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func:ResidentialRealEstateConstructionFinancingReceivableMember 2023-12-31 0000763907 us-gaap:PerformingFinancingReceivableMember func:OtherCommercialRealEstateFinancingReceivableMember 2023-12-31 0000763907 us-gaap:PerformingFinancingReceivableMember func:CommercialRealEstateNonOwnerOccupiedFinancingReceivableMember 2023-12-31 0000763907 us-gaap:PerformingFinancingReceivableMember func:AllOtherAcquisitionAndDevelopmentMember 2023-12-31 0000763907 us-gaap:NonperformingFinancingReceivableMember us-gaap:ResidentialMortgageMember 2023-12-31 0000763907 us-gaap:NonperformingFinancingReceivableMember us-gaap:HomeEquityMember 2023-12-31 0000763907 us-gaap:NonperformingFinancingReceivableMember us-gaap:ConsumerPortfolioSegmentMember 2023-12-31 0000763907 us-gaap:NonperformingFinancingReceivableMember func:OtherCommercialRealEstateFinancingReceivableMember 2023-12-31 0000763907 us-gaap:NonperformingFinancingReceivableMember func:CommercialRealEstateNonOwnerOccupiedFinancingReceivableMember 2023-12-31 0000763907 us-gaap:NonperformingFinancingReceivableMember func:AllOtherAcquisitionAndDevelopmentMember 2023-12-31 0000763907 us-gaap:HomeEquityMember us-gaap:SubstandardMember 2023-12-31 0000763907 us-gaap:HomeEquityMember us-gaap:PassMember 2023-12-31 0000763907 us-gaap:ConsumerPortfolioSegmentMember us-gaap:SubstandardMember 2023-12-31 0000763907 us-gaap:ConsumerPortfolioSegmentMember us-gaap:PassMember 2023-12-31 0000763907 us-gaap:CommercialPortfolioSegmentMember us-gaap:SubstandardMember 2023-12-31 0000763907 us-gaap:CommercialPortfolioSegmentMember us-gaap:SpecialMentionMember 2023-12-31 0000763907 us-gaap:CommercialPortfolioSegmentMember us-gaap:PassMember 2023-12-31 0000763907 func:ResidentialRealEstateConstructionFinancingReceivableMember us-gaap:PassMember 2023-12-31 0000763907 func:OtherCommercialRealEstateFinancingReceivableMember us-gaap:SubstandardMember 2023-12-31 0000763907 func:OtherCommercialRealEstateFinancingReceivableMember us-gaap:SpecialMentionMember 2023-12-31 0000763907 func:OtherCommercialRealEstateFinancingReceivableMember us-gaap:PassMember 2023-12-31 0000763907 func:CommercialRealEstateNonOwnerOccupiedFinancingReceivableMember us-gaap:SubstandardMember 2023-12-31 0000763907 func:CommercialRealEstateNonOwnerOccupiedFinancingReceivableMember us-gaap:SpecialMentionMember 2023-12-31 0000763907 func:CommercialRealEstateNonOwnerOccupiedFinancingReceivableMember us-gaap:PassMember 2023-12-31 0000763907 func:AllOtherAcquisitionAndDevelopmentMember us-gaap:SubstandardMember 2023-12-31 0000763907 func:AllOtherAcquisitionAndDevelopmentMember us-gaap:PassMember 2023-12-31 0000763907 us-gaap:SubstandardMember 2023-12-31 0000763907 us-gaap:SpecialMentionMember 2023-12-31 0000763907 us-gaap:PerformingFinancingReceivableMember 2023-12-31 0000763907 us-gaap:PassMember 2023-12-31 0000763907 us-gaap:NonperformingFinancingReceivableMember 2023-12-31 0000763907 func:CommercialRealEstateNonOwnerOccupiedFinancingReceivableMember 2023-12-31 0000763907 func:AllOtherAcquisitionAndDevelopmentMember 2023-12-31 0000763907 us-gaap:ResidentialMortgageMember 2023-01-01 2023-12-31 0000763907 us-gaap:HomeEquityMember 2023-01-01 2023-12-31 0000763907 us-gaap:ConsumerPortfolioSegmentMember 2023-01-01 2023-12-31 0000763907 us-gaap:CommercialPortfolioSegmentMember 2023-01-01 2023-12-31 0000763907 func:CommercialRealEstateNonOwnerOccupiedFinancingReceivableMember 2023-01-01 2023-12-31 0000763907 2023-01-01 2023-12-31 0000763907 us-gaap:ResidentialPortfolioSegmentMember 2024-01-01 2024-03-31 0000763907 us-gaap:ConsumerPortfolioSegmentMember 2024-01-01 2024-03-31 0000763907 us-gaap:CommercialRealEstatePortfolioSegmentMember 2024-01-01 2024-03-31 0000763907 us-gaap:CommercialPortfolioSegmentMember 2024-01-01 2024-03-31 0000763907 func:CommercialAndResidentialConstructionPortfolioSegmentMember 2024-01-01 2024-03-31 0000763907 us-gaap:ResidentialPortfolioSegmentMember 2023-01-01 2023-03-31 0000763907 us-gaap:ConsumerPortfolioSegmentMember 2023-01-01 2023-03-31 0000763907 us-gaap:CommercialRealEstatePortfolioSegmentMember 2023-01-01 2023-03-31 0000763907 us-gaap:CommercialPortfolioSegmentMember 2023-01-01 2023-03-31 0000763907 func:CommercialAndResidentialConstructionPortfolioSegmentMember 2023-01-01 2023-03-31 0000763907 us-gaap:ResidentialMortgageMember 2024-03-31 0000763907 us-gaap:HomeEquityMember 2024-03-31 0000763907 func:CommercialRealEstateNonOwnerOccupiedFinancingReceivableMember 2024-03-31 0000763907 us-gaap:ResidentialMortgageMember 2023-12-31 0000763907 us-gaap:HomeEquityMember 2023-12-31 0000763907 func:OtherCommercialRealEstateFinancingReceivableMember 2023-12-31 0000763907 us-gaap:ResidentialPortfolioSegmentMember 2023-03-31 0000763907 us-gaap:ConsumerPortfolioSegmentMember 2023-03-31 0000763907 us-gaap:CommercialRealEstatePortfolioSegmentMember 2023-03-31 0000763907 us-gaap:CommercialPortfolioSegmentMember 2023-03-31 0000763907 func:CommercialAndResidentialConstructionPortfolioSegmentMember 2023-03-31 0000763907 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember us-gaap:UnallocatedFinancingReceivablesMember 2022-12-31 0000763907 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember us-gaap:ResidentialPortfolioSegmentMember 2022-12-31 0000763907 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember us-gaap:ConsumerPortfolioSegmentMember 2022-12-31 0000763907 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember us-gaap:CommercialRealEstatePortfolioSegmentMember 2022-12-31 0000763907 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember us-gaap:CommercialPortfolioSegmentMember 2022-12-31 0000763907 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember func:CommercialAndResidentialConstructionPortfolioSegmentMember 2022-12-31 0000763907 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2022-12-31 0000763907 srt:MinimumMember 2023-12-31 0000763907 srt:MaximumMember 2023-12-31 0000763907 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CollateralizedDebtObligationsMember 2023-03-31 0000763907 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CollateralizedDebtObligationsMember 2022-12-31 0000763907 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CollateralizedDebtObligationsMember 2024-01-01 2024-03-31 0000763907 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CollateralizedDebtObligationsMember 2023-01-01 2023-03-31 0000763907 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsNonrecurringMember 2024-03-31 0000763907 us-gaap:FairValueMeasurementsNonrecurringMember 2024-03-31 0000763907 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsNonrecurringMember 2023-12-31 0000763907 us-gaap:FairValueMeasurementsNonrecurringMember 2023-12-31 0000763907 func:Year2023Member us-gaap:RestrictedStockUnitsRSUMember func:LongTermIncentivePlanMember 2024-03-31 0000763907 func:Year2022Member us-gaap:RestrictedStockUnitsRSUMember func:LongTermIncentivePlanMember 2024-03-31 0000763907 func:Year2021Member us-gaap:RestrictedStockUnitsRSUMember func:LongTermIncentivePlanMember 2024-03-31 0000763907 us-gaap:RetainedEarningsMember 2024-01-01 2024-03-31 0000763907 us-gaap:RetainedEarningsMember 2023-01-01 2023-03-31 0000763907 us-gaap:InterestRateSwapMember 2016-03-31 0000763907 us-gaap:InterestRateSwapMember 2024-03-31 0000763907 us-gaap:InterestRateSwapMember 2023-12-31 0000763907 srt:DirectorMember 2024-01-01 2024-03-31 0000763907 srt:DirectorMember func:TwentyEighteenEquityPlanMember 2023-10-01 2023-10-31 0000763907 srt:DirectorMember func:TwentyEighteenEquityPlanMember 2023-05-01 2023-05-31 0000763907 srt:DirectorMember func:TwentyEighteenEquityPlanMember 2023-01-01 2023-01-31 0000763907 srt:MaximumMember func:TwentyEighteenEquityPlanMember 2024-03-31 0000763907 srt:DirectorMember 2024-03-31 0000763907 us-gaap:SecuritiesSoldUnderAgreementsToRepurchaseMember 2024-03-31 0000763907 us-gaap:SecuritiesSoldUnderAgreementsToRepurchaseMember 2023-12-31 0000763907 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CollateralizedDebtObligationsMember 2024-03-31 0000763907 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember 2024-03-31 0000763907 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2024-03-31 0000763907 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ResidentialMortgageBackedSecuritiesMember 2024-03-31 0000763907 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesMember 2024-03-31 0000763907 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 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us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CollateralizedDebtObligationsMember 2023-12-31 0000763907 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember 2023-12-31 0000763907 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2023-12-31 0000763907 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ResidentialMortgageBackedSecuritiesMember 2023-12-31 0000763907 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesMember 2023-12-31 0000763907 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2023-12-31 0000763907 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialMortgageBackedSecuritiesMember 2023-12-31 0000763907 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember 2023-12-31 0000763907 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2023-12-31 0000763907 us-gaap:FairValueMeasurementsRecurringMember us-gaap:ResidentialMortgageBackedSecuritiesMember 2023-12-31 0000763907 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesMember 2023-12-31 0000763907 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2023-12-31 0000763907 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialMortgageBackedSecuritiesMember 2023-12-31 0000763907 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CollateralizedDebtObligationsMember 2023-12-31 0000763907 2022-01-01 2022-03-31 0000763907 2022-12-31 0000763907 us-gaap:CorporateDebtSecuritiesMember 2024-03-31 0000763907 us-gaap:CollateralizedDebtObligationsMember 2024-03-31 0000763907 us-gaap:CorporateDebtSecuritiesMember 2023-12-31 0000763907 us-gaap:CollateralizedDebtObligationsMember 2023-12-31 0000763907 func:OtherRealEstateOwnedMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsNonrecurringMember func:MarketComparablePropertiesMember 2024-03-31 0000763907 func:InvestmentSecuritiesAvailableForSaleMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember func:DiscountedCashFlowMember 2024-03-31 0000763907 func:EquityMethodInvestmentMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputRevenueMultipleMember 2024-03-31 0000763907 func:InvestmentSecuritiesAvailableForSaleMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember func:DiscountedCashFlowMember 2023-12-31 0000763907 func:EquityMethodInvestmentMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputRevenueMultipleMember 2023-12-31 0000763907 func:OtherRealEstateOwnedMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsNonrecurringMember 2023-12-31 0000763907 us-gaap:RestrictedStockUnitsRSUMember 2024-01-01 2024-03-31 0000763907 us-gaap:RestrictedStockUnitsRSUMember 2023-01-01 2023-03-31 0000763907 func:TrustAndInvestmentServicesSegmentMember 2024-01-01 2024-03-31 0000763907 func:TrustAndInvestmentServicesSegmentMember 2023-01-01 2023-03-31 0000763907 func:Year2023Member us-gaap:RestrictedStockUnitsRSUMember func:LongTermIncentivePlanMember 2024-01-01 2024-03-31 0000763907 func:Year2022Member us-gaap:RestrictedStockUnitsRSUMember func:LongTermIncentivePlanMember 2024-01-01 2024-03-31 0000763907 func:Year2021Member func:TimeVestedSharesMember func:LongTermIncentivePlanMember 2024-01-01 2024-03-31 0000763907 srt:DirectorMember func:TwentyEighteenEquityPlanMember 2024-01-01 2024-03-31 0000763907 func:EmployeesMember 2024-01-01 2024-03-31 0000763907 func:Year2022Member us-gaap:RestrictedStockUnitsRSUMember func:LongTermIncentivePlanMember 2023-01-01 2023-03-31 0000763907 func:Year2021Member func:TimeVestedSharesMember func:LongTermIncentivePlanMember 2023-01-01 2023-03-31 0000763907 srt:DirectorMember func:TwentyEighteenEquityPlanMember 2023-01-01 2023-03-31 0000763907 func:EmployeesMember 2023-01-01 2023-03-31 0000763907 us-gaap:AdditionalPaidInCapitalMember 2024-01-01 2024-03-31 0000763907 us-gaap:AdditionalPaidInCapitalMember 2023-01-01 2023-03-31 0000763907 srt:OfficerMember us-gaap:RestrictedStockUnitsRSUMember us-gaap:ShareBasedCompensationAwardTrancheTwoMember 2024-01-01 2024-03-31 0000763907 srt:OfficerMember us-gaap:RestrictedStockUnitsRSUMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2024-01-01 2024-03-31 0000763907 us-gaap:RestrictedStockUnitsRSUMember func:LongTermIncentivePlanMember us-gaap:ShareBasedCompensationAwardTrancheTwoMember 2024-01-01 2024-03-31 0000763907 us-gaap:RestrictedStockUnitsRSUMember func:LongTermIncentivePlanMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2020-03-26 2020-03-26 0000763907 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2024-01-01 2024-03-31 0000763907 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2023-01-01 2023-12-31 0000763907 func:ResidentialRealEstateConstructionFinancingReceivableMember 2024-01-01 2024-03-31 0000763907 func:ResidentialRealEstateConstructionFinancingReceivableMember 2023-01-01 2023-12-31 0000763907 func:ResidentialRealEstateConstructionFinancingReceivableMember 2023-01-01 2023-03-31 0000763907 func:TimeDepositRetailLiabilityMember 2024-03-31 0000763907 func:TimeDepositBrokeredLiabilityMember 2024-03-31 0000763907 func:SavingsDepositLiabilityMember 2024-03-31 0000763907 func:MoneyMarketLiabilityMember 2024-03-31 0000763907 func:DemandDepositLiabilityMember 2024-03-31 0000763907 func:TimeDepositRetailLiabilityMember 2023-12-31 0000763907 func:TimeDepositBrokeredLiabilityMember 2023-12-31 0000763907 func:SavingsDepositLiabilityMember 2023-12-31 0000763907 func:MoneyMarketLiabilityMember 2023-12-31 0000763907 func:DemandDepositLiabilityMember 2023-12-31 0000763907 2024-01-01 2024-01-31 0000763907 us-gaap:InterestRateSwapMember 2016-03-01 2016-03-31 0000763907 us-gaap:OperatingSegmentsMember func:TrustAndInvestmentServicesSegmentMember 2024-03-31 0000763907 us-gaap:OperatingSegmentsMember func:TrustAndInvestmentServicesSegmentMember 2023-12-31 0000763907 2024-03-01 2024-03-31 0000763907 us-gaap:OperatingSegmentsMember func:TrustAndInvestmentServicesSegmentMember 2024-01-01 2024-03-31 0000763907 us-gaap:OperatingSegmentsMember func:CommunityBankingSegmentMember 2024-01-01 2024-03-31 0000763907 us-gaap:OperatingSegmentsMember 2024-01-01 2024-03-31 0000763907 us-gaap:OperatingSegmentsMember func:TrustAndInvestmentServicesSegmentMember 2023-01-01 2023-03-31 0000763907 us-gaap:OperatingSegmentsMember func:CommunityBankingSegmentMember 2023-01-01 2023-03-31 0000763907 us-gaap:OperatingSegmentsMember 2023-01-01 2023-03-31 0000763907 us-gaap:USTreasurySecuritiesMember 2024-03-31 0000763907 us-gaap:USStatesAndPoliticalSubdivisionsMember 2024-03-31 0000763907 us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2024-03-31 0000763907 us-gaap:ResidentialMortgageBackedSecuritiesMember 2024-03-31 0000763907 us-gaap:MortgageBackedSecuritiesMember 2024-03-31 0000763907 us-gaap:CommercialMortgageBackedSecuritiesMember 2024-03-31 0000763907 us-gaap:USTreasurySecuritiesMember 2023-12-31 0000763907 us-gaap:USStatesAndPoliticalSubdivisionsMember 2023-12-31 0000763907 us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2023-12-31 0000763907 us-gaap:ResidentialMortgageBackedSecuritiesMember 2023-12-31 0000763907 us-gaap:MortgageBackedSecuritiesMember 2023-12-31 0000763907 us-gaap:CommercialMortgageBackedSecuritiesMember 2023-12-31 0000763907 func:ResidentialRealEstateConstructionFinancingReceivableMember 2024-03-31 0000763907 func:ResidentialRealEstateConstructionFinancingReceivableMember 2023-12-31 0000763907 2023-03-31 0000763907 us-gaap:RealEstateMember us-gaap:ResidentialPortfolioSegmentMember 2024-03-31 0000763907 us-gaap:RealEstateMember us-gaap:CommercialRealEstatePortfolioSegmentMember 2024-03-31 0000763907 func:OtherCollateralPledgedMember us-gaap:CommercialPortfolioSegmentMember 2024-03-31 0000763907 us-gaap:RealEstateMember 2024-03-31 0000763907 func:OtherCollateralPledgedMember 2024-03-31 0000763907 us-gaap:RealEstateMember us-gaap:ResidentialPortfolioSegmentMember 2023-12-31 0000763907 us-gaap:RealEstateMember us-gaap:CommercialRealEstatePortfolioSegmentMember 2023-12-31 0000763907 us-gaap:RealEstateMember 2023-12-31 0000763907 us-gaap:ResidentialPortfolioSegmentMember 2024-03-31 0000763907 us-gaap:ConsumerPortfolioSegmentMember 2024-03-31 0000763907 us-gaap:CommercialRealEstatePortfolioSegmentMember 2024-03-31 0000763907 us-gaap:CommercialPortfolioSegmentMember 2024-03-31 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us-gaap:MeasurementInputRevenueMultipleMember 2024-01-01 2024-03-31 0000763907 srt:WeightedAverageMember func:OtherRealEstateOwnedMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsNonrecurringMember func:MarketComparablePropertiesMember 2023-01-01 2023-12-31 0000763907 srt:MinimumMember func:OtherRealEstateOwnedMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsNonrecurringMember func:MarketComparablePropertiesMember 2023-01-01 2023-12-31 0000763907 srt:MinimumMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember func:DiscountedCashFlowMember 2023-01-01 2023-12-31 0000763907 srt:MaximumMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember func:DiscountedCashFlowMember 2023-01-01 2023-12-31 0000763907 func:OtherRealEstateOwnedMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsNonrecurringMember func:MarketComparablePropertiesMember 2023-01-01 2023-12-31 0000763907 func:ImpairedLoansMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:MeasurementInputRevenueMultipleMember 2023-01-01 2023-12-31 0000763907 2023-12-31 0000763907 2024-03-31 0000763907 2023-01-01 2023-03-31 0000763907 us-gaap:FairValueInputsLevel1Member 2024-03-31 0000763907 us-gaap:FairValueInputsLevel1Member 2023-12-31 0000763907 us-gaap:FairValueInputsLevel3Member 2024-03-31 0000763907 us-gaap:FairValueInputsLevel2Member 2024-03-31 0000763907 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2024-03-31 0000763907 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2024-03-31 0000763907 us-gaap:FairValueInputsLevel3Member 2023-12-31 0000763907 us-gaap:FairValueInputsLevel2Member 2023-12-31 0000763907 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2023-12-31 0000763907 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2023-12-31 0000763907 func:MarisaShockleyMember func:TradingArrangementMay2023Member 2024-01-01 2024-03-31 0000763907 2024-04-30 0000763907 2024-01-01 2024-03-31 xbrli:shares iso4217:USD xbrli:pure func:loan func:security func:contract iso4217:USD xbrli:shares func:segment

Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For quarterly period ended March 31, 2024

◻ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from _______________ to ________________

Commission file number 0-14237

First United Corporation

(Exact name of registrant as specified in its charter)

​

​ | ​ | ​
Maryland |  | 52-1380770
(State or other jurisdiction of incorporation or organization) | ​ | (I. R. S. Employer Identification No.)
​ |  | ​
19 South Second Street, Oakland, Maryland | ​ | 21550-0009
(Address of principal executive offices) | ​ | (Zip Code)

​

(800) 470-4356

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

​

​ | ​ | ​ | ​ | ​
Title of each class |  | Trading Symbols |  | Name of each exchange on which registered
Common Stock | ​ | FUNC | ​ | Nasdaq Stock Market

​

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

​

​ | ​
Large Accelerated filer ◻ | Accelerated Filer ◻
Non-Accelerated filer ☑ | Smaller Reporting Company ☑
Emerging Growth Company ◻ | ​

​

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standard provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ◻ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 6,648,645 shares of common stock, par value $0.01 per share, as of April 30, 2024.

​

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Table of Contents

INDEX TO QUARTERLY REPORT

FIRST UNITED CORPORATION

​

​ ​ | ​ | ​
​ ​ | ​ | Page
PART I. FINANCIAL INFORMATION | 3
Item 1. | Financial Statements (unaudited) | 3
​ | Consolidated Statements of Financial Condition – March 31, 2024 and December 31, 2023 | 3
​ | Consolidated Statements of Operations – for the three months ended March 31, 2024 and 2023 | 4
​ | Consolidated Statements of Comprehensive Income – for the three months ended March 31, 2024 and 2023 | 5
​ | Consolidated Statements of Changes in Shareholders’ Equity – for the three months ended March 31, 2024 and 2023 | 6
​ | Consolidated Statements of Cash Flows – for the three months ended March 31, 2024 and 2023 | 7
​ | Notes to Consolidated Financial Statements | 8
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 39
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 57
Item 4. | Controls and Procedures | 58
​ | ​ | ​
PART II. OTHER INFORMATION | 59
Item 1. | Legal Proceedings | 59
Item 1A. | Risk Factors | 59
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 59
Item 3. | Defaults upon Senior Securities | 59
Item 4. | Mine Safety Disclosures | 59
Item 5. | Other Information | 59
Item 6. | Exhibits | 60
SIGNATURES | 61

​

​

​

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2

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

First United Corporation and Subsidiaries

Consolidated Statements of Financial Condition

(In thousands, except share data - Unaudited)

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | March 31, 2024 |  | December 31, 2023
​ | ​ | ​ | ​ | ​ | ​
Assets | ​ | ​ | ​ | ​ | ​ | ​
Cash and due from banks | ​ | $ | 85,578 | ​ | $ | 48,343
Interest bearing deposits in banks | ​ | ​ | 1,354 | ​ | ​ | 1,410
Cash and cash equivalents | ​ | ​ | 86,932 | ​ | ​ | 49,753
Investment securities – available for sale (at fair value) | ​ | ​ | 95,580 | ​ | ​ | 97,169
Investment securities – held to maturity, net of allowance for credit losses of $45 and $45, respectively (fair value $152,225 at March 31, 2024 and $184,415 at December 31, 2023) | ​ | ​ | 183,136 | ​ | ​ | 214,297
Restricted investment in bank stock, at cost | ​ | ​ | 3,390 | ​ | ​ | 5,250
Loans held for sale | ​ | ​ | 175 | ​ | ​ | 443
Loans | ​ | ​ | 1,412,327 | ​ | ​ | 1,406,667
Unearned fees | ​ | ​ | (314) | ​ | ​ | (340)
Allowance for credit losses | ​ | ​ | (17,982) | ​ | ​ | (17,480)
Net loans | ​ | ​ | 1,394,031 | ​ | ​ | 1,388,847
Premises and equipment, net | ​ | ​ | 30,268 | ​ | ​ | 31,459
Goodwill and other intangibles | ​ | ​ | 12,021 | ​ | ​ | 12,103
Bank owned life insurance | ​ | ​ | 47,933 | ​ | ​ | 47,607
Deferred tax assets | ​ | ​ | 10,736 | ​ | ​ | 11,133
Other real estate owned, net | ​ | ​ | 4,402 | ​ | ​ | 4,493
Right of use assets | ​ | ​ | 1,299 | ​ | ​ | 1,367
Pension asset | ​ | ​ | 13,022 | ​ | ​ | 11,208
Accrued interest receivable | ​ | ​ | 7,762 | ​ | ​ | 7,487
Other assets | ​ | ​ | 22,266 | ​ | ​ | 23,244
Total Assets | ​ | $ | 1,912,953 | ​ | $ | 1,905,860
Liabilities and Shareholders’ Equity | ​ | ​ | ​ | ​ | ​ | ​
Liabilities: | ​ | ​ | ​ | ​ | ​ | ​
Non-interest bearing deposits | ​ | $ | 422,759 | ​ | $ | 427,670
Interest bearing deposits | ​ | ​ | 1,140,694 | ​ | ​ | 1,123,307
Total deposits | ​ | ​ | 1,563,453 | ​ | ​ | 1,550,977
Short-term borrowings | ​ | ​ | 79,494 | ​ | ​ | 45,418
Long-term borrowings | ​ | ​ | 70,929 | ​ | ​ | 110,929
Operating lease liability | ​ | ​ | 1,484 | ​ | ​ | 1,556
SERP deferred compensation | ​ | ​ | 9,859 | ​ | ​ | 9,777
Allowance for credit losses on off-balance sheet credit exposures | ​ | ​ | 858 | ​ | ​ | 873
Accrued interest payable | ​ | ​ | 919 | ​ | ​ | 612
Other liabilities | ​ | ​ | 19,147 | ​ | ​ | 22,515
Dividends payable | ​ | ​ | 1,329 | ​ | ​ | 1,330
Total Liabilities | ​ | ​ | 1,747,472 | ​ | ​ | 1,743,987
Shareholders’ Equity: | ​ | ​ | ​ | ​ | ​ | ​
Common Stock – par value $0.01 per share; Authorized 25,000,000 shares; issued and outstanding 6,648,645 shares at March 31, 2024 and 6,639,888 at December 31, 2023 | ​ | ​ | 66 | ​ | ​ | 66
Surplus | ​ | ​ | 23,865 | ​ | ​ | 23,734
Retained earnings | ​ | ​ | 176,272 | ​ | ​ | 173,900
Accumulated other comprehensive loss | ​ | ​ | (34,722) | ​ | ​ | (35,827)
Total Shareholders’ Equity | ​ | ​ | 165,481 | ​ | ​ | 161,873
Total Liabilities and Shareholders’ Equity | ​ | $ | 1,912,953 | ​ | $ | 1,905,860

