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Note 4 - Loans, Allowance for Credit Losses and Other Real Estate Owned

3 Months Ended

Mar. 31, 2025

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 4: Loans, Allowance for Credit Losses and Other Real Estate Owned

A summary of the major categories of loans outstanding is shown in the following tables at the dates indicated:

		At March 31,				At December 31,
		2025				2024
		(In thousands)
Commercial		$	111,888			$	127,276
Commercial real estate			489,612				507,900
Construction			5,064				5,064
Residential real estate			8,061				8,274
Consumer installment & other			156,405				171,786
Total		$	771,030			$	820,300

The following summarizes activity in the allowance for credit losses:

		Allowance for Credit Losses
		For the Three Months Ended March 31, 2025
																		Consumer
						Commercial								Residential				Installment
		Commercial				Real Estate				Construction				Real Estate				and Other				Total
		(In thousands)
Allowance for credit losses:
Balance at beginning of period		$	4,197			$	6,034			$	247			$	22			$	4,280			$	14,780
(Reversal) provision			(41	)			309				-				4				(822	)			(550	)
Chargeoffs			(10	)			(191	)			-				-				(1,525	)			(1,726	)
Recoveries			265				13				-				-				1,132				1,410
Total allowance for credit losses		$	4,411			$	6,165			$	247			$	26			$	3,065			$	13,914

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		Allowance for Credit Losses
		For the Three Months Ended March 31, 2024
																		Consumer
						Commercial								Residential				Installment
		Commercial				Real Estate				Construction				Real Estate				and Other				Total
		(In thousands)
Allowance for credit losses:
Balance at beginning of period		$	4,216			$	5,925			$	245			$	26			$	6,455			$	16,867
(Reversal) provision			(463	)			(212	)			(3	)			(4	)			982				300
Chargeoffs			-				-				-				-				(2,003	)			(2,003	)
Recoveries			12				45				-				-				658				715
Total allowance for credit losses		$	3,765			$	5,758			$	242			$	22			$	6,092			$	15,879

The Company’s customers are primarily small businesses, professionals and consumers. Given the scale of these borrowers, corporate credit rating agencies do not evaluate the borrowers’ financial condition. The Bank maintains a Loan Review Department which reports directly to the Audit Committee of the Board of Directors. The Loan Review Department performs independent evaluations of loans and validates management assigned credit risk grades on evaluated loans using grading standards employed by bank regulatory agencies. Loans judged to carry lower-risk attributes are assigned a “pass” grade, with a minimal likelihood of loss. Loans judged to carry higher-risk attributes are referred to as “classified loans,” and are further disaggregated, with increasing expectations for loss recognition, as “substandard,” “doubtful,” and “loss.” The Loan Review Department performs continuous evaluations throughout the year. If the Bank becomes aware of deterioration in a borrower’s performance or financial condition between Loan Review Department examinations, assigned risk grades are re-evaluated promptly. Credit risk grades assigned by management and validated by the Loan Review Department are subject to review by the Bank’s regulatory authorities during regulatory examinations.

The following summarizes the credit risk profile by internally assigned grade:

		Credit Risk Profile by Internally Assigned Grade
		At March 31, 2025
		Commercial				Commercial Real Estate				Construction				Residential Real Estate				Consumer Installment and Other				Total
		(In thousands)
Grade:
Pass		$	107,630			$	479,473			$	-			$	7,779			$	154,279			$	749,161
Substandard			4,258				10,139				5,064				282				1,717				21,460
Doubtful			-				-				-				-				99				99
Loss			-				-				-				-				310				310
Total		$	111,888			$	489,612			$	5,064			$	8,061			$	156,405			$	771,030

		Credit Risk Profile by Internally Assigned Grade
		At December 31, 2024
		Commercial				Commercial Real Estate				Construction				Residential Real Estate				Consumer Installment and Other				Total
		(In thousands)
Grade:
Pass		$	122,958			$	489,522			$	-			$	7,984			$	169,251			$	789,715
Substandard			4,318				18,378				5,064				290				1,817				29,867
Doubtful			-				-				-				-				192				192
Loss			-				-				-				-				526				526
Total		$	127,276			$	507,900			$	5,064			$	8,274			$	171,786			$	820,300

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The following tables summarize loans by delinquency and nonaccrual status:

		Summary of Loans by Delinquency and Nonaccrual Status
		At March 31, 2025
		Current and Accruing				30-59 Days Past Due and Accruing				60-89 Days Past Due and Accruing				Past Due 90 Days or More and Accruing				Nonaccrual				Total Loans
		(In thousands)
Commercial		$	111,583			$	305			$	-			$	-			$	-			$	111,888
Commercial real estate			488,508				1,104				-				-				-				489,612
Construction			5,064				-				-				-				-				5,064
Residential real estate			7,865				196				-				-				-				8,061
Consumer installment and other			152,966				2,543				619				277				-				156,405
Total		$	765,986			$	4,148			$	619			$	277			$	-			$	771,030

