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Note 7 - Loans and Related Allowance for Credit Losses

9 Months Ended

Sep. 30, 2024

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTE 7 – LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES

The following table summarizes the loan portfolio by primary segment and class of financial receivable (in thousands) ^(a)(b):

	September 30,			December 31,
	2024			2023

Commercial real estate:
Owner occupied	$	187,313		$	183,545
Non-owner occupied		407,159			401,580
Multifamily		94,798			82,506
Residential real estate		345,748			328,854
Commercial and industrial		213,172			221,508
Home equity lines of credit		137,761			127,818
Construction and other		111,550			125,105
Consumer installment		7,030			7,214
Total loans		1,504,531			1,478,130
Less: Allowance for credit losses		(22,526	)		(21,693	)
Net loans	$	1,482,005		$	1,456,437

(a)	Accrued interest of $5.3 million and $5.5 million at September 30, 2024 and December 31, 2023, respectively, is excluded from amortized cost and presented in "Accrued interest receivable and other assets" on the Consolidated Balance Sheets.
(b)	Unearned income, including net deferred loan fees and costs and unamortized premiums and discounts, totaled $8.4 million and $9.2 million at September 30, 2024 and December 31, 2023, respectively.

Allowance for Credit Losses: Loans

On January 1, 2023, the Company adopted ASU 2016-13. This methodology for calculating the allowance for credit losses considers the possibility of loss over the life of the loan. It also considers historical loss rates and other qualitative adjustments, as well as a new forward-looking component that considers reasonable and supportable forecasts over the expected life of each loan. To develop the ACL estimate under the current expected loss model, the Company segments the loan portfolio into loan pools based on loan type and similar credit risk elements. An ACL is maintained to absorb losses from the loan portfolio. The ACL is based on management’s continuing evaluation of the risk characteristics and credit quality of the loan portfolio, assessment of current economic conditions, diversification and size of the portfolio, adequacy of collateral, past and anticipated loss experience, and the amount of nonperforming loans.

Management reviews the loan portfolio quarterly using a defined, consistently applied process to make appropriate and timely adjustments to the ACL. When information confirms all or part of specific loans to be uncollectible, these amounts are promptly charged off against the ACL.

The following tables summarize the ACL within the primary segments of the loan portfolio and the activity within those segments (in thousands):

	For the Three Months Ended September 30, 2024
	Allowance for Credit Losses
	Balance										Balance
	June 30, 2024		Charge-offs			Recoveries		Provision			September 30, 2024
Loans:
Commercial real estate:
Owner occupied	$	2,058	$	(45	)	$	-	$	177		$	2,190
Non-owner occupied		7,981		(1,341	)		-		1,716			8,356
Multifamily		1,268		-			-		125			1,393
Residential real estate		4,891		-			-		219			5,110
Commercial and industrial		2,430		(35	)		9		8			2,412
Home equity lines of credit		813		-			-		56			869
Construction and other		2,290		-			-		(159	)		2,131
Consumer installment		64		(5	)		35		(29	)		65
Total	$	21,795	$	(1,426	)	$	44	$	2,113		$	22,526

	For the Three Months Ended September 30, 2023
	Allowance for Credit Losses
	Balance										Balance
	June 30, 2023		Charge-offs			Recoveries		Provision			September 30, 2023
Loans:
Commercial real estate:
Owner occupied	$	3,413	$	-		$	1	$	(711	)	$	2,703
Non-owner occupied		3,846		-			-		231			4,077
Multifamily		1,279		-			-		495			1,774
Residential real estate		5,114		-			-		187			5,301
Commercial and industrial		4,104		(25	)		10		106			4,195
Home equity lines of credit		723		-			-		3			726
Construction and other		1,884		-			-		146			2,030
Consumer installment		228		-			30		(78	)		180
Total	$	20,591	$	(25	)	$	41	$	379		$	20,986

