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Allowance for Credit Losses

3 Months Ended

Mar. 31, 2025

The ACL is a valuation amount that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the allowance when they are deemed uncollectible. The ACL consists of three elements: (1) specific reserves for loans individually analyzed; (2) general reserves for each portfolio segment; and, (3) qualitative reserves. All outstanding loans are considered in evaluating the appropriateness of the allowance. Loans are segmented by common risk characteristics as delineated in the paragraph below. The Company provides for loan losses through the ACL which represents an estimated reserve for losses in the loan portfolio. To determine an appropriate level for general reserves, a discounted cash flow approach is applied to each portfolio segment implementing a probability of default and loss given default estimate based upon a number of factors including historical losses over an economic cycle, economic forecasts, loan prepayment speeds and curtailment rates. To determine an appropriate level for qualitative reserves, various factors are considered including underwriting policies, credit administration practices, experience, ability and depth of lending management, and economic factors not captured in the general reserve calculation.

Loan Portfolio Composition & Risk Characteristics: The loan portfolio is segmented into eleven classes and credit risk is evaluated separately in each class. Major risk characteristics relevant to each portfolio segment are as follows:

Commercial Real Estate Owner Occupied - commercial real estate owner occupied loans consist of mortgage loans to finance investments in real property such as retail space, offices, industrial buildings, hotels, educational facilities, and other specific or mixed use properties. Loans are typically written with amortizing payment structures. Collateral values are determined based on appraisals and evaluations in accordance with established policy and regulatory guidelines. Loans typically have a loan-to-value ratio of up to 80% based upon current valuation information at the time the loan is made, and are primarily paid by the cash flow generated from the real property, typically the operating entity of owner occupant. Risk factors typically include competitive market forces, net operating incomes of the operating entity, and overall economic demand. Loans in the recreational and tourism sector can be affected by weather conditions, such as unseasonably low winter snowfalls. Commercial real estate lending also carries a higher degree of environmental risk than other types of lending.

Commercial Real Estate Non-Owner Occupied - commercial real estate loans non-owner occupied share many of the purpose, loan structure and risk characteristics of owner-occupied commercial real estate. The primary differentiating factor from Owner Occupied is that repayment is generally reliant upon cash flow generated from tenants rather than an operating entity. Risk factors are also influenced by vacancy rates, cap rates, lease renewals, and underlying financial health of lessees.

Commercial Construction - commercial construction loans consist of loans to finance construction in a mix of owner- and non-owner occupied commercial real estate properties. Loans typically have construction periods of less than two years, and payment structures during the construction period are typically on an interest only basis, although principal payments may be established depending on the type of construction project being financed. During the construction phase, commercial construction loans are primarily paid by cash flow generated from the construction project or other operating cash flows from the borrower or guarantors, if applicable. Commercial construction loans will typically convert to permanent financing from the Company, or loan repayment may come from a third party source in the event that the Company will not be providing permanent term financing. Collateral valuation and loan-to-value guidelines follow those for commercial real estate loans. Commercial construction loans are impacted by factors similar to those for commercial real estate loans in addition to risks related to contractor financial capacity and ability to complete a project within acceptable time frames and within budget.

Commercial and Industry - C&I loans consist of revolving and term loan obligations extended to business and corporate enterprises for the purpose of financing working capital and or capital investment. C&I loans may be secured or unsecured; when secured, collateral generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, equipment, and/or other tangible and intangible assets. C&I loans are primarily paid by the operating cash flow of the borrower. A weakened economy, soft consumer spending, and the rising cost of labor or raw materials are examples of issues that can impact the credit quality in this segment.

Commercial Multifamily - multifamily loans share structure and risk characteristics with non-owner occupied commercial real estate; underlying collateral is residential in nature rather than commercial, consisting of properties with five or more units.

Municipal Loans - municipal loans are comprised of loans to municipalities in Maine for capitalized expenditures, construction projects, or tax anticipation notes. All municipal loans are considered either general obligations of the municipality collateralized by the taxing ability of the municipality for repayment of debt or have a pledge of specific revenues. The overall health of the economy, including unemployment rates and housing prices, has an impact on the credit quality of this segment.

Agriculture - agriculture loans consist mostly of amortizing term loans and revolving lines of credit made to borrowers in agriculture related industries. For the Company, this includes loans made to land based agricultural production and to participants in the fishing industry. Collateral values are determined based on appraisals and evaluations in accordance with established policy and regulatory guidelines. Loans are primarily paid by the cash flow generated from the agricultural property or operation of equipment. Risk factors typically include competitive market forces, overall economic demand for the product, and may be further influenced by weather conditions which impact growing and/or harvesting, or other factors such as changes in government regulation(s).

