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LOANS AND ALLOWANCE FOR CREDIT LOSSES | 12 Months Ended
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Dec. 31, 2023
LOANS AND ALLOWANCE FOR CREDIT LOSSES |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | 7. LOANS AND ALLOWANCE FOR CREDIT LOSSES Loans receivable at December 31, 2023 and 2022 are summarized as follows: ​ Summary of Loans by Type (In Thousands)
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | December 31, |  | December 31,
​ |  | 2023 | ​ | 2022
Commercial real estate - non-owner occupied | ​ | $ | 737,342 | ​ | $ | 675,597
Commercial real estate - owner occupied | ​ | ​ | 237,246 | ​ | ​ | 205,910
All other commercial loans | ​ | ​ | 399,693 | ​ | ​ | 410,077
Residential mortgage loans | ​ | ​ | 413,714 | ​ | ​ | 393,582
Consumer loans | ​ | ​ | 60,144 | ​ | ​ | 54,874
Total | ​ | ​ | 1,848,139 | ​ | ​ | 1,740,040
Less: allowance for credit losses on loans | ​ | ​ | (19,208) | ​ | ​ | (16,615)
Loans, net | ​ | $ | 1,828,931 | ​ | $ | 1,723,425
​ (1) Total loans at December 31, 2022 include purchased credit impaired loans of $1,027,000. ​ In the table above, outstanding loan balances are presented net of deferred loan origination fees of $4,459,000 at December 31, 2023 and $4,725,000 at December 31, 2022. The Corporation grants loans to individuals as well as commercial and tax-exempt entities. Commercial, residential and personal loans are made to customers geographically concentrated in Northcentral Pennsylvania, the Southern tier of New York State, Southeastern Pennsylvania and Southcentral Pennsylvania. Although the Corporation has a diversified loan portfolio, a significant portion of its debtors’ ability to honor their contracts is dependent on the local economic conditions within the region. Acquired loans were initially recorded at fair value, with adjustments made to gross amortized cost based on movements in interest rates (market rate adjustment) and based on credit fair value adjustments on non-impaired loans and impaired loans. Subsequently, the Corporation has recognized amortization and accretion of a portion of the market rate adjustments and credit adjustments on performing loans. For the year ended December 31, 2023 and 2022, adjustments to the initial market rate and credit fair value adjustments of performing loans were recognized as follows: ​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​
(In Thousands) | ​ | Year Ended
​ | ​ | December 31, | ​ | December 31,
​ | ​ | 2023 | ​ | 2022
Market Rate Adjustment |  | ​ |  |  | ​ |
Adjustments to gross amortized cost of loans at beginning of period | ​ | $ | (916) | ​ | $ | (637)
Amortization recognized in interest income | ​ | ​ | (54) | ​ | ​ | (279)
Adjustments to gross amortized cost of loans at end of period | ​ | $ | (970) | ​ | $ | (916)
Credit Adjustment on Non-impaired Loans | ​ | ​ | ​ | ​ | ​ | ​
Adjustments to gross amortized cost of loans at beginning of period | ​ | $ | (1,840) | ​ | $ | (3,335)
Accretion recognized in interest income | ​ |  | 677 | ​ |  | 1,495
Adjustments to gross amortized cost of loans at end of period | ​ | $ | (1,163) | ​ | $ | (1,840)
​ The following table presents an analysis of past due loans as of December 31, 2023: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(In Thousands) | ​ | As of December 31, 2023
​ | ​ | Past Due | ​ | Past Due | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | 30-89 | ​ | 90+ | ​ | Nonaccrual | ​ | Current | ​ | Total
