Loans | NOTE 3 – LOANS The composition of net loans receivable as of June 30, 2024 and December 31, 2023: (Dollars in thousands) June 30, December 31, 2023 Commercial and industrial $ 143,950 $ 152,125 Commercial real estate 194,637 190,702 Commercial lessors of buildings 96,235 82,687 Construction 55,275 49,214 Consumer mortgage 171,198 166,891 Home equity line of credit 44,331 43,269 Consumer installment 10,646 10,636 Consumer indirect 5,734 5,957 Total loans 722,006 701,481 Allowance for credit losses ( 10,587 ) ( 6,607 ) Deferred loan fees, net ( 90 ) ( 77 ) Net Loans $ 711,329 $ 694,797 Loan Origination/Risk Management The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and non-performing and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions. Commercial loans are underwritten after evaluating and understanding the borrower’s ability to operate profitably and prudently expand its business. Underwriting standards are designed to promote relationship banking rather than transactional banking. The Company’s management examines current and occasionally projected cash flows to determine the ability of the borrower to repay their obligations as agreed. Commercial loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers; however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable, inventory, and equipment, and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers. NOTE 3 – LOANS (CONTINUED) Commercial real estate loans are subject to underwriting standards and processes similar to commercial loans, in addition to those of real estate loans. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts, and the repayment of these loans is largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be adversely affected by conditions in the real estate markets or in the general economy. The properties securing the Company’s commercial real estate portfolio are diverse in terms of type. This diversity helps reduce the Company’s exposure to adverse economic events that affect any single industry. Management monitors and evaluates commercial real estate loans based on collateral, geography, and risk grade criteria. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied. The top ten collateral exposures in commercial real estate and commercial lessors of buildings at June 30, 2024 are as follows: Industrial, manufacturing and production $ 57 million; warehouses $ 38 million; healthcare $ 27 million; residential investment property $ 24 million; retail strip centers $ 17 million; senior housing $ 17 million; automotive industry $ 15 million; retail buildings $ 14 million; lodging $ 11 million; and office buildings $ 8 million. With respect to loans to developers and builders that are secured by non-owner-occupied properties, the Company generally requires the borrower to have had an existing relationship with the Company and have a proven record of success. Construction and land development loans are underwritten utilizing independent appraisal reviews, sensitivity analysis of absorption and lease rates, and financial analysis of the developers and property owners. Construction and land development loans are generally based upon estimates of costs and value associated with the completed project. These estimates may be inaccurate. Construction and land development loans often involve the disbursement of substantial funds with repayment dependent on the success of the ultimate project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property, or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risk than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions, and the availability of long-term financing. The Company originates consumer loans utilizing a judgmental underwriting process. To monitor and