Set forth below is selected data relating to the composition of the loan portfolio at the dates indicated (dollars in thousands):

Foreclosed assets acquired in settlement of loans are carried at fair value less estimated costs to sell and are included in foreclosed real estate owned on the Consolidated Balance Sheets. As of June 30, 2024 and December 31, 2023, foreclosed real estate owned totaled $0 and $97,000, respectively. During the six months ended June 30, 2024, there were no additions to the foreclosed real estate category. As of June 30, 2024, the Company has initiated formal foreclosure proceedings on 8 properties classified as consumer residential mortgages with an aggregate carrying value of $364,000.

The following tables show the amount of loans in each category that were individually and collectively evaluated for credit loss:

Management uses an eight point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first four categories are considered not criticized, and are aggregated as “Pass” rated. 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. All loans greater than 90 days past due are considered Substandard. Any portion of a loan that has been charged off is placed in the Loss category.

To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Bank has a structured loan rating process with several layers of internal and external oversight. Generally, consumer and residential mortgage loans are included in the Pass categories unless a specific action, such as nonperformance, repossession, or death

occurs to raise awareness of a possible credit event. The Company’s Loan Review Department is responsible for the timely and accurate risk rating of the loans on an ongoing basis. Every credit which must be approved by Loan Committee or the Board of Directors is assigned a risk rating at time of consideration. Loan Review, in conjunction with a third-party consultant, also annually reviews all criticized credits and relationships of $1,500,000 and over to re-affirm risk ratings.

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 table presents the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans as of June 30, 2024 and December 31, 2023 (in thousands):



	Current		31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due and still accruing			Non-accrual	Total Past Due and Non-Accrual		Total Loans
June 30, 2024
Real Estate loans
Residential	$	315,355	$	1,150	$	49	$	-	$	953	$	2,152	$	317,507
Commercial		678,714		718		-		-		5,780		6,498		685,212
Agricultural		60,944		19		-		-		-		19		60,963
Construction		47,991		-		39		-		-		39		48,030
Commercial loans		208,280		236		34		-		108		378		208,658
Other agricultural loans		31,281		-				-		-		-		31,281
Consumer loans		288,278		616		186		-		800		1,602		289,880
Total	$	1,630,843	$	2,739	$	308	$	-	$	7,641	$	10,688	$	1,641,531



	Current		31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due and still accruing			Non-accrual	Total Past Due and Non-Accrual			Total Loans
December 31, 2023
Real Estate loans
Residential	$	315,224	$	877	$	13	$	-	$	432	$	1,322	$	316,546
Commercial		666,768		6,177		-		-		2,211		8,388		675,156
Agricultural		63,732		127		-				-		127		63,859
Construction		51,435		-		18		-		-		18		51,453
Commercial loans		192,988		3,170		154		-		4,264		7,588		200,576
Other agricultural loans		31,959		7		-				-		7		31,966
Consumer loans		262,578		865		163		-		715		1,743		264,321
Total	$	1,584,684	$	11,223	$	348	$	-	$	7,622	$	19,193	$	1,603,877

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 allowance for credit losses. When information confirms all or part of specific loans to be uncollectible, these amounts are promptly charged off against the allowance.

The following table presents the allowance for credit losses by the classes of the loan portfolio:


(In thousands)	Residential Real Estate		Commercial Real Estate			Agricultural		Construction	Commercial			Other Agricultural	Consumer		Total
Beginning balance, December 31, 2023	$	1,351	$	11,871	$	58	$	933	$	1,207	$	94	$	3,454	$	18,968
Charge Offs		-		-		-		-		(85)		-		(939)		(1,024)
Recoveries		42		104		-		-		-		-		44		190
(Release of) Provision for credit losses		(262)		(2,423)		(17)		(93)		913		36		1,518		(328)
Ending balance, June 30, 2024	$	1,131	$	9,552	$	41	$	840	$	2,035	$	130	$	4,077	$	17,806
Ending balance individually evaluated	$	-	$	-	$	-	$	-	$	-	$	-	$	164	$	164
Ending balance collectively evaluated	$	1,131	$	9,552	$	41	$	840	$	2,035	$	130	$	3,913	$	17,642


