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Note 4 - Loans and Allowance for Credit Losses

12 Months Ended

Dec. 31, 2023

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

(4) LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans at December 31, 2023 and 2022 consisted of the following:

	December 31,			December 31,
(In thousands)	2023			2022
				(As reclassified)

1-4 Family Residential Mortgage	$	133,480		$	116,269
Home Equity and Second Mortgage		62,070			57,872
Multifamily Residential		39,963			38,973
1-4 Family Residential Construction		15,667			16,575
Other Construction, Development and Land		76,713			47,632
Commercial Real Estate		168,757			161,362
Commercial Business		68,223			68,066
Consumer and Other		56,373			56,768
Principal loan balance		621,246			563,517

Deferred loan origination fees and costs, net		1,168			1,213
Allowance for credit losses		(8,005	)		(6,772	)

Loans, net	$	614,409		$	557,958

At December 31, 2023 and 2022, residential mortgage loans secured by residential properties without private mortgage insurance or government guarantee and with loan-to-value ratios exceeding 90% amounted to approximately $785,000 and $1.0 million, respectively.

The Bank has entered into loan transactions with certain directors, officers and their affiliates (i.e., related parties). In the opinion of management, such indebtedness was incurred in the ordinary course of business on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable transactions with unrelated persons and does not involve more than normal risk of collectability or present other unfavorable features.

The following table represents the aggregate activity for related party loans during the years ended December 31, 2023 and 2022. Adjustments are made to reflect new directors and officers added during the year, as well as directors and officers that left the Company during the year.

(In thousands)	2023			2022

Beginning balance	$	6,279		$	7,233
Adjustments due to officer and director changes		(14	)		(711	)
New loans		837			1,189
Payments		(1,225	)		(1,432	)

Ending balance	$	5,877		$	6,279

Off-balance-sheet commitments (including commitments to make loans, unused lines of credit and letters of credit) to related parties at December 31, 2023 and 2022 were $2.6 million and $2.7 million, respectively.

The following table provides the components of the Company’s amortized cost basis in loans at December 31, 2023:

										Other
	*1-4 Family*		*Home Equity*					*1-4 Family*		*Construction,*
	*Residential*		*and Second*		*Multifamily*			*Residential*		*Development*			*Commercial*			*Commercial*			*Consumer*
	*Mortgage*		*Mortgage*		*Residential*			*Construction*		*and Land*			*Real Estate*			*Business*			*and Other*		*Total*
	(In thousands)
Amortized Cost Basis in Loans:
Principal loan balance	$	133,480	$	62,070	$	39,963		$	15,667	$	76,713		$	168,757		$	68,223		$	56,373	$	621,246

Net deferred loan origination fees and costs		121		1,231		(17	)		-		(44	)		(112	)		(11	)		-		1,168

Amortized cost basis in loans	$	133,601	$	63,301	$	39,946		$	15,667	$	76,669		$	168,645		$	68,212		$	56,373	$	622,414

The following table presents the activity in the ACL on loans by class of loan for the year ended December 31, 2023:

													Other
	*1-4 Family*			*Home Equity*						*1-4 Family*			*Construction,*
	*Residential*			*and Second*			*Multifamily*			*Residential*			*Development*		*Commercial*			*Commercial*			*Consumer*
	*Mortgage*			*Mortgage*			*Residential*			*Construction*			*and Land*		*Real Estate*			*Business*			*and Other*			*Total*
	(In thousands)
ACL on Loans:

Beginning balance, prior to adoption of ASC 326	$	1,036		$	531		$	346		$	206		$	587	$	2,029		$	1,156		$	881		$	6,772
Impact of adopting ASC 326		423			(26	)		(3	)		(9	)		13		(130	)		(142	)		435			561
Provision for credit losses		41			(86	)		(11	)		11			204		220			613			149			1,141
Charge-offs		(31	)		(15	)		-			-			-		-			(205	)		(430	)		(681	)
Recoveries		21			2			-			-			-		-			9			180			212

