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LOANS AND ALLOWANCE FOR CREDIT LOSSES
 12 Months Ended
Dec. 31, 2024
Loans and Leases Receivable Disclosure [Abstract]  
LOANS AND ALLOWANCE FOR CREDIT LOSSES LOANS AND ALLOWANCE FOR CREDIT LOSSES
The composition of the loan portfolio, net of deferred loan fees as of December 31, 2024 and 2023 is summarized as follows (in thousands):
 20242023
Commercial and industrial$299,521 $264,396 
Commercial mortgages:
Construction94,943 138,887 
Commercial mortgages, other1,122,061 984,038 
Residential mortgages274,979 277,992 
Consumer loans:
Home equity lines and loans93,220 87,056 
Indirect consumer loans178,118 210,423 
Direct consumer loans8,577 9,872 
Total loans, net of deferred loan fees2,071,419 1,972,664 
Allowance for credit losses(21,388)(22,517)
Loans, net of allowance for credit losses$2,050,031 $1,950,147 
The Corporation's concentrations of credit risk by loan type are reflected in the preceding table. The concentrations of credit risk with standby letters of credit, committed lines of credit and commitments to originate new loans generally follow the loan classifications in the table above.

Accrued interest receivable on loans was $8.0 million as of December 31, 2024 and $7.8 million as of December 31, 2023. Accrued interest receivable on loans is included in the accrued interest receivable and other assets line item on the Corporation's Consolidated Balance Sheets, and is excluded from the amortized cost basis of loans and estimate of the allowance for credit losses, as presented in this Note.

Commercial and industrial loans includes agricultural loans which totaled $0.3 million as of December 31, 2024 and 2023. Agricultural loans were previously presented as a standalone loan category. Prior period information included in this Note reflects agricultural loans as a component of commercial and industrial loans.

The Corporation had no residential mortgages held for sale as of December 31, 2024 and December 31, 2023. When the Corporation has loans classified as held for sale, they are not included in the table above.
Residential mortgage and home equity loans totaling $244.6 million as of December 31, 2024 and $254.6 million as of December 31, 2023 were pledged under a blanket collateral agreement for the Corporation's line of credit with the FHLBNY.
The following tables present the activity in the allowance for credit losses by portfolio segment for the years ended December 31, 2024 and 2023 (in thousands):
 December 31, 2024
Allowance for credit lossesCommercial and IndustrialCommercial MortgagesResidential MortgagesConsumer LoansTotal
Beginning balance, January 1, 2024$5,055 $12,026 $2,194 $3,242 $22,517 
Charge Offs:(302)— (21)(1,550)(1,873)
Recoveries:128 4 62 519 713 
Net (charge offs) recoveries(174)4 41 (1,031)(1,160)
Provision (1)
(361)(816)24 1,184 31 
Ending balance, December 31, 2024$4,520 $11,214 $2,259 $3,395 $21,388 
(1) Additional provision related to off-balance sheet exposure was a credit of $77 thousand for the year ended December 31, 2024.
 December 31, 2023
Allowance for credit lossesCommercial and IndustrialCommercial MortgagesResidential MortgagesConsumer LoansTotal
Beginning balance, January 1, 2023$3,373 $11,576 $1,845 $2,865 $19,659 
Cumulative effect adjustment for the adoption of ASC-326909 (695)(16)176 374 
Beginning balance after cumulative effect adjustment, January 1, 20234,282 10,881 1,829 3,041 20,033 
Charge Offs:(281)— (32)(1,070)(1,383)
Recoveries:22 4 — 416 442 
Net recoveries (charge offs)(259)4 (32)(654)(941)
Provision (1)
1,032 1,141 397 855 3,425 
Ending balance, December 31, 2023$5,055 $12,026 $2,194 $3,242 $22,517 
(1) Additional provision related to off-balance sheet exposure was a credit of $163 thousand for the year ended December 31, 2023.