​

See accompanying notes to the consolidated financial statements

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First United Corporation and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended
​ | ​ | March 31,
​ |  | 2024 |  | 2023
​ | ​ | (Unaudited)
Interest income | ​ | ​ | ​ | ​ | ​ | ​
Interest and fees on loans | ​ | $ | 19,218 | ​ | $ | 15,444
Interest on investment securities | ​ | ​ | ​ | ​ | ​ | ​
Taxable | ​ | ​ | 1,744 | ​ | ​ | 1,768
Exempt from federal income tax | ​ | ​ | 53 | ​ | ​ | 270
Total investment income | ​ | ​ | 1,797 | ​ | ​ | 2,038
Other | ​ | ​ | 883 | ​ | ​ | 347
Total interest income | ​ | ​ | 21,898 | ​ | ​ | 17,829
Interest expense | ​ | ​ | ​ | ​ | ​ | ​
Interest on deposits: | ​ | ​ | ​ | ​ | ​ | ​
Savings | ​ | ​ | 48 | ​ | ​ | 79
Interest-bearing transaction accounts | ​ | ​ | 4,701 | ​ | ​ | 2,186
Time deposits | ​ | ​ | 1,517 | ​ | ​ | 413
Total interest on Deposits | ​ | ​ | 6,266 | ​ | ​ | 2,678
Interest on short-term borrowings | ​ | ​ | 461 | ​ | ​ | 31
Interest on long-term borrowings | ​ | ​ | 1,359 | ​ | ​ | 602
Total Interest Expense | ​ | ​ | 8,086 | ​ | ​ | 3,311
Net Interest income | ​ | ​ | 13,812 | ​ | ​ | 14,518
Credit loss expense - loans | ​ | ​ | 961 | ​ | ​ | 414
Credit loss expense - off-balance sheet credit exposures | ​ | ​ | (15) | ​ | ​ | 129
Total credit loss expense | ​ | ​ | 946 | ​ | ​ | 543
Net interest income after provision for credit losses | ​ | ​ | 12,866 | ​ | ​ | 13,975
Other operating income | ​ | ​ | ​ | ​ | ​ | ​
Net gains on sales of residential mortgage loans | ​ | ​ | 82 | ​ | ​ | 54
Net gains | ​ | ​ | 82 | ​ | ​ | 54
Other Income | ​ | ​ | ​ | ​ | ​ | ​
Service charges on deposit accounts | ​ | ​ | 556 | ​ | ​ | 516
Other service charges | ​ | ​ | 215 | ​ | ​ | 232
Trust department | ​ | ​ | 2,188 | ​ | ​ | 1,970
Debit card income | ​ | ​ | 932 | ​ | ​ | 955
Bank owned life insurance | ​ | ​ | 326 | ​ | ​ | 305
Brokerage commissions | ​ | ​ | 495 | ​ | ​ | 297
Other | ​ | ​ | 81 | ​ | ​ | 64
Total other income | ​ | ​ | 4,793 | ​ | ​ | 4,339
Total other operating income | ​ | ​ | 4,875 | ​ | ​ | 4,393
Other operating expenses | ​ | ​ | ​ | ​ | ​ | ​
Salaries and employee benefits | ​ | ​ | 7,157 | ​ | ​ | 7,296
FDIC premiums | ​ | ​ | 269 | ​ | ​ | 193
Equipment expense | ​ | ​ | 923 | ​ | ​ | 780
Occupancy expense of premises | ​ | ​ | 954 | ​ | ​ | 785
Data processing expense | ​ | ​ | 1,318 | ​ | ​ | 1,306
Marketing expense | ​ | ​ | 134 | ​ | ​ | 120
Professional services | ​ | ​ | 486 | ​ | ​ | 494
Contract labor | ​ | ​ | 183 | ​ | ​ | 134
Telephone | ​ | ​ | 109 | ​ | ​ | 110
Total OREO expense, net | ​ | ​ | 86 | ​ | ​ | 124
Investor relations | ​ | ​ | 53 | ​ | ​ | 83
Contributions | ​ | ​ | 50 | ​ | ​ | 64
Other | ​ | ​ | 1,159 | ​ | ​ | 1,149
Total other operating expenses | ​ | ​ | 12,881 | ​ | ​ | 12,638
Income before income tax expense | ​ | ​ | 4,860 | ​ | ​ | 5,730
Provision for income tax expense | ​ | ​ | 1,162 | ​ | ​ | 1,355
Net Income | ​ | $ | 3,698 | ​ | $ | 4,375
Basic net income per share | ​ | $ | 0.56 | ​ | $ | 0.66
Diluted net income per share | ​ | $ | 0.56 | ​ | $ | 0.65
Weighted average number of basic shares outstanding | ​ | ​ | 6,642 | ​ | ​ | 6,675
Weighted average number of diluted shares outstanding | ​ | ​ | 6,655 | ​ | ​ | 6,697
Dividends declared per common share | ​ | $ | 0.20 | ​ | $ | 0.20

​

See accompanying notes to the consolidated financial statements

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​

​

First United Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

(In thousands)

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended
​ | ​ | March 31,
​ | ​ | 2024 | ​ | 2023
Comprehensive Income | ​ | (Unaudited)
Net Income | ​ | $ | 3,698 | ​ | $ | 4,375
Other comprehensive loss, net of tax and reclassification adjustments: | ​ | ​ | ​ | ​ | ​ | ​
Available for sale securities: | ​ | ​ | ​ | ​ | ​ | ​
Unrealized holding gains/(losses) on investments with credit related impairment | ​ | $ | 210 | ​ | $ | (1,606)
Reclassification adjustment for accretable yield realized in income | ​ | ​ | 50 | ​ | ​ | 50
Other comprehensive income/(loss) on investments with credit related impairment | ​ | ​ | 160 | ​ | ​ | (1,656)
​ | ​ | ​ | ​ | ​ | ​ | ​
Unrealized holding (losses)/gains on all other AFS investments | ​ | $ | (623) | ​ | $ | 1,340
Other comprehensive (loss)/income on all other AFS investments | ​ | ​ | (623) | ​ | ​ | 1,340
​ | ​ | ​ | ​ | ​ | ​ | ​
Held to Maturity Securities | ​ | ​ | ​ | ​ | ​ | ​
Unrealized holding losses on securities transferred to held to maturity | ​ | $ | — | ​ | $ | —
Reclassification adjustment for amortization realized in income | ​ | ​ | (160) | ​ | ​ | (181)
Other comprehensive income on HTM investments | ​ | ​ | 160 | ​ | ​ | 181
​ | ​ | ​ | ​ | ​ | ​ | ​
Cash flow hedges: | ​ | ​ | ​ | ​ | ​ | ​
Unrealized holding gains/(losses) on cash flow hedges | ​ | $ | 73 | ​ | $ | (188)
Other comprehensive income/(loss) on cash flow hedges | ​ | ​ | 73 | ​ | ​ | (188)
​ | ​ | ​ | ​ | ​ | ​ | ​
Pension plan liability: | ​ | ​ | ​ | ​ | ​ | ​
Unrealized holding gains on pension plan liability | ​ | $ | 1,489 | ​ | $ | 168
Reclassification adjustment for amortization of unrecognized loss realized in income | ​ | ​ | (203) | ​ | ​ | (250)
Other comprehensive gain on pension plan liability | ​ | ​ | 1,692 | ​ | ​ | 418
​ | ​ | ​ | ​ | ​ | ​ | ​
SERP liability: | ​ | ​ | ​ | ​ | ​ | ​
Unrealized holding gains on SERP liability | ​ | $ | — | ​ | $ | —
Reclassification adjustment for amortization of unrealized (gain)/loss realized in income | ​ | ​ | (39) | ​ | ​ | 2
Other comprehensive income/(loss) on SERP liability | ​ | ​ | 39 | ​ | ​ | (2)
​ | ​ | ​ | ​ | ​ | ​ | ​
Other comprehensive income before income tax | ​ | ​ | 1,501 | ​ | ​ | 93
Income tax effect related to other comprehensive income | ​ | ​ | (396) | ​ | ​ | (24)
​ | ​ | ​ | ​ | ​ | ​ | ​
Other comprehensive income, net of tax | ​ | ​ | 1,105 | ​ | ​ | 69
Comprehensive income | ​ | $ | 4,803 | ​ | $ | 4,444
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​

​

See accompanying notes to the consolidated financial statements

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​

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First United Corporation and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity

(In thousands, except per share data)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Common Stock |  | Surplus |  | Retained Earnings |  | Accumulated Other Comprehensive Loss |  | Total Shareholders' Equity
Balance at January 1, 2024 | ​ | $ | 66 | ​ | $ | 23,734 | ​ | $ | 173,900 | ​ | $ | (35,827) | ​ | $ | 161,873
Net income | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 3,698 | ​ | ​ | ​ | ​ | ​ | 3,698
Other comprehensive income | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 1,105 | ​ | ​ | 1,105
Stock based compensation | ​ | ​ | ​ | ​ | ​ | 57 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 57
Common stock issued - 8,757 shares | ​ | ​ | ​ | ​ | ​ | 74 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 74
Common stock dividend declared - $0.20 per share | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (1,326) | ​ | ​ | ​ | ​ | ​ | (1,326)
Balance at March 31, 2024 | ​ | $ | 66 | ​ | $ | 23,865 | ​ | $ | 176,272 | ​ | $ | (34,722) | ​ | $ | 165,481

​

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Common Stock |  | Surplus |  | Retained Earnings |  | Accumulated Other Comprehensive Loss |  | Total Shareholders' Equity
Balance at January 1, 2023 | ​ | $ | 67 | ​ | $ | 24,409 | ​ | $ | 166,343 | ​ | $ | (39,026) | ​ | $ | 151,793
Adoption of ASC 326- Financial Instruments- Credit Losses | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (2,155) | ​ | ​ | ​ | ​ | ​ | (2,155)
Net income | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 4,375 | ​ | ​ | ​ | ​ | ​ | 4,375
Other comprehensive income | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 69 | ​ | ​ | 69
Stock based compensation | ​ | ​ | ​ | ​ | ​ | 56 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 56
Common stock issued - 22,282 shares | ​ | ​ | ​ | ​ | ​ | 64 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 64
Common stock dividend declared - $0.20 per share | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (1,334) | ​ | ​ | ​ | ​ | ​ | (1,334)
Balance at March 31, 2023 | ​ | $ | 67 | ​ | $ | 24,529 | ​ | $ | 167,229 | ​ | $ | (38,957) | ​ | $ | 152,868
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

​

See accompanying notes to the consolidated financial statement

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First United Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended
​ | ​ | March 31,
​ |  | 2024 |  | 2023
​ | ​ | (Unaudited)
Operating activities | ​ | ​ | ​ | ​ | ​ | ​
Net income | ​ | $ | 3,698 | ​ | $ | 4,375
Adjustments to reconcile net income to net cash provided by operating activities: | ​ | ​ | ​ | ​ | ​ | ​
Provision for credit losses | ​ | ​ | 946 | ​ | ​ | 543
Depreciation | ​ | ​ | 1,256 | ​ | ​ | 853
Stock based compensation | ​ | ​ | 57 | ​ | ​ | 56
Gain on sales of other real estate owned | ​ | ​ | (23) | ​ | ​ | (36)
Write-downs of other real estate owned, net | ​ | ​ | — | ​ | ​ | 32
Originations of loans held for sale | ​ | ​ | (1,707) | ​ | ​ | (552)
Proceeds from sales of loans held for sale | ​ | ​ | 2,057 | ​ | ​ | 422
Gains from sales of loans held for sale | ​ | ​ | (82) | ​ | ​ | (54)
Net accretion of investment securities discounts and premiums- AFS | ​ | ​ | (22) | ​ | ​ | (15)
Net accretion of investment securities discounts and premiums- HTM | ​ | ​ | (178) | ​ | ​ | (200)
Amortization of intangible assets | ​ | ​ | 82 | ​ | ​ | 83
Earnings on bank owned life insurance | ​ | ​ | (326) | ​ | ​ | (306)
Amortization of deferred loan (fees)/costs, net | ​ | ​ | (44) | ​ | ​ | 12
Amortization of operating lease right of use asset | ​ | ​ | 68 | ​ | ​ | 82
Decrease in accrued interest receivable and other assets | ​ | ​ | 387 | ​ | ​ | 542
Deferred tax expense/(benefit) | ​ | ​ | 397 | ​ | ​ | (934)
Operating lease liability | ​ | ​ | (72) | ​ | ​ | (93)
Decrease in accrued interest payable and other liabilities | ​ | ​ | (2,906) | ​ | ​ | (1,300)
Net cash provided by operating activities | ​ | ​ | 3,588 | ​ | ​ | 3,510
Investing activities | ​ | ​ | ​ | ​ | ​ | ​
Proceeds from maturities/calls of investment securities - AFS | ​ | ​ | 1,145 | ​ | ​ | 1,609
Proceeds from maturities/calls of investment securities - HTM | ​ | ​ | 31,339 | ​ | ​ | 2,776
Proceeds from sales of other real estate owned | ​ | ​ | 114 | ​ | ​ | 139
Net decrease/(increase) in restricted stock | ​ | ​ | 1,860 | ​ | ​ | (3,463)
Net increase in loans | ​ | ​ | (6,101) | ​ | ​ | (9,761)
Purchases of premises and equipment | ​ | ​ | (65) | ​ | ​ | (112)
Net cash provided by/(used in) by investing activities | ​ | ​ | 28,292 | ​ | ​ | (8,812)
Financing activities | ​ | ​ | ​ | ​ | ​ | ​
Net increase in deposits | ​ | ​ | 12,476 | ​ | ​ | 20,552
Issuance of common stock | ​ | ​ | 74 | ​ | ​ | 64
Cash dividends paid on common stock | ​ | ​ | (1,327) | ​ | ​ | (1,199)
Net increase/(decrease) in short-term borrowings | ​ | ​ | 34,076 | ​ | ​ | (12,535)
Proceeds from long-term borrowings | ​ | ​ | — | ​ | ​ | 80,000
Payments of long-term borrowings | ​ | ​ | (40,000) | ​ | ​ | —
Net cash provided by financing activities | ​ | ​ | 5,299 | ​ | ​ | 86,882
Increase in cash and cash equivalents | ​ | ​ | 37,179 | ​ | ​ | 81,580
Cash and cash equivalents at beginning of the year | ​ | ​ | 49,753 | ​ | ​ | 74,315
Cash and cash equivalents at end of period | ​ | $ | 86,932 | ​ | $ | 155,895
Supplemental information | ​ | ​ | ​ | ​ | ​ | ​
Interest paid | ​ | $ | 7,779 | ​ | $ | 2,989
Taxes paid | ​ | $ | 70 | ​ | $ | 90

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FIRST UNITED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 – Basis of Presentation

The financial information is presented in accordance with generally accepted accounting principles and general practice for financial institutions in the United States of America (“GAAP”). First United Corporation has prepared these unaudited condensed consolidated financial statements in accordance with GAAP for interim financial information, rules of the Securities and Exchange Commission that permit reduced disclosure for interim periods, and Article 8 of Regulation S-X. Operating results for the three- month period ended March 31, 2024, are not necessarily indicative of the results that may be expected for the full year or for any future interim period. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in First United Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023.

In preparing financial statements, management is required to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities as of the date of financial statements. In addition, these estimates and assumptions affect revenues and expenses in the financial statements and as such, actual results could differ from those estimates.

Certain reclassifications have been made to prior year amounts to conform with current year classifications. These reclassifications did not have a material impact on the Corporation’s consolidated financial condition or results of operations.

In the opinion of management, all adjustments (all of which are of a normal recurring nature) that are necessary for a fair statement are reflected in the unaudited condensed consolidated financial statements.

Principles of Consolidation

The consolidated financial statements include the accounts of First United Corporation, First United Bank & Trust (the “Bank”), First United Statutory Trust I, First United Statutory Trust II, OakFirst Loan Center, LLC, OakFirst Loan Center, Inc., First OREO Trust and FUBT OREO I, LLC. All significant inter-company accounts and transactions have been eliminated.

As used in these notes, the terms “the Corporation” “we”, “us”, and “our” refer to First United Corporation and, unless the context clearly requires otherwise, its consolidated subsidiaries.

The Corporation has evaluated events and transactions occurring subsequent to the statement of financial condition date of March 31, 2024 and through the date these consolidated financial statements were issued, for items of potential recognition or disclosure.

Newly Adopted Pronouncements in 2024

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of Reference Rate Reform on Financial Reporting.” The amendments in ASU 2020-04 provide optional guidance for a limited period of time to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The amendments provide optional expedients and exceptions for applying GAAP to loan and lease agreements, derivative contracts, and other transactions affected by the anticipated transition away from the London Interbank Offered Rate (“LIBOR”) toward new interest rate benchmarks. Modified contracts that meet certain scope guidance are eligible for relief from these modification accounting requirements in GAAP. The optional guidance generally allows for the modified contract to be accounted for as a continuation of the existing contract and does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. The amendments in ASU 2020-04 are effective for all entities between March 12, 2020 and December 31, 2022. In December 2022, FASB issued ASU No. 2022-06: “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848.” The amendments in ASU 2020-06 defer the sunset date for applying the reference rate reform relief by two years to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848.

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The Corporation has identified all known LIBOR exposures, created a plan to address the exposures, and continues to communicate with all stakeholders to transition to alternative reference rates. The Corporation had no financial instruments tied to LIBOR at March 31, 2024. The implementation of ASU 2020-04 did not have a material impact on our financial statements.

​

Note 2 – Accounting Statements Issued but Not Yet Adopted

In November 2023, FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvement to Reportable Segment Disclosures.” ASU 2023-07 expands segment disclosure requirements for public entities to require disclosure of significant segment expense and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within the fiscal years beginning after December 15, 2024. Early adoption is permitted. ASU 2023-07 is not expected to have a significant impact on our financial statements.

​

In December 2023, FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” ASU 2023-09 requires public business entities to disclose in their rate reconciliation table additional categories of information about Federal, state, and foreign income taxes and to provide more details about the reconciling items in some categories if items meet a quantitative threshold. ASU 2023-09 also requires all entities to disclose income taxes paid, net of refunds, disaggregated by Federal, state, and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold, among other things. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. ASU 2023-09 is not expected to have a significant impact on our financial statements.

​

In March 2024, FASB issued ASU No. 2024-01, “Compensation- Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards.” ASU 2024-01 provides an illustrative example that includes four fact patterns to demonstrate how an entity should apply the scope guidance in paragraph 718-10-15-3 to determine whether a profits interest award should be accounted for in accordance with Topic 718. ASU 2024-01 is effective for fiscal years beginning after December 15, 2024. ASU 2024-01 is not expected to have a significant impact on our financial statements.

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Note 3 – Earnings Per Common Share

Basic earnings per common share is derived by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period and does not include the effect of any potentially dilutive common stock equivalents. Diluted earnings per share is derived by dividing net income available to common shareholders by the weighted-average number of shares outstanding, adjusted for the dilutive effect of outstanding common stock equivalents, such as restricted stock units (“RSUs”). There were no anti-dilutive shares outstanding at March 31, 2024 or 2023.

The following table sets forth the calculation of basic and diluted earnings per common share for the three-month periods ended March 31, 2024 and 2023:

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended March 31,
​ | ​ | 2024 | ​ | 2023
​ |  | ​ | ​ |  | Average |  | Per Share |  | ​ | ​ |  | Average |  | Per Share
(in thousands, except for per share amount) | ​ | Income | ​ | Shares | ​ | Amount | ​ | Income | ​ | Shares | ​ | Amount
Basic Earnings Per Share: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income | ​ | $ | 3,698 | ​ | 6,642 | ​ | $ | 0.56 | ​ | $ | 4,375 | ​ | 6,675 | ​ | $ | 0.66
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Diluted Earnings Per Share: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Restricted stock units | ​ | ​ | ​ | ​ | 13 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 22 | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income | ​ | $ | 3,698 | ​ | 6,655 | ​ | $ | 0.56 | ​ | $ | 4,375 | ​ | 6,697 | ​ | $ | 0.65

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Note 4 – Investments

The following tables show a comparison of amortized cost and fair values of investment securities at March 31, 2024 and December 31, 2023:

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Allowance for Credit Losses |  | Estimated Fair Value
March 31, 2024 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Available for Sale: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. government agencies | ​ | $ | 7,000 | ​ | $ | — | ​ | $ | 981 | ​ | $ | — | ​ | $ | 6,019
Residential mortgage-backed agencies | ​ | ​ | 24,261 | ​ | ​ | — | ​ | ​ | 4,407 | ​ | ​ | — | ​ | ​ | 19,854
Commercial mortgage-backed agencies | ​ | ​ | 36,082 | ​ | ​ | — | ​ | ​ | 8,166 | ​ | ​ | — | ​ | ​ | 27,916
Collateralized mortgage obligations | ​ | ​ | 19,320 | ​ | ​ | — | ​ | ​ | 3,431 | ​ | ​ | — | ​ | ​ | 15,889
Obligations of states and political subdivisions | ​ | ​ | 10,481 | ​ | ​ | 14 | ​ | ​ | 242 | ​ | ​ | — | ​ | ​ | 10,253
Corporate bonds | ​ | ​ | 1,000 | ​ | ​ | — | ​ | ​ | 237 | ​ | ​ | — | ​ | ​ | 763
Collateralized debt obligations | ​ | ​ | 18,651 | ​ | ​ | — | ​ | ​ | 3,765 | ​ | ​ | — | ​ | ​ | 14,886
Total available for sale | ​ | $ | 116,795 | ​ | $ | 14 | ​ | $ | 21,229 | ​ | $ | — | ​ | $ | 95,580
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | Amortized Cost |  | Gross Unrecognized Gains |  | Gross Unrecognized Losses |  | Estimated Fair Value |  | Allowance for Credit Losses
March 31, 2024 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Held to Maturity: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. treasuries | ​ | $ | 7,498 | ​ | $ | — | ​ | $ | 14 | ​ | $ | 7,484 | ​ | $ | —
U.S. government agencies | ​ | ​ | 68,085 | ​ | ​ | — | ​ | ​ | 11,443 | ​ | ​ | 56,642 | ​ | ​ | —
Residential mortgage-backed agencies | ​ | ​ | 29,258 | ​ | ​ | 14 | ​ | ​ | 3,389 | ​ | ​ | 25,883 | ​ | ​ | —
Commercial mortgage-backed agencies | ​ | ​ | 21,371 | ​ | ​ | — | ​ | ​ | 5,583 | ​ | ​ | 15,788 | ​ | ​ | —
Collateralized mortgage obligations | ​ | ​ | 52,364 | ​ | ​ | — | ​ | ​ | 10,016 | ​ | ​ | 42,348 | ​ | ​ | —
Obligations of states and political subdivisions | ​ | ​ | 4,605 | ​ | ​ | 148 | ​ | ​ | 673 | ​ | ​ | 4,080 | ​ | ​ | 45
Total held to maturity | ​ | $ | 183,181 | ​ | $ | 162 | ​ | $ | 31,118 | ​ | $ | 152,225 | ​ | $ | 45
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

​

​

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Allowance for Credit Losses |  | Estimated Fair Value
December 31, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Available for Sale: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. government agencies | ​ | $ | 7,000 | ​ | $ | — | ​ | $ | 966 | ​ | $ | — | ​ | $ | 6,034
Residential mortgage-backed agencies | ​ | ​ | 24,781 | ​ | ​ | — | ​ | ​ | 4,218 | ​ | ​ | — | ​ | ​ | 20,563
Commercial mortgage-backed agencies | ​ | ​ | 36,258 | ​ | ​ | — | ​ | ​ | 7,841 | ​ | ​ | — | ​ | ​ | 28,417
Collateralized mortgage obligations | ​ | ​ | 19,725 | ​ | ​ | — | ​ | ​ | 3,369 | ​ | ​ | — | ​ | ​ | 16,356
Obligations of states and political subdivisions | ​ | ​ | 10,486 | ​ | ​ | 15 | ​ | ​ | 189 | ​ | ​ | — | ​ | ​ | 10,312
Corporate bonds | ​ | ​ | 1,000 | ​ | ​ | — | ​ | ​ | 222 | ​ | ​ | — | ​ | ​ | 778
Collateralized debt obligations | ​ | ​ | 18,671 | ​ | ​ | — | ​ | ​ | 3,962 | ​ | ​ | — | ​ | ​ | 14,709
Total available for sale | ​ | $ | 117,921 | ​ | $ | 15 | ​ | $ | 20,767 | ​ | $ | — | ​ | $ | 97,169
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

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(in thousands) |  | Amortized Cost |  | Gross Unrecognized Gains |  | Gross Unrecognized Losses |  | Estimated Fair Value |  | Allowance for Credit Losses
December 31, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Held to Maturity: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. treasuries | ​ | $ | 37,462 | ​ | $ | — | ​ | $ | 243 | ​ | $ | 37,219 | ​ | $ | —
U.S. government agencies | ​ | ​ | 68,014 | ​ | ​ | — | ​ | ​ | 10,985 | ​ | ​ | 57,029 | ​ | ​ | —
Residential mortgage-backed agencies | ​ | ​ | 29,588 | ​ | ​ | 42 | ​ | ​ | 2,913 | ​ | ​ | 26,717 | ​ | ​ | —
Commercial mortgage-backed agencies | ​ | ​ | 21,413 | ​ | ​ | — | ​ | ​ | 5,361 | ​ | ​ | 16,052 | ​ | ​ | —
Collateralized mortgage obligations | ​ | ​ | 53,261 | ​ | ​ | — | ​ | ​ | 9,973 | ​ | ​ | 43,288 | ​ | ​ | —
Obligations of states and political subdivisions | ​ | ​ | 4,604 | ​ | ​ | 177 | ​ | ​ | 671 | ​ | ​ | 4,110 | ​ | ​ | 45
Total held to maturity | ​ | $ | 214,342 | ​ | $ | 219 | ​ | $ | 30,146 | ​ | $ | 184,415 | ​ | $ | 45
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

​

The Corporation utilizes FASB Accounting Standards Codification (“ASC”) 326 to evaluate its available-for-sale (“AFS”) and held-to-maturity (“HTM”) debt security portfolio for expected credit losses. For AFS debt securities in an unrealized loss position, the Corporation first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either criteria is met, the security’s amortized cost basis is written down to fair value through income. For AFS debt securities that do not meet the aforementioned criteria, the Corporation evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses (“ACL”) is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an ACL is recognized in other comprehensive income, as a non-credit-related impairment.

​

Changes in the ACL are recorded as a provision for (or reversal of) credit losses. Losses are charged against the ACL when management believes the uncollectibility of an AFS security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Any impairment not recorded through an allowance for credit loss is recognized in other comprehensive income as a non-credit-related impairment.

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The Corporation has made the policy election to exclude accrued interest from the amortized cost basis of available-for-sale debt securities and report accrued interest separately in other assets in the Consolidated Balance Sheets. AFS debt securities are placed on nonaccrual status when we no longer expect to receive all contractual amounts due, which is generally at 90 days past due. Accrued interest receivable is reversed against interest income when a security is placed on nonaccrual status. Accordingly, we do not recognize an allowance for credit loss against accrued interest receivable.

