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LOANS AND ALLOWANCE FOR CREDIT LOSSES

3 Months Ended

Mar. 31, 2024

LOANS AND ALLOWANCE FOR CREDIT LOSSES [Abstract]

NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans are comprised of the following:

	March 31, 2024			December 31, 2023

Residential real estate	$	324,738		$	319,504
Commercial real estate:
Owner-occupied		79,317			82,356
Nonowner-occupied		182,994			178,201
Construction		73,586			62,337
Commercial and industrial		160,473			157,298
Consumer:
Automobile		58,641			61,461
Home equity		38,434			35,893
Other		71,679			74,850
		989,862			971,900
Less: Allowance for credit losses		(9,229	)		(8,767	)

Loans, net	$	980,633		$	963,133

At March 31, 2024 and December 31, 2023, net deferred loan origination costs were $777 and $794, respectively. At March 31, 2024 and December 31, 2023, net unamortized loan purchase premiums were $631 and $687, respectively.

The following table presents the recorded investment of nonaccrual loans and loans past due 90 days or more and still accruing by class of loans as of March 31, 2024 and December 31, 2023:

March 31, 2024	Loans Past Due 90 Days And Still Accruing		Nonaccrual Loans With No ACL		Nonaccrual Loans With an ACL		Total Nonaccrual Loans

Residential real estate	$	13	$	1,663	$	357	$	2,020
Commercial real estate:
Owner-occupied		—		885		—		885
Nonowner-occupied		—		—		66		66
Construction		—		—		—		—
Commercial and industrial		—		105		44		149
Consumer:
Automobile		145		—		94		94
Home equity		—		27		125		152
Other		39		—		115		115
Total	$	197	$	2,680	$	801	$	3,481

December 31, 2023	Loans Past Due 90 Days And Still Accruing		Nonaccrual Loans With No ACL		Nonaccrual Loans With an ACL		Total Nonaccrual Loans

Residential real estate	$	9	$	—	$	1,234	$	1,234
Commercial real estate:
Owner-occupied		—		775		—		775
Nonowner-occupied		—		—		61		61
Construction		—		—		1		1
Commercial and industrial		—		—		48		48
Consumer:
Automobile		56		—		78		78
Home equity		—		—		95		95
Other		54		—		100		100
Total	$	119	$	775	$	1,617	$	2,392

The Company recognized $4 and $20 of interest income in nonaccrual loans during the three months ended March 31, 2024 and 2023, respectively.

The following table presents the aging of the recorded investment of past due loans by class of loans as of March 31, 2024 and December 31, 2023:

March 31, 2024	30-59 Days Past Due		60-89 Days Past Due		90 Days Or More Past Due		Total Past Due		Loans Not Past Due		Total

Residential real estate	$	2,941	$	687	$	1,141	$	4,769	$	319,969	$	324,738
Commercial real estate:
Owner-occupied		70		805		179		1,054		78,263		79,317
Nonowner-occupied		173		—		-		173		182,821		182,994
Construction		-		3		—		3		73,583		73,586
Commercial and industrial		615		—		149		764		159,709		160,473
Consumer:
Automobile		1,117		116		221		1,454		57,187		58,641
Home equity		351		112		92		555		37,879		38,434
Other		510		633		149		1,292		70,387		71,679
Total	$	5,777	$	2,356	$	1,931	$	10,064	$	979,798	$	989,862

December 31, 2023	30-59 Days Past Due		60-89 Days Past Due		90 Days Or More Past Due		Total Past Due		Loans Not Past Due		Total

Residential real estate	$	2,705	$	368	$	481	$	3,554	$	315,950	$	319,504
Commercial real estate:
Owner-occupied		2,580		—		775		3,355		79,001		82,356
Nonowner-occupied		681		—		—		681		177,520		178,201
Construction		—		—		—		—		62,337		62,337
Commercial and industrial		3,338		—		48		3,386		153,912		157,298
Consumer:
Automobile		782		210		117		1,109		60,352		61,461
Home equity		353		62		95		510		35,383		35,893
Other		658		121		148		927		73,923		74,850
Total	$	11,097	$	761	$	1,664	$	13,522	$	958,378	$	971,900

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. These risk categories are represented by a loan grading scale from 1 through 11. The Company analyzes loans individually with a higher credit risk rating and groups these loans into categories called “criticized” and ”classified” assets. The Company considers its criticized assets to be loans that are graded 8 and its classified assets to be loans that are graded 9 through 11. The Company’s risk categories are reviewed at least annually on loans that have aggregate borrowing amounts that meet or exceed.

