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Loans And Allowance For Credit Losses

9 Months Ended

Sep. 30, 2025

Loans And Allowance For Credit Losses [Abstract]

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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 in the disclosures as of and for the periods indicated, as set forth below. Management has determined that the classifications presented below are appropriate for identifying and managing risk within 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 underwritten based on the identified cash flows of the borrower, and secondarily on the underlying collateral provided. Borrower cash flows may not meet expectations, and the value of collateral securing these loans can fluctuate. Most commercial loans are secured by the assets being financed or other business assets, such as accounts receivable or inventory, and may include personal guarantees. Short-term loans may be made on an unsecured basis. For loans secured by accounts receivable, the availability of funds for repayment may substantially depend on the borrower’s ability to collect amounts due from its customers.

Commercial real estate loans are viewed primarily as cash flow loans, with the collateral serving as a secondary source of repayment. Commercial real estate lending typically involves higher loan principal amounts, with repayment generally dependent on the successful operation of the property or the business conducted on the property. These loans may be more adversely affected by conditions in the real estate markets or the general economy. The properties securing the Company’s commercial real estate portfolio are diverse but are geographically concentrated almost entirely within 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. Management also tracks the level of owner-occupied versus non-owner-occupied commercial real estate loans.

Consumer and Residential

Consumer and residential segments consist of residential mortgage loans and personal loans. The consumer loan segment includes home equity lines of credit (HELOCs) and other second mortgages. Home equity loans are typically secured by a subordinate interest in 1–4 family residences, while consumer personal loans may be secured by personal assets such as automobiles or recreational vehicles, or may be unsecured, such as small installment loans and certain lines of credit.

For residential mortgage loans secured by 1–4 family, generally owner-occupied residences, the Company typically establishes a maximum loan-to-value ratio. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be affected by economic conditions in the market area, such as unemployment levels. Repayment can also be impacted by changes in property values. Risk is mitigated by the smaller individual loan amounts and the diversification provided by 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 $598,000 and $817,000 as of September 30, 2025 and December 31, 2024, respectively, is as follows (dollars in thousands):


	As of	As of
	September 30, 2025	December 31, 2024
Commercial	$ 61,987	$ 66,418
Commercial Real Estate:
Commercial Mortgages-Owner Occupied	149,824	140,443
Commercial Mortgages-Non-Owner Occupied	215,798	195,089
Commercial Construction/Land	14,364	23,883
Consumer:
Consumer Open-End	59,675	50,041
Consumer Closed-End	25,753	28,269
Residential:
Residential Mortgages	105,666	113,303
Residential Consumer Construction/Land	26,519	26,150

Total loans	$ 659,586	$ 643,596

Less: allowance for credit losses	6,298	7,044

Net loans	$ 653,288	$ 636,552

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


Collateral Dependent Loans	September 30, 2025
(dollars in thousands)	Business/Other Assets	Real Estate
Commercial	$ 3,925	$ -
Commercial Real Estate	-	7,028
Consumer	-	570
Residential	-	1,592
Total	$ 3,925	$ 9,190


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

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

The following tables present the activity in the allowance for credit losses for the three and nine-month periods ended and the distribution of the allowance by segment as of September 30, 2025, and 2024 (dollars in thousands).


	Allowance for Credit Losses and Recorded Investment in Loans
	As of and For the Three Months Ended September 30, 2025

		Commercial
	Commercial	Real Estate	Consumer	Residential	Total

Allowance for Credit Losses:

Beginning Balance, June 30, 2025	$ 747	$ 3,047	$ 799	$ 1,715	$ 6,308
Charge-Offs	-	-	(23)	-	(23)
Recoveries	1	-	2	-	3
Provision for (recovery of) credit ‎ losses	(93)	129	59	(85)	10
Ending Balance, September 30, 2025	$ 655	$ 3,176	$ 837	$ 1,630	$ 6,298

	Allowance for Credit Losses and Recorded Investment in Loans
	As of and For the Nine Months Ended September 30, 2025

		Commercial
	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	-	-	(235)	(9)	(244)
Recoveries	6	1	9	-	16
Provision for (recovery of) credit ‎ losses	(37)	(544)	221	(158)	(518)
Ending Balance, September 30, 2025	$ 655	$ 3,176	$ 837	$ 1,630	$ 6,298

‎

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


	Allowance for Credit Losses and Recorded Investment in Loans
	As of and For the Three Months Ended September 30, 2024

		Commercial
	Commercial	Real Estate	Consumer	Residential	Total

Allowance for Credit Losses:

Beginning Balance, June 30, 2024	$ 606	$ 3,748	$ 897	$ 1,700	$ 6,951
Charge-Offs	-	-	-	-	-
Recoveries	1	2	18	-	21
Provision for (recovery of) credit losses	(118)	165	(17)	76	106
Ending Balance, September 30, 2024	$ 489	$ 3,915	$ 898	$ 1,776	$ 7,078