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The Corporation separately evaluates its HTM investment securities for any credit losses. The Corporation pools like securities and calculates expected credit losses through an estimate based on a security’s credit rating, which is recognized as part of the ACL for HTM securities and is included in the balance of HTM securities held to maturity on the Consolidated Balance Sheets. If the Corporation determines that a security indicates evidence of deteriorated credit quality, the security is individually evaluated and a discounted cash flow analysis is performed and compared to the amortized cost basis.

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The Corporation recorded ACL of approximately $45,000 as of March 31, 2024 and December 31, 2023, related to one bond in its HTM security portfolio.

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The following table shows the Corporation’s investment securities with gross unrealized and unrecognized losses and fair values at March 31, 2024 and December 31, 2023, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position:

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Less than 12 months | ​ | 12 months or more
(in thousands) |  | Fair Value |  | Unrealized Losses |  | Number of Investments |  | Fair Value |  | Unrealized Losses |  | Number of Investments
March 31, 2024 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Available for Sale: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. government agencies | ​ | $ | — | ​ | ​ | — | ​ | — | ​ | ​ | 6,019 | ​ | ​ | 981 | ​ | 2
Residential mortgage-backed agencies | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | 19,854 | ​ | ​ | 4,407 | ​ | 3
Commercial mortgage-backed agencies | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | 27,916 | ​ | ​ | 8,166 | ​ | 8
Collateralized mortgage obligations | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | 15,889 | ​ | ​ | 3,431 | ​ | 9
Obligations of states and political subdivisions | ​ | ​ | 882 | ​ | ​ | 13 | ​ | 2 | ​ | ​ | 7,118 | ​ | ​ | 229 | ​ | 4
Corporate Bonds | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | 763 | ​ | ​ | 237 | ​ | 1
Collateralized debt obligations | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | 14,886 | ​ | ​ | 3,765 | ​ | 9
Total available for sale | ​ | $ | 882 | ​ | $ | 13 | ​ | 2 | ​ | $ | 92,445 | ​ | $ | 21,216 | ​ | 36
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Less than 12 months | ​ | 12 months or more
(in thousands) |  | Fair Value |  | Unrecognized Losses |  | Number of Investments |  | Fair Value |  | Unrecognized Losses |  | Number of Investments
March 31, 2024 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Held to Maturity: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. treasuries | ​ | $ | — | ​ | ​ | — | ​ | — | ​ | ​ | 7,484 | ​ | ​ | 14 | ​ | 1
U.S. government agencies | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | 56,642 | ​ | ​ | 11,443 | ​ | 9
Residential mortgage-backed agencies | ​ | ​ | 1,420 | ​ | ​ | 6 | ​ | 1 | ​ | ​ | 21,829 | ​ | ​ | 3,383 | ​ | 35
Commercial mortgage-backed agencies | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | 15,788 | ​ | ​ | 5,583 | ​ | 2
Collateralized mortgage obligations | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | 42,348 | ​ | ​ | 10,016 | ​ | 8
Obligations of states and political subdivisions | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | 2,204 | ​ | ​ | 673 | ​ | 1
Total held to maturity | ​ | $ | 1,420 | ​ | $ | 6 | ​ | 1 | ​ | $ | 146,295 | ​ | $ | 31,112 | ​ | 56
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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Less than 12 months | ​ | 12 months or more
(in thousands) |  | Fair Value |  | Unrealized Losses |  | Number of Investments |  | Fair Value |  | Unrealized Losses |  | Number of Investments
December 31, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Available for Sale: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. government agencies | ​ | $ | — | ​ | $ | — | ​ | — | ​ | $ | 6,034 | ​ | $ | 966 | ​ | 2
Residential mortgage-backed agencies | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | 20,563 | ​ | ​ | 4,218 | ​ | 3
Commercial mortgage-backed agencies | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | 28,417 | ​ | ​ | 7,841 | ​ | 8
Collateralized mortgage obligations | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | 16,356 | ​ | ​ | 3,369 | ​ | 9
Obligations of states and political subdivisions | ​ | ​ | 1,445 | ​ | ​ | 20 | ​ | 2 | ​ | ​ | 6,668 | ​ | ​ | 169 | ​ | 3
Corporate Bonds | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | 778 | ​ | ​ | 222 | ​ | 1
Collateralized debt obligations | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | 14,709 | ​ | ​ | 3,962 | ​ | 9
Total available for sale | ​ | $ | 1,445 | ​ | $ | 20 | ​ | 2 | ​ | $ | 93,525 | ​ | $ | 20,747 | ​ | 35
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Less than 12 months | ​ | 12 months or more
(in thousands) |  | Fair Value |  | Unrecognized Losses |  | Number of Investments |  | Fair Value |  | Unrecognized Losses |  | Number of Investments
December 31, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Held to Maturity: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. treasuries | ​ | $ | — | ​ | $ | — | ​ | — | ​ | $ | 37,219 | ​ | $ | 243 | ​ | 4
U.S. government agencies | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | 57,029 | ​ | ​ | 10,985 | ​ | 9
Residential mortgage-backed agencies | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | 22,613 | ​ | ​ | 2,913 | ​ | 35
Commercial mortgage-backed agencies | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | 16,052 | ​ | ​ | 5,361 | ​ | 2
Collateralized mortgage obligations | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | 43,288 | ​ | ​ | 9,973 | ​ | 8
Obligations of states and political subdivisions | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | 2,205 | ​ | ​ | 671 | ​ | 1
Total held to maturity | ​ | $ | — | ​ | $ | — | ​ | — | ​ | $ | 178,406 | ​ | $ | 30,146 | ​ | 59
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

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The amortized cost and estimated fair value of securities by contractual maturity at March 31, 2024 are shown in the following table. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to call or prepay obligations with or without call or prepayment penalties.

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​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | March 31, 2024
(in thousands) |  | Amortized Cost |  | Fair Value
Available for Sale: | ​ | ​ | ​ | ​ | ​ | ​
Due in one year or less | ​ | $ | 2,670 | ​ | $ | 2,651
Due after one year through five years | ​ | ​ | 5,250 | ​ | ​ | 4,943
Due after five years through ten years | ​ | ​ | 4,678 | ​ | ​ | 4,410
Due after ten years | ​ | ​ | 24,534 | ​ | ​ | 19,917
​ | ​ | ​ | 37,132 | ​ | ​ | 31,921
Residential mortgage-backed agencies | ​ | ​ | 24,261 | ​ | ​ | 19,854
Commercial mortgage-backed agencies | ​ | ​ | 36,082 | ​ | ​ | 27,916
Collateralized mortgage obligations | ​ | ​ | 19,320 | ​ | ​ | 15,889
Total available for sale | ​ | $ | 116,795 | ​ | $ | 95,580
Held to Maturity: | ​ | ​ | ​ | ​ | ​ | ​
Due in one year or less | ​ | $ | 7,498 | ​ | $ | 7,485
Due after one year through five years | ​ | ​ | 12,500 | ​ | ​ | 11,759
Due after five years through ten years | ​ | ​ | 40,503 | ​ | ​ | 34,161
Due after ten years | ​ | ​ | 19,687 | ​ | ​ | 14,801
​ | ​ | ​ | 80,188 | ​ | ​ | 68,206
Residential mortgage-backed agencies | ​ | ​ | 29,258 | ​ | ​ | 25,883
Commercial mortgage-backed agencies | ​ | ​ | 21,371 | ​ | ​ | 15,788
Collateralized mortgage obligations | ​ | ​ | 52,364 | ​ | ​ | 42,348
Total held to maturity | ​ | $ | 183,181 | ​ | $ | 152,225

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Note 5 – Loans and Related Allowance for Credit Losses

The following table summarizes the primary segments of the loan portfolio at March 31, 2024 and December 31, 2023:

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | Commercial Real Estate |  | Acquisition and Development |  | Commercial and Industrial |  | Residential Mortgage |  | Consumer |  | Total
March 31, 2024 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Individually evaluated for impairment | ​ | $ | 819 | ​ | $ | — | ​ | $ | 12,085 | ​ | $ | 1,971 | ​ | $ | — | ​ | $ | 14,875
Collectively evaluated for impairment | ​ | ​ | 492,000 | ​ | ​ | 83,424 | ​ | ​ | 262,637 | ​ | ​ | 500,019 | ​ | ​ | 59,372 | ​ | ​ | 1,397,452
Total loans | ​ | $ | 492,819 | ​ | $ | 83,424 | ​ | $ | 274,722 | ​ | $ | 501,990 | ​ | $ | 59,372 | ​ | $ | 1,412,327
December 31, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Individually evaluated for impairment | ​ | $ | 826 | ​ | $ | — | ​ | $ | — | ​ | $ | 2,137 | ​ | $ | — | ​ | $ | 2,963
Collectively evaluated for impairment | ​ | ​ | 492,877 | ​ | ​ | 77,060 | ​ | ​ | 274,604 | ​ | ​ | 497,734 | ​ | ​ | 61,429 | ​ | ​ | 1,403,704
Total loans | ​ | $ | 493,703 | ​ | $ | 77,060 | ​ | $ | 274,604 | ​ | $ | 499,871 | ​ | $ | 61,429 | ​ | $ | 1,406,667

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The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and non-accrual loans at March 31, 2024 and December 31, 2023:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | Current |  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 Days+ Past Due |  | Total Past Due and Accruing |  | Non- Accrual |  | Total Loans
March 31, 2024 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial real estate: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-owner-occupied | ​ | $ | 293,109 | ​ | $ | 1,387 | ​ | $ | — | ​ | $ | — | ​ | $ | 1,387 | ​ | $ | 219 | ​ | $ | 294,715
All other CRE | ​ | ​ | 197,505 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 599 | ​ | ​ | 198,104
Acquisition and development: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
1-4 family residential construction | ​ | ​ | 18,781 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 18,781
All other A&D | ​ | ​ | 64,538 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 105 | ​ | ​ | 64,643
Commercial and industrial | ​ | ​ | 262,061 | ​ | ​ | 559 | ​ | ​ | 9 | ​ | ​ | — | ​ | ​ | 568 | ​ | ​ | 12,093 | ​ | ​ | 274,722
Residential mortgage: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Residential mortgage - term | ​ | ​ | 436,673 | ​ | ​ | 1,845 | ​ | ​ | — | ​ | ​ | 61 | ​ | ​ | 1,906 | ​ | ​ | 2,528 | ​ | ​ | 441,107
Residential mortgage - home equity | ​ | ​ | 60,013 | ​ | ​ | 310 | ​ | ​ | 210 | ​ | ​ | 15 | ​ | ​ | 535 | ​ | ​ | 335 | ​ | ​ | 60,883
Consumer | ​ | ​ | 58,037 | ​ | ​ | 840 | ​ | ​ | 323 | ​ | ​ | 44 | ​ | ​ | 1,207 | ​ | ​ | 128 | ​ | ​ | 59,372
Total | ​ | $ | 1,390,717 | ​ | $ | 4,941 | ​ | $ | 542 | ​ | $ | 120 | ​ | $ | 5,603 | ​ | $ | 16,007 | ​ | $ | 1,412,327
December 31, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial real estate: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-owner-occupied | ​ | $ | 296,343 | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 227 | ​ | $ | 296,570
All other CRE | ​ | ​ | 196,123 | ​ | ​ | 411 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 411 | ​ | ​ | 599 | ​ | ​ | 197,133
Acquisition and development: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
1-4 family residential construction | ​ | ​ | 18,224 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 18,224
All other A&D | ​ | ​ | 58,723 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 113 | ​ | ​ | 58,836
Commercial and industrial | ​ | ​ | 274,465 | ​ | ​ | 120 | ​ | ​ | 19 | ​ | ​ | — | ​ | ​ | 139 | ​ | ​ | — | ​ | ​ | 274,604
Residential mortgage: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Residential mortgage - term | ​ | ​ | 433,878 | ​ | ​ | 130 | ​ | ​ | 717 | ​ | ​ | 384 | ​ | ​ | 1,231 | ​ | ​ | 2,720 | ​ | ​ | 437,829
Residential mortgage - home equity | ​ | ​ | 61,021 | ​ | ​ | 520 | ​ | ​ | 158 | ​ | ​ | 75 | ​ | ​ | 753 | ​ | ​ | 268 | ​ | ​ | 62,042
Consumer | ​ | ​ | 60,576 | ​ | ​ | 463 | ​ | ​ | 277 | ​ | ​ | 84 | ​ | ​ | 824 | ​ | ​ | 29 | ​ | ​ | 61,429
Total | ​ | $ | 1,399,353 | ​ | $ | 1,644 | ​ | $ | 1,171 | ​ | $ | 543 | ​ | $ | 3,358 | ​ | $ | 3,956 | ​ | $ | 1,406,667

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​

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Non-accrual loans that have been subject to partial charge-offs totaled $0.1 million at both March 31, 2024 and December 31, 2023. Loans secured by 1-4 family residential real estate properties in the process of foreclosure totaled $1.8 million at both March 31, 2024 and December 31, 2023. As a percentage of the loan portfolio, accruing loans past due 30 days or more was 0.40% at March 31, 2024 compared to 0.24% at December 31, 2023 and 0.17% at March 31, 2023.

​

The Corporation maintains an ACL at a level that management believes will be adequate to absorb expected credit losses associated with the Corporation’s financial instruments over the life of those instruments as of the balance sheet date. The Corporation develops and documents a systematic ACL methodology based on the following portfolio segments: (i) commercial real estate, (ii) acquisition and development, (iii) commercial and industrial, (iv) residential mortgage, and (v) consumer. The Corporation’s loan portfolio is segmented by homogeneous loan types that behave similarly to economic cycles. The following is a discussion of the key risks by portfolio segment that management assesses in preparing the ACL.

Commercial Real Estate- loans are secured by commercial purpose real estate, including both owner occupied properties and properties obtained for investment purposes, such as hotels, strip malls and apartments. Operations of the individual projects as well as global cash flows of the debtors are the primary source of repayment of these loans. The condition of the local economy is an important indicator of risk, but there are more specific risks depending on the collateral type as well as the business.

Acquisition and Development- loans include both commercial and consumer. Commercial loans are made to finance construction of buildings or other structures, as well as to finance the acquisition and development of raw land for various purposes. While the risk of these loans is generally confined to the construction period, if there are problems, the project may not be completed, and as such, may not provide sufficient cash flow on its own to service the debt or have sufficient value in a liquidation to cover the outstanding principal. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the type of project and the experience and resources of the developer. Consumer loans are made for the construction of residential homes for which a binding sales contract exists and generally are for a period of time sufficient to complete construction. Residential construction loans to individuals generally provide for the payment of interest only during the construction phase. Credit risk for residential real estate construction loans can arise from construction delays, cost overruns, failure of the contractor to complete the project to specifications and economic conditions that could impact demand for supply of the property being constructed.

Commercial and Industrial- loans are made to operating companies or manufacturers for the purpose of production, operating capacity, accounts receivable, inventory or equipment financing. Cash flow from the operations of the borrower is the primary source of repayment for these loans. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the industry of the borrower. Collateral for these types of loans often do not have sufficient value in a distressed or liquidation scenario to satisfy the outstanding debt. These loans are also made to local municipalities for various purposes including refinancing existing obligations, infrastructure up-fit and expansion, or to purchase new equipment. The primary repayment source for local municipalities include the tax base of the municipality, specific revenue streams related to the infrastructure financed, and other business operations of the municipal authority. The health and stability of state and local economies directly impacts each municipality’s tax basis and are important indicators of risk for this segment. The ability of each municipality to increase taxes and fees to offset service requirements give this type of loan a very low risk profile in the continuum of the Corporation’s loan portfolio.

Residential mortgage- loans are secured by first and second liens such as home equity lines of credit and 1-4 family residential mortgages. The primary source of repayment for these loans is the income of the borrower. The condition of the local economy, in particular the unemployment rate, is an important indicator of risk for this segment. The state of the local housing market can also have a significant impact on this segment because low demand and/or declining home values can limit the ability of borrowers to sell a property and satisfy debt.

Consumer- loans are made to individuals and may be either secured by assets other than 1-4 family residences or unsecured. This segment includes automobile loans and unsecured loans and lines of credit. The primary source of repayment for these loans is the income and assets of the borrower. The condition of the local economy, in particular the unemployment rate, is an important

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indicator of risk for this segment. The value of the collateral, if there is any, is less likely to be a source of repayment due to less certain collateral values.

The following table summarizes the primary segments of the ACL at March 31, 2024 and December 31, 2023, segregated by the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | Commercial Real Estate |  | Acquisition and Development |  | Commercial and Industrial |  | Residential Mortgage |  | Consumer |  | Total
March 31, 2024 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Individually evaluated for impairment | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | —
Collectively evaluated for impairment | ​ | ​ | 4,962 | ​ | ​ | 1,014 | ​ | ​ | 4,002 | ​ | ​ | 7,017 | ​ | ​ | 987 | ​ | ​ | 17,982
Total ACL | ​ | $ | 4,962 | ​ | $ | 1,014 | ​ | $ | 4,002 | ​ | $ | 7,017 | ​ | $ | 987 | ​ | $ | 17,982
December 31, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Individually evaluated for impairment | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | —
Collectively evaluated for impairment | ​ | ​ | 5,120 | ​ | ​ | 940 | ​ | ​ | 3,717 | ​ | ​ | 6,774 | ​ | ​ | 929 | ​ | ​ | 17,480
Total ACL | ​ | $ | 5,120 | ​ | $ | 940 | ​ | $ | 3,717 | ​ | $ | 6,774 | ​ | $ | 929 | ​ | $ | 17,480

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Changes in the fair value of the types of collateral for individually evaluated loans are reported as provision for credit loss in the period of change. The evaluation of the need and amount of a specific allocation of the ACL and whether a loan can be removed from impairment status is made on a quarterly basis.

The following table presents the amortized cost basis of collateral-dependent individually evaluated loans as of March 31, 2024 and December 31, 2023..

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | March 31, 2024
(in thousands) |  | Real Estate | ​ | Other Collateral | Non-Accrual Loans with No Allowance
Commercial real estate | ​ | $ | 819 | $ | — | $ | 819
Commercial and industrial | ​ | ​ | — | ​ | 12,085 | ​ | 12,085
Residential mortgage | ​ | ​ | 1,971 | ​ | — | ​ | 1,971
Total Loans | ​ | $ | 2,790 | $ | 12,085 | $ | 14,875

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2023
(in thousands) |  | Real Estate | ​ | Other Collateral | Non-Accrual Loans with No Allowance
Commercial real estate | ​ | $ | 826 | $ | — | $ | 826
Residential mortgage | ​ | ​ | 2,137 | ​ | — | ​ | 2,137
Total Loans | ​ | $ | 2,963 | $ | — | $ | 2,963

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Effective January 1, 2023, the Corporation adopted the accounting guidance in ASU 2022-02, which eliminates the recognition and measurement of a troubled debt restructuring (“TDR”). Due to the removal of the TDR designation, the Corporation evaluates loan restructurings according to the accounting guidance for loan modifications to determine if the restructuring results in a new loan or a continuation of the existing loan. Loan modifications to borrowers experiencing financial difficulty that result in a direct change in the timing or amount of contracted cash flows include situations where there is principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, and combinations of the listed modifications. Therefore, the disclosures related to loan restructurings are only for modifications that directly affect cash flows.

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A loan that is considered a modified loan may be subject to the individually evaluated loan analysis if the commitment is $0.1 million or greater; otherwise, the modified loan remains in the appropriate segment of the ACL model and associated reserves are adjusted based on changes in the discounted cash flows resulting from the modification of the modified loan. For a discussion with respect to reserve calculations regarding individually evaluated loans, refer to the “Nonrecurring Basis” section of Note 6, Fair Value Measurements. As of March 31, 2024 and 2023, there were no modified loans that were classified as individually evaluated loans.

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The following tables present the activity in the ACL for the three-month periods ended March 31, 2024 and 2023:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Three months ended (in thousands) |  | Commercial Real Estate |  | Acquisition and Development |  | Commercial and Industrial |  | Residential Mortgage |  | Consumer |  | Unallocated |  | Total
Beginning balance at January 1, 2024 | ​ | $ | 5,120 | ​ | $ | 940 | ​ | $ | 3,717 | ​ | $ | 6,774 | ​ | $ | 929 | ​ | $ | — | ​ | $ | 17,480
Loan charge-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (112) | ​ | ​ | — | ​ | ​ | (506) | ​ | ​ | — | ​ | ​ | (618)
Recoveries collected | ​ | ​ | 37 | ​ | ​ | 3 | ​ | ​ | 31 | ​ | ​ | 18 | ​ | ​ | 70 | ​ | ​ | — | ​ | ​ | 159
Credit loss (credit)/expense | ​ | ​ | (195) | ​ | ​ | 71 | ​ | ​ | 366 | ​ | ​ | 225 | ​ | ​ | 494 | ​ | ​ | — | ​ | ​ | 961
ACL balance at March 31, 2024 | ​ | $ | 4,962 | ​ | $ | 1,014 | ​ | $ | 4,002 | ​ | $ | 7,017 | ​ | $ | 987 | ​ | $ | — | ​ | $ | 17,982
Beginning balance at January 1, 2023 prior to adoption of ASC 326 | ​ | $ | 6,345 | ​ | $ | 979 | ​ | $ | 2,845 | ​ | $ | 3,160 | ​ | $ | 877 | ​ | $ | 430 | ​ | $ | 14,636
Impact of adopting ASC 326 | ​ | ​ | (1,143) | ​ | ​ | (15) | ​ | ​ | 1,334 | ​ | ​ | 2,112 | ​ | ​ | 208 | ​ | ​ | (430) | ​ | ​ | 2,066
Loan charge-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (6) | ​ | ​ | (333) | ​ | ​ | — | ​ | ​ | (339)
Recoveries collected | ​ | ​ | 5 | ​ | ​ | 5 | ​ | ​ | 4 | ​ | ​ | 18 | ​ | ​ | 62 | ​ | ​ | — | ​ | ​ | 94
Credit loss (credit)/expense | ​ | ​ | (345) | ​ | ​ | 134 | ​ | ​ | (428) | ​ | ​ | 1,040 | ​ | ​ | 13 | ​ | ​ | — | ​ | ​ | 414
ACL balance at March 31, 2023 | ​ | $ | 4,862 | ​ | $ | 1,103 | ​ | $ | 3,755 | ​ | $ | 6,324 | ​ | $ | 827 | ​ | $ | — | ​ | $ | 16,871

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The Corporation’s methodology for estimating the ACL includes:

Segmentation. The Corporation’s loan portfolio is segmented by homogeneous loan types that behave similarly to economic cycles.

Specific Analysis. A specific reserve analysis is applied to certain individually evaluated loans. These loans are evaluated quarterly generally based on collateral value, observable market value or the present value of expected future cash flows. A specific reserve is established if the fair value is less than the loan balance. A charge-off is recognized when the loss is quantifiable. Individually evaluated loans not specifically analyzed reside in the Quantitative Analysis.

Quantitative Analysis. The Corporation elected to use discounted cash flows. Economic forecasts include but are not limited to unemployment, the Consumer Price Index, the Housing Affordability Index, and Gross State Product. These forecasts are assumed to revert to the long term average and are utilized in the model to estimate the probability of default and the loss given default is the estimated loss rate, which varies over time. The estimated loss rate is applied within the appropriate periods in the cash flow model to determine the net present value. Net present value is also impacted by assumption related to the duration between default and recovery. The reserve is based on the difference between the summation of the principal balances taking amortized costs into consideration and the summation of the net present values.

Qualitative Analysis. Based on management’s review and analysis of internal, external and model risks, management may adjust the model output. Management reviews the peaks and troughs of the model’s calibrations, taking into account economic forecasts to develop guardrails that serve as the basis for determining the reasonableness of the model’s output and makes adjustments as necessary. This process challenges unexpected variability resulting from outputs beyond the model’s calibrations that appear to be unreasonable. Management also enhances the calculation through the use of Moody’s economic forecast data in its calculation. Additionally, management may adjust the economic forecast if it is incompatible with known market conditions based on management’s experience and perspective.

The ACL is based on estimates, and actual losses may vary from current estimates. Management believes that the granularity of the homogeneous pools and the related historical loss ratios and other qualitative factors, as well as the consistency in the application of assumptions, result in an ACL that is representative of the risk found in the components of the portfolio at any given date.

Credit Quality Indicators:

The Corporation’s portfolio grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled or at all. The Corporation’s internal credit risk grading system is based on debt service coverage, collateral values and other subjective factors. Mortgage and consumer loans are defaulted to pass grade until a loan migrates to past due status.

The Corporation has a loan review policy and annual scope report that details the level of loan review for loans in a given year. The annual loan review provides the Credit Risk Committee with an independent analysis of the following: (i) credit quality of the loan portfolio, (ii) compliance with loan policy, (iii) adequacy of documentation in credit files and (iv) validity of risk ratings.

The Corporation’s internally assigned grades are as follows:

Pass- The Corporation uses six grades of pass, including its watch rating. Generally, a pass rating indicates that the loan is currently performing and is of high quality.

Special Mention- Assets with potential weaknesses that warrant management’s close attention and if left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date.

Substandard- Assets that are inadequately protected by the current sound worth and paying capacity of the obligor or by the collateral pledged, if any. Assets so classified have a well-defined weakness, or weaknesses that jeopardize the liquidation of

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the debt. Such assets are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful- Assets with all weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable.

Loss- Assets considered of such little value that its continuance on the books is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical to defer writing off this basically worthless asset even though partial recovery may be affected in the future.

The ability of borrowers to repay commercial loans is dependent upon the success of their business and general economic conditions. Due to the greater potential for loss within our commercial portfolio, we monitor the commercial loan portfolio through an internal risk rating system. Loan risk ratings are assigned based upon the creditworthiness of the borrower and are reviewed on an ongoing basis according to our internal policies. Loans rated special mention or substandard have potential or well-defined weaknesses not generally found in high quality, performing loans, and require attention from management to limit loss.

