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Allowance for Credit Losses - Loans | 9 Months Ended
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Sep. 30, 2023
Allowance for Credit Losses - Loans |
Allowance for Credit Losses - Loans | 9. Allowance for Credit Losses – Loans ​ The allowance for credit losses (ACL) is a valuation reserve established and maintained by charges against income and is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged-off against the ACL when they are deemed uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. ​ The ACL is an estimate of expected credit losses, measured over the contractual life of a loan, that considers our historical loss experience, current conditions and forecasts of future economic conditions. Determination of an appropriate ACL is inherently subjective and may have significant changes from period to period. The methodology for determining the ACL has two main components: evaluation of expected credit losses for certain groups of homogeneous loans that share similar risk characteristics and evaluation of loans that do not share risk characteristics with other loans. ​ The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. The Company has aligned our segmentation to the quarterly Call Report. This allowed the Company to use not only our data, but also peer institutions to supplement loss observations in determining our qualitative adjustments. Some further sub- segmenting was performed on the commercial and industrial (C&I) and commercial real estate (CRE) portfolios based on collateral type. The Company has identified the following portfolio segments: ​
| ● | C&I and CRE Owner Occupied – Real Estate
| ● | C&I and CRE Owner Occupied – Other
| ● | CRE Non-Owner Occupied – Retail
| ● | CRE Non-Owner Occupied – Multi-Family
| ● | CRE Non-Owner Occupied – Other
| ● | Residential Mortgages
| ● | Consumer
​ The Company is utilizing the static pool analysis (cohort) method for our CECL model. The static pool analysis methodology captures loans that qualify for a segment (i.e. balance of a pool of loans with similar risk characteristics) as of a point in time to form a cohort, then tracks that cohort over their remaining lives to determine their loss behavior. The remaining lifetime loss rate is then applied to current loans that qualify for the same segmentation criteria to form a remaining life expectation on current loans. Once historical cohorts are established, the loans in each individual cohort are tracked over their remaining lives for loss and recovery events. Each cohort is evaluated individually and as a result, a loss may be counted in several different quarterly cohort periods, as long as the specific loan existed in the population of each of those cohort periods. ​ The following tables summarize the rollforward of the allowance for credit losses by loan portfolio segment for the three- and nine-month periods ending September 30, 2023 and 2022 (in thousands). ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended September 30, 2023
​ | ​ | Balance at | ​ | Charge- | ​ | ​ | ​ | ​ | Provision | ​ | Balance at
​ | ​ | June 30, 2023 | ​ | Offs | ​ | Recoveries | ​ | (Credit) | ​ | September 30, 2023
Commercial real estate (owner occupied) |  | $ | 1,517 |  | $ | — |  | $ | 6 |  | $ | 21 |  | $ | 1,544
Other commercial and industrial | ​ | ​ | 2,849 | ​ | ​ | (75) | ​ | ​ | — | ​ | ​ | (30) | ​ | ​ | 2,744
Commercial real estate (non-owner occupied) - retail | ​ | ​ | 1,477 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 49 | ​ | ​ | 1,526
Commercial real estate (non-owner occupied) - multi-family | ​ | ​ | 1,145 | ​ | ​ | — | ​ | ​ | 2 | ​ | ​ | 28 | ​ | ​ | 1,175
Other commercial real estate (non-owner occupied) | ​ | ​ | 3,087 | ​ | ​ | — | ​ | ​ | 4 | ​ | ​ | 92 | ​ | ​ | 3,183
Residential mortgages | ​ |  | 1,037 | ​ |  | (54) | ​ |  | 9 | ​ |  | 35 | ​ |  | 1,027
Consumer | ​ |  | 1,109 | ​ |  | (41) | ​ |  | 23 | ​ |  | 23 | ​ |  | 1,114
Total | ​ | $ | 12,221 | ​ | $ | (170) | ​ | $ | 44 | ​ | $ | 218 | ​ | $ | 12,313
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended September 30, 2022
​ | ​ | Balance at | ​ | Charge- | ​ | ​ | ​ | ​ | Provision | ​ | Balance at
​ | ​ | June 30, 2022 | ​ | Offs | ​ | Recoveries | ​ | (Credit) | ​ | September 30, 2022
Commercial |  | $ | 3,158 |  | $ | — |  | $ | 4 |  | $ | (406) |  | $ | 2,756
Commercial real estate (non-owner occupied) | ​ |  | 5,716 | ​ |  | (1,390) | ​ |  | 13 | ​ |  | 1,093 | ​ |  | 5,432
Residential mortgages | ​ |  | 1,473 | ​ |  | (9) | ​ |  | 2 | ​ |  | (89) | ​ |  | 1,377
Consumer | ​ |  | 102 | ​ |  | (24) | ​ |  | 8 | ​ |  | 1 | ​ |  | 87
Allocation for general risk | ​ |  | 1,119 | ​ |  | — | ​ |  | — | ​ |  | (99) | ​ |  | 1,020
Total | ​ | $ | 11,568 | ​ | $ | (1,423) | ​ | $ | 27 | ​ | $ | 500 | ​ | $ | 10,672
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine months ended September 30, 2023
​ | ​ | Balance at | ​ | Impact of Adopting | ​ | Charge- | ​ | ​ | ​ | ​ | Provision | ​ | Balance at
​ | ​ | December 31, 2022 | ​ | ASU 2016-13 | ​ | Offs | ​ | Recoveries | ​ | (Credit) | ​ | September 30, 2023
Commercial real estate (owner occupied) |  | $ | — | ​ | $ | 1,380 |  | $ | — |  | $ | 18 |  | $ | 146 |  | $ | 1,544