Ending balance	$	1,490		$	406		$	332		$	208		$	804	$	2,119		$	1,431		$	1,215		$	8,005

Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. There have been no significant changes to the types of collateral securing the Company’s collateral dependent loans. The following table presents the amortized cost basis of, and ACL allocation to, individually evaluated collateral-dependent loans by class of loans as of December 31, 2023:

	Real						ACL
	Estate		Other		Total		Allocation
	(In thousands)

1-4 Family Residential Mortgage	$	1,651	$	-	$	1,651	$	9
Home Equity and Second Mortgage		548		-		548		-
Multifamily Residential		-		-		-		-
1-4 Family Residential Construction		87		-		87		60
Other Construction, Development and Land		54		-		54		-
Commercial Real Estate		1,055		-		1,055		-
Commercial Business		-		38		38		-
Consumer and Other		-		-		-		-
	$	3,395	$	38	$	3,433	$	69

Nonperforming loans consists of nonaccrual loans and loans past due and still accruing interest. The following table presents the amortized cost basis of loans on nonaccrual status and loans 90 days or more past due still accruing as of December 31, 2023:

							Loans 90+ Days		Total
	*Nonaccrual Loans*		*Nonaccrual Loans*		*Total*		*Past Due*		*Nonperforming*
	*with No ACL*		*with An ACL*		*Nonaccrual*		*Still Accruing*		*Loans*
	(In thousands)

1-4 Family Residential Mortgage	$	1,120	$	36	$	1,156	$	-	$	1,156
Home Equity and Second Mortgage		454		-		454		-		454
Multifamily Residential		-		-		-		-		-
1-4 Family Residential Construction		-		87		87		-		87
Other Construction, Development and Land		54		-		54		-		54
Commercial Real Estate		-		-		-		-		-
Commercial Business		-		-		-		-		-
Consumer and Other		-		-		-		-		-

Total	$	1,628	$	123	$	1,751	$	-	$	1,751

No interest income was recognized on nonaccrual loans during the year ended December 31, 2023.

The following table presents the aging of the amortized cost basis in loans at December 31, 2023:

	30-59 Days		60-89 Days		90 Days or More		Total				Total
	Past Due		Past Due		Past Due		Past Due		Current		Loans
	(In thousands)

1-4 Family Residential Mortgage	$	2,104	$	335	$	482	$	2,921	$	130,680	$	133,601
Home Equity and Second Mortgage		396		70		-		466		62,835		63,301
Multifamily Residential		-		-		-		-		39,946		39,946
1-4 Family Residential Construction		-		-		-		-		15,667		15,667
Other Construction, Development and Land		162		-		54		216		76,453		76,669
Commercial Real Estate		834		-		-		834		167,811		168,645
Commercial Business		-		-		-		-		68,212		68,212
Consumer and Other		302		51		-		353		56,020		56,373

Total	$	3,798	$	456	$	536	$	4,790	$	617,624	$	622,414

Occasionally, the Company modifies loans to borrowers in financial distress. During the year ended December 31, 2023, no material loans to borrowers experiencing financial distress were modified. There were no loans to borrowers experiencing financial distress that were modified during the previous 12 months and which subsequently defaulted during the year ended December 31, 2023. There were no unfunded commitments associated with loans modified for borrowers experiencing financial distress as of December 31, 2023.

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, public information, historical payment experience, credit documentation, and current economic trends, among other factors. The Company classifies loans based on credit risk at least quarterly. The Company uses the following regulatory definitions for risk ratings:

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

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

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

Loss: Loans classified as loss are considered uncollectible and of such little value that their continuance on the institution’s books as an asset is not warranted.

Loans not meeting the criteria above that are analyzed individually as part of the described process are considered to be pass rated loans.