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The following table presents loan balances by year of origination and internally assigned risk rating for our portfolio segments as of dates presented:

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | 2024 |  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 and Prior |  | Revolving |  | Total Portfolio Loans
March 31, 2024 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial real estate: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-owner-occupied | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | $ | 1,709 | ​ | $ | 23,394 | ​ | $ | 66,664 | ​ | $ | 29,960 | ​ | $ | 53,161 | ​ | $ | 106,806 | ​ | $ | 1,076 | ​ | $ | 282,770
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 744 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 744
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 11,201 | ​ | ​ | — | ​ | ​ | 11,201
Total non-owner occupied | ​ | ​ | 1,709 | ​ | ​ | 23,394 | ​ | ​ | 66,664 | ​ | ​ | 29,960 | ​ | ​ | 53,905 | ​ | ​ | 118,007 | ​ | ​ | 1,076 | ​ | ​ | 294,715
Current period gross charge-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
All other CRE | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | ​ | 710 | ​ | ​ | 29,970 | ​ | ​ | 31,545 | ​ | ​ | 26,411 | ​ | ​ | 20,165 | ​ | ​ | 81,304 | ​ | ​ | 4,206 | ​ | ​ | 194,311
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 567 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 567
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 2,626 | ​ | ​ | 600 | ​ | ​ | 3,226
Total all other CRE | ​ | ​ | 710 | ​ | ​ | 29,970 | ​ | ​ | 31,545 | ​ | ​ | 26,411 | ​ | ​ | 20,732 | ​ | ​ | 83,930 | ​ | ​ | 4,806 | ​ | ​ | 198,104
Current period gross charge-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Acquisition and development: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
1-4 family residential construction | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | ​ | 129 | ​ | ​ | 16,488 | ​ | ​ | 337 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,827 | ​ | ​ | 18,781
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Total acquisition and development | ​ | ​ | 129 | ​ | ​ | 16,488 | ​ | ​ | 337 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,827 | ​ | ​ | 18,781
Current period gross charge-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
All other A&D | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | ​ | 3,553 | ​ | ​ | 20,963 | ​ | ​ | 18,794 | ​ | ​ | 1,949 | ​ | ​ | 3,022 | ​ | ​ | 11,860 | ​ | ​ | 4,397 | ​ | ​ | 64,538
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 105 | ​ | ​ | — | ​ | ​ | 105
Total all other A&D | ​ | ​ | 3,553 | ​ | ​ | 20,963 | ​ | ​ | 18,794 | ​ | ​ | 1,949 | ​ | ​ | 3,022 | ​ | ​ | 11,965 | ​ | ​ | 4,397 | ​ | ​ | 64,643
Current period gross charge-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Commercial and industrial: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | ​ | 9,089 | ​ | ​ | 45,722 | ​ | ​ | 63,811 | ​ | ​ | 22,485 | ​ | ​ | 8,883 | ​ | ​ | 17,848 | ​ | ​ | 78,843 | ​ | ​ | 246,681
Special Mention | ​ | ​ | — | ​ | ​ | 536 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 2,047 | ​ | ​ | — | ​ | ​ | 3,815 | ​ | ​ | 6,398
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 9,338 | ​ | ​ | 1,799 | ​ | ​ | 6,696 | ​ | ​ | 862 | ​ | ​ | 2,948 | ​ | ​ | 21,643
Total commercial and industrial | ​ | ​ | 9,089 | ​ | ​ | 46,258 | ​ | ​ | 73,149 | ​ | ​ | 24,284 | ​ | ​ | 17,626 | ​ | ​ | 18,710 | ​ | ​ | 85,606 | ​ | ​ | 274,722
Current period gross charge-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 56 | ​ | ​ | — | ​ | ​ | 41 | ​ | ​ | 15 | ​ | ​ | — | ​ | ​ | 112
Residential mortgage: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Residential mortgage - term | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | ​ | 6,398 | ​ | ​ | 52,650 | ​ | ​ | 97,246 | ​ | ​ | 86,175 | ​ | ​ | 37,658 | ​ | ​ | 152,285 | ​ | ​ | 2,118 | ​ | ​ | 434,530
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 925 | ​ | ​ | 15 | ​ | ​ | 5,581 | ​ | ​ | 56 | ​ | ​ | 6,577
Total residential mortgage - term | ​ | ​ | 6,398 | ​ | ​ | 52,650 | ​ | ​ | 97,246 | ​ | ​ | 87,100 | ​ | ​ | 37,673 | ​ | ​ | 157,866 | ​ | ​ | 2,174 | ​ | ​ | 441,107
Current period gross charge-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Residential mortgage - home equity | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | ​ | — | ​ | ​ | 965 | ​ | ​ | 4,447 | ​ | ​ | 843 | ​ | ​ | 460 | ​ | ​ | 694 | ​ | ​ | 52,732 | ​ | ​ | 60,141
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 74 | ​ | ​ | — | ​ | ​ | 37 | ​ | ​ | 15 | ​ | ​ | 616 | ​ | ​ | 742
Total residential mortgage - home equity | ​ | ​ | — | ​ | ​ | 965 | ​ | ​ | 4,521 | ​ | ​ | 843 | ​ | ​ | 497 | ​ | ​ | 709 | ​ | ​ | 53,348 | ​ | ​ | 60,883
Current period gross charge-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Consumer: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | ​ | 3,030 | ​ | ​ | 16,279 | ​ | ​ | 9,519 | ​ | ​ | 5,470 | ​ | ​ | 1,879 | ​ | ​ | 20,149 | ​ | ​ | 2,808 | ​ | ​ | 59,134
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Substandard | ​ | ​ | — | ​ | ​ | 61 | ​ | ​ | 26 | ​ | ​ | 119 | ​ | ​ | 21 | ​ | ​ | 5 | ​ | ​ | 6 | ​ | ​ | 238
Total consumer | ​ | ​ | 3,030 | ​ | ​ | 16,340 | ​ | ​ | 9,545 | ​ | ​ | 5,589 | ​ | ​ | 1,900 | ​ | ​ | 20,154 | ​ | ​ | 2,814 | ​ | ​ | 59,372
Current period gross charge-offs | ​ | ​ | 50 | ​ | ​ | 371 | ​ | ​ | 51 | ​ | ​ | 11 | ​ | ​ | 1 | ​ | ​ | 22 | ​ | ​ | — | ​ | ​ | 506
Total Portfolio Loans | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | ​ | 24,618 | ​ | ​ | 206,431 | ​ | ​ | 292,363 | ​ | ​ | 173,293 | ​ | ​ | 125,228 | ​ | ​ | 390,946 | ​ | ​ | 148,007 | ​ | ​ | 1,360,886
Special Mention | ​ | ​ | — | ​ | ​ | 536 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 3,358 | ​ | ​ | — | ​ | ​ | 3,815 | ​ | ​ | 7,709
Substandard | ​ | ​ | — | ​ | ​ | 61 | ​ | ​ | 9,438 | ​ | ​ | 2,843 | ​ | ​ | 6,769 | ​ | ​ | 20,395 | ​ | ​ | 4,226 | ​ | ​ | 43,732
Total Portfolio Loans | ​ | $ | 24,618 | ​ | $ | 207,028 | ​ | $ | 301,801 | ​ | $ | 176,136 | ​ | $ | 135,355 | ​ | $ | 411,341 | ​ | $ | 156,048 | ​ | $ | 1,412,327
Current YTD Period: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current period gross charge-offs | ​ | $ | 50 | ​ | $ | 371 | ​ | $ | 107 | ​ | $ | 11 | ​ | $ | 42 | ​ | $ | 37 | ​ | $ | — | ​ | $ | 618
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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 and Prior |  | Revolving |  | Total Portfolio Loans
December 31, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial real estate: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-owner-occupied | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | $ | 23,511 | ​ | $ | 65,878 | ​ | $ | 30,332 | ​ | $ | 54,270 | ​ | $ | 40,575 | ​ | $ | 65,134 | ​ | $ | 1,138 | ​ | $ | 280,838
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 4,331 | ​ | ​ | — | ​ | ​ | 4,331
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 11,401 | ​ | ​ | — | ​ | ​ | 11,401
Total non-owner occupied | ​ | ​ | 23,511 | ​ | ​ | 65,878 | ​ | ​ | 30,332 | ​ | ​ | 54,270 | ​ | ​ | 40,575 | ​ | ​ | 80,866 | ​ | ​ | 1,138 | ​ | ​ | 296,570
Current period gross charge-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 87 | ​ | ​ | — | ​ | ​ | 87
All other CRE | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | ​ | 30,130 | ​ | ​ | 27,379 | ​ | ​ | 27,042 | ​ | ​ | 20,691 | ​ | ​ | 22,879 | ​ | ​ | 60,054 | ​ | ​ | 4,495 | ​ | ​ | 192,670
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 644 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 644
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,847 | ​ | ​ | 1,372 | ​ | ​ | 600 | ​ | ​ | 3,819
Total all other CRE | ​ | ​ | 30,130 | ​ | ​ | 27,379 | ​ | ​ | 27,042 | ​ | ​ | 21,335 | ​ | ​ | 24,726 | ​ | ​ | 61,426 | ​ | ​ | 5,095 | ​ | ​ | 197,133
Current period gross charge-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Acquisition and development: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
1-4 family residential construction | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | ​ | 13,745 | ​ | ​ | 3,446 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,033 | ​ | ​ | 18,224
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Total acquisition and development | ​ | ​ | 13,745 | ​ | ​ | 3,446 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,033 | ​ | ​ | 18,224
Current period gross charge-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
All other A&D | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | ​ | 12,184 | ​ | ​ | 25,099 | ​ | ​ | 2,966 | ​ | ​ | 3,046 | ​ | ​ | 1,301 | ​ | ​ | 9,946 | ​ | ​ | 4,181 | ​ | ​ | 58,723
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 113 | ​ | ​ | — | ​ | ​ | 113
Total all other A&D | ​ | ​ | 12,184 | ​ | ​ | 25,099 | ​ | ​ | 2,966 | ​ | ​ | 3,046 | ​ | ​ | 1,301 | ​ | ​ | 10,059 | ​ | ​ | 4,181 | ​ | ​ | 58,836
Current period gross charge-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Commercial and industrial: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | ​ | 52,004 | ​ | ​ | 66,559 | ​ | ​ | 24,387 | ​ | ​ | 11,753 | ​ | ​ | 8,872 | ​ | ​ | 10,052 | ​ | ​ | 78,992 | ​ | ​ | 252,619
Special Mention | ​ | ​ | 558 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 558
Substandard | ​ | ​ | — | ​ | ​ | 9,352 | ​ | ​ | 1,854 | ​ | ​ | 6,806 | ​ | ​ | 98 | ​ | ​ | 837 | ​ | ​ | 2,480 | ​ | ​ | 21,427
Total commercial and industrial | ​ | ​ | 52,562 | ​ | ​ | 75,911 | ​ | ​ | 26,241 | ​ | ​ | 18,559 | ​ | ​ | 8,970 | ​ | ​ | 10,889 | ​ | ​ | 81,472 | ​ | ​ | 274,604
Current period gross charge-offs | ​ | ​ | 100 | ​ | ​ | 103 | ​ | ​ | 35 | ​ | ​ | 166 | ​ | ​ | — | ​ | ​ | 19 | ​ | ​ | — | ​ | ​ | 423
Residential mortgage: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Residential mortgage - term | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | ​ | 51,625 | ​ | ​ | 94,723 | ​ | ​ | 88,835 | ​ | ​ | 38,228 | ​ | ​ | 25,375 | ​ | ​ | 130,402 | ​ | ​ | 1,577 | ​ | ​ | 430,765
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Substandard | ​ | ​ | — | ​ | ​ | 138 | ​ | ​ | 929 | ​ | ​ | 17 | ​ | ​ | 98 | ​ | ​ | 5,825 | ​ | ​ | 57 | ​ | ​ | 7,064
Total residential mortgage - term | ​ | ​ | 51,625 | ​ | ​ | 94,861 | ​ | ​ | 89,764 | ​ | ​ | 38,245 | ​ | ​ | 25,473 | ​ | ​ | 136,227 | ​ | ​ | 1,634 | ​ | ​ | 437,829
Current period gross charge-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 13 | ​ | ​ | — | ​ | ​ | 13
Residential mortgage - home equity | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | ​ | 1,127 | ​ | ​ | 4,657 | ​ | ​ | 864 | ​ | ​ | 475 | ​ | ​ | 286 | ​ | ​ | 489 | ​ | ​ | 53,467 | ​ | ​ | 61,365
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 38 | ​ | ​ | — | ​ | ​ | 16 | ​ | ​ | 623 | ​ | ​ | 677
Total residential mortgage - home equity | ​ | ​ | 1,127 | ​ | ​ | 4,657 | ​ | ​ | 864 | ​ | ​ | 513 | ​ | ​ | 286 | ​ | ​ | 505 | ​ | ​ | 54,090 | ​ | ​ | 62,042
Current period gross charge-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 42 | ​ | ​ | — | ​ | ​ | 42
Consumer: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | ​ | 18,299 | ​ | ​ | 10,616 | ​ | ​ | 6,361 | ​ | ​ | 2,206 | ​ | ​ | 510 | ​ | ​ | 20,365 | ​ | ​ | 2,873 | ​ | ​ | 61,230
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Substandard | ​ | ​ | 14 | ​ | ​ | 35 | ​ | ​ | 113 | ​ | ​ | 23 | ​ | ​ | 6 | ​ | ​ | 2 | ​ | ​ | 6 | ​ | ​ | 199
Total consumer | ​ | ​ | 18,313 | ​ | ​ | 10,651 | ​ | ​ | 6,474 | ​ | ​ | 2,229 | ​ | ​ | 516 | ​ | ​ | 20,367 | ​ | ​ | 2,879 | ​ | ​ | 61,429
Current period gross charge-offs | ​ | ​ | 236 | ​ | ​ | 223 | ​ | ​ | 74 | ​ | ​ | 8 | ​ | ​ | 4 | ​ | ​ | 329 | ​ | ​ | — | ​ | ​ | 874
Total Portfolio Loans | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | ​ | 202,625 | ​ | ​ | 298,357 | ​ | ​ | 180,787 | ​ | ​ | 130,669 | ​ | ​ | 99,798 | ​ | ​ | 296,442 | ​ | ​ | 147,756 | ​ | ​ | 1,356,434
Special Mention | ​ | ​ | 558 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 644 | ​ | ​ | — | ​ | ​ | 4,331 | ​ | ​ | — | ​ | ​ | 5,533
Substandard | ​ | ​ | 14 | ​ | ​ | 9,525 | ​ | ​ | 2,896 | ​ | ​ | 6,884 | ​ | ​ | 2,049 | ​ | ​ | 19,566 | ​ | ​ | 3,766 | ​ | ​ | 44,700
Total Portfolio Loans | ​ | $ | 203,197 | ​ | $ | 307,882 | ​ | $ | 183,683 | ​ | $ | 138,197 | ​ | $ | 101,847 | ​ | $ | 320,339 | ​ | $ | 151,522 | ​ | $ | 1,406,667
Current YTD Period: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current period gross charge-offs | ​ | $ | 336 | ​ | $ | 326 | ​ | $ | 109 | ​ | $ | 174 | ​ | $ | 4 | ​ | $ | 490 | ​ | $ | — | ​ | $ | 1,439
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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.

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The following tables present loan balances by year of origination segregated by performing and non-performing loans for the periods presented:

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | 2024 |  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 and Prior |  | Revolving |  | Total Portfolio Loans
March 31, 2024 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial real estate: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-owner-occupied | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | $ | 1,709 | ​ | $ | 23,394 | ​ | $ | 66,664 | ​ | $ | 29,960 | ​ | $ | 53,905 | ​ | $ | 117,788 | ​ | $ | 1,076 | ​ | $ | 294,496
Nonperforming | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 219 | ​ | ​ | — | ​ | ​ | 219
Total non-owner occupied | ​ | ​ | 1,709 | ​ | ​ | 23,394 | ​ | ​ | 66,664 | ​ | ​ | 29,960 | ​ | ​ | 53,905 | ​ | ​ | 118,007 | ​ | ​ | 1,076 | ​ | ​ | 294,715
All other CRE | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | ​ | 710 | ​ | ​ | 29,970 | ​ | ​ | 31,545 | ​ | ​ | 26,411 | ​ | ​ | 20,732 | ​ | ​ | 83,331 | ​ | ​ | 4,806 | ​ | ​ | 197,505
Nonperforming | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 599 | ​ | ​ | — | ​ | ​ | 599
Total all other CRE | ​ | ​ | 710 | ​ | ​ | 29,970 | ​ | ​ | 31,545 | ​ | ​ | 26,411 | ​ | ​ | 20,732 | ​ | ​ | 83,930 | ​ | ​ | 4,806 | ​ | ​ | 198,104
Acquisition and development: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
1-4 family residential construction | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | ​ | 129 | ​ | ​ | 16,488 | ​ | ​ | 337 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,827 | ​ | ​ | 18,781
Nonperforming | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Total acquisition and development | ​ | ​ | 129 | ​ | ​ | 16,488 | ​ | ​ | 337 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,827 | ​ | ​ | 18,781
All other A&D | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | ​ | 3,553 | ​ | ​ | 20,963 | ​ | ​ | 18,794 | ​ | ​ | 1,949 | ​ | ​ | 3,022 | ​ | ​ | 11,860 | ​ | ​ | 4,397 | ​ | ​ | 64,538
Nonperforming | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 105 | ​ | ​ | — | ​ | ​ | 105
Total all other A&D | ​ | ​ | 3,553 | ​ | ​ | 20,963 | ​ | ​ | 18,794 | ​ | ​ | 1,949 | ​ | ​ | 3,022 | ​ | ​ | 11,965 | ​ | ​ | 4,397 | ​ | ​ | 64,643
Commercial and industrial: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | ​ | 9,089 | ​ | ​ | 46,258 | ​ | ​ | 63,811 | ​ | ​ | 22,538 | ​ | ​ | 17,626 | ​ | ​ | 18,710 | ​ | ​ | 84,597 | ​ | ​ | 262,629
Nonperforming | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 9,338 | ​ | ​ | 1,746 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,009 | ​ | ​ | 12,093
Total commercial and industrial | ​ | ​ | 9,089 | ​ | ​ | 46,258 | ​ | ​ | 73,149 | ​ | ​ | 24,284 | ​ | ​ | 17,626 | ​ | ​ | 18,710 | ​ | ​ | 85,606 | ​ | ​ | 274,722
Residential mortgage: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Residential mortgage - term | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | ​ | 6,398 | ​ | ​ | 52,650 | ​ | ​ | 97,246 | ​ | ​ | 86,965 | ​ | ​ | 37,673 | ​ | ​ | 155,443 | ​ | ​ | 2,143 | ​ | ​ | 438,518
Nonperforming | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 135 | ​ | ​ | — | ​ | ​ | 2,423 | ​ | ​ | 31 | ​ | ​ | 2,589
Total residential mortgage - term | ​ | ​ | 6,398 | ​ | ​ | 52,650 | ​ | ​ | 97,246 | ​ | ​ | 87,100 | ​ | ​ | 37,673 | ​ | ​ | 157,866 | ​ | ​ | 2,174 | ​ | ​ | 441,107
Residential mortgage - home equity | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | ​ | — | ​ | ​ | 965 | ​ | ​ | 4,447 | ​ | ​ | 843 | ​ | ​ | 460 | ​ | ​ | 693 | ​ | ​ | 53,125 | ​ | ​ | 60,533
Nonperforming | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 74 | ​ | ​ | — | ​ | ​ | 37 | ​ | ​ | 16 | ​ | ​ | 223 | ​ | ​ | 350
Total residential mortgage - home equity | ​ | ​ | — | ​ | ​ | 965 | ​ | ​ | 4,521 | ​ | ​ | 843 | ​ | ​ | 497 | ​ | ​ | 709 | ​ | ​ | 53,348 | ​ | ​ | 60,883
Consumer: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | ​ | 3,030 | ​ | ​ | 16,309 | ​ | ​ | 9,520 | ​ | ​ | 5,505 | ​ | ​ | 1,900 | ​ | ​ | 20,122 | ​ | ​ | 2,814 | ​ | ​ | 59,200
Nonperforming | ​ | ​ | — | ​ | ​ | 31 | ​ | ​ | 25 | ​ | ​ | 84 | ​ | ​ | — | ​ | ​ | 32 | ​ | ​ | — | ​ | ​ | 172
Total consumer | ​ | ​ | 3,030 | ​ | ​ | 16,340 | ​ | ​ | 9,545 | ​ | ​ | 5,589 | ​ | ​ | 1,900 | ​ | ​ | 20,154 | ​ | ​ | 2,814 | ​ | ​ | 59,372
Total Portfolio Loans | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | ​ | 24,618 | ​ | ​ | 206,997 | ​ | ​ | 292,364 | ​ | ​ | 174,171 | ​ | ​ | 135,318 | ​ | ​ | 407,947 | ​ | ​ | 154,785 | ​ | ​ | 1,396,200
Nonperforming | ​ | ​ | — | ​ | ​ | 31 | ​ | ​ | 9,437 | ​ | ​ | 1,965 | ​ | ​ | 37 | ​ | ​ | 3,394 | ​ | ​ | 1,263 | ​ | ​ | 16,127
Total Portfolio Loans | ​ | $ | 24,618 | ​ | $ | 207,028 | ​ | $ | 301,801 | ​ | $ | 176,136 | ​ | $ | 135,355 | ​ | $ | 411,341 | ​ | $ | 156,048 | ​ | $ | 1,412,327
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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 and Prior |  | Revolving |  | Total Portfolio Loans
December 31, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial real estate: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-owner-occupied | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | $ | 23,511 | ​ | $ | 65,878 | ​ | $ | 30,332 | ​ | $ | 54,270 | ​ | $ | 40,575 | ​ | $ | 80,639 | ​ | $ | 1,138 | ​ | $ | 296,343
Nonperforming | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 227 | ​ | ​ | — | ​ | ​ | 227
Total non-owner occupied | ​ | ​ | 23,511 | ​ | ​ | 65,878 | ​ | ​ | 30,332 | ​ | ​ | 54,270 | ​ | ​ | 40,575 | ​ | ​ | 80,866 | ​ | ​ | 1,138 | ​ | ​ | 296,570
All other CRE | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | ​ | 30,130 | ​ | ​ | 27,379 | ​ | ​ | 27,042 | ​ | ​ | 21,335 | ​ | ​ | 24,726 | ​ | ​ | 60,827 | ​ | ​ | 5,095 | ​ | ​ | 196,534
Nonperforming | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 599 | ​ | ​ | — | ​ | ​ | 599
Total all other CRE | ​ | ​ | 30,130 | ​ | ​ | 27,379 | ​ | ​ | 27,042 | ​ | ​ | 21,335 | ​ | ​ | 24,726 | ​ | ​ | 61,426 | ​ | ​ | 5,095 | ​ | ​ | 197,133
Acquisition and development: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
1-4 family residential construction | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | ​ | 13,745 | ​ | ​ | 3,446 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,033 | ​ | ​ | 18,224
Nonperforming | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Total acquisition and development | ​ | ​ | 13,745 | ​ | ​ | 3,446 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,033 | ​ | ​ | 18,224
All other A&D | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | ​ | 12,184 | ​ | ​ | 25,099 | ​ | ​ | 2,966 | ​ | ​ | 3,046 | ​ | ​ | 1,301 | ​ | ​ | 9,946 | ​ | ​ | 4,181 | ​ | ​ | 58,723
Nonperforming | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 113 | ​ | ​ | — | ​ | ​ | 113
Total all other A&D | ​ | ​ | 12,184 | ​ | ​ | 25,099 | ​ | ​ | 2,966 | ​ | ​ | 3,046 | ​ | ​ | 1,301 | ​ | ​ | 10,059 | ​ | ​ | 4,181 | ​ | ​ | 58,836
Commercial and industrial: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | ​ | 52,562 | ​ | ​ | 75,911 | ​ | ​ | 26,241 | ​ | ​ | 18,559 | ​ | ​ | 8,970 | ​ | ​ | 10,889 | ​ | ​ | 81,472 | ​ | ​ | 274,604
Nonperforming | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Total commercial and industrial | ​ | ​ | 52,562 | ​ | ​ | 75,911 | ​ | ​ | 26,241 | ​ | ​ | 18,559 | ​ | ​ | 8,970 | ​ | ​ | 10,889 | ​ | ​ | 81,472 | ​ | ​ | 274,604
Residential mortgage: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Residential mortgage - term | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | ​ | 51,625 | ​ | ​ | 94,722 | ​ | ​ | 89,629 | ​ | ​ | 38,245 | ​ | ​ | 25,375 | ​ | ​ | 133,526 | ​ | ​ | 1,603 | ​ | ​ | 434,725
Nonperforming | ​ | ​ | — | ​ | ​ | 139 | ​ | ​ | 135 | ​ | ​ | — | ​ | ​ | 98 | ​ | ​ | 2,701 | ​ | ​ | 31 | ​ | ​ | 3,104
Total residential mortgage - term | ​ | ​ | 51,625 | ​ | ​ | 94,861 | ​ | ​ | 89,764 | ​ | ​ | 38,245 | ​ | ​ | 25,473 | ​ | ​ | 136,227 | ​ | ​ | 1,634 | ​ | ​ | 437,829
Residential mortgage - home equity | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | ​ | 1,127 | ​ | ​ | 4,657 | ​ | ​ | 864 | ​ | ​ | 475 | ​ | ​ | 286 | ​ | ​ | 488 | ​ | ​ | 53,802 | ​ | ​ | 61,699
Nonperforming | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 38 | ​ | ​ | — | ​ | ​ | 17 | ​ | ​ | 288 | ​ | ​ | 343
Total residential mortgage - home equity | ​ | ​ | 1,127 | ​ | ​ | 4,657 | ​ | ​ | 864 | ​ | ​ | 513 | ​ | ​ | 286 | ​ | ​ | 505 | ​ | ​ | 54,090 | ​ | ​ | 62,042
Consumer: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | ​ | 18,304 | ​ | ​ | 10,616 | ​ | ​ | 6,405 | ​ | ​ | 2,229 | ​ | ​ | 516 | ​ | ​ | 20,367 | ​ | ​ | 2,879 | ​ | ​ | 61,316
Nonperforming | ​ | ​ | 9 | ​ | ​ | 35 | ​ | ​ | 69 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 113
Total consumer | ​ | ​ | 18,313 | ​ | ​ | 10,651 | ​ | ​ | 6,474 | ​ | ​ | 2,229 | ​ | ​ | 516 | ​ | ​ | 20,367 | ​ | ​ | 2,879 | ​ | ​ | 61,429
Total Portfolio Loans | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | ​ | 203,188 | ​ | ​ | 307,708 | ​ | ​ | 183,479 | ​ | ​ | 138,159 | ​ | ​ | 101,749 | ​ | ​ | 316,682 | ​ | ​ | 151,203 | ​ | ​ | 1,402,168
Nonperforming | ​ | ​ | 9 | ​ | ​ | 174 | ​ | ​ | 204 | ​ | ​ | 38 | ​ | ​ | 98 | ​ | ​ | 3,657 | ​ | ​ | 319 | ​ | ​ | 4,499
Total Portfolio Loans | ​ | $ | 203,197 | ​ | $ | 307,882 | ​ | $ | 183,683 | ​ | $ | 138,197 | ​ | $ | 101,847 | ​ | $ | 320,339 | ​ | $ | 151,522 | ​ | $ | 1,406,667

​

​

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Table of Contents

Note 6 – Fair Value of Financial Instruments

The Corporation complies with the guidance of ASC Topic 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements required under other accounting pronouncements. The Corporation also follows the guidance on matters relating to all financial instruments found in ASC Subtopic 825-10, Financial Instruments – Overall.