​ | ​ | Days | ​ | Days | ​ | Loans | ​ | Loans | ​ | Loans
Commercial real estate - non-owner occupied | ​ | $ | 2,215 | ​ | $ | 126 | ​ | $ | 8,412 | ​ | $ | 726,589 | ​ | $ | 737,342
Commercial real estate - owner occupied | ​ |  | 849 | ​ |  | 0 | ​ |  | 1,575 | ​ |  | 234,822 | ​ |  | 237,246
All other commercial loans | ​ | ​ | 229 | ​ | ​ | 2,593 | ​ | ​ | 1,323 | ​ | ​ | 395,548 | ​ | ​ | 399,693
Residential mortgage loans | ​ | ​ | 5,365 | ​ | ​ | 326 | ​ | ​ | 3,627 | ​ | ​ | 404,396 | ​ | ​ | 413,714
Consumer loans | ​ |  | 617 | ​ |  | 145 | ​ |  | 240 | ​ |  | 59,142 | ​ |  | 60,144
Total | ​ | $ | 9,275 | ​ | $ | 3,190 | ​ | $ | 15,177 | ​ | $ | 1,820,497 | ​ | $ | 1,848,139
​ The following table presents an analysis of past due loans as of December 31, 2022: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(In Thousands) | ​ | As of December 31, 2022
​ | ​ | Past Due | ​ | Past Due | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | 30-89 | ​ | 90+ | ​ | Nonaccrual | ​ | Current | ​ | Total
​ | ​ | Days | ​ | Days | ​ | Loans | ​ | Loans | ​ | Loans
Commercial real estate - non-owner occupied | ​ | $ | 644 | ​ | $ | 947 | ​ | $ | 6,350 | ​ | $ | 667,656 | ​ | $ | 675,597
Commercial real estate - owner occupied | ​ |  | 723 | ​ |  | 141 | ​ |  | 19 | ​ |  | 204,099 | ​ |  | 204,982
All other commercial loans | ​ | ​ | 537 | ​ | ​ | 151 | ​ | ​ | 11,528 | ​ | ​ | 397,762 | ​ | ​ | 409,978
Residential mortgage loans | ​ | ​ | 4,540 | ​ | ​ | 866 | ​ | ​ | 3,974 | ​ | ​ | 384,202 | ​ | ​ | 393,582
Consumer loans | ​ | ​ | 635 | ​ | ​ | 132 | ​ | ​ | 187 | ​ | ​ | 53,920 | ​ | ​ | 54,874
Purchased credit impaired | ​ |  | 0 | ​ |  | 0 | ​ |  | 1,027 | ​ |  | 0 | ​ |  | 1,027
Total | ​ | $ | 7,079 | ​ | $ | 2,237 | ​ | $ | 23,085 | ​ | $ | 1,707,639 | ​ | $ | 1,740,040
​ ​ The Corporation uses an internal risk rating system. Under the risk rating system, the Corporation classifies problem or potential problem loans as “Special Mention,” “Substandard,” or “Doubtful” on the basis of currently existing facts, conditions and values. Loans that do not currently expose the Corporation to sufficient risk to warrant classification as Substandard or Doubtful, but possess weaknesses that deserve management’s close attention, are deemed to be Special Mention. Substandard loans include those characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Risk ratings are updated any time that conditions or the situation warrants. Loans not classified are included in the “Pass” column in the table that follows. ​ The following table presents the recorded investment in loans by credit quality indicators by year of origination as of December 31, 2023: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(In Thousands) | ​ | Term Loans by Year of Origination | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | 2023 | ​ | 2022 | ​ | 2021 | ​ | 2020 | ​ | 2019 | ​ | Prior | ​ | Revolving | ​ | Total
Commercial real estate - non-owner occupied | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Pass | ​ | $ | 96,615 | ​ | $ | 167,484 | ​ | $ | 89,582 | ​ | $ | 55,390 | ​ | $ | 80,020 | ​ | $ | 207,017 | ​ | $ | 0 | ​ | $ | 696,108
Special Mention | ​ |  | 0 | ​ |  | 20,072 | ​ |  | 2,446 | ​ |  | 0 | ​ |  | 116 | ​ |  | 6,188 | ​ |  | 0 | ​ |  | 28,822
Substandard | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 18 | ​ | ​ | 566 | ​ | ​ | 11,828 | ​ | ​ | 0 | ​ | ​ | 12,412
