XML 22 R12.htm IDEA: XBRL DOCUMENT v3.23.1
LOANS AND ALLOWANCE FOR LOAN LOSSES
 3 Months Ended
Mar. 31, 2023
LOANS AND ALLOWANCE FOR LOAN LOSSES [Abstract]  
LOANS AND ALLOWANCE FOR LOAN LOSSES
NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans are comprised of the following:
 
March 31,
2023
    
December 31,
2022
  
             
Residential real estate
  
$
291,048
    
$
297,036
  
Commercial real estate:
                
Owner-occupied
    
70,636
      
72,719
  
Nonowner-occupied
    
185,272
      
182,831
  
Construction
    
37,437
      
33,205
  
Commercial and industrial
    
157,748
      
151,232
  
Consumer:
                
Automobile
    
58,718
      
54,837
  
Home equity
    
28,522
      
27,791
  
Other
    
76,932
      
65,398
  
     
906,313
      
885,049
  
Less:  Allowance for credit losses
    
(7,607
)
    
(5,269
)
                 
Loans, net
  
$
898,706
    
$
879,780
  

At March 31, 2023 and December 31, 2022, net deferred loan origination costs were $812 and $663, respectively. At March 31, 2023 and December 31, 2022, net unamortized loan purchase premiums were $985 and $1,142, respectively.

The following table presents the recorded investment of nonaccrual loans and loans past due 90 days or more and still accruing by class of loans as of March 31, 2023 and December 31, 2022:

March 31,2023
  
Loans Past Due
90 Days And
Still Accruing
    
Nonaccrual
Loans With No
ACL
    
Nonaccrual
Loans With an
ACL
    
Total
Nonaccrual
Loans
  
                         
Residential real estate
  
$
53
    
$
—
    
$
1,415
    
$
1,415
  
Commercial real estate:
                                
Owner-occupied
    
—
      
810
      
91
      
901
  
Nonowner-occupied
    
—
      
—
      
69
      
69
  
Construction
    
—
      
—
      
74
      
74
  
Commercial and industrial
    
—
      
—
      
149
      
149
  
Consumer:
                                
Automobile
    
14
      
—
      
103
      
103
  
Home equity
    
—
      
—
      
150
      
150
  
Other
    
488
      
—
      
94
      
94
  
Total
  
$
555
    
$
810
    
$
2,145
    
$
2,955
  

 
December 31, 2022
 
  
Loans Past Due
90 Days And
Still Accruing
    
Nonaccrual
  
             
Residential real estate
  
$
100
    
$
1,708
  
Commercial real estate:
                
Owner-occupied
    
—
      
938
  
Nonowner-occupied
    
—
      
70
  
Construction
    
—
      
75
  
Commercial and industrial
    
—
      
150
  
Consumer:
                
Automobile
    
27
      
82
  
Home equity
    
—
      
151
  
Other
    
411
      
59
  
Total
  
$
538
    
$
3,233
  

The Company recognized $20 of interest income in nonaccrual loans during the three months ended March 31, 2023.

The following table presents the aging of the recorded investment of past due loans by class of loans as of March 31, 2023 and December 31, 2022:

March 31, 2023
  
30-59
Days
Past Due
    
60-89
Days
Past Due
    
90 Days
Or More
Past Due
    
Total
Past Due
    
Loans Not
Past Due
    
Total
  
                                     
Residential real estate
  
$
1,265
    
$
486
    
$
499
    
$
2,250
    
$
288,798
    
$
291,048
  
Commercial real estate:
                                                
Owner-occupied
    
90
      
—
      
888
      
978
      
69,658
      
70,636
  
Nonowner-occupied
    
270
      
14
      
69
      
353
      
184,919
      
185,272
  
Construction
    
5
      
8
      
62
      
75
      
37,362
      
37,437
  
Commercial and industrial
    
759
      
—
      
149
      
908
      
156,840
      
157,748
  
Consumer:
                                                
Automobile
    
640
      
137
      
89
      
866
      
57,852
      
58,718
  
Home equity
    
76
      
—
      
150
      
226
      
28,296
      
28,522
  
Other
    
313
      
107
      
556
      
976
      
75,956
      
76,932
  
Total
  
$
3,418
    
$
752
    
$
2,462
    
$
6,632
    
$
899,681
    
$
906,313
  

December 31, 2022
  
30-59
Days
Past Due
    
60-89
Days
Past Due
    
90 Days
Or More
Past Due
    
Total
Past Due
    
Loans Not
Past Due
    
Total
  
                                     
Residential real estate
  
$
1,799
    
$
701
    
$
497
    
$
2,997
    
$
294,039
    
$
297,036
  
Commercial real estate:
                                                