Other commercial and industrial | ​ | ​ | — | ​ | ​ | 2,908 | ​ | ​ | (75) | ​ | ​ | 2 | ​ | ​ | (91) | ​ | ​ | 2,744
Commercial real estate (non-owner occupied) - retail | ​ | ​ | — | ​ | ​ | 1,432 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 94 | ​ | ​ | 1,526
Commercial real estate (non-owner occupied) - multi-family | ​ | ​ | — | ​ | ​ | 1,226 | ​ | ​ | — | ​ | ​ | 5 | ​ | ​ | (56) | ​ | ​ | 1,175
Other commercial real estate (non-owner occupied) | ​ | ​ | 5,972 | ​ | ​ | (2,776) | ​ | ​ | — | ​ | ​ | 11 | ​ | ​ | (24) | ​ | ​ | 3,183
Commercial (owner occupied real estate and other) | ​ |  | 2,653 | ​ | ​ | (2,653) | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Residential mortgages | ​ |  | 1,380 | ​ | ​ | (355) | ​ |  | (54) | ​ |  | 12 | ​ |  | 44 | ​ |  | 1,027
Consumer | ​ |  | 85 | ​ | ​ | 695 | ​ |  | (210) | ​ |  | 104 | ​ |  | 440 | ​ |  | 1,114
Allocation for general risk | ​ |  | 653 | ​ | ​ | (653) | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Total | ​ | $ | 10,743 | ​ | $ | 1,204 | ​ | $ | (339) | ​ | $ | 152 | ​ | $ | 553 | ​ | $ | 12,313
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine months ended September 30, 2022
​ | ​ | Balance at | ​ | Charge- | ​ | ​ | ​ | ​ | Provision | ​ | Balance at
​ | ​ | December 31, 2021 | ​ | Offs | ​ | Recoveries | ​ | (Credit) | ​ | September 30, 2022
Commercial |  | $ | 3,071 |  | $ | (72) |  | $ | 4 |  | $ | (247) |  | $ | 2,756
Commercial real estate (non-owner occupied) | ​ |  | 6,392 | ​ |  | (1,390) | ​ |  | 39 | ​ |  | 391 | ​ |  | 5,432
Residential mortgages | ​ |  | 1,590 | ​ |  | (32) | ​ |  | 14 | ​ |  | (195) | ​ |  | 1,377
Consumer | ​ |  | 113 | ​ |  | (110) | ​ |  | 46 | ​ |  | 38 | ​ |  | 87
Allocation for general risk | ​ |  | 1,232 | ​ |  | — | ​ |  | — | ​ |  | (212) | ​ |  | 1,020
Total | ​ | $ | 12,398 | ​ | $ | (1,604) | ​ | $ | 103 | ​ | $ | (225) | ​ | $ | 10,672
​ The Company recorded a $218,000 provision for credit losses in the third quarter of 2023 as compared to a $500,000 provision recorded in the third quarter of 2022. For the first nine months of 2023, the Company recorded a $553,000 provision for credit losses compared to a $225,000 provision recovery recorded in the first nine months of 2022, representing a $778,000 unfavorable shift between years. The 2023 provision for credit losses in the loan portfolio was necessary due to risk rating and non-accrual activity. Specifically, total classified loan levels exhibited a net increase during the first nine months of 2023 due to the risk rating downgrade of several commercial real estate loan relationships earlier this year. In addition, an increased historical loss rate within the consumer loan pool resulted in a significant increase in the allocated allowance for credit losses despite contraction within the portfolio since the beginning of the year. Non-performing assets increased from $5.2 million at December 31, 2022 to $6.2 million at September 30, 2023 primarily due to an increase in non-accrual loans reflecting the transfer of two commercial real estate loan relationships together with three small business loans to non-accrual status which were partially offset by a decline in non-accrual residential mortgage loans. Overall, non-performing assets remain well controlled at 0.62% of total loans. Through nine months of 2023, the Company experienced net loan charge-offs of $187,000, or 0.03% of total average loans, which compares favorably to net charge-offs of $1.5 million, or 0.21% of total average loans, in the first nine months of 2022. In summary, the allowance for credit losses on the loan portfolio provided 199% coverage of non-performing assets, and 1.23% of total loans, at September 30, 2023, compared to 207% coverage of non-performing assets, and 1.08% of total loans, on December 31, 2022. Historical credit loss experience is the basis for the estimation of expected credit losses. The Company applies historical loss rates to pools of loans with similar risk characteristics. After consideration of the historic loss calculation, management applies qualitative adjustments to reflect the current conditions and reasonable and supportable forecasts not already captured in the historical loss information at the balance sheet date. Our reasonable and supportable forecast adjustment is based on a blend of peer and Company data as well as management judgment. Including peer data addresses the Company’s lack of loss history in some pools of loans. For periods beyond our reasonable and supportable forecast period of two years, loss expectations revert to the long-run historical mean. The qualitative adjustments for current conditions are based upon the following factors: ​
| ● | changes in lending policies and procedures;
| ● | changes in economic conditions;
| ● | changes in the nature and volume of the portfolio;
| ● | staff experience;
| ● | changes in volume and severity of delinquency, non-performing loans, and classified loans;
| ● | changes in the quality of the Company’s loan review system;
| ● | trends in underlying collateral value;
| ● | concentration risk; and
| ● | external factors: competition, legal, regulatory.
