Loans And Allowance For Credit Losses

3 Months Ended

Mar. 31, 2025

Loans And Allowance For Credit Losses [Abstract]

Note 8 – Loans and allowance for credit losses

The Company’s primary portfolio segments align with the methodology applied in estimating the allowance for credit losses and are reflected as such in the disclosures as of and for the period ended March 31, 2025 as provided below. Management determined that the classifications set forth below were appropriate for use in identifying and managing risk in the loan portfolio.


Loan Segments:		Loan Classes:
Commercial		Commercial and Industrial Loans
Commercial Real Estate		Commercial Mortgages – Owner Occupied
		Commercial Mortgages – Non-Owner Occupied
		Commercial Construction/Land
Consumer		Consumer Open-End
		Consumer Closed-End
Residential		Residential Mortgages
		Residential Consumer Construction/Land

Commercial and Commercial Real Estate

Commercial loans are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not meet expectations, and the value of the collateral securing these loans may fluctuate. Most commercial loans are secured by the assets being financed or other business assets, such as accounts receivable or inventory, and may include a personal guarantee. Short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the borrower’s ability to collect amounts due from its customers. Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts, and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or the general economy. The characteristics of properties securing the Company’s commercial real estate portfolio are diverse but geographically concentrated almost entirely in the Company’s market area. Management monitors and evaluates commercial real estate loans based on collateral, geography, and risk grade criteria. In general, the Company avoids financing single-purpose projects unless other underwriting factors are present to help mitigate risk. In addition, management tracks the level of owner-occupied commercial real estate versus non-owner-occupied loans.

Consumer and Residential

Consumer and Residential consist of two segments - residential mortgage loans and personal loans. We include HELOCs and other second mortgages in our consumer loan segment. Home equity loans are typically secured by a subordinate interest in 1-4 family residences, and consumer personal loans are secured by consumer personal assets, such as automobiles or recreational vehicles. Some consumer personal loans are unsecured, such as small installment loans and certain lines of credit. For residential mortgage loans that are secured by 1-4 family residences and are generally owner-occupied, the Company generally establishes a maximum loan-to-value ratio. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas, such as unemployment levels. Repayment can also be impacted by changes in property values on residential properties. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

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Note 8 – Loans and allowance for credit losses (continued)

A summary of loans, net of deferred costs of $600,000 and $589,000 as of March 31, 2025 and December 31, 2024, respectively, is as follows (dollars in thousands):


	As of	As of
	March 31, 2025	December 31, 2024
Commercial	$ 59,976	$ 66,418
Commercial Real Estate:
Commercial Mortgages-Owner Occupied	154,630	140,443
Commercial Mortgages-Non-Owner Occupied	205,132	195,089
Commercial Construction/Land	11,537	23,883
Consumer:
Consumer Open-End	52,759	50,041
Consumer Closed-End	27,362	28,269
Residential:
Residential Mortgages	111,652	113,303
Residential Consumer Construction/Land	26,361	26,150

Total loans	$ 649,409	$ 643,596

Less allowance for credit losses	7,021	7,044

Net loans	$ 642,388	$ 636,552

The following table presents the amortized cost basis of collateral dependent loans by loan segment:


Collateral Dependent Loans	March 31, 2025
(dollars in thousands)	Business/Other Assets	Real Estate
Commercial	$ 4,181	$ -
Commercial Real Estate	-	7,239
Consumer	-	583
Residential	-	1,610
Total	$ 4,181	$ 9,432


Collateral Dependent Loans	December 31, 2024
(dollars in thousands)	Business/Other Assets	Real Estate
Commercial	$ 3,315	$ -
Commercial Real Estate	-	7,350
Consumer	-	592
Residential	-	1,369
Total	$ 3,315	$ 9,311

The following tables present the activity in the allowance for credit losses for the three-month periods ended and the distribution of the allowance by segment as of March 31, 2025, and 2024.