Residential Real Estate Term - residential term loans consist of residential real estate loans made to borrowers who demonstrate the ability to make scheduled payments with full consideration to underwriting factors. Borrower qualifications include favorable credit history combined with supportive income requirements and loan-to-value ratios within established policy and regulatory guidelines. Collateral values are determined based on appraisals and evaluations in accordance with established policy and regulatory guidelines. Residential loans typically have a loan-to-value ratio of up to 80% based on appraisal information at the time the loan is made. Collateral consists of mortgage liens on one-to four-family residential properties. Loans are offered with fixed or adjustable rates with amortization terms of up to thirty years. The overall health of the economy, including unemployment rates and housing prices, has an impact on the credit quality of this segment.

Residential Real Estate Construction - residential construction loans typically consist of loans for the purpose of constructing single family residences to be owned and occupied by the borrower. Borrower qualifications include favorable credit history combined with supportive income requirements and loan-to-value ratios within established policy and regulatory guidelines. Residential construction loans normally have construction terms of one year or less and payment during the construction term is typically on an interest only basis from sources including interest reserves, borrower liquidity, and/or income. Residential construction loans will typically convert to permanent financing from the Company or have another financing commitment in place from an acceptable mortgage lender. Collateral valuation and loan-to-value guidelines are consistent with those for residential term loans. Residential construction loans are impacted by factors similar to those for residential real estate term loans in addition to risks related to contractor financial capacity and ability to complete a project within acceptable time frames and within budget.

Home Equity Revolving and Term - home equity revolving and term loans are made to qualified individuals and are secured by senior or junior mortgage liens on owner occupied one- to four-family homes, condominiums, or vacation homes. The home equity line of credit typically has a variable interest rate and is billed as interest-only payments during the draw period. At the end of the draw period, the home equity line of credit is billed as a percentage of the principal balance plus all accrued interest. Loan maturities are normally 300 months. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios usually not exceeding 80% inclusive of priority liens. Collateral valuation guidelines follow those for residential real estate loans. The overall health of the economy, including unemployment rates and housing prices, has an impact on the credit quality of this segment.

Consumer - consumer loans include personal lines of credit and amortizing loans made to qualified individuals for various purposes such as autos, recreational vehicles, debt consolidation, personal expenses, or overdraft protection. Borrower qualifications include favorable credit history combined with supportive income and collateral requirements within established policy guidelines. Consumer loans may be secured or unsecured. The overall health of the economy, including unemployment rates, has an impact on the credit quality of this segment.

Construction, land, and land development: CLLD loans, both commercial and residential, represented 38.3% of total Bank capital as of March 31, 2025 and remain below the regulatory guidance of 100.0% of total Bank capital. Construction loans and non-owner-occupied commercial real estate loans represented 224.7% of total Bank capital at March 31, 2025, below the regulatory guidance of 300.0% of total Bank capital.

Composition of the ACL: A breakdown of the ACL as of March 31, 2025, by class of financing receivable and allowance element, is presented in the following table:


As of March 31, 2025	Specific Reserves on Loans Evaluated Individually		General Reserves on Loans Based on Historical Loss Experience		Reserves for Qualitative Factors		Total Reserves
Commercial
Real estate owner occupied	$	—	$	4,472,000	$	717,000	$	5,189,000
Real estate non-owner occupied	—		4,252,000		618,000		4,870,000
Construction	—		472,000		147,000		619,000
C&I	1,029,000		3,872,000		598,000		5,499,000
Multifamily	—		1,290,000		165,000		1,455,000
Agriculture	—		444,000		143,000		587,000
Municipal	—		33,000		202,000		235,000
Residential
Term	—		4,823,000		437,000		5,260,000
Construction	—		403,000		62,000		465,000
Home Equity
Revolving and term	—		662,000		89,000		751,000
Consumer	—		176,000		8,000		184,000
	$	1,029,000	$	20,899,000	$	3,186,000	$	25,114,000

A breakdown of the ACL as of December 31, 2024, by class of financing receivable and allowance element, is presented in the following table:


As of December 31, 2024	Specific Reserves on Loans Evaluated Individually		General Reserves on Loans Based on Historical Loss Experience		Reserves for Qualitative Factors		Total Reserves
Commercial
Real estate owner occupied	$	—	$	4,355,000	$	690,000	$	5,045,000
Real estate non-owner occupied	—		4,237,000		592,000		4,829,000
Construction	—		786,000		158,000		944,000
C&I	1,047,000		3,744,000		573,000		5,364,000
Multifamily	—		1,108,000		131,000		1,239,000
Agriculture	—		449,000		156,000		605,000
Municipal	—		35,000		227,000		262,000
Residential
Term	—		4,811,000		430,000		5,241,000
Construction	—		414,000		60,000		474,000
Home Equity
Revolving and term	—		600,000		86,000		686,000
Consumer	—		175,000		7,000		182,000
	$	1,047,000	$	20,714,000	$	3,110,000	$	24,871,000

A breakdown of the ACL as of March 31, 2024, by class of financing receivable and allowance element, is presented in the following table:


As of March 31, 2024	Specific Reserves on Loans Evaluated Individually		General Reserves on Loans Based on Historical Loss Experience		Reserves for Qualitative Factors		Total Reserves
Commercial
Real estate owner occupied	$	—	$	4,177,000	$	1,003,000	$	5,180,000
Real estate non-owner occupied	—		3,730,000		535,000		4,265,000
Construction	—		910,000		(90,000)		820,000
C&I	221,000		4,001,000		861,000		5,083,000
Multifamily	—		1,348,000		159,000		1,507,000
Agriculture	—		358,000		34,000		392,000
Municipal	—		38,000		156,000		194,000
Residential
Term	22,000		4,587,000		745,000		5,354,000
Construction	—		648,000		(86,000)		562,000
Home Equity
Revolving and term	—		554,000		123,000		677,000
Consumer	—		158,000		15,000		173,000
	$	243,000	$	20,509,000	$	3,455,000	$	24,207,000

The ACL as a percent of total loans stood at 1.05% as of March 31, 2025, 1.06% at December 31, 2024 and 1.11% as of March 31, 2024.

Off-Balance Sheet Credit Exposures: In the ordinary course of business, the Company enters into commitments to extend credit, including construction lines of credit, revolving lines of credit, written commitments to provide financing, commercial letters of credit and standby letters of credit. Such financial instruments are recorded as loans when they are funded.

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures: The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The ACL on off-balance sheet credit exposures is adjusted through credit loss expense and any adjustment is recognized in net income. To appropriately measure expected credit losses, management disaggregates the loan portfolio into similar risk characteristics, identical to those determined for the loan portfolio. An estimated funding rate is then applied to the qualifying unfunded loan commitments and letters of credit using the Company’s own historical experience to estimate the expected funded amount for each loan segment as of the reporting date. Once the expected funded amount for each loan segment is determined, the loss rate, which is the calculated expected loan loss as a percent of the amortized cost basis for each loan segment, is applied to calculate the ACL on off-balance sheet credit exposures as of the reporting date. The Company’s ACL on unfunded commitments is recognized as a liability, included within other liabilities on the consolidated balance sheet.

The following table presents the activity in the ACL for off-balance sheet credit exposures for the three months ended March 31, 2025 and 2024:


	For the three months ended March 31,
	2025		2024
Allowance for credit losses:
Beginning balance	$	714,000	$	1,255,000
Credit loss reduction	(5,000)		(360,000)
Total ending allowance balance	$	709,000	$	895,000

Credit Quality Indicators: To monitor the credit quality of its loan portfolio, management applies an internal risk rating system to categorize commercial loan segments. Approximately 60% of commercial loan outstanding balances are subject to review and validation annually by an independent consulting firm. Additionally, commercial loan relationships with exposure greater than or equal to $750,000 are subject to review annually by the Company's internal credit review function.

The risk rating system has eight levels, defined as follows:

1 Strong

Credits rated "1" are characterized by borrowers fully responsible for the credit with excellent capacity to pay principal and interest. Loans rated "1" may be secured with acceptable forms of liquid collateral.

2 Above Average

Credits rated "2" are characterized by borrowers that have better than average liquidity, capitalization, earnings, and/or cash flow with a consistent record of solid financial performance.

3 Satisfactory

Credits rated "3" are characterized by borrowers with favorable liquidity, profitability, and financial condition with adequate cash flow to pay debt service.

4 Average

Credits rated "4" are characterized by borrowers that present risk more than 1, 2 and 3 rated loans and merit an ordinary level of ongoing monitoring. Financial condition is on par or somewhat below industry averages while cash flow is generally adequate to meet debt service requirements.

5 Watch

Credits rated "5" are characterized by borrowers that warrant greater monitoring due to financial condition or unresolved and identified risk factors.