Fair value is defined as the price to sell an asset or to transfer a liability in an orderly transaction between willing market participants as of the measurement date. Fair value is best determined by values quoted through active trading markets. Active trading markets are characterized by numerous transactions of similar financial instruments between willing buyers and willing sellers. Because no active trading market exists for various types of financial instruments, many of the fair values disclosed were derived using present value discounted cash flows or other valuation techniques described below. As a result, the Corporation’s ability to actually realize these derived values cannot be assumed.

The Corporation measures fair values based on the fair value hierarchy established in ASC Paragraph 820-10-35-37. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of inputs that may be used to measure fair value under the hierarchy are as follows:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets and liabilities. This level is the most reliable source of valuation.

Level 2: Quoted prices that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability. Level 2 inputs include inputs other than quoted prices that are observable for the asset or liability (for example, interest rates and yield curves at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates). It also includes inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs). Several sources are utilized for valuing these assets, including a contracted valuation service, Standard & Poor’s evaluations and pricing services, and other valuation matrices.

Level 3: Prices or valuation techniques that require inputs that are both significant to the valuation assumptions and not readily observable in the market (i.e. supported with little or no market activity). Level 3 instruments are valued based on the best available data, some of which is internally developed, and consider risk premiums that a market participant would require.

The level established within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Transfers in and out of Level 1, 2 or 3 are recorded at fair value at the beginning of the reporting period.

Investments – The investment portfolio is classified and accounted for based on the guidance of ASC Topic 320, Investments – Debt and Equity Securities.

The fair value of investments is determined using a market approach. As of March 31, 2024, the U.S. Government agencies and treasuries, residential and commercial mortgage-backed securities, collateralized mortgage obligations, and state and political subdivisions bonds, excluding tax increment financing (“TIF”) bonds, were classified as Level 2 within the valuation hierarchy. Their fair values were determined based upon market-corroborated inputs and valuation matrices, which were obtained through third party data service providers or securities brokers through which the Corporation has historically transacted both purchases and sales of investment securities. The TIF bonds and collateralized debt obligation (“CDO”) portfolio, which consists of pooled trust preferred securities issued by banks, thrifts, and insurance companies, are classified as Level 3 within the valuation hierarchy. The CDO fair values are determined by a third party using a discounted cash flow model.

Derivative financial instruments (Cash flow hedge) – The Corporation’s open derivative positions are interest rate swap agreements. Those classified as Level 2 open derivative positions are valued using externally developed pricing models based on observable market inputs provided by a third party and validated by management. The Corporation has considered counterparty credit risk in the valuation of its interest rate swap assets.

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Table of Contents

Nonrecurring Basis –

Individually Evaluated Loans- Individual loans with borrowers experiencing financial difficulty and with a remaining principal balance of $0.1 million or more are evaluated for potential specific reserves and adjusted, if a shortfall exists, to fair value less costs to sell. Fair value is measured based on the value of the value of the underlying collateral securing the loan if repayment is expected solely from the sale of operation of the collateral or present value of estimated future cash flows discounted at the loan’s contractual interest rate if the loan is not determined to be collateral dependent.

Fair value for individually evaluated loans is determined using several methods. Generally, the fair value of real estate is determined based on appraisals by qualified licensed appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. These routine adjustments are made to adjust the value of a specific property relative to comparable properties for variations in qualities such as location, size, and income production capacity relative to the subject property of the appraisal.

Subsequent to the initial impairment date, existing individually evaluated loans are reevaluated quarterly for additional impairment and adjustments to fair value less costs to sell are made, where appropriate. For individually evaluated loans, the first state of our impairment analysis involves inspection of the property in question to affirm the condition has not deteriorated since the previous impairment analysis date. Management also engages in conversations with local real estate professionals and market participants to determine the likely marketing time and value range for the property. The second state involves an assessment of current trends in the regional market. After thorough consideration of these factors, management will order a new appraisal.

For non-individually evaluated loans, the fair value is determined by updating the present value of estimated future cash flows using the loan’s existing rate to reflect the payment schedule for the remaining life of the loan.

Equity Investment- Equity investments included in the table below are considered impaired with losses recognized on the income statement in net gains. Fair value of the equity investment was based on an independent third party valuation report where the value was determined based on the revenue multiples of like kind information technology businesses. These assets are included as Level 3 fair values based upon the lowest level of input that is significant to the fair value measurements.

Other real estate owned – Other real estate owned included in the table below are considered impaired with specific write-downs. Fair value of other real estate owned was based on independent third party appraisals of the properties. These values were determined based on the sales prices of similar properties in the approximate geographic area. These assets are included as Level 3 fair values based upon the lowest level of input that is significant to the fair value measurements.

​

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For assets measured at fair value on a recurring and non-recurring basis, the fair value measurements by level within the fair value hierarchy used at March 31, 2024 and December 31, 2023 were as follows:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Fair Value Measurements at March 31, 2024 Using
​ | ​ | ​ | ​ | Quoted | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Prices in | ​ | Significant | ​ | ​ | ​
​ | ​ | Assets | ​ | Active Markets | ​ | Other | ​ | Significant
​ | ​ | Measured at | ​ | for Identical | ​ | Observable | ​ | Unobservable
​ | ​ | Fair Value | ​ | Assets | ​ | Inputs | ​ | Inputs
(in thousands) |  | 03/31/24 |  | (Level 1) |  | (Level 2) |  | (Level 3)
Recurring: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Investment securities available-for-sale: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. government agencies | ​ | $ | 6,019 | ​ | ​ | ​ | ​ | $ | 6,019 | ​ | ​ | ​
Residential mortgage-backed agencies | ​ | $ | 19,854 | ​ | ​ | ​ | ​ | $ | 19,854 | ​ | ​ | ​
Commercial mortgage-backed agencies | ​ | $ | 27,916 | ​ | ​ | ​ | ​ | $ | 27,916 | ​ | ​ | ​
Collateralized mortgage obligations | ​ | $ | 15,889 | ​ | ​ | ​ | ​ | $ | 15,889 | ​ | ​ | ​
Obligations of states and political subdivisions | ​ | $ | 10,253 | ​ | ​ | ​ | ​ | $ | 10,253 | ​ | ​ | ​
Corporate bonds | ​ | $ | 763 | ​ | ​ | ​ | ​ | $ | 763 | ​ | ​ | ​
Collateralized debt obligations | ​ | $ | 14,886 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 14,886
Financial derivatives | ​ | $ | 829 | ​ | ​ | ​ | ​ | $ | 829 | ​ | ​ | ​
Non-recurring: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Individually evaluated loans, net | ​ | $ | — | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | —
Equity Investment | ​ | $ | 3,116 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 3,116
Other real estate owned | ​ | $ | 210 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 210

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Fair Value Measurements at December 31, 2023 Using
​ | ​ | ​ | ​ | Quoted | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Prices in | ​ | Significant | ​ | ​
​ | ​ | Assets/(liabilities) | ​ | Active Markets | ​ | Other | ​ | Significant
​ | ​ | Measured at | ​ | for Identical | ​ | Observable | ​ | Unobservable
​ | ​ | Fair Value | ​ | Assets | ​ | Inputs | ​ | Inputs
(in thousands) |  | 12/31/23 |  | (Level 1) |  | (Level 2) |  | (Level 3)
Recurring: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Investment securities available-for-sale: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. government agencies | ​ | $ | 6,034 | ​ | ​ | ​ | ​ | $ | 6,034 | ​ | ​ | ​
Residential mortgage-backed agencies | ​ | $ | 20,563 | ​ | ​ | ​ | ​ | $ | 20,563 | ​ | ​ | ​
Commercial mortgage-backed agencies | ​ | $ | 28,417 | ​ | ​ | ​ | ​ | $ | 28,417 | ​ | ​ | ​
Collateralized mortgage obligations | ​ | $ | 16,356 | ​ | ​ | ​ | ​ | $ | 16,356 | ​ | ​ | ​
Obligations of states and political subdivisions | ​ | $ | 10,312 | ​ | ​ | ​ | ​ | $ | 10,312 | ​ | ​ | ​
Corporate bonds | ​ | $ | 778 | ​ | ​ | ​ | ​ | ​ | 778 | ​ | ​ | ​
Collateralized debt obligations | ​ | $ | 14,709 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 14,709
Financial derivatives | ​ | $ | 756 | ​ | ​ | ​ | ​ | $ | 756 | ​ | ​ | ​
Non-recurring: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Individually evaluated loans, net | ​ | $ | — | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | —
Equity investment | ​ | $ | 3,087 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 3,087
Other real estate owned | ​ | $ | 4,443 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 4,443

​

Individually evaluated loans had a net carrying amount of $14.9 million and $3.0 million with no valuation allowance at March 31, 2024 and December 31, 2023, respectively.

​

There were no transfers of assets between any of the fair value hierarchy for the three month periods ended March 31, 2024 or 2023.

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For Level 3 assets and liabilities measured at fair value on a recurring and non-recurring basis as of March 31, 2024 and December 31, 2023, the significant unobservable inputs used in the fair value measurements were as follows:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | Fair Value at March 31, 2024 |  | Valuation Technique |  | Significant Unobservable Inputs |  | Significant Unobservable Input Value
Recurring: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Investment Securities – available for sale -CDO | ​ | $ | 14,886 | ​ | Discounted Cash Flow | ​ | Discount Margin | ​ | Range of low 500 to mid 500
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-recurring: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Equity Investment | ​ | $ | 3,116 | ​ | Market Method | ​ | Revenue Multiples | ​ | 2.8x
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other Real Estate Owned | ​ | $ | 210 | ​ | Market Comparable Properties | ​ | Marketability Discount | ​ | 5.00%
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | Fair Value at December 31, 2023 |  | Valuation Technique |  | Significant Unobservable Inputs |  | Significant Unobservable Input Value
Recurring: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Investment Securities – available for sale -CDO | ​ | $ | 14,709 | ​ | Discounted Cash Flow | ​ | Discount Margin | ​ | Range of low to mid 500 and low to mid 600
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-recurring: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Equity Investment | ​ | $ | 3,087 | ​ | Market Method | ​ | Revenue Multiples | ​ | 2.8x
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other Real Estate | ​ | $ | 4,443 | ​ | Market Comparable Properties | ​ | Marketability Discount | ​ | 5.0% to 15.0% (weighted avg 5.9%)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

​

| (1) | Range would include discounts taken since appraisal and estimated values

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The following tables show a reconciliation of the beginning and ending balances for fair valued assets measured on a recurring basis using Level 3 significant unobservable inputs for the three-month periods ended March 31, 2024 and 2023:

​

​ | ​ | ​ | ​
​ | ​ | Fair Value Measurements
​ | ​ | Using Significant Unobservable Inputs
​ | ​ | (Level 3)
​ | ​ | Investment Securities
(in thousands) |  | Available for Sale
Beginning balance January 1, 2024 | ​ | $ | 14,709
Total losses realized/unrealized: | ​ | ​ | ​
Included in other comprehensive loss | ​ | ​ | 177
Ending balance March 31, 2024 | ​ | $ | 14,886

​

​ | ​ | ​ | ​
​ | ​ | Fair Value Measurements
​ | ​ | Using Significant Unobservable Inputs
​ | ​ | (Level 3)
​ | ​ | Investment Securities
(in thousands) |  | Available for Sale
Beginning balance January 1, 2023 | ​ | $ | 15,871
Total losses realized/unrealized: | ​ | ​ | ​
Included in other comprehensive loss | ​ | ​ | (1,757)
Ending balance March 31, 2023 | ​ | $ | 14,114

​

There were no gains or losses included in earnings attributable to the change in realized/unrealized gains or losses related to the assets for the three-month periods ended March 31, 2024 or 2023.

The disclosed fair values may vary significantly between institutions based on the estimates and assumptions used in the various valuation methodologies. The derived fair values are subjective in nature and involve uncertainties and significant judgment. Therefore, they cannot be determined with precision. Changes in the assumptions could significantly impact the derived estimates of fair value. Disclosure of non-financial assets such as buildings, as well as certain financial instruments such as leases is not required. Accordingly, the aggregate fair values presented do not represent the underlying value of the Corporation.

The following tables present fair value information about financial instruments, whether or not recognized in the Consolidated Statement of Financial Condition, for which it is practicable to estimate that value. The actual carrying amounts and estimated fair values of the Corporation’s financial instruments that are included in the Consolidated Statement of Financial Condition are as follows:

​

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​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | March 31, 2024 | ​ | Fair Value Measurements
​ | ​ | ​ | ​ | ​ | ​ | Quoted | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | Prices in | ​ | Significant | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | Active Markets | ​ | Other | ​ | Significant
​ | ​ | ​ | ​ | ​ | ​ | for Identical | ​ | Observable | ​ | Unobservable
​ | ​ | Carrying | ​ | Fair | ​ | Assets | ​ | Inputs | ​ | Inputs
(in thousands) |  | Amount |  | Value |  | (Level 1) |  | (Level 2) |  | (Level 3)
Financial Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and due from banks | ​ | $ | 85,578 | ​ | $ | 85,578 | ​ | $ | 85,578 | ​ | ​ | ​ | ​ | ​ | ​
Interest bearing deposits in banks | ​ | ​ | 1,354 | ​ | ​ | 1,354 | ​ | ​ | 1,354 | ​ | ​ | ​ | ​ | ​ | ​
Investment securities - AFS | ​ | ​ | 95,580 | ​ | ​ | 95,580 | ​ | ​ | ​ | ​ | $ | 80,694 | ​ | $ | 14,886
Investment securities - HTM | ​ | ​ | 183,136 | ​ | ​ | 152,225 | ​ | ​ | ​ | ​ | ​ | 150,370 | ​ | ​ | 1,855
Restricted bank stock | ​ | ​ | 3,390 | ​ | ​ | N/A | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Loans, net | ​ | ​ | 1,394,031 | ​ | ​ | 1,314,303 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 1,314,303
Financial derivatives | ​ | ​ | 829 | ​ | ​ | 829 | ​ | ​ | ​ | ​ | ​ | 829 | ​ | ​ | ​
Accrued interest receivable | ​ | ​ | 7,762 | ​ | ​ | 7,762 | ​ | ​ | ​ | ​ | ​ | 744 | ​ | ​ | 7,018
Financial Liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Deposits - non-maturity | ​ | ​ | 1,382,272 | ​ | ​ | 1,382,272 | ​ | ​ | ​ | ​ | ​ | 1,382,272 | ​ | ​ | ​
Deposits - time deposits | ​ | ​ | 181,181 | ​ | ​ | 174,802 | ​ | ​ | ​ | ​ | ​ | 174,802 | ​ | ​ | ​
Short-term borrowed funds | ​ | ​ | 79,494 | ​ | ​ | 79,494 | ​ | ​ | ​ | ​ | ​ | 79,494 | ​ | ​ | ​
Long-term borrowed funds | ​ | ​ | 70,929 | ​ | ​ | 70,932 | ​ | ​ | ​ | ​ | ​ | 70,932 | ​ | ​ | ​
Accrued interest payable | ​ | ​ | 919 | ​ | ​ | 919 | ​ | ​ | ​ | ​ | ​ | 919 | ​ | ​ | ​

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2023 | ​ | Fair Value Measurements
​ | ​ | ​ | ​ | ​ | ​ | Quoted | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | Prices in | ​ | Significant | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | Active Markets | ​ | Other | ​ | Significant
​ | ​ | ​ | ​ | ​ | ​ | for Identical | ​ | Observable | ​ | Unobservable
​ | ​ | Carrying | ​ | Fair | ​ | Assets | ​ | Inputs | ​ | Inputs
(in thousands) |  | Amount |  | Value |  | (Level 1) |  | (Level 2) |  | (Level 3)
Financial Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and due from banks | ​ | $ | 48,343 | ​ | $ | 48,343 | ​ | $ | 48,343 | ​ | ​ | ​ | ​ | ​ | ​
Interest bearing deposits in banks | ​ | ​ | 1,410 | ​ | ​ | 1,410 | ​ | ​ | 1,410 | ​ | ​ | ​ | ​ | ​ | ​
Investment securities - AFS | ​ | ​ | 97,169 | ​ | ​ | 97,169 | ​ | ​ | ​ | ​ | $ | 82,460 | ​ | $ | 14,709
Investment securities - HTM | ​ | ​ | 214,297 | ​ | ​ | 184,415 | ​ | ​ | ​ | ​ | ​ | 182,510 | ​ | ​ | 1,905
Restricted bank stock | ​ | ​ | 5,250 | ​ | ​ | N/A | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Loans, net | ​ | ​ | 1,388,847 | ​ | ​ | 1,319,456 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 1,319,456
Financial derivative | ​ | ​ | 778 | ​ | ​ | 778 | ​ | ​ | ​ | ​ | ​ | 778 | ​ | ​ | —
Accrued interest receivable | ​ | ​ | 7,487 | ​ | ​ | 7,487 | ​ | ​ | ​ | ​ | ​ | 828 | ​ | ​ | 6,659
Financial Liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Deposits - non-maturity | ​ | ​ | 1,355,444 | ​ | ​ | 1,355,444 | ​ | ​ | ​ | ​ | ​ | 1,355,444 | ​ | ​ | ​
Deposits - time deposits | ​ | ​ | 195,533 | ​ | ​ | 193,337 | ​ | ​ | ​ | ​ | ​ | 193,337 | ​ | ​ | ​
Short-term borrowed funds | ​ | ​ | 45,418 | ​ | ​ | 45,418 | ​ | ​ | ​ | ​ | ​ | 45,418 | ​ | ​ | ​
Long-term borrowed funds | ​ | ​ | 110,929 | ​ | ​ | 110,809 | ​ | ​ | ​ | ​ | ​ | 110,809 | ​ | ​ | ​
Accrued interest payable | ​ | ​ | 612 | ​ | ​ | 612 | ​ | ​ | ​ | ​ | ​ | 612 | ​ | ​ | ​

​

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Note 7 – Accumulated Other Comprehensive Loss

The following table presents the changes in each component of accumulated other comprehensive loss for the three-month periods ended March 31, 2024 and 2023:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Investment | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | securities- | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | with credit | ​ | Investment | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | related | ​ | securities- | ​ | Investment | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | impairment | ​ | all other | ​ | securities- | ​ | Cash Flow | ​ | Pension | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | AFS |  | AFS |  | HTM |  | Hedge |  | Plan |  | SERP |  | Total
Accumulated OCL, net: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance - January 1, 2024 | ​ | ​ | (2,482) | ​ | ​ | (13,217) | ​ | ​ | (5,201) | ​ | ​ | 569 | ​ | ​ | (14,263) | ​ | ​ | (1,233) | ​ | ​ | (35,827)
Other comprehensive income/(loss) before reclassifications | ​ | ​ | 155 | ​ | ​ | (459) | ​ | ​ | — | ​ | ​ | 54 | ​ | ​ | 1,096 | ​ | ​ | — | ​ | ​ | 846
Amounts reclassified from accumulated other comprehensive income | ​ | ​ | (37) | ​ | ​ | — | ​ | ​ | 118 | ​ | ​ | — | ​ | ​ | 149 | ​ | ​ | 29 | ​ | ​ | 259
Balance - March 31, 2024 | ​ | $ | (2,364) | ​ | $ | (13,676) | ​ | $ | (5,083) | ​ | $ | 623 | ​ | $ | (13,018) | ​ | $ | (1,204) | ​ | $ | (34,722)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance - January 1, 2023 | ​ | $ | (1,711) | ​ | $ | (16,380) | ​ | $ | (5,703) | ​ | $ | 797 | ​ | $ | (16,603) | ​ | $ | 574 | ​ | $ | (39,026)
Other comprehensive (loss)/income before reclassifications | ​ | ​ | (1,180) | ​ | ​ | 985 | ​ | ​ | — | ​ | ​ | (138) | ​ | ​ | 123 | ​ | ​ | — | ​ | ​ | (210)
Amounts reclassified from accumulated other comprehensive loss | ​ | ​ | (37) | ​ | ​ | — | ​ | ​ | 133 | ​ | ​ | — | ​ | ​ | 184 | ​ | ​ | (1) | ​ | ​ | 279
Balance - March 31, 2023 | ​ | $ | (2,928) | ​ | $ | (15,395) | ​ | $ | (5,570) | ​ | $ | 659 | ​ | $ | (16,296) | ​ | $ | 573 | ​ | $ | (38,957)

​

​

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The following tables present the components of other comprehensive income for the three-month periods ended March 31, 2024 and 2023:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Before | ​ | Tax | ​ | ​
Components of Other Comprehensive Income | ​ | Tax | ​ | (Expense) | ​ | ​
(in thousands) |  | Amount |  | Benefit |  | Net
For the three months ended March 31, 2024 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Available for sale (AFS) securities with credit related impairment: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Unrealized holding gains | ​ | $ | 210 | ​ | $ | (55) | ​ | $ | 155
Less: accretable yield recognized in income | ​ | ​ | 50 | ​ | ​ | (13) | ​ | ​ | 37
Net unrealized gains on investments with credit related impairment | ​ | ​ | 160 | ​ | ​ | (42) | ​ | ​ | 118
Available for sale securities – all other: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Unrealized holding losses | ​ | ​ | (623) | ​ | ​ | 164 | ​ | ​ | (459)
Held to maturity securities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Unrealized holding gains on securities transferred to held to maturity | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Less: amortization recognized in income | ​ | ​ | (160) | ​ | ​ | 42 | ​ | ​ | (118)
Net unrealized gains on HTM securities | ​ | ​ | 160 | ​ | ​ | (42) | ​ | ​ | 118
Cash flow hedges: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Unrealized holding gains | ​ | ​ | 73 | ​ | ​ | (19) | ​ | ​ | 54
Pension Plan: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Unrealized net actuarial gain | ​ | ​ | 1,489 | ​ | ​ | (393) | ​ | ​ | 1,096
Less: amortization of unrecognized loss | ​ | ​ | (203) | ​ | ​ | 54 | ​ | ​ | (149)
Net pension plan liability adjustment | ​ | ​ | 1,692 | ​ | ​ | (447) | ​ | ​ | 1,245
SERP: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Unrealized net actuarial gain | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Less: amortization of unrecognized loss | ​ | ​ | (39) | ​ | ​ | 10 | ​ | ​ | (29)
Net SERP liability adjustment | ​ | ​ | 39 | ​ | ​ | (10) | ​ | ​ | 29
Other comprehensive income | ​ | $ | 1,501 | ​ | $ | (396) | ​ | $ | 1,105

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Before | ​ | Tax | ​ | ​
Components of Other Comprehensive Income | ​ | Tax | ​ | (Expense) | ​ | ​
(in thousands) |  | Amount |  | Benefit |  | Net
For the three months ended March 31, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Available for sale (AFS) securities with credit related impairment: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Unrealized holding losses | ​ | $ | (1,606) | ​ | $ | 426 | ​ | $ | (1,180)
Less: accretable yield recognized in income | ​ | ​ | 50 | ​ | ​ | (13) | ​ | ​ | 37
Net unrealized losses on investments with credit related impairment | ​ | ​ | (1,656) | ​ | ​ | 439 | ​ | ​ | (1,217)
Available for sale securities – all other: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Unrealized holding gains | ​ | ​ | 1,340 | ​ | ​ | (355) | ​ | ​ | 985
Net unrealized gains on all other AFS securities | ​ | ​ | 1,340 | ​ | ​ | (355) | ​ | ​ | 985
Held to maturity securities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Unrealized holding gains on securities transferred to held to maturity | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Less: amortization recognized in income | ​ | ​ | (181) | ​ | ​ | 48 | ​ | ​ | (133)
Net unrealized gains on HTM securities | ​ | ​ | 181 | ​ | ​ | (48) | ​ | ​ | 133
Cash flow hedges: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Unrealized holding loss | ​ | ​ | (188) | ​ | ​ | 50 | ​ | ​ | (138)
Pension Plan: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Unrealized net actuarial gain | ​ | ​ | 168 | ​ | ​ | (45) | ​ | ​ | 123
Less: amortization of unrecognized loss | ​ | ​ | (250) | ​ | ​ | 66 | ​ | ​ | (184)
Net pension plan liability adjustment | ​ | ​ | 418 | ​ | ​ | (111) | ​ | ​ | 307
SERP: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Unrealized net actuarial gain | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Less: amortization of unrecognized gain | ​ | ​ | 2 | ​ | ​ | (1) | ​ | ​ | 1
Net SERP liability adjustment | ​ | ​ | (2) | ​ | ​ | 1 | ​ | ​ | (1)
Other comprehensive income | ​ | $ | 93 | ​ | $ | (24) | ​ | $ | 69

​

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

​

The following table presents the details of amounts reclassified from accumulated other comprehensive income for the three-month periods ended March 31, 2024 and 2023:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Amounts Reclassified from | ​ | Three Months Ended | ​ | ​
Accumulated Other Comprehensive Loss | ​ | March 31, | ​ | Affected Line Item in the Statement
(in thousands) |  | 2024 |  | 2023 |  | Where Net Income is Presented
Net unrealized gains on available for sale investment securities with credit related impairment: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Accretable yield | ​ | $ | 50 | ​ | $ | 50 | ​ | Interest income on taxable investment securities
Taxes | ​ | ​ | (13) | ​ | ​ | (13) | ​ | Credit for income tax expense
​ | ​ | $ | 37 | ​ | $ | 37 | ​ | Net of tax
Net unrealized losses on held to maturity securities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Amortization | ​ | $ | (160) | ​ | $ | (181) | ​ | Interest income on taxable investment securities
Taxes | ​ | ​ | 42 | ​ | ​ | 48 | ​ | Provision for income tax expense
​ | ​ | $ | (118) | ​ | $ | (133) | ​ | Net of tax
Net pension plan liability adjustment: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Amortization of unrecognized loss | ​ | $ | (203) | ​ | $ | (250) | ​ | Other Expense
Taxes | ​ | ​ | 54 | ​ | ​ | 66 | ​ | Provision for income tax expense
​ | ​ | $ | (149) | ​ | $ | (184) | ​ | Net of tax
Net SERP liability adjustment: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Amortization of unrecognized (loss)/gain | ​ | $ | (39) | ​ | $ | 2 | ​ | Other Expense
Taxes | ​ | ​ | 10 | ​ | ​ | (1) | ​ | (Credit)/provision for income tax expense
​ | ​ | $ | (29) | ​ | $ | 1 | ​ | Net of tax
Total reclassifications for the period | ​ | $ | (259) | ​ | $ | (279) | ​ | Net of tax

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Note 8 - Equity Compensation Plan Information

​

At the 2018 Annual Meeting of Shareholders, First United Corporation’s shareholders approved the First United Corporation 2018 Equity Compensation Plan (the “Equity Plan”) which authorizes the issuance of up to 325,000 shares of common stock to employees, directors and qualifying consultants pursuant to stock options, stock appreciation rights, stock awards, dividend equivalents, and other stock-based awards.

The Corporation complies with the provisions of ASC Topic 718, Compensation-Stock Compensation, in measuring and disclosing stock compensation cost. The measurement objective in ASC Paragraph 718-10-30-6 requires public companies to measure the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. The cost is recognized in expense over the period in which an employee is required to provide service in exchange for the award (the vesting period).