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Note 8 – Loans and allowance for credit losses (continued)


	Allowance for Credit Losses and Recorded Investment in Loans
	(dollars in thousands)
	As of and For the Three Months Ended March 31, 2025

		Commercial
2025	Commercial	Real Estate	Consumer	Residential	Total

Allowance for Credit Losses:

Beginning Balance, December 31, 2024	$ 686	$ 3,719	$ 842	$ 1,797	$ 7,044
Charge-Offs	-	-	(53)	(9)	(62)
Recoveries	4	-	7	-	11
Provision for (recovery of)	(158)	196	41	(51)	28
Ending Balance, March 31, 2025	$ 532	$ 3,915	$ 837	$ 1,737	$ 7,021


	As of and For the Three Months Ended March 31, 2024

		Commercial
2024	Commercial	Real Estate	Consumer	Residential	Total

Allowance for Credit Losses:

Beginning Balance, December 31, 2023	$ 514	$ 3,985	$ 1,093	$ 1,820	$ 7,412
Charge-Offs	(8)	-	(57)	-	(65)
Recoveries	65	1	7	1	74
Provision for (recovery of)	73	(344)	(159)	(71)	(501)
Ending Balance, March 31, 2024	$ 644	$ 3,642	$ 884	$ 1,750	$ 6,920

Credit Quality Indicators

The Bank’s internal risk rating system is in place to grade commercial and commercial real estate loans. Category ratings are reviewed periodically by lenders and the credit review area of the Bank based on the borrower’s individual situation. Additionally, internal and external monitoring and review of credits are conducted on an annual basis.

Below is a summary and definition of the Bank’s risk rating categories:


RATING 1		Excellent
RATING 2		Above Average
RATING 3		Satisfactory
RATING 4		Acceptable / Low Satisfactory
RATING 5		Monitor
RATING 6		Special Mention
RATING 7		Substandard
RATING 8		Doubtful
RATING 9		Loss

We segregate commercial and commercial real estate loans into the above categories based on the following criteria and we review the characteristics of each rating at least annually, generally during the first quarter. The characteristics of these ratings are as follows:

“Pass.” These are loans having risk ratings of 1 through 4. Pass loans are to persons or business entities with an acceptable financial condition, appropriate collateral margins, appropriate cash flow to service the existing loan, and an appropriate leverage ratio. The borrower has paid all obligations as agreed and it is expected that this type of payment history will continue. When necessary, acceptable personal guarantors support the loan.

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Note 8 – Loans and allowance for credit losses (continued)

“Monitor.” These are loans having a risk rating of 5. Monitor loans have currently acceptable risk but may have the potential for a specific defined weakness in the borrower’s operations and the borrower’s ability to generate positive cash flow on a sustained basis. The borrower’s recent payment history may currently or in the future be characterized by late payments. The Bank’s risk exposure is mitigated by collateral supporting the loan. The collateral is considered to be well-margined, well maintained, accessible and readily marketable.

“Special Mention.” These are loans having a risk rating of 6. Special Mention loans have weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Bank’s credit position at some future date. Special Mention loans are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. These loans do warrant more than routine monitoring due to a weakness caused by adverse events.

“Substandard.” These are loans having a risk rating of 7. Substandard loans are considered to have specific and well-defined weaknesses that jeopardize the viability of the Bank’s credit extension. The payment history for the loan has been inconsistent and the expected or projected primary repayment source may be inadequate to service the loan. The estimated net liquidation value of the collateral pledged and/or ability of the personal guarantor(s) to pay the loan may not adequately protect the Bank. There is a distinct possibility that the Bank will sustain some loss if the deficiencies associated with the loan are not corrected in the near term. A substandard loan would not automatically meet our definition of impaired unless the loan is significantly past due and the borrower’s performance and financial condition provides evidence that it is probable that the Bank will be unable to collect all amounts due.

“Doubtful.” These are loans having a risk rating of 8. Doubtful rated loans have all the weaknesses inherent in a loan that is classified substandard but 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. The possibility of loss is extremely high.

“Loss.” These are loans having a risk rating of 9. Loss rated loans are not considered collectible under normal circumstances and there is no realistic expectation for any future payment on the loan. Loss rated loans are fully charged off.

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Note 8 – Loans and allowance for credit losses (continued)

The table below details the amortized cost of the classes of loans by credit quality indicator and year of origination as of March 31, 2025.


