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Loans and Allowance for Credit Losses

6 Months Ended

Jun. 30, 2023

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

The following table presents the composition of the loan portfolio as of June 30, 2023, and December 31, 2022:


In thousands	June 30, 2023		December 31, 2022
Commercial and industrial	$	158,537	$	178,762
Commercial real estate	873,787		821,805
Commercial real estate construction	73,951		80,470
Residential mortgage	372,819		362,098
Home equity lines of credit	85,019		84,141
Consumer	9,704		11,334
Total Loans	$	1,573,817	$	1,538,610

The following table presents nonaccrual loans as of June 30, 2023, and December 31, 2022:


In thousands	June 30, 2023		December 31, 2022
Commercial and industrial	$	744	$	781
Commercial real estate	1,601		1,873
Commercial real estate construction	—		—
Residential mortgage	343		—
Home equity lines of credit	202		—
	$	2,890	$	2,654

Consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process at June 30, 2023 and December 31, 2022, totaled $569,000 and $1,101,000, respectively.

No additional funds are committed to be advanced in connection with individually evaluated loans.

Loan Modifications

On January 1, 2023, the Corporation adopted the accounting guidance in ASU 2022-02, which eliminates the recognition and measurement of troubled debt restructurings (TDRs). Due to the removal of the TDR designation, the Corporation 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 above. Therefore, the disclosures related to loan restructurings are only for modifications that directly affect cash flows.

As of June 30, 2023, the Corporation had no modified loans or any commitments to lend any additional funds on modified loans. As of June 30, 2023, the Corporation had no loans that defaulted during the period and had been modified preceding the payment default when the borrower was experiencing financial difficulty at the time of modification. For purposes of this disclosure, a default occurs when, within 12 months of the original modification, either a full or partial charge-off occurs or the loan becomes 90 days or more past due.

Allowance for credit losses

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, universally referred to as Current Expected Credit Loss (CECL). The amendments in this ASU, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today are still permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on debt securities and purchased financial assets with credit deterioration. For smaller reporting companies, such as the Corporation, this standard (Topic 326) was effective as of January 1, 2023.

The Corporation maintains an allowance for credit losses (ACL) at a level determined to be adequate to absorb expected credit losses associated with the Corporation’s financial instruments over the life of those instruments as of the balance sheet date. The Corporation develops and documents a systematic ACL methodology based on the following portfolio segments: 1) Commercial and Industrial, 2) Commercial Real Estate, 3) Commercial Real Estate Construction, 4) Residential Mortgage, and 5) Home Equity Lines of Credit. The Corporation’s loan portfolio is segmented by loan types that have similar risk characteristics and behave similarly during economic cycles. The segmentation in the CECL model is different from the segmentation in the Incurred Loss Model, however there was minimal impact on the presentation of the financial statement disclosures. The following is a discussion of the key risks by portfolio segment that management assesses in preparing the ACL.

Commercial and Industrial Lending — The Corporation originates commercial and industrial loans primarily to businesses located in its primary market area and surrounding areas. These loans are used for various business purposes which include short-term loans and lines of credit to finance machinery and equipment purchases, inventory,

and accounts receivable. Generally, the maximum term for loans extended on machinery and equipment is based on the projected useful life of such machinery and equipment. Most business lines of credit are written on demand and may be renewed annually.

Commercial and industrial loans are generally secured with short-term assets; however, in many cases, additional collateral such as real estate is provided as additional security for the loan. Loan-to-value maximum values have been established by the Corporation and are specific to the type of collateral. Collateral values may be determined using invoices, inventory reports, accounts receivable aging reports, collateral appraisals, etc.

In underwriting commercial and industrial loans, an analysis is performed to evaluate the borrower’s character and capacity to repay the loan, the adequacy of the borrower’s capital and collateral, as well as the conditions affecting the borrower. Evaluation of the borrower’s past, present and future cash flows is also an important aspect of the Corporation’s analysis.

Commercial loans generally present a higher level of risk than other types of loans due primarily to the effect of general economic conditions.