​ These modified historical loss rates are multiplied by the outstanding principal balance of each loan to calculate a required reserve. Ultimately, 69% of the third quarter of 2023 general reserve represented qualitative adjustment with 31% representing quantitative reserve. ​ In accordance with ASU 2016-13, the Company will evaluate individual loans for expected credit losses when those loans do not share similar risk characteristics with loans evaluated using a collective (pooled) basis. In contrast to legacy accounting standards, this criterion is broader than the impairment concept and management may evaluate loans individually even when no specific expectation of collectability is in place. Loans will not be included in both collective and individual analysis. The individual analysis will establish a specific reserve for loans in scope. It should be noted that there is a review threshold of $150,000 or more for loans being subject to individual evaluation within the consumer and residential mortgage segments. ​ Specific reserves are established based on the following three acceptable methods for measuring the ACL: 1) the present value of expected future cash flows discounted at the loan’s original effective interest rate; 2) the loan’s observable market price; or 3) the fair value of the collateral when the loan is collateral dependent. The method is selected on a loan-by-loan basis, with management primarily utilizing either the discounted cash flows or the fair value of collateral method. The evaluation of the need and amount of a specific allocation of the allowance is made on a quarterly basis. ​ The need for an updated appraisal on collateral dependent loans is determined on a case-by-case basis. The useful life of an appraisal or evaluation will vary depending upon the circumstances of the property and the economic conditions in the marketplace. A new appraisal is not required if there is an existing appraisal which, along with other information, is sufficient to determine a reasonable value for the property and to support an appropriate and adequate allowance for credit losses. At a minimum, annual documented reevaluation of the property is completed by the Bank’s internal Collections and Assigned Risk Department to support the value of the property. When reviewing an appraisal associated with an existing real estate collateral dependent transaction, the Bank’s Chief Credit Officer must determine if there have been material changes to the underlying assumptions in the appraisal which affect the original estimate of value. Some of the factors that could cause material changes to reported values include:
| ● | the passage of time;
| ● | the volatility of the local market;
| ● | the availability of financing;
| ● | natural disasters;
| ● | the inventory of competing properties;
| ● | new improvements to, or lack of maintenance of, the subject property or competing properties upon physical inspection by the Bank;
| ● | changes in underlying economic and market assumptions, such as material changes in current and projected vacancy, absorption rates, capitalization rates, lease terms, rental rates, sales prices, concessions, construction overruns and delays, zoning changes, etc.; and/or
| ● | environmental contamination.
The value of the property is adjusted to appropriately reflect the above listed factors and the value is discounted to reflect the value impact of a forced or distressed sale, any outstanding senior liens, any outstanding unpaid real estate taxes, transfer taxes and closing costs that would occur with sale of the real estate. If the Chief Credit Officer determines that a reasonable value cannot be derived based on available information, a new appraisal is ordered. The determination of the need for a new appraisal, versus completion of a property valuation by the Bank’s Collections and Assigned Risk Department personnel, rests with the Chief Credit Officer and not the originating account officer. The following tables summarize the loan portfolio and allowance for credit losses (in thousands). ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At September 30, 2023
​ |  | Commercial real estate (owner occupied) |  | Other commercial and industrial |  | Commercial real estate (non-owner occupied) - retail | ​ | ​ | Commercial real estate (non-owner occupied) - multi-family |  | Other commercial real estate (non-owner occupied) |  | Residential mortgages |  | Consumer |  | Total
Loans: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Individually evaluated | ​ | $ | 191 | ​ | $ | 1,937 | ​ | $ | — | ​ | $ | — | ​ | $ | 2,602 | ​ | $ | — |  | $ | — | ​ | $ | 4,730
Collectively evaluated | ​ |  | 88,267 | ​ |  | 142,869 | ​ |  | 158,637 | ​ | ​ | 104,597 | ​ |  | 227,283 | ​ |  | 174,419 |  | ​ | 101,504 | ​ |  | 997,576
Total loans | ​ | $ | 88,458 | ​ | $ | 144,806 | ​ | $ | 158,637 | ​ | $ | 104,597 | ​ | $ | 229,885 | ​ | $ | 174,419 |  | $ | 101,504 | ​ | $ | 1,002,306
Allowance for credit losses: | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ | ​ | ​ |  |  | ​ |  |  |  | ​ |  | ​ |  |
Specific reserve allocation | ​ | $ | — | ​ | $ | 434 | ​ | $ | — | ​ | $ | — | ​ | $ | 1 | ​ | $ | — | ​ | $ | — | ​ | $ | 435
General reserve allocation | ​ |  | 1,544 | ​ |  | 2,310 | ​ |  | 1,526 | ​ | ​ | 1,175 | ​ |  | 3,182 | ​ |  | 1,027 | ​ |  | 1,114 | ​ |  | 11,878
Total allowance for credit losses | ​ | $ | 1,544 | ​ | $ | 2,744 | ​ | $ | 1,526 | ​ | $ | 1,175 | ​ | $ | 3,183 | ​ | $ | 1,027 | ​ | $ | 1,114 | ​ | $ | 12,313
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At December 31, 2022
​ | ​ | ​ | ​ | ​ | Commercial | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | real estate | ​ | Residential | ​ | ​ | ​ | ​ | Allocation for | ​ | ​ | ​
​ |  | Commercial |  | (non-owner occupied) |  | mortgages |  | Consumer |  | general risk |  | Total
Loans: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Individually evaluated | ​ | $ | 1,989 | ​ | $ | 1,586 | ​ | $ | — | ​ | $ | — |  | ​ |  | ​ | $ | 3,575
Collectively evaluated | ​ |  | 226,589 | ​ |  | 449,158 | ​ |  | 297,971 | ​ |  | 13,473 |  | ​ |  | ​ |  | 987,191
Total loans | ​ | $ | 228,578 | ​ | $ | 450,744 | ​ | $ | 297,971 | ​ | $ | 13,473 |  | ​ |  | ​ | $ | 990,766
Allowance for credit losses: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  |  | ​ |  | ​ |  |
Specific reserve allocation | ​ | $ | 520 | ​ | $ | 3 | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 523
General reserve allocation | ​ |  | 2,133 | ​ |  | 5,969 | ​ |  | 1,380 | ​ |  | 85 | ​ |  | 653 | ​ |  | 10,220
Total allowance for credit losses | ​ | $ | 2,653 | ​ | $ | 5,972 | ​ | $ | 1,380 | ​ | $ | 85 | ​ | $ | 653 | ​ | $ | 10,743
​ The following table presents the amortized cost basis of collateral-dependent loans by class of loans (in thousands). ​
​ | ​ | ​ | ​
​ | ​ | Collateral Type
September 30, 2023 | ​ | Real Estate
Commercial: | ​ | ​ | ​
Commercial real estate (owner occupied) | ​ | $ | 191
Commercial real estate (non-owner occupied): |  | ​ | ​
Other | ​ | ​ | 2,602
Total | ​ | $ | 2,793