	Term Loans Amortized Cost Basis by Origination Year
	2025	2024	2023	2022	2021	Prior	Revolving Loans Amortized Cost Basis	Revolving Loans Converted to Term	Total
Commercial:
Risk Rating
Pass	$ 1,013	$ 10,527	$ 3,331	$ 2,783	$ 6,511	$ 15,554	$ 15,889	$ 24	$ 55,632
Special Mention	-	-	-	37	74	-	-	-	111
Substandard	-	-	911	12	40	553	2,569	148	4,233
Total	$ 1,013	$ 10,527	$ 4,242	$ 2,832	$ 6,625	$ 16,107	$ 18,458	$ 172	$ 59,976

Commercial Real Estate:
Commercial Mort. - Owner Occupied
Risk Rating
Pass	$ 5,890	$ 25,000	$ 8,888	$ 22,227	$ 46,021	$ 39,929	$ 1,496	$ 151	$ 149,602
Special Mention	-	-	-	-	-	251	-	-	251
Substandard	-	-	92	-	2,851	1,834	-	-	4,777
Total	$ 5,890	$ 25,000	$ 8,980	$ 22,227	$ 48,872	$ 42,014	$ 1,496	$ 151	$ 154,630

Commercial Mort. - Non-Owner Occupied
Risk Rating
Pass	$ 10,573	$ 40,536	$ 12,005	$ 48,663	$ 27,010	$ 57,824	$ 6,404	$ -	$ 203,015
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	944	-	1,173	-	-	2,117
Total	$ 10,573	$ 40,536	$ 12,005	$ 49,607	$ 27,010	$ 58,997	$ 6,404	$ -	$ 205,132

Commercial Construction/Land
Risk Rating
Pass	$ 1,899	$ 1,820	$ 1,485	$ 378	$ 2,689	$ 2,508	$ 414	$ -	$ 11,193
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	-	344	-	-	-	344
Total	$ 1,899	$ 1,820	$ 1,485	$ 378	$ 3,033	$ 2,508	$ 414	$ -	$ 11,537

Consumer:
Consumer - Open-End
Risk Rating
Pass	$ -	$ -	$ -	$ -	$ -	$ -	$ 51,023	$ 1,336	$ 52,359
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	-	-	-	-	400	400
Total	$ -	$ -	$ -	$ -	$ -	$ -	$ 51,023	$ 1,736	$ 52,759

Consumer - Closed-End
Risk Rating
Pass	$ 375	$ 6,282	$ 4,388	$ 9,294	$ 363	$ 6,390	$ -	$ -	$ 27,092
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	36	-	118	-	116	-	-	270
Total	$ 375	$ 6,318	$ 4,388	$ 9,412	$ 363	$ 6,506	$ -	$ -	$ 27,362

Residential:
Residential Mortgages
Risk Rating
Pass	$ 416	$ 18,192	$ 23,501	$ 22,557	$ 8,962	$ 35,847	$ -	$ -	$ 109,475
Special Mention	-	-	-	-	-	72	-	-	72
Substandard	-	-	-	515	-	1,590	-	-	2,105
Total	$ 416	$ 18,192	$ 23,501	$ 23,072	$ 8,962	$ 37,509	$ -	$ -	$ 111,652


Residential Consumer Construction/Land
Risk Rating
Pass	$ 3,193	$ 11,963	$ 5,006	$ 2,340	$ 1,137	$ 2,722	$ -	$ -	$ 26,361
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	-	-	-	-	-	-
Total	$ 3,193	$ 11,963	$ 5,006	$ 2,340	$ 1,137	$ 2,722	$ -	$ -	$ 26,361

Totals:
Risk Rating
Pass	$ 23,359	$ 114,320	$ 58,604	$ 108,242	$ 92,693	$ 160,774	$ 75,226	$ 1,511	$ 634,729
Special Mention	-	-	-	37	74	323	-	-	434
Substandard	-	36	1,003	1,589	3,235	5,266	2,569	548	14,246
Total	$ 23,359	$ 114,356	$ 59,607	$ 109,868	$ 96,002	$ 166,363	$ 77,795	$ 2,059	$ 649,409

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Note 8 – Loans and allowance for credit losses (continued)

The table below details the amortized cost of the classes of loans by credit quality indicator and year of origination as of December 31, 2024.