Commercial Real Estate Lending — The Corporation engages in commercial real estate lending in its primary market area and surrounding areas. The Corporation’s commercial loan portfolio is secured primarily by commercial retail space, office buildings, and hotels. Generally, commercial real estate loans have terms that do not exceed 20 years, have loan-to-value ratios of up to 80% of the appraised value of the property, and are typically secured by personal guarantees of the borrowers.

In underwriting these loans, the Corporation performs a thorough analysis of the financial condition of the borrower, the borrower’s credit history, and the reliability and predictability of the cash flow generated by the property securing the loan. Appraisals on properties securing commercial real estate loans originated by the Corporation are performed by independent appraisers.

Commercial real estate loans generally present a higher level of risk than other types of loans due primarily to the effect of general economic conditions and the complexities involved in valuing the underlying collateral.

Commercial Real Estate Construction Lending — The Corporation engages in commercial real estate construction lending in its primary market area and surrounding areas. The Corporation’s commercial real estate construction lending consists of commercial and residential site development loans, as well as commercial building construction and residential housing construction loans.

The Corporation’s commercial real estate construction loans are generally secured with the subject property. Terms of construction loans depend on the specifics of the project, such as estimated absorption rates, estimated time to complete, etc.

In underwriting commercial real estate construction loans, the Corporation performs a thorough analysis of the financial condition of the borrower, the borrower’s credit history, and the reliability and predictability of the cash flow generated by the project using feasibility studies, market data, etc. Appraisals on properties securing commercial real estate construction loans originated by the Corporation are performed by independent appraisers.

Commercial real estate construction loans generally present a higher level of risk than other types of loans due primarily to the effect of general economic conditions and the uncertainties surrounding total construction costs.

Residential Mortgage Lending — One-to-four family residential mortgage loan originations, including home equity closed-end loans, are generated by the Corporation’s marketing efforts, its present customers, walk-in customers, and referrals. These loans originate primarily within the Corporation’s market area or with customers primarily from the market area.

The Corporation offers fixed-rate and adjustable-rate mortgage loans with terms up to a maximum of 30 years for both permanent structures and those under construction. The Corporation’s one-to-four family residential mortgage originations are secured primarily by properties located in its primary market area and surrounding areas. The majority of the Corporation’s residential mortgage loans originate with a loan-to-value of 80% or less. Loans in excess of 80% are required to have private mortgage insurance.

In underwriting one-to-four family residential real estate loans, the Corporation evaluates both the borrower’s financial ability to repay the loan as agreed and the value of the property securing the loan. Properties securing real estate loans made by the Corporation are appraised by independent appraisers. The Corporation generally requires borrowers to obtain an attorney’s title opinion or title insurance, as well as fire and property insurance (including flood insurance, if necessary) in an amount not less than the amount of the loan. The Corporation has not engaged in subprime residential mortgage originations.

Residential mortgage loans are subject to risk due primarily to general economic conditions, as well as periods of weak housing markets.

Home Equity Lines of Credit Lending — The Corporation originates home equity lines of credit primarily within the Corporation’s market area or with customers primarily from the market area. Home equity lines of credit are generated by the Corporation’s marketing efforts, its present customers, walk-in customers, and referrals.

Home equity lines of credit are secured by the borrower’s primary residence with a maximum loan-to-value of 90% and a maximum term of 20 years. In underwriting home equity lines of credit, the Corporation evaluates both the value of the property securing the loan and the borrower’s financial ability to repay the loan as agreed. The ability to repay is determined by the borrower’s employment history, current financial condition, and credit background.

Home equity lines of credit generally present a moderate level of risk due primarily to general economic conditions, as well as periods of weak housing markets.

Junior liens inherently have more credit risk by virtue of the fact that another financial institution may have a higher security position in the case of foreclosure liquidation of collateral to extinguish the debt. Generally, foreclosure actions could become more prevalent if the real estate markets are weak and property values deteriorate.

Consumer Lending — The Corporation offers a variety of secured and unsecured consumer loans, including those for vehicles and mobile homes and loans secured by savings deposits. These loans originate primarily within the Corporation’s market area or with customers primarily from the market area.

Consumer loan terms vary according to the type and value of collateral and the creditworthiness of the borrower. In underwriting consumer loans, a thorough analysis of the borrower’s financial ability to repay the loan as agreed is performed. The ability to repay is determined by the borrower’s employment history, current financial condition, and credit background.