manage consumer loan risk, policies and procedures are developed and modified, as needed. This activity, coupled with relatively small loan amounts that are spread across many individual borrowers, mitigates risk. The Company maintains an independent credit department that reviews and validates the credit risk program on a periodic basis. Results of these reviews are presented to management. The loan review process complements and reinforces the risk identification and assessment decisions made by lenders and credit personnel, as well as the Company’s policies and procedures. Loans serviced for others approximated $ 136 million and $ 132 million on June 30, 2024 and December 31, 2023, respectively. NOTE 3 – LOANS (CONTINUED) Concentrations of Credit Nearly all the Company’s lending activity occurs within the state of Ohio, including the four counties of Holmes, Stark, Tuscarawas and Wayne, as well as other markets. The majority of the Company’s loan portfolio consists of commercial and commercial real estate loans. Credit concentrations, including commitments, as determined using North American Industry Classification Codes (NAICS), to the three largest industries compared to total loans on June 30, 2024 , included $ 75.8 million, or 11 %, of total loans to lessors of non-residential buildings, $ 39.3 million, or 5 %, of total loans to manufacturers of animal food, and $ 30.5 million, or 4 %, of total loans to hotels. These loans are generally secured by real property and equipment, with repayment expected from operational cash flow. Credit evaluation is based on a review of cash flow coverage of principal, interest payments, and the adequacy of the collateral received. Allowance for Credit Losses The following table details activity in the allowance for credit losses ("ACL") by portfolio segment for the three-months ended June 30, 2024 and 2023. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. For the three and six months ended June 30, 2024 , the increase in the provision for commercial and industrial loans and commercial real estate loans primarily relates to one individually evaluated commercial loan relationship which has a collateral shortfall. As of June 30, 2024, this loan relationship has a specific reserve of $ 4.1 million. The remaining provision amounts for the quarter are primarily a result of changes in loan volume and weighted average remaining maturities of the loans in each category. For the three and six month periods in 2023 the increase in the provision for commercial and industrial loans primarily related to the increase in loan volume. The change in provision for commercial lessors of buildings related to the increase in loans graded special mention. The decrease in provision for commercial real estate loans was due to the payoff of one larger loan relationship with a specific allocation. (Dollars in thousands) Beginning Balance Charge-offs Recoveries Provisions (Recovery) Ending Balance Three Months Ended June 30, 2024 Commercial and industrial $ 2,224 $ ( 257 ) $ 12 $ 3,295 $ 5,274 Commercial real estate 1,612 — 1 420 2,033 Commercial lessors of buildings 1,344 — — ( 16 ) 1,328 Construction 323 — — 3 326 Consumer mortgage 1,068 — 8 ( 15 ) 1,061 Home equity line of credit 284 — — ( 8 ) 276 Consumer installment 74 ( 17 ) 4 13 74 Consumer indirect 207 — 3 5 215 $ 7,136 $ ( 274 ) $ 28 $ 3,697 $ 10,587 Six Months Ended June 30, 2024 Commercial and industrial $ 1,737 $ ( 268 ) $ 19 $ 3,786 $ 5,274 Commercial real estate 1,637 — 1 395 2,033 Commercial lessors of buildings 1,200 — — 128 1,328 Construction 333 — — ( 7 ) 326 Consumer mortgage 1,107 — 9 ( 55 ) 1,061 Home equity line of credit 288 — — ( 12 ) 276 Consumer installment 76 ( 35 ) 7 26 74 Consumer indirect 229 ( 59 ) 6 39 215 $ 6,607 $ ( 362 ) $ 42 $ 4,300 $ 10,587 NOTE 3 – LOANS (CONTINUED) (Dollars in thousands) Beginning Balance Impact of Adopting ASC 326 Charge-offs Recoveries Provisions (Recovery) Ending Balance Three Months Ended June 30, 2023 Commercial and industrial $ 1,821 $ — $ — $ 9 $ 289 $ 2,119 Commercial real estate 2,236 — — — ( 354 ) 1,882 Commercial lessors of buildings 965 — — — 272 1,237 Construction 271 — — — 12 283 Consumer mortgage 693 — — 1 20 714 Home equity line of credit 186 — — — ( 8 ) 178 Consumer installment 47 — ( 15 ) 5 15 52 Consumer indirect 88 — — 10 ( 4 ) 94 Unallocated — — — — — — $ 6,307 $ — $ ( 15 ) $ 25 $ 242 $ 6,559 Six Months Ended June 30, 2023 Commercial and industrial $ 1,110 $ 658 $ — $ 19 $ 332 $ 2,119 Commercial real estate 2,760 ( 541 ) — 1 ( 338 ) 1,882 Commercial lessors of buildings — 974 — — 263 1,237 Construction 803 ( 515 ) — — ( 5 ) 283 Consumer mortgage 1,268 ( 580 ) — 1 25 714 Home equity line of credit — 201 — — ( 23 ) 178 Consumer installment 233 ( 183 ) ( 23 ) 5 20 52 Consumer indirect — 91 ( 31 ) 34 — 94 Unallocated 664 ( 664 ) — — — — $ 6,838 $ ( 559 ) $ ( 54 ) $ 60 $ 274 $ 6,559 NOTE 3 – LOANS (CONTINUED) Age Analysis of Past-Due Loans Receivable and Nonperforming Loans 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 summarized by the past-due status. (Dollars in thousands) Current 30-59 60-89 90 Days + Total Past Due Total June 30, 2024 Commercial and industrial $ 143,869 $ 61 $ 20 $ — $ 81 $ 143,950 Commercial real estate 194,637 — — — — 194,637 Commercial lessors of buildings 96,235 — — — — 96,235 Construction 55,275 — — — — 55,275 Consumer mortgage 169,824 1,286 88 — 1,374 171,198 Home equity line of credit 44,132 93 72 34 199 44,331 Consumer installment 10,620 17 9 — 26 10,646 Consumer indirect 5,682 52 — — 52 5,734 Total Loans $ 720,274 $ 1,509 $ 189 $ 34 $ 1,732 $ 722,006 December 31, 2023 Commercial and industrial $ 151,964 $ 111 $ 50 $ — $ 161 $ 152,125 Commercial real estate 190,702 — — — — 190,702 Commercial lessors of buildings 82,687 — — — — 82,687 Construction 49,214 — — — — 49,214 Consumer mortgage 166,411 307 173 — 480 166,891 Home equity line of credit 42,955 33 281 — 314 43,269 Consumer installment 10,602 25 9 — 34 10,636 Consumer indirect 5,821 52 84 — 136 5,957 Total Loans $ 700,356 $ 528 $ 597 $ — $ 1,125 $ 701,481 NOTE 3 – LOANS (CONTINUED) The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing interest as of June 30, 2024 and December 31, 2023: (Dollars in thousands) Nonaccrual with no ACL Nonaccrual with ACL Total Nonaccrual Loans Past Due 90 Days or More Still Accruing Total Nonperforming June 30, 2024 Commercial and industrial $ 39 $ 5,251 $ 5,290 $ — $ 5,290 Commercial real estate — 1,099 1,099 — 1,099 Commercial lessors of buildings 13 — 13 — 13 Construction — — — — — Consumer mortgage 122 — 122 — 122 Home equity line of credit — — — 34 34 Consumer installment 14 — 14 — 14 Consumer indirect 111 — 111 — 111 Total Loans $ 299 $ 6,350 $ 6,649 $ 34 $ 6,683 December 31, 2023 Commercial and industrial $ 59 $ — $ 59 $ — $ 59 Commercial real estate 62 — 62 — 62 Commercial lessors of buildings 15 — 15 — 15 Construction — — — — — Consumer mortgage 172 — 172 — 172 Home equity line of credit — — — — — Consumer installment 49 — 49 — 49 Consumer indirect 39 — 39 — 39 Total Loans $ 396 $ — $ 396 $ — $ 396 Interest income recognized on nonaccrual loans for the six months ended June 30, 2024 was $ 33 thousand. Collateral-Dependent Financial Assets When loan repayment is expected to be provided substantially through the operation or sale of collateral and the borrower is experiencing financial difficulty, expected credit losses are based on the fair value of the collateral. The class of loan represents the primary collateral type associated with the