	Term Loans Amortized Cost Basis by Origination Year
	2024	2023	2022	2021	2020	Prior	Revolving Loans Amortized Cost Basis	Revolving Loans Converted to Term	Total
Commercial
Risk Rating
Pass	$ 10,412	$ 3,680	$ 2,901	$ 7,188	$ 734	$ 16,070	$ 21,602	$ 341	$ 62,928
Special Mention	-	-	41	79	-	-	-	-	120
Substandard	-	922	13	43	-	569	1,654	169	3,370
Total	$ 10,412	$ 4,602	$ 2,955	$ 7,310	$ 734	$ 16,639	$ 23,256	$ 510	$ 66,418

Commercial Real Estate:
Commercial Mort. - Owner Occupied
Risk Rating
Pass	$ 21,261	$ 8,959	$ 21,770	$ 39,881	$ 5,663	$ 35,869	$ 1,564	$ 153	$ 135,120
Special Mention	-	-	-	-	-	451	-	-	451
Substandard	-	93	-	2,898	44	1,837	-	-	4,872
Total	$ 21,261	$ 9,052	$ 21,770	$ 42,779	$ 5,707	$ 38,157	$ 1,564	$ 153	$ 140,443

Commercial Mort. - Non-Owner Occupied
Risk Rating
Pass	$ 39,659	$ 12,203	$ 49,273	$ 27,410	$ 9,698	$ 49,206	$ 6,467	$ -	$ 193,916
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	-	1,173	-	-	-	1,173
Total	$ 39,659	$ 12,203	$ 49,273	$ 27,410	$ 10,871	$ 49,206	$ 6,467	$ -	$ 195,089

Commercial Construction/Land
Risk Rating
Pass	$ 7,180	$ 1,496	$ 768	$ 9,497	$ 1,976	$ 1,020	$ 641	$ -	$ 22,578
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	951	354	-	-	-	-	1,305
Total	$ 7,180	$ 1,496	$ 1,719	$ 9,851	$ 1,976	$ 1,020	$ 641	$ -	$ 23,883

Consumer:
Consumer - Open-End
Risk Rating
Pass	$ -	$ -	$ -	$ -	$ -	$ -	$ 48,531	$ 1,110	$ 49,641
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	-	-	-	-	400	400
Total	$ -	$ -	$ -	$ -	$ -	$ -	$ 48,531	$ 1,510	$ 50,041

Consumer - Closed-End
Risk Rating
Pass	$ 6,660	$ 4,548	$ 9,634	$ 382	$ 398	$ 6,366	$ -	$ -	$ 27,988
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	37	-	119	-	-	125	-	-	281
Total	$ 6,697	$ 4,548	$ 9,753	$ 382	$ 398	$ 6,491	$ -	$ -	$ 28,269

Residential:
Residential Mortgages
Risk Rating
Pass	$ 18,418	$ 23,905	$ 22,954	$ 9,082	$ 8,376	$ 28,572	$ -	$ -	$ 111,307
Special Mention	-	-	-	-	-	73	-	-	73
Substandard	-	-	265	-	103	1,555	-	-	1,923
Total	$ 18,418	$ 23,905	$ 23,219	$ 9,082	$ 8,479	$ 30,200	$ -	$ -	$ 113,303


Residential Consumer Construction/Land
Risk Rating
Pass	$ 12,522	$ 6,375	$ 2,436	$ 1,161	$ 848	$ 2,808	$ -	$ -	$ 26,150
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	-	-	-	-	-	-
Total	$ 12,522	$ 6,375	$ 2,436	$ 1,161	$ 848	$ 2,808	$ -	$ -	$ 26,150

Totals:
Risk Rating
Pass	$ 116,112	$ 61,166	$ 109,736	$ 94,601	$ 27,693	$ 139,911	$ 78,805	$ 1,604	$ 629,628
Special Mention	-	-	41	79	-	524	-	-	644
Substandard	37	1,015	1,348	3,295	1,320	4,086	1,654	569	13,324
Total	$ 116,149	$ 62,181	$ 111,125	$ 97,975	$ 29,013	$ 144,521	$ 80,459	$ 2,173	$ 643,596

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Note 8 – Loans and allowance for credit losses (continued)

The following table details the gross charge-offs of loans by year of origination for the three months ended March 31, 2025 and the year ended December 31, 2024.