(In thousands)	Residential Real Estate		Commercial Real Estate			Farmland		Construction	Commercial			Other Agricultural	Consumer		Total
Beginning balance, March 31, 2024	$	1,197	$	9,831	$	84	$	831	$	1,987	$	168	$	3,922	$	18,020
Charge Offs		-		-		-		-		(30)		-		(500)		(530)
Recoveries		-		2		-		-		-		-		17		19
(Release of) Provision for credit losses		(66)		(281)		(43)		9		78		(38)		638		297
Ending balance, June 30, 2024	$	1,131	$	9,552	$	41	$	840	$	2,035	$	130	$	4,077	$	17,806



(In thousands)	Residential Real Estate		Commercial Real Estate			Agricultural		Construction	Commercial			Other Agricultural	Consumer		Total
Beginning balance, December 31, 2022	$	2,833	$	8,293	$	259	$	409	$	2,445	$	124	$	2,636	$	16,999
Impact of adopting ASC 326		(1,545)		5,527		(200)		388		(1,156)		3		(551)		2,466
Charge Offs		(6)		(154)		-		-		(147)		-		(308)		(615)
Recoveries		6		9		-		-		6		-		46		67
Provision for credit losses		(24)		(2,422)		(4)		22		133		(41)		902		(1,434)
Ending balance, June 30, 2023	$	1,264	$	11,253	$	55	$	819	$	1,281	$	86	$	2,725	$	17,483
Ending balance individually evaluated ‎for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Ending balance collectively evaluated ‎for impairment	$	1,264	$	11,253	$	55	$	819	$	1,281	$	86	$	2,725	$	17,483



(In thousands)	Residential Real Estate		Commercial Real Estate			Farmland		Construction	Commercial			Other Agricultural	Consumer		Total
Beginning balance, March 31, 2023	$	1,359	$	13,725	$	121	$	703	$	1,158	$	82	$	2,297	$	19,445
Charge Offs		(6)		(42)		-		-		(97)		-		(106)		(251)
Recoveries		—		3		-		-		—		-		20		23
Provision for loan losses		(89)		(2,433)		(66)		116		220		4		514		(1,734)
Ending balance, June 30, 2023	$	1,264	$	11,253	$	55	$	819	$	1,281	$	86	$	2,725	$	17,483

During the six months ended June 30, 2024, the Company recorded a release of provision for credit loss expense totaling $328,000. Factors impacting the release include changes in the cumulative loss rates applied to the respective loan pools due to loss activity being added or subtracted with the passage of time, and variances in Qualitative Factors and Economic Factors.

The cumulative loss rate used as the basis for the estimate of credit losses is comprised of the Company’s historical loss experience. The Company chose to apply qualitative factors based on “quantitative metrics” which link the quantifiable metrics to historical changes in the qualitative factor categories. The Company also chose to apply economic projections to the model. A select group of economic indicators was utilized which was then correlated to the historical loss experience of the Company and its peers. Based on the correlation results, the economic adjustments are then weighted for relevancy and applied to the individual loan pools.

The following table presents the carrying value of loans on nonaccrual status and loans past due over 90 days still accruing interest (in thousands):


		Nonaccrual		Nonaccrual				Loans Past Due
		with no		with		Total		Over 90 Days		Total
	ACL		ACL		Nonaccrual		Still Accruing		Nonperforming
June 30, 2024
Real Estate loans
Residential	$	953	$	-	$	953	$	-	$	953
Commercial		5,780		-		5,780		-		5,780
Agricultural		-		-		-		-		-
Construction		-		-		-		-		-
Commercial loans		108		-		108		-		108
Other agricultural loans		-		-		-		-		-
Consumer loans		636		164		800		-		800
Total	$	7,477	$	164	$	7,641	$	-	$	7,641