​ Allowance for Loan Losses – Prior to adopting ASU 2016-13 ​ Prior to the adoption of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), the Company calculated our allowance for loan losses (ALL) using an incurred loss methodology. The following policy related to the ALL in prior periods. ​ As a financial institution, which assumes lending and credit risks as a principal element of its business, the Company anticipates that credit losses will be experienced in the normal course of business. Accordingly, the Company consistently applies a comprehensive methodology and procedural discipline to perform an analysis which is updated on a quarterly basis at the Bank level to determine both the adequacy of the allowance for loan losses and the necessary provision for loan losses to be charged against earnings. The segments of the Company’s loan portfolio are disaggregated into classes that allows management to monitor risk and performance. The loan classes used are consistent with the internal reports evaluated by the Company’s management and Board of Directors to monitor risk and performance within various segments of its loan portfolio. The commercial loan segment includes both the commercial and industrial and the owner occupied commercial real estate loan classes while the remaining segments are not separated into classes as management monitors risk in these loans at the segment level. The residential mortgage loan segment is comprised of first lien amortizing residential mortgage loans and home equity loans secured by residential real estate. The consumer loan segment consists primarily of installment loans and overdraft lines of credit connected with customer deposit accounts. ​ The allowance consists of three elements: (1) an allowance established on specifically identified problem loans, (2) formula driven general reserves established for loan categories based upon historical loss experience and other qualitative factors, and (3) a general risk reserve which provides support for variance from our assessment of the qualitative factors, provides protection against credit risks resulting from other inherent risk factors contained in the Company’s loan portfolio, and recognizes the model and estimation risk associated with the specific and formula driven allowances. The qualitative factors used in the formula driven general reserves are evaluated quarterly (and revised if necessary) by the Company’s management to establish allocations which accommodate each of the risk factors. Management reviews the loan portfolio on a quarterly basis using a defined, consistently applied process in order to make appropriate and timely adjustments to the ALL. Specifically, this methodology includes:
| ● | Review of all impaired commercial and commercial real estate loans to determine if any specific reserve allocations are required on an individual loan basis. In addition, consumer and residential mortgage loans with a balance of $150,000 or more are evaluated for impairment and specific reserve allocations are established, if applicable. All required specific reserve allocations are based on careful analysis of the loan’s performance, the related collateral value, cash flow considerations and the financial capability of any guarantor. For impaired loans the measurement of impairment may be based upon (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) the observable market price of the impaired loan; or (3) the fair value of the collateral of a collateral dependent loan.
| ● | The application of formula driven reserve allocations for all commercial and commercial real estate loans by using a three-year migration analysis of net losses incurred within each risk grade for the entire commercial
|  | loan portfolio. The difference between estimated and actual losses is reconciled through the nature of the migration analysis.
| ● | The application of formula driven reserve allocations to consumer and residential mortgage loans which are based upon historical net charge-off experience for those loan types. The residential mortgage loan and consumer loan allocations are based upon the Company’s three-year historical average of actual loan net charge-offs experienced in each of those categories.
| ● | The application of formula driven reserve allocations to all outstanding loans is based upon review of historical losses and qualitative factors, which include but are not limited to, economic trends, delinquencies, levels of non-accrual and TDR loans, concentrations of credit, trends in loan volume, experience and depth of management, examination and audit results, effects of any changes in lending policies and trends in policy, financial information and documentation exceptions. Pass rated credits are segregated from criticized and classified credits for the application of qualitative factors.
| ● | Management recognizes that there may be events or economic factors that have occurred affecting specific borrowers or segments of borrowers that may not yet be fully reflected in the information that the Company uses for arriving at reserves for a specific loan or portfolio segment. Therefore, the Company believes that there is estimation risk associated with the use of specific and formula driven allowances.
After completion of this process, a formal meeting of the Loan Loss Reserve Committee is held to evaluate the adequacy of the reserve. When it is determined that the prospects for recovery of the principal of a loan have significantly diminished, the loan is charged-off against the allowance account; subsequent recoveries, if any, are credited to the allowance account. In addition, non-accrual and large delinquent loans are reviewed monthly to determine potential losses. The Company’s policy is to individually review, as circumstances warrant, its commercial and commercial mortgage loans to determine if a loan is impaired. At a minimum, credit reviews are mandatory for all commercial and commercial mortgage loan relationships with aggregate balances in excess of $1,000,000 within a 12-month period. The Company defines classified loans as those loans rated substandard or doubtful. The Company has also identified three pools of small dollar value homogeneous loans which are evaluated collectively for impairment. These separate pools are for small business relationships with aggregate balances of $250,000 or less, residential mortgage loans and consumer loans. Individual loans within these pools are reviewed and evaluated for specific impairment if factors such as significant delinquency in payments of 90 days or more, bankruptcy, or other negative economic concerns indicate impairment. ​ The ALL is maintained to support loan growth and cover charge-offs from the loan portfolio. The ALL is based on management’s continuing evaluation of the risk characteristics and credit quality of the loan portfolio, assessment of current economic conditions, diversification and size of the portfolio, adequacy of collateral, the amount of non-performing loans, and past and anticipated loss experience. Non-Performing Assets ​ Non-performing assets are comprised of (i) loans which are on a non-accrual basis, (ii) loans which are contractually past due 90 days or more as to interest or principal payments, and (iii) other real estate owned (OREO – real estate acquired through foreclosure and in-substance foreclosures) and repossessed assets. ​ Loans will be transferred to non-accrual status when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in evaluating the loan include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. The following table presents non-accrual loans, loans past due over 90 days still accruing interest, and OREO and repossessed assets by portfolio class (in thousands).
