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Allowance for Credit Losses - Loans

6 Months Ended

Jun. 30, 2025

8. 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 allows the Company to use not only our data but also peer institutions’ data 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:

●

Commercial Real Estate Owner Occupied

●

Commercial and Industrial

●

Commercial Real Estate Non-Owner Occupied – Retail

●

Commercial Real Estate Non-Owner Occupied – Multi-Family

●

Commercial Real Estate Non-Owner Occupied – Other

●

Residential Mortgages

●

Consumer

The Company is utilizing the static pool analysis (cohort) method for our current expected credit losses (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 six-month periods ending June 30, 2025 and 2024 (in thousands).

Three months ended June 30, 2025

Balance at

Charge-

Provision

Balance at

March 31, 2025

Offs

Recoveries

(Recovery)

June 30, 2025

Commercial real estate (owner occupied)

329

—

(16)

319

Commercial and industrial

2,879

(200)

301

3,012

Commercial real estate (non-owner occupied) - retail

3,817

—

(301)

3,516

Commercial real estate (non-owner occupied) - multi-family

1,619

—

(173)

1,446

Other commercial real estate (non-owner occupied)

3,586

(2,762)

3,490

4,317

Residential mortgages

391

—

(82)

310

Consumer

1,191

(15)

(63)

1,140

Total

13,812

(2,977)

3,156

14,060


	Three months ended June 30, 2024
	Balance at		Charge-				Provision		Balance at
	March 31, 2024		Offs		Recoveries		(Recovery)		June 30, 2024
Commercial real estate (owner occupied)	$	416	$	—	$	6	$	(51)	$	371
Commercial and industrial		2,667		(189)		9		191		2,678
Commercial real estate (non-owner occupied) - retail		3,606		—		—		(87)		3,519
Commercial real estate (non-owner occupied) - multi-family		1,358		—		1		11		1,370
Other commercial real estate (non-owner occupied)		4,616		—		3		46		4,665
Residential mortgages		847		—		2		3		852
Consumer		1,129		(63)		20		70		1,156
Total	$	14,639	$	(252)	$	41	$	183	$	14,611

Six months ended June 30, 2025

Balance at

Charge-

Provision

Balance at

December 31, 2024

Offs

Recoveries

(Recovery)

June 30, 2025

Commercial real estate (owner occupied)

398

—

(91)

319

Commercial and industrial

2,860

(200)

309

3,012

Commercial real estate (non-owner occupied) - retail

3,695

—

(179)

3,516

Commercial real estate (non-owner occupied) - multi-family

1,478

—

(32)

1,446

Other commercial real estate (non-owner occupied)

3,451

(2,762)

3,622

4,317

Residential mortgages

839

—

(531)

310

Consumer

1,191

(119)

1,140

Total

13,912

(3,081)

109

3,120

14,060


	Six months ended June 30, 2024
	Balance at		Charge-				Provision		Balance at
	December 31, 2023		Offs		Recoveries		(Recovery)		June 30, 2024
Commercial real estate (owner occupied)	$	1,529	$	—	$	12	$	(1,170)	$	371
Commercial and industrial		3,030		(292)		21		(81)		2,678
Commercial real estate (non-owner occupied) - retail		3,488		—		—		31		3,519
Commercial real estate (non-owner occupied) - multi-family		1,430		—		3		(63)		1,370
Other commercial real estate (non-owner occupied)		3,428		—		5		1,232		4,665
Residential mortgages		1,021		—		3		(172)		852
Consumer		1,127		(124)		40		113		1,156
Total	$	15,053	$	(416)	$	84	$	(110)	$	14,611

The Company recorded a $3.2 million provision for credit losses for loans in the second quarter of 2025 as compared to a $183,000 provision for credit losses in the second quarter of 2024. For the six months of 2025, the Company recognized a $3.1 million provision for credit losses for loans after recognizing a $110,000 provision for credit losses recovery in the first six months of 2024, representing a $3.2 million unfavorable shift between years. The increased provision for credit losses expense in 2025 primarily reflects the resolution of the Company’s largest problem asset, a loan secured by a mixed use commercial real estate retail/office property in the Pittsburgh market. The provision covers an additional $2.8 million charge-down that was necessary to write this loan down to a court approved sales price at a hearing that was held in late June 2025. Additionally, the 2025 provision for credit losses reflects an increase in historical loss rates, due to this large charge-down, used to calculate the allowance for loan credit losses.