Doubtful | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0
Total commercial real estate - non-owner occupied | ​ | $ | 96,615 | ​ | $ | 187,556 | ​ | $ | 92,028 | ​ | $ | 55,408 | ​ | $ | 80,702 | ​ | $ | 225,033 | ​ | $ | 0 | ​ | $ | 737,342
​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Year-to-date gross charge-offs | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 0
​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Commercial real estate - owner occupied | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Pass | ​ | $ | 33,761 | ​ | $ | 37,429 | ​ | $ | 52,090 | ​ | $ | 12,858 | ​ | $ | 17,505 | ​ | $ | 71,775 | ​ | $ | 0 | ​ | $ | 225,418
Special Mention | ​ | ​ | 104 | ​ |  | 746 | ​ |  | 0 | ​ |  | 0 | ​ |  | 0 | ​ |  | 166 | ​ |  | 0 | ​ |  | 1,016
Substandard | ​ | ​ | 5,200 | ​ | ​ | 0 | ​ | ​ | 2,567 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 3,045 | ​ | ​ | 0 | ​ | ​ | 10,812
Doubtful |  | ​ | 0 |  | ​ | 0 |  | ​ | 0 |  | ​ | 0 |  | ​ | 0 |  | ​ | 0 |  | ​ | 0 |  | ​ | 0
Total commercial real estate - owner occupied | ​ | $ | 39,065 | ​ | $ | 38,175 | ​ | $ | 54,657 | ​ | $ | 12,858 | ​ | $ | 17,505 | ​ | $ | 74,986 | ​ | $ | 0 | ​ | $ | 237,246
​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Year-to-date gross charge-offs | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 0
​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
All other commercial loans | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Pass | ​ | $ | 58,393 | ​ | $ | 90,560 | ​ | $ | 51,813 | ​ | $ | 27,718 | ​ | $ | 16,421 | ​ | $ | 24,326 | ​ | $ | 107,234 | ​ | $ | 376,465
Special Mention | ​ |  | 0 | ​ |  | 2,690 | ​ |  | 5,043 | ​ |  | 8 | ​ |  | 0 | ​ |  | 794 | ​ |  | 301 | ​ |  | 8,836
Substandard | ​ | ​ | 0 | ​ | ​ | 1,267 | ​ | ​ | 1,250 | ​ | ​ | 453 | ​ | ​ | 679 | ​ | ​ | 1,085 | ​ | ​ | 9,658 | ​ | ​ | 14,392
Doubtful | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0
Total all other commercial loans | ​ | $ | 58,393 | ​ | $ | 94,517 | ​ | $ | 58,106 | ​ | $ | 28,179 | ​ | $ | 17,100 | ​ | $ | 26,205 | ​ | $ | 117,193 | ​ | $ | 399,693
​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Year-to-date gross charge-offs | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 12 | ​ | $ | 12
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Residential mortgage loans | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | $ | 57,300 | ​ | $ | 87,519 | ​ | $ | 56,183 | ​ | $ | 39,411 | ​ | $ | 32,401 | ​ | $ | 135,546 | ​ | $ | 0 | ​ | $ | 408,360
Special Mention | ​ |  | 0 | ​ |  | 0 | ​ |  | 0 | ​ |  | 0 | ​ |  | 0 | ​ |  | 0 | ​ |  | 0 | ​ |  | 0
Substandard | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 285 | ​ | ​ | 369 | ​ | ​ | 4,700 | ​ | ​ | 0 | ​ | ​ | 5,354
Doubtful | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0
Total residential mortgage loans | ​ | $ | 57,300 | ​ | $ | 87,519 | ​ | $ | 56,183 | ​ | $ | 39,696 | ​ | $ | 32,770 | ​ | $ | 140,246 | ​ | $ | 0 | ​ | $ | 413,714
​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Year-to-date gross charge-offs | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 0 | ​ | $ | 33 | ​ | $ | 0 | ​ | $ | 33
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer loans | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | $ | 6,020 | ​ | $ | 4,664 | ​ | $ | 1,944 | ​ | $ | 1,205 | ​ | $ | 175 | ​ | $ | 913 | ​ | $ | 44,312 | ​ | $ | 59,233
Special Mention | ​ |  | 0 | ​ |  | 0 | ​ |  | 0 | ​ |  | 0 | ​ |  | 0 | ​ |  | 0 | ​ |  | 0 | ​ |  | 0