Unfunded Commitments
The allowance for credit losses on unfunded commitments represents the amount held against credit exposures which are not represented on the Consolidated Balance Sheets. The allowance is recognized as a liability, a component of other liabilities on the Consolidated Balance Sheets, with adjustments to the allowance recognized in the provision for credit losses line item on the Consolidated Statements of Income. The Corporation established an allowance for credit losses on unfunded commitments in conjunction with its adoption of ASC 326-Financial Instruments-Credit Losses.

The following table presents the activity in the allowance for credit losses on unfunded commitments for the years ended December 31, 2024 and 2023:

For the Years Ended December 31,
Allowance for credit losses on unfunded commitments20242023
Beginning balance$919 $— 
Impact of adoption of ASC-326— 1,082 
Provision for credit losses on unfunded commitments (77)(163)
Ending balance$842 $919 




The following table presents the provision for credit losses on loans and unfunded commitments for the years ended December 31, 2024 and 2023 (in thousands):

For the Years Ended December 31,
Provision for credit losses20242023
Provision for credit losses on loans$31 $3,425 
Provision for credit losses on unfunded commitments (77)(163)
Total provision (credit) for credit losses$(46)$3,262 
The following tables present the balance in the allowance for credit losses and the amortized cost basis in loans by portfolio segment and based on analysis status as of December 31, 2024 and 2023 (in thousands):

 December 31, 2024
Allowance for credit lossesCommercial
and
Industrial		Commercial MortgagesResidential MortgagesConsumer LoansTotal
Ending allowance balance attributable to loans:
Individually analyzed $1,446 $106 $— $— $1,552 
Collectively analyzed 3,074 11,108 2,259 3,395 19,836 
Total ending allowance balance$4,520 $11,214 $2,259 $3,395 $21,388 

 December 31, 2023
Allowance for credit lossesCommercial
and
Industrial		Commercial MortgagesResidential MortgagesConsumer LoansTotal
Ending allowance balance attributable to loans:
Individually analyzed$1,928 $27 $— $— $1,955 
Collectively analyzed3,127 11,999 2,194 3,242 20,562 
Total ending allowance balance$5,055 $12,026 $2,194 $3,242 $22,517 



 December 31, 2024
LoansCommercial
and
Industrial		Commercial MortgagesResidential MortgagesConsumer LoansTotal
Loans individually analyzed$1,512 $4,959 $— $— $6,471 
Loans collectively analyzed298,009 1,212,045 274,979 279,915 2,064,948 
Total ending loans balance$299,521 $1,217,004 $274,979 $279,915 $2,071,419 


 December 31, 2023
LoansCommercial
and
Industrial		Commercial MortgagesResidential MortgagesConsumer LoansTotal
Loans individually analyzed$2,067 $5,968 $— $— $8,035 
Loans collectively analyzed262,329 1,116,957 277,992 307,351 1,964,629 
Total ending loans balance$264,396 $1,122,925 $277,992 $307,351 $1,972,664 



Modifications to Loans Made to Borrowers Experiencing Financial Difficulty
Effective January 1, 2023, the Corporation adopted ASU 2022-02, Financial Instruments-Credit Losses (Topic 326)-Troubled Debt Restructurings and Vintage Disclosures, on a prospective basis. The Corporation may occasionally make modifications to loans where the borrower is considered to be experiencing financial difficulty. Types of modifications considered under ASU 2022-02 include principal reductions, interest rate reductions, term extensions, significant payment delays, or a combination thereof.
The following tables summarize the amortized cost basis of loans modified during the years ended December 31, 2024 and 2023 (in thousands):
December 31, 2024
Loans modified under ASU 2022-02Principal ReductionInterest Rate ReductionTerm ExtensionPayment DelayCombinationTotal
(%) of Loan Class (1)
Commercial & industrial$— $— $384 $— $— $384 0.13 %
Commercial mortgages:
Commercial mortgages, other— — — 376 — 376 0.03 %
Residential mortgages— — — 440 — 440 0.16 %
Total$— $— $384 $816 $— $1,200 
(1) Represents the amortized cost basis of loans modified during the period as a percentage of the period-end loan balances by class.