6 Other Assets Especially Mentioned

Loans in this category are currently protected but are potentially weak and constitute an undue and unwarranted credit risk, but not to the point of justifying a classification of substandard. OAEM have potential weaknesses which may, if not checked or corrected, weaken the asset or inadequately protect the Company's credit position at some future date.

7 Substandard

Loans in this category are inadequately protected by the paying capacity of the borrower or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Substandard loans are characterized by the distinct possibility that the Company may sustain some loss if the deficiencies are not corrected.

8 Doubtful

Loans classified "Doubtful" have the same weaknesses as those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, based on currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is high, but because of certain important and reasonably specific pending factors which may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined.

Most residential real estate, home equity, and consumer loans are not assigned ratings; therefore they are categorized as performing and non-performing loans. Performing loans include loans that are current and loans that are past due less than 90 days. Loans that are past due more than 90 days are considered non-performing.

The following table summarizes the credit quality for the Company's portfolio by risk category of loans and by class by vintage as of March 31, 2025:


	Term Loans Amortized Cost Basis by Origination Year
Dollars in thousands	2025		2024		2023		2022		2021		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of March 31, 2025
Commercial
Real estate owner occupied
Pass (risk rating 1-5)	$	25,528	$	47,943	$	63,697	$	69,323	$	34,093	$	105,636	$	11,439	$	960	$	358,619
Special Mention (risk rating 6)	335		—		3,026		5,334		—		1,602		134		—		10,431
Substandard (risk rating 7)	—		50		254		—		257		854		—		—		1,415
Doubtful (risk rating 8)	—		—		—		—		—		—		—		—		—
Total Real Estate Owner Occupied	25,863		47,993		66,977		74,657		34,350		108,092		11,573		960		370,465
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Real estate non-owner occupied
Pass (risk rating 1-5)	12,815		30,688		29,387		70,836		113,717		139,405		13,310		1,520		411,678
Special Mention (risk rating 6)	—		—		62		—		44		199		—		—		305
Substandard (risk rating 7)	1,285		201		—		—		—		61		—		—		1,547
Doubtful (risk rating 8)	—		—		—		—		—		—		—		—		—
Total Real Estate Non-Owner Occupied	14,100		30,889		29,449		70,836		113,761		139,665		13,310		1,520		413,530
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Construction
Pass (risk rating 1-5)	4,992		33,225		19,150		8,412		4,951		3,508		—		—		74,238
Special Mention (risk rating 6)	—		—		—		2,001		—		—		—		—		2,001
Substandard (risk rating 7)	—		95		—		—		68		—		—		—		163
Doubtful (risk rating 8)	—		—		—		—		—		—		—		—		—
Total Construction	4,992		33,320		19,150		10,413		5,019		3,508		—		—		76,402
Current period gross write-offs	—		—		—		—		—		—		—		—		—
C&I
Pass (risk rating 1-5)	17,421		71,806		49,011		45,461		38,872		36,195		115,708		1,184		375,658
Special Mention (risk rating 6)	—		25		10		301		471		73		840		—		1,720
Substandard (risk rating 7)	100		—		1,256		280		39		275		181		—		2,131
Doubtful (risk rating 8)	—		—		—		—		—		258		—		—		258
Total C&I	17,521		71,831		50,277		46,042		39,382		36,801		116,729		1,184		379,767
Current period gross write-offs	—		(46)		—		—		—		(100)		—		—		(146)
Multifamily
Pass (risk rating 1-5)	4,181		14,711		11,913		49,518		19,005		25,969		769		—		126,066
Special Mention (risk rating 6)	112		—		1,600		—		—		—		—		—		1,712
Substandard (risk rating 7)	—		—		—		1,020		1,328		910		—		—		3,258
Doubtful (risk rating 8)	—		—		—		—		—		—		—		—		—
Total Multifamily	4,293		14,711		13,513		50,538		20,333		26,879		769		—		131,036
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Agriculture
Pass (risk rating 1-5)	2,798		10,784		2,712		5,139		3,777		19,080		1,168		231		45,689
Special Mention (risk rating 6)	—		—		460		—		52		135		600		—		1,247
Substandard (risk rating 7)	1,325		—		75		211		29		129		—		—		1,769
Doubtful (risk rating 8)	—		—		—		—		—		—		—		—		—
Total Agriculture	4,123		10,784		3,247		5,350		3,858		19,344		1,768		231		48,705
Current period gross write-offs	—		—		—		—		—		—		—		—		—