Based on the most recent analysis performed, the risk category of loans by class of loans as of December 31, 2023 and gross write-offs for the year then ended are as follows:

	Term Loans Amortized Cost Basis by Origination Year
	2023		2022		2021		2020		2019		Prior		Revolving		Total
	(In thousands)
1-4 Family Residential Mortgage
Pass	$	34,344	$	31,551	$	25,846	$	6,913	$	9,525	$	23,628	$	-	$	131,807
Special Mention		-		-		-		-		-		144		-		144
Substandard		-		-		-		75		265		155		-		495
Doubtful		-		48		192		78		-		837		-		1,155
	$	34,344	$	31,599	$	26,038	$	7,066	$	9,790	$	24,764	$	-	$	133,601

Current period gross write-offs	$	-	$	-	$	2	$	-	$	-	$	29	$	-	$	31

Home Equity and Second Mortgage
Pass	$	5,267	$	4,380	$	529	$	232	$	163	$	327	$	51,794	$	62,692
Special Mention		-		-		-		-		-		-		61		61
Substandard		-		-		-		-		-		-		94		94
Doubtful		-		-		-		-		264		190		-		454
	$	5,267	$	4,380	$	529	$	232	$	427	$	517	$	51,949	$	63,301

Current period gross write-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	15	$	15

Multifamily Residential
Pass	$	3,374	$	10,495	$	9,534	$	7,943	$	4,137	$	4,463	$	-	$	39,946
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-
	$	3,374	$	10,495	$	9,534	$	7,943	$	4,137	$	4,463	$	-	$	39,946

Current period gross write-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

	Term Loans Amortized Cost Basis by Origination Year
	2023		2022		2021		2020		2019		Prior		Revolving		Total
	(In thousands)
1-4 Family Residential Construction
Pass	$	9,193	$	4,180	$	831	$	1,119	$	-	$	257	$	-	$	15,580
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-
Doubtful		-		-		87		-		-		-		-		87
	$	9,193	$	4,180	$	918	$	1,119	$	-	$	257	$	-	$	15,667

Current period gross write-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Other Construction, Development and Land
Pass	$	26,717	$	35,673	$	7,495	$	2,655	$	1,231	$	2,795	$	-	$	76,566
Special Mention		-		-		-		-		-		49		-		49
Substandard		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		54		-		54
	$	26,717	$	35,673	$	7,495	$	2,655	$	1,231	$	2,898	$	-	$	76,669

Current period gross write-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Commercial Real Estate
Pass	$	14,818	$	40,675	$	29,656	$	19,589	$	18,231	$	38,818	$	1,755	$	163,542
Special Mention		823		-		573		1,622		417		62		550		4,047
Substandard		-		-		-		231		-		825		-		1,056
Doubtful		-		-		-		-		-		-		-		-
	$	15,641	$	40,675	$	30,229	$	21,442	$	18,648	$	39,705	$	2,305	$	168,645

Current period gross write-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Commercial Business
Pass	$	14,717	$	12,603	$	11,049	$	5,706	$	5,312	$	3,646	$	12,384	$	65,417
Special Mention		208		2,097		106		48		160				138		2,757
Substandard		-		-		-		-		38		-		-		38
Doubtful		-		-		-		-		-		-		-		-
	$	14,925	$	14,700	$	11,155	$	5,754	$	5,510	$	3,646	$	12,522	$	68,212

Current period gross write-offs	$	-	$	155	$	2	$	26	$	-	$	6	$	16	$	205

	Term Loans Amortized Cost Basis by Origination Year
	2023		2022		2021		2020		2019		Prior		Revolving		Total
	(In thousands)
Consumer and Other
Pass	$	23,335	$	13,906	$	7,662	$	2,604	$	846	$	5,446	$	2,484	$	56,283
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		90		90
Doubtful		-		-		-		-		-		-		-		-
	$	23,335	$	13,906	$	7,662	$	2,604	$	846	$	5,446	$	2,574	$	56,373

Current period gross write-offs	$	16	$	90	$	107	$	25	$	24	$	52	$	116	$	430

Total Loans
Pass	$	131,765	$	153,463	$	92,602	$	46,761	$	39,445	$	79,380	$	68,417	$	611,833
Special Mention		1,031		2,097		679		1,670		577		255		749		7,058
Substandard		-		-		-		306		303		980		184		1,773
Doubtful		-		48		279		78		264		1,081		-		1,750
	$	132,796	$	155,608	$	93,560	$	48,815	$	40,589	$	81,696	$	69,350	$	622,414

Current period gross write-offs	$	16	$	245	$	111	$	51	$	24	$	87	$	147	$	681

Allowance for Loan Losses

Prior to the adoption of ASC 326 on January 1, 2023, the Company calculated the allowance for loan losses using the incurred loss methodology. The following tables are disclosures related to the allowance for loan losses in prior periods.