December 31, 2023
Loans modified under ASU 2022-02Principal ReductionInterest Rate ReductionTerm ExtensionPayment DelayCombinationTotal
(%) of Loan Class (1)
Commercial & industrial$— $— $1,011 $— $— $1,011 0.38 %
Commercial mortgages:— 
Commercial mortgages, other— — 272 1,878 — 2,150 0.22 %
Consumer loans: — 
Home equity lines and loans— — 116 — — 116 0.13 %
Total$— $— $1,399 $1,878 $— $3,277 
(1) Represents the amortized cost basis of loans modified during the period as a percentage of the period-end loan balances by class.

The following tables present the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during the years ended December 31, 2024 and 2023:

December 31, 2024
Effect of loan modifications under ASU 2022-02Principal reduction
(in thousands)		Weighted average interest rate reduction (%)Weighted average term extension
(in months)		Weighted-average payment delay
(in months)
Commercial & industrial$——%60 months0 months
Commercial mortgages:
Commercial mortgages, other$——%0 months101 months
Residential mortgages$——%0 months6 months
December 31, 2023
Principal Reduction (in thousands)Weighted average interest rate reduction (%)Weighted average term extension
(in months)		Weighted average payment delay
(in months)
Commercial & industrial——%12 months0 months
Commercial mortgages:
Commercial mortgages, other——%60 months4 months
Consumer loans:
Home equity lines and loans——%180 months0 months
The Corporation closely monitors the performance of loans that have been modified in accordance with ASU 2022-02 in order to gauge the effectiveness of its modifications, and to determine the degree to which borrowers continue to demonstrate financial weakness following modification. The following tables present the performance of such loans that were modified in the twelve month periods preceding December 31, 2024 and 2023 (in thousands):

Twelve Months Ended December 31, 2024
Past Due Status of Modifications under ASU 2022-02:30-59 Days Past Due60-89 Days Past DueGreater Than 89 Days Past DueLoans Not Past DueTotal
Commercial and industrial$— $— $— $384 $384 
Commercial mortgages:
Commercial mortgages, other— — — 376 376 
Residential mortgages (1)
— — 440 — 440 
Total$— $— $440 $760 $1,200 
(1) The residential mortgage included in the above table was contractually past due as of December 31, 2024, but was otherwise performing on its modified terms.


Twelve Months Ended December 31, 2023
Past Due Status of Modifications under ASU 2022-02:30-59 Days Past Due60-89 Days Past DueGreater Than 89 Days Past DueLoans Not Past DueTotal
Commercial and industrial$875 $— $— $136 $1,011 
Commercial mortgages:
Commercial mortgages, other— — — 2,150 2,150 
Consumer loans:
Home equity lines and loans— — — 116 116 
Total$875 $— $— $2,402 $3,277 

There was one commercial and industrial loan modified to a borrower experiencing financial difficulty during 2023 which sustained a payment default on its modified terms during the year ended December 31, 2024. Allocations totaling $0.7 million and $0.9 million were included for this loan in the allowance for credit losses as of December 31, 2024 and 2023, respectively.

The Corporation had no outstanding commitments to lend additional amounts to borrowers for which modifications subject to ASU 2022-02 were made during the years ended December 31, 2024 and 2023.

Collateral-Dependent Individually Analyzed Loans
As of December 31, 2024 and 2023, the amortized cost basis of individually analyzed loans was $6.5 million and $8.0 million respectively, of which $5.1 million and $6.3 million respectively were considered collateral-dependent. For collateral-dependent loans where the borrower is experiencing financial difficulty and repayment is likely to be substantially provided through the sale or operation of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan, as of the measurement date. Certain assets held as collateral may be exposed to future deterioration in fair value, particularly due to changes in real estate markets or usage.
The following table presents the amortized cost basis and related allowance for credit loss of individually analyzed loans considered to be collateral-dependent as of December 31, 2024 and 2023 (in thousands):