Pursuant to First United Corporation’s director compensation policy, each director receives an annual retainer of 1,000 shares of First United Corporation common stock, plus $15,000 to be paid, at the director’s election, in cash or additional shares of common stock. In May 2023, a total of 16,931 fully vested shares of common stock were issued to directors, which had a grant date fair value of $13.23 per share. In January 2023, a total of 333 fully vested shares of common stock were issued to a new director, which had a grant date fair value of $19.36 per share. In October 2023, a toal of 852 fully vested shares of common stock were issued to a new director which had a grant date fair value of $16.26 per share. Director stock compensation expense was $61,937 for the three months ended March 31, 2024 and $75,501 for the three months ended March 31, 2023.

Employee stock compensation was $5,058 and $2,832 for the three-month periods ended March 31, 2024 and 2023, respectively.

Restricted Stock Units

On March 26, 2020, pursuant to the Corporation’s Long Term Incentive Plan (the "LTIP"), which is a sub-plan of the Equity Plan, the Compensation Committee of First United Corporation’s Board of Directors (the "Compensation Committee") granted RSUs to the Corporation’s principal executive officer, its principal financial officer, and certain of its other executive officers. An RSU contemplates the issuance of shares of common stock of First United Corporation if and when the RSU vests.

The RSUs granted to each of the foregoing officers consist of (i) a performance vesting award for a three year performance period and (ii) a time-vesting award that will vest ratably over a three year period. Target performance levels were set based on the annual budget which supports the Corporation’s long-term objective of achieving high performance as compared to peers. Threshold performance is the minimum level of acceptable performance as defined by the Compensation Committee and maximum performance represented a level potentially achievable under ideal circumstances. Achievement of the threshold performance level would result in each executive participant earning a payout at 50% of his or her respective target award opportunity. Achievement of the target performance level would result in the executive participant earning the target award and achievement at or above the maximum performance level would result in the executive participant earning 150% of the target opportunity. Actual results for any goal that falls between performance levels would be interpolated to calculate a proportionate award.

To receive any shares under an RSU, a grantee must be employed by the Corporation or one of its subsidiaries on the applicable vesting date, except that a grantee whose employment terminates prior to such vesting date due to death, disability or retirement will be entitled to a pro-rated portion of the shares subject to the RSUs, assuming that, in the case of performance-vesting RSUs, the performance goals had been met at their "target" levels.

In May 2021, RSUs relating to 7,389 performance vesting shares and 3,693 time vesting shares (target level) for plan year 2021 were granted, which had a grant date fair market value of $17.93 per share of common stock underlying each RSU. The performance period for the performance-vesting RSUs was the three-year period ending December 31, 2023. On March 9, 2024, it was determined that 7,389 performance-vesting RSUs failed to vest. The time-vesting RSUs will vest ratably over a three year period beginning on May 5, 2022. On May 5, 2022, 1,230 shares of the 3,693 time-vesting RSUs were issued to participants. On May 5, 2023, 1,230 additional shares of the 3,693 time-vesting RSUs were issued to participants. Stock compensation expense was

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$5,524 and $16,571 for the three-month periods ended March 31, 2024 and 2023, respectively. Unrecognized compensation expense as of March 31, 2024 related to unvested units was $1,841.

In March 2022, RSUs relating to 8,096 performance vesting shares and 6,238 time vesting shares (target level) for plan year 2022 were granted, which had a grant date fair market value of $21.88 per share of common stock underlying each RSU. The performance period for the performance-vesting RSUs is the three year period ending December 31, 2024. The time-vesting RSUs will vest ratably over a three year period beginning on March 9, 2023. On March 9, 2023 2,079 shares of the 6,238 time-vesting RSUs were issued to participants. On March 9, 2024 2,079 additional shares of the 6,238 time-vesting RSUs were issued to participants. Stock compensation expense was $26,145 for each of the three-month periods ended March 31, 2024 and 2023. Unrecognized compensation expense as of March 31, 2024 related to unvested units was $104,581.

In March 2023, RSUs relating to 10,214 performance vesting shares and 7,920 time vesting shares (target level) for plan year 2023 were granted, which had a grant date fair market value of $18.25 per share of common stock underlying each RSU. The performance period for the performance-vesting RSUs is the three year period ending December 31, 2025. The time-vesting RSUs will vest ratably over a three year period beginning on March 15, 2024. On March 15, 2024 2,639 shares of the 7,920 time-vesting RSUs were issued to participants. Stock compensation expense was $27,585 for the three month period ended March 31, 2024. Unrecognized compensation expense as of March 31, 2024 related to unvested units was $220,679.

No new RSUs were granted during the three months ended March 31, 2024.

Note 9– Derivative Financial Instruments

As a part of managing interest rate risk, the Corporation entered into interest rate swap agreements to modify the re-pricing characteristics of certain interest-bearing liabilities. The Corporation has designated its interest rate swap agreements as cash flow hedges under the guidance of ASC Subtopic 815-30, Derivatives and Hedging – Cash Flow Hedges. Cash flow hedges have the effective portion of changes in the fair value of the derivative, net of taxes, recorded in net accumulated other comprehensive income.

In March 2016, the Corporation entered into four interest rate swap contracts totaling $30.0 million notional amount, hedging future cash flows associated with floating rate trust preferred debt. As of March 31, 2024, $15.0 million notional amount remains. The interest rate swap creates an effective fixed interest rate of 4.6450% on the $15.0 million notional amount of the Corporation’s junior subordination debt until the interest rate swap’s maturity in March 2026. The fair value of the interest rate swap contracts was $0.8 million at March 31, 2024 and December 31, 2023.

For the three months ended March 31, 2024, the Corporation recorded an increase in the value of the derivatives of $73 thousand and the related deferred tax of $19 thousand in net accumulated other comprehensive loss to reflect the effective portion of cash flow hedges. ASC Subtopic 815-30 requires the net accumulated other comprehensive loss to be reclassified to earnings if the hedge becomes ineffective or is terminated. There was no hedge ineffectiveness recorded for the three month period ended March 31, 2024. The Corporation does not expect any material losses relating to these hedges to be reclassified into earnings within the next 12 months.

Interest rate swap agreements are entered into with counterparties that meet established credit standards and the Corporation believes that the credit risk inherent in these contracts is not significant as of March 31, 2024.

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The table below discloses the impact of derivative financial instruments on the Corporation’s Consolidated Financial Statements for the three-month periods ended March 31, 2024 and 2023.

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Derivative in Cash Flow Hedging Relationships | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Amount of gain or
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (loss) recognized in
​ | ​ | Amount of gain or | ​ | Amount of gain or | ​ | income or derivative
​ | ​ | (loss) recognized in | ​ | (loss) reclassified from | ​ | (ineffective portion
​ | ​ | OCI on derivative | ​ | accumulated OCI into | ​ | and amount excluded
​ | ​ | (effective portion), | ​ | income (effective | ​ | from effectiveness
(in thousands) |  | net of tax |  | portion) (a) |  | testing) (b)
Interest rate contracts: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Three months ended: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
March 31, 2024 | ​ | $ | 54 | ​ | $ | — | ​ | $ | —
March 31, 2023 | ​ | ​ | (138) | ​ | ​ | — | ​ | ​ | —

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Notes:

| (a) | Reported as interest expense

| (b) | Reported as other income

​

​

​

Note 10 – Regulatory Capital Requirements

The following table presents our capital ratios as of March 31, 2024 and December 31, 2023.

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | March 31, 2024 |  | December 31, 2023 |  | Required for Capital Adequacy Purposes |  | Required to be Well Capitalized |
Total Capital (to risk-weighted assets) | ​ | 14.17 | % | 14.05 | % | 8.00 | % | 10.00 | %
Tier 1 Capital (to risk-weighted assets) | ​ | 12.92 | % | 12.81 | % | 6.00 | % | 8.00 | %
Common Equity Tier 1 Capital (to risk-weighted assets) | ​ | 12.92 | % | 12.81 | % | 4.50 | % | 6.50 | %
Tier 1 Capital (to average assets) | ​ | 10.08 | % | 9.92 | % | 4.00 | % | 5.00 | %

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As of March 31, 2024 and December 31, 2023, the Bank was considered “well capitalized” under the regulatory framework for prompt corrective action.

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Note 11 – Deposits

The following table summarizes deposits at March 31, 2024 and December 31, 2023.

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | March 31, 2024 |  | December 31, 2023
​ | ​ | ​ | Balance | ​ | Percent | ​ | ​ | Balance | ​ | Percent
Non-Interest-bearing deposits: | ​ | $ | 422,759 |  | 27% | ​ | $ | 427,670 | ​ | 28%
Interest-bearing deposits: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Demand | ​ | ​ | 377,723 | ​ | 24% | ​ | ​ | 350,860 | ​ | 22%
Money Market | ​ | ​ | 392,933 | ​ | 25% | ​ | ​ | 385,649 | ​ | 25%
Savings deposits | ​ | ​ | 188,857 | ​ | 12% | ​ | ​ | 191,265 | ​ | 12%
Time deposits- retail | ​ | ​ | 151,181 | ​ | 10% | ​ | ​ | 165,533 | ​ | 11%
Time deposits- brokered | ​ | ​ | 30,000 | ​ | 2% | ​ | ​ | 30,000 | ​ | 2%
Total Deposits | ​ | $ | 1,563,453 | ​ | 100% | ​ | $ | 1,550,977 | ​ | 100.0%

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Note 12 – Borrowed Funds

The following is a summary of borrowings:

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) | ​ | Three Months Ended March 31, 2024 | ​ | Year Ended December 31, 2023
Securities sold under agreements to repurchase: | ​ | ​ | ​ | ​ | ​ | ​
Outstanding at end of period | ​ | $ | 39,494 | ​ | $ | 45,418
Weighted average interest rate at end of period | ​ | ​ | 0.27% | ​ | ​ | 0.27%
Maximum amount outstanding as of any month end | ​ | $ | 44,415 | ​ | $ | 59,777
Average amount outstanding | ​ | $ | 41,422 | ​ | $ | 50,498
Approximate weighted average rate during the period | ​ | ​ | 0.27% | ​ | ​ | 0.24%
​ | ​ | ​ | ​ | ​ | ​ | ​
Bank Term Funding Program, fixed rate of 4.87% at March 31, 2024 | ​ | $ | 40,000 | ​ | $ | —
FHLB advances, bearing fixed interest rate of 4.53% at March 31, 2024 and rates ranging from 4.53% to 4.69% at December 31, 2023. | ​ | $ | 40,000 | ​ | $ | 80,000
Junior subordinated debt, bearing variable interest rate of 8.34% at March 31, 2024 and 8.39% at December 31, 2023 | ​ | ​ | 30,929 | ​ | ​ | 30,929
Total borrowings outstanding | ​ | $ | 150,423 | ​ | $ | 156,347

​

Short-term borrowings increased by $34.1 million, as the Bank borrowed $40.0 million from the Bank Term Funding Program of the Board of Governors of the Federal Reserve System in January 2024, which was partially offset by a decrease of $5.9 million in other short-term borrowings due to fluctuations in municipal customer balances in overnight investment sweep products.

​

At March 31, 2024, the repurchase agreements were secured by $52.7 million in investment securities issued by government related agencies. A minimum of 102% of fair value is pledged against account balances.

​

Long-term borrowings decreased by $40.0 million as a $40.0 million advance from the Federal Home Loan Bank matured in March 2024 and was fully repaid.

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Note 13 – Segment Reporting

Currently, the Corporation conducts business in two operating segments: (i) Community Banking and (ii) Trust and Investment Services. The accounting policies of the segments are the same as those described in the summary of significant accounting policies provided earlier in this report.

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Business activity for the operating segments are as follows:

Community Banking: The Community Banking segment is conducted through the Bank and involves delivering a broad range of financial products and services, including various loan and deposit products, to consumer, business, and not-for-profit customers. Parent company income and assets are included in the Community Banking segment, as the majority of parent company functions are related to this segment. Major revenue sources include net interest income, gains on sales of mortgage loans, and service charges on deposit accounts. Expenses include personnel, occupancy, marketing, equipment, and other expenses. Non-cash charges other than depreciation of fixed assets were immaterial for the three months ended March 31, 2024 and 2023.

Trust and Investment Services: The Trust and Investment Services segment is conducted through the Bank and offers corporate trustee services, trust and estate administration, IRA administration and custody services. Revenues for this segment is generated from administration, service and custody fees, as well as management fees that are derived from Assets Under Management. Expenses include personnel, occupancy, marketing, equipment, and other expenses. Non-cash charges associated with amortization of intangibles were approximately $52,000 for both of the three-month periods ended March 31, 2024 and 2023.

Information for the operating segments for the three month periods ended March 31, 2024 and 2023 are presented in the following tables:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Three Months Ended
​ | ​ | ​ | ​ | March 31, 2024
​ | ​ | ​ | ​ | ​ | ​ | Trust and | ​ | ​
​ | ​ | ​ | ​ | Community | ​ | Investment | ​ | ​
(in thousands) | ​ | ​ | ​ | Banking | ​ | Services | ​ | Total
Interest income | ​ | ​ | $ | 21,898 | $ | - | $ | 21,898
Interest expense | ​ | ​ | ​ | 8,086 | ​ | - | ​ | 8,086
Credit loss expense | ​ | ​ | ​ | 946 | ​ | - | ​ | 946
Non-interest income | ​ | ​ | ​ | 2,191 | ​ | 2,684 | ​ | 4,875
Non-interest expense | ​ | ​ | ​ | 11,594 | ​ | 1,287 | ​ | 12,881
Income before income taxes and intercompany fees | ​ | ​ | ​ | 3,463 | ​ | 1,397 | ​ | 4,860
Intercompany management fee income (expense) | ​ | ​ | ​ | 3 | ​ | (3) | ​ | -
Income before income taxes | ​ | ​ | ​ | 3,466 | ​ | 1,394 | ​ | 4,860
Income tax expense | ​ | ​ | ​ | 869 | ​ | 293 | ​ | 1,162
Net income | ​ | ​ | $ | 2,597 | $ | 1,101 | $ | 3,698
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Three Months Ended
​ | ​ | ​ | ​ | March 31, 2023
​ | ​ | ​ | ​ | ​ | ​ | Trust and | ​ | ​
​ | ​ | ​ | ​ | Community | ​ | Investment | ​ | ​
(in thousands) | ​ | ​ | ​ | Banking | ​ | Services | ​ | Total
Interest income | ​ | ​ | $ | 17,829 | $ | - | $ | 17,829
Interest expense | ​ | ​ | ​ | 3,311 | ​ | - | ​ | 3,311
Credit loss expense | ​ | ​ | ​ | 543 | ​ | - | ​ | 543
Non-interest income | ​ | ​ | ​ | 2,125 | ​ | 2,268 | ​ | 4,393
Non-interest expense | ​ | ​ | ​ | 11,385 | ​ | 1,253 | ​ | 12,638
Income before income taxes and intercompany fees | ​ | ​ | ​ | 4,715 | ​ | 1,015 | ​ | 5,730
Intercompany management fee income (expense) | ​ | ​ | ​ | 3 | ​ | (3) | ​ | -
Income before income taxes | ​ | ​ | ​ | 4,718 | ​ | 1,012 | ​ | 5,730
Income tax expense | ​ | ​ | ​ | 1,143 | ​ | 212 | ​ | 1,355
Net income | ​ | ​ | $ | 3,575 | $ | 800 | $ | 4,375

​

Total non-fiduciary assets of the trust and investment services segment were $0.7 million (including $0.6 million in intangible assets) at both March 31, 2024 and December 31, 2023. All other assets (including goodwill of $11.0 million as of both

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March 31, 2024 and December 31, 2023 and other intangible assets of $0.4 million and $0.5 million as of March 31, 2024 and December 31, 2023, respectively) were held by the community banking segment.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

INTRODUCTION

The following discussion and analysis is intended as a review of material changes in and significant factors affecting the financial condition and results of operations of First United Corporation and its consolidated subsidiaries for the periods indicated. This discussion and analysis should be read in conjunction with the unaudited consolidated financial statements and the notes thereto contained in Item 1 of Part I of this report, as well as the audited consolidated financial statements and related notes included in First United Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023.

Unless the context clearly suggests otherwise, references in this report to “us”, “we”, “our”, and “the Corporation” are to First United Corporation and its consolidated subsidiaries.

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not represent historical facts, but are statements about management’s beliefs, plans and objectives about the future, as well as its assumptions and judgments concerning such beliefs, plans and objectives. These statements are evidenced by terms such as "anticipate," "estimate," "should," “will”, "expect," "believe," "intend," and similar expressions. Although these statements reflect management’s good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. The beliefs, plans and objectives on which forward-looking statements are based involve risks and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. For a discussion of these risks and uncertainties, see the section of the periodic reports that First United Corporation files with the Securities and Exchange Commission entitled "Risk Factors".

FIRST UNITED CORPORATION

First United Corporation is a Maryland corporation chartered in 1985 and a financial holding company registered with the Board of Governors of the Federal Reserve System (the “FRB”) under the Bank Holding Company Act of 1956, as amended, that elected financial holding company status in 2021. The Corporation’s primary business is serving as the parent company of First United Bank & Trust, a Maryland trust company (the “Bank”), First United Statutory Trust I (“Trust I”) and First United Statutory Trust II (“Trust II” and together with Trust I, “the Trusts”), both Connecticut statutory business trusts. The Trusts were formed for the purpose of selling trust preferred securities that qualified as Tier 1 capital. The Bank has two consumer finance company subsidiaries- OakFirst Loan Center, Inc., a West Virginia corporation, and OakFirst Loan Center, LLC, a Maryland limited liability company – and two subsidiaries that it uses to hold real estate acquired through foreclosure or by deed in lieu of foreclosure – First OREO Trust, a Maryland statutory trust, and FUBT OREO I, LLC, a Maryland limited liability company. In addition, the Bank owns 99.9% of the limited partnership interests in Liberty Mews Limited Partnership, a Maryland limited partnership formed for the purpose of acquiring, developing and operating low-income housing units in Garrett County, Maryland, and a 99.9% non-voting membership interest in MCC FUBT Fund, LLC, an Ohio limited liability company formed for the purpose of acquiring, developing and operating low-income housing units in Allegany County, Maryland.

At March 31, 2024, the Corporation’s total assets were $1.9 billion, net loans were $1.4 billion, and deposits were $1.6 billion. Shareholders’ equity at March 31, 2024 was $165.5 million.

We maintain an Internet site at www.mybank.com on which we make available, free of charge, First United Corporation’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to the foregoing as soon as reasonably practicable after these reports are electronically filed with, or furnished to, the SEC.

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SELECTED FINANCIAL DATA

The following table sets forth certain selected financial data for the three-month periods ended March 31, 2024 and 2023 and is qualified in its entirety by the detailed information and unaudited financial statements, including the notes thereto, included elsewhere in this quarterly report.

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of the three months ended | ​
​ | ​ | March 31, | ​
​ |  | 2024 |  | 2023 |
Per Share Data | ​ | ​ | ​ | ​ | ​ | ​ | ​
Basic net income per common share | ​ | $ | 0.56 | ​ | $ | 0.66 | ​
Basic net income per common share (1) - non-GAAP | ​ | $ | 0.62 | ​ | $ | 0.66 | ​
Diluted net income per common share | ​ | $ | 0.56 | ​ | $ | 0.65 | ​
Diluted net income per common share (1) - non-GAAP | ​ | $ | 0.62 | ​ | $ | 0.65 | ​
Basic book value per common share | ​ | $ | 24.89 | ​ | $ | 22.85 | ​
Diluted book value per common share | ​ | $ | 24.86 | ​ | $ | 22.81 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Significant Ratios: | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Return on Average Assets (a) | ​ | ​ | 0.76 | % | ​ | 0.94 | %
Accelerated depreciation expense, net of tax | ​ | ​ | 0.09 | ​ | ​ | — | %
Adjusted Return on Average Assets (a) (1) (non-GAAP) | ​ | ​ | 0.85 | % | ​ | 0.94 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Return on Average Equity (a) | ​ | ​ | 9.07 | % | ​ | 11.87 | %
Accelerated depreciation expense, net of tax | ​ | ​ | 1.04 | ​ | ​ | — | %
Adjusted Return on Average Equity (a) (1) (non-GAAP) | ​ | ​ | 10.11 | % | ​ | 11.87 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Average Equity to Average Assets | ​ | ​ | 8.37 | % | ​ | 7.90 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Capital Ratios: | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consolidated Total Capital (to risk weighted assets) | ​ | ​ | 15.83 | % | ​ | 16.15 | %
Consolidated Tier 1 Capital (to risk weighted assets) | ​ | ​ | 14.58 | % | ​ | 14.90 | %
Consolidated Common Equity Tier 1 Capital (to risk weighted assets) | ​ | ​ | 12.60 | % | ​ | 12.82 | %
Consolidated Tier 1 Capital (to average assets) | ​ | ​ | 11.48 | % | ​ | 11.47 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

RESULTS OF OPERATIONS

Overview

Consolidated net income was $3.7 million, inclusive of $0.4 million, net of tax, in accelerated depreciation expenses related to branch closures, for the first quarter of 2024. This compares to $4.4 million for the first quarter of 2023. Basic and diluted earnings per share were $0.56 for the first quarter of 2024 compared to basic earnings per share of $0.66 and diluted earnings per share of $0.65 for the first quarter of 2023.

​

The $0.7 million decrease in net income year over year was primarily driven by a $0.7 million decrease in net interest income and a $0.4 million increase in provision for credit losses. Two large commercial relationships with combined loan balances of $12.1 million were moved to non-accrual status during the first quarter of 2024, which resulted in a reversal of $0.4 million in accrued interest income and fees during the quarter. Additionally, year-over-year interest expense increased at a slightly faster pace than year-over-year interest income. The provision for credit loss also increased year over year due to increased qualitative risk factors associated with the non-accrual loan balances. Management is actively managing these credits, which we anticipate will lead

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to normal collection procedures such as returning the credits to accrual or moving loans through the foreclosure process over the next year. Other activity when comparing the first quarter of 2024 to the same period in 2023 was a $0.4 million increase in wealth management income due to improving market conditions and growth of new relationships and an increase in operating expenses of $0.2 million. The provision for income tax expense was down $0.2 million when comparing the two quarters due to decreased net income before tax.

​

Other operating income, including net gains/(losses), for the first quarter of 2024 increased by $0.5 million when compared to the same period of 2023. The growth was driven by an increase of $0.4 million in wealth management income due to improving market conditions and growth in new and existing customer relationships.

​

Operating expenses increased by $0.2 million in the first quarter of 2024 when compared to the first quarter of 2023. The increase was largely driven by a $0.3 million increase in equipment and occupancy expense due to the accelerated depreciation expenses recognized in the first quarter of 2024 in conjunction with the branch closures in February 2024. This increase was partially offset by a $0.1 million decrease in salaries and employee benefits year over year due to unusually high health insurance premiums recognized in the first quarter of 2023, offset by higher salaries and benefits associated with normal merit increases effective April 1, 2023.

​

Net Interest Income

Net interest income is our largest source of operating revenue. Net interest income is the difference between the interest that we earn on our interest-earning assets and the interest expense we incur on our interest-bearing liabilities. For analytical and discussion purposes, net interest income is adjusted to a fully tax equivalent (“FTE”) basis to facilitate performance comparisons between taxable and tax-exempt assets by increasing tax-exempt income by an amount equal to the federal income taxes that would have been paid if this income were taxable at the statutorily applicable rate. This is a non-GAAP disclosure and management believes it is not materially different than the corresponding GAAP disclosure.

The tables below summarize net interest income for the three month periods ended March 31, 2024 and 2023.