	Term Loans Amortized Cost Basis by Origination Year
Dollars in thousands	2025		2024		2023		2022		2021		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of March 31, 2025
Municipal
Pass (risk rating 1-5)	1,937		9,186		18,563		3,984		3,881		17,553		—		—		55,104
Special Mention (risk rating 6)	—		—		—		—		—		—		—		—		—
Substandard (risk rating 7)	—		—		—		—		—		—		—		—		—
Doubtful (risk rating 8)	—		—		—		—		—		—		—		—		—
Total Municipal	1,937		9,186		18,563		3,984		3,881		17,553		—		—		55,104
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Residential
Term
Performing	15,831		57,989		94,350		148,507		127,709		269,381		2,517		120		716,404
Non-performing	—		—		—		420		703		1,821		—		—		2,944
Total Term	15,831		57,989		94,350		148,927		128,412		271,202		2,517		120		719,348
Current period gross write-offs	—		—		—		—		—		(1)		—		—		(1)
Construction
Performing	3,031		27,475		3,510		728		—		683		—		—		35,427
Non-performing	—		—		—		—		—		—		—		—		—
Total Construction	3,031		27,475		3,510		728		—		683		—		—		35,427
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Home Equity Revolving and Term
Performing	2,995		12,157		9,070		8,039		1,872		2,683		85,270		9,021		131,107
Non-performing	—		—		—		88		—		93		63		171		415
Total Home Equity Revolving and Term	2,995		12,157		9,070		8,127		1,872		2,776		85,333		9,192		131,522
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Consumer
Performing	1,750		2,614		2,134		1,079		626		6,399		7,242		—		21,844
Non-performing	—		—		—		—		—		—		—		—		—
Total Consumer	1,750		2,614		2,134		1,079		626		6,399		7,242		—		21,844
Current period gross write-offs	—		(16)		(11)		(8)		(2)		(24)		—		—		(61)
Total loans	$	96,436	$	318,949	$	310,240	$	420,681	$	351,494	$	632,902	$	239,241	$	13,207	$	2,383,150

The following table summarizes the credit quality for the Company's portfolio by risk category of loans and by class by vintage as of December 31, 2024:


	Term Loans Amortized Cost Basis by Origination Year
Dollars in thousands	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2024
Commercial
Real estate owner occupied
Pass (risk rating 1-5)	$	47,724	$	62,376	$	77,469	$	39,635	$	26,448	$	81,529	$	10,727	$	1,126	$	347,034
Special Mention (risk rating 6)	125		3,026		5,334		—		195		1,603		50		—		10,333
Substandard (risk rating 7)	41		261		—		257		160		502		—		—		1,221
Doubtful (risk rating 8)	—		—		—		—		—		—		—		—		—
Total Real Estate Owner Occupied	47,890		65,663		82,803		39,892		26,803		83,634		10,777		1,126		358,588
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Real estate non-owner occupied
Pass (risk rating 1-5)	33,083		29,546		72,025		113,630		45,421		96,778		11,241		1,520		403,244
Special Mention (risk rating 6)	—		62		—		44		—		199		—		—		305
Substandard (risk rating 7)	289		—		—		—		—		61		—		—		350
Doubtful (risk rating 8)	—		—		—		—		—		—		—		—		—
Total Real Estate Non-Owner Occupied	33,372		29,608		72,025		113,674		45,421		97,038		11,241		1,520		403,899
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Construction
Pass (risk rating 1-5)	36,478		22,629		26,650		7,826		1,356		2,314		—		—		97,253
Special Mention (risk rating 6)	—		—		2,007		44		—		199		—		—		2,250
Substandard (risk rating 7)	145		—		—		69		—		—		—		—		214
Doubtful (risk rating 8)	—		—		—		—		—		—		—		—		—
Total Construction	36,623		22,629		28,657		7,939		1,356		2,513		—		—		99,717
Current period gross write-offs	—		—		—		—		—		—		—		—		—
C&I
Pass (risk rating 1-5)	69,543		50,204		45,986		39,217		14,958		25,284		114,567		778		360,537
Special Mention (risk rating 6)	25		15		561		478		723		—		900		—		2,702
Substandard (risk rating 7)	473		1,227		356		30		15		19		200		—		2,320
Doubtful (risk rating 8)	—		—		—		—		—		258		—		—		258
Total C&I	70,041		51,446		46,903		39,725		15,696		25,561		115,667		778		365,817
Current period gross write-offs	—		(128)		(39)		(72)		(47)		(165)		—		—		(451)
Multifamily
Pass (risk rating 1-5)	14,048		13,102		33,558		17,335		14,483		12,152		781		—		105,459
Special Mention (risk rating 6)	—		—		—		—		—		—		—		—		—
Substandard (risk rating 7)	—		—		1,020		1,341		912		—		—		—		3,273
Doubtful (risk rating 8)	—		—		—		—		—		—		—		—		—
Total Multifamily	14,048		13,102		34,578		18,676		15,395		12,152		781		—		108,732
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Agriculture
Pass (risk rating 1-5)	11,694		2,749		5,790		3,835		14,651		6,023		4,546		215		49,503
Special Mention (risk rating 6)	—		474		—		52		—		152		600		—		1,278
Substandard (risk rating 7)	—		75		731		30		—		602		—		—		1,438
Doubtful (risk rating 8)	—		—		—		—		—		—		—		—		—
Total Agriculture	11,694		3,298		6,521		3,917		14,651		6,777		5,146		215		52,219
Current period gross write-offs	—		—		—		—		—		—		—		—		—



