended

Mar. 31, 2023

LOANS

Summary of loans outstanding

Summary of Loans by Type

(In Thousands)

	March 31,		December 31,
	2023		2022(1)
Commercial real estate - nonowner occupied	$	682,698	$	675,597
Commercial real estate - owner occupied		221,766		205,910
All other commercial loans		384,802		410,077
Residential mortgage loans		401,720		393,582
Consumer loans		54,153		54,874
Total		1,745,139		1,740,040
Less: allowance for credit losses on loans		(18,346)		(16,615)
Loans, net	$	1,726,793	$	1,723,425

(1) Total loans at December 31, 2022 include purchased credit impaired loans of $1,027,000.

Schedule of adjustments to the initial market rate and credit fair value adjustments recognized

(In Thousands)	Three Months Ended
	March 31,		March 31,
	2023		2022
Market Rate Adjustment
Adjustments to gross amortized cost of loans at beginning of period	$	(916)	$	(637)
Amortization recognized in interest income		(52)		(248)
Adjustments to gross amortized cost of loans at end of period	$	(968)	$	(885)
Credit Adjustment on Non-impaired Loans
Adjustments to gross amortized cost of loans at beginning of period	$	(1,840)	$	(3,335)
Accretion recognized in interest income		198		553
Adjustments to gross amortized cost of loans at end of period	$	(1,642)	$	(2,782)

Summary of the past due loans

(In Thousands)	As of March 31, 2023
	Past Due		Past Due
	30-89		90+		Nonaccrual		Current		Total
	Days		Days		Loans		Loans		Loans
Commercial real estate - nonowner occupied	$	233	$	365	$	6,017	$	676,083	$	682,698
Commercial real estate - owner occupied		484		141		1,612		219,529		221,766
All other commercial loans		827		147		1,680		382,148		384,802
Residential mortgage loans		3,666		398		3,251		394,405		401,720
Consumer loans		283		165		316		53,389		54,153
Total	$	5,493	$	1,216	$	12,876	$	1,725,554	$	1,745,139

The following table presents an analysis of past due loans as of December 31, 2022:

(In Thousands)	As of December 31, 2022
	Past Due		Past Due
	30-89		90+		Nonaccrual		Current		Total
	Days		Days		Loans		Loans		Loans
Commercial real estate - nonowner occupied	$	644	$	947	$	6,350	$	667,656	$	675,597
Commercial real estate - owner occupied		723		141		19		204,099		204,982
All other commercial loans		537		151		11,528		397,762		409,978
Residential mortgage loans		4,540		866		3,974		384,202		393,582
Consumer loans		635		132		187		53,920		54,874
Purchased credit impaired		0		0		1,027		0		1,027
Total	$	7,079	$	2,237	$	23,085	$	1,707,639	$	1,740,040

Schedule of aggregate credit quality classification of outstanding loans by risk

(In Thousands)	Term Loans by Year of Origination
	2023		2022		2021		2020		2019		Prior		Revolving		Total
Commercial real estate - nonowner occupied
Pass	$	22,553	$	181,862	$	94,978	$	51,333	$	83,703	$	225,718	$	0	$	660,147
Special Mention		0		0		1,531		0		123		10,282		0		11,936
Substandard		0		0		0		20		625		9,970		0		10,615
Doubtful		0		0		0		0		0		0		0		0
Total commercial real estate - nonowner occupied	$	22,553	$	181,862	$	96,509	$	51,353	$	84,451	$	245,970	$	0	$	682,698
Current period gross charge-offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial real estate - owner occupied
Pass	$	17,090	$	33,112	$	52,442	$	13,905	$	18,071	$	80,580	$	0	$	215,200
Special Mention		0		0		2,717		0		0		1,659		0		4,376
Substandard		0		0		0		0		0		2,190		0		2,190
Doubtful		0		0		0		0		0		0		0		0
Total commercial real estate - owner occupied	$	17,090	$	33,112	$	55,159	$	13,905	$	18,071	$	84,429	$	0	$	221,766
Current period gross charge-offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
All other commercial loans
Pass	$	11,961	$	88,513	$	64,892	$	40,119	$	20,443	$	33,290	$	108,892	$	368,110
Special Mention		0		45		12		146		0		513		1,720		2,436
Substandard		805		1,962		60		189		1,658		1,205		8,377		14,256
Doubtful		0		0		0		0		0		0		0		0
Total all other commercial loans	$	12,766	$	90,520	$	64,964	$	40,454	$	22,101	$	35,008	$	118,989	$	384,802
Current period gross charge-offs	$	0	$	0	$	0	$	0	$	0	$	0	$	5	$	5
Residential mortgage loans
Pass	$	11,807	$	98,765	$	59,192	$	42,155	$	34,008	$	150,715	$	0	$	396,642
Special Mention		0		0		0		0		0		0		0		0
Substandard		0		0		34		97		372		4,575		0		5,078
Doubtful		0		0		0		0		0		0		0		0
Total residential mortgage loans	$	11,807	$	98,765	$	59,226	$	42,252	$	34,380	$	155,290	$	0	$	401,720
Current period gross charge-offs	$	0	$	0	$	0	$	0	$	0	$	19	$	0	$	19
Consumer loans
Pass	$	2,639	$	6,387	$	3,107	$	1,725	$	432	$	1,243	$	37,876	$	53,409
Special Mention		0		0		0		0		0		0		0		0
Substandard		0		0		2		27		14		103		598		744
Doubtful		0		0		0		0		0		0		0		0
Total consumer loans	$	2,639	$	6,387	$	3,109	$	1,752	$	446	$	1,346	$	38,474	$	54,153
Current period gross charge-offs	$	0	$	21	$	0	$	0	$	0	$	3	$	19	$	43