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | Non-GAAP | GAAP | ​
​ | ​ | ​ | Three Months Ended | Three Months Ended | ​
​ | ​ | ​ | March 31, | March 31, | ​
(in thousands) |  | ​ | 2024 |  | 2023 |  | 2024 |  | 2023 |
Interest income | ​ | $ | 21,955 | ​ | $ | 18,056 | ​ | $ | 21,898 | ​ | $ | 17,829 | ​
Interest expense | ​ | ​ | 8,086 | ​ | ​ | 3,311 | ​ | ​ | 8,086 | ​ | ​ | 3,311 | ​
Net interest income | ​ | $ | 13,869 | ​ | $ | 14,745 | ​ | $ | 13,812 | ​ | $ | 14,518 | ​
Net interest margin % | ​ | ​ | 3.12 | % | ​ | 3.53 | % | ​ | 3.10 | % | ​ | 3.48 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

​

​

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The following tables set forth the average balances, net interest income and expense, and average yields and rates of our interest-earning assets and interest-bearing liabilities for the three-month periods ended March 31, 2024 and 2023:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​
​ | ​ | March 31, | ​
​ | ​ | 2024 | ​ | 2023 | ​
​ | ​ | Average | ​ | ​ | ​ | Average | ​ | Average | ​ | ​ | ​ | Average | ​
(in thousands) |  | Balance |  | Interest |  | Yield/Rate |  | Balance |  | Interest |  | Yield/Rate |
Assets | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Loans | ​ | $ | 1,407,886 | ​ | $ | 19,234 | ​ | 5.49 | % | $ | 1,279,547 | ​ | $ | 15,457 | ​ | 4.90 | %
Investment Securities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Taxable | ​ | ​ | 294,526 | ​ | ​ | 1,744 | ​ | 2.38 | % | ​ | 340,622 | ​ | ​ | 1,768 | ​ | 2.11 | %
Non taxable | ​ | ​ | 7,806 | ​ | ​ | 94 | ​ | 4.84 | % | ​ | 26,104 | ​ | ​ | 484 | ​ | 7.52 | %
Total | ​ | ​ | 302,332 | ​ | ​ | 1,838 | ​ | 2.45 | % | ​ | 366,726 | ​ | ​ | 2,252 | ​ | 2.49 | %
Federal funds sold | ​ | ​ | 63,843 | ​ | ​ | 758 | ​ | 4.78 | % | ​ | 40,092 | ​ | ​ | 307 | ​ | 3.11 | %
Interest-bearing deposits with other banks | ​ | ​ | 8,787 | ​ | ​ | 31 | ​ | 1.42 | % | ​ | 5,001 | ​ | ​ | 26 | ​ | 2.11 | %
Other interest earning assets | ​ | ​ | 5,107 | ​ | ​ | 94 | ​ | 7.40 | % | ​ | 1,632 | ​ | ​ | 14 | ​ | 3.48 | %
Total earning assets | ​ | ​ | 1,787,955 | ​ | ​ | 21,955 | ​ | 4.94 | % | ​ | 1,692,998 | ​ | ​ | 18,056 | ​ | 4.33 | %
Allowance for loan losses | ​ | ​ | (17,696) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (14,816) | ​ | ​ | ​ | ​ | ​ | ​
Non-earning assets | ​ | ​ | 188,425 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 213,929 | ​ | ​ | ​ | ​ | ​ | ​
Total Assets | ​ | $ | 1,958,684 | ​ | ​ | ​ | ​ | ​ | ​ | $ | 1,892,111 | ​ | ​ | ​ | ​ | ​ | ​
Liabilities and Shareholders’ Equity | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Interest-bearing demand deposits | ​ | $ | 348,998 | ​ | $ | 1,441 | ​ | 1.66 | % | $ | 353,072 | ​ | $ | 888 | ​ | 1.02 | %
Interest-bearing money markets | ​ | ​ | 322,965 | ​ | ​ | 3,260 | ​ | 4.06 | % | ​ | 340,128 | ​ | ​ | 1,298 | ​ | 1.55 | %
Savings deposits | ​ | ​ | 189,572 | ​ | ​ | 48 | ​ | 0.10 | % | ​ | 246,708 | ​ | ​ | 79 | ​ | 0.13 | %
Time deposits - Retail | ​ | ​ | 157,678 | ​ | ​ | 1,118 | ​ | 2.85 | % | ​ | 118,667 | ​ | ​ | 281 | ​ | 0.96 | %
Time deposits - Brokered | ​ | ​ | 30,000 | ​ | ​ | 399 | ​ | 5.35 | % | ​ | 10,180 | ​ | ​ | 132 | ​ | 5.26 | %
Short-term borrowings | ​ | ​ | 73,351 | ​ | ​ | 461 | ​ | 2.53 | % | ​ | 57,364 | ​ | ​ | 31 | ​ | 0.22 | %
Long-term borrowings | ​ | ​ | 103,017 | ​ | ​ | 1,359 | ​ | 5.31 | % | ​ | 43,373 | ​ | ​ | 602 | ​ | 5.63 | %
Total interest-bearing liabilities | ​ | ​ | 1,225,581 | ​ | ​ | 8,086 | ​ | 2.65 | % | ​ | 1,169,492 | ​ | ​ | 3,311 | ​ | 1.15 | %
Non-interest-bearing deposits | ​ | ​ | 534,412 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 545,215 | ​ | ​ | ​ | ​ | ​ | ​
Other liabilities | ​ | ​ | 34,747 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 27,988 | ​ | ​ | ​ | ​ | ​ | ​
Shareholders’ Equity | ​ | ​ | 163,944 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 149,416 | ​ | ​ | ​ | ​ | ​ | ​
Total Liabilities and Shareholders’ Equity | ​ | $ | 1,958,684 | ​ | ​ | ​ | ​ | ​ | ​ | $ | 1,892,111 | ​ | ​ | ​ | ​ | ​ | ​
Net interest income and spread | ​ | ​ | ​ | ​ | $ | 13,869 | ​ | 2.29 | % | ​ | ​ | ​ | $ | 14,745 | ​ | 3.18 | %
Net interest margin | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 3.12 | % | ​ | ​ | ​ | ​ | ​ | ​ | 3.53 | %

​

| (1) | The above table reflects the average rates earned or paid stated on an FTE basis assuming a 21% tax rate for 2024 and 2023. Non-GAAP interest income on a fully taxable equivalent for the three-month periods ended March 31, 2024 and 2023 was $57 and $227, respectively.

| (2) | Net interest margin is calculated as net interest income divided by average earning assets.

| (3) | The average yields on investments are based on amortized cost.

​

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Net interest income, on a non-GAAP, FTE basis, decreased by $0.9 million for the first quarter of 2024 when compared to the first quarter of 2023. This decrease was driven by an increase of $4.8 million in interest expense due to an increase of 133 basis points on interest paid on deposit accounts. The average balances decreased by $39.4 million when compared to the first quarter of 2023 due primarily to the increased deposit pricing pressures that began in the first quarter of 2023 as a result of the bank failures in March 2023 and liquidity fears in the market. Interest income increased by $3.9 million. Interest income on loans increased by $3.8 million due to the increase of 59 basis points in overall yield on the loan portfolio, as new loans were booked at higher rates and adjustable-rate loans repriced in correlation to the rising rate environment and an increase in average balances of $128.3 million. Investment income decreased by $0.4 million due to a decrease of $64.4 million in average balances related to the balance sheet restructuring of our investment portfolio in the fourth quarter of 2023 and the maturity of $30.0 million of U.S. Treasury bonds. The net interest margin for the three months ended March 31, 2024 was 3.12% compared to 3.53% for the three months ended March 31, 2023. Excluding the reversal of $0.4 million of interest and fees on loans related to the movement of $12.1 million of loans to non-accrual, the net interest margin would have been 3.21%.

​

​

The following table sets forth an analysis of volume and rate changes in interest income and interest expense for our average interest-earning assets and average interest-bearing liabilities for the three-month periods ended March 31, 2024 and 2023:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the Three months ended March 31, 2024
​ | ​ | compared to the Three months ended March 31, 2023
(in thousands and tax equivalent basis) |  | Volume |  | Rate |  | Net
Interest Income: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Loans | ​ | $ | 1,572 | ​ | $ | 2,205 | ​ | $ | 3,777
Taxable Investments | ​ | ​ | (243) | ​ | ​ | 219 | ​ | ​ | (24)
Non-taxable Investments | ​ | ​ | (344) | ​ | ​ | (46) | ​ | ​ | (390)
Federal funds sold | ​ | ​ | 185 | ​ | ​ | 266 | ​ | ​ | 451
Interest-bearing deposits | ​ | ​ | 20 | ​ | ​ | (15) | ​ | ​ | 5
Other interest earning assets | ​ | ​ | 30 | ​ | ​ | 50 | ​ | ​ | 80
Total interest income | ​ | ​ | 1,220 | ​ | ​ | 2,679 | ​ | ​ | 3,899
Interest Expense: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Interest-bearing demand deposits | ​ | ​ | (10) | ​ | ​ | 563 | ​ | ​ | 553
Interest-bearing money markets | ​ | ​ | (66) | ​ | ​ | 2,028 | ​ | ​ | 1,962
Savings deposits | ​ | ​ | (18) | ​ | ​ | (13) | ​ | ​ | (31)
Time deposits - Retail | ​ | ​ | 94 | ​ | ​ | 743 | ​ | ​ | 837
Time deposits - Brokered | ​ | ​ | 261 | ​ | ​ | 6 | ​ | ​ | 267
Short-term borrowings | ​ | ​ | 9 | ​ | ​ | 421 | ​ | ​ | 430
Long-term borrowings | ​ | ​ | 840 | ​ | ​ | (83) | ​ | ​ | 757
Total interest expense | ​ | ​ | 1,110 | ​ | ​ | 3,665 | ​ | ​ | 4,775
Net interest income | ​ | $ | 110 | ​ | $ | (986) | ​ | $ | (876)

| (1) | The change in interest income/expense due to both volume and rate has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each.

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

Provision for Credit Losses

Specific allocations have been made for loans where management has determined that the collateral supporting the loans is not adequate to cover the loan balance, and the qualitative factors affecting the estimated allowance for credit losses (“ACL”) have been adjusted based on the current economic environment and the characteristics of the loan portfolio. Net provision expense was $0.9 million for the three month period ended March 31, 2024 compared to net provision expense of $0.5 million and three month period ended March 31, 2023. The increased provision expense recorded in the 2024 period was primarily related to increases in qualitative risk factors of our commercial and industrial portfolio, as two large relationships moved to non-accrual status during the quarter.

​

Other Income

The composition of other operating income for the three-month periods ended March 31, 2024 and 2023 is illustrated in the following table:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Income as % of | ​
​ | ​ | Total Other Income | ​
(in thousands) |  | 2024 |  | 2023 |
Service charges on deposit accounts | ​ | $ | 556 |  | 12% | ​ | $ | 516 |  | 12% | ​
Other service charges | ​ | ​ | 215 | ​ | 4% | ​ | ​ | 232 | ​ | 5% | ​
Trust department | ​ | ​ | 2,188 | ​ | 46% | ​ | ​ | 1,970 | ​ | 46% | ​
Debit card income | ​ | ​ | 932 | ​ | 19% | ​ | ​ | 955 | ​ | 22% | ​
Bank owned life insurance | ​ | ​ | 326 | ​ | 7% | ​ | ​ | 305 | ​ | 7% | ​
Brokerage commissions | ​ | ​ | 495 | ​ | 10% | ​ | ​ | 297 | ​ | 7% | ​
Other income | ​ | ​ | 81 | ​ | 2% | ​ | ​ | 64 | ​ | 1% | ​
​ | ​ | $ | 4,793 | ​ | 100% | ​ | $ | 4,339 | ​ | 100% | ​

​

Other Operating Expenses

The composition of other operating expenses for the three month periods ended March 31, 2024 and 2023 is illustrated in the following table:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Expense as % of | ​
​ | ​ | Total Other Operating Expenses | ​
(in thousands) |  | 2024 |  | 2023 |
Salaries and employee benefits | ​ | $ | 7,157 |  | 56% | ​ | $ | 7,296 |  | 58% | ​
FDIC premiums | ​ | ​ | 269 | ​ | 2% | ​ | ​ | 193 | ​ | 1% | ​
Equipment | ​ | ​ | 923 | ​ | 7% | ​ | ​ | 780 | ​ | 6% | ​
Occupancy expense of premises | ​ | ​ | 954 | ​ | 8% | ​ | ​ | 785 | ​ | 6% | ​
Data processing expense | ​ | ​ | 1,318 | ​ | 10% | ​ | ​ | 1,306 | ​ | 10% | ​
Marketing expense | ​ | ​ | 134 | ​ | 1% | ​ | ​ | 120 | ​ | 1% | ​
Professional services | ​ | ​ | 486 | ​ | 4% | ​ | ​ | 494 | ​ | 4% | ​
Contract labor | ​ | ​ | 183 | ​ | 1% | ​ | ​ | 134 | ​ | 1% | ​
Telephone | ​ | ​ | 109 | ​ | 1% | ​ | ​ | 110 | ​ | 1% | ​
Other real estate owned | ​ | ​ | 86 | ​ | 1% | ​ | ​ | 124 | ​ | 1% | ​
Investor relations | ​ | ​ | 53 | ​ | 0% | ​ | ​ | 83 | ​ | 1% | ​
Contributions | ​ | ​ | 50 | ​ | 0% | ​ | ​ | 64 | ​ | 1% | ​
Other | ​ | ​ | 1,159 | ​ | 9% | ​ | ​ | 1,149 | ​ | 9% | ​
​ | ​ | $ | 12,881 | ​ | 100% | ​ | $ | 12,638 | ​ | 100% | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

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Provision for Income Taxes

In reporting interim financial information, income tax provisions should be determined under the procedures set forth in Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 740, Income Taxes (Section 740-270-30). This guidance provides that at the end of each interim period, an entity should make its best estimate of the effective tax rate expected to be applicable for the full fiscal year. The rate so determined should be used in providing for income taxes on a current year-to-date basis. The effective tax rate should reflect anticipated investment tax credits, capital gains rates, and other available tax planning alternatives. In arriving at this effective tax rate, however, no effect should be included for the tax related to significant, unusual or extraordinary items that will be separately reported or reported net of their related tax effect in reports for the interim period or for the fiscal year.

The effective income tax rates as a percentage of income for the three-month periods ended March 31, 2024 and March 31, 2023 were 23.9% and 23.6%, respectively.

​

Non-GAAP Financial Measures

The Corporation believes that certain non-GAAP financial measures are meaningful because they reflect adjustments commonly made by management, investors, regulators and analysts to evaluate performance trends and the adequacy of common equity. This non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for performance and financial condition measures determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.

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The following table presents a reconciliation of net income and diluted earnings per share (as reported) to adjusted net income and adjusted diluted earnings per share:

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended March 31,
​ | ​ | 2024 | ​ | 2023
(in thousands, except for per share amount) | ​ | ​ | ​ | ​ | ​ | ​
Net income - as reported | ​ | $ | 3,698 | ​ | $ | 4,375
Adjustments: | ​ | ​ | ​ | ​ | ​ | ​
Accelerated depreciation expenses | ​ | ​ | 562 | ​ | ​ | —
Income tax effect of adjustments | ​ | ​ | (137) | ​ | ​ | —
Adjusted net income (non-GAAP) | ​ | $ | 4,123 | ​ | $ | 4,375
​ | ​ | ​ | ​ | ​ | ​ | ​
Diluted earnings per share - as reported | ​ | $ | 0.56 | ​ | $ | 0.65
Adjustments: | ​ | ​ | ​ | ​ | ​ | ​
Accelerated depreciation expenses | ​ | ​ | 0.08 | ​ | ​ | —
Income tax effect of adjustments | ​ | ​ | (0.02) | ​ | ​ | —
Adjusted basic and diluted earnings per share (non-GAAP) | ​ | $ | 0.62 | ​ | $ | 0.65
​ | ​ | ​ | ​ | ​ | ​ | ​
Significant Ratios: | ​ | ​ | ​ | ​ | ​ | ​
Return on Average Assets - as reported | ​ | ​ | 0.76% | ​ | ​ | 0.94%
Accelerated depreciation expenses | ​ | ​ | 0.12% | ​ | ​ | —
Income tax effect of adjustments | ​ | ​ | (0.03%) | ​ | ​ | —
Adjusted Return on Average Assets (non-GAAP) | ​ | ​ | 0.85% | ​ | ​ | 0.94%
​ | ​ | ​ | ​ | ​ | ​ | ​
Return on Average Equity - as reported | ​ | ​ | 9.07% | ​ | ​ | 11.87%
Accelerated depreciation expenses | ​ | ​ | 1.38% | ​ | ​ | —
Income tax effect of adjustments | ​ | ​ | (0.34%) | ​ | ​ | —
Adjusted Return on Average Equity (non-GAAP) | ​ | ​ | 10.11% | ​ | ​ | 11.87%
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​

FINANCIAL CONDITION

Balance Sheet Overview

Total assets at March 31, 2024 were $1.9 billion, representing a $7.1 million increase since December 31, 2023. During the first quarter of 2024, cash and interest-bearing deposits in other banks increased by $37.2 million. The investment portfolio decreased by $32.8 million due to the maturities of $30.0 million of U.S. Treasury bonds during the quarter and normal principal amortization. Gross loans increased by $5.7 million. Other assets, including deferred taxes, premises and equipment, and accrued interest receivable, remained stable.

​

Total liabilities at March 31, 2024 were $1.7 billion, representing a $3.5 million increase since December 31, 2023. Total deposits increased by $12.5 million when compared to December 31, 2023. The increase in deposits was primarily attributable to the shift of $10.0 million in overnight investment sweep balances to the IntraFi Cash Service (“ICS”) product, as a result of management’s strategy to release pledging of investment securities for municipalities to increase available liquidity. Short term borrowings increased by $34.1 million since December 31, 2023 due primarily to the Bank’s utilization of the FRB’s Bank Term Funding Program (“BTFP”) to obtain $40.0 million in borrowings during January 2024 at a rate of 4.87% with a one-year maturity. There are no prepayment penalties associated with early payments on the BTFP borrowings. Long-term borrowings decreased by $40.0 million in the first quarter of 2024 due to the repayment of $40.0 million in Federal Home Loan Bank (“FHLB”) borrowings that matured.

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Loan Portfolio

The following table presents the composition of our loan portfolio at the dates indicated:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | March 31, 2024 |  | December 31, 2023
Commercial real estate | ​ | $ | 492,819 |  | 35% | ​ | $ | 493,703 |  | 35%
Acquisition and development | ​ | ​ | 83,424 | ​ | 6% | ​ | ​ | 77,060 | ​ | 5%
Commercial and industrial | ​ | ​ | 274,722 | ​ | 19% | ​ | ​ | 274,604 | ​ | 20%
Residential mortgage | ​ | ​ | 501,990 | ​ | 36% | ​ | ​ | 499,871 | ​ | 36%
Consumer | ​ | ​ | 59,372 | ​ | 4% | ​ | ​ | 61,429 | ​ | 4%
Total Loans | ​ | $ | 1,412,327 | ​ | 100% | ​ | $ | 1,406,667 | ​ | 100%

​

​

Outstanding loans of $1.4 billion at March 31, 2024 reflected growth of $5.7 million for the first quarter of 2024. Since December 31, 2023, commercial real estate loans decreased by $0.9 million and acquisition and development loans increased by $6.4 million. Commercial and industrial loans increased by $0.1 million. Residential mortgage loans increased by $2.1 million, offset by a decline of $2.1 million in the consumer loan portfolio related to new production offset by monthly amortization.

​

New commercial loan production for the three months ended March 31, 2024 was approximately $28.3 million. The pipeline of commercial loans as of March 31, 2024 was $30.9 million. At March 31, 2024, unfunded, committed commercial construction loans totaled approximately $8.2 million. Commercial amortization and payoffs were approximately $35.5 million through March 31, 2024, due primarily to pay-offs of short-term commercial loans as well as normal amortizations of the commercial loan portfolio.

​

New consumer mortgage loan production for the first quarter of 2024 was approximately $11.2 million, with most of this production comprised of in-house mortgages. The pipeline of in-house, portfolio loans as of March 31, 2024 was $9.8 million. The residential mortgage production level declined in the first quarter of 2024 due to the higher interest rates and seasonality of this line of business. Unfunded commitments related to residential construction loans totaled $13.9 million at March 31, 2024. Management chose to shift activity to the secondary market in the first quarter of 2024 to preserve liquidity.

​

Non-accrual loans totaled $16.0 million at March 31, 2024 compared to $4.0 million at December 31, 2023. The increase in non-accrual balances at March 31, 2024 was related to two commercial and industrial loan relationships that were classified as substandard at December 31, 2023 and moved to non-accrual during the first quarter. Management believes that these loans are marked appropriately, and our credit department is actively working with these borrowers on work-out plans.

​

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The following table presents loans in our commercial real estate portfolio by industry type at March 31, 2024.

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) | ​ | Non-owner-occupied | ​ | Owner-occupied | ​ | Multi-family | ​ | Total
Accommodations and food services | ​ | $ | 75,713 | ​ | $ | 4,964 | ​ | $ | — | ​ | $ | 80,677
Administration and support, waste management, and remediation services | ​ | ​ | — | ​ | ​ | 1,450 | ​ | ​ | — | ​ | ​ | 1,450
Agriculture, forestry, fishing and hunting | ​ | ​ | — | ​ | ​ | 2,201 | ​ | ​ | — | ​ | ​ | 2,201
Arts, entertainment and recreation | ​ | ​ | — | ​ | ​ | 3,090 | ​ | ​ | — | ​ | ​ | 3,090
Construction | ​ | ​ | 2,237 | ​ | ​ | 6,219 | ​ | ​ | 4 | ​ | ​ | 8,460
Educational services | ​ | ​ | — | ​ | ​ | 938 | ​ | ​ | — | ​ | ​ | 938
Finance and insurance | ​ | ​ | — | ​ | ​ | 108 | ​ | ​ | — | ​ | ​ | 108
Health care and social assistance | ​ | ​ | 4,773 | ​ | ​ | 11,523 | ​ | ​ | — | ​ | ​ | 16,296
Management of companies and enterprises | ​ | ​ | — | ​ | ​ | 2,799 | ​ | ​ | — | ​ | ​ | 2,799
Manufacturing | ​ | ​ | — | ​ | ​ | 6,921 | ​ | ​ | — | ​ | ​ | 6,921
Other services (except public services) | ​ | ​ | 2,271 | ​ | ​ | 18,017 | ​ | ​ | 317 | ​ | ​ | 20,605
Professional, scientific and technical services | ​ | ​ | — | ​ | ​ | 2,450 | ​ | ​ | — | ​ | ​ | 2,450
Public administration | ​ | ​ | 1,507 | ​ | ​ | 1,055 | ​ | ​ | — | ​ | ​ | 2,562
Commercial rental properties | ​ | ​ | 184,453 | ​ | ​ | 77,872 | ​ | ​ | — | ​ | ​ | 262,325
Residential rental properties | ​ | ​ | 507 | ​ | ​ | 337 | ​ | ​ | 26,416 | ​ | ​ | 27,260
Student rental properties | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 4,761 | ​ | ​ | 4,761
Mixed use rental properties | ​ | ​ | 148 | ​ | ​ | 238 | ​ | ​ | 17,774 | ​ | ​ | 18,160
Storage units | ​ | ​ | 18,436 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 18,436
Real estate rental and leasing- other | ​ | ​ | 4,670 | ​ | ​ | 3,478 | ​ | ​ | 417 | ​ | ​ | 8,565
Retail trade | ​ | ​ | — | ​ | ​ | 3,277 | ​ | ​ | — | ​ | ​ | 3,277
Transportation and warehousing | ​ | ​ | — | ​ | ​ | 511 | ​ | ​ | — | ​ | ​ | 511
Wholesale trade | ​ | ​ | — | ​ | ​ | 967 | ​ | ​ | — | ​ | ​ | 967
Total | ​ | $ | 294,715 | ​ | $ | 148,415 | ​ | $ | 49,689 | ​ | $ | 492,819

​

​

Our loan portfolio does not consist of any loans secured by office buildings located in major metropolitan areas or that are over four stories or any retail properties rented to major big box retail tenants. There have been no significant changes in our commercial real estate concentrations since December 31, 2023.

​

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Risk Elements of Loan Portfolio

The following table presents the risk elements of our loan portfolio at the dates indicated. Management is not aware of any potential problem loans other than those listed in this table or discussed below.

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | March 31, 2024 |  | % of Applicable Portfolio |  | December 31, 2023 |  | % of Applicable Portfolio
Non-accrual loans: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial real estate | ​ | $ | 818 | ​ | 0.17% | ​ | $ | 826 | ​ | 0.17%
Acquisition and development | ​ | ​ | 105 | ​ | 0.13% | ​ | ​ | 113 | ​ | 0.15%
Commercial and industrial | ​ | ​ | 12,093 | ​ | 4.40% | ​ | ​ | — | ​ | 0.00%
Residential mortgage | ​ | ​ | 2,863 | ​ | 0.57% | ​ | ​ | 2,988 | ​ | 0.60%
Consumer | ​ | ​ | 128 | ​ | 0.22% | ​ | ​ | 29 | ​ | 0.05%
Total non-accrual loans | ​ | $ | 16,007 | ​ | 1.13% | ​ | $ | 3,956 | ​ | 0.28%
Accruing Loans Past Due 90 days or more: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Residential mortgage | ​ | $ | 76 | ​ | ​ | ​ | $ | 459 | ​ | ​
Consumer | ​ | ​ | 44 | ​ | ​ | ​ | ​ | 84 | ​ | ​
Total loans past due 90 days or more | ​ | $ | 120 | ​ | ​ | ​ | $ | 543 | ​ | ​
Total non-accrual and accruing loans past due 90 days or more | ​ | $ | 16,127 | ​ | ​ | ​ | $ | 4,499 | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other real estate owned | ​ | $ | 4,402 | ​ | ​ | ​ | $ | 4,493 | ​ | ​
Total Non-performing assets | ​ | $ | 20,529 | ​ | ​ | ​ | $ | 8,992 | ​ | ​
Individually evaluated loans without a valuation allowance | ​ | ​ | 14,875 | ​ | ​ | ​ | ​ | 2,963 | ​ | ​
Individually evaluated loans with a valuation allowance | ​ | ​ | — | ​ | ​ | ​ | ​ | — | ​ | ​
Total individually evaluated loans | ​ | $ | 14,875 | ​ | ​ | ​ | $ | 2,963 | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-accrual loans to total loans (as %) | ​ | ​ | 1.13% | ​ | ​ | ​ | ​ | 0.28% | ​ | ​
Non-performing loans to total loans (as %) | ​ | ​ | 1.14% | ​ | ​ | ​ | ​ | 0.32% | ​ | ​
Non-performing assets to total assets (as %) | ​ | ​ | 1.07% | ​ | ​ | ​ | ​ | 0.47% | ​ | ​
Allowance for credit losses to non-accrual loans (as %) | ​ | ​ | 112.34% | ​ | ​ | ​ | ​ | 441.86% | ​ | ​
Allowance for credit losses to non-performing assets (as %) | ​ | ​ | 87.59% | ​ | ​ | ​ | ​ | 194.40% | ​ | ​

​

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​

Allowance for Credit Losses

The ACL represents an amount which, in management’s judgment, is adequate to absorb expected credit losses over the life of outstanding loans as of the balance sheet date based on the evaluation of current risk characteristics of the loan portfolio, past events, current conditions, reasonable and supportable forecasts of future economic conditions and prepayment experience. The ACL is measured and recorded upon the initial recognition of a financial asset. The ACL is reduced by charge-offs, net of recoveries of previous losses, and is increased by a provision or decreased by a recovery for credit losses, which is recorded as a current period operating expense.

Determination of an appropriate ACL is inherently complex and requires the use of highly subjective estimates. The reasonableness of the ACL is reviewed quarterly by management.

Management believes it uses relevant information available to make determination about the ACL and that it has established the existing allowance in accordance with GAAP. However, the determination of the ACL requires significant judgment, and estimates of expected credit losses in the loan portfolio can vary from the amounts actually observed. While management uses available information to recognize expected credit losses, future additions to the ACL may be necessary based on changes in the loans comprising the portfolio, changes in the current and forecasted economic conditions, changes to the interest rate environment which may directly impact prepayment and curtailment rate assumptions, and changes in the financial condition of borrowers.

The ACL “base case” model is derived from various economic forecasts provided by widely recognized sources. Management evaluates the variability of market conditions by examining the peak and trough of economic cycles. These peaks and troughs are used to stress the base case model to develop a range of potential outcomes. Management then determines the appropriate reserve through an evaluation of these various outcomes relative to current economic conditions and known risks in the portfolio. Management enhances its calculation with the use of Moody’s economic forecast data to provide additional support to substantiate its ACL.

