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Allowance for Loan Losses | 3 Months Ended
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Mar. 31, 2023
Allowance For Loan Losses [Abstract] |
Allowance for Loan Losses | Note 7: Allowance for Credit Losses Management extensively reviews recent trends in historical losses, qualitative factors, including concentrations of loans to related borrowers and concentrations of loans by collateral type, and specific reserve needs on loans individually evaluated for impairment in its determination of the adequacy of the credit losses. We recorded $692,000 in provision for credit losses for the three month period ended March 31, 2023, as compared to $102,000 for the three month period ended March 31, 2022. The increase in provision for credit losses in the third quarter of 2023, as compared to the same three month period in 2022, primarily reflected required reserves related to year-over-year loan growth. Certain credit sensitive portfolios continue to be carefully monitored, and the Bank will consistently apply its loan classification and reserve building methodologies to the analysis of these portfolios. Please refer to the asset quality section below for a further discussion of asset quality as it relates to the credit losses. Summarized in the tables below are changes in the allowance for credit losses for the indicated periods and information pertaining to the allocation of the balances of the credit losses, loans receivable based on individual, and collective impairment evaluation by loan portfolio class. An allocation of a portion of the allowance to a given portfolio class does not limit the Company’s ability to absorb losses in another portfolio class.
|  | For the three months ended March 31, 2023 |
|  | 1-4 family |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | first-lien |  |  | Residential |  |  |  |  |  |  |  |  |  | Other |
|  | residential |  |  | construction |  |  | Commercial |  |  |  | Commercial |  |  | commercial |
(In thousands) |  | mortgage |  |  | mortgage |  |  | real estate |  |  |  | lines of credit |  |  | and industrial |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning Balance |  | $ | 714 |  |  | $ | - |  |  | $ | 5,881 |  |  |  | $ | 3,990 |  |  | $ | 2,944 |
Adoption of New Accounting Standard |  |  | 1,396 |  |  |  | 969 |  |  |  | (1,744 | ) |  |  |  | 95 |  |  |  | 10 |
Charge-offs |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  | - |  |  |  | (36 | )
Recoveries |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  | 1 |  |  |  | 62 |
Provisions |  |  | (173 | ) |  |  | (269 | ) |  |  | 1,045 |  |  |  |  | (1,991 | ) |  |  | 2,101 |
Ending balance |  | $ | 1,937 |  |  | $ | 700 |  |  | $ | 5,182 |  |  |  | $ | 2,095 |  |  | $ | 5,081 |
|  | Tax exempt |  |  | Home equity and junior liens |  |  | Other consumer |  |  |  | Total |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning Balance |  | $ | 3 |  |  | $ | 741 |  |  | $ | 1,046 |  |  |  |  | 15,319 |  |  |  |
Adoption of New Accounting Standards |  |  | 14 |  |  |  | (97 | ) |  |  | 1,242 |  |  |  |  | 1,886 |  |  |  |
Charge-offs |  |  | - |  |  |  | - |  |  |  | (83 | ) |  |  |  | (119 | ) |  |  |
Recoveries |  |  | - |  |  |  | - |  |  |  | 28 |  |  |  |  | 91 |  |  |  |
Provisions |  |  | (2 | ) |  |  | 79 |  |  |  | (98 | ) |  | - |  |  | 692 |  |  |  |
Ending balance |  | $ | 15 |  |  | $ | 723 |  |  | $ | 2,135 |  |  |  | $ | 17,869 |  |  |  |
|  | For the three months ended March 31, 2022 |
|  | 1-4 family |  |  |  |  |  |  |  |  |  |  |  |  |
|  | first-lien |  |  | Residential |  |  |  |  |  |  |  |  | Other |
|  | residential |  |  | construction |  |  | Commercial |  |  | Commercial |  |  | commercial |
(In thousands) |  | mortgage |  |  | mortgage |  |  | real estate |  |  | lines of credit |  |  | and industrial |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning Balance |  | $ | 872 |  |  | $ | - |  |  | $ | 5,308 |  |  | $ | 935 |  |  | $ | 2,762 |
Charge-offs |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (17 | ) |  |  | - |
Recoveries |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Provisions |  |  | (42 | ) |  |  | - |  |  |  | (10 | ) |  |  | 143 |  |  |  | (25 | )
Ending balance |  | $ | 830 |  |  | $ | - |  |  | $ | 5,298 |  |  | $ | 1,061 |  |  | $ | 2,737 |
Ending balance: related to loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Tax exempt |  |  | Home equity and junior liens |  |  | Other consumer |  |  | Unfunded Commitments |  |  | Total |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning Balance |  | $ | 3 |  |  | $ | 774 |  |  | $ | 1,297 |  |  | $ | 984 |  |  | $ | 12,935 |