		Nonaccrual		Nonaccrual				Loans Past Due
		with no		with		Total		Over 90 Days		Total
	ACL		ACL		Nonaccrual		Still Accruing		Nonperforming
December 31, 2023
Real Estate loans
Residential	$	432	$	-	$	432	$	-	$	432
Commercial		2,211		-		2,211		-		2,211
Agricultural		-		-		-		-		-
Construction		-		-		-		-		-
Commercial loans		4,264		-		4,264		-		4,264
Other agricultural loans		-		-		-		-		-
Consumer loans		162		553		715		-		715
Total	$	7,069	$	553	$	7,622	$	-	$	7,622

Based on the most recent analysis performed, the following table presents the recorded investment in non-homogenous pools by internal risk rating systems (in thousands):


														Revolving		Revolving
	Term Loans Amortized Costs Basis by Origination Year													Loans		Loans
														Amortized		Converted
June 30, 2024		2024		2023		2022		2021		2020		Prior		Cost Basis		to Term		Total
Commercial real estate
Risk Rating
Pass	$	26,939	$	79,565	$	129,495	$	108,654	$	65,325	$	241,147	$	14,150	$	-	$	665,275
Special Mention		-		300		311		2,431		-		2,835		294		-		6,171
Substandard		-		-		2,944		3,217		1,424		6,181		-		-		13,766
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	26,939	$	79,865	$	132,750	$	114,302	$	66,749	$	250,163	$	14,444	$	-	$	685,212

Commercial real estate
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Real Estate - Agriculture
Risk Rating
Pass	$	2,002	$	2,515	$	12,261	$	4,132	$	7,430	$	31,241	$	444	$	-	$	60,025
Special Mention		-		-		-		-		-		788		150		-		938
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	2,002	$	2,515	$	12,261	$	4,132	$	7,430	$	32,029	$	594	$	-	$	60,963

Real Estate - Agriculture
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Commercial loans
Risk Rating
Pass	$	30,567	$	38,975	$	33,464	$	21,458	$	12,015	$	21,717	$	42,745	$	-	$	200,941
Special Mention		-		288		423		678		-		117		721		-		2,227
Substandard		-		-		2,845		557		44		49		1,995		-		5,490
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	30,567	$	39,263	$	36,732	$	22,693	$	12,059	$	21,883	$	45,461	$	-	$	208,658

Commercial loans
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	4	$	51	$	30	$	-	$	85

Other agricultural loans
Risk Rating
Pass	$	1,655	$	2,408	$	4,542	$	2,707	$	2,647	$	5,136	$	10,571	$	-	$	29,666
Special Mention		-		-		-		1		-		142		1,472		-		1,615
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-

Total	$	1,655	$	2,408	$	4,542	$	2,708	$	2,647	$	5,278	$	12,043	$	-	$	31,281

Other agricultural loans
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Total
Risk Rating
Pass	$	61,163	$	123,463	$	179,762	$	136,951	$	87,417	$	299,241	$	67,910	$	-	$	955,907
Special Mention		-		588		734		3,110		-		3,882		2,637		-		10,951
Substandard		-		-		5,789		3,774		1,468		6,230		1,995		-		19,256
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	61,163	$	124,051	$	186,285	$	143,835	$	88,885	$	309,353	$	72,542	$	-	$	986,114

‎


														Revolving		Revolving
	Term Loans Amortized Costs Basis by Origination Year													Loans		Loans
														Amortized		Converted
December 31, 2023		2023		2022		2021		2020		2019		Prior		Cost Basis		to Term		Total
Commercial real estate
Risk Rating
Pass	$	78,496	$	131,948	$	112,102	$	65,949	$	72,480	$	186,116	$	13,332	$	-	$	660,423
Special Mention		1,300		411		243		1,331		-		6,157		1,579		-		11,021
Substandard		-		-		-		1,444		36		2,232		-		-		3,712
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	79,796	$	132,359	$	112,345	$	68,724	$	72,516	$	194,505	$	14,911	$	-	$	675,156

Commercial real estate
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	112	$	42	$	-	$	-	$	154

Real Estate - Agriculture
Risk Rating
Pass	$	2,635	$	12,509	$	5,433	$	7,606	$	7,746	$	24,654	$	522	$	-	$	61,105
Special Mention		-		-		-		-		399		490		150		-		1,039
Substandard		-		508		-		1,018		-		189		-		-		1,715
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	2,635	$	13,017	$	5,433	$	8,624	$	8,145	$	25,333	$	672	$	-	$	63,859