Non-performing assets from the loan portfolio, which are discussed in detail below, increased from $12.7 million at December 31, 2024 to $15.4 million at June 30, 2025. The increase reflects the net impact of the charge-down of the

mixed use CRE loan, mentioned in the previous paragraph, as well as the sale of a $1.5 million other real estate owned (OREO) property which were more than offset by the transfer of four loans from one borrower relationship totaling $5.7 million and one additional $935,000 CRE loan into non-accrual status. Non-performing assets from the loan portfolio were at 1.44% of total loans as of June 30, 2025. During the first six months of 2025, the Company experienced net loan charge-offs of $3.0 million, or 0.56% of total average loans, compared to net charge-offs of $332,000, or 0.06% of total average loans, in the first six months of 2024. In summary, the allowance for credit losses on the loan portfolio provided 93% coverage of non-performing loans and 1.32% of total loans at June 30, 2025 compared to 127% coverage of non-performing loans and 1.30% of total loans at December 31, 2024.

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, 38% of the second quarter of 2025 general reserve represented qualitative adjustment with 62% representing quantitative reserve.

In accordance with ASC 326, Financial Instruments - Credit Losses, 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 June 30, 2025

Commercial real estate (owner occupied)

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

3,823

3,606

1,628

—

5,924

—

14,981

Collectively evaluated

85,252

139,364

177,159

131,375

236,395

175,030

109,504

1,054,079

Total loans

89,075

142,970

178,787

131,375

242,319

175,030

109,504

1,069,060

Allowance for credit losses:

Specific reserve allocation

—

851

—

851

General reserve allocation

319

2,161

3,516

1,446

4,317

310

1,140

13,209

Total allowance for credit losses

319

3,012

3,516

1,446

4,317

310

1,140

14,060


	At December 31, 2024
	Commercial real estate (owner occupied)		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	$	3,429	$	1,675	$	—	$	—	$	8,773	$	379	$	10	$	14,266
Collectively evaluated		83,524		145,576		181,778		132,364		225,109		176,731		108,601		1,053,683
Total loans	$	86,953	$	147,251	$	181,778	$	132,364	$	233,882	$	177,110	$	108,611	$	1,067,949
Allowance for credit losses:
Specific reserve allocation	$	—	$	541	$	—	$	—	$	—	$	—	$	—	$	541
General reserve allocation		398		2,319		3,695		1,478		3,451		839		1,191		13,371
Total allowance for credit losses	$	398	$	2,860	$	3,695	$	1,478	$	3,451	$	839	$	1,191	$	13,912

The following tables present the amortized cost basis of collateral-dependent loans which were individually evaluated for a specific reserve allocation in the allowance for credit losses by class of loans (in thousands).


	Collateral Type
June 30, 2025	Real Estate
Commercial:
Commercial real estate (owner occupied)	$	3,823
Commercial and industrial		1,000
Commercial real estate (non-owner occupied):
Retail		1,628
Other		5,924
Total	$	12,375


	Collateral Type
December 31, 2024	Real Estate
Commercial:
Commercial real estate (owner occupied)	$	3,429
Commercial and industrial		1,000
Commercial real estate (non-owner occupied):
Other		8,773
Residential mortgages		378
Consumer		10
Total	$	13,590

Non-Performing Assets from the Loan Portfolio

Non-performing assets from the loan portfolio 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 90 days or more still accruing interest, and OREO and repossessed assets by portfolio class (in thousands).


	At June 30, 2025
	Non-accrual with no ACL		Non-accrual with ACL		Total non-accrual		Loans past due 90 days or more still accruing		OREO and repossessed assets		Total non-performing assets
Commercial real estate (owner occupied)	$	3,823	$	—	$	3,823	$	—	$	—	$	3,823
Commercial and industrial		—		2,607		2,607		1,020		234		3,861
Commercial real estate (non-owner occupied) - retail		935		—		935		—		—		935
Other commercial real estate (non-owner occupied)		5,924		—		5,924		—		—		5,924
Residential mortgages		—		136		136		—		—		136
Consumer		—		716		716		—		24		740
Total	$	10,682	$	3,459	$	14,141	$	1,020	$	258	$	15,419


	At December 31, 2024
	Non-accrual with no ACL		Non-accrual with ACL		Total non-accrual		Loans past due 90 days or more still accruing		OREO and repossessed assets		Total non-performing assets
Commercial real estate (owner occupied)	$	152	$	—	$	152	$	—	$	—	$	152
Commercial and industrial		—		675		675		97		234		1,006
Other commercial real estate (non-owner occupied)		8,773		—		8,773		—		1,476		10,249
Residential mortgages		379		—		379		26		14		419
Consumer		10		821		831		—		—		831
Total	$	9,314	$	1,496	$	10,810	$	123	$	1,724	$	12,657