The following table presents the recorded investment in loans by credit quality indicators as of December 31, 2022:

			Special
(In Thousands)	Pass		Mention		Substandard		Doubtful		Total
Commercial real estate - nonowner occupied	$	654,430	$	9,486	$	11,681	$	0	$	675,597
Commercial real estate - owner occupied		202,702		1,909		371		0		204,982
All other commercial loans		383,846		2,516		23,616		0		409,978
Residential mortgage loans		387,944		0		5,638		0		393,582
Consumer loans		54,353		0		521		0		54,874
Purchased credit impaired		0		0		1,027		0		1,027
Total	$	1,683,275	$	13,911	$	42,854	$	0	$	1,740,040

Schedule of nonaccrual loans by major categories for the periods

	March 31, 2023						December 31, 2022
	Nonaccrual Loans with		Nonaccrual Loans		Total Nonaccrual
(In Thousands)	No Allowance		with an Allowance		Loans		Nonaccrual Loans
Commercial real estate - nonowner occupied	$	1,236	$	4,781	$	6,017	$	6,350
Commercial real estate - owner occupied		800		812		1,612		19
All other commercial loans		1,471		209		1,680		11,528
Residential mortgage loans		3,251		0		3,251		3,974
Consumer loans		316		0		316		187
Purchased credit impaired		0		0		0		1,027
Total	$	7,074	$	5,802	$	12,876	$	23,085

Schedule of accrued Interest receivables written off

	For the Three Months
(In Thousands)	Ended March 31, 2023
Commercial real estate - nonowner occupied	$	26
Residential mortgage loans		3
Consumer loans		2
Total	$	31

Schedule of collateral dependent loans

	March 31, 2023
	Amortized
(In Thousands)	Cost		Allowance
Commercial real estate - nonowner occupied	$	6,017	$	609
Commercial real estate - owner occupied		1,612		183
All other commercial loans		1,680		103
Total	$	9,309	$	895

Schedule of transactions within the allowance for loan losses

	Commercial		Commercial		All
	real estate -		real estate -		other		Residential
	nonowner		owner		commercial		mortgage		Consumer
(In Thousands)	occupied		occupied		loans		loans		loans		Unallocated		Total
Balance, December 31, 2022	$	6,305	$	1,942	$	4,142	$	2,751	$	475	$	1,000	$	16,615
Adoption of ASU 2016-13 (CECL)		3,763		7		(88)		(344)		(234)		(1,000)		2,104
Charge-offs		0		0		(5)		(19)		(43)		0		(67)
Recoveries		0		0		0		1		5		0		6
(Credit) provision for credit losses on loans		(414)		(7)		(469)		475		103		0		(312)
Balance, March 31, 2023	$	9,654	$	1,942	$	3,580	$	2,864	$	306	$	0	$	18,346

Three Months Ended March 31, 2022	December 31, 2021								March 31, 2022
(In Thousands)	Balance		Charge-offs		Recoveries		Provision (Credit)		Balance
Allowance for Loan Losses:
Commercial:
Commercial loans secured by real estate	$	4,405	$	0	$	0	$	612	$	5,017
Commercial and industrial		2,723		(150)		0		268		2,841
Commercial construction and land		637		0		0		(246)		391
Loans secured by farmland		115		0		0		14		129
Multi-family (5 or more) residential		215		0		0		152		367
Agricultural loans		25		0		0		2		27
Other commercial loans		173		0		0		(23)		150
Total commercial		8,293		(150)		0		779		8,922
Residential mortgage:
Residential mortgage loans - first liens		3,650		0		1		159		3,810
Residential mortgage loans - junior liens		184		0		0		(3)		181
Home equity lines of credit		302		0		15		(11)		306
1-4 Family residential construction		202		0		0		(54)		148
Total residential mortgage		4,338		0		16		91		4,445
Consumer		235		(30)		7		25		237
Unallocated		671		0		0		(4)		667
Total Allowance for Loan Losses	$	13,537	$	(180)	$	23	$	891	$	14,271