	For the Nine Months Ended September 30, 2024
	Allowance for Credit Losses
	Balance										Balance
	December 31, 2023		Charge-offs			Recoveries		Provision			September 30, 2024
Loans:
Commercial real estate:
Owner occupied	$	2,668	$	(45	)	$	11	$	(444	)	$	2,190
Non-owner occupied		4,480		(1,341	)		-		5,217			8,356
Multifamily		1,796		-			-		(403	)		1,393
Residential real estate		5,450		-			-		(340	)		5,110
Commercial and industrial		4,377		(35	)		24		(1,954	)		2,412
Home equity lines of credit		750		(7	)		1		125			869
Construction and other		1,990		-			-		141			2,131
Consumer installment		182		(11	)		118		(224	)		65
Total	$	21,693	$	(1,439	)	$	154	$	2,118		$	22,526

	For the Nine Months Ended September 30, 2023
	Allowance for Credit Losses
	Balance		CECL											Balance
	December 31, 2022		Adoption			Charge-offs			Recoveries		Provision			September 30, 2023
Loans:
Commercial real estate:
Owner occupied	$	2,203	$	811		$	(46	)	$	4	$	(269	)	$	2,703
Non-owner occupied		5,597		(1,206	)		-			-		(314	)		4,077
Multifamily		662		591			-			-		521			1,774
Residential real estate		2,047		2,744			(108	)		-		618			5,301
Commercial and industrial		1,483		2,320			(85	)		30		447			4,195
Home equity lines of credit		1,753		(1,031	)		-			70		(66	)		726
Construction and other		609		956			-			-		465			2,030
Consumer installment		84		197			(62	)		110		(149	)		180
Total	$	14,438	$	5,382		$	(301	)	$	214	$	1,253		$	20,986

The total ACL increased by $833,000, or 3.8%, from December 31, 2023 to September 30, 2024. The increase was driven by portfolio activity and the economic outlook. The Bank utilized economic projections issued by the Federal Open Market Committee (FOMC) to estimate credit losses, and the projections are updated quarterly for the ACL calculation. For 2024, the forecast takes into account the national unemployment rates. For 2023, the forecast took into account the national housing price index and national unemployment rates. To the extent that credit risk is not fully identified within the forecasts, management has made qualitative adjustments to the ACL balance.

The provision increased by $731,000, or 3.4%, for the three months ended September 30, 2024. Fluctuations were attributed to:

• Increase in residential real estate loans, residential real estate construction loans, home equity facilities loans, owner occupied CRE and non-owner occupied CRE

• Decrease in commercial real estate construction and development loans

• Increase in charge-offs due to the partial charge-off of one loan during the 2024 third quarter that had no previous ACL given the appraised valuation of the underlying collateral

• Increase in calculated loss rates, driven largely by unemployment forecasts

The provision increased by $395,000, or 1.9%, for the three months ended September 30, 2023. Fluctuations were attributed to:

• Increase in multi-family and non-owner occupied commercial real estate and commercial real estate construction and development loans

Credit Quality Indicators

Management evaluates individual loans in all of the commercial segments for possible impairment based on guidelines established by the Board of Directors. Loans are individually analyzed when, based on current information and events, the Company will probably 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 evaluating credit loss include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Management determines 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 the shortfall concerning the principal and interest owed. The evaluation of the need and amount of a specific allocation of the allowance and whether a loan can be removed from impairment status is made quarterly.

Management uses a nine-point internal risk-rating system to monitor the credit quality of the overall loan portfolio. The first five categories are considered not criticized and are aggregated as Pass rated. The criticized rating categories utilized by management generally follow bank regulatory definitions. The Special Mention category includes assets that are currently protected but have potential weaknesses, resulting in undue and unwarranted credit risk, but not to the point of justifying a Substandard classification. Loans in the Substandard category have well-defined weaknesses that jeopardize the liquidation of the debt and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. All loans greater than 90 days past due are considered Substandard. A loan categorized as Doubtful contains all of the weaknesses as a Substandard loan with the added characteristic that the weaknesses are so pronounced that the collection or liquidation in full of both principal and interest is highly questionable or improbable. Any portion of a loan that has been charged off is placed in the Loss category.

To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Company has a structured loan rating process with several layers of internal and external oversight. Generally, consumer and residential mortgage loans are included in the Pass categories unless a specific action, such as payment delinquency, bankruptcy, repossession, or death, occurs to raise awareness of a possible credit quality loss. The Company’s Commercial Loan Officers are responsible for the timely and accurate risk rating of the loans in their portfolios at origination and on an ongoing basis. The Credit Department performs an annual review of all commercial relationships with loan balances of $750,000 or greater. Detailed reviews, including plans for resolution, are performed on criticized loans of $150,000 or more on at least a quarterly basis. Loans in the Special Mention and Substandard categories that are collectively evaluated for impairment are given separate consideration in the determination of the allowance.