Owner-occupied
    
97
      
—
      
938
      
1,035
      
71,684
      
72,719
  
Nonowner-occupied
    
626
      
5
      
—
      
631
      
182,200
      
182,831
  
Construction
    
40
      
45
      
17
      
102
      
33,103
      
33,205
  
Commercial and industrial
    
21
      
—
      
150
      
171
      
151,061
      
151,232
  
Consumer:
                                                
Automobile
    
804
      
240
      
97
      
1,141
      
53,696
      
54,837
  
Home equity
    
204
      
—
      
151
      
355
      
27,436
      
27,791
  
Other
    
875
      
113
      
452
      
1,440
      
63,958
      
65,398
  
Total
  
$
4,466
    
$
1,104
    
$
2,302
    
$
7,872
    
$
877,177
    
$
885,049
  

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. These risk categories are represented by a loan grading scale from 1 through 11. The Company analyzes loans individually with a higher credit risk rating and groups these loans into categories called “criticized” and ”classified” assets. The Company considers its criticized assets to be loans that are graded 8 and its classified assets to be loans that are graded 9 through 11. The Company’s risk categories are reviewed at least annually on loans that have aggregate borrowing amounts that meet or exceed $1,000.

The Company uses the following definitions for its criticized loan risk ratings:

Special Mention.  Loans classified as “special mention” indicate considerable risk due to deterioration of repayment (in the earliest stages) due to potential weak primary repayment source, or payment delinquency.  These loans will be under constant supervision, are not classified and do not expose the institution to sufficient risks to warrant classification.  These deficiencies should be correctable within the normal course of business, although significant changes in company structure or policy may be necessary to correct the deficiencies.  These loans are considered bankable assets with no apparent loss of principal or interest envisioned.  The perceived risk in continued lending is considered to have increased beyond the level where such loans would normally be granted. 

The Company uses the following definitions for its classified loan risk ratings:

Substandard.  Loans classified as “substandard” represent very high risk, serious delinquency, nonaccrual, or unacceptable credit. Repayment through the primary source of repayment is in jeopardy due to the existence of one or more well-defined weaknesses, and the collateral pledged may inadequately protect collection of the loans. Loss of principal is not likely if weaknesses are corrected, although financial statements normally reveal significant weakness. Loans are still considered collectible, although loss of principal is more likely than with special mention loans. Collateral liquidation is considered likely to satisfy debt.

Doubtful.  Loans classified as “doubtful” display a high probability of loss, although the amount of actual loss at the time of classification is undetermined. This classification should be temporary until such time that actual loss can be identified, or improvements are made to reduce the seriousness of the classification. These loans exhibit all substandard characteristics with the addition that weaknesses make collection or liquidation in full highly questionable and improbable. This classification consists of loans where the possibility of loss is high after collateral liquidation based upon existing facts, market conditions, and value. Loss is deferred until certain important and reasonable specific pending factors that may strengthen the credit can be more accurately determined. These factors may include proposed acquisitions, liquidation procedures, capital injection, receipt of additional collateral, mergers, or refinancing plans. A doubtful classification for an entire credit should be avoided when collection of a specific portion appears highly probable with the adequately secured portion graded substandard.

Loss.  Loans classified as “loss” are considered uncollectible and are of such little value that their continuance as bankable assets is not warranted.  This classification does not mean that the credit has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this asset yielding such a minimum value even though partial recovery may be affected in the future.  Amounts classified as loss should be promptly charged off.

As of March 31, 2023 and December 31, 2022, and based on the most recent analysis performed, the risk category of commercial loans by class of loans was as follows:

                                     
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
March 31, 2023
  
2023
    
2022
    
2021
    
2020
    
2019
    
Prior
    
Cost Basis
    
Total
  
                                                 
Commercial real estate - Owner-occupied
                                                
     Risk Rating
                                                
        Pass
  
$
—
    
$
6,914
    
$
26,333
    
$
6,192
    
$
6,637
    
$
19,262
    
$
1,194
    
$
66,532
  
     Special Mention
    
—
      
—
      
281
      
—
      
—
      
821
      
198
      
1,300
  
        Substandard
    
—
      
—
      
—
      
—
      
496
      
2,008
      
300
      
2,804
  
        Doubtful
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
    Total
  
$
—
    
$
6,914
    
$
26,614
    
$
6,192
    
$
7,133
    
$
22,091
    
$
1,692
    
$
70,636
  
                                                                 
Current Period gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  

                                     
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
March 31, 2023
  
2023
    
2022
    
2021
    
2020
    
2019
    
Prior
    
Cost Basis
    
Total
  
                                                 
Commercial real estate - Nonowner-occupied
                                                
     Risk Rating
                                                
        Pass
  
$
4,078
    
$
30,405
    
$
36,372
    
$
26,641
    
$
15,831
    
$
65,173
    
$
1,465
    
$
179,965
  
     Special Mention
    
—
      
116
      
—
      
3,301
      
—
      
1,890
      
—
      
5,307
  
        Substandard
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
        Doubtful
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
    Total
  
$
4,078
    
$
30,521
    
$
36,372
    
$
29,942
    
$
15,831
    
$
67,063
    
$
1,465
    
$
185,272
  
                                                                 
Current Period gross charge-offs
  
$
—
    
$
—
    
$
132
    
$
—
    
$
—
    
$
—
    
$
—
    
$
132
  


                                     
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
March 31, 2023
  
2023
    
2022
    
2021
    
2020
    
2019
    
Prior
    
Cost Basis
    
Total
  
                                                 
Commercial real estate - Construction
                                                
     Risk Rating
                                                
        Pass
  
$
1,818
    
$
25,344
    
$
5,541
    
$
427
    
$
477
    
$
3,701
    
$
67
    
$
37,375
  
     Special Mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
        Substandard
    
—
      
—
      
—
      
—
      
—
      
62
      
—
      
62
  
        Doubtful
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
    Total
  
$
1,818
    
$
25,344
    
$
5,541
    
$
427
    
$
477
    
$
3,763
    
$
67
    
$
37,437
  
                                                                 
Current Period gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  


                                     
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
March 31, 2023
  
2023
    
2022
    
2021
    
2020
    
2019
    
Prior
    
Cost Basis
    
Total
  
                                                 
Commercial and Industrial
                                                
     Risk Rating
                                                
        Pass
  
$
2,005
    
$
32,416
    
$
27,566
    
$
34,496
    
$
639
    
$
29,782
    
$
27,386
    
$
154,290
  
     Special Mention
    
—
      
125
      
693
      
341
      
—
      
54
      
391
      
1,604
  
        Substandard
    
—
      
—
      
—
      
1,531
      
—
      
323
      
—
      
1,854
  
        Doubtful
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
    Total
  
$
2,005
    
$
32,541
    
$
28,259
    
$
36,368
    
$
639
    
$
30,159
    
$
27,777
    
$
157,748
  
                                                                 
Current Period gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
29
    
$
29
  

December 31, 2022
  
Pass
    
Criticized
    
Classified
    
Total
  
Commercial real estate:
                        
Owner-occupied
  
$
68,236
    
$
3,545
    
$
938
    
$
72,719
  
Nonowner-occupied
    
177,479
      
5,352
      
—
      
182,831
  
Construction
    
33,143
      
—
      
62
      
33,205
  
Commercial and industrial
    
147,627
      
1,879
      
1,726
      
151,232
  
Total
  
$
426,485
    
$
10,776
    
$
2,726
    
$
439,987
  

The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses.  For residential and consumer loan classes, the Company evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the recorded investment of residential and consumer loans by class of loans based on repayment activity as of March 31, 2023 and  December 31,2022:

                                     
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
March 31, 2023
  
2023
    
2022
    
2021
    
2020
    
2019
    
Prior
    
Cost Basis
    
Total
  
                                                 
Residential Real Estate:
                                                
     Payment Performance
                                                
        Performing
  
$
10,669
    
$
39,985
    
$
54,928
    
$
48,103
    
$
23,860
    
$
103,894
    
$
8,141
    
$
289,580
  
        Nonperforming
    
—
      
72
      
115
      
8
      
128
      
1,145
      
—
      
1,468
  
    Total
  
$
10,669
    
$
40,057
    
$
55,043
    
$
48,111
    
$
23,988
    
$
105,039
    
$
8,141
    
$
291,048
  
                                                                 
Current Period gross charge-offs
  
$
—
    
$
—
    
$
1
    
$
—
    
$
—
    
$
46
    
$
—
    
$
47
  


                                     
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
March 31, 2023
  
2023
    
2022
    
2021
    
2020
    
2019
    
Prior
    
Cost Basis
    
Total
  
                                                 
Consumer - Automobile:
                                                