The Company uses the following definitions for its criticized loan risk ratings:

Special Mention. Loans classified as “special mention” are graded 8 and indicate considerable risk due to deterioration of repayment (in the earliest stages) due to potential weak primary repayment source, or payment delinquency. These loans will be under constant supervision, are not classified and do not expose the institution to sufficient risks to warrant classification. These deficiencies should be correctable within the normal course of business, although significant changes in company structure or policy may be necessary to correct the deficiencies. These loans are considered bankable assets with no apparent loss of principal or interest envisioned. The perceived risk in continued lending is considered to have increased beyond the level where such loans would normally be granted.

The Company uses the following definitions for its classified loan risk ratings:

Substandard. Loans classified as “substandard” are graded 9 and represent very high risk, serious delinquency, nonaccrual, or unacceptable credit. Repayment through the primary source of repayment is in jeopardy due to the existence of one or more well-defined weaknesses, and the collateral pledged may inadequately protect collection of the loans. Loss of principal is not likely if weaknesses are corrected, although financial statements normally reveal significant weakness. Loans are still considered collectible, although loss of principal is more likely than with special mention loans. Collateral liquidation is considered likely to satisfy debt.

Doubtful. Loans classified as “doubtful” are graded 10 and display a high probability of loss, although the amount of actual loss at the time of classification is undetermined. This classification should be temporary until such time that actual loss can be identified, or improvements are made to reduce the seriousness of the classification. These loans exhibit all substandard characteristics with the addition that weaknesses make collection or liquidation in full highly questionable and improbable. This classification consists of loans where the possibility of loss is high after collateral liquidation based upon existing facts, market conditions, and value. Loss is deferred until certain important and reasonable specific pending factors that may strengthen the credit can be more accurately determined. These factors may include proposed acquisitions, liquidation procedures, capital injection, receipt of additional collateral, mergers, or refinancing plans. A doubtful classification for an entire credit should be avoided when collection of a specific portion appears highly probable with the adequately secured portion graded substandard.

Loss. Loans classified as “loss” are graded 11 and are considered uncollectible and are of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the credit has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this asset yielding such a minimum value even though partial recovery may be affected in the future. Amounts classified as loss should be promptly charged off.

As of March 31, 2024 and December 31, 2023, and based on the most recent analysis performed, the risk category of commercial loans by class of loans was as follows:

													Revolving
													Loans
	Term Loans Amortized Cost Basis by Origination Year												Amortized
March 31, 2024	2024		2023		2022		2021		2020		Prior		Cost Basis		Total

Commercial real estate:
Owner-occupied
Risk Rating
Pass	$	1,571	$	17,801	$	7,859	$	10,484	$	5,735	$	18,700	$	347	$	62,497
Special Mention		—		—		—		13,405		—		633		99		14,137
Substandard		—		—		—		—		—		2,383		300		2,683
Doubtful		—		—		—		—		—		—		—		—
Total	$	1,571	$	17,801	$	7,859	$	23,889	$	5,735	$	21,716	$	746	$	79,317

Current Period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

													Revolving
													Loans
	Term Loans Amortized Cost Basis by Origination Year												Amortized
March 31, 2024	2024		2023		2022		2021		2020		Prior		Cost Basis		Total

Commercial real estate:
Nonowner-occupied
Risk Rating
Pass	$	9,036	$	6,210	$	27,689	$	31,906	$	20,259	$	70,782	$	5,585	$	171,467
Special Mention		—		1,663		113		760		—		5,791		—		8,327
Substandard		—		—		—		—		3,200		—		—		3,200
Doubtful		—		—		—		—		—		—		—		—
Total	$	9,036	$	7,873	$	27,802	$	32,666	$	23,459	$	76,573	$	5,585	$	182,994