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due.

The following table represents outstanding loan balances by credit quality indicators and vintage year by class of financing receivable and current period gross charge-offs by year of origination as of September 30, 2024:

September 30, 2024
Term Loans Amortized Cost Basis by Origination Year														Revolving Amortized
(Dollar amounts in thousands)	2024		2023		2022		2021		2020		Prior			Cost Basis		Total
Commercial real estate:
Owner occupied
Pass	$	11,011	$	20,602	$	36,219	$	36,987	$	26,092	$	42,627		$	2,382	$	175,920
Special Mention		-		-		-		2,707		-		778			-		3,485
Substandard		-		-		4,547		-		-		3,361			-		7,908
Total Owner occupied	$	11,011	$	20,602	$	40,766	$	39,694	$	26,092	$	46,766		$	2,382	$	187,313
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	45		$	-	$	45
Non-owner occupied
Pass	$	6,515	$	50,123	$	97,043	$	49,075	$	20,461	$	139,800		$	4,011	$	367,028
Special Mention		-		-		2,506		-		-		2,019			-		4,525
Substandard		-		-		3,991		635		-		30,980			-		35,606
Total Non-owner occupied	$	6,515	$	50,123	$	103,540	$	49,710	$	20,461	$	172,799		$	4,011	$	407,159
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	1,341		$	-	$	1,341
Multifamily
Pass	$	2,943	$	36,236	$	26,225	$	7,491	$	10,158	$	11,713		$	32	$	94,798
Total Multifamily	$	2,943	$	36,236	$	26,225	$	7,491	$	10,158	$	11,713		$	32	$	94,798
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-		$	-	$	-
Residential real estate
Pass	$	32,687	$	49,940	$	59,318	$	74,692	$	36,706	$	89,742		$	232	$	343,317
Substandard		34		-		189		722		-		1,486			-		2,431
Total Residential real estate	$	32,721	$	49,940	$	59,507	$	75,414	$	36,706	$	91,228		$	232	$	345,748
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-		$	-	$	-
Commercial and industrial
Pass	$	31,952	$	35,883	$	34,893	$	14,707	$	21,296	$	5,993		$	65,459	$	210,183
Special Mention		-		180		-		-		-		-			792		972
Substandard		231		11		1,000		-		314		94			371		2,021
Loss		-		-		-		-		-		(4	)		-		(4	)
Total Commercial and industrial	$	32,183	$	36,074	$	35,893	$	14,707	$	21,610	$	6,083		$	66,622	$	213,172
Current-period gross charge-offs	$	-	$	-	$	23	$	12	$	-	$	-		$	-	$	35
Home equity lines of credit
Pass	$	-	$	205	$	148	$	-	$	35	$	1,942		$	133,937	$	136,267
Substandard		-		72		153		-		34		607			628		1,494
Total Home equity lines of credit	$	-	$	277	$	301	$	-	$	69	$	2,549		$	134,565	$	137,761
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	7		$	-	$	7
Construction and other
Pass	$	19,163	$	69,902	$	2,518	$	5,262	$	542	$	1,558		$	9,713	$	108,658
Special Mention		-		-		841		-		-		232			-		1,073
Substandard		-		-		-		-		-		1,296			523		1,819
Total Construction and other	$	19,163	$	69,902	$	3,359	$	5,262	$	542	$	3,086		$	10,236	$	111,550
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-		$	-	$	-
Consumer installment
Pass	$	1,649	$	1,203	$	521	$	135	$	44	$	3,294		$	-	$	6,846
Substandard		-		-		5		-		-		179			-		184
Total Consumer installment	$	1,649	$	1,203	$	526	$	135	$	44	$	3,473		$	-	$	7,030
Current-period gross charge-offs	$	-	$	-	$	-	$	6	$	-	$	5		$	-	$	11
Total Loans	$	106,185	$	264,357	$	270,117	$	192,413	$	115,682	$	337,697		$	218,080	$	1,504,531