The following table provides the components of the Company’s recorded investment in loans at December 31, 2022:

														Home Equity
	*Residential*							*Commercial*			*Commercial*			*and Second*		*Other*
	*Real Estate*		*Land*		*Construction*			*Real Estate*			*Business*			*Mortgage*		*Consumer*		*Total*
	(In thousands)

Principal loan balance	$	155,334	$	21,860	$	42,271		$	161,425		$	60,817		$	57,781	$	64,029	$	563,517

Accrued interest receivable		493		123		105			343			170			348		236		1,818

Net deferred loan origination fees and costs		111		14		(12	)		(93	)		(11	)		1,204		-		1,213

Recorded investment in loans	$	155,938	$	21,997	$	42,364		$	161,675		$	60,976		$	59,333	$	64,265	$	566,548

An analysis of the allowance for loan losses and recorded investment in loans as of and for the year ended December 31, 2022 is as follows:

													Home Equity
	*Residential*							*Commercial*		*Commercial*			*and Second*		*Other*
	*Real Estate*			*Land*		*Construction*		*Real Estate*		*Business*			*Mortgage*		*Consumer*			*Total*
	(In thousands)
Allowance for Loan Losses:

Beginning balance	$	1,174		$	234	$	403	$	1,884	$	873		$	527	$	988		$	6,083
Provisions		247			31		123		147		173			1		228			950
Charge-offs		(48	)		-		-		-		(9	)		-		(448	)		(505	)
Recoveries		10			-		-		-		9			2		223			244

Ending balance	$	1,383		$	265	$	526	$	2,031	$	1,046		$	530	$	991		$	6,772

Ending allowance balance attributable to loans:

Individually evaluated for impairment	$	-		$	-	$	-	$	-	$	155		$	-	$	-		$	155
Collectively evaluated for impairment		1,383			265		526		2,031		891			530		991			6,617
Acquired with deteriorated credit quality		-			-		-		-		-			-		-			-

Ending balance	$	1,383		$	265	$	526	$	2,031	$	1,046		$	530	$	991		$	6,772

Recorded Investment in Loans:

Individually evaluated for impairment	$	854		$	51	$	-	$	463	$	195		$	372	$	-		$	1,935
Collectively evaluated for impairment		154,798			21,946		42,364		161,212		60,781			58,961		64,265			564,327
Acquired with deteriorated credit quality		286			-		-		-		-			-		-			286

Ending balance	$	155,938		$	21,997	$	42,364	$	161,675	$	60,976		$	59,333	$	64,265		$	566,548

An analysis of the allowance for loan losses for the year ended December 31, 2021 is as follows:

														Home Equity
	*Residential*								*Commercial*			*Commercial*		*and Second*			*Other*
	*Real Estate*			*Land*			*Construction*		*Real Estate*			*Business*		*Mortgage*			*Consumer*			*Total*
	(In thousands)
Allowance for Loan Losses:

Beginning balance	$	1,239		$	209		$	292	$	2,358		$	843	$	617		$	1,067		$	6,625
Provisions		(35	)		34			111		(474	)		20		(88	)		107			(325	)
Charge-offs		(35	)		(9	)		-		-			-		(10	)		(400	)		(454	)
Recoveries		5			-			-		-			10		8			214			237

Ending balance	$	1,174		$	234		$	403	$	1,884		$	873	$	527		$	988		$	6,083

The following table summarizes the Company’s impaired loans as of and for the year ended December 31, 2022. The Company did not recognize any interest income on impaired loans using the cash receipts method of accounting for the year ended December 31, 2022.

