Loan Restructurings

9 Months Ended

Sep. 30, 2024

The Company adopted the accounting guidance in ASU No. 2022-02, effective as of January 1, 2023, which eliminates the recognition and measurement of troubled debt restructurings (“TDR”). Due to the removal of the TDR designation, the Company evaluates all loan restructurings according to the accounting guidance for loan modifications to determine if the restructuring results in a new loan or a continuation of the existing loan. Loan modifications to borrowers experiencing financial difficulty that result in a direct change in the timing or amount of contractual cash flows include situations where there is principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, and combinations of the listed modifications. Therefore, the disclosures related to loan restructurings are only for modifications that directly affect cash flows.

Any restructuring of a loan in which the borrower has experienced financial difficulty and the terms of the loan are more favorable than would generally be considered for borrowers with the same credit characteristics would be individually evaluated. Otherwise, the restructured loan remains in the appropriate segment in the ACL model.

The following table presents the amortized cost basis of loans that were both experiencing financial difficulty and modified during the three and nine months ended September 30, 2024 and September 30, 2023, by class and type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below:

For the three month period ended September 30, 2024, there were no modifications to borrowers experiencing financial difficulty.


Nine Months Ended September 30, 2024	Amortized Cost
(In Thousands of Dollars)	Payment Deferral		Principal Forgiveness		Interest Rate Reduction		Combination Term Extension and Interest Rate Reduction		Total		% of Total Class of Financing Receivable
Residential real estate
Home equity lines of credit	$	0	$	0	$	29	$	20	$	49		0.03	%
Total modifications to borrowers experiencing financial difficulty	$	0	$	0	$	29	$	20	$	49		0.00	%


Three Months Ended September 30, 2023	Amortized Cost
(In Thousands of Dollars)	Payment Deferral		Principal Forgiveness		Interest Rate Reduction		Combination Term Extension and Interest Rate Reduction		Total		% of Total Class of Financing Receivable
Residential real estate
1-4 family residential	$	0	$	0	$	31	$	133	$	164		0.02	%
Total modifications to borrowers experiencing financial difficulty	$	0	$	0	$	31	$	133	$	164		0.01	%


Nine Months Ended September 30, 2023	Amortized Cost
(In Thousands of Dollars)	Payment Deferral		Principal Forgiveness		Interest Rate Reduction		Combination Term Extension and Interest Rate Reduction		Total		% of Total Class of Financing Receivable
Commercial
Commercial and industrial	$	50	$	0	$	0	$	0	$	50		0.01	%
Residential real estate
1-4 family residential		0		0		31		133		164		0.02	%
Total modifications to borrowers experiencing financial difficulty	$	50	$	0	$	31	$	133	$	214		0.01	%

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2024 and September 30, 2023:

For the three month period ended September 30, 2024, there were no loan modification for borrowers experiencing financial difficulty.

         
        Payment Deferral

        Term Extension

        Interest Rate Reduction

         
        Weighted-Average Years Added to the Life

        Weighted-Average Years Added to the Life

        Weighted-Average Contractual Interest Rate

        Nine Months Ended September 30, 2024

        From

        To

        Residential real estate

Home equity lines of credit

10

10.45

5.91

         
        Payment Deferral

        Term Extension

        Interest Rate Reduction

         
        Weighted-Average Years Added to the Life

        Reduction of Amortized Cost Basis of the Loans

        Weighted-Average Contractual Interest Rate

        Three Months Ended September 30, 2023

        From

        To

        Residential real estate

1-4 family residential

5

4.77

3.38

         
        Payment Deferral

        Term Extension

        Interest Rate Reduction

         
        Weighted-Average Years Added to the Life

        Reduction of Amortized Cost Basis of the Loans

        Weighted-Average Contractual Interest Rate

        Nine Months Ended September 30, 2023

        From

        To

        Commercial

Commercial and industrial

0.5

        Residential real estate

1-4 family residential

5

4.77

3.38

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 presents the performance of such loans that have been modified in the three and nine months ended September 30, 2024 and September 30, 2023:

For the three month period ended September 30, 2024, there were no loan modification for borrowers experiencing financial difficulty.


Nine Months Ended September 30, 2024	Payment status (Amortized cost Basis)
(In Thousands of Dollars)	Current		30-89 Days past due		90+ Days past due
Accrual restructured loans
Residential real estate
Home equity lines of credit	$	0	$	20	$	0
Total accruing restructured loans	$	0	$	20	$	0

Nonaccrual restructured loans
Residential real estate
Home equity lines of credit		0		0		29
Total nonaccrual restructured loans	$	0	$	0	$	29
Total restructured loans	$	0	$	20	$	29


Three Months Ended September 30, 2023	Payment status (Amortized cost Basis)
(In Thousands of Dollars)	Current		30-89 Days past due		90+ Days past due
Residential real estate
1-4 family residential	$	164	$	0	$	0
Total accruing restructured loans	$	164	$	0	$	0

Total restructured loans	$	164	$	0	$	0


Nine Months Ended September 30, 2023	Payment status (Amortized cost Basis)
(In Thousands of Dollars)	Current		30-89 Days past due		90+ Days past due
Commercial
Commercial and industrial	$	50	$	0	$	0
Residential real estate
1-4 family residential		164		0		0
Total accruing restructured loans	$	214	$	0	$	0

Nonaccrual restructured loans
Total nonaccrual restructured loans	$	0	$	0	$	0
Total restructured loans	$	214	$	0	$	0

As of September 30, 2024, the Company had no commitments to lend any additional funds on restructured loans.

The following table presents the amortized cost basis of loans that had a payment default during the three and nine months ended September 30, 2024 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty. For purposes of this disclosure a default occurs when within 12 months of the original modification, a loan is 30 days contractually past due under the modified terms:


Three Months Ended September 30, 2024	Amortized Cost
(In Thousands of Dollars)	Payment Deferral		Term Extension		Interest Rate Reduction		Combination Term Extension and Interest Rate Reduction
Residential real estate
1-4 family residential	$	0	$	37	$	0	$	0
Home equity lines of credit		0		0		29		20
Total modifications to borrowers experiencing financial difficulty	$	0	$	37	$	29	$	20


Nine Months Ended September 30, 2024	Amortized Cost
(In Thousands of Dollars)	Payment Deferral		Term Extension		Interest Rate Reduction		Combination Term Extension and Interest Rate Reduction
Residential real estate
1-4 family residential	$	0	$	37	$	0	$	0
Home equity lines of credit		0		0		29		20
Total modifications to borrowers experiencing financial difficulty	$	0	$	37	$	29	$	20

For the three and nine months ended September 30, 2023, the Company had no loans that defaulted during the period and had been modified in the twelve months prior to that default to borrowers experiencing financial difficulty.

Upon the Company's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance of the credit losses is adjusted by the same amount.