Summary of loan balances and the related allowance for loan losses

December 31, 2022	Loans:						Allowance for Loan Losses:
(In Thousands)
	Individually		Collectively				Individually		Collectively
	Evaluated		Evaluated		Totals		Evaluated		Evaluated		Totals
Commercial:
Commercial loans secured by real estate	$	7,154	$	675,095	$	682,249	$	427	$	6,647	$	7,074
Commercial and industrial		11,223		167,048		178,271		26		2,883		2,909
Paycheck Protection Program - 1st Draw		0		5		5		0		0		0
Paycheck Protection Program - 2nd Draw		0		163		163		0		0		0
Political subdivisions		0		90,719		90,719		0		0		0
Commercial construction and land		244		73,719		73,963		0		647		647
Loans secured by farmland		76		12,874		12,950		0		112		112
Multi-family (5 or more) residential		0		55,886		55,886		0		411		411
Agricultural loans		57		2,378		2,435		0		21		21
Other commercial loans		0		14,857		14,857		0		124		124
Total commercial		18,754		1,092,744		1,111,498		453		10,845		11,298
Residential mortgage:
Residential mortgage loans - first liens		506		509,276		509,782		0		3,413		3,413
Residential mortgage loans - junior liens		30		24,919		24,949		0		167		167
Home equity lines of credit		68		43,730		43,798		0		282		282
1-4 Family residential construction		0		30,577		30,577		0		211		211
Total residential mortgage		604		608,502		609,106		0		4,073		4,073
Consumer		0		19,436		19,436		0		244		244
Unallocated												1,000
Total	$	19,358	$	1,720,682	$	1,740,040	$	453	$	15,162	$	16,615

Summary of information related to impaired loans

(In Thousands)	December 31, 2022
	Unpaid
	Principal		Recorded		Related
	Balance		Investment		Allowance
With no related allowance recorded:
Commercial loans secured by real estate	$	8,563	$	3,754	$	0
Commercial and industrial		12,926		11,163		0
Residential mortgage loans - first liens		506		506		0
Residential mortgage loans - junior liens		68		30		0
Home equity lines of credit		68		68		0
Loans secured by farmland		76		76		0
Agricultural loans		57		57		0
Construction and other land loans		244		244		0
Total with no related allowance recorded		22,508		15,898		0
With a related allowance recorded:
Commercial loans secured by real estate		3,400		3,400		427
Commercial and industrial		60		60		26
Total with a related allowance recorded		3,460		3,460		453
Total	$	25,968	$	19,358	$	453

Schedule of average balance of impaired loans and interest income recognized on impaired loans

(In Thousands)	Average Investment in		Interest Income Recognized on
	Impaired Loans		Impaired Loans on a Cash Basis
	Three Months Ended		Three Months Ended
	March 31,		March 31,
	2022		2022
Commercial:
Commercial loans secured by real estate	$	10,735	$	129
Commercial and industrial		1,626		4
Commercial construction and land		48		1
Loans secured by farmland		82		0
Multi-family (5 or more) residential		789		0
Agricultural loans		63		2
Total commercial		13,343		136
Residential mortgage:
Residential mortgage loans - first lien		565		7
Residential mortgage loans - junior lien		37		1
Home equity lines of credit		0		1
Total residential mortgage		602		9
Total	$	13,945	$	145

Schedule of carrying amount of foreclosed residential real estate properties

(In Thousands)	March 31,		December 31,
	2023		2022
Foreclosed residential real estate	$	184	$	0

Schedule of mortgage loans secured by residential real properties

(In Thousands)	March 31,		December 31,
	2023		2022
Residential real estate in process of foreclosure	$	1,154	$	1,229

Schedule of Off-Balance-Sheet

	Total Allowance for
	Credit Losses -
(In Thousands)	Off-Balance Sheet Exposures
Balance, December 31, 2022	$	425
Adjustment to allowance for off-balance sheet exposures for adoption of ASU 2016-13		793
Credit for unfunded commitments		(40)
Balance, March 31, 2023	$	1,178