     Payment Performance
                                                
        Performing
  
$
8,824
    
$
29,154
    
$
10,808
    
$
5,315
    
$
2,353
    
$
2,147
    
$
—
    
$
58,601
  
        Nonperforming
    
—
      
30
      
54
      
2
      
21
      
10
      
—
      
117
  
    Total
  
$
8,824
    
$
29,184
    
$
10,862
    
$
5,317
    
$
2,374
    
$
2,157
    
$
—
    
$
58,718
  
                                                                 
Current Period gross charge-offs
  
$
—
    
$
10
    
$
58
    
$
—
    
$
11
    
$
3
    
$
—
    
$
82
  


 
                                      
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
March 31, 2023
  
2023
    
2022
    
2021
    
2020
    
2019
    
Prior
    
Cost Basis
    
Total
  
                                                 
Consumer - Home Equity:
                                                
     Payment Performance
                                                
        Performing
  
$
—
    
$
—
    
$
—
    
$
40
    
$
—
    
$
—
    
$
28,332
    
$
28,372
  
        Nonperforming
    
—
      
—
      
—
      
—
      
—
      
—
      
150
      
150
  
    Total
  
$
—
    
$
—
    
$
—
    
$
40
    
$
—
    
$
—
    
$
28,482
    
$
28,522
  
                                                                 
Current Period gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  


                                     
Revolving
        
                                       
Loans
        
   
Term Loans Amortized Cost Basis by Origination Year
    
Amortized
        
March 31, 2023
  
2023
    
2022
    
2021
    
2020
    
2019
    
Prior
    
Cost Basis
    
Total
  
                                                 
Consumer - Other:
                                                
     Payment Performance
                                                
        Performing
  
$
5,910
    
$
32,497
    
$
14,676
    
$
6,660
    
$
2,172
    
$
1,653
    
$
12,782
    
$
76,350
  
        Nonperforming
    
—
      
363
      
98
      
78
      
10
      
33
      
—
      
582
  
    Total
  
$
5,910
    
$
32,860
    
$
14,774
    
$
6,738
    
$
2,182
    
$
1,686
    
$
12,782
    
$
76,932
  
                                                                 
Current Period gross charge-offs
  
$
61
    
$
31
    
$
26
    
$
8
    
$
—
    
$
1
    
$
39
    
$
166
  

 
Consumer
          
December 31, 2022
Automobile
  
Home Equity
  
Other
  
Residential
Real Estate
  
Total
  
Performing
  
$
54,728
    
$
27,640
    
$
64,928
    
$
295,228
    
$
442,524
  
Nonperforming
    
109
      
151
      
470
      
1,808
      
2,538
  
Total
  
$
54,837
    
$
27,791
    
$
65,398
    
$
297,036
    
$
445,062
  

The Company originates residential, consumer, and commercial loans to customers located primarily in the southeastern areas of Ohio as well as the western counties of West Virginia.  Approximately 4.61% of total loans were unsecured at March 31, 2023, up from 4.52% at December 31, 2022.

Modifications to Borrowers Experiencing Financial Difficulty:
Occasionally, the Company modifies loans to borrowers experiencing financial difficulty.  These modifications may include one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a reduction in the contractual principal and interest payments of the loan; or short-term interest-only payment terms. All modifications to borrowers experiencing financial difficulty are considered to be impaired.

During the three months ended March 31, 2023, the Company experienced no new modifications to borrowers experiencing financial difficulty.

The following table presents the activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2023 and 2022:

March 31, 2023
  
Residential
Real Estate
    
Commercial
Real Estate
    
Commercial
and Industrial
    
Consumer
    
Total
  
Allowance for credit losses:
                              
Beginning balance
  
$
681
    
$
2,038
    
$
1,293
    
$
1,257
    
$
5,269
  
Impact of adopting ASC 326
    
1,345
      
162
      
(116
)
    
771
      
2,162
  
Provision for credit losses
    
39
      
225
      
21
      
180
      
465
  
Loans charged-off
    
(47
)
    
(132
)
    
(29
)
    
(248
)
    