Total Loans Summary
Pass	$	105,920	$	264,094	$	256,885	$	188,349	$	115,334	$	296,669		$	215,766	$	1,443,017
Special Mention		-		180		3,347		2,707		-		3,029			792		10,055
Substandard		265		83		9,885		1,357		348		38,003			1,522		51,463
Loss		-		-		-		-		-		(4	)		-		(4	)
Total Loans	$	106,185	$	264,357	$	270,117	$	192,413	$	115,682	$	337,697		$	218,080	$	1,504,531

December 31, 2023
Term Loans Amortized Cost Basis by Origination Year														Revolving Amortized
(Dollar amounts in thousands)	2023		2022		2021		2020		2019		Prior			Cost Basis		Total
Commercial real estate:
Owner occupied
Pass	$	14,634	$	34,850	$	41,609	$	25,040	$	12,304	$	41,976		$	2,662	$	173,075
Special Mention		-		2,271		-		-		13		799			-		3,083
Substandard		-		2,356		-		1,559		146		3,326			-		7,387
Total Owner occupied	$	14,634	$	39,477	$	41,609	$	26,599	$	12,463	$	46,101		$	2,662	$	183,545
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	46		$	-	$	46
Non-owner occupied
Pass	$	43,393	$	95,098	$	40,959	$	22,707	$	32,405	$	127,469		$	504	$	362,535
Special Mention		-		2,508		-		-		-		2,197			-		4,705
Substandard		-		-		-		-		5,237		24,569			-		29,806
Doubtful		-		-		647		-		3,887		-			-		4,534
Total Non-owner occupied	$	43,393	$	97,606	$	41,606	$	22,707	$	41,529	$	154,235		$	504	$	401,580
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-		$	-	$	-
Multifamily
Pass	$	29,218	$	25,776	$	4,267	$	10,453	$	1,391	$	11,231		$	104	$	82,440
Substandard		-		-		-		-		-		66			-		66
Total Multifamily	$	29,218	$	25,776	$	4,267	$	10,453	$	1,391	$	11,297		$	104	$	82,506
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-		$	-	$	-
Residential real estate
Pass	$	50,086	$	56,180	$	78,909	$	39,476	$	19,418	$	82,441		$	672	$	327,182
Substandard		-		127		210		-		24		1,311			-		1,672
Total Residential real estate	$	50,086	$	56,307	$	79,119	$	39,476	$	19,442	$	83,752		$	672	$	328,854
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	108		$	-	$	108
Commercial and industrial
Pass	$	46,918	$	43,494	$	17,909	$	25,143	$	2,741	$	6,533		$	66,842	$	209,580
Special Mention		-		-		-		-		-		-			184		184
Substandard		13		15		-		353		124		876			10,367		11,748
Loss		-		-		-		-		-		(4	)		-		(4	)
Total Commercial and industrial	$	46,931	$	43,509	$	17,909	$	25,496	$	2,865	$	7,405		$	77,393	$	221,508
Current-period gross charge-offs	$	-	$	-	$	75	$	-	$	6	$	4		$	-	$	85
Home equity lines of credit
Pass	$	-	$	126	$	-	$	16	$	63	$	2,097		$	124,001	$	126,303
Substandard		-		105		-		36		29		583			762		1,515
Total Home equity lines of credit	$	-	$	231	$	-	$	52	$	92	$	2,680		$	124,763	$	127,818
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-		$	-	$	-
Construction and other
Pass	$	55,528	$	23,059	$	20,246	$	1,777	$	5,609	$	851		$	9,152	$	116,222
Special Mention		-		3,573		2,371		-		265		-			-		6,209
Substandard		-		-		420		-		1,770		-			484		2,674
Total Construction and other	$	55,528	$	26,632	$	23,037	$	1,777	$	7,644	$	851		$	9,636	$	125,105
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-		$	-	$	-
Consumer installment
Pass	$	1,810	$	1,088	$	324	$	89	$	74	$	3,669		$	-	$	7,054
Substandard		-		7		-		-		-		153			-		160
Total Consumer installment	$	1,810	$	1,095	$	324	$	89	$	74	$	3,822		$	-	$	7,214
Current-period gross charge-offs	$	-	$	25	$	-	$	-	$	-	$	38		$	-	$	63
Total Loans	$	241,600	$	290,633	$	207,871	$	126,649	$	85,500	$	310,143		$	215,734	$	1,478,130