Current Period Gross Charge-Offs by Origination Year (in thousands)


As of March 31, 2025	2025	2024	2023	2022	2021	Prior	Revolving Loans Amortized Cost Basis	Revolving Loans Converted to Term	Total
Commercial	-	-	-	$ -	-	-	-	-	-
Commercial Real Estate:	-	-	-	-	-	-	-		-
Commercial Mortgages-Owner Occupied	-	-	-	-	-	-	-	-	-
Commercial Mortgages-Non-Owner Occupied	-	-	-	-	-	-	-	-	-
Commercial Construction/ Land	-	-	-	-	-	-	-	-	-
Consumer:	-	-	-		-	-	-	-	-
Consumer Open-End	-	-	-	48	-	5	-	-	53
Consumer Closed-End	-	-	-	-	-	-	-	-	-
Residential:	-	-	-	-	-	-	-	-	-
Residential Mortgages	-	-	-	-	-	9	-	-	9
Residential Consumer Construction/Land	-	-	-	-	-	-	-	-	-

Total	$ -	$ -	$ -	$ 48	$ -	$ 14	$ -	$ -	$ 62


As of December 31, 2024	2024	2023	2022	2021	2020	Prior	Revolving Loans Amortized Cost Basis	Revolving Loans Converted to Term	Total
Commercial	$ -	$ 8	$ -	$ -	$ -	$ -	$ -	$ -	$ 8
Commercial Real Estate:
Commercial Mortgages-Owner Occupied	-	-	-	-	-	-	-	-	-
Commercial Mortgages-Non-Owner Occupied	-	-	-	-	-	-	-	-	-
Commercial Construction/Land	-	-	-	-	-	-	-	-	-

Consumer:
Consumer Open-End	-	-	-	-	-	2	-	-	2
Consumer Closed-End	-	-	74	-	-	-	-	-	74
Residential:
Residential Mortgages	-	-	-	-	-	-	-	-	-
Residential Consumer Construction/Land	-	-	-	-	-	-	-	-	-

Total	$ -	$ 8	$ 74	$ -	$ -	$ 2	$ -	$ -	$ 84

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Note 8 – Loans and allowance for credit losses (continued)

The following tables present nonaccrual information by class of loans as of March 31, 2025 and December 31, 2024:

Loans on Nonaccrual Status

(dollars in thousands)


	March 31, 2025
	Nonaccrual Loans
	With No Allowance	With an Allowance	Total
Commercial	$ 393	$ 72	$ 465
Commercial Real Estate:
Commercial Mortgages-Owner Occupied	35	-	35
Commercial Mortgages-Non-Owner Occupied	-	-	-
Commercial Construction/Land	344	-	344
Consumer
Consumer Open-End	-	-	-
Consumer Closed-End	184	-	184
Residential:
Residential Mortgages	770	-	770
Residential Consumer Construction/Land	-	-	-
Total	$ 1,726	$ 72	$ 1,798


	December 31, 2024
	Nonaccrual Loans
	With No Allowance	With an Allowance	Total
Commercial	$ 279	$ 193	$ 472
Commercial Real Estate:
Commercial Mortgages-Owner Occupied	43	-	43
Commercial Mortgages-Non-Owner Occupied	-	-	-
Commercial Construction/Land	354	-	354
Consumer
Consumer Open-End	-	-	-
Consumer Closed-End	192	-	192
Residential:
Residential Mortgages	579	-	579
Residential Consumer Construction/Land	-	-	-
Total	$ 1,447	$ 193	$ 1,640

The Company did not record any interest income on nonaccrual loans during the three months ended March 31, 2025 and 2024. The Company did reverse any interest on nonaccrual loans in the three months ended March 31, 2025 and 2024, respectively.