	Term Loans Amortized Cost Basis by Origination Year
Dollars in thousands	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2024
Municipal
Pass (risk rating 1-5)	9,503		18,642		4,017		3,822		8,498		17,345		—		—		61,827
Special Mention (risk rating 6)	—		—		—		—		—		—		—		—		—
Substandard (risk rating 7)	—		—		—		—		—		—		—		—		—
Doubtful (risk rating 8)	—		—		—		—		—		—		—		—		—
Total Municipal	9,503		18,642		4,017		3,822		8,498		17,345		—		—		61,827
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Residential
Term
Performing	56,378		94,816		148,877		130,413		84,028		192,466		2,109		121		709,208
Non-performing	—		—		297		257		380		665		—		—		1,599
Total Term	56,378		94,816		149,174		130,670		84,408		193,131		2,109		121		710,807
Current period gross write-offs	—		—		—		—		—		(37)		—		—		(37)
Construction
Performing	26,386		7,487		925		—		683		—		—		—		35,481
Non-performing	—		—		—		—		—		—		—		—		—
Total Construction	26,386		7,487		925		—		683		—		—		—		35,481
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Home Equity Revolving and Term
Performing	12,449		8,917		8,310		1,894		1,021		1,857		79,132		9,192		122,772
Non-performing	—		—		—		—		—		96		15		180		291
Total Home Equity Revolving and Term	12,449		8,917		8,310		1,894		1,021		1,953		79,147		9,372		123,063
Current period gross write-offs	—		—		—		—		—		(7)		—		—		(7)
Consumer
Performing	3,146		2,438		1,218		734		1,114		5,805		6,335		—		20,790
Non-performing	—		—		—		—		—		—		—		—		—
Total Consumer	3,146		2,438		1,218		734		1,114		5,805		6,335		—		20,790
Current period gross write-offs	(13)		(53)		(72)		(39)		(20)		(55)		—		—		(252)
Total loans	$	321,530	$	318,046	$	435,131	$	360,943	$	215,046	$	445,909	$	231,203	$	13,132	$	2,340,940

The following table summarizes the credit quality for the Company's portfolio by risk category of loans and by class by vintage as of March 31, 2024:


	Term Loans Amortized Cost Basis by Origination Year
Dollars in thousands	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of March 31, 2024
Commercial
Real estate owner occupied
Pass (risk rating 1-5)	$	10,565	$	66,273	$	75,952	$	40,501	$	28,584	$	85,709	$	10,728	$	—	$	318,312
Special Mention (risk rating 6)	—		1,903		—		—		—		6,428		50		—		8,381
Substandard (risk rating 7)	—		283		—		—		—		520		—		—		803
Doubtful (risk rating 8)	—		—		—		—		—		—		—		—		—
Total Real Estate Owner Occupied	10,565		68,459		75,952		40,501		28,584		92,657		10,778		—		327,496
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Real estate non-owner occupied
Pass (risk rating 1-5)	2,669		34,878		76,822		124,788		47,560		107,295		5,646		—		399,658
Special Mention (risk rating 6)	—		—		—		—		—		—		—		—		—
Substandard (risk rating 7)	—		—		—		—		—		—		—		—		—
Doubtful (risk rating 8)	—		—		—		—		—		—		—		—		—
Total Real Estate Non-Owner Occupied	2,669		34,878		76,822		124,788		47,560		107,295		5,646		—		399,658
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Construction
Pass (risk rating 1-5)	4,032		30,768		37,898		8,592		1,529		2,929		—		—		85,748
Special Mention (risk rating 6)	—		—		—		69		—		—		—		—		69
Substandard (risk rating 7)	—		—		—		—		—		—		—		—		—
Doubtful (risk rating 8)	—		—		—		—		—		—		—		—		—
Total Construction	4,032		30,768		37,898		8,661		1,529		2,929		—		—		85,817
Current period gross write-offs	—		—		—		—		—		—		—		—		—
C&I
Pass (risk rating 1-5)	14,720		41,357		52,070		45,491		17,868		28,896		89,309		859		290,570
Special Mention (risk rating 6)	—		23,905		146		296		390		3,166		2,805		—		30,708
Substandard (risk rating 7)	—		—		361		54		—		34		128		—		577
Doubtful (risk rating 8)	—		—		—		—		—		—		—		—		—
Total C&I	14,720		65,262		52,577		45,841		18,258		32,096		92,242		859		321,855
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Multifamily
Pass (risk rating 1-5)	4,517		12,360		34,562		17,855		14,913		13,319		530		—		98,056
Special Mention (risk rating 6)	—		—		1,020		—		912		—		—		—		1,932
Substandard (risk rating 7)	—		—		—		1,356		—		—		—		—		1,356
Doubtful (risk rating 8)	—		—		—		—		—		—		—		—		—
Total Multifamily	4,517		12,360		35,582		19,211		15,825		13,319		530		—		101,344
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Agriculture
Pass (risk rating 1-5)	4,330		3,738		7,534		4,325		15,357		7,974		670		234		44,162
Special Mention (risk rating 6)	21		—		—		—		—		—		600		—		621
Substandard (risk rating 7)	—		87		—		33		—		161		—		—		281
Doubtful (risk rating 8)	—		—		—		—		—		—		—		—		—
Total Agriculture	4,351		3,825		7,534		4,358		15,357		8,135		1,270		234		45,064
Current period gross write-offs	—		—		—		—		—		—		—		—		—



	Term Loans Amortized Cost Basis by Origination Year
Dollars in thousands	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of March 31, 2024
Municipal
Pass (risk rating 1-5)	2,420		21,146		4,714		4,335		9,770		12,361		—		—		54,746
Special Mention (risk rating 6)	—		—		—		—		—		—		—		—		—
Substandard (risk rating 7)	—		—		—		—		—		—		—		—		—
Doubtful (risk rating 8)	—		—		—		—		—		—		—		—		—
Total Municipal	2,420		21,146		4,714		4,335		9,770		12,361		—		—		54,746
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Residential
Term
Performing	10,439		64,948		157,400		138,399		91,824		209,986		3,011		127		676,134
Non-performing	—		—		299		269		404		987		—		—		1,959
Total Term	10,439		64,948		157,699		138,668		92,228		210,973		3,011		127		678,093
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Construction
Performing	1,329		29,910		2,246		—		1,339		—		—		—		34,824
Non-performing	—		—		—		—		—		—		—		—		—
Total Construction	1,329		29,910		2,246		—		1,339		—		—		—		34,824
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Home Equity Revolving and Term
Performing	3,594		10,114		9,134		2,007		1,175		2,166		66,901		10,419		105,510
Non-performing	—		—		—		—		—		104		18		182		304
Total Home Equity Revolving and Term	3,594		10,114		9,134		2,007		1,175		2,270		66,919		10,601		105,814
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Consumer
Performing	775		3,347		1,806		1,055		1,625		4,724		5,703		—		19,035
Non-performing	—		—		—		—		—		—		—		—		—
Total Consumer	775		3,347		1,806		1,055		1,625		4,724		5,703		—		19,035
Current period gross write-offs	—		(11)		(41)		(21)		(5)		(18)		—		—		(96)
Total loans	$	59,411	$	345,017	$	461,964	$	389,425	$	233,250	$	486,759	$	186,099	$	11,821	$	2,173,746

Loss Recognition: Commercial loans are generally charged off when all or a portion of the principal amount is determined to be uncollectible. This determination is based on circumstances specific to a borrower including repayment ability, analysis of collateral, and other factors as applicable. Consumer loans greater than 120 days past due are generally charged off. Residential loans 90 days or more past due are placed on non-accrual status unless the loans are both well secured and in the process of collection. One- to four-family residential real estate loans and home equity loans are written down or charged-off no later than 180 days past due, or for residential real estate secured loans having a borrower in bankruptcy, within 60 days of receipt of notification of filing from the bankruptcy court, whichever is sooner. This is subject to completion of a current assessment of the value of the collateral with any outstanding loan balance in excess of the fair value of the property, less costs to sell, written down or charged-off.