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At September 30, 2023
​ |  | Non-accrual with no ACL |  | Non-accrual with ACL |  | Total non-accrual |  | Loans past due over 90 days still accruing | ​ | OREO and repossessed assets |  | Total non-performing assets
Commercial real estate (owner occupied) | ​ | $ | 191 | ​ | $ | — | ​ | $ | 191 | ​ | $ | — | ​ | $ | — | ​ | $ | 191
Other commercial and industrial | ​ | ​ | — | ​ | ​ | 1,937 | ​ | ​ | 1,937 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,937
Commercial real estate (non-owner occupied) - retail | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Commercial real estate (non-owner occupied) - multi-family | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Other commercial real estate (non-owner occupied) | ​ | ​ | 2,601 | ​ | ​ | 1 | ​ | ​ | 2,602 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 2,602
Residential mortgages | ​ | ​ | — | ​ | ​ | 491 | ​ | ​ | 491 | ​ | ​ | 255 | ​ | ​ | — | ​ | ​ | 746
Consumer | ​ | ​ | — | ​ | ​ | 697 | ​ | ​ | 697 | ​ | ​ | 21 | ​ | ​ | — | ​ | ​ | 718
Total | ​ | $ | 2,792 | ​ | $ | 3,126 | ​ | $ | 5,918 | ​ | $ | 276 | ​ | $ | — | ​ | $ | 6,194
​
​ | ​ | ​ | ​ | ​
​ | ​ | At December 31, 2022 | ​
Non-accrual loans: | ​ | ​ | ​ | ​
Commercial and industrial | ​ | $ | 1,989 | ​
Commercial real estate (non-owner occupied) | ​ | ​ | 1,586 | ​
Residential mortgages | ​ |  | 1,577 | ​
Consumer | ​ | ​ | 9 | ​
Total | ​ |  | 5,161 | ​
​ | ​ | ​ | ​ | ​
Other real estate owned and repossessed assets: | ​ |  |  | ​
Residential mortgages | ​ |  | 38 | ​
Consumer | ​ |  | 1 | ​
Total | ​ |  | 39 | ​
Total non-performing assets | ​ | $ | 5,200 | ​
​ It should be noted that the Company has elected to exclude accrued interest receivable from the measurement of its ACL. When a loan is placed in non-accrual status, any outstanding interest is reversed against interest income. ​ 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. The Company analyzes loans individually to classify the loans as to credit risk. ​ Management uses a nine-point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first six categories are considered not criticized. The first five pass categories are aggregated, while the pass-6, special mention, substandard and doubtful categories are disaggregated to separate pools. The criticized rating categories utilized by management generally follow bank regulatory definitions. The special mention category includes assets that are currently protected but are potentially weak, resulting in an undue and unwarranted credit risk, but not to the point of justifying a substandard classification. Loans in the substandard category have well-defined weaknesses that jeopardize the liquidation of the debt, and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. Loans in the doubtful category 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. All loans greater than 90 days past due, or for which any portion of the loan represents a specific allocation of the allowance for credit losses are placed in substandard or doubtful. To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Company has a structured loan rating process, which dictates that, at a minimum, credit reviews are mandatory for all commercial and commercial mortgage loan relationships with aggregate balances in excess of $1,000,000 within a 12-month period. Generally, consumer and residential mortgage loans are included in the pass categories unless a specific action, such as bankruptcy, delinquency, or death occurs to raise awareness of a possible credit event. The Company’s commercial relationship managers are responsible for the timely and accurate risk rating of the loans in their portfolios at origination and on an ongoing basis. Risk ratings are assigned by the account officer, but require independent review and rating concurrence from the Company’s internal Loan Review Department. The Loan Review Department is an experienced, independent function which reports directly to the Board’s Audit Committee. The scope of commercial portfolio coverage by the Loan Review Department is defined and presented to the Audit Committee for approval on an annual basis. The approved scope of coverage for the year ending December 31, 2023 requires review of approximately 25% of the commercial loan portfolio. In addition to loan monitoring by the account officer and Loan Review Department, the Company also requires presentation of all credits rated pass-6 with aggregate balances greater than $2,000,000, all credits rated special mention or substandard with aggregate balances greater than $250,000, and all credits rated doubtful with aggregate balances greater than $100,000 on an individual basis to the Company’s Loan Loss Reserve Committee on a quarterly basis. Additionally, the Asset Quality Task Force, which is a group comprised of senior level personnel, meets monthly to monitor the status of problem loans. ​ The following table presents the classes of the commercial and commercial real estate loan portfolios summarized by the aggregate pass and the criticized categories of special mention, substandard and doubtful within the internal risk rating system. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At September 30, 2023
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Revolving | ​ | Revolving | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Loans | ​ | Loans | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Amortized | ​ | Converted | ​ | ​ | ​
​ | ​ | Term Loans Amortized Cost Basis by Origination Year | ​ | Cost | ​ | to | ​ | ​ | ​