December 31, 2024December 31, 2023
Amortized Cost BasisRelated AllowanceAmortized Cost BasisRelated Allowance
Commercial and industrial:
Commercial and industrial (1) (2)
$130 $65 $379 $240 
Commercial mortgages:
Construction (1)
— — 2,209 — 
Commercial mortgages, other (1) (2) (3)
4,959 106 3,759 27 
Total$5,089 $171 $6,347 $267 
(1) Secured by commercial real estate
(2) Secured by business assets
(3) Secured by residential real estate


The following table presents the average amortized basis in and interest income recognized on loans individually analyzed, by class, as of December 31, 2024 and 2023 (in thousands):
 December 31, 2024December 31, 2023
With no related allowance recorded:Average Amortized Cost Basis
Interest Income Recognized (1)
Average Amortized Cost Basis
Interest Income Recognized (1)
Commercial and industrial$102 $4 $431 $— 
Commercial mortgages:
Construction1,753 — 443 103 
Commercial mortgages2,876 — 3,988 5 
Residential mortgages— — 288 — 
Consumer loans:
Home equity lines & loans— — 99 — 
With an allowance recorded:
Commercial and industrial1,797 8 1,339 55 
Commercial mortgages:
Construction— — — — 
Commercial mortgages379 — 33 — 
Consumer loans:
Home equity lines and loans— — 25 — 
Total$6,907 $12 $6,646 $163 
(1) Cash basis interest income approximates interest income recognized.
The following table presents the amortized cost basis of nonaccrual loans with no related specific allocation in the allowance for credit losses, total nonaccrual loans, and loans pasts due 90 days or greater which were still accruing, by class of loans, as of December 31, 2024 and 2023 (in thousands):

Nonaccrual with no allowance for credit lossesNonaccrualLoans Past Due 90 Days or More and Still Accruing
202420232024202320242023
Commercial and industrial$76 $76 $1,534 $1,930 $23 $10 
Commercial mortgages:
Construction— 2,209 — 2,209 — — 
Commercial mortgages3,981 3,732 4,959 3,760 — — 
Residential mortgages1,372 1,315 1,372 1,315 — — 
Consumer loans:
Home equity lines and loans613 508 613 508 — — 
Indirect consumer loans474 687 474 687 — — 
Direct consumer loans2 2 2 2 — — 
Total$6,518 $8,529 $8,954 $10,411 $23 $10 

The following tables present the aging of the amortized cost basis in loans as of December 31, 2024 and 2023 (in thousands):

December 31, 2024
30 - 59 Days Past Due60-89 Days Past DueGreater Than 89 Days Past DueTotal Past DueLoans Not Past DueTotal
Commercial and industrial$140 $201 $702 $1,043 $298,478 $299,521 
Commercial mortgages:
Construction— — — — 94,943 94,943 
Commercial mortgages1,032 — 3,258 4,290 1,117,771 1,122,061 
Residential mortgages1,529 662 696 2,887 272,092 274,979 
Consumer loans:
Home equity lines and loans231 — 364 595 92,625 93,220 
Indirect consumer loans2,101 719 235 3,055 175,063 178,118 
Direct consumer loans14 6 1 21 8,556 8,577 
Total$5,047 $1,588 $5,256 $11,891 $2,059,528 $2,071,419 

December 31, 2023
30 - 59 Days Past Due60-89 Days Past DueGreater Than 89 Days Past DueTotal Past DueLoans Not Past DueTotal
Commercial and industrial$1,196 $31 $10 $1,237 $263,159 $264,396 
Commercial mortgages:
Construction2,164 — 2,207 4,371 134,516 138,887 
Commercial mortgages1,022 103 261 1,386 982,652 984,038 
Residential mortgages2,244 201 585 3,030 274,962 277,992 
Consumer loans:
Home equity lines and loans461 87 366 914 86,142 87,056 
Indirect consumer loans2,473 501 426 3,400 207,023 210,423 
Direct consumer loans2 20 — 22 9,850 9,872 
Total$9,562 $943 $3,855 $14,360 $1,958,304 $1,972,664 
Credit Quality Indicators

The Corporation establishes a risk rating at origination for all commercial loans. The primary factors considered in assigning risk ratings include, but are not limited to: historic and future debt service coverage, collateral position, operating performance, liquidity, leverage, payment history, management ability, and the customer’s industry. Commercial relationship managers monitor all loans in their respective portfolios for any changes in the borrower’s ability to service its debt and affirm the risk ratings for the loans at least annually.