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 typically 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, 2025 requires review of approximately 36% 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 tables present 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 June 30, 2025
													Revolving		Revolving
													Loans		Loans
													Amortized		Converted
	Term Loans Amortized Cost Basis by Origination Year												Cost		to
	2025		2024		2023		2022		2021		Prior		Basis		Term		Total

	(In Thousands)
Commercial real estate (owner occupied)
Pass	$	5,319	$	10,340	$	16,785	$	7,056	$	9,867	$	34,279	$	516	$	—	$	84,162
Special Mention		—		—		—		—		—		548		149		—		697
Substandard		—		—		—		—		3,678		538		—		—		4,216
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	5,319	$	10,340	$	16,785	$	7,056	$	13,545	$	35,365	$	665	$	—	$	89,075
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial
Pass	$	8,043	$	11,992	$	16,078	$	14,822	$	6,422	$	21,463	$	58,406	$	10	$	137,236
Special Mention		—		—		—		—		—		—		1,183		—		1,183
Substandard		—		—		478		254		1,759		510		1,127		25		4,153
Doubtful		—		—		—		—		—		398		—		—		398
Total	$	8,043	$	11,992	$	16,556	$	15,076	$	8,181	$	22,371	$	60,716	$	35	$	142,970
Current period gross charge-offs	$	—	$	—	$	—	$	200	$	—	$	—	$	—	$	—	$	200
Commercial real estate (non-owner occupied) - retail
Pass	$	15,391	$	23,439	$	37,099	$	19,081	$	31,323	$	51,185	$	32	$	—	$	177,550
Special Mention		—		—		—		302		—		—		—		—		302
Substandard		—		—		935		—		—		—		—		—		935
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	15,391	$	23,439	$	38,034	$	19,383	$	31,323	$	51,185	$	32	$	—	$	178,787
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate (non-owner occupied) - multi-family
Pass	$	136	$	27,312	$	32,166	$	15,952	$	16,547	$	36,549	$	475	$	—	$	129,137
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		2,238		—		—		2,238
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	136	$	27,312	$	32,166	$	15,952	$	16,547	$	38,787	$	475	$	—	$	131,375
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Other commercial real estate (non-owner occupied)
Pass	$	14,134	$	27,684	$	34,295	$	34,420	$	41,615	$	70,250	$	5,108	$	—	$	227,506
Special Mention		—		—		—		—		—		6,435		—		—		6,435
Substandard		—		—		—		539		199		7,640		—		—		8,378
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	14,134	$	27,684	$	34,295	$	34,959	$	41,814	$	84,325	$	5,108	$	—	$	242,319
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	2,762	$	—	$	—	$	2,762
Total by risk rating
Pass	$	43,023	$	100,767	$	136,423	$	91,331	$	105,774	$	213,726	$	64,537	$	10	$	755,591
Special Mention		—		—		—		302		—		6,983		1,332		—		8,617
Substandard		—		—		1,413		793		5,636		10,926		1,127		25		19,920
Doubtful		—		—		—		—		—		398		—		—		398
Total	$	43,023	$	100,767	$	137,836	$	92,426	$	111,410	$	232,033	$	66,996	$	35	$	784,526
Current period gross charge-offs	$	—	$	—	$	—	$	200	$	—	$	2,762	$	—	$	—	$	2,962


	At December 31, 2024
													Revolving		Revolving
													Loans		Loans
													Amortized		Converted
	Term Loans Amortized Cost Basis by Origination Year												Cost		to
	2024		2023		2022		2021		2020		Prior		Basis		Term		Total

