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Loans and Allowance for Credit Losses
 6 Months Ended
Jun. 30, 2024
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]  
Loans and Allowance for Credit Losses Loans and Allowance for Credit Losses
 
The following table presents the composition of the loan portfolio:

(In thousands)June 30, 2024December 31, 2023
Commercial real estate$950,086 $898,709 
Residential mortgage397,466 394,189 
Commercial and industrial149,080 152,344 
Home equity lines of credit84,858 90,163 
Real estate construction89,780 84,341 
Consumer9,888 9,954 
Gross loans1,681,158 1,629,700 
Unearned income(1,558)(1,712)
Total loans, net of unearned income$1,679,600 $1,627,988 
One of the factors used to monitor the performance and credit quality of the loan portfolio is to analyze the age of the loans receivable as determined by the length of time a recorded payment is past due. The following tables present the classes of the loan portfolio summarized by the past due status:
(In thousands)30–59 Days Past Due60–89 Days
Past Due		≥ 90 Days
Past Due		Total Past
Due		CurrentTotal Loans
Receivable		Loans
Receivable
≥ 90 Days
and
Accruing
June 30, 2024
Commercial real estate$214 $— $346 $560 $949,526 $950,086 $32 
Residential mortgage170 389 678 1,237 396,229 397,466 505 
Commercial and industrial653 56 157 866 148,214 149,080 — 
Home equity lines of credit443 12 207 662 84,196 84,858 207 
Real estate construction16 12 — 28 89,752 89,780 — 
Consumer16 4 — 20 9,868 9,888 — 
Gross Loans$1,512 $473 $1,388 $3,373 $1,677,785 $1,681,158 $744 

(In thousands)30–59 Days Past Due60–89 Days
Past Due		≥ 90 Days
Past Due		Total Past
Due		CurrentTotal Loans
Receivable		Loans
Receivable
≥ 90 Days
and
Accruing
December 31, 2023
Commercial real estate$150 $347 $— $497 $898,212 $898,709 $— 
Residential mortgage1,293 388 849 2,530 391,659 394,189 505 
Commercial and industrial50 — 159 209 152,135 152,344 — 
Home equity lines of credit414 — 654 1,068 89,095 90,163 654 
Real estate construction12 — — 12 84,329 84,341 — 
Consumer8 — 3 11 9,943 9,954 3 
Gross Loans$1,927 $735 $1,665 $4,327 $1,625,373 $1,629,700 $1,162 

Nonaccrual and Nonperforming Loans

Loans individually evaluated consist of nonaccrual loans, presented in the following table: 

(In thousands)With a Related AllowanceWithout a Related AllowanceTotal
June 30, 2024
Commercial real estate$314 $1,062 $1,376 
Residential mortgage— 172 172 
Commercial and industrial670 — 670 
Home equity lines of credit— 174 174 
 $984 $1,408 $2,392 
December 31, 2023
Commercial real estate$315 $1,164 $1,479 
Residential mortgage— 343 343 
Commercial and industrial1,004 — 1,004 
Home equity lines of credit— 185 185 
$1,319 $1,692 $3,011 
During the three and six months ended June 30, 2024, no material amount of interest income was recognized on nonaccrual loans subsequent to their classification as nonaccrual.

Total nonperforming loans are as follows:

(In thousands)June 30, 2024December 31, 2023
Nonaccrual loans$2,392 $3,011 
Greater than or equal to 90 days past due and accruing744 1,162 
Total nonperforming loans$3,136 $4,173 
Collateral-Dependent Loans
A loan is considered to be collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. For all classes of loans deemed collateral-dependent, the Corporation elected the practical expedient to estimate expected credit losses based on the collateral’s fair value less cost to sell. In most cases, the Corporation records a partial charge-off to reduce the collateral-dependent loan’s carrying value to the collateral’s fair value less cost to sell. Substantially all of the collateral supporting collateral-dependent loans consists of various types of real estate, including residential properties, commercial properties, such as retail centers, office buildings, and lodging, agriculture land, and vacant land.

