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Note 7 - Loans and Related Allowance for Credit Losses

12 Months Ended

Dec. 31, 2024

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

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):

	December 31,			December 31,
	2024 ⁽¹⁾⁽²⁾			2023 ⁽¹⁾⁽²⁾

Commercial real estate:
Owner occupied	$	181,447		$	183,545
Non-owner occupied		412,291			401,580
Multifamily		89,849			82,506
Residential real estate		353,442			328,854
Commercial and industrial		229,034			221,508
Home equity lines of credit		143,379			127,818
Construction and other		103,608			125,105
Consumer installment		6,564			7,214
Total loans		1,519,614			1,478,130
Less: Allowance for credit losses		(22,447	)		(21,693	)
Net loans	$	1,497,167		$	1,456,437

⁽¹⁾	Accrued interest of $5.5 million and $5.5 million at December 31, 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.
⁽²⁾	Unearned income, including net deferred loan fees and costs and unamortized premiums and discounts, totaled $8.2 million and $9.2 million at December 31, 2024 and 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 expected 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 Twelve Months Ended December 31, 2024
	Allowance for Credit Losses
	Balance										Balance
	December 31, 2023		Charge-offs			Recoveries		Provision			December 31, 2024
Loans:
Commercial real estate:
Owner occupied	$	2,668	$	(45	)	$	11	$	(534	)	$	2,100
Non-owner occupied		4,480		(1,341	)		-		5,225			8,364
Multifamily		1,796		-			-		(486	)		1,310
Residential real estate		5,450		-			-		(214	)		5,236
Commercial and industrial		4,377		(215	)		55		(1,790	)		2,427
Home equity lines of credit		750		(7	)		1		153			897
Construction and other		1,990		-			-		62			2,052
Consumer installment		182		(38	)		143		(226	)		61
Total	$	21,693	$	(1,646	)	$	210	$	2,190		$	22,447

	For the Twelve Months Ended December 31, 2023
	Allowance for Credit Losses
	Balance		CECL											Balance
	December 31, 2022		Adoption			Charge-offs			Recoveries		Provision			December 31, 2023
Loans:
Commercial real estate:
Owner occupied	$	2,203	$	811		$	(46	)	$	5	$	(305	)	$	2,668
Non-owner occupied		5,597		(1,206	)		-			-		89			4,480
Multifamily		662		591			-			-		543			1,796
Residential real estate		2,047		2,744			(108	)		13		754			5,450
Commercial and industrial		1,483		2,320			(85	)		38		621			4,377
Home equity lines of credit		1,753		(1,031	)		-			70		(42	)		750
Construction and other		609		956			-			-		425			1,990
Consumer installment		84		197			(63	)		207		(243	)		182
Total	$	14,438	$	5,382		$	(302	)	$	333	$	1,842		$	21,693

The total ACL increased by $754,000, or 3.5%, from December 31, 2023 to December 31, 2024. The increase was driven by portfolio activity and the economic outlook, which was partially driven by a change in data inputs. For 2024, the Bank utilized unemployment rate data from Federal Open Market Committee ("FOMC") within the model to forecast credit losses in the portfolio, while Moody’s September 2023 consensus information, which takes into account the national housing price index and national unemployment rates, was used forecast credit losses during 2023. The change was due, in part, to the change from using state specific economic data as inputs in the 2023 assessments to using national economic data inputs in the 2024 assessments. It was determined that national data inputs are more representative of the Bank’s loan portfolio, including historical loss rates. The noted changes to data sources in 2024 within the model and in the application of qualitative adjustments resulted in an increase or decrease to loss rates when applied to each pool. To the extent that credit risk is not fully identified within the forecasts, management has made qualitative adjustments to the ACL balance. Refer to Note 1 – Summary of Significant Accounting Policies for additional information on the Bank’s methodology for estimating the ACL.