For retail loans, which include residential mortgages, indirect and direct consumer loans, and home equity lines and loans, once a loan is appropriately approved and closed, the Corporation evaluates credit quality based upon loan repayment. Retail loans that have been modified subject to ASU 2022-02, but are otherwise performing, are assigned a risk rating of Special Mention, as defined below. Retail loans are not rated until they become 90 days past due or are modified under ASU 2022-02.

The Corporation uses its risk rating system to identify criticized and classified loans. Commercial relationships within the criticized and classified risk ratings are analyzed quarterly.  The Corporation uses the following definitions for criticized and classified loans (which are consistent with regulatory guidelines):

Special Mention – Loans classified as special mention have a potential weakness that deserves management’s close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or the institution’s credit position at some future date.

Substandard – Loans classified as substandard are inadequately protected by the current net worth and paying capability of the obligor or of the collateral pledged, if any.  Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.  They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful – Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Commercial loans not meeting the criteria above to be considered criticized or classified, are considered to be pass rated loans. Loans listed as not rated, are included in groups of homogeneous loans performing under terms of the loan notes.
Based on the analyses performed as of December 31, 2024, the risk category of the amortized cost basis of loans by class of loans and vintage, as well as the gross charge-offs by loan class and vintage for the period, are as follows (in thousands):
Term Loans - Amortized Cost by Origination YearRevolving Loans Amortized CostRevolving Loans Converted to TermTotal
20242023202220212020Prior
Commercial & Industrial
Pass$44,130 $32,157 $34,862 $16,787 $8,326 $27,452 $108,819 $1,380 $273,913 
Special Mention810 262 3,933 — 4,390 3,673 10,203 62 23,333 
Substandard99 — 8 733 30 — 379 318 1,567 
Doubtful21 — — — — 687 — — 708 
Total45,060 32,419 38,803 17,520 12,746 31,812 119,401 1,760 299,521 
Gross charge offs— 84 200 6 — — 12 — 302 
Construction
Pass19,344 46,954 17,568 9,058 — 1,536 483 — 94,943 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total19,344 46,954 17,568 9,058 — 1,536 483 — 94,943 
Gross charge offs— — — — — — — — — 
Commercial mortgages
Pass120,351 132,539 294,225 162,843 107,341 264,306 6,793 832 1,089,230 
Special Mention— 370 5,935 7,902 — 10,039 2,000 — 26,246 
Substandard— 2,244 1,009 321 1,014 1,982 — — 6,570 
Doubtful— — — — — 15 — — 15 
Total120,351 135,153 301,169 171,066 108,355 276,342 8,793 832 1,122,061 
Gross charge offs— — — — — — — — — 
Residential mortgages
Not rated21,574 20,257 55,321 55,152 64,471 56,708 — — 273,483 
Substandard— — 85 771 220 420 — — 1,496 
Total21,574 20,257 55,406 55,923 64,691 57,128 — — 274,979 
Gross charge offs— — — — — 21 — — 21 
Home equity lines and loans