The following table presents a summary of the activity in the ACL for the three-month periods ended March 31:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | 2024 |  | 2023 |
Balance, January 1 | ​ | $ | 17,480 | ​ | $ | 14,636 | ​
Impact of CECL Adoption | ​ | ​ | — | ​ | ​ | 2,066 | ​
Charge-offs: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial and industrial | ​ | ​ | (112) | ​ | ​ | — | ​
Residential mortgage | ​ | ​ | — | ​ | ​ | (6) | ​
Consumer | ​ | ​ | (506) | ​ | ​ | (333) | ​
Total charge-offs | ​ | ​ | (618) | ​ | ​ | (339) | ​
Recoveries: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial real estate | ​ | ​ | 37 | ​ | ​ | 5 | ​
Acquisition and development | ​ | ​ | 3 | ​ | ​ | 5 | ​
Commercial and industrial | ​ | ​ | 31 | ​ | ​ | 4 | ​
Residential mortgage | ​ | ​ | 18 | ​ | ​ | 18 | ​
Consumer | ​ | ​ | 70 | ​ | ​ | 62 | ​
Total recoveries | ​ | ​ | 159 | ​ | ​ | 94 | ​
Net losses | ​ | ​ | (459) | ​ | ​ | (245) | ​
Credit/loan loss expense | ​ | ​ | 961 | ​ | ​ | 414 | ​
Balance at end of period | ​ | $ | 17,982 | ​ | $ | 16,871 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Allowance for credit losses to gross loans outstanding (as %) | ​ | ​ | 1.27 | % | ​ | 1.31 | %

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​ | ​ | ​ | ​ | ​ | ​ | ​
Net (Charge-offs)/Recoveries as a % of Average Applicable Portfolio
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | 2024 | ​ | 2023
Commercial real estate | ​ | ​ | 0.03% | ​ | ​ | 0.00%
Acquisition and development | ​ | ​ | 0.01% | ​ | ​ | 0.03%
Commercial and industrial | ​ | ​ | (0.12)% | ​ | ​ | 0.01%
Residential mortgage | ​ | ​ | 0.01% | ​ | ​ | 0.01%
Consumer | ​ | ​ | (2.89)% | ​ | ​ | (1.79)%
Total | ​ | ​ | (0.13)% | ​ | ​ | (0.08)%

​

Investment Securities

At March 31, 2024, the total amortized cost basis of the available-for-sale investment portfolio was $116.8 million, compared to a fair value of $95.6 million. Unrealized gains and losses on available-for-sale securities are reflected in accumulated other comprehensive loss, a component of shareholders’ equity. The amortized cost basis of the held to maturity portfolio was $183.2 million, compared to a fair value of $152.2 million.

The following table presents the composition of our securities portfolio at amortized cost and fair values at the dates indicated:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | March 31, 2024 | ​ | December 31, 2023
​ | ​ | Amortized | ​ | Fair Value | ​ | FV as % | ​ | Amortized | ​ | Fair Value | ​ | FV as %
(in thousands) |  | Cost |  | (FV) |  | of Total |  | Cost |  | (FV) |  | of Total
Available for Sale Securities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. government agencies | ​ | $ | 7,000 | ​ | $ | 6,019 | ​ | 6% | ​ | $ | 7,000 | ​ | $ | 6,034 | ​ | 6%
Residential mortgage-backed agencies | ​ | ​ | 24,261 | ​ | ​ | 19,854 | ​ | 21% | ​ | ​ | 24,781 | ​ | ​ | 20,563 | ​ | 21%
Commercial mortgage-backed agencies | ​ | ​ | 36,082 | ​ | ​ | 27,916 | ​ | 28% | ​ | ​ | 36,258 | ​ | ​ | 28,417 | ​ | 29%
Collateralized mortgage obligations | ​ | ​ | 19,320 | ​ | ​ | 15,889 | ​ | 17% | ​ | ​ | 19,725 | ​ | ​ | 16,356 | ​ | 17%
Obligations of state and political subdivisions | ​ | ​ | 10,481 | ​ | ​ | 10,253 | ​ | 11% | ​ | ​ | 10,486 | ​ | ​ | 10,312 | ​ | 11%
Corporate bonds | ​ | ​ | 1,000 | ​ | ​ | 763 | ​ | 1% | ​ | ​ | 1,000 | ​ | ​ | 778 | ​ | 1%
Collateralized debt obligations | ​ | ​ | 18,651 | ​ | ​ | 14,886 | ​ | 16% | ​ | ​ | 18,671 | ​ | ​ | 14,709 | ​ | 15%
Total available for sale | ​ | $ | 116,795 | ​ | $ | 95,580 | ​ | 100% | ​ | $ | 117,921 | ​ | $ | 97,169 | ​ | 100%
Held to Maturity Securities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. treasuries | ​ | $ | 7,498 | ​ | $ | 7,484 | ​ | 5% | ​ | $ | 37,462 | ​ | $ | 37,219 | ​ | 20%
U.S. government agencies | ​ | ​ | 68,085 | ​ | ​ | 56,642 | ​ | 37% | ​ | ​ | 68,014 | ​ | ​ | 57,029 | ​ | 31%
Residential mortgage-backed agencies | ​ | ​ | 29,258 | ​ | ​ | 25,883 | ​ | 17% | ​ | ​ | 29,588 | ​ | ​ | 26,717 | ​ | 14%
Commercial mortgage-backed agencies | ​ | ​ | 21,371 | ​ | ​ | 15,788 | ​ | 10% | ​ | ​ | 21,413 | ​ | ​ | 16,052 | ​ | 9%
Collateralized mortgage obligations | ​ | ​ | 52,364 | ​ | ​ | 42,348 | ​ | 28% | ​ | ​ | 53,261 | ​ | ​ | 43,288 | ​ | 24%
Obligations of state and political subdivisions | ​ | ​ | 4,605 | ​ | ​ | 4,080 | ​ | 3% | ​ | ​ | 4,604 | ​ | ​ | 4,110 | ​ | 2%
Total held to maturity | ​ | $ | 183,181 | ​ | $ | 152,225 | ​ | 100% | ​ | $ | 214,342 | ​ | $ | 184,415 | ​ | 100%

​

Total fair value of investment securities available for sale decreased by $1.6 million since December 31, 2023 due primarily to principal paydowns of the portfolio. At March 31, 2024, the securities classified as available-for-sale included a net unrealized loss of $21.2 million, which represents the difference between the fair value and amortized cost of securities in the portfolio.

Total amortized cost of securities held to maturity decreased by $31.2 million since December 31, 2023 due primarily to the maturity of $30.0 million in U.S. Treasury bonds and $1.2 million in other principal paydowns of the portfolio. Proceeds from the maturities and principal paydowns were reinvested into cash at the Federal Reserve Bank of Richmond in anticipation of the $40.0 million maturing FHLB advance.

As discussed in Note 6 to the consolidated financial statements presented elsewhere in this report, the Corporation measures fair market values based on the fair value hierarchy established in ASC Topic 820, Fair Value Measurements and Disclosures. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Level 3 prices or valuation techniques require

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inputs that are both significant to the valuation assumptions and are not readily observable in the market (i.e. supported with little or no market activity). These Level 3 instruments are valued based on both observable and unobservable inputs derived from the best available data, some of which is internally developed, and considers risk premiums that a market participant would require.

Approximately $80.7 million of the available-for-sale portfolio was valued using Level 2 pricing and had net unrealized losses of $17.5 million at March 31, 2024. The remaining $14.9 million of the securities available-for-sale represents the entire collateralized debt obligation portfolio, which was valued using significant unobservable inputs (Level 3 assets). The $3.8 million in net unrealized losses associated with this portfolio relates to nine pooled trust preferred securities that comprise the collateralized debt obligation portfolio.

Deposits

The following table presents the composition of our deposits at the dates indicated:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | March 31, 2024 |  | December 31, 2023
​ | ​ | ​ | Balance | Percent | ​ | ​ | Balance | Percent
Non-interest-bearing demand deposits | ​ | $ | 422,759 | 27% | ​ | $ | 427,670 | 27%
Interest-bearing deposits: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Demand | ​ | ​ | 377,723 | 24% | ​ | ​ | 350,860 | 23%
Money Market | ​ | ​ | 392,933 | 25% | ​ | ​ | 385,649 | 25%
Savings deposits | ​ | ​ | 188,857 | 12% | ​ | ​ | 191,265 | 12%
Time deposits- retail | ​ | ​ | 151,181 | 10% | ​ | ​ | 165,533 | 11%
Time deposits- brokered | ​ | ​ | 30,000 | 2% | ​ | ​ | 30,000 | 2%
Total Deposits | ​ | $ | 1,563,453 | 100% | ​ | $ | 1,550,977 | 100%

​

Total deposits at March 31, 2024 increased by $12.5 million when compared to December 31, 2023. During the quarter, non-interest-bearing deposits decreased by $4.9 million. Interest-bearing demand deposits increased by $26.9 million, primarily related to the shift of $10.0 million in overnight investment sweep balances into the ICS product to maintain insurance through the Federal Deposit Insurance Corporation due to management’s strategy to release pledging of investment securities for municipalities to increase available liquidity. Money market accounts increased by $7.3 million due primarily to the expansion of current relationships and new relationships during the quarter. Traditional savings accounts decreased by $2.4 million and time deposits decreased by $14.4 million. The decrease in time deposits was primarily due to the maturing of a nine-month CD product that was offered by the Bank in 2023 at higher rates. The Bank has worked closely with customers as these CDs mature to transition them to other deposit and wealth management products offered by the Bank.

​

The following table summarizes the percentage of deposits that are insured by deposit insurance or otherwise fully collateralized by securities compared to uninsured deposits as of March 31, 2024 and December 31, 2023.

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | March 31, 2024 | ​ | ​ | December 31, 2023
(in thousands) | ​ | ​ | Balance | Percent | ​ | ​ | Balance | Percent
Insured deposits | ​ | $ | 1,198,898 | 77% | ​ | $ | 1,175,812 | 76%
Uninsured but collateralized deposits | ​ | ​ | 81,271 | 5% | ​ | ​ | 76,569 | 5%
Uninsured and uncollateralized deposits | ​ | ​ | 283,284 | 18% | ​ | ​ | 298,596 | 19%
​ | ​ | $ | 1,563,453 | 100% | ​ | $ | 1,550,977 | 100%

​

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The following table summarizes the percentage of deposit balances from retail customers compared to business customers as of March 31, 2024 and December 31, 2023.

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | March 31, 2024 | ​ | ​ | December 31, 2023
(in thousands) | ​ | ​ | Balance | Percent | ​ | ​ | Balance | Percent
Retail deposits | ​ | $ | 763,657 | 49% | ​ | $ | 748,295 | 53%
Business deposits | ​ | ​ | 799,796 | 51% | ​ | ​ | 802,682 | 47%
​ | ​ | $ | 1,563,453 | 100% | ​ | $ | 1,550,977 | 100%

​

Borrowed Funds

The following table presents the composition of our borrowings at the dates indicated:

​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | March 31, 2024 |  | December 31, 2023
Bank Term Funding Program | ​ | $ | 40,000 | ​ | $ | —
Securities sold under agreements to repurchase | ​ | $ | 39,494 | ​ | $ | 45,418
Total short-term borrowings | ​ | ​ | 79,494 | ​ | ​ | 45,418
FHLB advances | ​ | ​ | 40,000 | ​ | ​ | 80,000
Junior subordinated debt | ​ | ​ | 30,929 | ​ | ​ | 30,929
Total long-term borrowings | ​ | $ | 70,929 | ​ | $ | 110,929

​

Short-term borrowings increased by $34.1 million as the Bank borrowed $40.0 million from the BTFP in January 2024, which was partially offset by a decrease of $5.9 million in other short-term borrowings related to the shift of $10.0 million from a large municipality to the ICS product. Long-term borrowings decreased by $40.0 million as a $40.0 million FHLB advance matured in March 2024 and was fully repaid.

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Liquidity Management

Liquidity is a financial institution’s capability to meet customer demands for deposit withdrawals while funding all credit-worthy loans. The factors that determine the institution’s liquidity are:

| ● | Reliability and stability of core deposits;

| ● | Cash flow structure and pledging status of investments; and

| ● | Potential for unexpected loan demand.

We actively manage our liquidity position through regular meetings of a sub-committee of executive management, known as the Treasury Team, which looks forward 12 months at 30-day intervals. The measurement is based upon the projection of funds sold or purchased position, along with ratios and trends developed to measure dependence on purchased funds and core growth. Monthly reviews by management and quarterly reviews by the Asset and Liability Committee under prescribed policies and procedures are designed to ensure that we will maintain adequate levels of available funds.

It is our policy to manage our affairs so that liquidity needs are fully satisfied through normal Bank operations. That is, the Bank will manage its liquidity to minimize the need to make unplanned sales of assets or to borrow funds under emergency conditions. The Bank will use funding sources where the interest cost is relatively insensitive to market changes in the short run (periods of one year or less) to satisfy operating cash needs. The remaining normal funding will come from interest-sensitive liabilities, either deposits or borrowed funds. When the marginal cost of needed wholesale funding is lower than the cost of raising this funding in the retail markets, the Corporation may supplement retail funding with external funding sources such as:

| 1. | Unsecured Fed Funds lines of credit with upstream correspondent banks (M&T Bank, Pacific Coast Banker’s Bank, PNC Financial Services, Atlantic Community Bankers Bank, Community Bankers Bank and Zions National Bank).

| 2. | Secured advances with the FHLB, which are collateralized by eligible one to four family residential mortgage loans, home equity lines of credit, commercial real estate loans.

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| 3. | Secured line of credit with the Fed Discount Window for use in borrowing funds up to 90 days, using municipal securities as collateral.

| 4. | Brokered deposits, including CDs and money market funds, provide a method to generate deposits quickly. These deposits are strictly rate driven but often provide the most cost-effective means of funding growth.

| 5. | One Way Buy CDARS/ICS funding – a form of brokered deposits that has become a viable supplement to brokered deposits obtained directly.

| 6. | Bank Term Funding Program – A Federal Reserve program collateralized by government agency securities. The Bank obtained $40.0 million in funds through the BTFP in January 2024 at a fixed rate of 4.87%

​

​

The following table presents sources of liquidity available to the Corporation as of March 31, 2024.

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) | ​ | ​ | Total Availability | ​ | ​ | Amount Used | ​ | ​ | Net Availability
Internal Sources | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Excess cash | ​ | $ | 79,521 | ​ | $ | - | ​ | $ | 79,521
Unpledged securities | ​ | ​ | 35,757 | ​ | ​ | - | ​ | ​ | 35,757
External Sources | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Federal Reserve (discount window) | ​ | ​ | 31,776 | ​ | ​ | - | ​ | ​ | 31,776
Correspondent unsecured lines of credit | ​ | ​ | 140,000 | ​ | ​ | - | ​ | ​ | 140,000
FHLB | ​ | ​ | 235,475 | ​ | ​ | 42,914 | ​ | ​ | 192,561
Bank Term Funding Program | ​ | ​ | 40,000 | ​ | ​ | 40,000 | ​ | ​ | -
​ | ​ | $ | 562,529 | ​ | $ | 82,914 | ​ | $ | 479,615
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

Management is not aware of any demands, commitments, events or uncertainties that are likely to materially affect our ability to meet our future capital requirements.

​

Due to the market disruption and uncertainties, management implemented the Liquidity Contingency Plan in the first quarter and believes that we have adequate liquidity available to respond to current and anticipated liquidity demands and is not aware of any trends or demands, commitments, events or uncertainties that are likely to materially affect our ability to maintain liquidity at satisfactory levels.

Market Risk and Interest Sensitivity

Our primary market risk is interest rate fluctuation. Interest rate risk results primarily from the traditional banking activities that we engage in, such as gathering deposits and extending loans. Many factors, including economic and financial conditions, movements in interest rates and consumer preferences affect the difference between the interest earned on our assets and the interest paid on our liabilities. Interest rate sensitivity refers to the degree that earnings will be impacted by changes in the prevailing level of interest rates. Interest rate risk arises from mismatches in the repricing or maturity characteristics between interest-bearing assets and liabilities. Management seeks to minimize fluctuating net interest margins, and to enhance consistent growth of net interest income through periods of changing interest rates. Management uses interest sensitivity gap analysis and simulation models to measure and manage these risks. The interest rate sensitivity gap analysis assigns each interest-earning asset and interest-bearing liability to a time frame reflecting its next repricing or maturity date. The differences between total interest-sensitive assets and liabilities at each time interval represent the interest sensitivity gap for that interval. A positive gap generally indicates that rising interest rates during a given interval will increase net interest income, as more assets than liabilities will reprice. A negative gap position would benefit us during a period of declining interest rates.

At March 31, 2024, we were asset sensitive.

Our interest rate risk management goals are:

| ● | Ensure that the Board of Directors and senior management will provide effective oversight and ensure that risks are adequately identified, measured, monitored and controlled;

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| ● | Enable dynamic measurement and management of interest rate risk;

| ● | Select strategies that optimize our ability to meet our long-range financial goals while maintaining interest rate risk within policy limits established by the Board of Directors;

| ● | Use both income and market value oriented techniques to select strategies that optimize the relationship between risk and return; and

| ● | Establish interest rate risk exposure limits for fluctuation in net interest income (“NII”), net income and economic value of equity.

To manage interest sensitivity risk, management formulates guidelines regarding asset generation and pricing, funding sources and pricing, and off-balance sheet commitments. These guidelines are based on management’s outlook regarding future interest rate movements, the state of the regional and national economy, and other financial and business risk factors. Management uses computer simulations to measure the effect on net interest income of various interest rate scenarios. Key assumptions used in the computer simulations include cash flows and maturities of interest rate sensitive assets and liabilities, changes in asset volumes and pricing, and management’s capital plans. This modeling reflects interest rate changes and the related impact on net interest income over specified periods.

We evaluate the effect of a change in interest rates of +/-100 basis points to +/-400 basis points on both NII and Net Portfolio Value (“NPV”) / Economic Value of Equity (“EVE”). We concentrate on NII rather than net income as long as NII remains the significant contributor to net income.

NII modeling allows management to view how changes in interest rates will affect the spread between the yield paid on assets and the cost of deposits and borrowed funds. Unlike traditional Gap modeling, NII modeling takes into account the different degree to which installments in the same repricing period will adjust to a change in interest rates. It also allows the use of different assumptions in a falling versus a rising rate environment. The period considered by the NII modeling is the next eight quarters.

NPV / EVE modeling focuses on the change in the market value of equity. NPV / EVE is defined as the market value of assets less the market value of liabilities plus/minus the market value of any off-balance sheet positions. By effectively looking at the present value of all future cash flows on or off the balance sheet, NPV / EVE modeling takes a longer-term view of interest rate risk. This complements the shorter-term view of the NII modeling.

Measures of NII at risk produced by simulation analysis are indicators of an institution’s short-term performance in alternative rate environments. These measures are typically based upon a relatively brief period, usually one year. They do not necessarily indicate the long-term prospects or economic value of the institution.

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Based on the simulation analysis performed at March 31, 2024 and December 31, 2023, management estimated the following changes in net interest income, assuming the indicated rate changes:

​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | March 31, 2024 | ​ | December 31, 2023
+400 basis points | ​ | $ | 3,074 | ​ | $ | 4,464
+300 basis points | ​ | $ | 3,378 | ​ | $ | 3,353
+200 basis points | ​ | $ | 2,992 | ​ | $ | 2,255
+100 basis points | ​ | $ | 1,466 | ​ | $ | 1,155
-100 basis points | ​ | $ | (1,576) | ​ | $ | (1,280)
-200 basis points | ​ | $ | (4,016) | ​ | $ | (3,102)
-300 basis points | ​ | $ | (6,021) | ​ | $ | (5,249)
-400 basis points | ​ | $ | (8,501) | ​ | $ | (8,086)

​

​

This estimate is based on assumptions that may be affected by unforeseeable changes in the general interest rate environment and any number of unforeseeable factors. Rates on different assets and liabilities within a single maturity category adjust to changes in interest rates to varying degrees and over varying periods of time. The relationships between lending rates and rates paid on purchased funds are not constant over time. Management can respond to current or anticipated market conditions by lengthening or shortening the Bank’s sensitivity through loan repricings or changing its funding mix. The rate of growth in interest-free sources of funds will influence the level of interest-sensitive funding sources. In addition, the absolute level of interest rates will affect the volume of earning assets and funding sources. As a result of these limitations, the interest-sensitive gap is only one factor to be considered in estimating the net interest margin.

Management believes that no material changes in our market risks, our procedures used to evaluate and mitigate those risks, or our actual or simulated sensitivity positions have occurred since December 31, 2023. Our NII simulation analysis as of December 31, 2023 is included in Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2023 under the heading “Market Risk and Interest Sensitivity.

Impact of Inflation – Our assets and liabilities are primarily monetary in nature, and as such, future changes in prices do not affect the obligations to pay or receive fixed and determinable amounts of money. During inflationary periods, monetary assets lose value in terms of purchasing power and monetary liabilities have corresponding purchasing power gains. The concept of purchasing power is not an adequate indicator of the impact of inflation on financial institutions because it does not incorporate changes in our earnings.

Capital Resources

We require capital to fund loans, satisfy our obligations under the Bank’s letters of credit, meet the deposit withdrawal demands of the Bank’s customers, and satisfy our other monetary obligations. To the extent that deposits are not adequate to fund our capital requirements, we can rely on the funding sources identified above under the heading “Liquidity Management”.

In addition to operational requirements, the Bank is subject to risk-based capital regulations, which were adopted and are monitored by federal banking regulators. These regulations are used to evaluate capital adequacy and require an analysis of an institution’s asset risk profile and off-balance sheet exposures, such as unused loan commitments and stand-by letters of credit. Based on capital ratios at March 31, 2024, the Bank was considered to be well-capitalized.

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The following table presents the Bank’s capital ratios as of the dates indicated:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | March 31, 2024 |  | December 31, 2023 |  | Required for Capital Adequacy Purposes |  | Required to be Well Capitalized |
Total Capital (to risk-weighted assets) | ​ | 14.17 | % | 14.05 | % | 8.00 | % | 10.00 | %
Tier 1 Capital (to risk-weighted assets) | ​ | 12.92 | % | 12.81 | % | 6.00 | % | 8.00 | %
Common Equity Tier 1 Capital (to risk-weighted assets) | ​ | 12.92 | % | 12.81 | % | 4.50 | % | 6.50 | %
Tier 1 Capital (to average assets) | ​ | 10.08 | % | 9.92 | % | 4.00 | % | 5.00 | %

​

As of both March 31, 2024 and December 31, 2023, the Bank was considered “well capitalized” under the regulatory framework for prompt corrective action.

​

Contractual Obligations, Commitments and Off-Balance Sheet Arrangements

Contractual Obligations

The Corporation enters into contractual obligations in the normal course of business. Among these obligations are FHLB advances and junior subordinated debentures, operating lease agreements for banking and subsidiaries’ offices and for data processing and telecommunications equipment. Comparing March 31, 2024 to December 31, 2023, short-term borrowings increased by $34.1 million as the Bank borrowed $40.0 million from the BTFP in January 2024, which was partially offset by a decrease of $4.9 million in other short-term borrowings due to fluctuations in municipal customer balances in overnight investment sweep products.

Commitments

Loan commitments are made to accommodate the financial needs of our customers. Letters of credit commit us to make payments on behalf of customers when certain specified future events occur. The credit risks inherent in loan commitments and letters of credit are essentially the same as those involved in extending loans to customers, and these arrangements are subject to our normal credit policies. We are not a party to any other off-balance sheet arrangements.

Commitments to extend credit in the form of consumer, commercial and business at the dates indicated were as follows:

​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | March 31, 2024 |  | December 31, 2023
Residential mortgage - home equity | ​ | $ | 72,515 | ​ | $ | 72,080
Residential mortgage - construction | ​ | ​ | 13,815 | ​ | ​ | 17,684
Commercial | ​ | ​ | 154,146 | ​ | ​ | 160,196
Consumer - personal credit lines | ​ | ​ | 4,232 | ​ | ​ | 4,186
Standby letters of credit | ​ | ​ | 11,436 | ​ | ​ | 11,037
Total | ​ | $ | 256,144 | ​ | $ | 265,183

​

The decrease of $9.0 million in commitments at March 31, 2024 when compared to December 31, 2023 was due to fluctuations in line of credit balances of commercial customers.

Credit loss expense for off-balance sheet credit exposures was a credit of $15 thousand for the three-month period ended March 31, 2024.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The information required by this item is included in Item 2 of Part I of this report under the caption “Market Risk and Interest Sensitivity” and in Item 7 of Part II of First United Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023 under the heading “Market Risk and Interest Sensitivity” both of which are incorporated in this Item 3 by reference.

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Item 4. Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 with the SEC, such as this Quarterly Report, is recorded, processed, summarized and reported within the periods specified in those rules and forms, and that such information is accumulated and communicated to our management, including First United Corporation’s principal executive officer (“PEO”) and its principal financial officer (“PFO”), as appropriate, to allow for timely decisions regarding required disclosure. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

An evaluation of the effectiveness of these disclosure controls as of March 31, 2024 was carried out under the supervision and with the participation of management, including the PEO and the PFO. Based on that evaluation, management, including the PEO and the PFO, has concluded that our disclosure controls and procedures are, in fact, effective at the reasonable assurance level.

During the three months ended March 31, 2024, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Part II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

The risks and uncertainties to which our financial condition and operations are subject are discussed in detail in Item 1A of Part I of First United Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023. Management does not believe that any material changes in our risk factors have occurred since they were last disclosed.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

During the quarter ended March 31, 2024, Marisa Shockley, a director of the Company, terminated a “non-Rule 10b5-1 trading arrangement” (as defined in Item 408(c) of the SEC’s Regulation S-K). The arrangement was adopted on May 16, 2023 and contemplated the monthly purchase on the open market of a specified dollar amount of shares of the Company’s common stock on the first business day of each month, beginning on June 1, 2023, at times and at market prices on such dates as determined by her broker, until the earlier of (i) the termination of the plan by Ms. Shockley, (ii) the termination of Ms. Shockley’s position as a director or an officer of the Company, (iii) Ms. Shockley’s death and (iv) May 31, 2024.

During the quarter ended March 31, 2024, no other director or officer of the Company adopted or terminated (i) any contract, instruction or written plan for the purchase or sale of securities of the registrant intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) promulgated under the Exchange Act or (ii) any “non-Rule 10b5-1 trading arrangement” (as defined in Item 408(c) of the SEC’s Regulation S-K).

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Item 6. Exhibits

The exhibits filed or furnished with this quarterly report are listed in the following Exhibit Index.

​ | ​ | ​
Exhibit |  | Description
31.1 | ​ | Certifications of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act (filed herewith)
31.2 | ​ | Certifications of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act (filed herewith)
32 | ​ | Certification of the Principal Executive Officer and the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act (furnished herewith)
101.INS | ​ | Inline XBRL Instance Document (filed herewith)
101.SCH | ​ | Inline XBRL Taxonomy Extension Schema (filed herewith)
101.CAL | ​ | Inline XBRL Taxonomy Extension Calculation Linkbase (filed herewith)
101.DEF | ​ | Inline XBRL Taxonomy Extension Definition Linkbase (filed herewith)
101.LAB | ​ | Inline XBRL Taxonomy Extension Label Linkbase (filed herewith)
101.PRE | ​ | Inline XBRL Taxonomy Extension Presentation Linkbase (filed herewith)
104 | ​ | The cover page of First United Corporation’s Quarterly Report on Form 10Q for the quarter ended March 31, 2024 formatted in Inline XBRL, included within the Exhibit 101 attachments (filed herewith).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

​ ​ | ​
​ ​ | FIRST UNITED CORPORATION
​ | ​
​ | ​
Date: May 8, 2024 | /s/ Carissa L. Rodeheaver
​ | Carissa L. Rodeheaver, CPA
​ | Chairman of the Board, President and Chief Executive Officer
​ | (Principal Executive Officer)
​ | ​
​ | ​
Date: May 8, 2024 | /s/ Tonya K. Sturm
​ | Tonya K. Sturm, Senior Vice President,
​ | Chief Financial Officer
​ | (Principal Financial Officer and Principal Accounting Officer)

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