loan. There were no collateral dependent loans as of December 31, 2023. The following table presents the amortized cost basis of collateral dependent loans by class of loan: Type of Collateral (Dollars in thousands) Real Estate Blanket Liens June 30, 2024 Commercial and industrial $ — $ 5,251 Commercial real estate 1,099 — Total collateral dependent loans $ 1,099 $ 5,251 NOTE 3 – LOANS (CONTINUED) 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. The Company analyzes commercial loans individually by classifying the loans as to credit risk. This analysis includes all commercial loans before origination and an annual review of those with an outstanding commitment greater than $ 500 thousand. The Company uses the following definitions for risk ratings: Pass . Loans classified as pass (Cash Secured, Exceptional, Acceptable, Monitor, or Pass Watch) may exhibit a wide array of characteristics but at a minimum represent an acceptable risk to the Bank. Borrowers in this rating may have leveraged but acceptable balance sheet positions, satisfactory asset quality, stable to favorable sales and earnings trends, acceptable liquidity and adequate cash flow. Loans are considered fully collectible and require an average amount of administration. While generally adhering to credit policy, these loans may exhibit occasional exceptions that do not result in undue risk to the Bank. Borrowers are generally capable of absorbing setbacks, financial and otherwise, without the threat of failure. Special Mention . Assets assigned a Special Mention grade are not considered classified assets but are considered criticized. These assets exhibit potential weaknesses that, deserve management’s close attention. If left uncorrected, those potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Bank’s credit position at some future date. Loans in this rating warrant special attention but have not yet reached the point of concern for loss. These assets have deteriorated sufficiently to the point they would have difficulty refinancing elsewhere. Similarly, purchasers of the business would not be eligible for bank financing unless they represent a significantly stronger credit risk. Substandard . Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful . Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable. NOTE 3 – LOANS (CONTINUED) Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be pass rated loans. Based on the most recent analysis performed, the following tables present the recorded investment in non-homogeneous loans by internal risk rating system as of June 30, 2024 and December 31, 2023: Term Loans Amortized Cost Basis by Origination Year (Dollars in thousands) 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total June 30, 2024 Commercial and industrial: Pass $ 8,357 $ 30,310 $ 21,888 $ 9,692 $ 4,015 $ 8,008 $ 43,459 $ — $ 125,729 Special mention 63 58 179 156 277 — 2,322 — 3,055 Substandard — 1,486 3,006 938 328 1,056 8,352 — 15,166 Doubtful — — — — — — — — — Total $ 8,420 $ 31,854 $ 25,073 $ 10,786 $ 4,620 $ 9,064 $ 54,133 $ — $ 143,950 YTD gross charge-offs $ — $ 246 $ - $ — $ - $ 22 $ - $ — $ - $ — $ — $ — $ 268 Commercial real estate: Pass $ 6,793 $ 23,687 $ 40,996 $ 49,193 $ 14,045 $ 39,537 $ 822 $ — $ 175,073 Special Mention — 237 1,467 3,041 2,069 510 — — 7,324 Substandard 348 1,099 — — — 10,793 — — 12,240 Doubtful — — — — — — — — — Total $ 7,141 $ 25,023 $ 42,463 $ 52,234 $ 16,114 $ 50,840 $ 822 $ — $ 194,637 YTD gross charge-offs $ — $ — $ - $ — $ - $ — $ - $ — $ - $ — $ — $ — Commercial lessors of buildings: Pass $ 17,262 $ 21,112 $ 22,031 $ 15,655 $ 3,274 $ 14,544 $ 391 $ — $ 94,269 Special Mention — — — 184 — — — — 184 Substandard — — 567 233 969 13 — — 1,782 Doubtful — — — — — — — — — Total $ 17,262 $ 21,112 $ 