Real Estate - Agriculture
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Commercial loans
Risk Rating
Pass	$	48,571	$	41,863	$	24,443	$	13,752	$	9,914	$	15,384	$	38,644	$	-	$	192,571
Special Mention		553		1,412		257		134		20		188		768		-		3,332
Substandard		-		126		342		656		-		49		3,500		-		4,673
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	49,124	$	43,401	$	25,042	$	14,542	$	9,934	$	15,621	$	42,912	$	-	$	200,576

Commercial loans
Current period gross charge-offs	$	-	$	32	$	24	$	4,856	$	-	$	41	$	-	$	-	$	4,953

Other agricultural loans
Risk Rating
Pass	$	2,670	$	5,286	$	3,251	$	2,912	$	2,373	$	3,836	$	11,091	$	-	$	31,419
Special Mention		-		-		2		185		86		-		155		-		428
Substandard		-		-		-		-		119		-		-		-		119
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	2,670	$	5,286	$	3,253	$	3,097	$	2,578	$	3,836	$	11,246	$	-	$	31,966

Other agricultural loans
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Total
Risk Rating
Pass	$	132,372	$	191,606	$	145,229	$	90,219	$	92,513	$	229,990	$	63,589	$	-	$	945,518
Special Mention		1,853		1,823		502		1,650		505		6,835		2,652		-		15,820
Substandard		-		634		342		3,118		155		2,470		3,500		-		10,219
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	134,225	$	194,063	$	146,073	$	94,987	$	93,173	$	239,295	$	69,741	$	-	$	971,557

The Company monitors the credit risk profile by payment activity for residential and consumer loan classes. Loans past due over 90 days and loans on nonaccrual status are considered nonperforming. Nonperforming loans are reviewed monthly. The following table presents the carrying value of residential and consumer loans based on payment activity (in thousands):


														Revolving		Revolving
	Term Loans Amortized Costs Basis by Origination Year													Loans		Loans
														Amortized		Converted
June 30, 2024		2024		2023		2022		2021		2020		Prior		Cost Basis		to Term		Total
Residential real estate
Payment Performance
Performing	$	5,508	$	33,444	$	62,335	$	55,302	$	33,460	$	97,694	$	28,811	$	-	$	316,554
Nonperforming		-		137		-		189		-		608		19		-		953
Total	$	5,508	$	33,581	$	62,335	$	55,491	$	33,460	$	98,302	$	28,830	$	-	$	317,507

Residential real estate
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Construction
Payment Performance
Performing	$	11,403	$	23,927	$	9,813	$	459	$	-	$	215	$	2,213	$	-	$	48,030
Nonperforming		-		-		-		-		-		-		-		-		-
Total	$	11,403	$	23,927	$	9,813	$	459	$	-	$	215	$	2,213	$	-	$	48,030

Construction
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Consumer loans to individuals
Payment Performance
Performing	$	67,755	$	110,808	$	63,631	$	19,965	$	11,249	$	14,785	$	887	$	-	$	289,080
Nonperforming		-		241		358		135		31		35		-		-		800
Total	$	67,755	$	111,049	$	63,989	$	20,100	$	11,280	$	14,820	$	887	$	-	$	289,880

Consumer loans to individuals
Current period gross charge-offs	$	38	$	216	$	479	$	113	$	58	$	35	$	-	$	-	$	939

Total
Payment Performance
Performing	$	84,666	$	168,179	$	135,779	$	75,726	$	44,709	$	112,694	$	31,911	$	-	$	653,664
Nonperforming		-		378		358		324		31		643		19		-		1,753
Total	$	84,666	$	168,557	$	136,137	$	76,050	$	44,740	$	113,337	$	31,930	$	-	$	655,417