Consumer loans may entail greater credit risk than residential mortgage loans or home equity lines of credit, particularly in the case of consumer loans which are unsecured or are secured by rapidly depreciable assets such as automobiles or recreational equipment. In such cases, any repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation. In addition, consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be affected by adverse personal circumstances. Furthermore, the application of various federal and state laws, including bankruptcy and insolvency laws, may limit the amount which can be recovered on such loans.

Credit Quality Indicators:

The Corporation’s portfolio grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled or at all. The Corporation’s internal credit risk grading system is based on debt service coverage, collateral values and other subjective factors. Mortgage and consumer loans are defaulted to a pass grade until a loan migrates to past due status.

Special Mention – Considered “Other Assets Especially Mentioned”, these loans are currently protected, but are potentially weak. Loans in this rating category constitute an undue and unwarranted credit risk, but not to the point of justifying a classification of substandard. The credit risk may be relatively minor, yet constitutes an unwarranted risk in light of the circumstances surrounding a specific loan.

Substandard – Loans in this category are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank

will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual loans classified as substandard.

Doubtful – Loans in this category have all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonable specific pending factors which may work to strengthen the credit, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral, and refinancing plans.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass-related loans.

The following table presents loan balances by year of origination and internally assigned risk rating for ACNB’s portfolio segments as of June 30, 2023:


In thousands	2023		2022		2021		2020		2019		2018 and Prior		Revolving		Total
Commercial and industrial
Pass	$	3,061	$	26,848	$	39,180	$	16,865	$	14,949	$	25,763	$	26,949	$	153,615
Special Mention	118		388		344		514		174		613		1,387		3,538
Substandard	8		19		—		20		13		820		504		1,384
Doubtful	—		—		—		—		—		—		—		—
Total Commercial and industrial	$	3,187	$	27,255	$	39,524	$	17,399	$	15,136	$	27,196	$	28,840	$	158,537
Year-to-date gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	29	$	—	$	29

Commercial real estate
Pass	$	72,354	$	147,795	$	144,506	$	67,743	$	72,227	$	321,050	$	14,273	$	839,948
Special Mention	174		4,781		1,382		1,548		4,922		15,107		686		28,600
Substandard	—		—		—		—		544		4,695		—		5,239
Doubtful	—		—		—		—		—		—		—		—
Total Commercial real estate	$	72,528	$	152,576	$	145,888	$	69,291	$	77,693	$	340,852	$	14,959	$	873,787
Year-to-date gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial real estate construction
Pass	$	9,045	$	43,769	$	7,420	$	1,016	$	342	$	3,781	$	7,251	$	72,624
Special Mention	—		477		—		93		—		757		—		1,327
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total Commercial real estate construction	$	9,045	$	44,246	$	7,420	$	1,109	$	342	$	4,538	$	7,251	$	73,951
Year-to-date gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Residential mortgage
Pass	$	33,241	$	75,302	$	57,348	$	32,870	$	20,680	$	146,279	$	289	$	366,009
Special Mention	480		84		713		412		708		3,438		—		5,835
Substandard	—		—		—		—		—		975		—		975
Doubtful	—		—		—		—		—		—		—		—
Total Residential Mortgage	$	33,721	$	75,386	$	58,061	$	33,282	$	21,388	$	150,692	$	289	$	372,819
Year-to-date gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Home equity lines of credit
Pass	$	939	$	40	$	—	$	—	$	99	$	4,515	$	78,107	$	83,700
Special Mention	—		—		—		—		—		36		782		818
Substandard	—		—		—		—		—		501		—		501
Doubtful	—		—		—		—		—		—		—		—
Total Home equity lines of credit	$	939	$	40	$	—	$	—	$	99	$	5,052	$	78,889	$	85,019
Year-to-date gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Consumer
Pass	$	1,389	$	3,130	$	971	$	740	$	362	$	1,331	$	1,755	$	9,678
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		26		26
Doubtful	—		—		—		—		—		—		—		—
Total Consumer	$	1,389	$	3,130	$	971	$	740	$	362	$	1,331	$	1,781	$	9,704
Year-to-date gross charge-offs	$	5	$	62	$	32	$	7	$	16	$	48	$	—	$	170