Substandard | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 5 | ​ | ​ | 11 | ​ | ​ | 1 | ​ | ​ | 58 | ​ | ​ | 836 | ​ | ​ | 911
Doubtful | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0
Total consumer loans | ​ | $ | 6,020 | ​ | $ | 4,664 | ​ | $ | 1,949 | ​ | $ | 1,216 | ​ | $ | 176 | ​ | $ | 971 | ​ | $ | 45,148 | ​ | $ | 60,144
​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Year-to-date gross charge-offs | ​ | $ | 0 | ​ | $ | 149 | ​ | $ | 0 | ​ | $ | 18 | ​ | $ | 3 | ​ | $ | 3 | ​ | $ | 138 | ​ | $ | 311
​ 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
​ The following table is a summary of the Corporation’s nonaccrual loans by major categories for the periods indicated. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2023 | ​ | December 31, 2022
​ | ​ | Nonaccrual Loans with | ​ | Nonaccrual Loans | ​ | Total Nonaccrual | ​ | ​
(In Thousands) | ​ | No Allowance | ​ | with an Allowance | ​ | Loans | ​ | Nonaccrual Loans
Commercial real estate - non-owner occupied | ​ | $ | 1,111 | ​ | $ | 7,301 | ​ | $ | 8,412 | ​ | $ | 6,350
Commercial real estate - owner occupied | ​ |  | 1,281 | ​ |  | 294 | ​ |  | 1,575 | ​ |  | 19
All other commercial loans | ​ | ​ | 1,132 | ​ | ​ | 191 | ​ | ​ | 1,323 | ​ | ​ | 11,528
Residential mortgage loans | ​ | ​ | 3,627 | ​ | ​ | 0 | ​ | ​ | 3,627 | ​ | ​ | 3,974
Consumer loans | ​ |  | 240 | ​ |  | 0 | ​ |  | 240 | ​ |  | 187
Purchased credit impaired | ​ |  | 0 | ​ |  | 0 | ​ |  | 0 | ​ |  | 1,027
Total | ​ | $ | 7,391 | ​ | $ | 7,786 | ​ | $ | 15,177 | ​ | $ | 23,085
​ The Corporation recognized $932,000 of interest income on nonaccrual loans during the year ended December 31, 2023. The following table presents the accrued interest receivable written off by reversing interest income during the year ended December 31, 2023: ​
​ | ​ | ​ | ​
​ | ​ | Year Ended
(In Thousands) | ​ | December 31, 2023
Commercial real estate - non-owner occupied | ​ | $ | 48
Residential mortgage loans | ​ | ​ | 28
Consumer loans | ​ |  | 3
Total | ​ | $ | 79
​ The Corporation has certain loans for which repayment is dependent upon the operation or sale of collateral, as the borrower is experiencing financial difficulty. The underlying collateral can vary based upon the type of loan. The following provides more detail about the types of collateral that secure collateral dependent loans:
| ● | Commercial real estate loans can be secured by either owner occupied commercial real estate or non-owner occupied investment commercial real estate. Typically, owner occupied commercial real estate loans are secured by office buildings, warehouses, manufacturing facilities and other commercial and industrial properties occupied by operating companies. Non-owner occupied commercial real estate loans are generally secured by office buildings and complexes, retail facilities, multifamily complexes, land under development, industrial properties, as well as other commercial or industrial real estate.
| ● | All other commercial loans are typically secured by business assets including inventory, equipment and receivables.
| ● | Residential mortgage loans are typically secured by first mortgages, and in some cases could be secured by a second mortgage.
| ● | Consumer loans are generally secured by automobiles, motorcycles, recreational vehicles and other personal property. Some consumer loans are unsecured and have no underlying collateral.