	Allowance for Credit Losses and Recorded Investment in Loans
	As of and For the Nine Months Ended September 30, 2024

		Commercial
	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)	-	(76)	-	(84)
Recoveries	199	6	38	1	244
Provision for (recovery of)	(216)	(76)	(157)	(45)	(494)
Ending Balance, September 30, 2024	$ 489	$ 3,915	$ 898	$ 1,776	$ 7,078

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

In the second quarter of 2025, the Company, in collaboration with its third-party model vendor and as part of ongoing model governance, implemented updates to the quantitative CECL loss models for collectively evaluated loan segments that use discounted cash flow techniques (all segments other than agricultural loans, which uses the weighted-average remaining life method). The updates (i) revised certain maximum loss-rate parameters, (ii) incorporated additional post-COVID historical loss data, and (iii) as is customary each quarter, refreshed the economic forecasts.

The model updates were first reflected in the second quarter provision for credit losses and continued to be reflected in the allowance for credit losses in the third quarter of 2025. Using the prior-period model specification as a sensitivity, management estimates that the second quarter would have resulted in a provision of approximately $232,000; under the updated specifications, the Company recorded a net recovery of $555,000 on loans for that quarter. The updated models remained in use throughout the third quarter, with no further specification changes. Provision activity for the third quarter primarily reflected the ongoing application of these updated models, together with normal portfolio dynamics, updated forecasts, and loan growth trends.

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.

“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.

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

“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.

There are no loans classified as doubtful or loss as of September 30, 2025 or September 30, 2024.

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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 September 30, 2025 (dollars in thousands).


	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	$ 7,927	$ 6,643	$ 2,854	$ 2,642	$ 5,857	$ 14,951	$ 17,082	$ 61	$ 58,017
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	889	9	36	531	2,358	147	3,970
Total	$ 7,927	$ 6,643	$ 3,743	$ 2,651	$ 5,893	$ 15,482	$ 19,440	$ 208	$ 61,987

Commercial Real Estate:
Commercial Mort. - Owner Occupied
Risk Rating
Pass	$ 18,493	$ 19,977	$ 7,476	$ 17,781	$ 43,672	$ 36,031	$ 1,794	$ -	$ 145,224
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	91	-	2,757	1,752	-	-	4,600
Total	$ 18,493	$ 19,977	$ 7,567	$ 17,781	$ 46,429	$ 37,783	$ 1,794	$ -	$ 149,824

Commercial Mort. - Non-Owner Occupied
Risk Rating
Pass	$ 26,153	$ 40,021	$ 13,754	$ 46,571	$ 26,013	$ 53,818	$ 7,283	$ -	$ 213,613
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	930	-	1,255	-	-	2,185
Total	$ 26,153	$ 40,021	$ 13,754	$ 47,501	$ 26,013	$ 55,073	$ 7,283	$ -	$ 215,798

Commercial Construction/Land
Risk Rating
Pass	$ 2,983	$ 1,860	$ 3,324	$ 372	$ 2,626	$ 2,369	$ 505	$ -	$ 14,038
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	-	326	-	-	-	326
Total	$ 2,983	$ 1,860	$ 3,324	$ 372	$ 2,952	$ 2,369	$ 505	$ -	$ 14,364

Consumer:
Consumer - Open-End
Risk Rating
Pass	$ -	$ -	$ -	$ -	$ -	$ -	$ 57,734	$ 1,371	$ 59,105
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	-	-	-	-	570	570
Total	$ -	$ -	$ -	$ -	$ -	$ -	$ 57,734	$ 1,941	$ 59,675

Consumer - Closed-End
Risk Rating
Pass	$ 1,760	$ 5,791	$ 3,478	$ 8,540	$ 280	$ 5,640	$ -	$ -	$ 25,489
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	30	-	107	-	127	-	-	264
Total	$ 1,760	$ 5,821	$ 3,478	$ 8,647	$ 280	$ 5,767	$ -	$ -	$ 25,753

Residential:
Residential Mortgages
Risk Rating	$ 8,653	$ 16,845	$ 17,755	$ 20,513	$ 7,690	$ 32,184	$ -	$ -	$ 103,640
Pass
Special Mention	-	-	-	-	-	68	-	-	68
Substandard	-	-	-	502	-	1,456	-	-	1,958
Total	$ 8,653	$ 16,845	$ 17,755	$ 21,015	$ 7,690	$ 33,708	$ -	$ -	$ 105,666

Residential Consumer Construction/Land
Risk Rating
Pass	$ 12,762	$ 6,591	$ 1,404	$ 2,194	$ 1,046	$ 2,517	$ 5	$ -	$ 26,519
Special Mention	-	-	-	-	-	-	-	-	-
Substandard	-	-	-	-	-	-	-	-	-
Total	$ 12,762	$ 6,591	$ 1,404	$ 2,194	$ 1,046	$ 2,517	$ 5	$ -	$ 26,519

Totals:
Risk Rating
Pass	$ 78,731	$ 97,728	$ 50,043	$ 98,613	$ 87,184	$ 147,510	$ 84,403	$ 1,432	$ 645,644
Special Mention	-	-	-	-	-	68	-	-	68
Substandard	-	30	980	1,548	3,118	5,122	2,358	717	13,874
Total	$ 78,731	$ 97,758	$ 51,023	$ 100,161	$ 90,302	$ 152,700	$ 86,761	$ 2,149	$ 659,586

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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 (dollars in thousands).