	(In Thousands)
Commercial real estate (owner occupied)
Pass	$	10,294	$	17,016	$	6,648	$	10,675	$	10,476	$	26,393	$	324	$	856	$	82,682
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		3,680		—		591		—		—		4,271
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	10,294	$	17,016	$	6,648	$	14,355	$	10,476	$	26,984	$	324	$	856	$	86,953
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial
Pass	$	16,714	$	19,357	$	20,977	$	7,397	$	4,568	$	19,280	$	54,455	$	—	$	142,748
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		480		409		1,753		—		689		1,172		—		4,503
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	16,714	$	19,837	$	21,386	$	9,150	$	4,568	$	19,969	$	55,627	$	—	$	147,251
Current period gross charge-offs	$	—	$	—	$	427	$	—	$	—	$	—	$	—	$	—	$	427
Commercial real estate (non-owner occupied) - retail
Pass	$	29,349	$	38,912	$	20,935	$	31,934	$	21,322	$	38,047	$	32	$	942	$	181,473
Special Mention		—		—		305		—		—		—		—		—		305
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	29,349	$	38,912	$	21,240	$	31,934	$	21,322	$	38,047	$	32	$	942	$	181,778
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate (non-owner occupied) - multi-family
Pass	$	25,984	$	28,807	$	16,423	$	16,816	$	11,513	$	30,066	$	475	$	—	$	130,084
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		915		1,365		—		—		2,280
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	25,984	$	28,807	$	16,423	$	16,816	$	12,428	$	31,431	$	475	$	—	$	132,364
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Other commercial real estate (non-owner occupied)
Pass	$	27,801	$	32,514	$	35,365	$	40,876	$	16,226	$	61,619	$	4,537	$	194	$	219,132
Special Mention		—		—		—		—		—		3,488		—		—		3,488
Substandard		—		—		569		199		—		10,494		—		—		11,262
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	27,801	$	32,514	$	35,934	$	41,075	$	16,226	$	75,601	$	4,537	$	194	$	233,882
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	1,571	$	—	$	—	$	1,571
Total by risk rating
Pass	$	110,142	$	136,606	$	100,348	$	107,698	$	64,105	$	175,405	$	59,823	$	1,992	$	756,119
Special Mention		—		—		305		—		—		3,488		—		—		3,793
Substandard		—		480		978		5,632		915		13,139		1,172		—		22,316
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	110,142	$	137,086	$	101,631	$	113,330	$	65,020	$	192,032	$	60,995	$	1,992	$	782,228
Current period gross charge-offs	$	—	$	—	$	427	$	—	$	—	$	1,571	$	—	$	—	$	1,998

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 June 30, 2025
													Revolving		Revolving
													Loans		Loans
													Amortized		Converted
	Term Loans Amortized Cost Basis by Origination Year												Cost		to
	2025		2024		2023		2022		2021		Prior		Basis		Term		Total

	(In Thousands)
Residential mortgages
Performing	$	852	$	13,844	$	15,451	$	10,258	$	55,573	$	78,916	$	—	$	—	$	174,894
Non-performing		—		—		—		—		—		136		—		—		136
Total	$	852	$	13,844	$	15,451	$	10,258	$	55,573	$	79,052	$	—	$	—	$	175,030
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer
Performing	$	6,114	$	9,885	$	9,227	$	14,803	$	6,850	$	6,358	$	55,520	$	31	$	108,788
Non-performing		—		7		78		—		—		374		257		—		716
Total	$	6,114	$	9,892	$	9,305	$	14,803	$	6,850	$	6,732	$	55,777	$	31	$	109,504
Current period gross charge-offs	$	1	$	28	$	29	$	4	$	—	$	57	$	—	$	—	$	119
Total by payment performance
Performing	$	6,966	$	23,729	$	24,678	$	25,061	$	62,423	$	85,274	$	55,520	$	31	$	283,682
Non-performing		—		7		78		—		—		510		257		—		852
Total	$	6,966	$	23,736	$	24,756	$	25,061	$	62,423	$	85,784	$	55,777	$	31	$	284,534
Current period gross charge-offs	$	1	$	28	$	29	$	4	$	—	$	57	$	—	$	—	$	119


	At December 31, 2024
													Revolving		Revolving
													Loans		Loans
													Amortized		Converted
	Term Loans Amortized Cost Basis by Origination Year												Cost		to
	2024		2023		2022		2021		2020		Prior		Basis		Term		Total

