LOANS AND ALLOWANCE FOR CREDIT LOSSES

Schedule of adjustments to the initial market rate and credit fair value adjustments recognized


(In Thousands)	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2023		2022		2023		2022
Market Rate Adjustment
Adjustments to gross amortized cost of loans at beginning of period	$	(968)	$	(885)	$	(916)	$	(637)
(Amortization) accretion recognized in interest income		(32)		19		(84)		(229)
Adjustments to gross amortized cost of loans at end of period	$	(1,000)	$	(866)	$	(1,000)	$	(866)
Credit Adjustment on Non-impaired Loans
Adjustments to gross amortized cost of loans at beginning of period	$	(1,642)	$	(2,782)	$	(1,840)	$	(3,335)
Accretion recognized in interest income		196		379		394		932
Adjustments to gross amortized cost of loans at end of period	$	(1,446)	$	(2,403)	$	(1,446)	$	(2,403)

Schedule of aggregate credit quality classification of outstanding loans by risk


(In Thousands)	Term Loans by Year of Origination
	2023		2022		2021		2020		2019		Prior		Revolving		Total
Commercial real estate - nonowner occupied
Pass	$	67,743	$	189,214	$	94,135	$	56,150	$	81,629	$	219,042	$	0	$	707,913
Special Mention		0		0		1,509		0		121		11,124		0		12,754
Substandard		0		0		0		2,603		654		9,859		0		13,116
Doubtful		0		0		0		0		0		0		0		0
Total commercial real estate - nonowner occupied	$	67,743	$	189,214	$	95,644	$	58,753	$	82,404	$	240,025	$	0	$	733,783

Current period gross charge-offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Commercial real estate - owner occupied
Pass	$	23,074	$	37,121	$	51,575	$	13,599	$	17,942	$	78,363	$	0	$	221,674
Special Mention		0		0		2,667		0		0		223		0		2,890
Substandard		0		0		0		0		0		3,237		0		3,237
Doubtful		0		0		0		0		0		0		0		0
Total commercial real estate - owner occupied	$	23,074	$	37,121	$	54,242	$	13,599	$	17,942	$	81,823	$	0	$	227,801

Current period gross charge-offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

All other commercial loans
Pass	$	28,723	$	94,383	$	59,295	$	30,016	$	17,947	$	30,125	$	111,591	$	372,080
Special Mention		0		0		4,014		0		0		506		343		4,863
Substandard		0		1,926		60		444		2,292		1,166		9,853		15,741
Doubtful		0		0		0		0		0		0		0		0
Total all other commercial loans	$	28,723	$	96,309	$	63,369	$	30,460	$	20,239	$	31,797	$	121,787	$	392,684

Current period gross charge-offs	$	0	$	0	$	0	$	0	$	0	$	0	$	5	$	5

Residential mortgage loans
Pass	$	30,740	$	89,266	$	57,871	$	41,629	$	34,324	$	145,357	$	0	$	399,187
Special Mention		0		0		0		0		0		0		0		0
Substandard		0		0		0		291		371		4,384		0		5,046
Doubtful		0		0		0		0		0		0		0		0
Total residential mortgage loans	$	30,740	$	89,266	$	57,871	$	41,920	$	34,695	$	149,741	$	0	$	404,233

Current period gross charge-offs	$	0	$	0	$	0	$	0	$	0	$	33	$	0	$	33

Consumer loans
Pass	$	8,323	$	14,132	$	2,637	$	1,507	$	329	$	1,128	$	27,021	$	55,077
Special Mention		0		0		0		0		0		0		0		0
Substandard		262		0		1		8		10		79		572		932
Doubtful		0		0		0		0		0		0		0		0
Total consumer loans	$	8,585	$	14,132	$	2,638	$	1,515	$	339	$	1,207	$	27,593	$	56,009

Current period gross charge-offs	$	0	$	84	$	0	$	18	$	3	$	3	$	55	$	163

The following table presents the recorded investment in loans by credit quality indicators as of December 31, 2022:



			Special
(In Thousands)	Pass		Mention		Substandard		Doubtful		Total
Commercial real estate - nonowner occupied	$	654,430	$	9,486	$	11,681	$	0	$	675,597
Commercial real estate - owner occupied		202,702		1,909		371		0		204,982
All other commercial loans		383,846		2,516		23,616		0		409,978
Residential mortgage loans		387,944		0		5,638		0		393,582
Consumer loans		54,353		0		521		0		54,874
Purchased credit impaired		0		0		1,027		0		1,027
Total	$	1,683,275	$	13,911	$	42,854	$	0	$	1,740,040

Schedule of accrued Interest receivables written off


	Three Months Ended		Six Months Ended
(In Thousands)	June 30, 2023		June 30, 2023
Commercial real estate - nonowner occupied	$	0	$	26
Residential mortgage loans		3		6
Consumer loans		0		2
Total	$	3	$	34