(456
)
Recoveries
    
13
      
13
      
8
      
133
      
167
  
Total ending allowance balance
  
$
2,031
    
$
2,306
    
$
1,177
    
$
2,093
    
$
7,607
  

March 31, 2022
  
Residential
Real Estate
    
Commercial
Real Estate
    
Commercial
and Industrial
    
Consumer
    
Total
  
Allowance for credit losses:
                              
Beginning balance
  
$
980
    
$
2,548
    
$
1,571
    
$
1,384
    
$
6,483
  
Provision for credit losses
    
(279
)
    
(575
)
    
(190
)
    
(82
)
    
(1,126
)
Loans charged-off
    
(3
)
    
(1
)
    
—
      
(330
)
    
(334
)
Recoveries
    
16
      
19
      
8
      
202
      
245
  
Total ending allowance balance
  
$
714
    
$
1,991
    
$
1,389
    
$
1,174
    
$
5,268
  

The following table presents the balance in the allowance for credit losses and the recorded investment of loans by portfolio segment and based on impairment method as of December 31, 2022:

December 31, 2022
  
Residential
Real Estate
    
Commercial
Real Estate
    
Commercial
and Industrial
    
Consumer
    
Total
  
Allowance for loan losses:
                              
Ending allowance balance attributable to loans:
                              
Individually evaluated for impairment
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  
Collectively evaluated for impairment
    
681
      
2,038
      
1,293
      
1,257
      
5,269
  
Total ending allowance balance
  
$
681
    
$
2,038
    
$
1,293
    
$
1,257
    
$
5,269
  
                                         
Loans:
                                        
Loans individually evaluated for impairment
  
$
—
    
$
1,986
    
$
—
    
$
28
    
$
2,014
  
Loans collectively evaluated for impairment
    
297,036
      
286,769
      
151,232
      
147,998
      
883,035
  
Total ending loans balance
  
$
297,036
    
$
288,755
    
$
151,232
    
$
148,026
    
$
885,049
  

The following table presents the amortized cost basis of collateral dependent loans by class of loans as of March 31, 2023:

 
Collateral Type
  
 
March 31, 2023
  
Real Esttate
    
Business Assets
    
Total
  
Commercial real estate:
                  
Owner-occupied
  
$
450
    
$
360
    
$
810
  
Consumer:
                        
Home equity
    
27
      
—
      
27
  
Total collateral dependent loans
  
$
477
    
$
360
    
$
837
  

The following tables present information related to loans individually evaluated for impairment by class of loans as of  December 31, 2022:

December 31, 2022
  
Unpaid
Principal
Balance
    
Recorded
Investment
    
Allowance for
Loan Losses
Allocated
  
With an allowance recorded:
  
$
—
    
$
—
    
$
—
  
With no related allowance recorded:
                        
Commercial real estate:
                        
Owner-occupied
    
1,692
      
1,607
      
—
  
Nonowner-occupied
    
379
      
379
      
—
  
Consumer:
                        
Home equity
    
28
      
28
      
—
  
Total
  
$
2,099
    
$
2,014
    
$
—
  

The following tables present information related to loans individually evaluated for impairment by class of loans for the three months ended March 31, 2022:

 
Three months ended
March 31, 2022
  
   
Average
Impaired Loans
    
Interest Income
Recognized
    
Cash Basis
Interest Recognized
  
With an allowance recorded:
                  
   Commercial and industrial
  
$
1,862
    
$
40
    
$
40
  
With no related allowance recorded:
                        
Commercial real estate:
                        
Owner-occupied
    
2,713
      
39
      
39
  
Nonowner-occupied
    
384
      
7
      
7
  
Commercial and industrial
    
2,323
      
23
      
23
  
Consumer:
                        
Home equity
    
30
      
1
      
1
  
Total
  
$
7,312
    
$
110
    
$
110
  

The recorded investment of a loan excludes accrued interest and net deferred origination fees and costs due to immateriality.

Nonaccrual loans and loans past due 90 days or more and still accruing include both smaller balance homogenous loans that are collectively evaluated for impairment and individually classified as impaired loans.

The Company transfers loans to other real estate owned, at fair value less cost to sell, in the period the Company obtains physical possession of the property (through legal title or through a deed in lieu). The Company had no other real estate owned for residential real estate properties at March 31, 2023 and December 31, 2022. In addition, nonaccrual residential mortgage loans that are in the process of foreclosure had a recorded investment of $455 and $370 as of March 31, 2023 and December 31, 2022, respectively.