Charge-offs |  |  | - |  |  |  | - |  |  |  | (29 | ) |  |  | - |  |  |  | (46 | )
Recoveries |  |  | - |  |  |  | - |  |  |  | 26 |  |  |  | - |  |  |  | 26 |
Provisions |  |  | 1 |  |  |  | (98 | ) |  |  | 128 |  |  |  | 5 |  |  |  | 102 |
Ending balance |  | $ | 4 |  |  | $ | 676 |  |  | $ | 1,422 |  |  | $ | 989 |  |  | $ | 13,017 |
The Company’s methodology for determining its allowance for credit losses includes an analysis of qualitative factors that are added to the historical loss rates in arriving at the total allowance for credit losses needed for this general pool of loans. The qualitative factors include, but are not limited to, the following: • Changes in national and local economic trends; • The rate of growth in the portfolio; • Trends of delinquencies and nonaccrual balances; • Changes in loan policy; and • Changes in lending management experience and related staffing. Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation. These qualitative factors, applied to each product class, make the evaluation inherently subjective, as it requires material estimates that may be susceptible to significant revision as more information becomes available. Adjustments to the factors are supported through documentation of changes in conditions in a narrative accompanying the allowance for credit losses analysis and calculation. The allocation of the allowance for credit losses summarized on the basis of the Company’s calculation methodology was as follows:
|  | March 31, 2023 |
|  | 1-4 family |  |  |  |  |  |  |  |  |  |  |  |  |
|  | first-lien |  |  | Residential |  |  |  |  |  |  |  |  | Other |
|  | residential |  |  | construction |  |  | Commercial |  |  | Commercial |  |  | commercial |
(In thousands) |  | mortgage |  |  | mortgage |  |  | real estate |  |  | lines of credit |  |  | and industrial |
Specifically reserved |  | $ | 63 |  |  | $ | - |  |  | $ | 627 |  |  | $ | 1,301 |  |  | $ | 3,478 |
Historical loss rate |  |  | 1,579 |  |  |  | 537 |  |  |  | 2,802 |  |  |  | 193 |  |  |  | 963 |
Qualitative factors |  |  | 295 |  |  |  | 163 |  |  |  | 1,754 |  |  |  | 601 |  |  |  | 640 |
Total |  | $ | 1,937 |  |  | $ | 700 |  |  | $ | 5,183 |  |  | $ | 2,095 |  |  | $ | 5,081 |
|  |  |  |  | Home equity |  |  | Other |  |  |  |  |  |  |
|  | Tax exempt |  |  | and junior liens |  |  | consumer |  |  | Total |  |  |  |
Specifically reserved |  | $ | - |  |  | $ | 157 |  |  | $ | - |  |  | $ | 5,626 |  |  |  |
Historical loss rate |  |  | 4 |  |  |  | 502 |  |  |  | 2,095 |  |  |  | 8,675 |  |  |  |
Qualitative factors |  |  | 11 |  |  |  | 64 |  |  |  | 40 |  |  |  | 3,568 |  |  |  |
Total |  | $ | 15 |  |  | $ | 723 |  |  | $ | 2,135 |  |  | $ | 17,869 |  |  |  |
|  | March 31, 2022 |
|  | 1-4 family |  |  |  |  |  |  |  |  |  |  |  |  |
|  | first-lien |  |  | Residential |  |  |  |  |  |  |  |  | Other |
|  | residential |  |  | construction |  |  | Commercial |  |  | Commercial |  |  | commercial |
(In thousands) |  | mortgage |  |  | mortgage |  |  | real estate |  |  | lines of credit |  |  | and industrial |
Specifically reserved |  | $ | 97 |  |  | $ | - |  |  | $ | 352 |  |  | $ | 48 |  |  | $ | 1,353 |
Historical loss rate |  |  | 85 |  |  |  | - |  |  |  | 2 |  |  |  | 26 |  |  |  | 96 |
Qualitative factors |  |  | 648 |  |  |  | - |  |  |  | 4,944 |  |  |  | 987 |  |  |  | 1,288 |
Total |  | $ | 830 |  |  | $ | - |  |  | $ | 5,298 |  |  | $ | 1,061 |  |  | $ | 2,737 |
|  |  |  |  | Home equity |  |  | Other |  |  |  |  |  |  |
|  | Tax exempt |  |  | and junior liens |  |  | consumer |  |  | Unallocated |  |  | Total |
Specifically reserved |  | $ | - |  |  | $ | 114 |  |  | $ | - |  |  | $ | - |  |  | $ | 1,964 |
Historical loss rate |  |  | - |  |  |  | 324 |  |  |  | 1,147 |  |  |  | - |  |  |  | 1,680 |
Qualitative factors |  |  | 4 |  |  |  | 238 |  |  |  | 275 |  |  |  | - |  |  |  | 8,384 |
Other |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 989 |  |  |  | 989 |
Total |  | $ | 4 |  |  | $ | 676 |  |  | $ | 1,422 |  |  | $ | 989 |  |  | $ | 13,017 |

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- Definition Allowance for loan losses. + References No definition available. + Details
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- Definition The entire disclosure for allowance for credit losses. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -URI https://asc.fasb.org/topic&trid=2196771 + Details
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Namespace Prefix: | us-gaap_
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Balance Type: | na
Period Type: | duration