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. The following table presents the amortized cost basis of individually evaluated loans as of the periods presented:
Type of Collateral
(In thousands)Business AssetsReal Estate
June 30, 2024
Commercial real estate$— $1,376 
Residential mortgage— 172 
Commercial and industrial670 — 
Home equity lines of credit— 174 
Total$670 $1,722 
December 31, 2023
Commercial real estate$— $1,479 
Residential mortgage— 343 
Commercial and industrial1,004 — 
Home equity lines of credit— 185 
Total$1,004 $2,007 

Consumer residential mortgages and home equity lines of credit which are well secured by residential real estate properties and are in the process of collection are not considered nonaccrual, however, formal foreclosure proceedings are in process. These loans totaled $1.0 million at June 30, 2024 and $1.3 million at December 31, 2023 and are included in nonperforming loans if they are greater than or equal to 90 days past due.
Loan Modifications

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, or combinations of the above. Therefore, the disclosures related to loan restructurings are only for modifications that directly affect cash flows.

During both the six months ended June 30, 2024 and 2023, the Corporation did not modify any loans nor were there any commitments to lend any additional funds on existing modified loans.

The following presents the performance of loans modified in the previous twelve months as of June 30, 2024:

(In thousands)Current30-89 Days Past Due≥ 90 Days
Past Due		Total Past Due
Commercial and industrial$259 $— $— $— 

As of June 30, 2024, the Corporation had no loans that defaulted during the period that 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