Total Loans Summary
Pass	$	241,587	$	279,671	$	204,223	$	124,701	$	74,005	$	276,267		$	203,937	$	1,404,391
Special Mention		-		8,352		2,371		-		278		2,996			184		14,181
Substandard		13		2,610		630		1,948		7,330		30,884			11,613		55,028
Doubtful		-		-		647		-		3,887		-			-		4,534
Loss		-		-		-		-		-		(4	)		-		(4	)
Total Loans	$	241,600	$	290,633	$	207,871	$	126,649	$	85,500	$	310,143		$	215,734	$	1,478,130

Collateral-dependent Loans

The following table presents individually analyzed and collateral-dependent loans by class of loans (in thousands):

	September 30, 2024
	Type of Collateral
(Dollar amounts in thousands)	Real Estate		Blanket Lien		Investment/Cash		Other		Total
Commercial real estate:
Owner occupied	$	2,224	$	-	$	-	$	-	$	2,224
Non-owner occupied		14,381		-		-		11,105		25,486
Residential real estate		617		-		-		-		617
Commercial and industrial		-		-		-		1,213		1,213
Total	$	17,222	$	-	$	-	$	12,318	$	29,540

	December 31, 2023
	Type of Collateral
(Dollar amounts in thousands)	Real Estate		Blanket Lien		Investment/Cash		Other		Total
Commercial real estate:
Non-owner occupied	$	8,150	$	-	$	-	$	-	$	8,150
Total	$	8,150	$	-	$	-	$	-	$	8,150

Nonperforming and Past Due Loans

The following tables present the aging of the recorded investment in past-due loans by class of loans (in thousands):

			30-59 Days		60-89 Days		90 Days+		Total		Total
September 30, 2024	Current		Past Due		Past Due		Past Due		Past Due		Loans

Commercial real estate:
Owner occupied	$	187,205	$	48	$	-	$	60	$	108	$	187,313
Non-owner occupied		393,788		1,367		4,396		7,608		13,371		407,159
Multifamily		94,798		-		-		-		-		94,798
Residential real estate		343,090		1,943		566		149		2,658		345,748
Commercial and industrial		211,957		29		190		996		1,215		213,172
Home equity lines of credit		137,081		155		122		403		680		137,761
Construction and other		111,057		-		493		-		493		111,550
Consumer installment		7,016		14		-		-		14		7,030
Total	$	1,485,992	$	3,556	$	5,767	$	9,216	$	18,539	$	1,504,531

			30-59 Days		60-89 Days		90 Days+		Total		Total
December 31, 2023	Current		Past Due		Past Due		Past Due		Past Due		Loans

Commercial real estate:
Owner occupied	$	183,242	$	197	$	-	$	106	$	303	$	183,545
Non-owner occupied		397,964		3,616		-		-		3,616		401,580
Multifamily		82,440		-		-		66		66		82,506
Residential real estate		326,224		1,366		1,010		254		2,630		328,854
Commercial and industrial		221,304		-		146		58		204		221,508
Home equity lines of credit		126,894		447		180		297		924		127,818
Construction and other		125,040		65		-		-		65		125,105
Consumer installment		7,138		69		-		7		76		7,214
Total	$	1,470,246	$	5,760	$	1,336	$	788	$	7,884	$	1,478,130

The following tables present the recorded investment in nonaccrual loans and loans 90 and greater days past due and still on accrual by class of loans (in thousands):

	September 30, 2024
	Nonaccrual		Nonaccrual				Loans Past
(Dollar amounts in thousands)	with no		with		Total		Due Over 90 Days		Total
	ACL		ACL		Nonaccrual		Still Accruing		Nonperforming
Commercial real estate:
Owner occupied	$	-	$	310	$	310	$	-	$	310
Non-owner occupied		21,870		3,616		25,486		-		25,486
Residential real estate		617		1,321		1,938		-		1,938
Commercial and industrial		-		1,212		1,212		-		1,212
Home equity lines of credit		-		916		916		32		948
Consumer installment		179		5		184		-		184
Total	$	22,666	$	7,380	$	30,046	$	32	$	30,078