The fluctuation in the ACL during the year ended December 31, 2024, can also be attributed to the following:

	•	increase in ACL for non-owner occupied CRE loans is due to increases in outstanding balances and an increase in loss rates utilized in 2024.
	•	decrease in ACL for owner occupied CRE loans is due to a decrease in outstanding balances.
	•	decrease in ACL for multifamily loans is due to a decrease in loss rates utilized in 2024.
	•	decrease in ACL for commercial and industrial loans is due to a decrease in loss rates utilized in 2024.

The provision fluctuations during the year ended December 31, 2023, can be attributed to:

	•	increase in ACL for residential, commercial and industrial, and construction loans are due to increases in outstanding balances.
	•	decrease in ACL for owner occupied CRE loans and home equity lines of credit are due to a decrease in outstanding balances.

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 December 31, 2024:

December 31, 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	$	12,424	$	20,265	$	33,389	$	39,025	$	25,532	$	39,393	$	4,394	$	174,422
Special Mention		-		-		-		389		-		772		-		1,161
Substandard		974		-		4,535		-		-		355		-		5,864
Total Owner occupied	$	13,398	$	20,265	$	37,924	$	39,414	$	25,532	$	40,520	$	4,394	$	181,447
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	45	$	-	$	45
Non-owner occupied
Pass	$	7,542	$	63,559	$	96,624	$	49,009	$	20,230	$	133,530	$	905	$	371,399
Special Mention		-		-		2,506		-		-		2,002		-		4,508
Substandard		-		-		3,719		635		-		32,030		-		36,384
Total Non-owner occupied	$	7,542	$	63,559	$	102,849	$	49,644	$	20,230	$	167,562	$	905	$	412,291
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	1,341	$	-	$	1,341
Multifamily
Pass	$	2,930	$	36,113	$	21,978	$	7,437	$	10,057	$	11,324	$	10	$	89,849
Total Multifamily	$	2,930	$	36,113	$	21,978	$	7,437	$	10,057	$	11,324	$	10	$	89,849
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Residential real estate
Pass	$	45,347	$	50,820	$	61,963	$	69,982	$	36,067	$	86,492	$	291	$	350,962
Substandard		34		169		115		635		-		1,527		-		2,480
Total Residential real estate	$	45,381	$	50,989	$	62,078	$	70,617	$	36,067	$	88,019	$	291	$	353,442
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Commercial and industrial
Pass	$	48,654	$	33,860	$	31,305	$	13,512	$	18,864	$	4,888	$	74,169	$	225,252
Special Mention		2,263		-		-		-		-		-		832		3,095
Substandard		214		10		-		-		305		84		74		687
Total Commercial and industrial	$	51,131	$	33,870	$	31,305	$	13,512	$	19,169	$	4,972	$	75,075	$	229,034
Current-period gross charge-offs	$	-	$	180	$	23	$	12	$	-	$	-	$	-	$	215
Home equity lines of credit
Pass	$	244	$	-	$	166	$	183	$	133	$	2,041	$	139,214	$	141,981
Substandard		-		68		150		-		34		493		653		1,398
Total Home equity lines of credit	$	244	$	68	$	316	$	183	$	167	$	2,534	$	139,867	$	143,379
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	7	$	-	$	7
Construction and other
Pass	$	31,361	$	48,177	$	2,418	$	1,223	$	506	$	1,368	$	14,909	$	99,962
Special Mention		-		-		834		-		-		221		-		1,055
Substandard		-		493		-		-		-		1,171		927		2,591
Total Construction and other	$	31,361	$	48,670	$	3,252	$	1,223	$	506	$	2,760	$	15,836	$	103,608
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Consumer installment
Pass	$	1,539	$	1,047	$	381	$	112	$	36	$	3,284	$	-	$	6,399
Substandard		-		-		3		-		-		162		-		165
Total Consumer installment	$	1,539	$	1,047	$	384	$	112	$	36	$	3,446	$	-	$	6,564
Current-period gross charge-offs	$	-	$	-	$	2	$	6	$	-	$	30	$	-	$	38
Total Loans	$	153,526	$	254,581	$	260,086	$	182,142	$	111,764	$	321,137	$	236,378	$	1,519,614