Schedule of transactions within the allowance for loan losses


	Commercial		Commercial		All
	real estate -		real estate -		other		Residential
	nonowner		owner		commercial		mortgage		Consumer
(In Thousands)	occupied		occupied		loans		loans		loans		Unallocated		Total
Balance, March 31, 2023	$	9,654	$	1,942	$	3,580	$	2,864	$	306	$	0	$	18,346
Charge-offs		0		0		0		(14)		(120)		0		(134)
Recoveries		0		0		0		1		7		0		8
Provision (credit) for credit losses on loans		949		83		106		(387)		85		0		836
Balance, June 30, 2023	$	10,603	$	2,025	$	3,686	$	2,464	$	278	$	0	$	19,056


	Commercial		Commercial		All
	real estate -		real estate -		other		Residential
	nonowner		owner		commercial		mortgage		Consumer
(In Thousands)	occupied		occupied		loans		loans		loans		Unallocated		Total
Balance, December 31, 2022	$	6,305	$	1,942	$	4,142	$	2,751	$	475	$	1,000	$	16,615
Adoption of ASU 2016-13 (CECL)		3,763		7		(88)		(344)		(234)		(1,000)		2,104
Charge-offs		0		0		(5)		(33)		(163)		0		(201)
Recoveries		0		0		0		2		12		0		14
Provision (credit) for credit losses on loans		535		76		(363)		88		188		0		524
Balance, June 30, 2023	$	10,603	$	2,025	$	3,686	$	2,464	$	278	$	0	$	19,056


Three Months Ended June 30, 2022	March 31, 2022								June 30, 2022
(In Thousands)	Balance		Charge-offs		Recoveries		Provision (Credit)		Balance
Allowance for Loan Losses:
Commercial:
Commercial loans secured by real estate	$	5,017	$	0	$	0	$	(35)	$	4,982
Commercial and industrial		2,841		0		0		(49)		2,792
Commercial construction and land		391		0		0		124		515
Loans secured by farmland		129		0		0		(17)		112
Multi-family (5 or more) residential		367		0		0		(28)		339
Agricultural loans		27		0		0		(4)		23
Other commercial loans		150		0		0		(19)		131
Total commercial		8,922		0		0		(28)		8,894
Residential mortgage:
Residential mortgage loans - first liens		3,810		0		1		(122)		3,689
Residential mortgage loans - junior liens		181		0		0		(1)		180
Home equity lines of credit		306		0		0		2		308
1-4 Family residential construction		148		0		0		67		215
Total residential mortgage		4,445		0		1		(54)		4,392
Consumer		237		(41)		8		57		261
Unallocated		667		0		0		333		1,000
Total Allowance for Loan Losses	$	14,271	$	(41)	$	9	$	308	$	14,547


Six Months Ended June 30, 2022	December 31, 2021								June 30, 2022
(In Thousands)	Balance		Charge-offs		Recoveries		Provision (Credit)		Balance
Allowance for Loan Losses:
Commercial:
Commercial loans secured by real estate	$	4,405	$	0	$	0	$	577	$	4,982
Commercial and industrial		2,723		(150)		0		219		2,792
Commercial construction and land		637		0		0		(122)		515
Loans secured by farmland		115		0		0		(3)		112
Multi-family (5 or more) residential		215		0		0		124		339
Agricultural loans		25		0		0		(2)		23
Other commercial loans		173		0		0		(42)		131
Total commercial		8,293		(150)		0		751		8,894
Residential mortgage:
Residential mortgage loans - first liens		3,650		0		2		37		3,689
Residential mortgage loans - junior liens		184		0		0		(4)		180
Home equity lines of credit		302		0		15		(9)		308
1-4 Family residential construction		202		0		0		13		215
Total residential mortgage		4,338		0		17		37		4,392
Consumer		235		(71)		15		82		261
Unallocated		671		0		0		329		1,000
Total Allowance for Loan Losses	$	13,537	$	(221)	$	32	$	1,199	$	14,547

Summary of information related to impaired loans


(In Thousands)	December 31, 2022
	Unpaid
	Principal		Recorded		Related
	Balance		Investment		Allowance
With no related allowance recorded:
Commercial loans secured by real estate	$	8,563	$	3,754	$	0
Commercial and industrial		12,926		11,163		0
Residential mortgage loans - first liens		506		506		0
Residential mortgage loans - junior liens		68		30		0
Home equity lines of credit		68		68		0
Loans secured by farmland		76		76		0
Agricultural loans		57		57		0
Construction and other land loans		244		244		0
Total with no related allowance recorded		22,508		15,898		0

With a related allowance recorded:
Commercial loans secured by real estate		3,400		3,400		427
Commercial and industrial		60		60		26
Total with a related allowance recorded		3,460		3,460		453
Total	$	25,968	$	19,358	$	453

Schedule of carrying amount of foreclosed residential real estate properties


(In Thousands)	June 30,		December 31,
	2023		2022
Foreclosed residential real estate	$	184	$	0

Schedule of Off-Balance-Sheet


	Three Months		Six Months
	Ended		Ended
(In Thousands)	June 30, 2023		June 30, 2023
Beginning Balance	$	1,178	$	425
Adjustment to allowance for off-balance sheet exposures for adoption of ASU 2016-13		0		793
Credit for unfunded commitments		(24)		(64)
Balance, June 30, 2023	$	1,154	$	1,154