The Corporation maintains an 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 ACL consists of loans evaluated collectively and individually for expected credit losses. The Corporation considers the performance of the loan portfolio and its impact on the ACL and does not assign internal risk ratings to smaller balance, homogeneous loans such as certain residential mortgage, home equity lines of credit, construction loans to individuals secured by residential real estate and consumer loans. For these loans, the Corporation evaluates credit quality based on the aging status of the loan and designates as performing and nonperforming.
The following summarizes designated internal risk categories by portfolio segment for loans assigned a risk rating and those evaluated based on the performance status:
June 30, 2024
Term Loans Amortized Cost Basis by Origination YearRevolving Loans Amortized Cost Basis
(In thousands)20242023202220212020PriorTotal
Internally Risk Rated:
Commercial real estate
Pass$83,987 $134,961 $156,662 $128,043 $57,944 $331,428 $15,672 $908,697 
Special Mention42 2,424 4,079 5,931 1,992 16,887 1,735 33,090 
Substandard— — — — 1,507 6,792 — 8,299 
Total Commercial real estate$84,029 $137,385 $160,741 $133,974 $61,443 $355,107 $17,407 $950,086 
Residential mortgage
Pass$11,954 $38,229 $24,251 $39,571 $14,258 $34,039 $298 $162,600 
Special Mention— 990 273 581 248 3,267 94 5,453 
Substandard— — — — — 241 — 241 
Total Residential Mortgage$11,954 $39,219 $24,524 $40,152 $14,506 $37,547 $392 $168,294 
Commercial and industrial
Pass$6,787 $11,578 $22,118 $32,936 $13,782 $26,669 $26,920 $140,790 
Special Mention179 160 285 221 156 498 2,078 3,577 
Substandard— 422 101 406 16 1,397 2,371 4,713 
Total Commercial and industrial$6,966 $12,160 $22,504 $33,563 $13,954 $28,564 $31,369 $149,080 
Home equity lines of credit
Pass$— $297 $95 $— $— $284 $5,235 $5,911 
Special Mention— — — — — — 717 717 
Substandard— — — — — 181 — 181 
Total Home equity lines of credit$— $297 $95 $— $— $465 $5,952 $6,809 
Real estate construction
Pass$5,830 $28,610 $38,226 $1,233 $314 $1,127 $6,239 $81,579 
Special Mention— — 284 — — 694 26 1,004 
Substandard— — — — — 65 — 65 
Total Real estate construction$5,830 $28,610 $38,510 $1,233 $314 $1,886 $6,265 $82,648 
Performance Rated:
Residential mortgage
Performing$8,101 $39,369 $42,477 $14,087 $15,413 $109,150 $70 $228,667 
Nonperforming— — — — — 505 — 505 
Total Residential Mortgage$8,101 $39,369 $42,477 $14,087 $15,413 $109,655 $70 $229,172 
Home equity lines of credit
Performing$— $21 $36 $— $12 $3,343 $74,430 $77,842 
Nonperforming— — — — — — 207 207 
Total Home equity lines of credit$— $21 $36 $— $12 $3,343 $74,637 $78,049 
Real estate construction
Performing$1,970 $3,073 $742 $169 $199 $978 $1 $7,132 
Total Real estate construction$1,970 $3,073 $742 $169 $199 $978 $1 $7,132 
Consumer
Performing$1,169 $1,856 $2,260 $611 $378 $1,025 $2,589 $9,888 
Total Consumer$1,169 $1,856 $2,260 $611 $378 $1,025 $2,589 $9,888 
Year-to-date gross charge-offs$— $— $5 $— $— $7 $100 $112 
Total Portfolio loans:
Pass$108,558 $213,675 $241,352 $201,783 $86,298 $393,547 $54,364 $1,299,577 
Special Mention221 3,574 4,921 6,733 2,396 21,346 4,650 43,841 
Substandard— 422 101 406 1,523 8,676 2,371 13,499 
Performing11,240 44,319 45,515 14,867 16,002 114,496 77,090 323,529 
Nonperforming— — — — — 505 207 712 
Total Portfolio loans$120,019 $261,990 $291,889 $223,789 $106,219 $538,570 $138,682 $1,681,158 
Year-to-date gross charge-offs$— $— $5 $— $— $7 $100 $112 
December 31, 2023
Term Loans Amortized Cost Basis by Origination YearRevolving Loans Amortized Cost Basis
(In thousands)20232022202120202019PriorTotal
Internally Risk Rated:
Commercial real estate
Pass$136,158 $152,767 $130,994 $60,918 $65,856 $287,026 $13,636 $847,355 
Special Mention1,927 6,385 5,920 1,904 8,222 16,244 1,994 42,596 
Substandard— — — 1,530 704 6,524 — 8,758 
Total Commercial real estate$138,085 $159,152 $136,914 $64,352 $74,782 $309,794 $15,630 $898,709 
Residential mortgage
Pass$39,146 $27,612 $41,031 $14,758 $10,492 $27,274 $402 $160,715 
Special Mention588 82 593 397 826 2,457 62 5,005 
Substandard— — — — — 218 — 218 
Total Residential mortgage$39,734 $27,694 $41,624 $15,155 $11,318 $29,949 $464 $165,938 
Commercial and industrial
Pass$12,319 $24,259 $34,830 $15,614 $13,922 $17,780 $25,147 $143,871 
Special Mention128 303 290 529 140 459 2,014 3,863 
Substandard7 135 499 91 9 1,597 2,272 4,610 