The following table details the amortized cost of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related allowance for credit losses on loans allocated to these loans: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2023
​ | ​ | Amortized | ​ | ​
(In Thousands) | ​ | Cost | ​ | Allowance
Commercial real estate - non-owner occupied | ​ | $ | 8,412 | ​ | $ | 648
Commercial real estate - owner occupied | ​ |  | 1,575 | ​ |  | 5
All other commercial loans | ​ | ​ | 1,277 | ​ | ​ | 90
Total | ​ | $ | 11,264 | ​ | $ | 743
​ The following table summarizes the activity related to the ACL for the year ended December 31, 2023 under the CECL methodology. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | 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) | ​ | ​ | (311) | ​ | ​ | 0 | ​ | ​ | (356)
Recoveries | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 44 | ​ | ​ | 11 | ​ | ​ | 37 | ​ | ​ | 0 | ​ | ​ | 92
(Credit) provision for credit losses on loans |  | 1,942 | ​ |  | 167 | ​ |  | (1,168) | ​ |  | (621) | ​ |  | 433 | ​ |  | 0 | ​ |  | 753
Balance, December 31, 2023 | $ | 12,010 | ​ | $ | 2,116 | ​ | $ | 2,918 | ​ | $ | 1,764 | ​ | $ | 400 | ​ | $ | 0 | ​ | $ | 19,208
​ Prior to the adoption of ASC 326 on January 1, 2023, the Corporation calculated the allowance for loan losses under the incurred loss methodology. The following tables are disclosed related to the allowance for loan losses in prior period. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
December 31, 2022 |  | Loans: | ​ | Allowance for Loan Losses:
(In Thousands) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Individually | ​ | Collectively | ​ | ​ | ​ | ​ | Individually | ​ | Collectively | ​ |  | ​
​ |  | Evaluated |  | Evaluated |  | Totals |  | Evaluated |  | Evaluated |  | Totals
Commercial: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Commercial loans secured by real estate | ​ | $ | 7,154 | ​ | $ | 675,095 | ​ | $ | 682,249 | ​ | $ | 427 | ​ | $ | 6,647 | ​ | $ | 7,074
Commercial and industrial | ​ |  | 11,223 | ​ |  | 167,048 | ​ |  | 178,271 | ​ |  | 26 | ​ |  | 2,883 | ​ |  | 2,909
Paycheck Protection Program - 1st Draw | ​ |  | 0 | ​ |  | 5 | ​ |  | 5 | ​ |  | 0 | ​ |  | 0 | ​ |  | 0
Paycheck Protection Program - 2nd Draw | ​ | ​ | 0 | ​ | ​ | 163 | ​ | ​ | 163 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0
Political subdivisions | ​ |  | 0 | ​ |  | 90,719 | ​ |  | 90,719 | ​ |  | 0 | ​ |  | 0 | ​ |  | 0
Commercial construction and land | ​ |  | 244 | ​ |  | 73,719 | ​ |  | 73,963 | ​ |  | 0 | ​ |  | 647 | ​ |  | 647
Loans secured by farmland | ​ |  | 76 | ​ |  | 12,874 | ​ |  | 12,950 | ​ |  | 0 | ​ |  | 112 | ​ |  | 112
Multi-family (5 or more) residential | ​ |  | 0 | ​ |  | 55,886 | ​ |  | 55,886 | ​ |  | 0 | ​ |  | 411 | ​ |  | 411
Agricultural loans | ​ |  | 57 | ​ |  | 2,378 | ​ |  | 2,435 | ​ |  | 0 | ​ |  | 21 | ​ |  | 21
Other commercial loans | ​ |  | 0 | ​ |  | 14,857 | ​ |  | 14,857 | ​ |  | 0 | ​ |  | 124 | ​ |  | 124
Total commercial | ​ |  | 18,754 | ​ |  | 1,092,744 | ​ |  | 1,111,498 | ​ |  | 453 | ​ |  | 10,845 | ​ |  | 11,298
Residential mortgage: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Residential mortgage loans - first liens | ​ | ​ | 506 | ​ | ​ | 509,276 | ​ | ​ | 509,782 | ​ | ​ | 0 | ​ | ​ | 3,413 | ​ | ​ | 3,413
Residential mortgage loans - junior liens | ​ |  | 30 | ​ |  | 24,919 | ​ |  | 24,949 | ​ |  | 0 | ​ |  | 167 | ​ |  | 167
Home equity lines of credit | ​ |  | 68 | ​ |  | 43,730 | ​ |  | 43,798 | ​ |  | 0 | ​ |  | 282 | ​ |  | 282
1-4 Family residential construction | ​ |  | 0 | ​ |  | 30,577 | ​ |  | 30,577 | ​ |  | 0 | ​ |  | 211 | ​ |  | 211
Total residential mortgage | ​ |  | 604 | ​ |  | 608,502 | ​ |  | 609,106 | ​ |  | 0 | ​ |  | 4,073 | ​ |  | 4,073
Consumer | ​ |  | 0 | ​ |  | 19,436 | ​ |  | 19,436 | ​ |  | 0 | ​ |  | 244 | ​ |  | 244
Unallocated | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | 1,000