		Summary of Loans by Delinquency and Nonaccrual Status
		At December 31, 2024
		Current and Accruing				30-59 Days Past Due and Accruing				60-89 Days Past Due and Accruing				Past Due 90 Days or More and Accruing				Nonaccrual				Total Loans
		(In thousands)
Commercial		$	126,538			$	700			$	28			$	-			$	10			$	127,276
Commercial real estate			506,588				1,121				-				-				191				507,900
Construction			5,064				-				-				-				-				5,064
Residential real estate			8,274				-				-				-				-				8,274
Consumer installment and other			166,875				3,493				884				534				-				171,786
Total		$	813,339			$	5,314			$	912			$	534			$	201			$	820,300

There was no allowance for credit losses allocated to loans on nonaccrual status as of March 31, 2025 or December 31, 2024.

There were no commitments to lend additional funds to borrowers whose loans were on nonaccrual status at March 31, 2025 or December 31, 2024.

There were no loan modifications made to borrowers experiencing financial difficulty during the three months ended March 31, 2025 and March 31, 2024.

A loan is considered collateral dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. Loans considered collateral dependent are reassessed quarterly. Loans that were considered collateral dependent at March 31, 2025 included the following: seven commercial real estate loans totaling $9.4 million secured by real property and $273 thousand of indirect consumer installment loans secured by personal property. There were no other collateral dependent loans at March 31, 2025. Loans that were considered collateral dependent at December 31, 2024 included the following: nine commercial real estate loans totaling $17.6 million secured by real property and $503 thousand of indirect consumer installment loans secured by personal property. There were no other collateral dependent loans at December 31, 2024.

Based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

		At March 31, 2025
																														Line of
																														Credit
		Term Loans Amortized Cost Basis by Origination Year																								Total				Amortized
		Prior				2021				2022				2023				2024				2025				Term Loans				Cost Basis				Total
		(In thousands)
Commercial loans by grade:
Pass		$	25,468			$	6,542			$	11,323			$	8,509			$	18,720			$	15,271			$	85,833			$	21,797			$	107,630
Substandard			255				2,835				-				-				-				-				3,090				1,168				4,258
Doubtful			-				-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-				-
Total		$	25,723			$	9,377			$	11,323			$	8,509			$	18,720			$	15,271			$	88,923			$	22,965			$	111,888

Current gross chargeoffs on commercial loans:
For the three months ended March 31, 2025
		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	10			$	10

		At December 31, 2024
																														Line of
																														Credit
		Term Loans Amortized Cost Basis by Origination Year																								Total				Amortized
		Prior				2020				2021				2022				2023				2024				Term Loans				Cost Basis				Total
		(In thousands)
Commercial loans by grade:
Pass		$	18,752			$	8,542			$	18,539			$	12,388			$	14,776			$	19,399			$	92,396			$	30,562			$	122,958
Substandard			266				-				2,835				-				-				-				3,101				1,217				4,318
Doubtful			-				-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-				-
Total		$	19,018			$	8,542			$	21,374			$	12,388			$	14,776			$	19,399			$	95,497			$	31,779			$	127,276

Current gross chargeoffs on commercial loans:
For the year ended December 31, 2024
		$	59			$	-			$	-			$	-			$	-			$	-			$	59			$	224			$	283

		At March 31, 2025
																														Line of
																														Credit
		Term Loans Amortized Cost Basis by Origination Year																								Total				Amortized
		Prior				2021				2022				2023				2024				2025				Term Loans				Cost Basis				Total
		(In thousands)
Commercial real estate loans by grade:
Pass		$	254,005			$	61,266			$	48,702			$	42,836			$	70,650			$	2,014			$	479,473			$	-			$	479,473
Substandard			10,139				-				-				-				-				-				10,139				-				10,139
Doubtful			-				-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-				-
Total		$	264,144			$	61,266			$	48,702			$	42,836			$	70,650			$	2,014			$	489,612			$	-			$	489,612

Current gross chargeoffs on commercial real estate loans:
For the three months ended March 31, 2025
		$	191			$	-			$	-			$	-			$	-			$	-			$	191			$	-			$	191

		At December 31, 2024
																														Line of
																														Credit
		Term Loans Amortized Cost Basis by Origination Year																								Total				Amortized
		Prior				2020				2021				2022				2023				2024				Term Loans				Cost Basis				Total
		(In thousands)
Commercial real estate loans by grade:
Pass		$	197,160			$	65,384			$	63,697			$	49,117			$	43,091			$	71,073			$	489,522			$	-			$	489,522
Substandard			17,409				969				-				-				-				-				18,378				-				18,378
Doubtful			-				-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-				-
Total		$	214,569			$	66,353			$	63,697			$	49,117			$	43,091			$	71,073			$	507,900			$	-			$	507,900

Current gross chargeoffs on commercial real estate loans:
For the year ended December 31, 2024
		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-