	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 nine months ended September 30, 2025 and the year ended December 31, 2024.


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


Nine months ended September 30, 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	-	-	-	49	-	6	-	-	54
Consumer Closed-End	-	-	44	110	27	-	-	-	181
Residential:	-	-	-	-	-	-	-	-	-
Residential Mortgages	-	-	-	-	-	9	-	-	9
Residential Consumer Construction/Land	-	-	-	-	-	-	-	-	-

Total	$ -	$ -	$ 44	$ 159	$ 27	$ 15	$ -	$ -	$ 244


Year ended 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

‎

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

The following tables present nonaccrual information by class of loans as of September 30, 2025 and December 31, 2024:

Loans on Nonaccrual Status

(dollars in thousands)



	September 30, 2025
	Nonaccrual Loans
	With No Allowance	With an Allowance	Total
Commercial	$ 387	$ 72	$ 459
Commercial Real Estate:
Commercial Mortgages-Owner Occupied	30	-	30
Commercial Mortgages-Non-Owner Occupied	82	-	82
Commercial Construction/Land	325	-	325
Consumer
Consumer Open-End	174	-	174
Consumer Closed-End	187	-	187
Residential:
Residential Mortgages	638	-	638
Residential Consumer Construction/Land	-	-	-
Total	$ 1,823	$ 72	$ 1,895



	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

Interest income on nonaccrual loans is recognized only when received in cash. The Company did not record any interest income on nonaccrual loans during the three and nine months ended September 30, 2025 or 2024. The Company also reversed all previously accrued but unpaid interest on nonaccrual loans during the three and nine months ended September 30, 2025 and 2024. If interest on these loans had been accrued, such income cumulatively would have approximated $11,000 and $66,000 for the three and nine months ended September 30, 2025 and $1,000 and $15,000 for the comparable periods in 2024.
‎

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 September 30, 2025 and December 31, 2024 (dollars in thousands):


Age Analysis of Past Due Loans as of September 30, 2025
														Recorded
						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	$	398	$	61,589	$	61,987	$	-
Commercial Real Estate:
Commercial Mortgages-Owner Occupied		-		-		-		-		149,824		149,824		-
Commercial Mortgages-Non-Owner Occupied		-		-		82		82		215,716		215,798		-
Commercial Construction/Land		53		-		-		53		14,311		14,364		-
Consumer:
Consumer Open-End		-		112		41		153		59,522		59,675		-
Consumer Closed-End		25		-		80		105		25,649		25,753		-
Residential:
Residential Mortgages		1,852		109		57		2,018		103,647		105,666		-
Residential Consumer Construction/Land		70		-		-		70		26,449		26,519		-
Total	$	2,000	$	221	$	658	$	2,879	$	656,707	$	659,586	$	-


Age Analysis of Past Due Loans as of December 31, 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	$	-

‎

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 is typically not adjusted upon modification. When principal forgiveness is provided, the amount forgiven is charged against the allowance for credit losses.

There were no loan modifications for borrowers experiencing financial difficulty during the three and nine months ended September 30, 2025 or September 30, 2024. As of September 30, 2025, no previously modified loans had defaulted within the past 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, and both standby and commercial letters of credit, when there is a contractual obligation to extend credit and such extension is not unconditionally cancellable by the Company. The allowance for off-balance sheet credit exposures is adjusted through 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, as well as an estimate of expected credit losses on commitments expected to be funded over their estimated life, using the same loss rates that are applied in computing the allowance for loan credit losses.

The allowance for credit losses for unfunded loan commitments was $760 thousand at September 30, 2025, and is separately classified within Other Liabilities on the Consolidated Balance Sheets.

The following table presents the balance and activity in the allowance for credit losses (ACL) for unfunded commitments for the three and nine months ended September 30, 2025 and 2024 (dollars in thousands):


Allowance for Credit Losses on Unfunded Commitments
Balance, June 30, 2025	$ 678
Provision for credit losses	82
Balance September 30, 2025	$ 760

Balance, December 31, 2024	$ 543
Provision for credit losses	217
Balance September 30, 2025	$ 760

Allowance for Credit Losses on Unfunded Commitments
Balance, June 30, 2024	$ 589
Recovery of credit losses	(14)
Balance September 30, 2024	$ 575

Balance, December 31, 2023	$ 665
Recovery of credit losses	(90)
Balance September 30, 2024	$ 575

Other Real Estate Owned

At September 30, 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 September 30, 2025 and December 31, 2024.