Total Portfolio loans
Pass	$	120,029	$	296,884	$	249,425	$	119,234	$	108,659	$	502,719	$	128,624	$	1,525,574
Special Mention	772		5,730		2,439		2,567		5,804		19,951		2,855		40,118
Substandard	8		19		—		20		557		6,991		530		8,125
Doubtful	—		—		—		—		—		—		—		—
Total Portfolio loans	$	120,809	$	302,633	$	251,864	$	121,821	$	115,020	$	529,661	$	132,009	$	1,573,817
Year-to-date gross charge-offs	$	5	$	62	$	32	$	7	$	16	$	77	$	—	$	199

The following table presents the recorded investment in loan classes by internally assigned risk ratings and loan classes by performing and nonperforming status as of December 31, 2022:


In thousands	Commercial and Industrial		Commercial Real Estate		Commercial Real Estate Construction		Residential Mortgage		Home Equity Lines of Credit		Consumer		Total
December 31, 2022
Pass	$	173,437	$	786,711	$	78,652	$	356,081	$	83,044	$	11,334	$	1,489,259
Special Mention	4,035		29,540		1,818		5,803		712		—		41,908
Substandard	1,290		5,554		—		214		385		—		7,443
Doubtful	—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—
Total Portfolio Loans	$	178,762	$	821,805	$	80,470	$	362,098	$	84,141	$	11,334	$	1,538,610

Performing Loans	$	177,981	$	819,932	$	80,470	$	361,393	$	83,643	$	11,334	$	1,534,753
Nonperforming Loans	781		1,873		—		705		498		—		3,857
Total Portfolio Loans	$	178,762	$	821,805	$	80,470	$	362,098	$	84,141	$	11,334	$	1,538,610

The following table presents loan balances by year of origination and performing and nonperforming status for ACNB’s portfolio segments as of June 30, 2023:


In thousands	2023		2022		2021		2020		2019		2018 and Prior		Revolving		Total
Commercial and industrial
Performing	$	3,187	$	27,255	$	39,524	$	17,399	$	15,136	$	26,956	$	28,336	$	157,793
Nonperforming	—		—		—		—		—		240		504		744
Total Commercial and industrial	3,187		27,255		39,524		17,399		15,136		27,196		28,840		158,537
Commercial real estate
Performing	72,528		152,576		145,888		69,291		77,369		339,575		14,959		872,186
Nonperforming	—		—		—		—		324		1,277		—		1,601
Total Commercial real estate	72,528		152,576		145,888		69,291		77,693		340,852		14,959		873,787
Commercial real estate construction
Performing	9,045		44,246		7,420		1,109		342		4,538		7,251		73,951
Nonperforming	—		—		—		—		—		—		—		—
Total Commercial real estate construction	9,045		44,246		7,420		1,109		342		4,538		7,251		73,951
Residential mortgage
Performing	33,721		75,386		58,061		33,282		21,388		149,704		289		371,831
Nonperforming	—		—		—		—		—		988		—		988
Total Residential Mortgage	33,721		75,386		58,061		33,282		21,388		150,692		289		372,819
Home equity lines of credit
Performing	939		40		—		—		99		4,726		78,889		84,693
Nonperforming	—		—		—		—		—		326		—		326
Total Home equity lines of credit	939		40		—		—		99		5,052		78,889		85,019
Consumer
Performing	1,389		3,130		971		740		362		1,331		1,781		9,704
Nonperforming	—		—		—		—		—		—		—		—
Total Consumer	1,389		3,130		971		740		362		1,331		1,781		9,704
Total Portfolio loans
Performing	120,809		302,633		251,864		121,821		114,696		526,830		131,505		1,570,158
Nonperforming	—		—		—		—		324		2,831		504		3,659
Total Portfolio loans	$	120,809	$	302,633	$	251,864	$	121,821	$	115,020	$	529,661	$	132,009	$	1,573,817

The following tables present the classes of the loan portfolio summarized by the past due status as of June 30, 2023, and December 31, 2022:


In thousands	30–59 Days Past Due		60–89 Days Past Due		>90 Days Past Due		Total Past Due		Current		Total Loans Receivable		Loans Receivable >90 Days and Accruing
June 30, 2023
Commercial and industrial	$	—	$	126	$	161	$	287	$	158,250	$	158,537	$	—
Commercial real estate	419		198		—		617		873,170		873,787		—
Commercial real estate construction	113		18		—		131		73,820		73,951		—
Residential mortgage	47		—		988		1,035		371,784		372,819		645
Home equity lines of credit	596		123		124		843		84,176		85,019		124
Consumer	63		27		—		90		9,614		9,704		—
Total Loans	$	1,238	$	492	$	1,273	$	3,003	$	1,570,814	$	1,573,817	$	769


In thousands	30–59 Days Past Due		60–89 Days Past Due		>90 Days Past Due		Total Past Due		Current		Total Loans Receivable		Loans Receivable >90 Days and Accruing
December 31, 2022
Commercial and industrial	$	287	$	—	$	162	$	449	$	178,313	$	178,762	$	—
Commercial real estate	2,026		350		255		2,631		819,174		821,805		—
Commercial real estate construction	24		—		—		24		80,446		80,470		—
Residential mortgage	2,969		970		705		4,644		357,454		362,098		705
Home equity lines of credit	438		117		498		1,053		83,088		84,141		498
Consumer	155		80		—		235		11,099		11,334		—
Total Loans	$	5,899	$	1,517	$	1,620	$	9,036	$	1,529,574	$	1,538,610	$	1,203

The following table summarizes information relative to individually evaluated loans by loan portfolio class as of June 30, 2023 and December 31, 2022:


	Individually Evaluated Loans with Allowance				Individually Evaluated Loans with No Allowance
In thousands	Recorded Investment		Related Allowance		Recorded Investment		Related Allowance
June 30, 2023
Commercial and industrial	$	744	$	647	$	—	$	—
Commercial real estate	324		184		1,277		—
Commercial real estate construction	—		—		—		—
Residential mortgage	—		—		343		—
Home equity lines of credit	—		—		202		—
	$	1,068	$	831	$	1,822	$	—
December 31, 2022
Commercial and industrial	$	781	$	628	$	—	$	—
Commercial real estate	350		192		4,984		—
Commercial real estate construction	—		—		—		—
Residential mortgage	—		—		—		—
Home equity lines of credit	—		—		—		—
	$	1,131	$	820	$	4,984	$	—

A loan is considered individually evaluated when it is transferred to nonaccrual status. During the three and six months ended June 30, 2023, no material amount of interest income was recognized on individually evaluated loans subsequent to their classification as individually evaluated loans.

The adoption of Topic 326 resulted in certain acquired and purchase credit impaired loans being added to the individually evaluated loan category and a prior troubled debt restructured loan was moved to performing status due to loan repayment history.

The following table presents the amortized cost basis of individually evaluated loans as of June 30, 2023. Changes in the fair value of the collateral for individually evaluated loans are reported as provision for credit losses or a reversal of provision for credit losses in the period of change.


	June 30, 2023
	Type of Collateral
In thousands	Business Assets		Real Estate
Commercial and industrial	$	744	$	—
Commercial real estate	—		1,601
Commercial real estate construction	—		—
Residential mortgage	—		343
Home equity lines of credit	—		202
Consumer	—		—
Total	$	744	$	2,146

The following tables summarize the allowance for credit losses and allowance for loan losses and recorded investment in loans receivable:


In thousands	Commercial and Industrial		Commercial Real Estate		Commercial Real Estate Construction		Residential Mortgage		Home Equity Lines of Credit		Consumer		Unallocated		Total
AS OF AND FOR THE PERIOD ENDED JUNE 30, 2023
Allowance for Credit Losses
Beginning balance - April 1, 2023	$	2,105	$	11,032	$	2,465	$	3,366	$	379	$	138	$	—	$	19,485

Charge-offs	—		—		—		—		—		(82)		—		(82)
Recoveries	9		—		—		—		—		9		—		18
Provisions (credits)	(173)		696		(580)		(291)		9		66		—		(273)
Ending balance - June 30, 2023	$	1,941	$	11,728	$	1,885	$	3,075	$	388	$	131	$	—	$	19,148