	December 31, 2023
	Nonaccrual		Nonaccrual				Loans Past
(Dollar amounts in thousands)	with no		with		Total		Due Over 90 Days		Total
	ACL		ACL		Nonaccrual		Still Accruing		Nonperforming
Commercial real estate:
Owner occupied	$	-	$	252	$	252	$	-	$	252
Non-owner occupied		4,534		3,616		8,150		-		8,150
Multifamily		-		66		66		-		66
Residential real estate		-		1,170		1,170		-		1,170
Commercial and industrial		-		223		223		-		223
Home equity lines of credit		-		856		856		-		856
Construction and other		-		-		-		-		-
Consumer installment		153		7		160		-		160
Total	$	4,687	$	6,190	$	10,877	$	-	$	10,877

Interest income that would have been recorded had these loans not been placed on nonaccrual status was $852,000 and $1.2 million for the three and nine months ended September 30, 2024, respectively, and $211,000 and $414,000 for the three and nine months ended September 30, 2023, respectively.

Modifications to Borrowers Experiencing Financial Difficulty

Effective January 1, 2023, the Company implemented ASU 2022-02, which eliminated the recognition and measure of troubled debt restructurings and enhanced disclosures for loan modifications to borrowers experiencing financial difficulty. The Bank may modify the contractual terms of a loan to a borrower experiencing financial difficulty to mitigate the risk of loss. Such modifications may include a term extension, interest rate reduction, significant payment deferral, other modifications, or a combination of modification types. In general, any delay in payment of greater than 90 days in the last 12 months is considered to be a significant payment deferral.

The table below details the amortized cost basis of the loans modified to borrowings experiencing financial difficulty, disaggregated by class of loans and type of concessions granted, and the financial effect of the modifications:

	September 30, 2024
	Modifications
					Payment		Interest Rate		Interest Rate				Percentage of
					Deferral		Reduction		Reduction				Total Loans
	Payment		Term		and Term		and Term		and Principal				Held for
	Deferral		Extension		Extension		Past Due		Forgiveness		Total		Investment

Commercial real estate:
Non-owner occupied	$	-	$	13,482	$	2,507	$	-	$	-	$	15,989		1.1	%
Construction and other		-		1,819		-		-		-		1,819		0.1	%
Total	$	-	$	15,301	$	2,507	$	-	$	-	$	17,808		1.2	%

	September 30, 2023
	Modifications
					Payment		Interest Rate		Interest Rate				Percentage of
					Deferral		Reduction		Reduction				Total Loans
	Payment		Term		and Term		and Term		and Principal				Held for
	Deferral		Extension		Extension		Past Due		Forgiveness		Total		Investment

Commercial real estate:
Non-owner occupied	$	-	$	145	$	2,507	$	-	$	-	$	2,652		0.2	%
Residential real estate		-		19,074		-		-		-		19,074		1.4	%
Commercial and industrial		-		83		-		-		-		83		0.0	%
Consumer installment		-		8		-		-		-		8		0.0	%
Total	$	-	$	19,310	$	2,507	$	-	$	-	$	21,817		1.6	%

As of September 30, 2024, the Bank had no commitments to lend additional funds on modified loans. As of September 30, 2024, the Bank did not have any loans that were modified for borrowers experiencing financial difficulty and subsequently defaulted. As of September 30, 2024, there were no modified loans that were delinquent. Payment default is defined as movement to nonperforming status, foreclosure or charge-off, whichever occurs first. At September 30, 2024 and December 31, 2023, the Company reported $381,000 and $228,000, respectively, in residential real estate loans in the process of foreclosure.

Allowance for Credit Losses: Unfunded Commitments

Upon adoption of ASU 2016-13 on January 1, 2023, the Company recorded a separate ACL for unfunded commitments using a methodology that is inherently similar to the methodology used for calculating the ACL for loans. The liability for credit losses on these exposures is included in “Accrued interest payable and other liabilities” on the Consolidated Balance Sheet and amounted to $1.8 million as of September 30, 2024, and December 31, 2023.