​ |  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | Prior |  | Basis |  | Term |  | Total
​ | ​ | (IN THOUSANDS)
Commercial real estate (owner occupied) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | $ | 15,059 | ​ | $ | 6,936 | ​ | $ | 15,265 | ​ | $ | 8,581 | ​ | $ | 10,463 | ​ | $ | 27,086 | ​ | $ | 456 | ​ | $ | — | ​ | $ | 83,846
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 465 | ​ | ​ | — | ​ | ​ | 2,258 | ​ | ​ | — | ​ | ​ | 783 | ​ | ​ | — | ​ | ​ | 3,506
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,106 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,106
Doubtful | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Total | ​ | $ | 15,059 | ​ | $ | 6,936 | ​ | $ | 15,730 | ​ | $ | 8,581 | ​ | $ | 12,721 | ​ | $ | 28,192 | ​ | $ | 1,239 | ​ | $ | — | ​ | $ | 88,458
Current period gross charge-offs | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | —
Other commercial and industrial | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | $ | 13,691 | ​ | $ | 37,112 | ​ | $ | 13,378 | ​ | $ | 6,425 | ​ | $ | 5,547 | ​ | $ | 20,960 | ​ | $ | 43,603 | ​ | $ | — | ​ | $ | 140,716
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 131 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,872 | ​ | ​ | — | ​ | ​ | 2,003
Substandard | ​ | ​ | — | ​ | ​ | 159 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,442 | ​ | ​ | 486 | ​ | ​ | — | ​ | ​ | 2,087
Doubtful | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Total | ​ | $ | 13,691 | ​ | $ | 37,271 | ​ | $ | 13,509 | ​ | $ | 6,425 | ​ | $ | 5,547 | ​ | $ | 22,402 | ​ | $ | 45,961 | ​ | $ | — | ​ | $ | 144,806
Current period gross charge-offs | ​ | $ | — | ​ | $ | 75 | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 75
Commercial real estate (non-owner occupied) - retail | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | $ | 25,300 | ​ | $ | 23,906 | ​ | $ | 33,398 | ​ | $ | 23,355 | ​ | $ | 9,322 | ​ | $ | 42,373 | ​ | $ | 983 | ​ | $ | — | ​ | $ | 158,637
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Doubtful | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Total | ​ | $ | 25,300 | ​ | $ | 23,906 | ​ | $ | 33,398 | ​ | $ | 23,355 | ​ | $ | 9,322 | ​ | $ | 42,373 | ​ | $ | 983 | ​ | $ | — | ​ | $ | 158,637
Current period gross charge-offs | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | —
Commercial real estate (non-owner occupied) - multi-family | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | $ | 14,145 | ​ | $ | 16,789 | ​ | $ | 16,487 | ​ | $ | 12,139 | ​ | $ | 10,984 | ​ | $ | 32,602 | ​ | $ | 351 | ​ | $ | — | ​ | $ | 103,497
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Substandard | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 978 | ​ | ​ | — | ​ | ​ | 122 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,100
Doubtful | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Total | ​ | $ | 14,145 | ​ | $ | 16,789 | ​ | $ | 16,487 | ​ | $ | 13,117 | ​ | $ | 10,984 | ​ | $ | 32,724 | ​ | $ | 351 | ​ | $ | — | ​ | $ | 104,597
Current period gross charge-offs | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | —
Other commercial real estate (non-owner occupied) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | $ | 22,939 | ​ | $ | 34,857 | ​ | $ | 48,257 | ​ | $ | 20,354 | ​ | $ | 23,233 | ​ | $ | 55,878 | ​ | $ | 978 | ​ | $ | — | ​ | $ | 206,496
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 3,847 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 3,847
Substandard | ​ | ​ | — | ​ | ​ | 1,066 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 7,047 | ​ | ​ | 11,229 | ​ | ​ | — | ​ | ​ | 199 | ​ | ​ | 19,541
Doubtful | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1
Total | ​ | $ | 22,939 | ​ | $ | 35,923 | ​ | $ | 48,257 | ​ | $ | 20,354 | ​ | $ | 30,280 | ​ | $ | 70,955 | ​ | $ | 978 | ​ | $ | 199 | ​ | $ | 229,885
Current period gross charge-offs | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | —
Total by risk rating |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Pass | ​ | $ | 91,134 | ​ | $ | 119,600 | ​ | $ | 126,785 | ​ | $ | 70,854 | ​ | $ | 59,549 | ​ | $ | 178,899 | ​ | $ | 46,371 | ​ | $ | — | ​ | $ | 693,192
Special Mention | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 596 | ​ | ​ | — | ​ | ​ | 2,258 | ​ | ​ | 3,847 | ​ | ​ | 2,655 | ​ | ​ | — | ​ | ​ | 9,356
Substandard | ​ | ​ | — | ​ | ​ | 1,225 | ​ | ​ | — | ​ | ​ | 978 | ​ | ​ | 7,047 | ​ | ​ | 13,899 | ​ | ​ | 486 | ​ | ​ | 199 | ​ | ​ | 23,834
Doubtful | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1
Total | ​ | $ | 91,134 | ​ | $ | 120,825 | ​ | $ | 127,381 | ​ | $ | 71,832 | ​ | $ | 68,854 | ​ | $ | 196,646 | ​ | $ | 49,512 | ​ | $ | 199 | ​ | $ | 726,383
Current period gross charge-offs | ​ | $ | — | ​ | $ | 75 | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 75
​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At December 31, 2022
​ | ​ | ​ | ​ | ​ | SPECIAL | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | PASS |  | MENTION |  | SUBSTANDARD |  | DOUBTFUL |  | TOTAL
​ | ​ | (IN THOUSANDS)
Commercial and industrial | ​ | $ | 148,361 | ​ | $ | — | ​ | $ | 5,037 | ​ | $ | — | ​ | $ | 153,398
Paycheck Protection Program (PPP) | ​ | ​ | 22 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 22
Commercial real estate (owner occupied) |  | ​ | 74,187 |  | ​ | — |  | ​ | 971 |  | ​ | — |  | ​ | 75,158
Commercial real estate (non-owner occupied) |  | ​ | 423,486 |  | ​ | 11,015 |  | ​ | 16,240 |  | ​ | 3 |  | ​ | 450,744