Beginning balance - January 1, 2023	$	2,848	$	10,016	$	1,000	$	3,029	$	347	$	376	$	245	$	17,861
Impact of CECL adoption	(762)		1,106		1,347		297		17		(142)		(245)		$	1,618
Charge-offs	(29)		—		—		—		—		(170)		—		(199)
Recoveries	10		—		—		—		—		34		—		44
Provisions (credits)	(126)		606		(462)		(251)		24		33		—		(176)
Ending balance - June 30, 2023	$	1,941	$	11,728	$	1,885	$	3,075	$	388	$	131	$	—	$	19,148
Ending balance: individually evaluated for impairment	$	647	$	184	$	—	$	—	$	—	$	—	$	—	$	831
Ending balance: collectively evaluated for impairment	$	1,294	$	11,544	$	1,885	$	3,075	$	388	$	131	$	—	$	18,317
Loans Receivable
Ending balance	$	158,537	$	873,787	$	73,951	$	372,819	$	85,019	$	9,704	$	—	$	1,573,817
Ending balance: individually evaluated for impairment	$	744	$	1,601	$	—	$	343	$	202	$	—	$	—	$	2,890
Ending balance: collectively evaluated for impairment	$	157,793	$	872,186	$	73,951	$	372,476	$	84,817	$	9,704	$	—	$	1,570,927
AS OF AND FOR THE PERIOD ENDED JUNE 30, 2022
Allowance for Loan Losses
Beginning balance - April 1, 2022	$	3,280	$	10,625	$	666	$	3,082	$	426	$	385	$	499	$	18,963
Charge-offs	(34)		—		—		(3)		—		(1)		—		(38)
Recoveries	5		—		—		5		—		8		—		18
Provisions (credits)	(135)		214		152		115		(30)		35		(351)		—
Ending balance - June 30, 2022	$	3,116	$	10,839	$	818	$	3,199	$	396	$	427	$	148	$	18,943

Beginning balance - January 1, 2022	$	3,176	$	10,716	$	616	$	3,235	$	501	$	408	$	381	$	19,033
Charge-offs	(97)		—		—		(3)		—		(20)		—		(120)
Recoveries	15		—		—		5		—		10		—		30
Provisions (credits)	22		123		202		(38)		(105)		29		(233)		—
Ending balance - June 30, 2022	$	3,116	$	10,839	$	818	$	3,199	$	396	$	427	$	148	$	18,943
Ending balance: individually evaluated for impairment	$	742	$	832	$	—	$	—	$	—	$	—	$	—	$	1,574
Ending balance: collectively evaluated for impairment	$	2,374	$	10,007	$	818	$	3,199	$	396	$	427	$	148	$	17,369
Loans Receivable
Ending balance	$	177,115	$	818,117	$	69,120	$	348,475	$	83,589	$	13,376	$	—	$	1,509,792
Ending balance: individually evaluated for impairment	$	895	$	7,000	$	—	$	—	$	—	$	—	$	—	$	7,895
Ending balance: collectively evaluated for impairment	$	176,220	$	811,117	$	69,120	$	348,475	$	83,589	$	13,376	$	—	$	1,501,897


In thousands	Commercial and Industrial		Commercial Real Estate		Commercial Real Estate Construction		Residential Mortgage		Home Equity Lines of Credit		Consumer		Unallocated		Total
AS OF DECEMBER 31, 2022
Allowance for Loan Losses
Ending balance	$	2,848	$	10,016	$	1,000	$	3,029	$	347	$	376	$	245	$	17,861
Ending balance: individually evaluated for impairment	$	628	$	192	$	—	$	—	$	—	$	—	$	—	$	820
Ending balance: collectively evaluated for impairment	$	2,220	$	9,824	$	1,000	$	3,029	$	347	$	376	$	245	$	17,041

Loans Receivable
Ending balance	$	178,762	$	821,805	$	80,470	$	362,098	$	84,141	$	11,334	$	—	$	1,538,610
Ending balance: individually evaluated for impairment	$	781	$	5,334	$	—	$	—	$	—	$	—	$	—	$	6,115
Ending balance: collectively evaluated for impairment	$	177,981	$	816,471	$	80,470	$	362,098	$	84,141	$	11,334	$	—	$	1,532,495