			Unpaid				Average		Interest
	*Recorded*		*Principal*		*Related*		*Recorded*		*Income*
	*Investment*		*Balance*		*Allowance*		*Investment*		*Recognized*
	(In thousands)
Loans with no related allowance recorded:
Residential	$	854	$	996	$	-	$	893	$	12
Land		51		51		-		71		-
Construction		-		-		-		-		-
Commercial real estate		463		484		-		582		25
Commercial business		40		40		-		137		8
Home equity and second mortgage		372		389		-		155		-
Other consumer		-		-		-		-		-

	$	1,780	$	1,960	$	-	$	1,838	$	45

Loans with an allowance recorded:
Residential	$	-	$	-	$	-	$	11	$	-
Land		-		-		-		-		-
Construction		-		-		-		-		-
Commercial real estate		-		-		-		-		-
Commercial business		155		155		155		31		-
Home equity and second mortgage		-		-		-		172		-
Other consumer		-		-		-		-		-

	$	155	$	155	$	155	$	214	$	-

Total:
Residential	$	854	$	996	$	-	$	904	$	12
Land		51		51		-		71		-
Construction		-		-		-		-		-
Commercial real estate		463		484		-		582		25
Commercial business		195		195		155		168		8
Home equity and second mortgage		372		389		-		327		-
Other consumer		-		-		-		-		-

	$	1,935	$	2,115	$	155	$	2,052	$	45

The following table summarizes the Company’s impaired loans for the year ended December 31, 2021. The Company did not recognize any interest income on impaired loans using the cash receipts method of accounting for the year ended December 31, 2021.

	Average		Interest
	Recorded		Income
	Investment		Recognized
	(In thousands)
Loans with no related allowance recorded:
Residential	$	1,529	$	21
Land		100		-
Construction		-		-
Commercial real estate		740		34
Commercial business		191		8
Home equity and second mortgage		111		2
Other consumer		-		-

	$	2,671	$	65

Loans with an allowance recorded:
Residential	$	-	$	-
Land		10		-
Construction		-		-
Commercial real estate		-		-
Commercial business		-		-
Home equity and second mortgage		231		-
Other consumer		-		-

	$	241	$	-

Total:
Residential	$	1,529	$	21
Land		110		-
Construction		-		-
Commercial real estate		740		34
Commercial business		191		8
Home equity and second mortgage		342		2
Other consumer		-		-

	$	2,912	$	65

Nonperforming loans consists of nonaccrual loans and loans over 90 days past due and still accruing interest. The following table presents the recorded investment in nonperforming loans at December 31, 2022:

			Loans 90+ Days		Total
	*Nonaccrual*		*Past Due*		*Nonperforming*
	*Loans*		*Still Accruing*		*Loans*
	(In thousands)

Residential	$	744	$	83	$	827
Land		51		-		51
Construction		-		-		-
Commercial real estate		81		-		81
Commercial business		155		-		155
Home equity and second mortgage		372		-		372
Other consumer		-		4		4

Total	$	1,403	$	87	$	1,490

The following table presents the aging of the recorded investment in loans at December 31, 2022:

											Purchased
	*30-59 Days*		*60-89 Days*		*90 Days or More*		*Total*				*Credit*		*Total*
	*Past Due*		*Past Due*		*Past Due*		*Past Due*		*Current*		*Impaired Loans*		*Loans*
	(In thousands)

Residential	$	2,229	$	226	$	543	$	2,998	$	152,654	$	286	$	155,938
Land		119		-		51		170		21,827		-		21,997
Construction		-		-		-		-		42,364		-		42,364
Commercial real estate		-		-		-		-		161,675		-		161,675
Commercial business		-		-		155		155		60,821		-		60,976
Home equity and second mortgage		206		278		93		577		58,756		-		59,333
Other consumer		211		72		4		287		63,978		-		64,265