Total Loans Summary
Pass	$	150,041	$	253,841	$	248,224	$	180,483	$	111,425	$	282,320	$	233,892	$	1,460,226
Special Mention		2,263		-		3,340		389		-		2,995		832		9,819
Substandard		1,222		740		8,522		1,270		339		35,822		1,654		49,569
Total Loans	$	153,526	$	254,581	$	260,086	$	182,142	$	111,764	$	321,137	$	236,378	$	1,519,614

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 classes of loan type as of December 31, 2024:

	December 31, 2024
	Type of Collateral
(Dollar amounts in thousands)	Real Estate		Blanket Lien		Investment/Cash		Other		Total
Commercial real estate:
Owner occupied	$	3,198	$	-	$	-	$	-	$	3,198
Non-owner occupied		24,881		-		-		-		24,881
Residential real estate		617		-		-		-		617
Commercial and industrial		214		-		-		-		214
Construction and other		493		-		-		-		493
Total	$	29,403	$	-	$	-	$	-	$	29,403

The following table presents individually analyzed and collateral-dependent loans by classes of loan type as of December 31, 2023:

	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 table present the aging of the recorded investment in past-due loans by class of loans (in thousands) as of December 31, 2024:

			30-59 Days		60-89 Days		90 Days+		Total		Total
December 31, 2024	Current		Past Due		Past Due		Past Due		Past Due		Loans

Commercial real estate:
Owner occupied	$	180,752	$	513	$	122	$	60	$	695	$	181,447
Non-owner occupied		402,942		1,355		-		8,012		9,367		412,291
Multifamily		89,756		93		-		-		93		89,849
Residential real estate		349,645		2,216		562		1,019		3,797		353,442
Commercial and industrial		226,669		81		2,284		-		2,365		229,034
Home equity lines of credit		142,484		366		102		427		895		143,379
Construction and other		103,115		-		-		493		493		103,608
Consumer installment		6,479		41		44		-		85		6,564
Total	$	1,501,824	$	4,665	$	3,114	$	10,011	$	17,790	$	1,519,614

The following table present the aging of the recorded investment in past-due loans by class of loans (in thousands) as of December 31, 2023:

			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:

	December 31, 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	$	974	$	301	$	1,275	$	-	$	1,275
Non-owner occupied		21,265		3,616		24,881		-		24,881
Residential real estate		617		1,377		1,994		-		1,994
Commercial and industrial		-		159		159		-		159
Home equity lines of credit		-		1,017		1,017		-		1,017
Construction and other		-		493		493		-		493
Consumer installment		162		3		165		-		165
Total	$	23,018	$	6,966	$	29,984	$	-	$	29,984

	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 $2.3 million and $689,000 for the years ended December 31, 2024 and 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:

	December 31, 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	$	-	$	8,414	$	13,151	$	-	$	-	$	21,565		1.4	%
Multifamily		-		707		-		-		-		707		4.7	%
Total	$	-	$	9,121	$	13,151	$	-	$	-	$	22,272		1.5	%

	December 31, 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 December 31, 2024, the Bank had no commitments to lend additional funds on modified loans. As of December 31, 2024 and 2023, the Bank did not have any loans that were modified for borrowers experiencing financial difficulty and subsequently defaulted. Payment default is defined as movement to nonperforming status, foreclosure or charge-off, whichever occurs first.

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 $1.6 million and $1.8 million as of December 31, 2024 and 2023, respectively, and included in “accrued interest payable and other liabilities” on the Consolidated Balance Sheet. The provision for credit loss associated with the liability for unfunded commitments amounted to a recovery of credit losses of $182,000 for the year ended December 31, 2024, and a provision for credit losses of $1.8 million for the year ended December 31, 2023.