														Revolving		Revolving
	Term Loans Amortized Costs Basis by Origination Year													Loans		Loans
														Amortized		Converted
December 31, 2023		2023		2022		2021		2020		2019		Prior		Cost Basis		to Term		Total
Residential real estate
Payment Performance
Performing	$	27,446	$	62,178	$	57,691	$	35,357	$	16,406	$	87,951	$	29,085	$	-	$	316,114
Nonperforming		-		-		-		-		58		324		50		-		432
Total	$	27,446	$	62,178	$	57,691	$	35,357	$	16,464	$	88,275	$	29,135	$	-	$	316,546

Residential real estate
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	34	$	-	$	-	$	34

Construction
Payment Performance
Performing	$	23,500	$	14,906	$	6,791	$	1,599	$	1,829	$	624	$	2,204	$	-	$	51,453
Nonperforming		-		-		-		-		-		-		-		-		-
Total	$	23,500	$	14,906	$	6,791	$	1,599	$	1,829	$	624	$	2,204	$	-	$	51,453

Construction
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Consumer loans to individuals
Payment Performance
Performing	$	127,243	$	76,339	$	24,584	$	14,343	$	10,217	$	9,942	$	938	$	-	$	263,606
Nonperforming		111		404		118		31		41		10		-		-		715
Total	$	127,354	$	76,743	$	24,702	$	14,374	$	10,258	$	9,952	$	938	$	-	$	264,321

Consumer loans to individuals
Current period gross charge-offs	$	45	$	710	$	200	$	35	$	45	$	28	$	4	$	-	$	1,067

Total
Payment Performance
Performing	$	178,189	$	153,423	$	89,066	$	51,299	$	28,452	$	98,517	$	32,227	$	-	$	631,173
Nonperforming		111		404		118		31		99		334		50		-		1,147
Total	$	178,300	$	153,827	$	89,184	$	51,330	$	28,551	$	98,851	$	32,277	$	-	$	632,320

Occasionally, the Bank modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, and other-than-insignificant payment delay or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses.

In some cases, the Bank provides multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. During the six months ended June 30, 2024, there were 6 modifications made to borrowers experiencing financial difficulty. The following table presents modifications made to borrowers experiencing financial difficulty:


Principal Payment Deferral

		Amortized Cost Basis at June 30, 2024	% of Total Class of Financing Receivable		Financial Effect

Commercial real estate loans	$	7,042	1.03	%	Deferred Principal for 2-12 months
Commercial loans		3,416	1.64		Deferred Principal for 2-12 months
Other agricultural loans		363	1.16		Deferred Principal for 4-6 months
Consumer loans		30	0.01		Deferred Principal for 12 months


Total	$	10,851

Payment Reduction

		Amortized Cost Basis at June 30, 2024	% of Total Class of Financing Receivable		Financial Effect

Commercial real estate loans	$	391	0.06	%	Reduced monthly payment, which resulted in a balloon payment at maturity

Total	$	391


Combination - Term Adjustment and Interest Rate Adjustment

		Amortized Cost Basis at June 30, 2024	% of Total Class of Financing Receivable		Financial Effect

Residential real estate loans	$	41	0.01	%	Reduced term by 5 years and increased interest rate from 4.75% to 9.25%
Consumer loans		29	0.01		Increase term by 6 months and increased interest rate from 9.19% to 12.99%

Total	$	70

The following table provides the amortized cost basis of financing receivables that had a payment default during the period and were modified (in thousands):

The following table depicts the performance of loans that have been modified in the last 12 months for which a payment default has occured (in thousands):

The Company’s primary business activity as of June 30, 2024 was with customers located in northeastern Pennsylvania and the New York counties of Delaware, Sullivan, Ontario, Otsego and Yates. Accordingly, the Company has extended credit primarily to commercial entities and individuals in this area whose ability to repay their loans is influenced by the region’s economy.

As of June 30, 2024, the Company considered its concentration of credit risk to be acceptable. The highest concentrations are in commercial rentals with $146.1 million of loans outstanding, or 8.9% of total loans outstanding, and residential rentals with loans outstanding of $112.8 million, or 6.9% of loans outstanding. For the six months ended June 30, 2024, the Company recognized charge offs of $0 on commercial rentals and $0 on residential rentals. The following table presents additional details regarding the company’s largest loan concentrations by industry as of June 30, 2024 (in thousands):