Total	$	2,765	$	576	$	846	$	4,187	$	562,075	$	286	$	566,548

The following table presents the recorded investment in loans by risk category at December 31, 2022:

											Home Equity
	*Residential*						*Commercial*		*Commercial*		*and Second*		*Other*
	*Real Estate*		*Land*		*Construction*		*Real Estate*		*Business*		*Mortgage*		*Consumer*		*Total*
	(In thousands)

Pass	$	154,429	$	21,827	$	42,364	$	159,842	$	60,261	$	58,937	$	64,149	$	561,809
Special Mention		-		60		-		679		388		-		116		1,243
Substandard		765		59		-		1,073		172		24		-		2,093
Doubtful		744		51		-		81		155		372		-		1,403
Loss		-		-		-		-		-		-		-		-

Total	$	155,938	$	21,997	$	42,364	$	161,675	$	60,976	$	59,333	$	64,265	$	566,548

Troubled Debt Restructurings

The following table summarizes the Company’s TDRs by accrual status as of December 31, 2022:

							Related
							Allowance
	*Accruing*		*Nonaccrual*		*Total*		*for Loan Losses*
	(In thousands)
Troubled debt restructurings:
Residential real estate	$	108	$	16	$	124	$	-
Commercial real estate		381		-		381		-
Commercial business		40		-		40		-
Home equity and second mortgage		-		278		278		-

Total	$	529	$	294	$	823	$	-

At December 31, 2022, there were no commitments to lend additional funds to debtors whose loan terms had been modified in a TDR.

There were no TDRs that were restructured during the years ended December 31, 2022 and 2021. There were no principal charge-offs recorded as a result of TDRs during the years ended December 31, 2022 and 2021.

The Company had no payment defaults (defined as the loan becoming more than 90 days past due, being moved to nonaccrual status, or the collateral being foreclosed upon) for TDRs modified within the previous 12 months during the year ended December 31, 2022. During the year ended December 31, 2021, there was one second mortgage loan TDR modified within the previous 12 months with a balance of $290,000 that was moved to nonaccrual status. In the event that a TDR subsequently defaults, the Company evaluates the restructuring for possible impairment. As a result, the related allowance may be increased or charge-offs may be taken to reduce the carrying amount of the loan. As a result of the payment default described above, a specific reserve of $7,000 was established during the year ended December 31, 2021. The current amortized cost of the second mortgage described above is $264,000 and there is no specific reserve related to the loan at December 31, 2023. The Company did not recognize any provisions for loan losses or net charge-offs as a result of defaulted TDRs for the year ended December 31, 2022.

Purchased Credit Deteriorated (“PCD”) Loans

The Company has purchased groups of loans, some of which have experienced more than insignificant credit deterioration since origination. An ACL for PCD loans is determined using the same methodology as other loans held for investment. Upon adoption of ASC 326, the Company elected to maintain pools of loans that were previously accounted for as purchased credit impairment (“PCI”) loans under ASC 310-30 and will continue to account for these pools as a unit of account. Loans are only removed from the existing pools if they are written off, paid off or sold. Upon adoption of ASC 326, the ACL was determined for each pool and added to the pool’s carrying amount to establish a new amortized cost basis. The difference between the unpaid principal balance of the pool and the new amortized cost basis will be amortized into interest income over the remaining life of the pool. Changes to the ACL after adoption are recorded through the provision for credit losses. The carrying amount of PCD loans at December 31, 2023 and 2022 was $234,000 and $244,000, respectively. There was no ACL related to PCD loans at December 31, 2023 and 2022.

ACL on Off-Balance-Sheet Credit Exposures

The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The Company recorded an ACL for unfunded commitments of $131,000 in conjunction with the Company’s adoption of ASU 2016-13 on January 1, 2023. The ACL for off-balance-sheet credit exposures is presented in accrued expenses and other liabilities on the consolidated balance sheets. Changes in the ACL for off-balance-sheet credit exposures are reflected in the provision for credit losses on the consolidated statements of income. There were no changes to the ACL for off-balance-sheet credit exposures during the year ended December 31, 2023.