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total | ​ | $ | 19,358 | ​ | $ | 1,720,682 | ​ | $ | 1,740,040 | ​ | $ | 453 | ​ | $ | 15,162 | ​ | $ | 16,615
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Prior to the adoption of ASU 2016-13, loans were classified as impaired when, based on current information and events, it was probable that the Corporation would be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment included payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experienced insignificant payment delays and payment shortfalls generally were not classified as impaired. Management determined the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of shortfall in relation to the principal and interest owed. Impairment was measured on a loan-by-loan basis for commercial loans by the fair value of the collateral (if the loan is collateral dependent), by future cash flows discounted at the loan’s effective rate or by the loan’s observable market price. ​ The scope of loans reviewed individually each quarter to determine if they were impaired included all commercial loan relationships greater than $200,000 and any residential mortgage or consumer loans of $400,000 or more for which there was at least one extension of credit graded Special Mention, Substandard or Doubtful. All loans classified as troubled debt restructurings and all commercial loan relationships less than $200,000 or other loan relationships less than $400,000 in the aggregate, but with an estimated loss of $100,000 or more, were individually evaluated for impairment. ​ ​ ​ Summary information related to impaired loans at December 31, 2022 is provided in the table immediately below. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(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
Multi-family (5 or more) residential | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 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
​ The average balance of impaired loans and interest income recognized on these impaired loans is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(In Thousands) | ​ | ​ | ​ | ​
​ | ​ | Average Investment in | ​ | Interest Income Recognized on
​ | ​ | Impaired Loans | ​ | Impaired Loans on a Cash Basis
​ | ​ | Year Ended December 31, | ​ | Year Ended December 31,
​ | ​ | 2022 | ​ | 2021 | ​ | 2022 |  | 2021
Commercial: | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ | ​ |  | ​
Commercial loans secured by real estate | ​ | $ | 9,757 | ​ | $ | 11,617 | ​ | $ | 657 | ​ | $ | 557
Commercial and industrial | ​ | ​ | 2,078 | ​ | ​ | 2,636 | ​ |  | 210 | ​ |  | 34
Commercial construction and land | ​ | ​ | 72 | ​ | ​ | 48 | ​ |  | 3 | ​ |  | 3
Loans secured by farmland | ​ | ​ | 80 | ​ | ​ | 84 | ​ |  | 0 | ​ |  | 1
Multi-family (5 or more) residential | ​ | ​ | 197 | ​ | ​ | 1,583 | ​ | ​ | 1,156 | ​ | ​ | 133
Agricultural loans | ​ | ​ | 60 | ​ | ​ | 67 | ​ |  | 4 | ​ |  | 4
Other commercial loans | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0 | ​ | ​ | 0
Total commercial | ​ | ​ | 12,244 | ​ | ​ | 16,035 | ​ |  | 2,030 | ​ |  | 732
Residential mortgage: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ | ​ |
Residential mortgage loans - first lien | ​ | ​ | 575 | ​ | ​ | 1,647 | ​ | ​ | 24 | ​ | ​ | 78
Residential mortgage loans - junior lien | ​ | ​ | 33 | ​ | ​ | 361 | ​ |  | 7 | ​ |  | 11
Home equity lines of credit | ​ | ​ | 43 | ​ | ​ | 0 | ​ |  | 4 | ​ |  | 0
Total residential mortgage | ​ | ​ | 651 | ​ | ​ | 2,008 | ​ |  | 35 | ​ |  | 89
Total | ​ | $ | 12,895 | ​ | $ | 18,043 | ​ | $ | 2,065 | ​ | $ | 821