Total Commercial and industrial$12,454 $24,697 $35,619 $16,234 $14,071 $19,836 $29,433 $152,344 
Year-to-date gross charge-offs$— $— $— $— $— $110 $— $110 
Home equity lines of credit
Pass$300 $99 $— $— $— $131 $5,235 $5,765 
Special Mention— — — — — — 727 727 
Substandard— — — — — 362 — 362 
Total Home equity lines of credit$300 $99 $— $— $— $493 $5,962 $6,854 
Real estate construction
Pass$19,766 $39,758 $3,953 $1,160 $— $2,604 $8,003 $75,244 
Special Mention— 465 — 92 — 725 — 1,282 
Substandard— — — — — 69 — 69 
Total Real estate construction$19,766 $40,223 $3,953 $1,252 $— $3,398 $8,003 $76,595 
Performance Rated:
Residential mortgage
Performing$33,884 $45,221 $14,878 $16,184 $9,059 $108,021 $156 $227,403 
Nonperforming— — — — — 848 — 848 
Total Residential mortgage$33,884 $45,221 $14,878 $16,184 $9,059 $108,869 $156 $228,251 
Home equity lines of credit
Performing$23 $38 $— $13 $94 $4,742 $77,745 $82,655 
Nonperforming— — — — — 92 562 654 
Total Home equity lines of credit$23 $38 $— $13 $94 $4,834 $78,307 $83,309 
Real estate construction
Performing$5,571 $753 $175 $210 $170 $867 $— $7,746 
Total Real estate construction$5,571 $753 $175 $210 $170 $867 $— $7,746 
Consumer
Performing$2,351 $2,685 $778 $522 $271 $1,085 $2,259 $9,951 
Nonperforming— — — — — — 3 3 
Total Consumer$2,351 $2,685 $778 $522 $271 $1,085 $2,262 $9,954 
Year-to-date gross charge-offs$48 $83 $42 $55 $23 $78 $67 $396 
Total Portfolio loans
Pass$207,689 $244,495 $210,808 $92,450 $90,270 $334,815 $52,423 $1,232,950 
Special Mention2,643 7,235 6,803 2,922 9,188 19,885 4,797 53,473 
Substandard7 135 499 1,621 713 8,770 2,272 14,017 
Performing41,829 48,697 15,831 16,929 9,594 114,715 80,160 327,755 
Nonperforming— — — — — 940 565 1,505 
Total Portfolio loans$252,168 $300,562 $233,941 $113,922 $109,765 $479,125 $140,217 $1,629,700 
Year-to-date gross charge-offs$48 $83 $42 $55 $23 $188 $67 $506 
During the three months ended June 30, 2024, the Corporation revised estimates driven by a realignment of the peer group used for the CECL allowance process, an update to loss driver factors from third-party data, and an update to the application of prepayment and curtailment rate studies since implementation of CECL on January 1, 2023. These estimates, which were based on more current information available as of June 30, 2024, drive input assumptions which are used in the determination of the Corporation’s allowance for credit losses and the reserve for unfunded commitments. These updated estimates were the primary
drivers for a $3.0 million and $259 thousand reversal of the provisions for credit losses and unfunded commitments, respectively, for the three months ended June 30, 2024 and a $2.8 million and $410 thousand reversal of the provisions for credit losses and for unfunded commitments, respectively, for the six months ended June 30, 2024.
The following table presents the activity in the ACL by loan portfolio segment:
(In thousands)Commercial
Real Estate		Residential
Mortgage		Commercial
and
Industrial		Home Equity
Lines of
Credit		Real Estate
Construction		ConsumerUnallocatedTotal
Three Months Ended June 30, 2024     
Beginning balance - April 1, 2024$12,240 $3,227 $1,960 $314 $2,313 $118 $— $20,172 
Charge-offs— — — — — (52)— (52)
Recoveries— — 3 — — 29 — 32 
Provisions (credits)(2,044)(388)(498)(2)(66)8 — (2,990)
Ending balance - June 30, 2024$10,196 $2,839 $1,465 $312 $2,247 $103 $— $17,162 
Six Months Ended June 30, 2024
Beginning balance - January 1, 2024$12,010 $3,303 $2,048 $397 $2,070 $141 $— $19,969 
Charge-offs— — — — — (112)— (112)
Recoveries— — 18 — — 54 — 72 
Provisions (credits)(1,814)(464)(601)(85)177 20 — (2,767)
Ending balance - June 30, 2024$10,196 $2,839 $1,465 $312 $2,247 $103 $— $17,162 
Three Months Ended June 30, 2023     
Beginning balance - April 1, 2023$11,032 $3,366 $2,105 $379 $2,465 $138 $— $19,485 
Charge-offs— — — — — (82)— (82)
Recoveries— — 9 — — 9 — 18 
Provisions696 (291)(173)9 (580)66 — (273)
Ending balance - June 30, 2023$11,728 $3,075 $1,941 $388 $1,885 $131 $— $19,148 
Six Months Ended June 30, 2023
Beginning balance - January 1, 2023$10,016 $3,029 $2,848 $347 $1,000 $376 $245 $17,861 
Impact of CECL adoption1,106 297 (762)17 1,347 (142)(245)1,618 
Charge-offs— — (29)— — (170)— (199)
Recoveries— — 10 — — 34 — 44 
Provisions606 (251)(126)24 (462)33 — (176)
Ending balance - June 30, 2023$11,728 $3,075 $1,941 $388 $1,885 $131 $— $19,148