22,598 $ 16,072 $ 4,243 $ 14,557 $ 391 $ — $ 96,235 YTD gross charge-offs $ — $ — $ - $ — $ - $ — $ - $ — $ - $ — $ — $ — $ — Commercial Construction: Pass $ 4,785 $ 30,418 $ 9,926 $ 760 $ 851 $ 470 $ 1,352 $ — $ 48,562 Special Mention — — — — — — — Substandard — — — — — 76 — — 76 Doubtful — — — — — — — — — Total $ 4,785 $ 30,418 $ 9,926 $ 760 $ 851 $ 546 $ 1,352 $ — $ 48,638 YTD gross charge-offs $ — $ — $ - $ — $ - $ — $ - $ — $ - $ — $ — $ — $ — Total Pass $ 37,197 $ 105,527 $ 94,841 $ 75,300 $ 22,185 $ 62,559 $ 46,024 $ — $ 443,633 Special Mention 63 295 1,646 3,381 2,346 510 2,322 — 10,563 Substandard 348 2,585 3,573 1,171 1,297 11,938 8,352 — 29,264 Doubtful — — — — — — — — — Total $ 37,608 $ 108,407 $ 100,060 $ 79,852 $ 25,828 $ 75,007 $ 56,698 $ — $ 483,460 YTD commercial gross charge-offs $ — $ 246 $ — $ 22 $ — $ — $ — $ — $ 268 NOTE 3 – LOANS (CONTINUED) Term Loans Amortized Cost Basis by Origination Year 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total December 31, 2023 Commercial and industrial: Pass $ 32,037 $ 25,996 $ 12,196 $ 5,207 $ 3,388 $ 7,112 $ 45,423 $ — $ 131,359 Special mention 76 225 522 33 33 65 3,872 — 4,826 Substandard 782 2,968 1,021 1,017 106 1,416 8,630 — 15,940 Doubtful — — — — — — — — — Total $ 32,895 $ 29,189 $ 13,739 $ 6,257 $ 3,527 $ 8,593 $ 57,925 $ — $ 152,125 YTD gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate: Pass $ 22,206 $ 38,696 $ 54,830 $ 12,233 $ 19,543 $ 21,938 $ 647 $ — $ 170,093 Special Mention 241 1,380 2,292 2,496 — 322 — — 6,731 Substandard 1,150 — 888 — 466 11,374 — — 13,878 Doubtful — — — — — — — — — Total $ 23,597 $ 40,076 $ 58,010 $ 14,729 $ 20,009 $ 33,634 $ 647 $ — $ 190,702 YTD gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial lessors of buildings: Pass $ 18,353 $ 22,762 $ 15,455 $ 6,429 $ 3,543 $ 8,934 $ 360 $ — $ 75,836 Special Mention — 436 1,687 — 3,578 — — — 5,701 Substandard — — — 989 — 161 — — 1,150 Doubtful — — — — — — — — — Total $ 18,353 $ 23,198 $ 17,142 $ 7,418 $ 7,121 $ 9,095 $ 360 $ — $ 82,687 YTD gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial construction: Pass $ 24,119 $ 14,855 $ 576 $ 272 $ 281 $ 256 $ — $ — $ 40,359 Special Mention — 258 43 635 — — — — 936 Substandard — — — 30 80 — — — 110 Doubtful — — — — — — — — — Total $ 24,119 $ 15,113 $ 619 $ 937 $ 361 $ 256 $ — $ — $ 41,405 YTD gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Total Pass $ 96,715 $ 102,309 $ 83,057 $ 24,141 $ 26,755 $ 38,240 $ 46,430 $ — $ 417,647 Special Mention 317 2,299 4,544 3,164 3,611 387 3,872 — 18,194 Substandard 1,932 2,968 1,909 2,036 652 12,951 8,630 — 31,078 Doubtful — — — — — — — — — Total $ 98,964 $ 107,576 $ 89,510 $ 29,341 $ 31,018 $ 51,578 $ 58,932 $ — $ 466,919 YTD commercial gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — NOTE 3 – LOANS (CONTINUED) The Company monitors the credit risk profile by payment activity for the loan classes listed below. Loans past due 90 days or more and loans on nonaccrual status are considered nonperforming. The following table presents the amortized cost in consumer loans based on payment activity as of June 30, 2024 and December 31, 2023: Term Loans Amortized Cost Basis by Origination Year (Dollars in thousands) 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total June 30, 2024 Consumer mortgage: Performing $ 8,086 $ 27,855 $ 33,551 $ 34,420 $ 30,606 $ 36,558 $ — $ — $ 171,076 Nonperforming — — — — — 122 — — 122 Total $ 8,086 $ 27,855 $ 33,551 $ 34,420 $ 30,606 $ 36,680 $ — $ — $ 171,198 YTD gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Consumer Construction: Performing $ 1,884 $ 3,142 $ 1,076 $ 168 $ 324 $ 43 $ — $ — $ 6,637 Nonperforming — — — — — — — — — Total $ 1,884 $ 3,142 $ 1,076 $ 168 $ 324 $ 43 $ — $ — $ 6,637 YTD gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Home equity line of credit: Performing $ — $ — $ — $ — $ — $ — $ 44,257 $ 40 $ 44,297 Nonperforming — — — — — — 34 — 34 Total $ — $ — $ — $ — $ — $ — $ 44,291 $ 40 $ 44,331 YTD gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Consumer installment: Performing $ 2,785 $ 4,400 $ 2,216 $ 623 $ 336 $ 205 $ 67 $ — $ 10,632 Nonperforming — 7 — — — 7 — — 14 Total $ 2,785 $ 4,407 $ 2,216 $ 623 $ 336 $ 212 $ 67 $ — $ 10,646 YTD gross charge-offs $ — $ 12 $ 15 $ 2 $ 1 $ 5 $ — $ — $ 35 Consumer indirect: Performing $ 545 $ 715 $ 1,011 $ 537 $ 530 $ 2,285 $ — $ — $ 5,623 Nonperforming — 22 — — — 89 — — 111 Total $ 545 $ 737 $ 1,011 $ 537 $ 530 $ 2,374 $ — $ — $ 5,734 YTD gross charge-offs $ — $ — $ — $ — $ — $ 59 $ — $ — $ 59 Total Performing $ 13,300 $ 36,112 $ 37,854 $ 35,748 $ 31,796 $ 39,091 $ 44,324 $ 40 $ 238,265 Nonperforming — 29 — — — 218 34 — 281 Total $ 13,300 $ 36,141 $ 37,854 $ 35,748 $ 31,796 $ 39,309 $ 44,358 $ 40 $ 238,546 YTD consumer gross charge-offs $ — $ 12 $ 15 $ 2 $ 1 $ 64 $ — $ — $ 94 NOTE 3 – LOANS (CONTINUED) Term Loans Amortized Cost Basis by Origination Year 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total December 31, 2023 Consumer mortgage: Performing $ 24,521 $ 34,798 $ 35,802 $ 32,259 $ 8,931 $ 30,408 $ — $ — $ 166,719 Nonperforming — — — — — 172 — — 172 Total $ 24,521 $ 34,798 $ 35,802 $ 32,259 $ 8,931 $ 30,580 $ — $ — $ 166,891 YTD gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Consumer construction: Performing $ 5,463 $ 1,477 $ 264 $ 483 $ 81 $ 41 $ — $ — $ 7,809 Nonperforming — — — — — — — — — Total $ 5,463 $ 1,477 $ 264 $ 483 $ 81 $ 41 $ — $ — $ 7,809 YTD gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Home equity line of credit: Performing $ — $ — $ — $ — $ — $ — $ 43,223 $ 46 $ 43,269 Nonperforming — — — — — — — — — Total $ — $ — $ — $ — $ — $ — $ 43,223 $ 46 $ 43,269 YTD gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Consumer installment: Performing $ 5,705 $ 3,067 $ 981 $ 513 $ 118 $ 184 $ 68 $ — $ 10,636 Nonperforming — — — — — — — — — Total $ 5,705 $ 3,067 $ 981 $ 513 $ 118 $ 184 $ 68 $ — $ 10,636 YTD gross charge-offs $ 2 $ 12 $ 19 $ 5 $ 2 $ 6 $ — $ — $ 46 Consumer indirect: Performing $ 858 $ 1,086 $ 622 $ 568 $ 607 $ 2,128 $ — $ — $ 5,869 Nonperforming — 3 — — 81 4 — — 88 Total $ 858 $ 1,089 $ 622 $ 568 $ 688 $ 2,132 $ — $ — $ 5,957 YTD gross charge-offs $ — $ — $ — $ — $ — $ 66 $ — $ — $ 66 Total Performing $ 36,547 $ 40,428 $ 37,669 $ 33,823 $ 9,737 $ 32,761 $ 43,291 $ 46 $ 234,302 Nonperforming — 3 — — 81 176 — — 260 Total $ 36,547 $ 40,431 $ 37,669 $ 33,823 $ 9,818 $ 32,937 $ 43,291 $ 46 $ 234,562 YTD consumer gross charge-offs $ 2 $ 12 $ 19 $ 5 $ 2 $ 72 $ — $ — $ 112 Consumer mortgages are substantially secured by one to four family owner occupied properties and consumer indirect loans are substantially secured by recreational vehicles. All nonperforming consumer loans are evaluated when placed on nonaccrual status and may be charged down based on the collateral fair value less cost to sell if that value is lower than the outstanding balance. As of June 30, 2024 there were two loans secured by consumer real estate totaling $ 38 thousand in process of foreclosure. Modifications to Borrowers Experiencing Financial Difficulty Occasionally, the Bank modifies loans to borrowers in financial distress by providing – principal forgiveness, term extension, an other-than-insignificant payment delay or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. In some cases, the Bank may provide multiple types of concessions on one loan. 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. There were no modifications of loans to borrowers in financial distress completed during the six months ended June 30, 2024 and 2023. |