Not rated13,833 10,657 14,094 4,879 2,503 10,259 35,015 1,252 92,492 
Special Mention— — 115 — — — — — 115 
Substandard— 24 63 — — 195 116 215 613 
Total13,833 10,681 14,272 4,879 2,503 10,454 35,131 1,467 93,220 
Gross charge offs— — 1 — — 11 1 — 13 
Indirect consumer
Not rated37,746 52,480 67,237 13,266 4,194 2,726 — — 177,649 
Substandard75 157 107 79 11 40 — — 469 
Total37,821 52,637 67,344 13,345 4,205 2,766 — — 178,118 
Gross charge offs47 517 525 161 99 116 — — 1,465 
Direct consumer
Not rated2,420 1,681 1,454 275 41 225 2,455 14 8,565 
Substandard— — — — — — 10 2 12 
Total2,420 1,681 1,454 275 41 225 2,465 16 8,577 
Gross charge offs5 21 20 14 — 4 8 — 72 
— — — — — — 
Total loans$260,403 $299,782 $496,016 $272,066 $192,541 $380,263 $166,273 $4,075 $2,071,419 
Total Gross charge-offs$52 $622 $746 $181 $99 $152 $21 $— $1,873 
Based on the analyses performed as of December 31, 2023, the risk category of the amortized cost basis of loans by class of loans and vintage, as well as the gross charge-offs by loan class and vintage for the period, are as follows (in thousands):
Term Loans - Amortized Cost by Origination YearRevolving Loans Amortized CostRevolving Loans Converted to TermTotal
20232022202120202019Prior
Commercial & Industrial
Pass$41,925 $40,579 $21,892 $13,541 $31,233 $10,523 $77,241 $1,662 $238,596 
Special Mention185 4,608 — 4,020 — 4,690 9,137 482 23,122 
Substandard— 24 991 109 23 456 — 161 1,764 
Doubtful— — — — — 790 75 49 914 
Total42,110 45,211 22,883 17,670 31,256 16,459 86,453 2,354 264,396 
Gross charge offs— — — — 9 272 — — 281 
Construction
Pass46,951 68,483 19,066 — 28 1,669 481 — 136,678 
Special Mention— — — — — — — — — 
Substandard— — — — 2,207 2 — — 2,209 
Doubtful— — — — — — — — — 
Total46,951 68,483 19,066 — 2,235 1,671 481 — 138,887 
Gross charge offs— — — — — — — — — 
Commercial mortgages
Pass110,864 260,763 161,858 113,198 57,782 244,211 5,197 767 954,640 
Special Mention— 2,533 8,189 2,609 — 8,642 — — 21,973 
Substandard272 1,107 345 1,022 — 4,555 97 — 7,398 
Doubtful— — — — — 27 — — 27 
Total111,136 264,403 170,392 116,829 57,782 257,435 5,294 767 984,038 
Gross charge offs— — — — — — — — — 
Residential mortgages
Not rated18,653 58,098 60,024 71,369 15,948 52,585 — — 276,677 
Substandard— 75 346 — 169 725 — — 1,315 
Total18,653 58,173 60,370 71,369 16,117 53,310 — — 277,992 
Gross charge offs— 32 — — — — — — 32 
Home equity lines and loans
Not rated13,552 16,384 5,821 3,134 2,867 10,400 33,275 1,115 86,548 
Substandard— 77 — — — 293 25 113 508 
Total13,552 16,461 5,821 3,134 2,867 10,693 33,300 1,228 87,056 
Gross charge offs— — — — — — 6 — 6 
Indirect consumer
Not rated72,264 98,008 23,015 9,192 3,870 3,387 — — 209,736 
Substandard119 246 135 48 36 103 — — 687 
Total72,383 98,254 23,150 9,240 3,906 3,490 — — 210,423 
Gross charge offs184 375 215 121 21 55 — — 971 
Direct consumer
Not rated3,005 2,745 785 256 53 324 2,697 5 9,870 
Substandard— — — 2 — — — — 2 
Total3,005 2,745 785 258 53 324 2,697 5 9,872 
Gross charge offs4 15 8 6 — 54 6 — 93 
— — — — — — 
Total loans$307,790 $553,730 $302,467 $218,500 $114,216 $343,382 $128,225 $4,354 $1,972,664 
Total Gross charge-offs$188 $422 $223 $127 $30 $381 $12 $— $1,383