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Note 8 – Loans and allowance for credit losses (continued)

The following tables present an aging analysis of the loan portfolio by class and past due as of March 31, 2025 and December 31, 2024:


Age Analysis of Past Due Loans as of March 31, 2025
														Recorded
						Greater								Investment
2025		30-59 Days		60-89 Days		than		Total Past				Total		> 90 Days &
		Past Due		Past Due		90 Days		Due		Current		Loans		Accruing
Commercial	$	24	$	-	$	398	$	422	$	59,554	$	59,976	$	—
Commercial Real Estate:
Commercial Mortgages-Owner Occupied		75		-		-		75		154,555		154,630		-
Commercial Mortgages-Non-Owner Occupied		82		-		-		82		205,050		205,132		-
Commercial Construction/Land		-		-		-		-		11,537		11,537		-
Consumer:
Consumer Open-End		371		40		-		411		52,348		52,759		-
Consumer Closed-End		109		118		-		227		27,135		27,362		-
Residential:
Residential Mortgages		329		126		97		552		111,100		111,652		-
Residential Consumer Construction/Land		-		-		-		-		26,361		26,361		-
Total	$	990	$	284	$	495	$	1,769	$	647,640	$	649,409	$	-


Age Analysis of Past Due Loans as of December 31, 2024

2024						Greater								Investment
		30-59 Days		60-89 Days		than		Total Past				Total		> 90 Days &
		Past Due		Past Due		90 Days		Due		Current		Loans		Accruing
Commercial	$	—	$	398	$	74	$	472	$	65,946	$	66,418	$	—
Commercial Real Estate:
Commercial Mortgages-Owner Occupied		—		—		43		43		140,400		140,443		—
Commercial Mortgages-Non-Owner Occupied		—		—		—		—		195,089		195,089		—
Commercial Construction/Land		—		—		—		—		23,883		23,883		—
Consumer:
Consumer Open-End		39		1		—		40		50,001		50,041		—
Consumer Closed-End		112		73		—		185		28,084		28,269		—
Residential:
Residential Mortgages		174		358		340		872		112,431		113,303		—
Residential Consumer Construction/Land		—		—		—		—		26,150		26,150		—
Total	$	325	$	830	$	457	$	1,612	$	641,984	$	643,596	$	—

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Note 8 – Loans and allowance for credit losses (continued)

Occasionally, the Bank modifies loans for borrowers experiencing financial difficulties by providing principal forgiveness, term extensions, interest rate reductions, or payment deferrals. Because the effect of most modifications is already included in the allowance for credit losses due to the measurement methodologies used in its estimate, the allowance for credit losses is typically not adjusted upon modification. When principal forgiveness is provided at modification, the amount forgiven is charged against the allowance for credit losses.

There were no loan modifications for borrowers experiencing financial difficulty during the three months ended March 31, 2025, or March 31, 2024. As of March 31, 2025, no previously modified loans had defaulted in the last twelve months.

ACL on Unfunded Commitments

The Company maintains an allowance for off-balance sheet credit exposures such as unfunded balances for existing lines of credit, commitments to extend future credit, as well as both standby and commercial letters of credit when there is a contractual obligation to extend credit and when this extension of credit is not unconditionally cancellable by the Company. The allowance for off-balance sheet credit exposures is adjusted as a provision for (or recovery of) credit losses in the Consolidated Statements of Income. The estimate includes consideration of the likelihood that funding will occur, which is based on a historical funding study derived from internal information, and an estimate of expected credit losses on commitments expected to be funded over its estimated life, which are the same loss rates that are used in computing the allowance for loan credit losses. The allowance for credit losses for unfunded loan commitments of $652,000 at March 31, 2025, is separately classified within Other Liabilities on the Consolidated Balance Sheets.

The following table presents the balance and activity in the ACL for unfunded commitments for the three months ended March 31, 2025 and 2024:


Allowance for Credit Losses on Unfunded Commitments
Balance, December 31, 2024	$ 543
Provision for credit losses	109
Balance March 31, 2025	$ 652

Balance, December 31, 2023	$ 665
Recovery of credit losses	(52)
Balance March 31, 2024	$ 613

Other Real Estate Owned

At March 31, 2025 and December 31, 2024, the Company had no consumer mortgage loans secured by residential real estate for which foreclosure was in process. The Company held no residential real estate properties in other real estate owned as of March 31, 2025 and December 31, 2024.