The following table presents ACL activity by class for the three months ended March 31, 2025:


Dollars in thousands	Commercial												Municipal		Residential				Home Equity		Consumer		Total
	Real Estate Owner Occupied		Real Estate Non-Owner Occupied		Construction		C&I		Multifamily		Agriculture				Term		Construction		Revolving and term
For the three months ended March 31, 2025
Beginning balance	$	5,045	$	4,829	$	944	$	5,364	$	1,239	$	605	$	262	$	5,241	$	474	$	686	$	182	$	24,871
Charge offs	—		—		—		(146)		—		—		—		(1)		—		—		(61)		(208)
Recoveries	—		—		—		26		—		—		—		2		—		2		25		55
Credit loss (reduction) expense	144		41		(325)		255		216		(18)		(27)		18		(9)		63		38		396
Ending balance	$	5,189	$	4,870	$	619	$	5,499	$	1,455	$	587	$	235	$	5,260	$	465	$	751	$	184	$	25,114

The following table presents ACL activity by class for the year ended December 31, 2024:


Dollars in thousands	Commercial												Municipal		Residential				Home Equity		Consumer		Total
Dollars in thousands	Real Estate Owner Occupied		Real Estate Non-Owner Occupied		Construction		C&I		Multifamily		Agriculture				Term		Construction		Revolving and term
For the year ended December 31, 2024
Beginning balance	$	4,633	$	4,285	$	1,978	$	5,001	$	1,318	$	—	$	334	$	4,991	$	618	$	626	$	246	$	24,030
Charge offs	—		—		—		(451)		—		—		—		(37)		—		(7)		(252)		(747)
Recoveries	100		—		—		25		—		—		—		32		—		24		103		284
Credit loss (reduction) expense	312		544		(1,034)		789		(79)		605		(72)		255		(144)		43		85		1,304
Ending balance	$	5,045	$	4,829	$	944	$	5,364	$	1,239	$	605	$	262	$	5,241	$	474	$	686	$	182	$	24,871

The following table presents ACL activity by class for the three months ended March 31, 2024:


Dollars in thousands	Commercial												Municipal		Residential				Home Equity		Consumer		Total
	Real Estate Owner Occupied		Real Estate Non-Owner Occupied		Construction		C&I		Multifamily		Agriculture				Term		Construction		Revolving and term
For the three months ended March 31, 2024
Beginning balance	$	4,633	$	4,285	$	1,978	$	5,001	$	1,318	$	—	$	334	$	4,991	$	618	$	626	$	246	$	24,030
Charge offs	—		—		—		—		—		—		—		—		—		—		(96)		(96)
Recoveries	100		—		—		23		—		—		—		25		—		3		23		174
Credit loss (reduction) expense	447		(20)		(1,158)		59		189		392		(140)		338		(56)		48		—		99
Ending balance	$	5,180	$	4,265	$	820	$	5,083	$	1,507	$	392	$	194	$	5,354	$	562	$	677	$	173	$	24,207

As of March 31, 2025, the significant model inputs and assumptions used within the discounted cash flow model for purposes of estimating the ACL on loans were:

Macroeconomic loss drivers: The following loss drivers for each loan segment were used to calculate the expected probability of default over the forecast and reversion period:

•Commercial Real Estate Owner Occupied: FOMC median forecasts of national unemployment and change in national real GDP

•Commercial Real Estate Non-Owner Occupied: FOMC median forecasts of national unemployment and change in national real GDP

•Commercial Construction: FOMC median forecasts of national unemployment and change in national real GDP

•Commercial & Industrial: FOMC median forecasts of national unemployment and change in national real GDP

•Commercial Multifamily: FOMC median forecast of national unemployment

•Commercial Agriculture: FOMC median forecasts of national unemployment and change in national real GDP

•Municipal: Probability of default is measured based upon an index supplied by a nationally recognized ratings agency

•Residential Real Estate Term: FOMC median forecasts of national unemployment and change in national real GDP

•Residential Real Estate Construction: FOMC median forecast of national unemployment and change in national real GDP

•Home Equity Revolving & Term: FOMC median forecasts of national unemployment and change in national real GDP

•Consumer: FOMC median forecasts of national unemployment and change in national real GDP

Reasonable and supportable forecast period: The ACL on loans estimate used a reasonable and supportable forecast period of one year.

Reversion period: The ACL on loans estimate used a reversion period of one year.

Prepayment speeds: The estimate of prepayment speed for each loan segment was derived using internally sourced prepayment data.

Qualitative factors: The ACL on loans estimate incorporated various qualitative factors into the calculation such as changes in lending policies, changes in the nature and volume and terms of loans, changes in the experience, depth and ability of lending management, and economic factors not captured in the quantitative model.