		At March 31, 2025
																														Line of
																														Credit
		Term Loans Amortized Cost Basis by Origination Year																								Total				Amortized
		Prior				2021				2022				2023				2024				2025				Term Loans				Cost Basis				Total
		(In thousands)
Residential real estate loans by grade:
Pass		$	7,779			$	-			$	-			$	-			$	-			$	-			$	7,779			$	-			$	7,779
Substandard			282				-				-				-				-				-				282				-				282
Doubtful			-				-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-				-
Total		$	8,061			$	-			$	-			$	-			$	-			$	-			$	8,061			$	-			$	8,061

Current gross chargeoffs on residential real estate loans:
For the three months ended March 31, 2025
		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-

		At December 31, 2024
																														Line of
																														Credit
		Term Loans Amortized Cost Basis by Origination Year																								Total				Amortized
		Prior				2020				2021				2022				2023				2024				Term Loans				Cost Basis				Total
		(In thousands)
Residential real estate loans by grade:
Pass		$	7,984			$	-			$	-			$	-			$	-			$	-			$	7,984			$	-			$	7,984
Substandard			290				-				-				-				-				-				290				-				290
Doubtful			-				-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-				-
Total		$	8,274			$	-			$	-			$	-			$	-			$	-			$	8,274			$	-			$	8,274

Current gross chargeoffs on residential real estate loans:
For the year ended December 31, 2024
		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-

		At March 31, 2025
																														Line of
																														Credit
		Term Loans Amortized Cost Basis by Origination Year																								Total				Amortized
		Prior				2021				2022				2023				2024				2025				Term Loans				Cost Basis				Total
		(In thousands)
Construction loans by grade:
Pass		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-
Substandard			-				-				-				-				-				-				-				5,064				5,064
Doubtful			-				-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-				-
Total		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	5,064			$	5,064

Current gross chargeoffs on construction loans:
For the three months ended March 31, 2025
		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-

		At December 31, 2024
																														Line of
																														Credit
		Term Loans Amortized Cost Basis by Origination Year																								Total				Amortized
		Prior				2020				2021				2022				2023				2024				Term Loans				Cost Basis				Total
		(In thousands)
Construction loans by grade:
Pass		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-
Substandard			-				-				-				-				-				-				-				5,064				5,064
Doubtful			-				-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-				-
Total		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	5,064			$	5,064

Current gross chargeoffs on construction loans:
For the year ended December 31, 2024
		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-

The Company considers the delinquency and nonaccrual status of the consumer loan portfolio and its impact on the allowance for credit losses. The following table presents the amortized cost in consumer installment and other loans based on delinquency and nonaccrual status:

		At March 31, 2025
																														Line of
																														Credit
		Term Loans Amortized Cost Basis by Origination Year																								Total				Amortized
		Prior				2021				2022				2023				2024				2025				Term Loans				Cost Basis				Total
		(In thousands)
Consumer installment and other loans by delinquency and nonaccrual status:
Current		$	14,575			$	28,719			$	43,829			$	24,305			$	22,626			$	4,460			$	138,514			$	14,452			$	152,966
30-59 days past due			339				707				1,016				297				157				-				2,516				27				2,543
60-89 days past due			29				72				204				100				165				-				570				49				619
Past due 90 days or more			49				68				78				56				22				-				273				4				277
Nonaccrual			-				-				-				-				-				-				-				-				-
Total		$	14,992			$	29,566			$	45,127			$	24,758			$	22,970			$	4,460			$	141,873			$	14,532			$	156,405

Current gross chargeoffs on consumer installment and other loans:
For the three months ended March 31, 2025
		$	55			$	400			$	545			$	267			$	203			$	-			$	1,470			$	55			$	1,525

		At December 31, 2024
																														Line of
																														Credit
		Term Loans Amortized Cost Basis by Origination Year																								Total				Amortized
		Prior				2020				2021				2022				2023				2024				Term Loans				Cost Basis				Total
		(In thousands)
Consumer installment and other loans by delinquency and nonaccrual status:
Current		$	6,068			$	12,464			$	32,608			$	48,694			$	26,805			$	24,522			$	151,161			$	15,714			$	166,875
30-59 days past due			173				201				949				1,392				385				263				3,363				130				3,493
60-89 days past due			33				36				184				256				91				120				720				164				884
Past due 90 days or more			-				38				129				200				149				-				516				18				534
Nonaccrual			-				-				-				-				-				-				-				-				-
Total		$	6,274			$	12,739			$	33,870			$	50,542			$	27,430			$	24,905			$	155,760			$	16,026			$	171,786

Current gross chargeoffs on consumer installment and other loans:
For the year ended December 31, 2024
		$	246			$	388			$	2,376			$	1,843			$	913			$	162			$	5,928			$	463			$	6,391

There were no loans held for sale at March 31, 2025 and December 31, 2024.

The Company held no other real estate owned (OREO) at March 31, 2025 and December 31, 2024. At March 31, 2025 and December 31, 2024, there were no consumer mortgage loans outstanding secured by residential real estate properties for which formal foreclosure proceedings were in process.