	(In Thousands)
Residential mortgages
Performing	$	12,877	$	15,602	$	10,400	$	57,540	$	41,868	$	38,418	$	—	$	—	$	176,705
Non-performing		—		—		—		—		—		405		—		—		405
Total	$	12,877	$	15,602	$	10,400	$	57,540	$	41,868	$	38,823	$	—	$	—	$	177,110
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer
Performing	$	11,476	$	10,988	$	16,397	$	7,605	$	2,475	$	4,299	$	53,876	$	664	$	107,780
Non-performing		—		110		46		—		59		344		272		—		831
Total	$	11,476	$	11,098	$	16,443	$	7,605	$	2,534	$	4,643	$	54,148	$	664	$	108,611
Current period gross charge-offs	$	5	$	6	$	21	$	19	$	13	$	143	$	—	$	—	$	207
Total by payment performance
Performing	$	24,353	$	26,590	$	26,797	$	65,145	$	44,343	$	42,717	$	53,876	$	664	$	284,485
Non-performing		—		110		46		—		59		749		272		—		1,236
Total	$	24,353	$	26,700	$	26,843	$	65,145	$	44,402	$	43,466	$	54,148	$	664	$	285,721
Current period gross charge-offs	$	5	$	6	$	21	$	19	$	13	$	143	$	—	$	—	$	207

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 June 30, 2025

30 – 59

60 – 89

90 or More

Days

Total

Non-

Total

Current

Past Due

Accrual

Loans

(In Thousands)

Commercial real estate (owner occupied)

85,252

—

3,823

89,075

Commercial and industrial

139,031

312

—

1,020

1,332

2,607

142,970

Commercial real estate (non-owner occupied) - retail

177,681

171

—

171

935

178,787

Commercial real estate (non-owner occupied) - multi-family

131,375

—

131,375

Other commercial real estate (non-owner occupied)

236,069

326

—

326

5,924

242,319

Residential mortgages

174,545

—

349

—

349

136

175,030

Consumer

108,438

318

—

350

716

109,504

Total

1,052,391

1,127

381

1,020

2,528

14,141

1,069,060


	At December 31, 2024

			30 – 59		60 – 89		90 or More
			Days		Days		Days		Total		Non-		Total
	Current		Past Due		Past Due		Past Due		Past Due		Accrual		Loans

	(In Thousands)
Commercial real estate (owner occupied)	$	86,368	$	433	$	—	$	—	$	433	$	152	$	86,953
Commercial and industrial		144,627		1,852		—		97		1,949		675		147,251
Commercial real estate (non-owner occupied) - retail		181,778		—		—		—		—		—		181,778
Commercial real estate (non-owner occupied) - multi-family		132,364		—		—		—		—		—		132,364
Other commercial real estate (non-owner occupied)		224,914		195		—		—		195		8,773		233,882
Residential mortgages		175,817		852		36		26		914		379		177,110
Consumer		106,796		948		36		—		984		831		108,611
Total	$	1,052,664	$	4,280	$	72	$	123	$	4,475	$	10,810	$	1,067,949

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 following tables summarize the amortized cost basis of loans modified to borrowers experiencing financial difficulty during the three and six months ended June 30, 2025 and 2024 (in thousands).

There were no loans modified to borrowers experiencing financial difficulty during the three months ended June 30, 2025.


	Six months ended June 30, 2025
	Term Extension
	Amortized Cost Basis		% of Total Class of Loans
Residential mortgages	$	192		0.11	%
Total	$	192

As of June 30, 2025, the modified loan described in the table above was current as to payments.


	Three and six months ended June 30, 2024
	Combination - Term Extension and Payment Delay
	Amortized Cost Basis		% of Total Class of Loans
Commercial and industrial	$	171		0.11	%
Total	$	171

At June 30, 2025 and 2024, the Company had no unfunded loan commitments associated with the loan modifications to borrowers experiencing financial difficulty.

The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty during the three and six months ended June 30, 2025 and 2024. There were no loans modified to borrowers experiencing financial difficulty during the three months ended June 30, 2025.


Six months ended June 30, 2025
Term Extension
Loan Type		Financial Effect
Residential mortgages		Provided a maturity date extension of 230 months (approximately 19 years).


Three and six months ended June 30, 2024
Combination - Term Extension and Payment Delay
Loan Type		Financial Effect
Commercial and industrial		During the first quarter of 2024, provided a maturity date extension of ninety days and modified seasonal principal and interest payments to interest only until maturity. During the second quarter of 2024, provided the same borrower an additional maturity date extension of ninety days with continued interest only payments.

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. The Company had no loans which were modified to borrowers experiencing financial difficulty which subsequently defaulted during the three or six months ended June 30, 2025. An other commercial real estate (non-owner occupied) loan modified during the second quarter of 2023 was in non-accrual status and significantly past due as of June 30, 2024. The loan is secured by a mixed use (retail/office) property located within the City of Pittsburgh, but not in the downtown central business district. The loan was considered in default and the Company initiated formal foreclosure procedures on the property during the second quarter of 2024.