Current Period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

													Revolving
													Loans
	Term Loans Amortized Cost Basis by Origination Year												Amortized
March 31, 2024	2024		2023		2022		2021		2020		Prior		Cost Basis		Total

Commercial real estate:
Construction
Risk Rating
Pass	$	2,820	$	33,479	$	31,455	$	1,186	$	296	$	3,148	$	306	$	72,690
Special Mention		—		657		—		—		—		52		—		709
Substandard		—		—		—		—		—		187		—		187
Doubtful		—		—		—		—		—		—		—		—
Total	$	2,820	$	34,136	$	31,455	$	1,186	$	296	$	3,387	$	306	$	73,586

Current Period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

													Revolving
													Loans
	Term Loans Amortized Cost Basis by Origination Year												Amortized
March 31, 2024	2024		2023		2022		2021		2020		Prior		Cost Basis		Total

Commercial and Industrial
Risk Rating
Pass	$	3,436	$	8,363	$	29,893	$	26,592	$	30,383	$	27,512	$	28,631	$	154,810
Special Mention		—		196		91		503		273		—		440		1,503
Substandard		—		134		—		55		1,291		165		2,515		4,160
Doubtful		—		—		—		—		—		—		—		—
Total	$	3,436	$	8,693	$	29,984	$	27,150	$	31,947	$	27,677	$	31,586	$	160,473

Current Period gross charge-offs	$	107	$	—	$	—	$	1	$	—	$	—	$	1	$	109

													Revolving
													Loans
	Term Loans Amortized Cost Basis by Origination Year												Amortized
December 31, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total

Commercial real estate:
Owner-occupied
Risk Rating
Pass	$	18,120	$	7,911	$	10,679	$	5,973	$	6,125	$	15,925	$	459	$	65,192
Special Mention		—		—		—		—		—		427		—		427
Substandard		—		—		13,934		—		498		2,005		300		16,737
Doubtful		—		—		—		—		—		—		—		—
Total	$	18,120	$	7,911	$	24,613	$	5,973	$	6,623	$	18,357	$	759	$	82,356

Current Period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

													Revolving
													Loans
	Term Loans Amortized Cost Basis by Origination Year												Amortized
December 31, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total

Commercial real estate:
Nonowner-occupied
Risk Rating
Pass	$	12,688	$	29,344	$	32,235	$	20,484	$	15,415	$	61,809	$	1,128	$	173,103
Special Mention		—		—		768		3,226		—		1,034		—		5,028
Substandard		—		—		70		—		—		—		—		70
Doubtful		—		—		—		—		—		—		—		—
Total	$	12,688	$	29,344	$	33,073	$	23,710	$	15,415	$	62,843	$	1,128	$	178,201

Current Period gross charge-offs	$	—	$	—	$	132	$	—	$	—	$	—	$	—	$	132

													Revolving
													Loans
	Term Loans Amortized Cost Basis by Origination Year												Amortized
December 31, 2023	2023		2022		2021		2020			20219	Prior		Cost Basis		Total

Commercial real estate:
Construction
Risk Rating
Pass	$	28,055	$	29,174	$	1,231	$	302	$	392	$	2,937	$	—	$	62,091
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		246		—		246
Doubtful		—		—		—		—		—		—		—		—
Total	$	28,055	$	29,174	$	1,231	$	302	$	392	$	3,183	$	—	$	62,337

Current Period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

													Revolving
													Loans
	Term Loans Amortized Cost Basis by Origination Year												Amortized
December 31, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total

Commercial and Industrial
Risk Rating
Pass	$	8,770	$	30,885	$	26,806	$	31,247	$	344	$	27,632	$	27,510	$	153,194
Special Mention		140		—		—		—		—		8		66		214
Substandard		—		—		58		1,363		4		182		2,283		3,890
Doubtful		—		—		—		—		—		—		—		—
Total	$	8,910	$	30,885	$	26,864	$	32,610	$	348	$	27,822	$	29,859	$	157,298

