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				Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2023		2022		2023		2022
Market Rate Adjustment
Adjustments to gross amortized cost of loans at beginning of period	$	(1,000)	$	(866)	$	(916)	$	(637)
(Amortization) accretion recognized in interest income		(16)		5		(100)		(224)
Adjustments to gross amortized cost of loans at end of period	$	(1,016)	$	(861)	$	(1,016)	$	(861)
Credit Adjustment on Non-impaired Loans
Adjustments to gross amortized cost of loans at beginning of period	$	(1,446)	$	(2,403)	$	(1,840)	$	(3,335)
Accretion recognized in interest income		147		308		541		1,240
Adjustments to gross amortized cost of loans at end of period	$	(1,299)	$	(2,095)	$	(1,299)	$	(2,095)

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 - non-owner occupied
Pass	$	83,002	$	188,426	$	91,246	$	55,618	$	80,858	$	211,778	$	0	$	710,928
Special Mention		0		0		2,475		0		119		8,147		0		10,741
Substandard		0		0		0		2,577		610		12,431		0		15,618
Doubtful		0		0		0		0		0		0		0		0
Total commercial real estate - non-owner occupied	$	83,002	$	188,426	$	93,721	$	58,195	$	81,587	$	232,356	$	0	$	737,287

Year-to-date gross charge-offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Commercial real estate - owner occupied
Pass	$	28,058	$	37,306	$	52,680	$	13,245	$	17,722	$	75,113	$	0	$	224,124
Special Mention		0		0		2,617		0		0		1,301		0		3,918
Substandard		0		0		0		0		0		3,070		0		3,070
Doubtful		0		0		0		0		0		0		0		0
Total commercial real estate - owner occupied	$	28,058	$	37,306	$	55,297	$	13,245	$	17,722	$	79,484	$	0	$	231,112

Year-to-date gross charge-offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

All other commercial loans
Pass	$	39,638	$	94,942	$	53,556	$	29,097	$	17,364	$	25,489	$	112,698	$	372,784
Special Mention		0		0		4,642		0		0		805		400		5,847
Substandard		0		3,091		1,250		435		2,151		1,121		9,024		17,072
Doubtful		0		0		0		0		0		0		0		0
Total all other commercial loans	$	39,638	$	98,033	$	59,448	$	29,532	$	19,515	$	27,415	$	122,122	$	395,703

Year-to-date gross charge-offs	$	0	$	0	$	0	$	0	$	0	$	0	$	12	$	12

Residential mortgage loans
Pass	$	44,449	$	88,378	$	57,166	$	40,943	$	33,257	$	140,684	$	0	$	404,877
Special Mention		0		0		0		0		0		0		0		0
Substandard		0		0		0		289		369		4,478		0		5,136
Doubtful		0		0		0		0		0		0		0		0
Total residential mortgage loans	$	44,449	$	88,378	$	57,166	$	41,232	$	33,626	$	145,162	$	0	$	410,013

Year-to-date gross charge-offs	$	0	$	0	$	0	$	0	$	0	$	33	$	0	$	33

Consumer loans
Pass	$	5,216	$	5,070	$	2,227	$	1,372	$	238	$	991	$	40,512	$	55,626
Special Mention		0		0		0		0		0		0		0		0
Substandard		0		0		1		12		5		78		833		929
Doubtful		0		0		0		0		0		0		0		0
Total consumer loans	$	5,216	$	5,070	$	2,228	$	1,384	$	243	$	1,069	$	41,345	$	56,555

Year-to-date gross charge-offs	$	0	$	134	$	0	$	18	$	3	$	3	$	96	$	254

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 - non-owner 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		Nine Months Ended
(In Thousands)	September 30, 2023		September 30, 2023
Commercial real estate - non-owner occupied	$	22	$	48
Residential mortgage loans		11		17
Consumer loans		0		2
Total	$	33	$	67

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, June 30, 2023	$	10,603	$	2,025	$	3,686	$	2,464	$	278	$	0	$	19,056
Charge-offs		0		0		(7)		0		(91)		0		(98)
Recoveries		0		0		34		8		18		0		60
(Credit) provision for credit losses on loans		(268)		(161)		(161)		(479)		136		0		(933)
Balance, September 30, 2023	$	10,335	$	1,864	$	3,552	$	1,993	$	341	$	0	$	18,085


	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		(12)		(33)		(254)		0		(299)
Recoveries		0		0		34		10		30		0		74
(Credit) provision for credit losses on loans		267		(85)		(524)		(391)		324		0		(409)
Balance, September 30, 2023	$	10,335	$	1,864	$	3,552	$	1,993	$	341	$	0	$	18,085


Three Months Ended September 30, 2022	June 30, 2022								September 30, 2022
(In Thousands)	Balance		Charge-offs		Recoveries		Provision (Credit)		Balance
Allowance for Loan Losses:
Commercial:
Commercial loans secured by real estate	$	4,982	$	(2,160)	$	0	$	3,225	$	6,047
Commercial and industrial		2,792		0		0		31		2,823
Commercial construction and land		515		0		0		169		684
Loans secured by farmland		112		0		0		1		113
Multi-family (5 or more) residential		339		0		0		88		427
Agricultural loans		23		0		0		(1)		22
Other commercial loans		131		0		0		(9)		122
Total commercial		8,894		(2,160)		0		3,504		10,238
Residential mortgage:
Residential mortgage loans - first liens		3,689		0		1		229		3,919
Residential mortgage loans - junior liens		180		0		0		14		194
Home equity lines of credit		308		0		0		25		333
1-4 Family residential construction		215		0		0		36		251
Total residential mortgage		4,392		0		1		304		4,697
Consumer		261		(36)		24		(14)		235
Unallocated		1,000		0		0		0		1,000
Total Allowance for Loan Losses	$	14,547	$	(2,196)	$	25	$	3,794	$	16,170


Nine Months Ended September 30, 2022	December 31, 2021								September 30, 2022
(In Thousands)	Balance		Charge-offs		Recoveries		Provision (Credit)		Balance
Allowance for Loan Losses:
Commercial:
Commercial loans secured by real estate	$	4,405	$	(2,160)	$	0	$	3,802	$	6,047
Commercial and industrial		2,723		(150)		0		250		2,823
Commercial construction and land		637		0		0		47		684
Loans secured by farmland		115		0		0		(2)		113
Multi-family (5 or more) residential		215		0		0		212		427
Agricultural loans		25		0		0		(3)		22
Other commercial loans		173		0		0		(51)		122
Total commercial		8,293		(2,310)		0		4,255		10,238
Residential mortgage:
Residential mortgage loans - first liens		3,650		0		3		266		3,919
Residential mortgage loans - junior liens		184		0		0		10		194
Home equity lines of credit		302		0		15		16		333
1-4 Family residential construction		202		0		0		49		251
Total residential mortgage		4,338		0		18		341		4,697
Consumer		235		(107)		39		68		235
Unallocated		671		0		0		329		1,000
Total Allowance for Loan Losses	$	13,537	$	(2,417)	$	57	$	4,993	$	16,170

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)	September 30,		December 31,
	2023		2022
Foreclosed residential real estate	$	202	$	0

Schedule of Off-Balance-Sheet


	Three Months		Nine Months
	Ended		Ended
(In Thousands)	September 30, 2023		September 30, 2023
Beginning Balance	$	1,154	$	425
Adjustment to allowance for off-balance sheet exposures for adoption of ASU 2016-13		0		793
Recoveries		38		38
Credit for unfunded commitments		(292)		(356)
Balance, September 30, 2023	$	900	$	900