Total | ​ | $ | 646,056 | ​ | $ | 11,015 | ​ | $ | 22,248 | ​ | $ | 3 | ​ | $ | 679,322
​ It is generally the policy of the Bank that the outstanding balance of any residential mortgage or home equity loan that exceeds 90-days past due as to principal and/or interest is transferred to non-accrual status and an evaluation is completed to determine the fair value of the collateral less selling costs, unless the balance is minor. A charge-down is recorded for any deficiency balance determined from the collateral evaluation. It is generally the policy of the Bank that the outstanding balance of any unsecured consumer loan that exceeds 90-days past due as to principal and/or interest is charged-off. Loans past due 90 days or more and loans in non-accrual status are considered non-performing. The following tables present the performing and non-performing outstanding balances of the residential mortgage and consumer loan portfolio classes. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At September 30, 2023
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Revolving | ​ | Revolving | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Loans | ​ | Loans | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Amortized | ​ | Converted | ​ | ​ | ​
​ | ​ | Term Loans Amortized Cost Basis by Origination Year | ​ | Cost | ​ | to | ​ | ​ | ​
​ |  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | Prior |  | Basis |  | Term |  | Total
​ | ​ | (IN THOUSANDS)
Residential mortgages | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | $ | 11,097 | ​ | $ | 12,015 | ​ | $ | 61,839 | ​ | $ | 44,856 | ​ | $ | 7,154 | ​ | $ | 36,712 | ​ | $ | — | ​ | $ | — | ​ | $ | 173,673
Non-performing | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 746 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 746
Total | ​ | $ | 11,097 | ​ | $ | 12,015 | ​ | $ | 61,839 | ​ | $ | 44,856 | ​ | $ | 7,154 | ​ | $ | 37,458 | ​ | $ | — | ​ | $ | — | ​ | $ | 174,419
Current period gross charge-offs | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 54 | ​ | $ | — | ​ | $ | — | ​ | $ | 54
Consumer | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | $ | 10,285 | ​ | $ | 21,742 | ​ | $ | 10,352 | ​ | $ | 3,389 | ​ | $ | 1,263 | ​ | $ | 5,378 | ​ | $ | 47,860 | ​ | $ | 517 | ​ | $ | 100,786
Non-performing | ​ | ​ | 16 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 65 | ​ | ​ | 48 | ​ | ​ | 328 | ​ | ​ | 162 | ​ | ​ | 99 | ​ | ​ | 718
Total | ​ | $ | 10,301 | ​ | $ | 21,742 | ​ | $ | 10,352 | ​ | $ | 3,454 | ​ | $ | 1,311 | ​ | $ | 5,706 | ​ | $ | 48,022 | ​ | $ | 616 | ​ | $ | 101,504
Current period gross charge-offs | ​ | $ | 8 | ​ | $ | 35 | ​ | $ | 17 | ​ | $ | 1 | ​ | $ | 3 | ​ | $ | 146 | ​ | $ | — | ​ | $ | — | ​ | $ | 210
Total by payment performance |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Performing | ​ | $ | 21,382 | ​ | $ | 33,757 | ​ | $ | 72,191 | ​ | $ | 48,245 | ​ | $ | 8,417 | ​ | $ | 42,090 | ​ | $ | 47,860 | ​ | $ | 517 | ​ | $ | 274,459
Non-performing | ​ | ​ | 16 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 65 | ​ | ​ | 48 | ​ | ​ | 1,074 | ​ | ​ | 162 | ​ | ​ | 99 | ​ | ​ | 1,464
Total | ​ | $ | 21,398 | ​ | $ | 33,757 | ​ | $ | 72,191 | ​ | $ | 48,310 | ​ | $ | 8,465 | ​ | $ | 43,164 | ​ | $ | 48,022 | ​ | $ | 616 | ​ | $ | 275,923
Current period gross charge-offs | ​ | $ | 8 | ​ | $ | 35 | ​ | $ | 17 | ​ | $ | 1 | ​ | $ | 3 | ​ | $ | 200 | ​ | $ | — | ​ | $ | — | ​ | $ | 264
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At December 31, 2022
​ |  | ​ | ​ |  | NON- | ​ |  | ​
​ |  | PERFORMING |  | PERFORMING |  | TOTAL
​ | ​ | (IN THOUSANDS)
Residential mortgages | ​ | $ | 296,401 | ​ | $ | 1,570 | ​ | $ | 297,971
Consumer | ​ |  | 13,457 | ​ |  | 16 | ​ | ​ | 13,473
Total | ​ | $ | 309,858 | ​ | $ | 1,586 | ​ | $ | 311,444
​ Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and non-accrual loans. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At September 30, 2023
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | 30 – 59 | ​ | 60 – 89 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | DAYS | ​ | DAYS | ​ | 90 DAYS | ​ | TOTAL | ​ | TOTAL
​ |  | CURRENT |  | PAST DUE |  | PAST DUE |  | PAST DUE |  | PAST DUE |  | LOANS
​ | ​ | (IN THOUSANDS)
Commercial real estate (owner occupied) | ​ | $ | 88,267 | ​ | $ | — | ​ | $ | — | ​ | $ | 191 | ​ | $ | 191 | ​ | $ | 88,458
Other commercial and industrial | ​ | ​ | 144,438 | ​ | ​ | 295 | ​ | ​ | — | ​ | ​ | 73 | ​ | ​ | 368 | ​ | ​ | 144,806
Commercial real estate (non-owner occupied) - retail | ​ |  | 158,637 | ​ |  | — | ​ | ​ | — | ​ |  | — | ​ |  | — | ​ | ​ | 158,637
Commercial real estate (non-owner occupied) - multi-family | ​ |  | 104,347 | ​ |  | 250 | ​ | ​ | — | ​ |  | — | ​ |  | 250 | ​ | ​ | 104,597
Other commercial real estate (non-owner occupied) | ​ | ​ | 227,284 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 2,601 | ​ | ​ | 2,601 | ​ | ​ | 229,885
Residential mortgages | ​ |  | 173,431 | ​ |  | 198 | ​ | ​ | 44 | ​ |  | 746 | ​ |  | 988 | ​ | ​ | 174,419
Consumer | ​ |  | 100,715 | ​ |  | 328 | ​ | ​ | 74 | ​ |  | 387 | ​ |  | 789 | ​ | ​ | 101,504
Total | ​ | $ | 997,119 | ​ | $ | 1,071 | ​ | $ | 118 | ​ | $ | 3,998 | ​ | $ | 5,187 | ​ | $ | 1,002,306
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At December 31, 2022
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | 30 – 59 | ​ | 60 – 89 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | DAYS | ​ | DAYS | ​ | 90 DAYS | ​ | TOTAL | ​ | TOTAL
​ |  | CURRENT |  | PAST DUE |  | PAST DUE |  | PAST DUE |  | PAST DUE |  | LOANS