Current Period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	29	$	29

The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. For residential and consumer loan classes, the Company evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the recorded investment of residential and consumer loans by class of loans based on repayment activity as of March 31, 2024 and December 31, 2023:

													Revolving
													Loans
	Term Loans Amortized Cost Basis by Origination Year												Amortized
March 31, 2024	2024		2023		2022		2021		2020		Prior		Cost Basis		Total

Residential Real Estate:
Payment Performance
Performing	$	8,841	$	53,765	$	43,313	$	50,199	$	43,511	$	109,602	$	13,474	$	322,705
Nonperforming		—		—		927		—		—		1,106		—		2,033
Total	$	8,841	$	53,765	$	44,240	$	50,199	$	43,511	$	110,708	$	13,474	$	324,738

Current Period gross charge-offs	$	—	$	—	$	10	$	—	$	—	$	27	$	—	$	37

													Revolving
													Loans
	Term Loans Amortized Cost Basis by Origination Year												Amortized
March 31, 2024	2024		2023		2022		2021		2020		Prior		Cost Basis		Total

Consumer - Automobile:
Payment Performance
Performing	$	3,894	$	26,641	$	18,048	$	5,922	$	2,504	$	1,393	$	—	$	58,402
Nonperforming		—		128		51		37		—		23		—		239
Total	$	3,894	$	26,769	$	18,099	$	5,959	$	2,504	$	1,416	$	—	$	58,641

Current Period gross charge-offs	$	—	$	64	$	129	$	5	$	—	$	2	$	—	$	200

													Revolving
													Loans
	Term Loans Amortized Cost Basis by Origination Year												Amortized
March 31, 2024	2024		2023		2022		2021		2020		Prior		Cost Basis		Total

Consumer - Home Equity:
Payment Performance
Performing	$	—	$	1,773	$	—	$	92	$	—	$	119	$	36,298	$	38,282
Nonperforming		—		—		—		—		—		—		152		152
Total	$	—	$	1,773	$	—	$	92	$	—	$	119	$	36,450	$	38,434

Current Period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

													Revolving
													Loans
	Term Loans Amortized Cost Basis by Origination Year												Amortized
March 31, 2024	2024		2023		2022		2021		2020		Prior		Cost Basis		Total

Consumer - Other:
Payment Performance
Performing	$	4,747	$	25,236	$	12,305	$	9,713	$	3,951	$	1,697	$	13,877	$	71,526
Nonperforming		—		38		35		6		36		4		34		153
Total	$	4,747	$	25,274	$	12,340	$	9,719	$	3,987	$	1,701	$	13,911	$	71,679

Current Period gross charge-offs	$	68	$	18	$	28	$	51	$	16	$	2	$	65	$	248

													Revolving
													Loans
	Term Loans Amortized Cost Basis by Origination Year												Amortized
December 31, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total

Residential Real Estate:
Payment Performance
Performing	$	50,484	$	44,640	$	50,949	$	44,818	$	21,854	$	91,956	$	13,560	$	318,261
Nonperforming		—		—		—		—		182		1,061		—		1,243
Total	$	50,484	$	44,640	$	50,949	$	44,818	$	22,036	$	93,017	$	13,560	$	319,504

Current Period gross charge-offs	$	—	$	—	$	3	$	—	$	—	$	118	$	—	$	121

													Revolving
													Loans
	Term Loans Amortized Cost Basis by Origination Year												Amortized
December 31, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total

Consumer - Automobile:
Payment Performance
Performing	$	28,939	$	20,376	$	7,013	$	3,028	$	1,212	$	759	$	—	$	61,327
Nonperforming		34		60		15		1		9		15		—		134
Total	$	28,973	$	20,436	$	7,028	$	3,029	$	1,221	$	774	$	—	$	61,461

Current Period gross charge-offs	$	51	$	163	$	116	$	6	$	29	$	3	$	—	$	368

													Revolving
													Loans
	Term Loans Amortized Cost Basis by Origination Year												Amortized
December 31, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total