​ The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. ​ Because the effect of most modifications made to borrowers experiencing financial difficulty, such as extensions of terms, insignificant payment delays and interest rate reductions, is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification. ​ Occasionally, the Corporation modifies loans by providing principal forgiveness on certain of its real estate loans. When principal forgiveness is provided, the amortized cost basis of the asset is written off against the allowance for credit losses. The amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses. ​ ​ Modifications Made to Borrowers Experiencing Financial Difficulty ​ In 2023, there were two loan modifications made to borrowers experiencing financial difficulty at the time of modification, described in the following table: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(Dollars in Thousands) | ​ | Term Extension
​ |  | ​ |  | ​ |  | ​ |
​ | ​ | ​ | ​ | ​ |  | ​ | ​
​ | ​ | Amortized Cost | ​ | % of Total |  | ​ | ​
​ | ​ | Basis | ​ | Loan Type |  | Financial Effect | ​
Commercial Real Estate - Non-owner Occupied: |  |  |  | ​ |  | ​ |  |
Non-owner occupied | $ | 3,907 | ​ | ​ | 0.53 | % | Extended the maturity of one loan for 6 months and another loan for 12 months. | ​
​ The Corporation closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification. At December 31, 2023, the amortized cost basis of the loan included in the table above where the maturity was extended for 6 months was $1,381,000, with a specific allowance of $38,000 and the contractual payments on the loan were 117 days past due. At December 31, 2023, the amortized cost basis of the loan where the maturity was extended for 12 months was $2,526,000 with a specific allowance of $486,000 and the contractual payments were current. There were no commitments to lend additional funds to these two borrowers. ​ The carrying amount of foreclosed residential real estate properties held as a result of obtaining physical possession (included in Foreclosed assets held for sale in the consolidated balance sheets) is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
(In Thousands) | ​ | December 31, |  | December 31,
​ | ​ | 2023 | ​ | 2022
Foreclosed residential real estate | ​ | $ | 47 | ​ | $ | 256
​ The recorded investment of consumer mortgage loans secured by residential real properties for which formal foreclosure proceedings were in process is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
(In Thousands) | ​ | December 31, |  | December 31,
​ | ​ | 2023 | ​ | 2022
Residential real estate in process of foreclosure | ​ | $ | 1,227 | ​ | $ | 1,229
​ ​ The Corporation maintains an allowance for off-balance sheet credit exposures such as unfunded balances for existing lines of credit, commitments to extend future credit, commercial letters of credit and credit enhancement obligations related to residential mortgage loans sold with recourse, when there is a contractual obligation to extend credit and when this extension of credit is not unconditionally cancellable (i.e. commitment cannot be canceled at any time). Additional information related to commitments to extend credit and standby letter of credits is provided in Note 15. The allowance for off-balance sheet credit exposures is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over their estimated lives. The allowance for credit losses for off-balance sheet exposures of $690,000 at December 31, 2023 and $425,000 at December 31, 2022, is included in accrued interest and other liabilities on the consolidated balance sheets. ​ The following table presents the balance and activity in the allowance for credit losses for off-balance sheet exposures for the year ended December 31, 2023. ​
​ | ​ | ​ | ​
​ | ​ | Year Ended
(In Thousands) | ​ | December 31, 2023
Beginning Balance | ​ | $ | 425
Adjustment to allowance for off-balance sheet exposures for adoption of ASU 2016-13 | ​ | ​ | 793
Recoveries | ​ | ​ | 39
Credit for unfunded commitments | ​ | ​ | (567)
Balance, December 31, 2023 | ​ | $ | 690
​

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 310 -SubTopic 10 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//310-10/tableOfContent + Details
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