​ | ​ | (IN THOUSANDS)
Commercial and industrial | ​ | $ | 152,314 | ​ | $ | 797 | ​ | $ | 287 | ​ | $ | — | ​ | $ | 1,084 | ​ | $ | 153,398
Paycheck Protection Program (PPP) | ​ | ​ | 22 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 22
Commercial real estate (owner occupied) | ​ |  | 74,960 | ​ |  | 198 | ​ | ​ | — | ​ |  | — | ​ |  | 198 | ​ | ​ | 75,158
Commercial real estate (non-owner occupied) | ​ |  | 446,809 | ​ |  | 3,935 | ​ | ​ | — | ​ |  | — | ​ |  | 3,935 | ​ | ​ | 450,744
Residential mortgages | ​ |  | 295,790 | ​ |  | 489 | ​ | ​ | 422 | ​ |  | 1,270 | ​ |  | 2,181 | ​ | ​ | 297,971
Consumer | ​ |  | 13,290 | ​ |  | 60 | ​ | ​ | 114 | ​ |  | 9 | ​ |  | 183 | ​ | ​ | 13,473
Total | ​ | $ | 983,185 | ​ | $ | 5,479 | ​ | $ | 823 | ​ | $ | 1,279 | ​ | $ | 7,581 | ​ | $ | 990,766
​ Loan Modifications to Borrowers Experiencing Financial Difficulty ​ Occasionally, the Company modifies loans to borrowers experiencing financial difficulty as a result of our loss mitigation activities. A variety of solutions are offered to borrowers, including loan modifications that may result in principal forgiveness, interest rate reductions, term extensions, payment delays, or combinations thereof. ​
| ● | Principal forgiveness includes principal and accrued interest forgiveness. When principal forgiveness is provided, the amount of forgiveness is charged-off against the ACL.
| ● | Interest rate reductions include modifications where the interest rate is reduced and interest is deferred.
| ● | Term extensions extend the original contractual maturity date of the loan.
| ● | Payment delays consist of modifications where we expect to collect the contractual amounts due, but result in a delay in the receipt of payments specified under the original loan terms. We generally consider payment delays to be insignificant when the delay is three months or less.
​ The Company had no loans modified to borrowers experiencing financial difficulty during the three months ended September 30, 2023. ​ The following table summarizes the amortized cost basis, as of September 30, 2023, of loans modified to borrowers experiencing financial difficulty during the nine months ended September 30, 2023 (in thousands). ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Term Extension | ​
​ |  | Amortized Cost Basis |  | % of Total Class of Loans |
Other commercial and industrial | ​ | $ | 417 | ​ | ​ | 0.29 | %
Total | ​ | $ | 417 | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Combination - Interest Rate Reduction and Term Extension | ​
​ |  | Amortized Cost Basis |  | % of Total Class of Loans |
Other commercial real estate (non-owner occupied) | ​ | $ | 7,047 | ​ | ​ | 3.07 | %
Total | ​ | $ | 7,047 | ​ | ​ | ​ | ​
​ At September 30, 2023, the Company had no unfunded loan commitments associated with the loan modifications to borrowers experiencing financial difficulty. ​ The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty during the nine months ended September 30, 2023. ​
​ | ​ | ​
Term Extension
Loan Type |  | Financial Effect
Other commercial and industrial | ​ | During the first quarter of 2023, provided five month expiration date extension on non-accrual line of credit under which availability has been eliminated. During the second quarter of 2023, provided the same borrower with a one year maturity date extension
​ | ​ | ​
Combination - Interest Rate Reduction and Term Extension
Loan Type |  | Financial Effect
Other commercial real estate (non-owner occupied) | ​ | During the second quarter, provided seven months of interest only payments at a reduced rate with the remaining portion of interest, totaling approximately $303,000, being deferred until maturity. Additionally, provided three month maturity date extension
​ The Company had no loans which were modified to borrowers experiencing financial difficulty which subsequently defaulted during the three and nine months ended September 30, 2023. The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. Specifically, the $7.0 million other commercial real estate (non-owner occupied) loan disclosed above is secured by a mixed use (retail/office) property located within the City of Pittsburgh, but not in the downtown central business district. A recent appraisal of the property supports the collectability of the outstanding loan balance as the borrower works to find new tenants for open spaces. As of September 30, 2023, the modified loans described in the tables above were current as to payments. ​ The following table details the loan modified as a TDR during the three-month period ended September 30, 2022 (dollars in thousands). ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Loans in non-accrual status |  | # of Loans |  | Current Balance |  | Concession Granted
Commercial real estate (non-owner occupied) |  | 1 | ​ | $ | 1,620 |  | Extension of maturity date with an interest only period at below market interest rate
​ The following table details the loans modified as TDRs during the nine-month period ended September 30, 2022 (dollars in thousands). ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Loans in non-accrual status | ​ | # of Loans |  | Current Balance |  | Concession Granted
Commercial and industrial |  | 1 | ​ | $ | 458 |  | Subsequent modification of a TDR - Extension of maturity date with a below market interest rate
Commercial real estate (non-owner occupied) |  | 1 | ​ | $ | 1,620 |  | Extension of maturity date with an interest only period at below market interest rate
​

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