Consumer - Home Equity:
Payment Performance
Performing	$	1,649	$	79	$	—	$	—	$	—	$	—	$	34,070	$	35,798
Nonperforming		—		—		—		—		—		—		95		95
Total	$	1,649	$	79	$	—	$	—	$	—	$	—	$	34,165	$	35,893

Current Period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	87	$	87

													Revolving
													Loans
	Term Loans Amortized Cost Basis by Origination Year												Amortized
December 31, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		Total

Consumer - Other:
Payment Performance
Performing	$	18,377	$	24,904	$	10,800	$	4,482	$	1,093	$	953	$	14,087	$	74,696
Nonperforming		11		17		67		53		1		4		1		154
Total	$	18,388	$	24,921	$	10,867	$	4,535	$	1,094	$	957	$	14,088	$	74,850

Current Period gross charge-offs	$	306	$	119	$	119	$	84	$	28	$	53	$	246	$	955

The Company originates residential, consumer, and commercial loans to customers located primarily in the southeastern areas of Ohio as well as the western counties of West Virginia. Approximately 4.46% of total loans were unsecured at March 31, 2024, up from 4.37% at December 31, 2023.

Modifications to Borrowers Experiencing Financial Difficulty:

Occasionally, the Company modifies loans to borrowers experiencing financial difficulty. These modifications may include one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a reduction in the contractual principal and interest payments of the loan; or short-term interest-only payment terms. All modifications to borrowers experiencing financial difficulty are considered to be impaired.

During the three months ended March 31, 2024 and 2023, the Company experienced no new modifications to borrowers experiencing financial difficulty.

The following table presents the activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2024 and 2023:

March 31, 2024	Residential Real Estate			Commercial Real Estate		Commercial and Industrial			Consumer			Total
Allowance for credit losses:
Beginning balance	$	2,213		$	3,047	$	1,275		$	2,232		$	8,767
Provision for credit losses		130			188		184			355			857
Loans charged-off		(37	)		—		(109	)		(448	)		(594	)
Recoveries		22			11		4			162			199
Total ending allowance balance	$	2,328		$	3,246	$	1,354		$	2,301		$	9,229

March 31, 2023	Residential Real Estate			Commercial Real Estate			Commercial and Industrial			Consumer			Total
Allowance for credit losses:
Beginning balance	$	2,026		$	2,200		$	1,177		$	2,028		$	7,431
Provision for credit losses		39			225			21			180			465
Loans charged-off		(47	)		(132	)		(29	)		(248	)		(456	)
Recoveries		13			13			8			133			167
Total ending allowance balance	$	2,031		$	2,306		$	1,177		$	2,093		$	7,607

The following table presents the amortized cost basis of collateral dependent loans by class of loans as of March 31, 2024 and December 31, 2023:

	Collateral Type
March 31, 2024	Real Estate		Business Assets		Total
Residential real estate	$	1,663	$	—	$	1,663
Commercial real estate:
Owner-occupied		696		189		885
Consumer:
Home equity		27		—		27
Total collateral dependent loans	$	2,386	$	189	$	2,575

	Collateral Type
December 31, 2023	Real Estate		Business Assets		Total
Residential real estate	$	1,663	$	—	$	1,663
Commercial real estate:
Owner-occupied		700		258		958
Consumer:
Home equity		27		—		27
Total collateral dependent loans	$	2,390	$	258	$	2,648

The recorded investment of a loan excludes accrued interest and net deferred origination fees and costs due to immateriality.

Nonaccrual loans and loans past due 90 days or more and still accruing include both smaller balance homogenous loans that are collectively evaluated for impairment and individually classified as impaired loans.

The Company transfers loans to other real estate owned, at fair value less cost to sell, in the period the Company obtains physical possession of the property (through legal title or through a deed in lieu). The Company had no other real estate owned for residential real estate properties at March 31, 2024 compared to $68 at December 31, 2023. In addition, nonaccrual residential mortgage loans that are in the process of foreclosure had a recorded investment of $196 and $348 as of March 31, 2024 and December 31, 2023, respectively.